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GATT Library | hg580sf6477 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Seventeenth Meeting of the Tariff Agreement Committee Held on Friday, 12 September 1947 at 2.30 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/17 and E/PC/T/TAC/PV/15-17 | https://exhibits.stanford.edu/gatt/catalog/hg580sf6477 | hg580sf6477_90260063.xml | GATT_155 | 13,961 | 85,005 | UNITED NAT IONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/'C/T/TAC/PV/17
12 September 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
SEVENTEENTH MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON FRIDAY, 12 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. J. 2 E/PC/T/TAC/PV/17
CHAIRMAN: The meeting is called to order.
As I announced at our meeting yesterday afternoon, the first
part which we will take up this afternoon is Provisional Application,
and after we have considered that we will then deal with the Final
Act; after that we will take up the Protocol accompanying the
Agreement and the various Annexes; we will then endeavour to deal
'with Reports of Sub-Committees or other proposals for the revision
of the texts of certain Articles.
This is the work which we have to get through during the next
two days if we are to permit the Secretariat to prepare a clean text
of the Agreement for our consideration and the third reading next
week. I would ask for the co-operation of all Members of the
Committee in expediting the work so that we may get through the
Second reading stage at our meeting tomorrow morning.
In connection with Provisional Application, we have already
agreed in principle that Article XXXII of the Draft Agreement should
be supplanted by a Protocol of Provisional Application. The
United States Delegation have submitted a text of a Protocol of
Provisional Application, which is given on pages 3 and 4 of document
E/PC/T/W/316. I think that the best plan would be for us to
consider the United States draft of the Protocol of Provisional
Application. We will deal with this Protocol of Provisional
Application paragraph by paragraph.
Are there any comments on the first paragraph of the United
States Draft?
The Delegate of the Netherlands. J. 3 E/PC/T/PAC/PV/17
DR. G.A. LAMSVELT (Netherlands): Mr. Chairman, it might be of
interest to the Secretariat that, instead of the word "Netherlands",
my Delegation would like to substitute the words "Kingdom of the
Netherlands" in any place where the word "Netherlands" appears.
CHAIRMAN: That change will be made in the Protocol of
Provisional Application. Does the Netherlands Delegation also desire
that change to be made in the Preamble?
DR. G.A. LAMSVELT (Netherlands): Yes, Mr. Chairman.
CHAIRMAN: The first two lines of the Preamble would read:
"The Governments of the Commonwealth of Australia, Belgiam, the
Kingdom of the Netherlands and Luxembourg".
Are there any other comments on the first paragraph of the
United States draft Protocol?
MR. B. ADARKAR (India): Mr. Chairman, it appears from the
last sentence of the first paragraph that any other signatory
Government shall make effective such provisional application on or
after January 1st, 1948. I take it that, should the circumstances
of the country require it, there will be no objection to any
Government giving provisional effect to its tariff concessions
immediately after the simultaneous publication of the Tariff
Schedules?
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, there is just
a point about the list of territories. We have a Sub-Committee
still sitting on the question of Burma, Ceylon and Southern Rhodesia,
and this rather depends on the findings of that Committee, and the
question may arise of including some'or all of those territories in J. 4 E/PC/T/TAC/PV/17
the list of territories at the beginning of this Protocol.
CHAIRMAN: In reply to the question raised by the Delegate of
India, I should think that it.would be the view of the Committee
that there would be nothing to prevent any country applying its own
tariff concessions before applying the provisions of the General
Agreement.
Are there any other comments on the first paragraph?
MR. L.E. COUILLARD (Canada): Is that date of November 15th
still correct, Mr. Chairman, or should it be November l0th?
CHAIRMAN: That is a matter for decision.. We had, on our
list prepared by the Secretariat, a tentative time-table which seems
to have agreed to the date of November 10th. The United States
have proposed the date of November 15th in their document, and
therefore it is up to the Committee to decide which of the two dates
is preferable. R E/PC/T/TAC/PV/17
CHAIRMAN: Any views on the date which should be shown
as to date of the signature of the Protocol?
Mr. R. J. SHACKLE (United Kingdom): I am in favour of
making the date a little early to leave time for the Secretariat
to inform all the various countries of what signatures have come
in so that they would have the opportunity of seeing how these
were roughly fulfilled and knowing what the position was going
to be before actual enforcement takes place. I think that was
the idea, was it not; to give some time to the Secretariat to
spread the information around. It would perhaps be as well to
leave a few days for that purposo.
CHAIRMAN: When the subject of the tentative time-table was
being discussed in this Committee, it was agreed that there should
be a certain period of time between the closing of the Protocol
for signature and the date of simultaneous public announcement.
Some members of the Committee suggested there should be a week's
interval between these two stages and therefore it was agreed
that the simultaneous publication should take place before
the Havana Conference of November 17th. It was therefore felt
that we should put the date of November 1Yth for the closing
signature, being a week before the simultaneous public announcement.
The question which we should now decide is what date we should take
for the closing of the Protocol for signature.
Any other comments in regard to the dates?
Mr J. P.D. HOHNSEN (New Zealand): I think the idea was
to leave sufficient time between the tentative date, of signature
of the Final Act and the date for signature of the Protocol.
1 think it was, if I remember correctly, that there should be a fair lapse of time so as to give an opportunity to study the
Agreement and give full consideration to it.
CHAIRMAN: Is the Committee agreed that the date should be
November 15th as proposed by the United States Delegation?
Mr. E. McCARTHY (Australia): Subject to amendment, Mr.
Chairman, that we have a clear idea as to when the negotiations
of the Trade Agreement will have finished. Our view is, that
we cannot agree to other countries publishing statements on the
tariffs which would include amendments to our tariffs unless we
publish at the same time. Our problem would be to conclude the
Trade Agreement and pass,or introduce, the necessary schedules
into Parliament before any publication is made by anybody; and
whilst November 15th at present would be satisfactory it is just
a matter as to whether we will have time after the negotiations
have finished to take the necessary action before November 15th
Mr. T. M. LEDDY (United States): Mr. Chairman, as I under-
stand the position, the Australian Delegation would like to
publish the Agreement about the same time as they declare it
before their Parliament. But they might sign the Protocol
of Provisional Application a day, or several days, before that,
though the publication is not made at the moment when they wish
to lay it beforetheir Parliament. If that is correct, we
could possibly leave November 15th as it stands which would give
them ample time to effect the necessary clearance whicn will allow
signature and perhaps publication two or three days/later.
I should not think it would take much time and every Government,
I should think, by the end of the Geneva Meeting/and the date of
publication will have its arrangements made and be able to act.
on very short notice indeed.
E/PC/T/TAC/PV/17
R 7
R E/PC/T/TAC/PV/17
Mr. SHACKLE (United Kingdom): If we adhere to the idea
that there should be publication before the Havana Conference,
the last possible date should be: Saturday, 15th November, for
signature, Tuesday 18th November for publication because the
Havana Conference opens on the 21st November.
Mr. McCARTHY (Australia): My problem is, Mr. Chairman,
whether we will have time to put the schedules into Parliament
before they are published by other countries. On present
indication there should be no difficulty, but if the Trade
Agreement negotiations drag on and we have not got the material
to act on we would be in difficulties. Other countries, by
order of Council, or some other method;that did not take any
length of tine, might perhaps finish early in November their
trade negotiations and publish them the next day, and we should
then be in difficulties. We have got a certain procedure to
go through. It might not take very long - it happens
Parliament will be sitting - but we see the difficulty of
publishing the tariff schedules when the conclusion of the
Trade Agreement negotiations is as indefinite as it is at the
momont.
If, of course, everybody is satisfied that they will have
their negotiations cleared up by the middle of October, we would
have nothing further to say. We could handle it in three weeks
or a month but we would not be able to handle it in one week or
ten days.
CHAIRMAN: I r; stage that all we have been doing here
and all our discussions on the tentative time-table have been
pased on the assumption that the tariff negotiations will be
completed, if not by the end of this month, at least shortly
after the beginning of next month, so I think we could accept R 8 E/PC/T/TAC/PV/ 17
this date of November 15th that is put in here, under that
understanding. Of course, if the tariff negotiations are pro-
longed, there will have to be a teneral review of the whole time-
table and of these developments.
Mr. E. McCARTHY (Australia): We can accept that point of view
CHAIRMAN: Any other comments with regard to Paragraph 1
of the United States draft of the Protocol?
(Agreed)
Paragraph 2. Any comments?
Mr. LEDDY (United States): We have a criticism as to the
second clause. We think that freedom to withdraw the provional
application should be freedom to withdraw the application of the
whole arrangement and not part of it. I think that is essential,
otherwise by this clause some countries would be free to withdraw
some parts of the tariff schedule without any similar action by
other countries. I think it must be freedom to withdraw from the
whole of the arrangement.
CHAIRMAN: The United States Delegation propose the deletion
of the words "in whole or in part" in the second paragraph.
M. ROYER (France) (Interpretation): I second this proposal.
CHAIRMAN: Any objections to this proposal?
(Agreed)
Any other comments on the second paragraph?
(Agreed)
Paragraph 3. Any commente?
(Agreed)
Paragraph 4. Any comments.
(Agreed)
We now come to the formula at the end and I take it that in
accordance with the decision yesterday wedwill delete the words
"and have affixed their seals hereto."
Mr. SHACKLE (United Kingdom): I have just one question. I am
wondering if the expression "their full powers" could be replaced
by "duly authorised on their behalf". Full power is, I understand,
a very formal thing and it may be that something less formal
might be adequate but I do not know. E/PC/T/TAC/PV/17
CHAIRMAN: That is the same form we had suggested yesterday
for the General Agreement itself. I should think it would be the
same powers which would apply both to the signature of the General
Agreement and the signature of the Protocol.
M. ROYER (France): (Interpretation): Mr. Chairmen, I beg to
second your opinion. I think that we ought to maintain here the
principle of full powers. In fact here this is not only a Protocol
for a simple signature; this Protocol goes far beyond that and it
it s Protocol by which its signatories will commit their governments.
Therefore it seems to us that these powers must be given in due form
and that it must be absolutely certain that the signatories of the
Protocol have the powers to commit their governments. I think that
therefore we should adopt the most solemn form of procedure here in
conformity with constitutional procedure.
Mr. R.J. SHACKLE (United Kingdom): It says "in a single copy"
now.
CHAIRMAN: First of all let us deal with this first paragraph.
Are there any other comments on this paragraph? Then this
paragraph will remain as it is in this text with the deletion of the
words "and have fixed their seals hereto" in conformity with the
decision we took yesterday on the formula of the General Agreement
and the words "Done in a single copy" would be changed to "Done in
duplicate".
Mr. J.M. LEDDY (United States) : I do not really think it is
done in duplicate. It is just done in the English and French
would
languages. If it were done in duplicate you/have to have two copies
both in English and French. So I think it is really in a single
copy in French and English.
9 E/PC /T/TAC/PV/17
CHAIRMAN: Is that agreed?
Agreed.
Should the same change be made in the formula for the General
Agreement?
Mr. J.M. LEDDY (United States): I should think so.
M. ROYER (France): (Interpretation): Mr. Chairman, I think
that it might be well to make that reservation here because when we
have an Act which is passed before a Notary or a solemn Act it is
good to show how many authetic copies there exist of such an Act
and therefore we should say "Done in the English and French
languages, the English and French texts being authentic".
CHAIRMAN: Shall we leave this question to be studied by the
Legal Drafting Committee?
Are there any other comments?
Dr. A.J. BEYLEVELD (South Africa): Mr. Chairman, is "at
Geneva" in order? Not everybody might be signing atGeneva.
Mr. J.M. LEDDY (United States): Mr. Chairman, I do not think
that means that everybody signs at Geneva. I would quote a
precedent, namely the Convention for the Abolition of Prohibition
and Restrictions of 1927. That said "at Geneva" but it was not
signed at Geneva. Some of the parties signed at Geneva and some
later. It merely means that the text was established at Geneva.
CHIRMAN: Are there any other comments?
I take it that we leave the text now of the Protocol of
Provisional Application and we can pass on to consider the Final
Act. We have had submitted to us the text of the Final Act given
in document W/315 of the 1st September together with Corrigendum 1.
Then I would also call the attention of members of the Committee to
document W/319 of 4th September. This deals with the question of 11
E/PC/T/TAC/PV/17
Reservations to the Charter. The Tariff Negotiations Working
Party considered the request of several delegates for assurances
that signature or application of the General Agreement would not
prejudice their freedom to maintain reservations to the Charter.
The Tariff Negotiations Working Party suggested that these
assurances could be provided by adding certain provisions at the
end of the first paragraph of the Final Act. A draft paragraph to
that effect is given in document W/319.
Are there any comments on this question of the Final Act?
Dr. GUTIERREZ (Cuba): Mr. Chairman, when you decide to take
up the question of reservations I wish to say a few words.
CHAIRMAN: I think we might first of all proceed to consider
the first paragraph of the Final Act as given in document W/315 and
then take up the report of the Tariff Negotiations Working Party
regarding reservations.
In this first paragraph the word "Netherlands" will be changed
to "The Kingdom of the Netherlands" in accordance with the request
of the Netherlands Delegate.
Dr. G.A. LAMSVELT (Netherlands): Mr. Chairman, as it is put
here there might be a confusion, because the text reads
"Netherlands and Luxembourg". Since the late King William III died,
Luxembourg. is no more a part of the Kingdom of the Netherlands.
CHAIRMAN: That is why I asked the Netherlands Delegate
whether he wished that same change to be made in the Preamble,
because it appears in the Preamble.
M. ROYER (France): (Interpretation): Mr. Chairman, I think
that the only superfluous word is "and" in the Preamble and in the
Final Act. The text is even queerer because it seems that one 12
P. E/PC/T/TAC/PV/17
speaks of "the Goverments of the Commonwealth of Australia, Belgium,
Netherlands and Luxembourg", and then afterwards goes on to speak
of the United States of Brazil.
CHAIRMAN: We have an expression of the wish of the Netherlands
Delegate that the Netherlands should be described as "the Kingdom
of the Netherlands" and it is up to the Legal Drafting Committee
to wrestle with the problem of putting these countries in their
proper order in a way that will avoid confusion.
Are there any other comments on the first paragraph of the
Final Act?
Then I take it that the first paragraph is approved.
We will therefore pass on to the second paragraph given in
document W/315. Are there any comments?
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, according to our
interpretation we have here, as the main document to be signed in
the first chronological order, the Final Act; together with the
Final Act comes the General Agreement on Tariffs and Trade and its
accompanying Protocols. Those Governments which do not wish to
sign the Agreement at geneva, in our opinion - and I want to know
if it is also the opinion of the Committee - would only sign the
Final Act and not sign, up till the time it is open for signature,
the General Agreement.
Now the question that I wish to put to the Committee is,
firstly, if that interpretation is correct; and secondly, if it
is only the nations signing the General Agreement which have to
sign the Protocols; so that if a nation chooses to sign only the
Final Act we only have to have one signature - the signature to
that document. 13
P. E/PC/T/TAC/PV/17
CHAIRMAN: My understanding of the position is this: that
the Final Act will simply authenticate the text of the General
Agreement with the accompanying Protocols and existing Schedules:
that the Final Act will be signed by all of the Delegations who
will be in Geneva; but that it will be necessary for each
Delegation to sign the General Agreement and the Protocols that go
with the General Agreement, except the Protocols of Provisional
Application, either at Geneva or at so me other place up to 30 June.
The Protocol of Provisional Application will be also signed either
at Geneva or elsehwere by the key countries up to 15 November and
by other countries at any time subsequent to that.
Dr. Gustavo GUTIERREZ (Cuba): I want to be sure, in order
to give the.proper information to my Delegation. My Delegation
has not yet received the instructions of our government as to
whether it should sign the Treaty here or not and it is our
understanding that if we choose not to sign the Treaty here at this
moment, but probably at some other date, then we only have to put
the signature on the Final Act and not on any other document;
because at the end of document W/319 where an amendment has been
presented for the wording of the closing phrases of the Final Act
it says:
"In witness whereof the respective Representatives have
signed the present Act and have thereby authenticated the
text of the General Agreement on Tariffs and Trade with
accompanying Protocols annexed hereto".
So it seems clear that there is only one signature, that of the
Final Act. Then the nations that decide to sign the General
Agreement here at Geneva will also have to sign that General
Agreement and the accompanying Protocols. I wanted to know if
that .:,r cxt is correct. V 14 E/PC/T/TAC/PV/17
CHAIRMAN: The Delegate of the United States.
Mr. J.M. LEDDY (United States): MR. Chairman, a
distinction should be drawn between the signature of the Trade
Agreement proper and the signature of the Protocol of Provisional
Application. By signing the Protocol of Provisional Application,
the Government concerned is undertaking a firm commitment to
give provisional application thirty days after signature. By
signing the Trade Agreement, countries are not undertaking a
commitment to put the Agreement into effect. That takes place
only after they have accepted it and sent in an instrument of
acceptance. Therefore, it would be open to any country here
at Geneva to sign the Trade Agreement without a binding commitment
to bring the Trade Agreement into force. Apart from that, I
think the explanation of Dr. Gutierrez is quite correct.
CHAIRMAN: I thought I had drawn a distinction in my
statement between the Protocols which accompany the General
Agreement and the Protocol of Provisional Application, which is
a document of another character, and therefore, of course, its
signature would take place independently of the signature of
the General Agreement and its accompanying Protocols.
The Delegate of Belgium.
Baron P. de GAIFFIER (Belgium) (Interpretation): Mr.Chairman,
are there three different documents to which we have to affix a
signature -that is, the General Agreement, the Protocols.
accompanying the General Agreement and then the Protocol of
Provisional Application? Will we have to give three signatures?
CHAIRMAN: The Delegate of the United States. 15
V E/PC/T/TAC/PV/17
Mr. J.M. LEDDY (United States): I think there are four
and possibly five, depending upon what we decide to do about the
Interpretative Notes. There is the General Agreement; the
Protocol of Signature which deals with the Charter as a whole;
the Protocol of Provisional Application; the Protocol relating
to Interpretative Notes, and the Final Act. Then there is the
Protocol relating to the Occupied Territories, which would make six.
Baron P. de GAIFFIER (Belgium) (Interpretation):
Mr. Chairman, if a Government signs the Protocol of Provisional
Application, does this mean that he will also have to sign, at
the same time, the Protocol of Signature -that is, the undertaking
to observe the provisions of the Charter; the Protocol relating
to Interpretative Notes; the Protocol relating to the General
Agreement, and the Protocol relating to Occupied Territories such
as Germany, Japan and Korea?
CHAIRMAN: My answer would be yes.
Mr. J.M. LEDDY (United States): May I suggest that with
regard to the Protocol or Signature, since that deals with the
Charter as a whole I wonder whether we should not contemplate
that that should be signed here at Geneva?
CHAIRMAN: That is a question which can be discussed either
now or at a later date.
Dr. Gustavo GUTIBRREZ (Cuba): Mr. Chairman, I think that
we have a clear situation now in relation to the signatures.
The main document, technically speaking, that we have to sign
is the Final Act, because all the others are in some form related
to the Final Act. Then the main document after the Final Act would E/PC/T/TAC/PV/l7
be the Agreement. Those signing the Agreement should sign all
the Protocols except, naturally, the nations who do not intend
to undertake provisional application. That would be, in my
opinion, the best distinction in relation to the signatures.
not
Those nations who are/signing the General Agreement at Geneva
could not sign the Protocol on Interpretative Notes, because the
Interpretative Notes are related not to the Cjarter but to the
Agreement. Therefore, there are two "key" signatures: the
signature of the Final Act and the signature of the Agreement.
Those signing the Agreement will have to sign the Protocols;
those not signing the Agreement would simply sign the Final Act.
CHAIRMAN: I think Dr. Gutierrez has practically summed up
the situation, except that we should, I think, bear in mind very
clearly the distinction between the accompanying Protocols-
the Protocols which would be signed at the same time as the
Agreement-and the Protocol of Provisional Application, which can
be signed at.the same time or can be signed before or after. It
has an independent status in relation to the others.
Mr. J.M. LEDDY (United States): Mr. Chairman, I wonder
whether it would not be a good idea to ask the Secretariat to
prepare a brief paper on this subject, so that we could get it
down in black and white in regard to what the status is; and
what it means when each country signs tho instrument, and what
other instruments they have to sign, if any, if they sign one.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I think
that we could make this more specific by calling the Protocol of
Provisional Application the "Optional Protocol". In that way,
16 17
V E/PC/T/TAC/PV/l7
one would see clearly that the Governments would be allowed to
sign it or not to sign it, at their free will. (Further remarks
concerned the French text only).
CHAIRMAN: I think the suggestion made by Mr. Leddy is
a good one, and if the Committee agrees, we will ask the
Secretariat to prepare a paper setting forth the various documents
in relation to the time and obligation of signature.
.. The Secretary advises me that he thinks this document can
be circulated tomorrow morning.
Are there any other comments with regard to the second
paragraph of the Final Act given in Document W/315?
Mr. J.P.D. JOHNSEN (New Zealand): I think the date would
require to be changed.
CHAIRMAN: Yes, I think that date would require to be
changed, because, as Mr. Shackle pointed out, if the provisional
application Protocol closesfor signature on 15th November, the
earliest date for simuj c.neous publication would be 18th, so
I would suggest that we change that date to the 18th provisionally.
Is that agreed? Are there any other comments on the
second paragraph? Then we take the formula given on page 2,
and I think that is in order.
Mr. R.J-- SHACKLE (United Kingdom): Is not that altered by
Document W/319, Mr. Chairman?
CHAIRMAN: Yes, I think so. That has been altered by
Document W/319. Then I think we might take up Document W/319
and consider this paragraph. It is suggested that it be
inserted at the end of the first paragraph given on Document W/315. 18
V E/PC/T/TAC/PV/17
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, a small
verbal point: in the fifth line., I think it would be better to
say "uphold" rather than "maintain", because what we are saying
is that it will be open to Delegates to argue in support of
the reservations they have previously made, not merely to keep
the reservations on. I think the word "uphold" better carries
that implication.
CHAIRMAN: Mr. Shackle proposes that the word "uphold"
should be substituted for the word "maintain". The Delegate of
Chile.
M. F. Garcia OLDINI (Chile) (Interpretation): Mr.Chairman,
I do not wish to speak on this point. Therefore, if you prefer,
I will wait a little.
CHAIRMAN: Are there any objections to the proposal made
by Mr. Shackle?
Agreed.
Are there any other comments on this paragraph? E/PC/T/TAC/PV/17
MR. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
this text will be part of the Final Act, and the Final Act is the
instrument to authenticate the results of our work here. It will,
in the words of the French Delegate, be a solemn report or a
solemn record of what we have done here. We want this record to be
as truthful as possible,. and therefore we must mention the reservations
which have been made by certain Delegations in the course of the
discussions on the Charter. It is said here that the delegaations
are free to uphold at the Havana Conference the reservations which
they have made, but it has been said that reservations could not be
made at the time of the signature of the Agreement. These
reservations could only be made if they were unanimously approved by.
here that
the contracting parties. It is not mentioned/reservations can be
made at the time of the Final Act, and the only. thing which is stated
is that States will have the freedom to uphold these reservations at
Havana.
The text of the Agreement takes up certain provisions of the
Charter, and it seems to me necessary to state that the Delegations
will be able to maintain the reservations which they. have made to
these provisions.
Therefore, as this is not specified in the text, I would propose
that the text of this paragraph should read in the following way:
"It is understood that the signature of this Final Act does not imply
the withdrawal of reservations relating to the provisions of the
Draft Charter which are included in the Agreement, nor does it in
any way prejudice their freedom to uphold at the United Nations
Conference ..etc.". Thus, the two ideas would be included,.first,
that these reservations which were made to the provisions of the
J . 20
J. E/PC/T/TAC/PV/17
Charter would be maintained as far as the provisions of the Charter
are included in the Agreement, and secondly, that the right to
uphold such reservations at the Havana Conference is maintained.
CHAIRMAN: The Delegate for Czechoslovakia.
H.E... Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
think that we should make some drafting changes in this paragraph.
As it stands here, it would mean that at the Havana Conference the
countries present would be free only to uphold the recommendations
which they made here, but that they would not be allowed to raise
any other questions. Well, it may happen that the Governments at
home would give to their representatives in Havana some different
instructions, they may find some inconsistencies in the Draft
Charter and so on, and, if I am not mistaken, we were told that, with
regard to the Draft Charter, any country has freedom of action at
Havana. I do not say that it is desirable, but I am rather afraid
that we can renounce at this moment any amendments and so on which
our Governments might wish to present at Havana.
Therefore, I would suggest that we put something of this kind
'in: ".....does not in any way prejudice their freedom of action at
the United Nations Conference on Trade and Employment to uphold
reservations which they may have made.....".
CHAIRMAN: The Delegate of Cuba.
DR. G. GUTIERREZ (Cuba): Mr. Chairman, it seems that we have
two different questions before the Committee. Tne one is that
raised by our Chilean colleague in relation to the reservations to
the Agreement, and the other is the amendment presented by our 21
J. E/PC/T/TAC/PV/17
Czechoslovakian colleague.
The Cuban Delegation. has no hesitation in seconding the proposal
made by the Czechoslovakian Delegate with regard to the amendment of
the text, and considers that that text is acceptable from the point
of view of the reservations which have been made to the provisions
of the Draft Charter, but is in complete accord with the Chilean
Delegation that there is no mention of reservations with regard to
the Agreement.
According to this text, the Agreement has a..2 rL.-;s at
all, and we do not agree with that. We never have agreed. During
this discussion we have twice raised this question and we were told
that the matter would be taken up when we came to the discussion on
Article XXVII. When we came to the discussion of Article XXVII and
asked about the reservations, we were told that the matter would be
taken up when we reached the Final Act, and now that the Final Act
has come up the reservations have disappeared. Well, we have to
bring them back.
This question of the reservations and this new theory in relation
to them, as so many other things which we have heard here of new
international law, which could probably be called the new economic
international law, could teach us something new and we are ready to
learn, but according to international law as it is stated in the text
books at the university and, more than that, as it has been framed
by famous statisticians, does not agree with that.
Now, I am not going to take up the mention of authorities of
international law because, fortunately enough; in one of the most
reliable books of today - Hackworth's Digent of International Law -
there is a quotation from three outstanding documents of the E /PC/T/TAC/PV/17
Secretaries of State of the United States. Therefore I am not going
to use my own words, I am going to use the words of Secretary Colby
to Ambassador Wallace in 1920. It says: "That reservations
should be made and recorded at the time of signature in order that
all parties to the Treaty may previous to and in considering
ratification understand to what extent each signatory is bound by the
terms of the Treaty. This has been the practice followed in
signing preceding conventions where the United States of America and
numerous other countries stated their reservations at the time of
signature (Hague Conferences, 1899-1907, Radio Telegraphic Convention
in London, on July 5th, 1912, General Act of the International
Conference of Algeciras, on April 7th, l906)". Secretary Colby adds
in. his instructions to the American Delegation: "... for these
reasons you will urge that a protocol of signature be kept open wi th
the Convention; that therein be recorded all reservations or
declarations made by Signatory Governments; that a certified copy
of this protocol be sent to each Government with its official
copy of the Convention and that in the signature of the Convention
the plenipotentiaries of reserving Governments may place after their
names the words 'subject to reservations declared in the protocol of
(Date)'".
Therefore, what we ask is that we simply do what this famous
Secretary for State of the United States instructed to their
Delegation. We, of course, know that there is a difference between
the ratification at the time of signature, that is to say, the
reservations of the Delegates and what is the effect of the reservations
at the time of signature, but that also is clearly expressed in
another document of United States diplomacy, and I name this one
J. E/PC /T/TAC/PV/17
because I consider that it is more clear in relation to this fact:
"If reservations are not made at the time of signing a multilateral
treaty, ratification with reservations in order to be binding must
be brought to the knowledge of the other contracting powers and
receive their approval unless otherwise specified in the Treaty, since
they constitute a modification of the Agreement. Whether a
multilateral treaty may be regarded as in force as between a country
making a reservation and countries accepting such reservation, but
in force as regards countries not accepting the reservation, depends
upon whether the Treaty as signed is susceptible of application to
the smaller group of signatories".
Then, just to end this very clear juridical procedure of
ratification, we have a letter of July 24th, 1919, which
Mr. Charles Evans Hughes wrote with respect to the Treaty of
Versailles: "The Nation making reservations as a part of the
instrument of ratification is not bound further than it agreed to be
bound, And if, a reservation has a part of the ratification makes
the material addition to or a substantial change in the proposed
Treaty other parties will not be bound unless they assent. It
should be added that where a Treaty is made on the part of a number
of nations they may acquiesce in a partial ratification on the part
of one or more".
So, we consider this matter very clear. No matter what is the
Decision of this Committee, I will make a most energetic protest if
we depart from this method. Every nation has a right to regular
reservations, and the result of that reservation is the second phase,
that is to say, if we consider that we should sign with reservations
we will do it. Then at the time of ratification, our Governments
J. 24
J. E/PC/T/TAC//PV/17
or our constitutional organs in our countries may decide or may
insist on the ratification. If these countries, and we consider
that there may be many countries, insist on the ratification, then,
of course, this question has to be taken up by other nations. If
the other nations agree to the ratification, then the recommendation
stands; if the other nations do not agree, then the country making
the reservation has a choice - either to withdraw the reservation,
or to withdraw from the group. That is the practice in
international law and we will not depart from it.
So, I think we must go further than our Chilean colleague and
ask this Committee to accept this practice, which has proved a good
practice. It will not prejudice at all the effect of the Treaty,
it will not jeopardize its possibilities.
With respect to the co-operation of the rest of the nations to
the fullest extent in the application of the Treaty, I think that
could be done as Secretary Colby stated - have a protocol of
reservations, those reservations being treated according to the
sovereign desire of the nations -that are making this Convention, and
the nations that remain in the group as a whole will decide whether
they accept or do not accept those reservations. If it is stated
here that no reservation can be made to the Protocol, I would not
accept it. E/PC/T/TAC/PV/17
Mr. J. MELANDER (Norway): Mr. Chairman, I will only deal
with the point which is covered by the draft we have before us
in Document E/PC/T/W/319. I think perhaps one could find an
easier way of covering the freedom of action not only in regard
to the reservations in the Charter here but in regard to any
other point which might come up, if we added to the fourth line
in the formula "in any way prejudice their final attitude towards
the Draft Charter" and then end with the remaining two lines
".. for and International Trade Organization recommended
by the Preparatory Committee", and then cut out the two and a
half lines between.
CHAIRMAN: The Delegate of the United States.
Mr. LEDDY (United States): Mr. Chairman, we have heard
a very learned dissertation on international practice in this
field by the Delegate of Cuba, who has drawn upon authorities
whom I do not wish to question but the quarrel I have with his
statement is that I think it is beside the point. We are
signature of the
dealing with the/Final Act authenticating the text of the Protocol,
It does not commit anybody to do anything and therefore there is
no point in any reservations being made to signature of the
Uinal Act. Some of the countries were concerned lest their
signature of the Trade Agreement without reservation on their
part would prejudice their freedom to uphold reservations on
some provisions in the Charter. which is quite a dilfferent and
separate instrument, and that is the reason why the Tariff
Negotiations Working Party proposed this additional paragraph
to make crystal clear that signature or acceptance of the
Provisional Application of the Trade Agreement without reservation
would not prejudice the freedom of any country. to maintain
their reservation in respect to the Charter.
25
R E/PC/T/TAC/PV/17
We have two things - reservations to the Charter and
reservations to the Trade Agreement. With regard to reservations
to the Charter, I think we can discuss that in connection with
the Final Act because signature of the Final Act does not
commit anybody.
With regard to the reservations to the Charter, I think
we would get along f- stor if we considered them probably .after
we have considered the question of supersession because the
two are very closely linked. As I understand it, the Australian
Delegation is busy preparing a dr ft on supersession which may
be ready early next week and I suggest we should take up
reservations to the Trade Agreement after we have agreed upon
that draft
CHAIRMAN: The Delegate, of India.
Mr. B. N. ADAKAR (India): Mr. Chairman, we would like
to support the amendment which is suggested by the Delegate of
Norwvay it has the advantage of avoiding reference to reservations.
It has also, of course, the disadvantage of creating some
uncertainty about the final attitude of Delegations which have
not made reservations because, as it is stated, it gives
freedom to all the above-mentioned Governments to determine
their final attitude towards the Draft Charter in the World
Conference.
Even so, since it is a Drat Charter that we recommend to
the World Conference it would be best to emphasise that character
of the document. We would therefore support the amendment
suggested by the Norwegian Delegate.
R R 27 E/PC/TAC/PV/17
As regards the pointwhether it would be permissble to make
reservations to the General Agreement as distinet from the Final
Act , what I am going to say is very much on the line of what was
just states by the Delegate of the United States. It is certainly
with considerable interest and enlightenment that we listened to
the observations made by the Delegate of Cuba. I must confess
that the Indian Delegation was under the impression which, after
listening to the Delegate of Cuba, we feel was wrong, that only
reservations which are unanimously acceptable to the signatories
of the General Agreement may be attached to the General Agreement.
From the authorities quoted by the Delegate of Cuba, it appears
here that any Delegation wishing to make reservations could make
them even at the time of signature and that other signatory
countries, the signatory making the reservation, will have to
decide its attitude towards the reservation at the time of
ratification.
Even so, we think that before we accept the conclusion
suggested by the Delegate of Cuba we will have to obtain clarifi-
cation on certain points. It seems to us that from a practical
point of view the conclusions suggested by him might not be
desirable. It would have been necessary for delegations which
have resvations to make, to make these reservations at the time
of signing the General Agreement in the manner suggested by the
Delegate of Cuba, if that were the last treaty they were going to
sign on this subject. In this particular instances, that is not
so. It is accepted that Part II of the Gneral Agreement from
the point of view of these reservations is going to be superseded
by the provisions of the Draft Charter. R. E/PC/T/TAC/PV/17
It has also been provided that any country which feels
hesitant about accepting the provisions in Part II can delete
its signature to that Agreement. In the circumstances, any
country has, by virtue of the new paragraph which is proposed
to be inserted in the Final Act, the right to maintain its
reservations at the World Conference and to convies the
countries which are meeting at the World Conference to get them
to accept these amendments in the Draft Charter. Then all that
the country would wish is that the amended Provision should be
substituted for the corresponding provision in Part II of the
General Agreement.
On the other hand, if it fails to convince the other
Delegates of other countries which are meeting at the World
Conference, then it will have failed, I think, for all time.
It will then have to decide whether it will accept the decision
of the World Conference or whether it will keep out of the whole
show altogether.
Therefore, from a practical point of view, there is nothing
to be gained by attaching the Protocol of Reservations to the
General Agreement because any Delegation having reservations to
make can either take up the matter at the World Conference and
convince the World Conference or, if it fails at the World
Conference, it can decide what to do.
28 29 E/PC/TAC/PV/17
In these circumstances, while on the factual position, we
thank the Delegate of Cuba for the clarification which he has
given, we are not quite sure as to the practical effect of the
procedure which he has suggested. From that point of view, the
most important factor on which our decision should depend is with
what case and elasticity we would secure the substitution of
Part II by the corresponding provisions of the Charter adopted at
the World Conference. If that procedure is not acceptable to us,
or if we have any fears or apprehensions about that procedure, then
of course this question will become very important.
Therefore I, am inclined to agree with what the Delegate of
the United States has just stated, that the question is linked up
very vitally with paragraph 1 of Artlicle XXVII on Amendments.
CHAIRMAN: The Delegate of Chile.
Mr. F. Garcia OLDINI (Chile) (Interpretation): Mr. Chairman,
even if I do not agree with the distinction which was made by
the Indian Delegate between the juridical and legal point of view
and the practical point of view in solving this problem, because
I think that here this is a juridical question, nevertheless I
must raise this question now from the practical point of view. I
think that the text here, and the comments which have just been
made by the United States, Norwegian and Indian Delegates, only
increase the confusion with which we are struggling now. It is
not the Charter which is under discussion here, and therefore it
is not the upholding of reservations to the Charter, and I do not
see why we should speak here of the right to maintain or uphold
reservations at the Havana Conference, reservations which were
made regarding the Charter, because this is a right which exists
anyhow and a right which could not be denied to any Member; every
Member will have the right to do that, whether we state it here or
not. P. 30 E/PC/T/TAC/PV/17
One may have gathered the impression that by signing this
Agreement this right was more or less abandoned, and it may be that
from one point of view the draft to which I at one time seemed to
have agreed may have given that impression.
Nevertheless I thank the question here is the question of
reservations to be made to Part II of the Agreement, reservations
which have been made to the corresponding Ariticles of the Charter.
During the discussion we said more than once that the same
reservations had to be made to the same Articles of the Charter and
that we should not adopt an attitude which would put us in
conflict with ourselves and which would be completely illogical.
We could not say one day "No", to a text, and then the next day
agree to it and think that the text is all right. We have to
follow the same line which will safeguard our vital interests and
if reservations have been made to certain texts and Articles of the
Charter then we have to make the same reservations for Articles
of the agreement.
Mr. Chairman, you stated that no reservations should be made
to the Agreement. I am sorry to say that I oppose this view. I
say that reservations should be made to the Agreement, and, after
the demonstration which was made in the most brilliant manner by
the Cuban Delegate it is certain that reservations should be made
both at the time of signature of the Agreement and at, the time of
the ratification of the Agreement.
But, Mr. Chairman, I must say I am tired of fighting as I have
fought for the last five months, against positions which have been
taken up and from which people do not seem willing to budge. For
that reason I was ready to accept discussion of the text
contained in this paper, and that text I was ready to accept, but in
that text one should mention the question of reservations. The
text which we have now before us does not mention this queston of P. 31E/PC/T/TAC/PV/17
reservations to the Agreeement. It only mentions the right of
parties to uphold reservations which they have made to the Charter.
But as I have stated this is not the problem. The problem is
reservations to the Agreement, reservations which have to be made
as regards the Agreement if Articles of the Charter are reproduced
in the Agreement. Any draft which does not consider this fact
would not be befitting and therefore I must insist to have such a
text inserted in our Agreement: that is that text must state that
the reservations which have been made regarding certain Articles
of the Charter are maintained regarding the Articles of the
Agreement when those Articles of the Agreement reproduce the
Articles of the Charter.
The text could read (and of course this would only be a
tentative draft and could be modified):
"It is understood that the signature of the Agreement does
not imply the withdrawal of any of the reservations which
have been made regarding the Charter and which are inserted
in the General Agreement".
But the text which we have now before us does not refer at all to
this question.
Therefore Mr. Chairman, unless we insert this principle, which
I think is essential because if we do not we would be quite
beside the point, I could not agree to any text which would not
take this principle into account. V
M. ROYER (France) (Interpretation): Mr. Chairman, I
hesitate to intervene because I fear that the Chilean Delegate
will accuse me of adding to the confusion of this discussion.
It seems to me, nevertheless, that the distinction between these
two questions has been clarified by the various statements which
have been made. I think that the problem could have been
simplified and part of this discussion might have been avoided
if, as I had proposed, the words "without reservations had been
inserted.
it is obvious that the right to upheld reservations and
to present new reservations at the World Conference is preserved,
and from a psychological point of view, perhaps, this should be
stated, because to some Delegations there appears to be a
contradiction - at least on the surface - between the fact of
not having made reservations at the time of signature of the
Agreement, and the right to present reservations at the World
Conference.
Therefore, I think that the Committee must give satisfaction
to those Delegations who would ask for a provision covering that
case, and I think the solution of this question is found in the
amendment which was presented by the Czeohoslovak Delegation.
On the second point, I quite agree with the Delegate of
Cuba that it is the sovereign right of the contracting parties
to make reservations at the time of signature or at the time of
ratification of any Agreement, and whether or not we say anything
here about that right, does not alter it. The Governments
have the right to make reservations at the time of signature,
and the Parliaments have the right to make reservations at the
time of ratification of an Agreement; but the other contracting
parties have the same sovereign right to accept, or not to accept,
32 V
33
E/PC/T/TAC/PV/17
the adherence of the other contracting party which has made
reservations, and this is also a sovereign right.
The question is complicated as regards the General
Agreement by the following two factors: first, that there
will not only be one time of signature, but the times of
signature will be staggered in respect of the various
Governments; and the second factor is that we have up-to-date
no definitive text of the Charter, and the text of the Charter
which will be adopted at Havana may be modified - I hope it
will not be, but nevertheless it may be modified by the World
Conference at Havana.
Therefore, it seems to me that we have various practical
problems to solve. There are two ways in which we could solve
these problems. Firstly, if reservations are to be made at
the time of signature, the States intending to make
reservations to the-Agreement could deposit these reservations
now with the various Delegations, and they could be taken up for
discussion by those various Delegations now. I do not think
that this would be a happy solution, because there would be
certain to be more reservations made now than there would be
likely to be in a few months time.
Secondly, we could permit - I use the word: "permit"
because this is a right of every contracting party - the
contracting parties to sign the Agreement and to make, at
the same time, reservations, but, of course, the text of these
reservations would have to be communicated in advance to the
other contracting parties. Therefore, the other contracting
parties would have to accept in writing, or would have to
accept or refuse at a meeting of the contracting parties.
Such meeting could take place, for instance, at the Havana E/PC/T/TAC/PV/17
Conference: this has been provided for , it seems, in the text
of the Agreement, and following the consultation, the adherence
or the non-adherence of the contracting party making reservations
would be decided.
In the case of reservations made at the time of ratification
the procedure to be followed would be the same. The text of
these reservations would be forwarded to the other contracting
parties, and a decision would be made by the other contracting
parties and the contracting party making the reservations, with
due knowledge of the situation.
The solution of this second problem would, however, be
tackled better once we had studied the revised text of
Article XXVII, dealing with the substitution of the provisions
of the Charter for the provisions of the Agreement, and here I
agree with what was said by the United States and Indian
Delegates.
Therefore, I think, regarding the first question, we could
insert a note here stating that if parties wish to sign the
Agreement without making reservations, the right to make
reservations on the corresponding text of the Charter at the
Havan Conference would not be withdrawn from those Delegations.
CHAIRMAN: The Delegate of the Lebanon.
Mr. J. MIKAOVI (Lebanon) (Interpretation): Mr. Chairmen,
my Syrian colleague and myself adhere completely to the opinion
stated by the Delegate of Cuba, and therefore we suppert his
point of view.
CHAIRMAN: Are there any other speakers?
Dr. Gustavo GUTIERREX (Cuba): Mr. Cha irman, reservations
34
V V E/PC/T/TAC/PV/17
are the result of diplumatic practice. Reservations are a form
of flexibility in order to reconcile different points of view
and to allow time in which to remove the obstacles to agreement.
If we take a stand against reservations, instead of a flexible
rule governing the relations of foreign states, we will be
establishing a form of "take it or leave it", end that would have
a very bad effect on international relations. That is why we
have to try to find a way out of this difficulty.
I listened with interest to what the United States Delegate
said, but I think that the Final Act is a document that relates
exclusively to the General Agreement on Tariffs and Trade and all
the Protocols that the Committee have considered it necessary
to establish in order to make it work.
We realize that the idea of having a General Agreement on
Tariffs and Trade before having a Charter of the International
Trade Organization entails a very difficult task, but we do not
solve problems simply by pushing them to one side. If we do not
tackle this matter here in the Final Act with a simple
declaration, then we would increase our difficulties, because
nobody in the world - neither this Committee, nor the Big Five, nor
all the Great Powers of the world, could prevent a nation from
making reservations. In fact, there could even be a clause here
that reservations are not admitted, and when this document had,
for any reason, to go to a Parliament, or even, the United States
Congress, it is very possible that they might make new
reservations which were not made by the Delegate, and nobody hasl
challenged that right of Congress or Parliament to make those
reservations. Therefore, I think that it is bad policy to hide
one's head in the sand, instead of trying to solve the problem.
I am told there is a wild animal in Australia that does that.
A
S } V E/PC/T/TAC/PV/17
We do not believe that, because everything Australian we know
is very keen and very intelligent - therefore, I do not think
that that wild animal comes from Australia.
The suggestion of our Norwegian colleague to eliminate the
clause reminds us of the story of the Grneral who was reviewing
a regiment at a certain barracks, and as he passed by, he noticed
that some of the men were much taller than the others. The
General's idea of obtaining uniformity was to immediately order
the heads or legs of those men to be cut off: I do not think
that that is the way we should tackle this problem:
We have here a juridicial problem which is out of our
control. We cannot solve that problem simply by saying that
it does not exist. It is as if we were to say, now, that there is
no sun, while the sun is shining outside. To say that we should
wait until the Havana Conference to see if we can convince that
Conference, leaves the question in mid air. It is not that we
are afraid that we might not convince the World Conference, but
experience has shown that everything that is left to the future
continues to hang fire in the future, because although there will
be a Conference at Havana, there might not be a draft Charter of
the international Trade Organization. In that case, the whole
problem would remain in the General Agreement -that is the document
that is going to be put into effect almost immediately.
Our French colleague, with that peculiar characteristic of
the French mentality of finding solutions to a problem where
nobody else can (it is one of the most remarkable peculiarities
of his wonderful country),-has agreed with us on certain grounds
and has also agreed to the practical ideas of the others, and
the result is something which, it seems to me, could not work.
By way of a compromise, I suggest that we modify this text
1 37
V E/PC/T/TAC/PV/17
in the following manner. (I am trying to find a way out myself,
and, of course, this text would be subject to all sorts of
qualifications. I may fail to express it in English, but I
have no other language at my disposal in which to express my
ideas, and I know that my phraseology will not be elegant). I
suggest the text might read like this;
"...does not in any way prejudice their freed on to uphold
the reservations which they may have made to the provisions of
the draft Charter for an International Trade Organization,which
have been in whole or in part inserted in Tlhe General Agreement,
until a proper decision has been taken by the constitutional
organ of the respective countries and the rest of the contracting
parties".
In our opinion (we leave it to our British colleague to
suggest the final wording if the idea should be accepted) if we
establish something of this kind, it will mean simply that we are
not going to make any new reservations, but the reservations to
the text inserted from the Charter in the General Agreement are
there, with the same reservations that were attached to the
draft Charter; not permanently, but until the constitutional
organs of the respective countries (that is to say, the Government
or the Parliament as it may be) decide about the maintenance or
withdrawal of the reservations of the contracting parties.
, _ ,_ , 38 E/PC/T/TAC/PV/17
That would mean subject to the decision of the other Members of
the Organization that have signed the General Agreement, If these
Members accept the reservation as it is, the practice there presents
no prpblem. If they do not accept that reservation, the nation
making the reservation would only have two alternatives, either to
withdraw the reservation or withdraw from the result of the
Agreement.
o I dare, Mr. Chairman, to submit this compromise text to see
if !t is possible to find a way outf Is not - and I do not know
what is the opinion of the rest of the Committee - of course we do
iot,Intend to hold up this meeting more than is necessary.
CMAIRKAN: There appears to be general agreement on the
proposal that we should leave the question of whether or not the
reservations will be attached to he 'Agreement until we have had a
flnal look at the text which the Australian Delegation jas Just
propoto ed paragraph 1 of Article XXVII.
In the meantime, therv hare been a number of proposals made by
ouvprfs, delegations with regard to the text of this paragraph which
is now before us. the Delegations of Chile, Czechoslovakia,
1orway and Cuba have made proposals for amending the text. I have
examined these proposals and it would eem. that the most drastic
proposal., that is, the one furthest removed from the original text,
tahaht proposed by the Norieg.an Delegation. it is to delete
fifth,
most of the words which appear in the/sixth and seventh lines, so
that the paragraph will read somewhat as follows, after the words
"aocompanying Prctoaols": "does not in any way prejudice their
final attitude towards the Draft Charter of the International Trade E/PC/T/TAC/PV/17
Organization recommended by the Preparatory Committee.
Are there any objections to the proposal of the Norwegian
Delegation?
The Delegate of Cuba.
DR. G. GUTIERREZ (Cuba): Mr. Chairman, I oppose the proposal
because it means that it is intended to eliminate the declaration of
the Committee on the question of reservations to the General
Agreement, and, taken as that, I cannot accept it
CHAIRMAN: The Delegate of India.
MR. B.N. ADARKAR (India): Mr. Chairman, I would like to add
a few words to what I have already stated on the Norwegian amendment.
As I understood it, I thought that the Norwegian Delegate
suggested that the provision should read: "does not in any way
prejudice their final attitude towards the provisions in the Draft
Charter", not merely "towards the Draft Charter".
Further, I would like to point out that although this amendment
involves the suppression of the word "reservations" it has two
advantages, one, it would enable all countries to present
reservations at the World Conference, even if they have not made
any reservations here, that is to say, if the reservations made by
some countries here are carried, those other countries which have
not made reservations will be free to present new reservations to
other parts of the Charter in order to restore the balance of the
Charter.
Secondly, it also permits countries which have made reservations
here to present new reservations, and this draft paragraph merely
39
J. 40
speaks of the reservations which they may have made to the provisions
of the Draft Charter. The wider wording suggested by the Norwegian
Delegation would permit such Delegations to present new reservations,
even if they find it necessary to do so after a further examination
and study of the Charter.
The third advantage that I see in the Norwegian amendment is
that it deletes the reference to the word "Conference", thereby
covering a point which was made just now by the Delegate for Cuba.
He would like to have these reservations taken into account by other
contracting parties even if there is no World Conference. If there
is no World Conference then this paragraph will not operate at all
because it states here that the signature of the Final Act of the
General Agreement or its Protocols does not prejudice the right of
the signatories to maintain their reservations at the World
Conterence until a decision has been taken by the proper constitutional
authorities, and so on, adding to that the amendment suggested by
the Delegate for Cuba, but if there is no World Conference it does
that
not follow from that/a country which has made reservations will
automatically withdraw their reservations.
Therefore, it seems to me advantageous to delete reference to
both factors, namely, the particular reservations which have been
made here, because there may be other reservations, and also to the
World Conference, because there will be no reservations.
Let us recognise the fact that the Charter that we are
presenting to the World Conference is a Draft Charter, and therefore
all countries, not merely the countries which have made reservations
here, but all countries have a right to reconsider the ir attitude
E/PC/T/TAC/PV/17 41
E/PC/T/TAC/PV/17
towards the provisions of the Draft Charter.
Thank you, Mr. Chairman.
CHAIRMAN: The Delegate of Norway.
MR. J.MELANDER (Norway): Mr. Chairman, first of all, I think
it is an improvement to let my amendment include the words "the
provisions of", as suggested by the Delegate of India.
Secondly, in answer to the Delegate for Cuba, I would just say
that this text, as far as I understand it, is not intended to cover
that position. It is only intended to cover the point which is
referred to in the opening sentence of this paper; that 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 - and also to the Havana Conference.
That is how iI interpret it. The point raised by the Delegate for
Cuba, I think, would have to be covered by an additional sentence
dealing with that particular point. R
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, In
support of the remarks which the Cuban Delegat has made, I will
try once more to find a solution which may satisfy evryone here.
The Chilean Delegate, who unfortunately was obliged to leave the
meeting, has agreed on the text which I am now about to propose.
The text which I am going, to propose may have the double advantage
of giving, satisfaction to those who would like to adopt the
Norwegian proposal and also of giving satifaction to the Chilean
Delegate and the other Delegates who share his view. The text
would be: "It is understood that the signature of the Final Act,
or the signature or application by any of the above-mentioned
Governments of the General Agreement or its accompanying Protocol,
does not in any way imply the withdrawal of reservations formulated
in regard to the provisions of the Draft Charter which have seen
inserted in the General Agreement."
It seems to me this formula would have the advantage of
covering the cases made by the Cuban and Chilan Delegates
and also of avoiding any discussion about the various points,
the time, the possibility and the conditions of formulating
reservations.
CHAIMAN: Would that proposal of the French Delegation meet
with the approval of the Delegations who have submitted various
proposals.
Mr. J.M. LEDDY (United States): I think that this would
prejudice the decision with regard to the reservations of the
Trade Agreement and its Protocol. I wonder whether it would
not be better, in regard to reservations, simply to set the whole
thing, aside, as I thought we had agreed to do, until we have a
settlement of the question of supersession.
42
E/PC/T/TAC/PV/17 43
CHAIRMAN: I take it that there were, two points. One point
was the question made by the Cuban Delegate of the right of
delegations to submit serservations or to attach reservations to
their signatures to the General Agreement. The other point was
that reference should be made in the Final Act to the question of
reservations as covered by this paragraph.
I understood that the first question we agreed to defer until
after we had had another attempt to approve the text for Paragraph
1 of Article 27. I think we had to deal in some way with the
various proposals which had been made at this meeting for changes
in the text of this paragraph, and that is why I have taken up the
Norwegian proposal first because it seemed to be the one that was
furthest removed from the original text.
Dr. GUTIERREZ (Cuba): The Norwegian Delegate has stated that
his proposal is not intended to give decision to the problem
of reservations; but it is considered that this matter is within
the scope of Article 27 which should remain continuously open
without prejudice to returning to the Final Act if it is necessary.
I do not see any inconvenience if we can take this proposal for
discussion.
CHAIRMAN: The Delegate for the United States.
Mr. LEDDY (United States): The only point, Mr. Chairman,
we that the proposal made by the French Delegate seems to imply
be
that there would reservations in the Trade Agreement, and that is
a question that we have not yet gone into and I would prefer not
to prejudice our own view. There are legal questions, but there
is the main question of substance as to whether we are to reach
agreement on the Trade Agreement without reservations,. and we should
like to have a full opportunity to go into that and to settle it
after discussion. For that reason we should prefer a language
which would not prejudice the position one way or another.
E/PC/T/TAC/PV/17 44
CHAIRMAN: The Delegate of Czechoslovakia.
Dr. Z. AUGERTGER (Czechoslovakia): Mr. Chairman, I fee1
that the proposal of Mr. Melander is actually identical with mine
because what we had in mind was that we were acting here in
regard to the Draft Charter as experts and not binding, our
Governments. We have several times stated that I do not
know if some Governments have already approved the Draft
Charter; in any case, this is not so in regard to the Czecho-
slovakian Government. Any Government is free, I think, to
decide to go or not to go to Havana; any Government is free
to decide to give its instructions to its delegates in Havana,
supposing, there is some change of government in some country.
I understood that it is quite clear among ourselves and I would
refer to the remarks of Mr. Speekenbrink who stated that he made
no reservations at all because it w...s understood that anybody
was free at Havana to come forward with a proposal. Of
course there will be as few amendments and proposals as possible
but this possibility cannot be the case here. So I would support
the amendment of Mr. Melander because I feel it is the same as
my own.
E/PC/T/TAC/PV/l7 E/PC/T/TAC/PV/17
CHAIRMEN: As I urderstand the proposal just made by the
Delegate of the United States, it is that we adjourn the
discussion of this paragraph to be inserted in the Final Act,
together with all the proposals which have been made to amend
that paragraph, until after we have taken up consideration of
the first paragraph of Article XXVII.
(To Mr. Leddy): Is that correct?
If it is decided to adjourn the discussion, it will have
priority over the discussion of any other proposals. I would
therefore like to know if any Delegate objects to deferring
further consideration of this proposal until we have discussed.
Article XXVII.
There being no objections, I take it the proposal of the
United States Delegation is approved.
Before leaving the Final Act, I think we might deal with
the formula which appears at the bottom of Document E/PC/T/W/319.
Are there any comments on this formula?
I take it then that the text of the formula is approved.
M. ROYER (France): (Interpretation): Of course, I reserve
the right to alter the French text, because there is a definite
mistake in it.
CHAIRMAN: That will be a matter for the Legal Drafting
committee.
I think we can now take up the Protocol of Signature, which
.~~~~~~~~~~~~~~~~~~~~.
appears on Page 60 of Document E/PC/T/189. If there are any
armgrapcnts on the first 'rsaph, it will.bea matter of drafting
We will thErefo2e go on to the second paragraph.
The Delegate of China.
Dr. O... CHEN (China) Mrx Chairman, we would like to add
t rds "the Republic of" before "China" in the third line of
the. first paragraph. E/PC/T/TAC/PV/17
CHAIRMAN : Due note will be taken of the desire of the
Chinese Delegation always to be called The Republic of China.
(To Dr. Chen): I take it that will apply everywhere.
Are there any other, comments?
The Delegate of Cuba,
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, the title of
this Protocol - Protocol of Signature - does not say anything to
me. All of them are Protocols of Signature. I think we
ought to call this the Protocol of Observance of the Draft Charted.
Perhaps the Legal Drafting Committee can discuss it, but we must
certainly give it a name. Protocol of Signature does not say
anything.
CHAIRMAN: The Delegate of the United States.
Mr. LEDDY (United States): Referring to the second para-
graph, this Protocol, I believe, was drafted at a time when the
general plan was that all countries would singn the Protocol at
the same time on the same day. Therefore; the second paragraph
reads: "Having this day, through their duly authorized Repre-
entatives, signed the General Agreement ......." etc.
I think there are really two ways of settling this: either
we can change it to read "Having this day signed the Final Act
of the Second Session, to which is appended a General Agreement
on Tariffs and Trade", or we can simply say. "Having signed the
General Agreement on Tariffs and Trade." The difference between
them is this: that the first alternative assumes that all countries,
in addition to signing the Final Act at Geneva, will sign this
Protocol relating to the Charter.
The second alternative envisages that the Protocol relating
to the Charter will be signed only when the Trade Agreement is
signed.
S.
46 S.
I think perhaps it might be well - unless some countries have
difficulty with it - to envisage the signature of this Protocol
at the time of the signing of the Final Act.
CHAIRMAN: The Delegate of the United States proposes that
this Protocol of Signature should be signed at the same time as
the signature of the Final Act; this would involve a consequential
change in the second paragraph. It would then read: "Having
this day, through their duly authorized Representatives, signed
the Final Act of the Second Session of the Preparatory Committee,"
etc.
I think we had better discuss this point before discussing
the proposal of the Delegate of Cuba, because that would affect
Whatever decision we make regarding the title of the Protocol.
The Delegate of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, I think I
heard the Delegate of the United States make an alternative proposal;
that is to say, that thin text should read as you have said, or
simply say: "Having signed here an Agreementr, without any
reference to the day. It is an alternative proposal and I think
it is very important; for example, I am entirely in agreement with
the second proposal but I am not in agreement with the first.
CHAIRMAN: The Delegate of the United States.
Mr.LEDDY (United States): Yes, Mr. Chairman I did present
two alternatives, but I thought we would prefer the signature at the
time of the signing of the Final Act. That was the proposal I made.
CHAIRMAN: That was my understanding, too.
Dr. Guastavo GUTIERREZ (Cuba): The Final Act? Then, Mr.
Chairman, I think tha Recond proposal is far better than the first
E/PC/T/TAC/PV/17
47 S. E/PC/T/TAC/PV/17
one, because if you take the Protocal as a whole, it says "Having
this day ........ agree that the objectives laid down in the
Preamble to the Agreement ........", so if you take away the
Agreement and you make a reference to the Final Act, what in the
world are we doing here? The real connection of this Document
is with the General Agreement. If you take it away, the
connection with the General Agreement, in my opinion, has no sense,
CHAIRMAN: The Delegate of the United States.
Me. LEDDY (United States): My poposal had in view the
reference to the Final Act, which has attached to it the text of
the General Agreement on Tariffs and Trade, and the Agreement here
would simply be that the objectives laid down in the Preamble to
the Agreement could best be attained, etc. In other words, you
would still retain the reference to the General Agreement but only
as an appendix or attachment, so to speak, to the Final Act.
This is surely a preambulatory part of the Protocol, at any rate;
the substantive part is in the last paragraph.
CHAIRMAN: The Delegate of France.
Mr. ROYER (France) (Interpretation): Mr. Chairman, I would
like to second the statement just made by the Cuban Delegate. We
have already made an innovation here on this question, by applying
an Agreement before it comes into force. There was a novel by
Wells Which described a Time Machine: here we are going to have
an Agreement which will enable us to go back on time. It would
seem rather strange. We are to sign the Agreement and the
Protocol at the same time, but really I do not think we could state
here that we are going to sign a Final Act to which the Agreement
and the Protocol and so forth, would be appended.
CHAIRMAN: The Delegate of New Zealand.
48 S. 49 E/PC/T/TAC/PV/17
Mr.J.P. JOHNSEN (New Zealand): Mr. Chairman, I also
support the view put forward by the Delegate of Cuba, and now
also by the Delegate of France. I am afraid that we could
not commit ourselves to an action based on signature of the
Final Act. That action would have to be in conformity with
the signature of the General Agreement.
CHAIRMAN: The Delegate of India,
Mr. B .N. ADAKAR (India): Mr. Chairman, the Indian
Delegation also associates itself with the view expressed by
the Delegate of Cuba on this point. E/PC/T/TAC/PV/17
CHAIRMAN: The Delegate of China.
Mr. D.Y. DAO (China): Our views are the same as those
expressed by the Delegate of Cuba. Because to sign the Final Act,
and to assume the obligation to observe to the fullest extent the
principles of the Charter are not the same thing.
CHAIRMAN: There does not seem to be my substantial measure
of support for the proposal of the United States Delegate and
therefore I take it he does not wish to press it. I should like
to know what proposal he would make for the redrafting of this
second paragraph.
Mr. J.M. LEDDY (United States): The only amendment I suggest
here is to propose the suppression of the words "this day"; because
the signing of this document will take place upon different days by
different countries. I think, perhaps, we might just leave it that
the Legal Drafting Committee will look closely at the provisions
for signing this particular document and the provisions for
signing the other documents.
Perhaps one way of handling it would be simply to say:
"The Governments signatories of the General Agreement.
as we have now for the Preamble - and then list all the countries
represented here in the Preamble, although we are not sure that all
the countries represented here will sign the Agreement.
Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I am only
wondering what will happen to this Protocol if for instance some
country does not sign. So I suggest we take the old form, which
has many precedents, and start the Protocol in the following way:
"At the moment of signing the General Agreement on Tariffs
and Trade the undersigned, duly authorised ....." and then
"agree with the objectives" and so on.
P.
50 51
P. F/PC/T/TAC/PV/17
CHAIRMAN: The Delegate of Norway.
Mr. J. MELANDER (Norway): Mr. Chairman, I am in general
agreement with what Dr. Augenthaler just said, for the reason
especially that this Protocol may very well be signed after the
Havana Conference, and it would seem a bit odd to sign a Protocol
where you make certain references to a Conference which has not
already been held. I think it better to leave out that
reference and go directly to the main point which is the last
paragraph.
Mr. R. J. SHACKLE (United Kingdom): . small point , Mr.
Chairman. It seems to me that the form suggested by Dr.
Augenthaler would be quite all right, except that I feel you have
to make some reference to the Governments because this is not a
personal agreement between individuals, so you have to say
Something like "agree as follows on behalf of their respective
Governments" and then set out whatever the Agreement is. I think
it is necessary that there should be some reference to the
Governments. Otherwise I think the suggestion of Dr. Augenthaler
would be satisfactory.
CHAIRMAN: Could we agree on some such text as that and
meet Mr. Melander's point by deleting the reference to the
Conference and simply refer to the Charter?
Mr. J.M. LEDDY (United States): I do think we must refer to
the Charter recommended to the Conference by the preparatory
Committee. That is the only document that any of us know about,
and some of us will be signing before the Conference.
CHAIRMAN: Perhaps, as the hour is getting late and we have
to adjourn in order to be back here for our meeting at 9 o'clock
we could leave it to the Secretariat to redraft these first 52
P. E/PC/T/TAC/PV/17
three paragraphs of the Protocol in the light of our discussion
now, and then we could take up the matter when we meet again at
9 o'clock?
Mr. R. J. SHACKLE (United Kingdom): Mr. Chairman, what shall
we take at 9 o'clock?
CHAIRMAN: I want to just mention the order of business which
I propose to take up, the various matters still outstanding.
After we have dealt with this Protocol of Signature, I think
perhaps we should take up the Protocol relating to Occupied
Territories, which is based on the proposals submitted by the
United States Delegation then the Protocol of Interpretative
Notes: then the various Annexes to the General Agreement on
Tariffs and Trade, and then, if we still have time, the Report of
the Sub-Committee on Article XXVI, Modification of Schedules, Then,
if there is still time, I propose that we take up the texts
proposed by the Delegation of the United States for the new
Article XVII, and XXIII - Joint Action by the Contracting Parties;
but I take it we will be lucky if we reach those two points
tomorrow.
M. ROYER (France) (Interpretation): Mr. Chairman, is it
possible to postpone until tomorrow the discussion on the Protocol
relating to Occupied Territories? We are awaiting instructions
from Paris and if this discussion were to take place tonight I am
afraid I would not be in a position to express an opinion on the
subject.
Mr. R. H. SHACKLE (United Kingdom): Mr. Chairman, I support
that.
Mr.C.H. CHEN (China): I also support that.
CHAIRMAN: If that is the general wish we will postpone
discussion on the Protocol relating, to Occupied Territories until
tomorrow.
The meeting is adjourned.
(The meeting rose at 6.10 p.m.) |
GATT Library | df897mx3842 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Seventh Meeting of Commission A, held on Tuesday, 3 June, 1947 at 2.50 p.m. in the Palais Des Nations, Geneva | United Nations Economic and Social Council, June 3, 1947 | United Nations. Economic and Social Council | 03/06/1947 | official documents | E/PC/T/A/PV/7 and E/PC/T/A/PV.7-8 | https://exhibits.stanford.edu/gatt/catalog/df897mx3842 | df897mx3842_90240069.xml | GATT_155 | 14,044 | 85,128 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/A/PV/7
3 June 1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOMYMENT.
VERBATIM REPORT
SEVENTH MEETING OF COMMISSION A, HELD ON
TUESDAY, 3 JUNE, 1947 at 2.50 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 Document Clearance
Office, Room 220 (Tcl.2247). S - 2 - E/PC/T/A/PV/7
CHAIRMAN: Our Agenda comprises the study of Articles
14, 15, 15A and 24 of the Draft Charter. You will find all
the information you need in Document W.150. You have before
you also the New York Draft. There you will find, as is noted
in Document W.150, that at New York two Delegates made a
suggestion with regard to the application of the rules on
preferences. I take it that we will not start the discussion
with that but postpone it until we have discussed Paragraph 2
of Article 14.
The next point we come to is what is called specific
Comments, on Page 10 of the New York Draft. These Specific
Comments also relate to Paragraph 2, that is, to preferences,
and before we deal with that we must deal with Paragraph 1.
You will find on Page 2 of Document W.150 a communication
from the French Delegation.
CHAIRMAN (Interpretation): Does the Delegate of France
wish to complete the commentary which appears on Page 2 of
Document W.150?
M. Pierre BARADUC (France) replied in French - not
interpreted.
Dr. Gustavo GUTIERREZ (Cuba): On Page 2 of Document
W.150 it is said the Cuban Delegation reserves its right to
present amendments at the moment Commission A begins the discussion
of this Article, or before that date. I wish to ask the Chair
if this is not a proper moment for the Cuban Delegation to make
a statement.
CHAIRMAN: It would certainly be the right moment to do
this if the Cuban Delegate had sent his suggestion to me; I think
he has not. So I would invite him now to present his suggestion. S -3 - E/PC/T/A/PV/7
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, We have
really been very hesitant to take any of the time of the
Commission in relation to this matter. We were indeed expecting
that, with the many amendments which have been presented to
Articles 14 and 24, we could find a way out of our problem.
Nevertheless, we consider that we must state clearly our
position according to the experience we have had in the tariff
negotiations.
The Cuban Delegation is of the opinion that it is
inconsistent with the purposes of the Charter and with the basic
idea of a multilateral agreement, which aims at the removal
of unnecessary trade bariers and customs duties, that the
concessions made by ono Member should have to be granted to
another Member, even if the latter were unwilling to fall
into line with those Members who readily accept a multilateral
agreement based upon reciprocal and mutually advantageous
concessions between all Members.
Article 24 already provides a remedy for the extreme
case in which a Member has failed to fulfil, within a reasonable
period of time, its obligations under Paragraph 1 of this
Article. But this seems to refer only to the case in
which the Organization finds, as sentence 2 of Paragraph 3
states, "that the Member has, without sufficient justification,
having regard to the provisions of the Charter as a whole,
failed to negotiate" with the complaining Member.
The Cuban Delegation understands that this covers the
case in which a Member has rejected the negotiations, but
not the different situation, which may be not less serious,
of its refusal to make reasonable concessions equivalent to
the offers made by another Member. S - 4 - E/PC/T/A/PV/7
Under these conditions the concessions granted in the
interest of all Members who are co-operating to create a
genuine multilateralism lose their real character and
become a unilateral obligation of one Member in favour of
another
In order to avoid that the progressive idea of a real
multilateralism in international trade, to which the Cuban
Delegation adheres, could be discredited by such undesired
and undesirable consequences, and to make fully clear the
inter-dependence existing between the obligations set forth
in Articles 14 and 24, the Cuban Delegation suggests that
there be inserted in Article 14, Paragraph 1, after the
words "shall be accorded immediately and unconditionally",
the words "subject to the provisions of Article 24".
The Cuban Delegation also suggests that a new paragraph,
4, be added to Article 24 to read as follows:
Article 24, Paragraph 4.
"Paragraph 3 will apply correspondingly if
offers made by one Member in accordance with Paragraph
1 were not met by equivalent concessions of the other
so as to make possible a reciprocal and mutually
advantageous agreement on tariff and/or other charges
on imports, and if the first Member considers that
its interests would be seriously prejudiced by the
fact that nevertheless its multilateral concessions
could be claimed by the other Member on the basis
of the Most-Favoured-Nation clause". S
5 E/PC/T/A/PV/7
Furthermore, the Cuban delegation is convinced that the
preferences deliberately kept in force as a result of careful
deliberations should be protected. Therefore, the Cuban
delegation proposes that paragraph 1(b) of Article 24 should
read as follows:
"All negotiated reductions in Most-Favoured-Nation
import tariffs shall operate [automatically] to reduce
or eliminate margins of preference, as far as the Member
that enjoys the preference and will be affected by such
reduction agrees. No margins of preference shall be
increased, after the negotiations are completed." CHAIRMAN: It is in the terms of our rules of procedure that
amendments or proposals must be submitted by a certain date, and
that amendments or proposals submitted after that date will not be
dealt with in the Commission but transmitted to such ad hoc sub-
committee as may be constituted for dealing with the Article con-
cerned. I wonder whether it would be satisfactory to the Cuban
delegate that his statement be written and presented to all the
delegations in English and French and sent over to the ad hoc sub-
committee which I take it for granted we shall be obliged to con-
stitute.
DR. GUSTAVO GUBIERREZ (Cuba) (Interpretation): The Cuban delega-
tion has no objection, but as the case presented by the Cuban delega-
tion is involved in amendments presented by all the delegations we
will take part in the debate and raise it again in its place.
CHAIRMAN: Does anyone want to speak on the Cuban declaration
now? This not being the case I think we abide by the rules of our
procedure, but obviously every delegate has the right to have at the
back of his mind what the Cuban delegation has just said.
(continued in French) (Interpretation): I would like to come
back on what I said a few minutes ago, come back to the declaration
made by the French delegate. It is not, properly speaking, an
amendment. It is a declaration by which the French delegation
draws the attention of the conference to the difficulties which the
French administration meats in applying that paragraph 1 of Article
14 and with certain points of Article 16.
E/PC/T/A/PV/7
P. - 6 - E/PC/T/A/PV/7
- 7 -
M. BARADUC (France) (Interpretation): Mr. Chairman, you may
well consider that the point raised by the French delegation on
page 2 of document 150 is a point of detail. As you pointed out
yourself, this is not exactly an amendment which we want to propose
but it is an old story which the French delegation has had an
opportunity more than once to explain to members of this
conference. We brought this point up in our meeting in London,
again in the Drafting Committee in New York, and, if my recollection
is correct, also at our present meeting in Geneva.
We had hoped until recently that it would be possible to
amend the Draft Charter so as to introduces in the clauses of the
Charter this different distinction between country of origin and
country of export of certain goods. This is a traditional
discrimination which exists in French legislation, and it would
have suited our own legislation had the Charter recognised this
principle which is important to us.
As things are now, we do not want to press our point, but feel
that we will require a certain delay after the Charter has been
signed to adjust our legislation to the clauses contained in the
national Charter. Such adjustment in our own national legislation
will not be possible until such time as the general agreement on
tariffs, which will presumably deal with Article 14, has been
signed.
When the Charter comes into effect, on the contrary, it will
be possible for the French government to consider the necessary
amendment in our own legislation so as to bring it into harmony
with the clauses of the Charter. --
Thice only practal question that I wantCommiasi the %,.rsslon
is whether membemmiof oh e Co=.-ssicnconsider that the French
government, considering the peculiarity of our legisdlation, woul
X - 8 - E/PC/T/A/PV/7
be justified in asking for a certain delay after the Charter has
been signed, so as to adjust our own legislation to the clauses of
the Charter.
CHAIRMAN (Interpretation): If nobody asks for the floor, I
will try to answer the question put by the delegate of France.
If I may say so, I am gratified to understand that the
French delegation does not insist or any change in the Charter
itself, but that it expects, at the time when the general tariff
agreement would be signed, some understanding on the part of other
delegations if the French government does not succeed at that time
to bring its own legislation on the same level to comply exactly
with the Charter.
This being understood, then it simply means that the other
delegations will show the confidence that they have that French
administration will be able to live up to its promises at the time
when the Charter itself will be signed.
M. A. FAIVOVICH (Chile) (Interpretation): Before speaking
about the observations of the French delegate. I would like to
ask him whether his intention is to suggest that in some way or
another the Charter itself mentions the fact that the Commission
and the Conference would allow the French government a certain
delay to comply with the clauses of the Charter.
M. BARADUC (France) (Interpretation): The French delegation
leaves it entirely to the Commission to decide whether a note should
be made in the tariff agreement itself, or whether it should
simply be mentioned in the report of our work generally.
CHAIRMAN: The delegate of Chile.
J. G. E/PC/T/A/PV/7
Mr. FAIVOVICH (Chile) (Interpretation): I wish to thank
the French Delegate, Mr. Chairman, for his commentary upon the
proposal which he has made; but even though the Charter does not
specifically mention the fact that each of the signatory powers
will have to adjust its national legislation to the clauses of the
Charter, such procedure goes without saying, and the necessary
adjustments will have to be made by all necessity before any
Member can become a party to the Draft Charter.
If the French Government consider that in view of their
peculiar legislation they will need a certain delay in order to
adjust their legislation to the clauses of the Charter, the
provision of such additional delay must by all necessity be
considered as an Amendment to the clauses of the Charter which the
Commission is now considering. Such Amendment, as a matter of
fact, would give the French Government a preferential situation,
and could only be introduced in the Charter if it resulted from
an agreement of all the Members here, and was treated as an
Amendment.
You have, Mr. Chairman, stated that we should consider this
commentary of the French Government in a spirit of harmony and
of confidence, but I wish to recall that such confidence has not
always existed in other respects; more particularly in a certain
Amendment which the Chilean Delegation have moved to Article 14
of the Draft Charter, the French Delegation were opposed very
strongly and did not consider that simple confidence would be
enough for understanding the point of view expressed by the
Delegation.
Secondly, although the French Delegate considers his solution
was given merely in the form of a commentary, it could only be G. - 10 - E/PC/T/A/PV/7
dealt with properly by this Commission in the form of an Amendment,
and should be dealt with as such.
When you refer to delay you refer to something entirely
indeterminate, and that delay the French delegation would claim
in order to harmonise their resolution with the clause in Article 14.
To sum up my point of view, I suggest, Mr. Chairman, that
the French commentary and observation should be dealt with as an
Amendment to Article 14, and I for one an opposed to such Amendment.
CHAIRMAN (Interpretation): If I understood correctly what
the French Delegate has said, it is this: That he will foresee the
time when the French legislation will be modified in the way
contemplated before the signature of the Charter.
Therefore I do not see how we can talk about an Amendment to
the Charter. On the other hand he has declared that he cannot
take the responsibility of having his legislation amended before
the signature of the tariff agreement. Therefore, at the time when
the tariff agreement will be signed it will be up to the French
Delegation either to make a reservation or to bring to note in any
document an explanation of its attitude at a time when the tariff
agreement/is settled, promising on the other hand to have the legislation
moved at a time when the Charter will come into force.
Therefore I think this is the only practical way in which we
can deal with the present situation.
Does any other Delegate with to speak on this?
MR. SHACKLE (United Kingdom): I would merely like to say I
support your suggestion. E/PC/T/A/PV/7
CHAIRMAN: The Delegate of France.
M. BARADUC (France) (Interpretation): Mr. Chairman, I would
just like to tell you that you have correctly interpreted our point
of view, but in view of the discussion which has taken place here
this afternoon, the French Delegation will make it its business to
solicit its Parliament and its Government to bring about the
necessary changes in the legislation as soon as possible, and even,
perhaps, even if I cannot give any definite undertaking in that
respect, to have it modified before the signature of the Tariff
Agreement.
CHAIRMAN: The Delegate of Chile.
M. ANGEL FAIVOVICH (Chile) (Interpretation) I am sorry,
Mr. Chairman, but I still feel that there may be some misunderstanding
concerning this problem. If what the French Delegate wanted to say
was that France will have to adjust its national legislation to the
clauses of the Charter, I do not see the purpose of his declaration,
since all countries who are signatories of the Charter and of the
Tariff Agreement will have to act alike. If, on the other hand,
what the French Delegate had in mind was to state that after the
signature of the Charter and the Tariff Agreement France may need an
additional delay in order to harmonise its legislation with those inter-
national instruments, I stated, and I state again, that it implies
a preferential treatment in favour of the French Government which
can only be granted by way of an amendment in the Charter itself.
CHAIRMAN : The Delegate of France.
M. BARADUC (France) (Interpretation): Mr. Chairman, I want
to make more precise what I have just stated. The French Govern-
ment understands periectly well that it cannot sign the Charter
- 11 -
V V. -12- E/PC/T/A/PV/7
without having put its legislation in order in conformity
with the Charter. The only thing I wanted to point out
was that the French Government will have some difficulties
in putting its legislation into accord with the Charter before
the Tariff Agreement, which is to be signed in a very short
time, is completed. That is all I wanted to say.
CHAIRMAN: Well, I think this discussion has proved
rather useful because we now know that there is no question
of any preferential rights being reserved to the French
Government. If there has been any misunderstanding in the
minds of any of the Delegates, that is cleared away by the
declaration of the French representative; and we are carried a
step further by his promise to do his utmost to be, if possible,
in possession of the revised legislation even when the Tariff
Agreement is signed. After all, it is not the signature but
the coming into force of the Agreement that is the legally
decisive thing.
The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, might I
add one small comment? The Charter, as it is now drafted,
makes no provision for signature. It is perfectly evident
that there will have to be signature if only to attest an agreed
text. If I understand all precedents rightly, there is no
necessity for a country, the moment it signs an agreement, to
have brought its legislation into conformity. It is when it
ratifies or -in modern parlance- when it accepts, that it is
expected to have brought its legislation into conformity.
CHAIRMAN: We pass on to the next item - the proposal of the V - 13 - E/PC/T/A/PV/7
United States Delegation for a slight but rather important
amendment of paragraph 1 of Article 14. You will see it on
page 3 of Document W/150. They propose to strike out the
term "national treatment" and to say explicitly "all matters
referred to in paragraphs 1, 2, 3 and 4 of Article 15". When
I said that it has considerable importance, I did not mean that
it altered the fundamental idea of the text, but simply that
it made the text very much clearer. ER - 14 -
E/PC/T/A/PV/7
CHAIRMAN: Any delegation wishes to speak about this
amendment?
M. STANISLAV MINOVSKY (Czechoslovakia) (Interpretation): Mr.
Chairman, the United States amendment which you have just read out,
refers to paragraphs 1, 2, 3 and 4 of Article 14. You will
in
remember that/Article 15 a certain number of amendments have been
submitted which appear on page 8 of W/150. Consequently, I
assume it would be preferable to dispose of those amendments on
Article 15 before considering the United States amendment on
paragraph 1 of Article 14. If this procedure will not be
followed, the Czechoslovakian delegation would have to reserve
their right to come back to Article 14 after Article 15.
CHAIRMAN: I can assure the Czechoslovak delegate that we
all wish to come back to the exact terms of Article 14 after we
have discussed Article 15. What I meant was simply whether we
want to get rid of the word "national treatment" and replace it
by the matters referred to in such and such paragraph of Article
15 which will be drafted and agreed upon at a later date. I
hope this is satisfactory. Does anybody else wish to speak on
the United States proposal? May I take it then that we are
generally in agreement with that proposal? Agreed.
The next point is the middle of page 3. The Australian
delegation proposes an amendment. It wishes to insert, after
the word "shall" the words "except as otherwise provided else-
where in this Charter", and the document 150 gives the comments
and arguments of the Australian delegation. You have already
read it. Does the Australian delegation wish to speak? - 15 -
E/PC/T/A/PV/7
Dr. H.C. COOMBS (Australia): At the risk of wearying the
Commission, I feel it necessary to take the opportunity of
introducing this very modest amendment to emphasize the point
regarding the attitude of the Australian delegation towards this
group of Articles as a whole. As you know, the Australian
government has, in the past, relied upon a system of commercial
policy which did not conform to the principles embodied in these
Articles, and it is the opinion of my government that the
departure from practices in this respect represented a major
change of policy and, from their point of view, a major sacrifice
of principles to which they have held very firmly in the past.
It is not our intention here to question the major principles
involved in this Article, but I would like to draw the attention
of this Commission to the fact that my government is willing to
accept these principles which date back historically to an
agreement entered into between the United States government on
the one hand and certain governments of the British Commonwealth
on the other. The agreement was concerned with the mutual aid
and exchange during the war, and an Article of that Agreement
provided that there should be, in the future, provision for agreed
action between the United States government on the one hand and
the governments of the British Commonwealth concerned on the other,
open to participation by all other countries who, like mine, have
agreed to action directed towards the expansion by appropriate
international and domestic measures of production, employment and
and exchange and consumption of goods, and elimination of all forms of
discriminatory treatment of international commerce and the reduction
of tariff and other trade barriers. You will have noticed that
the purposes towards which the agreed action referred should be
directed, are of three kinds. Action directed towards expansion - 16 -
E/PC/T/A/PV/7
of production, employment, and exchange and consumption of goods,
the elimination of all forms of discriminatory treatment, and
the reduction of tariff and trade barriers. A point I want to
emphasise, Mr. Chairman, is that, from the point of view of the
Australian delegation, those purposes are inter-related, and it
is not our intention to accept the obligations implied by anyone
of them unless there is a substantial evidence that the other
purposes are receiving attention which gives us reason to
Anticipate that agreed action would be taken and will prove
affective,and consequently it will not be possible for a final
Judgment to be made by the Australian government as to whether
the acceptance of the general most-favoured-national principle,
as replacing the preferential basis on which the whole of this
commercial policy has been constructed in the past, can in
fact be accepted until we have made fairly substantial progress,
not merely in the discussion of the Charter but in other parts
of the work and in other parts of the international and domestic
policy. As I pointed out, it is not our intention to raise any
of these matters of principle in the discussion of this particular
Article, but merely be improve the present draft on the
assumption that it will prove possible for us to make the major
change of policy to which I have referred. With reference to the
particular amendment which appears on page 3 of the annotated
agenda, we have little to add to the note which appears there
which makes it clear that it is not the intention of the most-
favoured-nation treatment required by Articles 14 and 15 to over-
ride specific exceptions provided for in other Articles of the
Charter. We therefore suggest the inclusion of the words "except
as otherwise provided elsewhere in this Charter". - 17 - /7
Mr. R.J.SHACKLE (United Kingdom): Mr. Chairman, I
think it is quite obvious that the terms of the Australian
amendment would involve no change of substance whatever.
It is, as I say, purely a drafting clarification. At
the same time I think it is desirable, because the words
of Paragraph 1 of Article 14 are certainly very wide:
"With respect to customs duties and charges of any kind. . .
and with respect to all rules and formalities in connection
with importation or exportation. . .". They are clearly
very wide words. I do not believe it was the intention
of those who drafted those words to catch within them
certain matters provided for elsewhere in the Charter,
such as quantitative restrictions. The fact remains that
the very wide net they have spread is capable of catching
those particular fish. I think it is very desirable to
make it clear that those fish are not caught.
CHAIRMAN: May I take it that the Commission ----
The Delegate for Belgium.
M. Desclée de MAREDSOUS (Belgium) (Interpretation):
I am not so convinced, Mr. Chairman, that this is a mere
change in the drafting of article 14. I feel that, inasmuch
as this amendment may refer indirectly to such clauses
as Article 28, it may also entail quantitative restrictions
and it might, in so doing, introduce new escape clauses in
Paragraph 1 of Article 14.
CHAIRMAN: If I may express my own view it is simply
this: chat all the clauses of the Charter are of equal
value and for that reason it would not be necessary to adopt
the Australian amendment. On the other hand, as we, during
E/PC/T/A/PV/7
S S - 18 - E/PC/T/A/PV/7
the discussions, come up against this misunderstanding that
there is a kind of priority between the different Articles.
I think it is advisable to say expressly what we all agree
to, that this Article covers its ground only insofar as it
is not contrary to other equally valid stipulations of the
Charter, so I think for practical reasons it would be advisable
to adopt it. P. 19 E/PC/T/A/PV/7
CHAIRMAN (Interpretation): I would like to make a correction:
I have no right to accept or refuse: I would simply consider that
this addition would be in order.
Mr.C.DESCLEE DE MAREDSOUS (Interpretation): Mr. Chairman, I wish to
repeat that this amendment is either superfluous or else it is necessary
and if it is necessary we should read it and understand it in the light
of the commentary which the Australian delegation themselves have given
on page 3 of document T/W/150 where it says, for example, "Article 28
provides for the possibility of discrimination in certain circumstances"
and then it goes on to say "The words which it is suggested should be
added to Articles 14 and 15 are designed merely to remove any possible
doubt on this questions." If you read Article 28, which I have men-
tioned before, you will notice that this Article 28 refers exclusively
to Section (c) and not at all to Section (a).
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, may I make
this observation? I think you have ruled on previous matters that
the titles of Articles of this Charter have no legal force. A
fortiori, the section letters have no legal force. Section (a) is
not a watertight compartment, Section (b) is not a watertight com-
partment, nor is Section (c), nor any other Section. It therefore
follows that one has to cross-refer from every Article of this Charter
to every other and I do not think we can admit that because Articles
have certain sections they are to be interpreted irrespective of the
Sections which appear in any other Articles.
Dr. COOMBS (Australia): Mr. Chairman, I do not think there is
any need for us to discuss this question at great length here. I can
assure the delegate of Belgium that we are not seeking in any way to
alter the purport of this Article. Our intention is to make it
quite clear that, if the Charter in another part permits action in E/PC/T/A/PV/7
certain, specfic circumstances, the general rule embodied in Article
14. shouId not be taken to over-rule the specific approval embodied
in another part of the Charter. Whether the particular amendment we
have suggested is necessary is a matter which probably a lawyer could
determine a good deal more readily than I could, and I, for my part,
at any rate, am perfectly content having made the point, for it
to be left to a drafting committee who could seek appropriate advice
on the matter as to whether the particular words we suggest are in
fact necessary; and if the decision is that they are not, then we
are so much the happier.
CHAIRMAN: I have already said that, although in my mind this
is not necessary, it is a good amendment, and I have the feeling
that the Commission generally agrees to the amendment submitted by
the Australian delegation, and before referring this to a drafting
committee, or to a Legal Adviser, I would like to know whether the
Commission is prepared to accept it as a useful addition to the text.
Mr. WINTHROP BROWN (United States): I think my delegation would
prefer to see the matter referred to the drafting committee. In fact
perhaps there may be a point there, and we might have a suggestion as
to how it could be met; but we do not quite agree with the language
as suggested and we think it may be a little broader than is needed.
Dr. J. .E. HOLLOWAY (South Africa): On the substance of the
Australian amendment we are in full agreement with Australia. I
think though, that the lawyers should be brought into this position.
Our understanding of the Charter is that the specific exception
always takes precedence over the general rule, but if in one general
rule we put that in and we do not put it into others, there may be
doubt about that, and I think it is purely a matter for the lawyers
to decide what that means.
P.
20 P. 21 E/PC/T/A/PV/7
Mr. J.J. DEUTSCH (Canada): I agree with the suggestion that
the drafting committee should examine the necessity for the inclusion
of the Australian amendment. We prefer to keep a general rule such
as this as clear-out as possible and not cluttered up with any ex-
ceptions and things of that kind. This is a general rule. We
should try to keep it as clear and as simple as possible without
any except ions . Therefore I would like the sub-committee really
to examine the necessity for including this.
Dr. CUSTAVO GUTIERREZ (Cuba): The Cuban delegation at this
moment has not made a full judgment about the inclusion of this
amendment and is not in a position to accept it here in the Com-
mission now. We should prefer to pass it to the sub-committee.
CHAIRMAN: We will send the question to the ad hoc sub-committee
we are going to set up, advising the sub-committee to seek legal.
assistance.
We pass on to the examination of paragraph 2. There you have in
the New York text some specific comments. There is a reservation
by the Chinese delegate who wished to reserve the right of his Govern-
ment in case of absolute need to resort to preferences in the future
and the Chilean delegate made another proposed, and so on. But I
propose to pass over these just now and go on with the full New York
text of this paragraph and then afterwards we shall take the different
reservations.
I beg to draw your attention to the United States proposal on page
4 of document 150. You will see that they combine here Article 17
with Article 15 in bringing in the words "or internal taxes". I
wonder whether the United States delegation wants to comment more upon
this proposal. J. - 22 - E/PC/T/A/PV/7
MR. W. G. BROWN (United States): Mr. Chairman, the concept
which we have been proceeding on is that preferential agreements pf
the certain kind now in force should be subject to negotiation.
There are a few preferential internal taxes - we have some, and
some other nations have some. Our suggestion is simply that they
be played on the same basis of being negotiable as internal tariffs.
M. C.D. de MAREDSOUS (Belgium) (Interpretation): Mr. Chairman,
the Belgian delegation cannot accept the amendment proposed by the
United States delegation to paragraph 2 of Article 14, because it
is a new step backwards in comparison with our initial objectives,
among which the total suppression of all preferential duties was
contemplated. We had expected to be part of the Preparatory
Commission in this idea.
Moreover, it changes one of the basic principles on which we
had started our tariff negotiations, and on which all our
preparatory work is being conducted.
We have not presented demands or requests as far as
preferences in matters of duties and taxes or internal taxes are
concerned, because paragraph 1 of Article 14 and Article 15
altogether put a definite and to all differences or discriminations
in matters of interior taxes as soon as the Charter comes into force.
CHAIRMAN (Interpretation): The delegate of France.
M. BARADUC (France) (Interpretation): Unless I have not
properly understood the meaning of the amendment submitted by our
United States colleagues, I wish to state that I agree entirely
with what has been said by the Belgian delegate. It seems to be
difficult to accept the idea that Article 14 should recognise
internal preferential tariffs, whereas Article 15 states very
clearly that such taxes should be suppressed. J.
- 23 - E/PC/T/A/PV/7
CHAIRMAN (Interpretation); Are there any further remarks?
MR. A. VAN KLEFFENS (Netherlands): I fully concur with what my
Belgian colleague has just been saying.
MR. J.P.D. JOHNSEN (New Zealand): I would like to support
the suggestion made by the delegate of the United States,
Mr. Chairman. New Zealand is one of those countries that has an
internal tax. It is really in the form of deferred customs duties.
I think it is only right in the case of a tax of that nature,
which is negotiable until such time as it has been negtiated, that
it should be permitted to continue in operation, just as an
ordinary customs duty should be. For that reason, I support the
amendment suggested by the United States.
CHAIRMAN (Interpretation): Are there any further remarks?
Then it seems that as opinions are divided, I would like to come
to the common opinion before sending it out to the sub-committee.
DR. G. GUTIERREZ (Cuba): Mr. Chairman, this matter is so
inter-related with Article 15 and with Article 24, that the Cuban
delegation thinks it is rather difficult to name an opinion on the
separate issues of the amendment, some would really prefer very
much that the whole matter be sent to the sub-committee.
CHAIRMAN: Does the delegate of the United States wish to
say more about it before we send it to the sub-committee?
MR. W.G. BROWN (United States) I do not think so, thank
you, Mr. Chairman.
- I '_ __ . J. E/PC/T/A/PV/7
-24-
CHAIRMAN: We now take the reservations I have already
alluded to. The Chinese reservation will be found at the bottom
of page 10. It is to reserve the right, in case of absolute need,
to resort to preferences in future. I believe I remember that
he made this suggestion only as a suggestion, and I would like to
know whether he can see his way now to modify it or explain it
further.
MR. K.S. MA (China): Mr. Chairman, we have decided to
withdraw this reservation so as to bring ourselves in line with
other Member countries in the spirit of the Charter as best we
can.
CHAIRMAN: Thank you. - 25 -
CHAIRMAN: Then the next specific comment on page 10 of
the New York Draft was the reservation of the Chilean Delegation,
but that reservation was further explained by the proposal they
have submitted together with the Delegates of the Lebanon and Syria,
and that was discussed in three long meetings of the Executive
Committee and disposed of.
I remember - I was not present, but I think I remember having
read - that these Delegates reserved their position; but I wonder
whether it would further any useful purpose to go back upon the
discussion in giving any decision.
Any comment?
The Delegate of Chile.
Mr. FAIVOVICH (Chile) (Interpretation): The Chilean Delegation
have already stated they want to maintain their reservation of this
clause and now accept the final Draft which will be submitted in
the Report of the proper Sub-Committee.
CHAIRMAN: The Delegate of Lebanon.
Mr. HAKIM (Lebanon): Mr. Chairman, the maintenance of our
reservation to Article 14 depends on whether a satisfactory
solution could be found to the question of regional preferences
somewhere else in the Charter, and particularly in Article 38.
Therefore I would say now that the Delegation of Lebanon
would maintain this reservation to article 14 until the question
of regional preferences is satisfactorily resolved under
Article 38.
That solution is satisfactory.
CHAIRMAN: We pass on now to further consideration of the text
of paragraph 2. You will see in 2 (a) that there is a reference to
Annexes giving lists of countries under "common sovereignty or
E/PC/T/A/PV/7
G E/PC/T/A/PV/7
relations of protection or suzerainty; or between two or more
of the territories listed in Annexure A to this Charter".
And that Annexure you will find on page 53 in the New York paper.
We should state whether we have any observation to make on
either of those two.
Let us start with Annexe A on page 53 of the New York paper.
We slightly re-drafted it in New York, but I think that is what
the Delegate said and what we are considering.
I take it there is no observation on Annexe A of the New York
text?
Approved.
And then we have a paper submitted by the Delegation of France
giving a list of territories under French sovereignty.
We have considered that list. Does the Delegate of France
wish to say anything about it?
Approved.
Mr. WINTHROP BROWN (United States): I wonder if the Delegate
for France could elaborate little bit on this footnote No. 2
which appears in paper W.49, and tell us exactly what it means.
CHAIRMAN; Reading:-
"(2) Recent changes in the political status of these territories
are likely sooner or later to involve modifications in their
customs codes such that it would be impossible at the
present time to consider consolidating the duties in the
tariff which may result from the tariff negotiations."
Does the Delegate of France wish to speak?
Mr. BARADUC (France) (Interpretation): The reservation made
by the French Delegation is appertaining mostly to those parts of
G -26 - G - 27 - E/PC/T/A/PV/7
the French Empire whose status has been changed.
They are no longer overseas territories, but some of them
have become French and therefore are treated on the same level
concerning customs questions as Metropolitan France itself.
However, negotiations are proceeding at this very moment
concerning these territories. Therefore, replying to a question
put by the Chairman, the French Delegation would say that this
reservation does not imply the request of any explanation whatsoever,
but is just to state that at present negotiations were going on
in order to determine more precisely the status of those different
territories. V - 28- E/PC/T/A/PV/7
CHAIRMAN: Does that satisfy the United States Delegation?
Mr. Winthrop BROWN (United States): I take it, from what
the French Delegate said, that that would not mean that these
territories were excluded from the scope of the present tariff
negotiations.
M. BARADUC (France) (Interpretation): In no way.
CHAIRMAN: Finally we have to deal with the General Comment
on Page 10 of the New York Draft. The two Delegates referred to
are the Delegates of Australia and India. In the last line it
states that another Delegate agreed - that was the Delegate of
South Africa. These three Delegations suggest that Articles
14 and 24 should be interpreted in such a way that "so long
as a preference remained accordable in one part of a prefer-
ential system specified in paragraph 2 of Article 14, that
part of the preferential system according the preferences
should be at liberty to extend the same, or a lesser measure
of preference to any other part of the same preferential
system which at present did not enjoy it". The Delegate
of Australia.
Dr. H.C. COOMBS (Australia) Mr. Chairman, it is
not the wish of the Australian Delegate to maintain the
reservation referring to the extension of preferences to
areas which do not at present enjoy them. The position is
somewhat more difficult from our point of view, however, in
relation to what has been referred to as "accordable preferences".
I think I can explain this from our point of view by
telling the Committee that under existing agreements the
Australian Government did undertake to extend certain V.
-29- E/PC/T/A/PV/7
preferences, which it grants to the United Kingdom, to the
Colonial territories of the United Kingdom on request. Such
requests have, I believe, on occasion been received, and the
preferences have been granted. In other cases, they have
not been received, but the attitude of the Australian Govern-
ment is that if a request were received, the preference would
be granted.
It is obviously rather difficult for Australia, in these
circumstances, to suggest that action should be taken which
would relieve us of the responsibility which we freely undertook.
I it is the decision that these accordable preferences, as
we have referred to them, should not be saved in the same sense
as existing preferences, we would naturally be prepared to
accept that; but I want to make it clear that, as far as we
are concerned, we are not seeking to be relieved of an obligation
which we freely entered into in the past.
CHAIRMAN: Are there any further remarks on this question?
Mr. S. RANGANATHAN (India) Mr. Chairman, I wish to say
that our Delegation does not wish to pursue this suggestion further.
Dr. J.E. HOLLOWAY (South Africa): We are in complete accord
with the Delegation of India.
CHAIRMAN: May I express the hope that the position of
Australia in this matter may be cleared up before we terminate
our work here: at any rate, before we take this Article in the
second reading, and that perhaps the whole reservation may disappear.
We have now dealt with Article 14, and the remaining work
will have to be done by the ad hoc sub-Committee.
The Delegate of Australia.
E/PC/T/A/PV/7 V - 30 - E/PC/T/A/PV/7
Dr. H.C. COOMBS (Australia): Before we leave Article 14,
Mr. Chairman, I have one or two minor points to which I would
liko to refer in the hope that the Drafting Committee will be
able to look into them. They are not matters, generally,
concerning which we have listed specific amendments; but we
believe they are worthy of investigation.
First of all, with regard to the preservation of existing
preferences and the effect of paragraph 2 of Article 14 in
precluding the establishment of new preferences or the increase
of existing preferences, there are one or two minor complications
of an essentially administrative character which I think need to
be looked into. I will give an example which affects our own
practices--it may illustrate the type of things which I have in
mind.
It is the practice in Australia to take out from particular
tariff items for short periods of time--sometimes longer than
others--particular classes of goods which currently are not being
produced in Australia, or, in the case of a preferential item,
in the countries entitled to those preferences, and the goods
concerned are admitted free of duty, or at particularly low rates
of duty; and in some cases they are admitted on much narrower
margins of preference than apply to the article generally.
This procedure is implemented by what we refer to as a
bye-law. It does not represent a change in the tariff, but
takes ut for purposes of avoiding unnecessarily high duties
goods which it is not at the moment practicable to produce in
our own country, to avoid their being subjected to unduly high
rates of duty. As the circumstances which made it necessary
or desirable to deal with them under the bye-law change, the
bye-law is removed and they go back into the normal tariff
classification to which they belong. In such an event as V - 31 - E/PC/T/A/PV/7
that, as, goods pass back from being dealt with under the bye-law
to the substantive tariff item to which they belong, it will
normally be the case that they will then pay higher rates of duty,
and-probably higher margins of preference, then they did when
they were dealt with under bye-law. ER
32 E/PC/T/A/PV/7
It would be argued that that procedure would not, in fact,
conflict with our second paragraph of Article 14, but I would
like the Sub-Committee to examine that case. That procedure
would clearly mean that on one day a wider margin of preference
existed in practice than existed on the previous day, and that
would not constitute a breach of the Article. It would merely
mean that it would not be practicable to admit the goods under
by-law at low rates of duty and narrow margins of preference when
circumstances warrant such a procedure. I think there is another
possibility that the Commission should have a look at, and that is
the question of dealing with the preferential rates of duty which
exist within the British Commonwealth preferential area, at any
rate .where some countries have a multiplicity of rates, some
applying to one country entitled to preference, and another higher
or lower rate applicable to another. I think it may be desirable
to take this opportunity to simplify some of those multiple customs
tariffs and to substitutt a single preferential rate. If that were
done, however, the normal practice would be to choose the most
representative preferential rate, the one under which the bulk of
the trade was admitted. That may involve, in some cases, the
application of higher kinds of preference to a country whose trade
was insignificant since it would then come under the preferential
rate applicable to the country from which the bulk of the trade
came. I mentioned those as illustrations of what I might call
minor administrative difficulties associated with the original
application of this law. We are anxious that there should not be
any misunderstanding of the motives or intentions of the countries
concerned, and yet it will be desirable for certain administrative
practices to continue, and we would like to submit this to the Sub-
Committee. ER
E/PC/T/A/PV/7
There is another matter which my delegation wishes to raise.
The Australian delegation has submitted, in connection with
Article 24, certain amendments to Article 24(b). My attention has
been drawn to the fact that it might be desirable for parts of the
provisions that we have embodied in sub-paragraphs 4 of that
amendment, to be included not in 24 butin 14. This may be over-
come by the United States proposals for a rearrangement of the
whole section, but it may not, and I would, therefore, ask that the
Sub-Committee, when it is dealing with this question, should look
also at the suggested amendment to 24 and see if part of that
would be more properly dealt with as part of Article 14. S - E/PC/T/A/PV/7
CHAIRMAN: The DeIegate of France.
M. BARADUC (France) (Interpretation): Mr. Chairman,
there is no answer to the explanation which has. just been
given by Dr. Coombs, but the French Delegation would like to
suggest that we might find a clearer drafting of Paragraph 2.
The drafting itself is meant, first of all, to do away wiith
any possibility of confusion between two central ideas, the
preferential system itself and the margin of preference on
the other hand. Therefore we would suggest that the
Comimission should send to the Sub-Committee, to be studied,
the following draft:
"The stimulations of Paragraph 1 of the present Article
shall not be interpreted as necessitating the elimination of
preferences in respect of customs duties or other charges
imposed on imports as they are defined hereunder:
(a) Preferences in force , and so on; (s) and (c).
"iThe margin of preference in those preferential systems
referred to above shall not be higher than the level established
by negotiations as provided for in Article 54, and in any case
will not be higher than the margin existing between the
preferential tariff and the tariff applied to States who
are beneficiaries of the Mood-Favarnad-Nation clause at
the date of reference established for negotiations."
This is just a matter of clarifying the text itself
and I hope, Mr. Chairman, that the Drafting Committee will take
our new proposal into consideration.
I should add that the last part of the sentence takes
into account the decisions which have just been taken.
CHAIRMAN: (Interpretation): It wiill be referred
to the Sub-Committee. S 35 E/PC/T/A/PV/7
CHAIRMAN: The DeIegate of New Zealand.
Mr. J.P.D.JOHNSON (New Zeland): Mr. Chairman, the
New Zealand Delegation is in full accord with what has been
said by the Dellegate of Australia and we support fully the
suggestions which have been made by him.
CHAIRMAN: The Delegate of India.
Mr. S.RANGANATHAN (India): I just want to ask one
question: is it the intention to have a separate sub-committee
for each of these three Articles, or to have one joint
committee for them all?
CHAIRMAN: I would like to answer that when this
Meeting breaks up. My original idea was that we would not
need any sub-committees on Article 14, but I was too optimistic,
As Articles 14, 15 and 24 hang very closely together, I thiink
we shall find we need a very small committee to deal with the
whole set of problems, but let us decide that when we continue
the discussions.
We now have to decide whether we shall take Article 15,
as our Agenda prescribes, or whether you prefer to take
Article 24 first. My own feeling is that we all have this
complexity of Articles in our minds and whether we deal with
one or the other first or last does not really very much
matter. So it would perhaps be as wall to go on in
accordance with our Agenda and deal with Article 15, but
there may be other opinions and other reasons for taking
Article 24 first. I should like to have the opinions of
the Commission. 36
The Delegate of the United States.
Mr. Winthrop G. BROWN (United States): Mr. Chairman,
I would respectfully suggest that we proceed to consider
Article 24 next, in view of the fact that Article 24 deals
primarily with the methods of dealing with preferences
and tariffs which we have been talking about in Article 14.
All through the discussion we have just had, there have been
continual references to Article 24. There has been a suggestion
that part of Article 24 could be included in Article 14 and I
would suggest that the continuity of our discussion would be
greater if we went on directly to Article 24 now. There are
some. special problems in Article 15 which do not fall quite
so directly into the context of our present discussion and
which might more happily be taken up a little later.
E/PC/T/A/PV/7
S 37
CHAIRMAN: Does the suggestion of the United States delegate
meet with the approval of the Committee? Are there any objections?
We therefore pass on to Article 24, document W/150, page 11.
It starts with a general note about the Cuban reservation, but that,
I take it, has already been dealt with under Article 14, because the
Cuban delegate referred to Articles 14 4nd 24.
Has the delegate of Cuba in further remarks to make.
MR. G. GUTIERREZ (Cuba): The sub-amendments have been
presented to the Secretariat for distribution among the members,
and they will be sent to the sub-committee. We do not want to
take the time of the Committee, but will only explain that our
amendments are endorsed to make consistent both Articles 14 and 24.
CHAIRMAN: Then we pass on to paragraph 1 of Article 24.
There we have a proposal by the United Kingdom delegation only
dealing with the very first lines of paragraph 1, and we might
perhaps dispose of that at once.
MR. R.J, SHACKLE (United Kingdom): Mr. Chairman, I need not
say very much in explanation of this amendment. It is a purely
verbal amendment. The text is "reciprocal and mutually advantageous
negotiations", but as negotiations as such, they are not
advantageous. It is purely in order to secure that verbal
sufficiency that we suggest this amendment.
It is true that the first of the paragraphs in the United
States amendent, which follows immediately below, is directed to
the same object. I think we still have a slight preference for
our own wording, but it is a mere nuance.
CHAIRMAN: Does the amendment by the delegate of the United
Kingdom meet with any objection? E/EC/ T/APV/ 7
DR. G. GUTIERREZ (Cuba): Mr. Chairman, as the delegate of
the United Kingdom has said, it is very much like paragraph 1 of
the amendment presented by the United States delegation, and I
wonder if they should be considered together by the. sub-committee
CHAIRMAN: That is alright, only I always like to be able to
give the sub-committee as much guidance as possible and that is why
I would like to know whether, generally, this Committee agrees with
the United Kingdom amendment, leaving it to the sub-committee then
to vote on the British and United States draft. .
However, as we have also the United States proposal, I .might
perhaps not insist too much upon the delegates making their choice
just now. Let us go on to the examination of the United States
proposal. You will see that that covers the whole of paragraph 1
with sub-paragraphs (a) and (b) and (c), but .e should not forget
that we have an important proposal by the Australian delegation on
sub-paragraph (b).
As far as I can see, the United States proposal is mainly
drafting amendments, but I should like to ask the United States
delegate whether he would care to explain them.
MR. w.G.BROWN (United States): Mr. Chairman, you. have
correctly interpreted our amendment. They are. mainly drafting
and clarification suggestions.
May I call the attention of the committee to one error in the
typing, for which we are responsible. It is in the sixth line of
paragraph 1. Brackets appear around the words "and other charges"
at the end of the line, indicating that they should be omitted.
We did not intend to suggest the omission of those words, so will
the delegate please delete the square brackcts which appear around
those words. Then, they remain consistent with the words of
J.
38 E/PC/T/A./PV/ 7
Article 14.
CHAIRMAN: You have seen both the United Kingdom and the
United States drafts concerning the beginning of paragraph 1. I
would be happy if we could indicate to the sub-committee which of
the two alternative drafts meets with the particular favour of .our
oommittee.
MR. G.W .BROWN (United states): Mr. Chairman, may I indicate why
oux delegation has a slight prefer noe for our language in
achieving the object of what both the United Kingdom and ourselves
have in mind. That is, of making it clear that it is the results
of negotiations that should be advantageous and not the negoitiations
themselves.
It seems to us that the way we have suggested it makes it
clear and states more directly the purpose of negotiations, because
it leaves the phrase "negotiations directed to the substantial
reduction of tariffs and other charges on imports and exports and
"the elimination of the preferences referred to in paragraph 2 of
Article 14 on a reciprocal and mutually advantageous basis.
In other words the purpose of the negotiation is a little bit
more clearly stated in our draft, we think.
J. G. E/PC/T/A/PV/7
40
Mr. COOMBS (Australia):Could I suggest that since the purpose
of these two amendments is the same, it would be probably easier
for the Sub-Committee itself to consider the relative merits of
the two ventures from a purely verbal point of view, and we
might refer to that immediately.
CHAIRMAN: Yes.
The Delegate of the United Kingdom.
Mr. SHACKLE (United :Kingdom): I would like to say I do
not think really there. are two pins to choose between the United
Kingdom and the United States Amendment, and as it would mean a
lot of work on Sub-Committees, some of which would not be necessary,
perhaps this is a case where we might simply accept the U.S.
amendments as they stand. With the exception of a little
difficulty,as the Australian Amendment will have to be considered
I would have thought we might possibly adopt the U.S. Amendment
straightaway and save the Sub-Committee some work.
CHAIRMAN: That means that the Delegates who have spoken
are in favour of the U. S. re-draft of the New York text.
The Committee will base their work upon the U.S. re-draft
of paragraph 1.
Then we come to 1 (a). We have there a proposal also by
the United States, and you have before you - there is no other
proposal - it is not very different from the New York Draft.
Does any Delegate want to rnaintain the New York Draft?
I take it that as there is a silence with regard to the
maintenance of the New York Draft, it implies general agreement
wi th the U.S. re-draft of paragraph 1 (a),
agreed. 41
Then we pass on to paragraph 1 (c) - we pass by (b).
Mr. MA (China): Mr. Chairman, what happened to (b)?
CHAIRMAN: We shall take that afterwards. Leave out the
U.S. proposal, and take (b) as a separate item.
It is only to say whether the Committee agrees to the
very slight Drafting Amendment to (c) that the United States
strike out the superfluous words "or consultation"'; "consultation"
and "binding" is the same thing, and it seems superfluous to have
two expressions for the same item.
The Delegate of Australia.
Mr. COOMBS (Australia): We have certain comments to make
as to (b) and (c) and in view of that I think perhaps it might
be desirable to deal with them together or in the order as they
appear.
CHAIRMAN: Then we pass on to point (d).
You have before you the United States proposal, which
really is only a drafting amendment of the New York text, and
you have on page 12 of Doc. 150 a proposal by the Australian
Delegation. And I should to be complete also mention that a
certain point of paragraph (b) is the object of a reservation
by the Delegates of India, New Zealand and the Union of South
Africa.
Perhaps the Australian Delegate would be kind enough to
explain his point.
Mr. COOMBS(Australia): Mr. Chairman, as I think I explained
to the Committee earlier in our present meeting, it is the view
of the Australian Delegation that neither. of the Rules omitted
in (b) or (c) is necessary.
This Article contemplates negotiations directed towards the
E/PC/T/A/PV/7
G. G. E/PC/T/A/PV/7
42
substantial reduction of tariffs and the elimination of tariff
preferences. For these negotiations to proceed it is necessary
only that a certain minimum set of understood Rules should be
agreed upon.
We agree it is desirable that the negotiations should work
towards agreement that is reciprocal and on a mutually advantageous
basis. Negotiations should be conducted on a consultative basis
so far as the commodities themselves are concerned, and the
resulting agreement should be multilateral in its application, so
far at least as the present countries represented on this Committee
are concerned.
We dislike the inclusion of these Rules because we believe
that they call into question the basic Rule, which is that the
agreements should be mutually advantageous. It seems to us that to
include Rules such as Rule (b), "Where the negotiations affect
only the m.f.n. rate, any negotiated reduction in that rate shall
operate automatically to reduce or eliminate any margin of preference
applicable to the product", may or may not be consistent with an
agreement which is mutually advantageous. In fact, in our opinion
it would not be consistent with such an agreement; but whether that
was so or not, we believe that the very statement of Rules of this
character does tend to interfere with the bargaining procedure of
such agreements, and. to imply that certain values should be attached
to concessions, whether the Bargaining committees agree that those
concessions carry those values or not; consequently, and similarly,
in relation to Rule (c), it is said that the binding of low tariffs,
or tariff retreatment, shall in principle be recognised as a
concession equivalent in value to the substantial reduction of high
tariffs, or the elimination of preferences.
We do not wish to call the general idea behind that into G.
question, it is clearly desirable; but whether in fact the
binding of a low tariff or a tariff retreatment is equal or
equivalent in value to a substantial reduction of another high
tariff item, is something which only the parties themselves
can judge. Sometimes such a binding will be of very, great value,
particularly, for example, if there is a high degree of probability
that the country concerned will take advantage of an unbound
situation to increase it. But if that is not probable in the
nature of the circumstances, obviously a lower value for
negotiation purposes would be attachable to it.
I have had very limited experience of these tariff negotiations,
but it does seem to me, when I think of men with the skill and
experience of Mr. Hawkins, and Mr. McCarthy of my own Delegation,
being told summarily by this Conference that the binding shall
be regarded as equivalent to something or other - -it savours
somewhat of teaching your Grandmother to suck eggs.
In other words, the values attachable to any concession are
something which can be judged by the people who are engaged in
the bargaining, and they do not need to be told exactly how to
deal with them, and any attempt to lay down such a system of
values is capable of interfering with a fair assessment of the
exchanges between the parties.
Perhaps my point on this may be illustrated if I draw attention
to the fact that in view of the wording of (c) as it at present
stands, it might not be unreasonable to add an addtional sentence
which would say that the binding of high tariffs shall not be
regarded as a concession at all.
However, Mr. Chairman, we do not need to be told that, nor
do I suggest that anybody else in this Conference needs to be
told that. Consequently we have very grave doubts as to whether
any practical value is obtained by the inclusion of Rules (b) and
43 G.
44
(c), and in the case of (b) we are definitely of the opinion
that there are serious disadvantages to the conduct of negotiations
in the existence of such a rule.
Rule (o) is not of such importance from that-point of view,
because I believe that the negotiating.parties can be trusted to
take such notice of the Rule as it is entitled to, and. consequently
we do not propose to worry very much about the inclusion of (c);
as a statement of a general point of view we are not opposed. to it,
in fact we favour it; and therefore we are content to let it go,
although we do think it is superfluous.
So far as (b) is concerned, we cannot accept it in its
present form. We would say, briefly, the Rule should be omitted
completely. But we understand that for historical reasons there
are difficulties for some of the parties concerned, in its complete
omission. V E/PC/T/A/PV/7
45
We have, therefore, sought to set down the basis on which
we were, in practice, approaching this problem in our
consideration of the current negotiations, and to set out
what appeared to us, in the present context, to be a reasonable
approach to the way in which negotiated reductions in
Most-Favoured-Nations rates and, where they are associated,
preferential rates,.should be dealt with, and we have set
that out in the suggested amendment which, appears on page 12
of the annotated Agenda.
I would like to make it clear that our distinct preference
would be for the elimination of this rule altogether, but
since there may be difficulties in that elimination being
acceptable to other parties vitally concerned,.we are prepared
to accept a rule of the kind set out in (b), in the hope that,
without proving a burden and handicap to the conclusion of
mutually advantageous agreements, it will satisfy the particular
requirements of the interested parties. ER
E/PC/T/.A/PV/7
Dr. H.C. COOMBS (Australia): Mr. Chairman, could I draw
the attention of the Committee to the typographical error in sub-
paragraph (iii)of the amendment. In the third line of sub-paragraph
(iii) as it at present reads: "such reductions may be effected in
the
either as may be agreed between/Members concerned". That should
read: "in either or both".
Mr. J. TORRES (Brazil): We feel that there is a certain
purpose and utility in maintaining those two sub-paragraphs. They
explicitly state two principles which should be stated in the
Charter. It is true that, to negotiators, these things do not look
very much as a rule we should give to them,. however I do not think
there should be any harm in stating them very clearly and very
explicitly. Only the other day, in the course of negotiations,
we had one negotiator tell as that the Charter was one thing and
the tariff negotiations another thing. I wonder whether, if we
omit these two sub-paragraphs, we should not give more ground to
such confusion. We, of Brazil, have of course a rather low tariff,
and when we make a binding we want it to be clearly understood that
it is a very, very substantial concession. Therefore, Mr.
Chairman, our position is that these two sub-paragraphs should be
kept and not omitted.
Mr. J.J. DEUTSCH (Canada): Mr. Chairman, the Canadian
delegation at London took a very strong objection to the rule in
paragraph (b) as it now reads. We objected to the present wording
on two grounds. One is that the rule itself was not desirable,and
secondly,the meaning of the words as now written is not explicit
enough. Clearly, whom both the preferential rates and the most-
favoured-nation rates are the subject of negotiations, it is
impossible to achieve an automatic reduction of the margin. ER
47 E/PC/T/A/PV/7
preference simply by operating on the most-favoured-nation rate.
That is a physical impossibility. We should not have a rule
whose meaning is indeterminate in this way in a Charter. For
that reason we press very strongly for the change in the wording
which would make the meaning clear. We think that the Australian
elaboration of the rule does make the meaning clear, and we think
that the interpretation of the Australian wording is clear and we
would agree with the general principles which that wording wishes
to convey.
Consequently, we support, in principle, the Australian
amendment. S 48 E/PC/T/.A/PV/7
CHAIRMAN : The Delegate of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, we are
very sorry indeed that we cannot accept the Australian
amendment, especially in regard to (i) and (ii) of sub-
paragraph (b).
When we started these tariff negotiations, we really
thought that the reduction or elimination of any margin of
preference could operate automatically between the different
nations. But we have experienced more than once that
Country A., having a large amount of business with Country B.,
have undertaken very important negotiations to reduce their
preferences and they have received offers themselves, and
made counter-offers, for the reduction of such preferences.
At the same time, for example, Country A. has made offers of
tariff reductions to Country C., but Country C, does not
offer anything to Country A., absolutely nothing; in one
case because it would mean a substantial reduction of the
fiscal taxes; in some other cases simply because there is
a prohibition on the importation of a commodity which is of
primary importance to Country A.
But than afterwards it comes that, with the automatic
operationn of. the reduction of preferences, Country C receives
all the benefits of the long negotiations between Countries A
and B. Besides that, some countries have not offered anything
to other countries.
So we are at this time in a different position from
that in which we were when we started these negotiations,
and we simply cannot accept sub-paragraphs (i) and (ii),
which would mean increasing more and more the automatic S E/PC/T/A/PV/7
49
operation of their reduction of preferences in such a way
that one, two or three countries who are represented at this
table do not offer anything to the rest of the countries and
receive all the benefits of the mutual negotiations between
the other two groups of countries
That is why we have brought this matter to the attention
of the Conference in our paper. We consider it is a very
serious matter, but we havo asked for a modification of
sub-paragraph (b), to read in this form:
"All negotiated reductions in Most-Favoured-Nation
import tariffs shall operate" - not automatically - "to
reduce or eliminate margins of preference, as far as the
Member that enjoys the preference and will be affected
by such reduction agrees. No margins of preference shall
be increased, after the negotiations are completed."
Them by another amendment to Article 24, which would
be a new paragraph, we have taken into consideration the
question of the case in which some countries do not offer
anything at all to the one that is making the reduction of
its preferences.
M. Desclée de MAREDSOUS (Belgium) (interpretation):
Mr. Chairman, the discussion which has been taking place
shows the utmost importance of the amendment which is being
discussed and the fact that we seen to have progressed very
little since we started our discussions in London. We do
not seek to establish equal conditions in the negotiations
which are being conducted, but to restore international
competition in trade. S E/PC/T/A/PV/7
In order to achieve this aim, it is not only necessary to
reduce duties, but also to unity them and to consolidate them as
much as possible, and I am anxious to hear what the United States
representative - who had already, in London, explained his
position to us - has to contribute to this discussion at the
present stage.
CHAIRMAN: (to the Delegate of the United States): Are
you prepared to fall in with the wishes of our Belgian colleagues
Mr. Winthrop G. BROWN (United States): Mr. Chairman,
I think the importance which the United States attaches to the
so-called automatic rule for determining the negotiations
for the elimination of preferences is very well known. The
Belgian Delegate has referred to the number of times and the
extent to which we have held forth on this subject at previous
meetings, and I hesitate to take up the time of the Delegates
to reiterate all the arguments which we have advanced in
support of this clause (b)..
We feel that one of the major objectives of this Conferenoe,
and of future negotiations which may be undertaken, is the
elimination of discriminations in international trade, along
with the reduction of the barriers to such trade. We feel that
the explicit statement of a rule to that effect as governing
the negotiations is/highly important element in the Charter. 51
MR. W.G. BROWN (United States); On the other hand, we
recognise that we would prefer to see the tax remain as it is.
On the other hand we do recognise that some delegations find an
extreme difficulty with the tax as it row stands, both in substance
and in form.
I am afraid I cannot share the view of the Canadian delegate
that it is, impossible to eliiminate a preference by the use of the
automatic rule when both rates are involved, and I confess that I
do not find the obsecurity in that clause of tne Charter, as drawn,
that some of the other delegates do.
Nevertheless , we appreciate the spirit in which the
Australian delegation has approched this problem and the suggestions
they have made both for clarification and, perhaps, some
modification of the rule. We could not accept the .Australian
proposal as it stands, but we do feel that it provides a basis for
discussion which we would be very glad to consider and discuss
further with the other delegations concerned. Perhaps that
disoussion could more profitably be conducted, as it will involve
drafting in the sub-committee.
CHAIRMAN: The delagate of New Zealand.
MR. J.P.C. JOHNSEN (New Zealand): Mr. Chairman, as one of
the countries that reserved it position in respect of paragraph (b),
I would just like to say that we had great difficulty in accepting
paragraph (b) on the grounds that where we had agreed to a
principle of regotiating on a mutually advantageous basis, we felt
that it was not necessary to lay down any specific rules.
For that reason, we think that the exposition given by the
delegate of Australia covered the position very well, and certainly
reflected our own views on the matter.
J.
E/PC/T/A./PV/7 We and also of the opinion that, apart from what the delegate
of the United. States has said, there is difficulty in
interpreting the rule as it stands and. if the rule is to remain
in the Charter we think that some attempt should certainly be
made to explain it in material language.
We think that the approvach has been made by the
Australian delegation to the matter is a reasonable one, and we
think it should. provide a good basis on which to work. For that
reason we would like to support it.
MR R.J. SHACKLE (United Kingdom): Mr. Chairman, I was only
going to say, that we, the United Kingdom delegation, think that
it would be desirable to have a more clear expression of statements
on the lines of the Australian amendments
DR. J.E. HOLLOWAY (South Africa): Mr. Chairman, the
Australian delegation is opposed, rather uncomprisingly, to
rule (b) as it stands in the New York draft. I want to state
that we are in full agreement with everything that Dr. Coombs has
CHAIRMAN: Well, I think that the other sub-commiitte, when
having before them the minutes of this discussion, will have
sufficient guidances to arrive at a satisfactory conclusion. My
own impression, after having listened to the discussion, is that
we are not very far from such happy results.
If there is no further question about paragraph 2, we will
pass on to paragraph 3. Yes wall find. in the New. York paper
that two delegates reserved their position and suggested the
insertion of the words "and particularly with regard to Members
in legitimate need for protection" after the phrase "having regard
to the provisions of the Charter as a whole". These two delegates
were the representatives of Brazil and of Chile.
J. E/PC/T/4/PV/7
53
CHAIRMAN: Does the Delegate of Brazil maintain that
reservation?
Mr. TORRES (Brazil): Yes, Mr. Chairman. I suppose that
you would probably like us to say a word or two on why we have
suggested that drafting, or why we maintain it.
Well, the reason is that we look at the negotiations between
two Member countries as something that must necessarily take into
account the stage of economic development of the two countries;
and that possibly, a country well-developed should notexpect
from a country still in need of developing industries the degree
of concessions that the country so developed can give. It. is
difficult to visualise how it might be a mathematical equivalent.
Therefore we have suggested that Amendment to particularise
the situation of the country in need of protection for legitimate
and economic industries.
We, however, have no pride of authorship, and are.happy to
see that apparently the American, Amendment has. taken that into
account; and if the understanding is that their drafting covers
our point, we are perfectly willing to withdraw our reservation
under the condition that the American Amendment is approved.
Mr. GUTIERREZ (Cuba): Mr. Chairman, I wonder if we should
not work here for a favourable labour standard. If we hold to
the principle e of 8-hours a day, we should adjourn, because it is
more than 6 o'clock.
CHAIRMAN: I do not remember when I could work only 8 hours.
Mr. MA (China): I would support the Cuban Delegate's proposal.
CHAIRMAN: Allright - but at any rate we must decide now what
kind. of a Sub-Committee we should set up.
I have said before that I had thought we might have different G. E/PC/T/A/PV/7
Sub-Committees for 15 and 24, but the more I listen to the
discussion the more I feel that we must ask the same Delegations to
take the trouble of looking into the whole complex of problems.
I would suggest the following Sub-Committee, and in making
this suggestion I would add that it may be that after the
discussion to-morrow on Article 15 it might be advisable to add
one or two; but we have the general Rule of Procedure that any
Delegation having a particular interest in a question dealt with
in the Sub-Committees has always the right to attend the meetings
and express his view, so that I hope we can, provisionally at any
rate, agree on a Sub-Committee composed. as follows:-
Australia, Cuba, France, Norway, United Kingdom,United.
States. That mates six.
The Delegate of the Netherlands.
Mr. VAN KLEFFENS (Netherlands): Mr. Chairman, since there
are matters at state which we consider as absolutely vital, I
would suggest that either the Belgian Delegate or the Dutch
Delegate be added to the number of countries represented. V 55 E/PC/T/A /PV/7
CHAIRMAN: I have, of course, not the slightest objection,
but I would like to draw the attention of the Netherlands
Delegate to the fact that the sub-Committee is composed with a
view to doing very strenuous work, and the more members, the less
progress will be made in that work. As the members of any
Delegation have the right to attend and to express their views
on any particular point, I think that would cover all reasonable
demands, and it would make it easier for the sub-Committee to
do their difficult work., although I am, of course, in the hands
of the Committee--I cannot propose anything.
The Delegate of France.
M. BARADUC (France) (Interpretation): Mr. Chairman, in
suggesting the sub-Committee you have nominated France and I wish
to thank you. Since, however, on matters raised in Article
14, 15 and 24 of the Draft Charter the French Delegation has
always acted in close harmony with the Belgian and Dutch
Delegations, the French Delegation is perfectly willing to
give its place on the sub-Committee to one or other of the
two Delegations mentioned.
CHAIRMAN: The Delegate of the Netherlands.
M. van KLEFFENS (Netherlands): I would like to thank my
French colleague for his French courtesy in offering me his
place. I feel that as a low tariff country typical of its kind,
there is something to be said for his giving place to one of
his Benelux partners, and perhaps I might suggest that the Belgian
Delegate should profit from this courtesy of the French Delegation.
CHAIRMAN: The Delegate of Belgium. E/PC/T/ A/PV/7
56
Baron P. de GAIFFIER (Belgium) (Interpretation): I wish
to thank my French and Dutch colleagues for their courtesy and
their generous ofter, and I would like to recall the fact that
when Article 15 .was first discused, the Belgium dielegation stated
their interest in the problem, and that it was understood
that when a Working Party was set up to consider Article 15, a
representative of Belgium or the Netherlands would be appointed
to serve. on that sub-Committee.
CHAIRMAN: The Delegate of Brazil.
M. J. TORRES (Brazil): Mr. Chairman, may I rais, a
question? I would like to know whether this Committee is
supposed to take charge of all Chapter V or only these Articles.
CHAIRMAN: Only these Articles. The sub-Committee is
finally constituted, with the small alteration that France
renounces in favour of Belgium.
I have an announcement to make: that at the meeting tomorrow
at 2.30 we shall start, as we did today, in Executive Session.
That is in order to dispose of the Sixth Report of the Tariff
Working Party. You received that Report this morning, so you
will have had it for the required twenty-four hours. Afterwards,
when we have finished discussing Article 24, we will then take
Article 15. We .will try to got through that in the course of
tomorrow, but you know that the Stearing Committee has to reserve
the day after tomorrow, in case; we cannot got through it tomorrow.
I want to mention the possiibility of the ad hoc sub-Committee
coming together and, at any rate, having a start on the word
tomorrow morning; or perhaps the tariff negotiations will keep
most of the members busy. I will not ask for a decision on that
V E/PC/T/A./PV/7
point now, but the Delgates will all be here in the morning,
and if one or two of them .feel that they ought to start, they
could get in touch with the others and the Secretariat would
provide the necessary room.
The Delegate of China.
Mr. K.S. MA (CHINA): Mr. Ohairman, we have no objection
to not being included in the sub-Committee on the condition that
all these sub-Committee meetings would be previously made known
to us, so that we may have the chance to participate and present
our views.
CHAIRMAN: When the sub-Committee has started work, it is the
rule that the Agenda of the Conference every morning contains
information with regard to the meetings of the sub-Commit tees;
but it may not always be possible to do it, so please excuse, if
sometimes there is no provisions announcement in the morning Agenda.
The simplest way --if there is any doubt in the mind of a Delegate
as to whether a sub-Committee is smitting or not-- is to telephone
to Mr. Laoarto's office and ask him. But, as I say, he. will do
what he can to have the meetings of this sub-Committee included
in the general Agenda. As you have already seen, in some cases
the different sub-Committees of Commission A have been included
in that .Agenda.
The Delegation of China.
Mr. E.S. MA. (CHINA): Mr. Chairman, I do not want to lay any
difficulty in the way of the Committee.. On the other hand, we,
of course, would not like to miss any of the meetings, because we
consider these Articles to be very important.
CHARMAN: I would like to say that most of us would like
to be present in the room.
V
57 58-,,,,
Mr. R.A, SHLCKLE (Uniteg Kinrdom): Mr. Chairman, I
Wonder whether it might not be as will to say here and now that
theComb-Oooeittea well moet at010.3U a.m. on Thursday. I
say Thursday rather than tomorrow, because perhaps by then
we will have completed discussion on Articles 24 and 15.
I think the sub-Committee will be in a positios to atart
when we have completed the discussion of those twocArticles.
Could we10.30 lO0. on Thursday morning definitely?
MAMIRIU : There is no objection on the part of the
Secretariat, I hear, so we say definitel. 10,30 on Tharsdey
morning. Toe rxom wil be-announced.
Zhe Delegote ;f Brazil.
M. J. TORRES (Brazil): Mr. Chairman, I know that you
do not favour, as we.all do not, the constitution of big
sub-Committees with more than six, but in view of the concern
of the Chinese Delegate in the matter o_.. be dealt with by
this sub-Committee, and in view of the fact that we may balance
the sub-Committee a little more, Iay 1 suggest that China be
included s a-member of the sub-Committee?
RCAAIMUN: rn pfactive it won't make any difference to the
delegate of Chind ar he will get special information witg re6ard
to the meetings, so I think be would accept the suggestion of the
Brazilian delegate in order to clear away all possibility of the
Chinese delegate not being informed.
The meeting rose at 6.25 p.m.
E/PA/T/l/PV/7
V |
GATT Library | cd738ry6150 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Seventh Meeting of Commission B held on Tuesday, 10 June 1947, at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, June 10, 1947 | United Nations. Economic and Social Council | 10/06/1947 | official documents | E/PC/T/B/PV/7 and E/PC/T/B/PV/5-7 | https://exhibits.stanford.edu/gatt/catalog/cd738ry6150 | cd738ry6150_90250075.xml | GATT_155 | 14,384 | 86,637 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/B/PV/7
10 JUNE 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
SEVENTH MEETING OF COMMISSION B
HELD ON TUESDAY, 10 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.
CHAIRMAN: The meeting is called to order.
I wish to apologise for my late arrival, but as the delegations
were entertained by the Swiss Federal Council, that explains why
the Chairman and one or two other delegates are not quite sharp on
time.
Before we take up Article 47, I would like to ask if there is
any question that any delegate would like to raise?
The delegate of France.
M. PETER (France) (Interpretation): This morning,
Mr. Chairman, we had the first meeting of the drafting sub-
committee that was appointed yesterday. Vie have already made some
progress with our work, but we thought it would be a good thing to
have one more delegate. I refer to a delegate who has already
taken part in the work carried out both in London and at
Lake Success - the Netherlands delegate. I think that he can
make a useful contribution to our work and that his experience of
this question will prove valuable. Thorefore, I propose that, in
edition to the members that were appointed yesterday to from this
sub-committee, the Netherlands delegate be also appointed.
CHAIRMAN: The delegate for the United States.
MR. R.B. SCHWENGER (United States): Mr. Chairman, I am very
happy to be able to support that reccommnedation wa.ly. As a
matter of faot, I had asked for the floor with the idea of making
the same suggestion myself, and I am very happy that he did so.
Professor de Vries has had experience in that Chapter and this makes
it very worth while for use to have him in our sub-committee.
MR. D. CAPLAN (United Kingdom): I support that.
2
E/PC/T/B/PV/7 MR. J. A. GUERRA (Cuba): I support that also.
CHAIRMAN: The delegate for Brazil.
MR. L.D. MARTINS (Brazil) (Interpretation): Mr. Chairman,
I can only support the proposal made by the French delegation to
t ure atb
ad anuereuxtr"member to our drafting sub-committee, but on,st be
aware that there is a rule limiting the nuae of members in
sub-committees and that is bein infringed. Therefore, as this
rule has been infringed, and in order to have a proper balance
between the various parties represented on that committee and not
to, have more members intr.sed in the production of commodities, I
would suggest, in order to have a proper balance within that
committee, that we nominate the Inian delegate to be a member of
that sub-committee.
bnCH1~Ma eeI am very sorry that the Braz.ii egatQ has
calgled gargttgetntion to the fotat th rule re-adin he umber in
the sub-committe has beanifrinned.
Ystaca, weI gacccet eltgahehofereques that the dcalete f
Cuba be dded to the sub-committee, I realised fully that we were
ininkn,,te ruse wSigehohg so eeeten set by the 8terin6 mmita
tuhat ris not id rul, bat arue of convenience, that the
nuoe ei un uld nhe sub-committuehxo. exceed six, because that was
foucaln otro ggnumberactic-evt thaa nmbgreat harml t-no ereham
wifld b done nc thencumbee was omzreascd by ene ane the delegat
of Cubo aldwd. Tidaydohen Iohearu the u-mination pat forward by
toe dalegatan 'f France nd the delegate of the United States that
the delegate of the Netherlands sed, uld be add,I also felt some
reolief boecause, in nminating this sub-committee the Chair had been
faced with a very difficult problem.
E//T/B/3?7 . 4 E/PC/T/B/PV/7
The great difficulty about this Chapter No. VII dealing with
inter-governmental commodity arrangements is that there is such a
wealth of experience on this Committee. If we wanted to take
advantage of all the wealth of experience on this Committee, we
would have to form a sub-committee of ten or twelve members, and
that would clearly defeat the purpose for which sub-committees are
designed.
Now there is an opportunity for any member if the Committee,
who wishes to express to the sub-committee his point of view on any
particular subject, to get in touch with the Chairman of the
sub-committee and to be given a hearing, but I would strongly urge
that the number on the sub-committee be restricted to a workable
number. Now, I do not know what that workable number is. The
Steering Committee indicated that six was a workable number.
Yesterday, we allowed the rule to be infringed by adding one and
making, it seven, and I think we might even stretch it to eight, but
when it comes to nine I feel we are getting a little out of balance.
Therefore, I would like to have further views of the Commission
before we definitely decide upon this question. E/PC/T/B/PV/7
- 5 -
CHAIRMAN: The Delegate of Cuba.
Mr. GUERRA (Cuba): Mr. Chairman, I do not have any
priority for judging what the right number for any particular
Sub-Committee should be; but on the basis of the experience
we had in London, working on this same Chapter, I would be
inclined to support very strongly the inclusion both of the
Representative of the Netherlands and, the Representative of India.
In London we had a Sub-Committee of nine countries, and if I am
not mistaken it would be, with these two inclusions, exactly
the same Delegations represented as were in London.
The experience we had there was that, when the work of the
Sub-Committee came to the plenary session, the problem had been
so well discussed and the difficulty thrashed out that the
result was there was very little discussion in regard to
Chapter VII as it came out from the Sub-Committee. Here we are
having now a more restricted discussion in the Commission of the
problems involved, and notwithstanding the fact that we consider
the Sub-Comaittee as a Drafting Committee, nevertheless the
question involves in many cases such very important matters of
substance that we had experience that would be very definite when
we take up the discussion again in the plenary discussion of the
difficulties, and agreements are reached as far as possible.
So on the basis of the experience I will support the inclusion
of both the Delegate of the Netherlands and the Delegate of India.
CHAIRMAN: The Chairman of the Sub-Committee: the Delegate of
the United Kingdom.
Mr. CHAIRMAN (United Kingdom): Well, I do not want to speak in
that capacity, Mr. Chairman, because it would be too invidious for
me to say what I think the Committee should consist of. G. - 6 - E/PC/T/B/PV/7
Just speaking as an ordinary Member of our Committee here,
I would say that this question arises at every Conference. This
is the tenth international conference which I have attended in
the last nine months, and it always arises. It is a most
invidious question to have to be dealt with. That does not mean
that I do not sympathise with the views the other Delegates have
expressed; being ready to support Professor de Vries, I personally
say leave out personal considerations, but that we do know that
the Professor has been intimately and personally connected with
the development of this Chapter. That, you can say, is a very
invidious way of looking at it, but I think it can be defended.
I was thinking of adding Professor de Vries in an advisory
capacity.
I am not sure whether our Chairman this afternoon is quite
right - it is a very fine point to say eight is enough, and nine
too many; but there is nothing to stop any Member of a Commission,
from any Delegation, being present at the meetings of the Sub-
Committee, without the right, as such, to speak to any and every
point; and I am sure that there is no reason why, if a Delegate
feels very strongly on a point that is of particular concern,
he should not ask for permission to speak to that. He has the
opportunity of hearing what is going on, and can put his views in
writing if it is a critical point. But we must see that most of
the work referred to the Drafting Committee is work of drafting.
We are not referring the great major mass of problems to
that Committee. If we are, it changes completely my understanding
of its work. So I would suggest that the Commission this
afternoon should support the view of its Chairman, and say that
eight representatives areas many as we should have for this work.
The work of that Committee will come back, it will have
to be argued again, and if any Delegate has had a real point of
substance to deal with he still has the right to raise it when
the Report of the Drafting Committee comes back. - 7 -
E/PC/T/B/PV/7
CHAIRMAN: The Delegate of India.
Mr. Habib I. RAHIMTOOLA (India): Mr. Chairman, I wish I
had had an opportunity of making my statement a little earlier:
it might have prevented some of the remarks that have been made.
I am most grateful to the Delegate of Brazil and the Delegate of
Cuba; but we have never been very keen to come on to this
committee, and in due deference to your wishes in the matter, I
would like to state that we would like to stand down. We quite
realize that the most important part of this Committe's duties
will be in the speedy dispatch of the work, and so long as we
have an opportunity of attending the meetings on items which we
consider important, that will satisfy our needs.
CHAIRMAN: I wish to thank very much the Delegate of India
for the very commendable spirit he has shown, and I wish to assure
him that so far as the Chair is concerned, I should have been only
too happy to see India represented on this sub-Committee. But we
are faced with a very difficult task of choosing a sub-Committee
that is representative of all points of view expressed in the
Commission, and, at the same time, a workable number.
I think the St!:.ering Committee are quite right in deciding
that the number should be six; but in view of the intricate
character of the work we have to deal with in this Chapter, and
in view of the wealth of experience that we have on this Commission --
representatives who h ave worked before on this Chapter and who have
a fund of experience to contribute to the work of the sub-Committee --
I think we are perhaps justified in going beyond the number six
that was established by the Steering Committee. But when we go
beyond eight, I think we are really getting a little too far, and
if the nomination of India had come seventh or eighth I would have V - 8 - E/PC/T/B/PV/7
been very pleased to see the Delegate of India included; but
when this nomination came ninth, I became a little alarmed.
I appreciate greatly the help, that the Chairman has received
from the Delegate of the United Kingdom, in pointing out the need
for keeping the number of the sub-Committee down to a workable
number; but I think it would be wrong to derive the impression that
this is just a Drafting Committee. The instructions that we
received from the Steering Committee were that after the Commission
had dealt with each section of the Charter, it should establish a
sub-Committee to reconcile differences in views, and that that
sub-Committee should be representative of the various points of
view. That is the main task of the sub-Committae, although it
also has the very important task of drafting, and putting into
a form that will be acceptable to the majority of the Members
of the Commission, the various Articles of the Charter with
which the sub-Committee has to deal.
I think the sub-Committee that we have established is a
representative one. It contains four countries in Europe and
four countries outside of Europe. There are other Delegations
interested in a number of special points that arise in connection
with the amendments that have been proposed, and I think it would
be the duty of the sub-Committee to call representatives of those
Delegations in when those points are discussed. That particularly
applies to the Delegation of India. The Delegation of India
has raised a number of points in regard to this Chapter, and
when the sub-Committee come to consider those points I think it
is essential (I am sure it would have occurred to the sub-Committee
itself) that they invite a representative of the Indian Delegation
to come before them and take part freely in the discussion of
those particular points. In that way, we would have the benefit
of the advice and the experience which the Delegation of India
has to contribute, and, at the same time, keep the number of the
sub-Committee down to a workable number. I therefore hope that V - 9 - E/PC/T/B/PV/7
the Commission will approve the addition to the number on the
sub-Committee of Dr. de Vries of the Netherlands Delegation,
and that we will be able to confine the number on the sub-Committee
to eight. Is that approved? (Agreed).
The Delegate of the Netherlands. - 10 - E/PC/T/B/PV/7
Dr. E. de VRIeS (Netherlands): Mr. Chairman, I feel obliged
to thank you and many members of this Commission for the kind words
you have spoken to me. As you well pointedout, Mr. Chairman,
this Sub-Committee has, as its main task, to reconcile points of
view, and you put me in the place of consumer countries for the
Netherlands in Europe, but I have to reconcile the points of view
myself because I am representing myself, not only the Netherlands in
Europe, including the Belgo-Luxembeurg Union who are consumers of
natural products, but also producing countries in Asia, Africa and
America. So I think if I can be of any use in the reconciliation
of points of view I will do my best.
CHAIRMAN : We will now pass on to our Agenda. We take up
Article 48. The first item on our Agenda concerns paragraph 1.
The New Zealand delegation proposes the deletion of the word
"primary" in the third line. There is a similar proposal of the
New Zealand delegation in relation to Article 49. I would therefore
propose, if the New Zealand delegate agrees,that we consider both
of these proposals at the same time.
Mr. G.D.L.WHITE (New Zealand.): Mr. Chairman, after hearing
about the wealth of experience which we have assembled in this room
this afternoon, I feel very diffident about proposing anything at
all, particularly about proposing the deletion of some words which
have already been passed through the deliberations of our experts
for approval, However, we have here a criticism of this Chapter
and it involves, as you say, an amendment to article 48 and. to
Article 49, and this is an amendment to which I attach a little bit
of importance. Our position is that we are, in general, in favour
of leaving the door open to the conclusion of agreements for non- ER
-11 - E/PC/T/B/PV/7
primary commodities. Now, the deliberations of this Commission
have not progressed far enough to know excactly where we stand as
regards regulatory and non-regulatory agreements, but if I might
take the present text and refer to some later Articles, we will
find that Article 52 (c) states that the regulatory agreement can
be made for a non-primary commodity but only in certain circumstances,
that is when, in addition to the circumstances set out in 52 (a) and
52 (b) .-that is conditions of burdensome surplus or widespread
unemployment - in addition to those circumstances, if the ITO finds
that some special circumstances justify such action, well then the
door is open to the formation of an agreement about a non-primary
commodity. We have some amendments before us which propose the
deletion of this article 52 (c), but for the moment I would prefer
to assume that that sub-paragraph is allowed to remain in the
Chapter. Although the field is limited in Article 52 (c) for
forming regulatory agreements for non-primary commodities, there is
nothing, as far as I can see, which prevents a non-regulatory
agreement for a non-primary commodity, provided that such agreements
are governed by the general principle applicable to all agreements.
That is the principle which is at present set out in Article 51.
Now this being so, our delegation does not see that the
procedure for study groups and conferences in Articles 48 and 49,
should be limited to primary commodities only. We envisage that a
study group and a conference could lead to a non-regulatory
agreement or, in the more limited circumstances of Article 52 (c),
it could lead to a regulatory agreement for a non-primary commodity
that
and/that sort of action could achieve some of the objectives of
Article 47 where we are setting out our general objectives of
intergovernmental commodity arrangements. So that, in those sorts ER
- 12 - E/PC/T/B/PV/7
of arrangement ts are to be permitted, we feel that it is illogical
to exclude non-primary commodities from Articles 48 and 49 where we
set up study groups and have commodity conferences. We have not
in
proposed the deletion of the word "primary" from Article 50,/which
it also a appears, and in which it mentions our relation with
intergovernmental organizations and we have not proposed the
deletion at that stage because we have not got any specific
intergovernmental organizations in mind which are dealing now with
primary commodities. But if organizations of that nature are
likely to be set up in future, I think it would be a good case for
deleting the word "primary" from Article 50 also, but we have not
put that suggestion forward and we would be glad to hear the views
of any other delegation on that question after it has been
determined whether our amendments to Articles 48 and 49 are
acceptable. S - 13 - E/PC/T/B/PV/7
CHAIRMAN: The Delegate of China.
Dr. T.T.CHANG (China) Mr. Chairman, the Chinese
Delegation shares the view expressed by the New Zealand Delegation
and would like to support their proposal to delete the word
"primary from the third line of the first paragraph of
Article 48, as well as from Paragraph 1 of Article 49.
CHAlRMAN: The Delegate of Canada.
Mr. J.J. DEUTSON(Canada): Mr. . Chairman, the proposal
of the New Zealand Delegation would make a very fundamental
change in the whole conception of this Chapter. The whole
Chapter, in a sense, is an exception from the other provisions
of this Charter, an exception which would allow the use of
certain quotas, controls and regulations which are prohibited
elsewhere in the Charter.
The reasons for this exception are stated in this Chapter
itself. We say that there are particular difficulties
surrounding the trade of primary commodities, special
difficulties - special difficulties of price fluctuation,
development of surpluses and over-production, and so on -
which cannot be dealt with by the normal forces of the market
and which, if not dealt with, will lead to certain difficulties
harmful to international trade, and that those problems are
peculiar to primary commodities, or at least the problems are
more severe in the case of primary commodities than they are
in the case of manufactured goods generally.
For that reason it was thought proper that primary
commodities should be dealt with in a special way. The
proposal by the New Zealand Delegation would seem to deny S - 14 - E/PC/T/B/PV/7
this entire item, would seem to deny the entire purpose
of the Chapter. I think. that is a vary fundamental
change and an undesirable one, because it will change the
character, not only of this Chapter but of the whole
Charter. It would introduce another very large escape
clause into all the undertakings that are put elsewhere
in this Chater. For that reason, Mr. Chairman, I
would not support the New Zealand proposal. P . - 1 5 - E/PC/T/B/PV/ 7
CHAIRMAN: The delegate.,of Cuba.
M. J.A. GUERRA. (Cuba): Mr. Chairman, the Cuban delegation
shares the view expressed just now by the delegate from Canada but,
while in entire agreement with him regarding the effects of the amend-
ment proposed by theNew Zealand Delegation, we nevertheless find we
very logical justification for the substance of the amendment in the
sense-that in Article 52 (c) we have recognised that in conformity
with the general character of the Chapter, the Organization may in
special exceptional circumstances authorise the agreements regarding
commodities which are not primary. In that sense the New Zealand
proposal is justified to the extent that in paragraph (c) of Article
52 there is only the general declaration that "the Organization finds
that...." but there is no procedure stated whereby the Organization
will make the determination. To that extent the substance of the
New Zealand smendment will be justified if it is only limited to
Articles 48 and 49 because the effect will only be to make studies
of the commodity, and that will be a very logical step to take: not
being a primary commodity, it will be a case contemplated under 52 (c).
But we agree that the substance is justified. We think the proper
thing to do will be to make some reference to the procedure by which
the Organization will make the determination regarding the exception-
al cases contemplated in (c) of Article 52, but not to drop the word
from Articles 48 and 40 or any others because, as the Canadian delegate
pointed out, that will in fact change to a very great extent, if not
in the specific effect of this specific amendment, nevertheless will
change the general approach and appearance of the Chapter in the
sense that if the Chapter were contemplated in a general way it would
appear to give the possibility of making agreements for commodities
which are not primary. Therefore we are against the proposal of
the New Zealand delegation in its present form but we think that their P. - 16 - E/PC/T/B/PV/7
case may be met by making some amendment under Article 52 (c) to
provide for some procedure whereby the Organization will make a
determination regarding such consequent cases in which the agreement
may be justified for non-primary commodities.
CHAIRMAN: The delegate of the United Kingdom.
Mr. D. CAPLAN (United Kingdom): Only to say this, Mr. Chairman:
I think there is a point here which looks loke having to be ironed but
a bit. We are a Committee here, I think, of enthusiasts, because we
are all if us in love with Chapter VII; but I think the delegate of
Canada has done us a great service in reminding as - as I am sure we
all need to be reminded - that Chapter VII is the seventh chapter in
a Charter; it is not a document on its own, and I do support strong-
ly what the Canadian delegate has said about the implication of the
New Zealand proposal. But, apart from that, if we were to accept
the New Zealand proposal it would necessitate most substantial re-
drafting to other parts of this Chapter 7. Article 46, I think,
would lose its real significance. And the whole point, if one
looks closely at 52 (c), is that it stresses - and rightly - the
very exceptional character of the circumstances and it requires a
determination by the Organization of such circumstances before you
would apply Chapter VII to a non-primary commodity.
So I am afraid that I find myself also unable to support the
New Zealand proposal. E/PC/T/B/PV/7 17 -
CHAIRMAN: The delegate of France.
M. PETER (France) (Interpretation): The French delegation
entertains the same concern as the New Zealand delegate, and in
particular I am now thinking of the case of steel. It may happen
that. some day an inter-governmental arrangement appears desirable
as regards steel, and while iron ore can be considered as a primary
commodity, it would appear difficult to introduce steel es being a
primary commodity.
Therefore, on the substance I agree with the contention of the
New Zealand delegate, but at the same time I should like to refer
to paragraph (c) of Article 52. Like other colleagues who have
spoken before me, I think that it is likely to meet the desires of
the New Zealand delegation, with few slight amendments. I
therefore agree as regards the substance of the idea expressed by
the New Zealand delegation, but I think that their amendment can be
rejected as regards its form, and that concerning; its substance we
can revert to it when we take up the discussion of Article 52 (c).
CHAIRMAN: Tha delegate of the Netherlands.
DR. E.. de VRIES (Netherlands): Mr. Chairman, as far as I can
see the difficulties for the New Zealand delegation derive from the
re-drafting in New York of Article 60 on the definition of primary
commodities.
According to the London draft a non-primary commodity could
be called primary commodity. Now, we have a new draft on
primary commodities and I think that is the casic reason why the
difficulties arise now.
I should like to join the several delegates who are putting it
before us that we ought to deal with these non-primary commodities
J. - 17 - J -18 - E/PC/T/B/PV/7
under Article 52(c), and I think that the determinations which are
asked for in Article 52(c) are dealt with in Article 66, paragraph 4,
that is, Articlee 52 is mentioned in Article 66, so that we have it
already in the Charter. I think that a slight addition in
Article 52(c), saying that not only the principles but also the
provisions in the Chapter shall be followed in the case of non-
primary commodities, might suit the New Zealand delegation. In
that case, we might have a Study Group who will make recommendations
to a commodity conference as to what we want for a non-primary
commodity by inserting the words "and provision" after the word principles"
in Article 52(c).
CHAIRMAN: Will the delegate of New Zealand reply to the
various suggestions which have been put forward?
MR. G.D.L. WHITE (New Zealand: Mr. Chairman, in the first
place I would like it to be clear that our purpose in putting
forward this amendment was not, somehow or other, to widen the
escape from Chapter V.
It seemed to us that if there were to be any agreements about
non-primary commodities t all, they would definitely have to
conform with the provisions of Chapter VII, and that would be
sufficient to assure that any unjustified escape, from the provisions
of Chapter V could not enter into the matter.
As regards the proposal to accommodate our suggestion under
Article 52(c), that seems to me a rather peculiar way of doing about
it, because if Article 52(c) remains in some form or another with
a limited scope governing the use of a regulatory agreement about a
non-primary commodity, I cannot imagine how that agreement is set in
motion, unless you do have a commodity study group or commodity
conferences to initiate the thing in the proper style, which you do
for your other commodities. - 19 -
E/PC/T/B/PV/7
There is one further point that I am not quite clear on
as a result of this debate, and that is that although the
provisions of Article 52 (c) as they stand at the moment are
quite clear about non-primary commodities, I still do not see
that the non-regulatory agreement about a non-primary commodity
is excluded from this Chapter; and I appreciate the point made
by the Delegate of Canada, that Articles 46 and 47 set out the
circumstances which necessitate commodity agreements; but even
he had to admit that it was merely a matter of degree - that these
special difficulties were not entirely inapplicable to non-
primary commodities. He said they were more severe; and therefore,
I think that the Chapter as it stands still leaves scope for
agreement about non-primary commodities, and that it seems strange,
therefore, to exclude primary commodities from Articles 48 and 49.
CHAIRMAN: The Delegate of Canada.
Mr. DEUTSCH (Canada): Mr. Chairman, as has been pointed
out, the Chapter does contain a provision for agreements on
non-primary commodities in exceptional circumstances, namely
sub-paragraph (c) of Article 52. As the Delegate of Cuba has
pointed out, it may be desirable in cases where exceptional
circumstances justify an agreement on a non-primary commodity,
that the procedure leading up to the agreement might be the same as
that of Articles 48 and. 49. I think that is something that can
be fixed on in the drafting of sub-paragraph (c) of Article 52.
At present that sub-paragraph states, the last sentence, that
agreements under this sub-paragraph "shall be governed not only
by the principles set forth in this Chapter" - in other words, the
agreements are to be set up under the principles of this Chapter.
Now the procedure leading up to these agreements could also
be the same as in this Chapter. That does not alter the main G. --- 20 --- E/PC/T/B/PV/7
argument, however, that agreements on non-primary commodities
are exceptional cases, and not general cases, and that is where
we differ fundament ally.
I think the New Zealand Delegate is inclined to feel that
agreements for non-primary commodities should not be dealt with as
an exceptional matter. There I differ with him fundamentally;
but as far as dealing with them as an exceptional case is concerned
I think it can be made clear that the procedure as now laid down
should govern that case also.
CHAIRMAN: The Delegate of Cuba.
Mr. GUERRA (Cuba): I associate myself entirely with the
remarks made by the Delegate of Canada, and I want to make clear,
to the extent that the Amendment proposed by New Zealand can
be made clear, that in the procedure on part of the exceptional
cases we would be in favour of making a charge in article 52(c);
but as the Canadian Delegate said, there is a fundamental
difference in conception regarding non-regulatory agreement on
non-primary commodities, as a general rule. That difference will
be fundamental and will not be supported by Cuba.
CHAIRMAN: If I may sum up the discussion on this point, it
appears to the Chair that the majority of Delegates who have spoken
on this question are opposed to the New Zealand proposal that the
word "primary" should be deleted in the first paragraph of
Article 48 and the first paragraph of Article 49; but they are of
the view that the relation of the Chapter to non-primary products
should be covered by Article 52 (c), and that when we come to
examine Article 52(c) We should endeavour to see if the procedures
envisaged in the Chapter should also be made to apply to non-
primary products. - G. 2. E/PC/T/B/PV/7
-21-
I the New DZealand jlegate is in agreement, we could
reer this questihon to tl Sub-Committee to be examined, in
relatAion to rticle 52(c). If, however, the New Zealand Delegate
wishes to persist in his proposal thaort the wd "primary" should
be deleteAd from rticles 49 and 48, I then feel it will be necessary
for us to put the question to a vote, in order to obtain the
fsense o the Commission regarding this particular question.
I wold therefore ask the New Zealand Delegate if he would
be content to havm,e theatter referred to a Sub-Committee, or
whether he wishhaes to ve the matter put to the vote? V - 22 - E/PC/T/B/PV/7
CHAIRMAN: The Delegate or New Zealand.
Mr. G.D.L. WHITE (New Zealand): Mr. Chairman, I would
be very glad to see this question handled by the sub-Committee,
but I would suggest that the sub-Committee also give some thought
to the question that I have raised as to the fact that
Article 52(c) comes in a section that is all about regulatory
agreements, and the sub-Committee should also consider the
position of non-primary commodities as regards non-regulatory
agreements.
CHAIRMAN: I thank you. I think we can refer this matter
to the sub-Committee and ask them to examine this question not
only in relation to Article 52(c) but also, in considering the
re-arrangement of the Chapter, to consider the relationship of
non-primary products to non-regulatory agreements. Would that!N1 tf,
sfactory?b;Qti¢-
Mr. G.D.L. WHITEealand (Newe sZ) n Mrm.n Chaira.
CHAIRMAN: Is that agreed? (Agreed)
Wae to a proposal of thpsaoi:he Unitee D StatsDelegation
with regard tro h 1. I woj parwoult lase the.ak the United
Stlegation to e lain the pnmto xp of thitsproposal, isesls and
whetheear it rltes esttono a quai ingoor f ethft wnyher a
qonptof principle are involved
Mr. R.B. SCHWENGER (UinitedSttae)a: Mr. Chiaarmn,
es cseehange inu Article 48n-s riaonenrdtdat to e inrgbf ing cd t~c
to bring the wording in lines with such changes as were made by
this Commission in Article 46. Those of you who were at
London will remember that the words "special difficulties" were
put in at a late stage in the drafting of this Article, specifically V. - 23- E/PC/T/B/PV/7
to refer to Article 46, and that these changes were made by us
at the same time as we proposed a change in Article 46.
CHAIRMAN: The Delegate of the United Kingdom.
MR. D. CAPLAN (United Kingdom): I think it is a drafting
improvement.
CHAIRMAN: The Delegate of Cuba.
Mr. J.A. GOERRA (Cuba): We feel the same way.
CHAIRMAN: After these remarks, is the Commission agreed
that the United States proposed text should be referred to the
sub-Committee for further study?
The Delegate of 17 New Zealand.
Mr. G.D.L.. WHITE (New Zealand): Mr. Chairman, I would just
like to make one remark. I am not quite happy that Article 46
covers all the circumstances in which we might wish to set up a
commodity study group. I think that the circumstances of
Article 46 are understood to apply in the first paragraph of
Article 48; but I am not quite sure that Article 46 covers all
possible cases, and I do not support this amendment because I do
not quite see the necessity for it.
CHAIRMAN: Any other observations? If not, I take it
that it is agreed that the United States proposal be referred to
a sub-Committee.
(Agreed)
Paragraph 2. We have a proposal of the United Kingdom
Delegation which is a revised text of paragraph 2. Would the
United Kingdom Delegate please explain the reasons for his proposal? V. -24 - E/PC/T/B/PV/7
Mr. D. CAPLAN (United Kingdom): As in the previous
cases when dealing with an amendment to Article 48 which
applies to Article 49, you will notice that the United Kingdom
suggest a comparable amendment for Article 49 (2) as well as
Article 48 (2). We sent round our paper which everybody has
seen and which gave, I hope, a clear explanation of the reason
for this suggestion. What it really comes to is this, that
we think that the right principle when you are trying to
secure the widest possible measure of international co-operation
on commodity problems, is to leave it to each country to
determine whether that country itself has a sufficient interest
to wish to participate in whatever form of international co-oper-
ation arises at that point. I do not think I need say any
more, Mr. Chairman.
CHAIRMAN: The Delegate of France. -- 25 -- E/PC/T/B/PV/7
M. PETER (France) (Interpretation): Mr. Chairman, I would
like to support the amendment suggested by the United Kingdom
delegation. The purpose of this amendment is to make it possible
for all members interested in a particular question to participate
in the particular study group appointed for that purpose. I do not
think that it would be possible to leave it to the organization to
determine what member states should be invited. Every state, I
think, that is substantially interested in a particular question
should be in a position to participate, and it appears necessary
not to leave aside or forget any member.
I would like to give a practical example. Last November a
study group for the study of rubber met at The Hague, and at the
end of the meeting the Netherlands government sent a letter to all
the United Nations asking them whether they would be interested in
taking part in the conference, which was going to meet in Paris the
next month. The replies that were received by the Netherlands
government were communicated to the French government, which invited
all the states that desired to take part; that is to say, all the
states that declaired that they were interested in the question.
This procedure has proved satisfactory to everybody. For these
reasons, I support the United Kingdom amendment.
Mr. J.J. DEUTSCH (Canada) Mr. Chairman, I also support the
United Kingdom amendment. I would like, however, some explanation
of the last sentence: "Non-members may also be similarity invited".
Does that mean that all non-members who consider that they have an
interest in the commodity will be invited? That may mean a certain
amount of difficulty if it follows that every, i -member may be
invited if he wishes to come. ER
-26 -
E/PC/T/B/PV/7
Mr. D. CAPLAN (United Kingdom): Mr. Chairman, if I might
answer that question, my attention had been drawn to this point by
a number of other delegates. We had in mind, of course, that if
the Organization decided that that was the best way of doing it,
that was quite a good idea, but we do see that the word ''similarly"
gives rise to difficulty, and we would be very happy ourselves to
see the word "similarly" dropped.
Dr. T.T. CHANG (China): Mr. Chairman, in this case I would
refer the retention of the last sentence of the original text,
that is to say "Non-members having a similar interest may also be
invited".
Dr. E. de VRIES (Netherlands): Up to now no delegation has
spoken against the United Kingdom proposal, so may be I may ask for
the floor now. I am glad that the French delegate mentioned the
actual implication by the Netherlands government, to invite all the
members of the United Nations for the conference on rubber. But
I think in this case the word. "study group is ambiguous. What
is meant here by a study group is to start a study group on
commodities. Such is not the case with rubber.
Mr. D. CAPLAN (United Kingdom): It is a study group. Mr.
Peter used the word "conference" inadvertently.
Dr. de VRIES (Netherlands): Mr. Chairman, this only makes my
point stronger that the word "study group" here is an ambiguous
word. It means a permanent body meeting once, twice or three times
a year. A study group mentioned in Article 48 means a study group
started and then given over to an organization and then to a
conference. Here I think it is almost the same thing as you ER
E/PC/T/B/PV/7
- 27 -
mentioned so rightly yesterday and today. If you have a Working
Committee with too many members you cannot go far, and I think that
it is a very good thing to send invitations to all the members for a
conference. As far as it goes to any negotiations, to any
agreement or arrangement, I should think we ought to invite everybody,
but I doubt very much whether it would be necessary to invite all
the members of the United Nations or of the ITO for the study of any
commodity. There are many problems that are regional in character,
and I do not see that it is necessary to invite all the members.
That just means that the organization has to cyclostyle an
invitation and send it to about sixty governments and they have to
consider whether they are interested or not. But if you consider
the possibility that there would be a study group on, say, coffee,
and sixty members would attend it, I think it would be better to
leave the study to, say, ten or twelve or at the most fifteen most
interested rations. As regards negotiations, I think we ought to
invite everybody, but as I say it is only a matter of procedure
that the study can go on in a quick way and that we do not have to
wait a year or more for the resort of a study group. S -- 28 -- E/PC/T/B/PV/7
CHAIRMAN: TheDelegate of Cuba.
Mr J.A.GUERRA (Cuba): Mr Chairman, with the final
sentence amended in the form suggested by the Delegate of
China, keeping the New YorK text, we support the amendment
proposed by the United Kingdom Delegation.
We think that the difficulties referred to by the Delegate
for the Netherlands are real ones but in practice they would
be found not to exist at all, in the sense that, if a parti-
cular country does not have an interest strong enough or
large enough to justify sending people out of the country,
spending money and time in making a study, it is only natural that
that country will not send them. If those is an invitation
extended to every country, a workable plan will automatically
come out of the interests which the countries may have in
the Study Group.
We think the amendment proposed by the United Kingdom
is a rather important one because, as the text stands now,
we give.the Organisation the task of determining the special
difficulties without giving any criteria by which to judge
whether or not a country will be substantially interested.
These are very fine words, but very vague ones. We either
have to try to give the Organisation a very definite criterion
to try to define wht the substantial interest is, or leave it
entirely in the air, and in many cases countries may be
deprived of the right to participate in a Study Group in
which they may be very much interested. Therefore we
think that the only way out will be to invite everybody
and then they will automatically fall out if their interest
is not a substantial one.
CHAIRMAN: The Delegate of the United States. S - 29 - /7
Mr. R.B. SCHWENGER (United States): Mr. Chairman, I
find myself somewhat in the middle on this argument and I
wonder if it might not be well at this stage - as perhaps
you have been eager to do in any case - to ask the Drafting
Committee to try to modify the proposal somewhat, so as
to avoid both of two rather serious difficulties on each
side of the problem. If I say, I would just like to
outline then as we see them, on the basis of this discussion
and re-consideration of this proposal.
In practice, as has very well been said by other
Delegations, it is quite necessary to invite any country
which, after full consideration of the nature of the group
that is being brought together, wishes to participate for
reas of substantial interest.
On the other hand, I believe there should be some
criterion in this Article to indicate that that is the idea,
that a country invited to come in should decide for itself
whether it has a substantial interest, rather than whether
it has just an interest. That may be of some assistance in
the application of this article, even for those countries,
it seems to me.
I seem to remember that in Leabon we tried to graduate
the degree of participation, from Study Group to conference,
to final Commodity agreement, and this was our effort to
start out with a small group of the countries with the
greatest degree of interest, since obviously a sine qua non
of any agreement would be some degree of understanding about
the matter between countries on the two sides - importers
and exporters - with the greatest degree of interest.
E/PC/T/B/PV/7 Yr - 30 -
II is not extremely useful, at that stage of discussions,
for countries with a rather small interest - however real and
important it may be to them - to take a very active part, but
at any rate they should be welcomed if they feel they have a
substantial interest.
The whole wording, I think, had some of that idea, perhaps,
intended to be hidden rather than expressed in it. It says:
"... the Organization shall promptly invite the Members
substantially interested..." it does not say, " shall decide
which they are." Presumably we shall have to decide in
order to invite them. I believe it has because a general
practice to decide by asking them. That is the practice
which we have used. But I ox believe that it is useful
to put in some words of criteria such as the words "substantially
interested", even though the decision may rest with the
Government which is going to be invited.
E/PC/T/E/PV/7
S E/PC/ T/B/PV/7
Concerning the last sentence, I agree with the point of view
expressed by the Canadian delegate, but I am not sure that it is
met by dropping "similarly", but that is a drafting question. We
have some suggestions on that which I would like to submit to the
Committee afterwards.
CHAIRMAN : The delegate of the United Kingdom.
MR. D. CAPLAN (United Kingdom): Mr. Chairman, after eight
hours of discussion, which have brought the Commission to Article 48,
paragraph 2, I hesitate to prolong the discussion on this particular
point. I do so, because there are two points that are worrying me.
The first is that I think the discussion on this particular
point has been somewhat unreal. In connection with this I would
like to make one or two general remarks, with your permission, if
I am not out of order. We must not lose sight of the fact that
Chapter VII has a very special position today in the world.
Unlike the rest of the Charter, it is being applied as a general
guide, not merely by the nations represented on the Preparatory
Committee, but by all the members of the Economic and Social Council.
That was shown by the results of the Economic and Social Council at
its session last March.
For my part, since I have to deal with commodity problems and
I go from one commodity conference or study group to another, I
thought that I was very 'happily married ' to Chapter VII in
practical life. I must say that in the light of a lot of the
discussion, I am beginning to wonder whether I have not been living
in sin' for a very long time.
Let us take some specific cases which are important, because
there are specific cases of events which are taking place using
J.
31 E/PC/T/B/PV/7
Chapter VII as a general guide.
Sixty-two invitations were sent out to nations, Members of the
United Nations and one or two who were almost Members, for the Tin
Study Group meeting which was held in Brussels last April. Twelve
countries accepted membership of the Study Group and attended that
meeting, and another five were present as observers. Does that show,
Mr. Chairman, good sense on the part of countries when they have the
freedom of entry to a study group, or does it show that we are
likely to have to operate study groups with sixty-two nations present:
Another case in point is the one which has been mentioned by
Monsieur Peter about the Rubber Stuty Group. Have sixty-two
nations said they are going to be present at Paris next week? I
believe that the latest figure is that some twenty had indicated
their desire to be present, of which a number have said that they
wish to attend this first meeting as observers. It is by no means
certain that twenty of therm will wish to join permanently.
Therefore, I do make this appeal to my colleagues. Because
there is obvious room for improvement in the Chapter as it is
before us, we must not lose sight of the practical existence of
arrangements which are already in full conformity with the basic
spirit of this Chapter VII, which commands the support of many more
nations than are represented on the Preparatory Committee. We have
a living thing there.
I am not suggesting that we limit our discussion to the
Second Session in any way. Any country which feels strongly, and
has a real point which will represent an improvement if put into
effect by the Commission, should put it forward, but I ao appeal to
my colleagues oil the Committee to keep in mind that there are
practical arrangements going on already and that there is a whole
corpus of study and consultation being built up.
J.
32 J. 33 E/PC/T/B/PV/7
To come back to Article 48, to which the United Kingdom
proposed this amendment, I believe that we can challenge this
principle and allow every Member to appoint representatives at
the initial moment of the formation of a study group, and, as
subsequently explained by our amendment, that is the point in
calling a commodity conference. If we allow to be present those
who feel they ought to be, we can count on the good sense of
governments. Governments do not send delegations to conferences
unnecessarily - they cost money, they cost man-power. I, myself,
have the utmost confidence in the good sense of all governments not
to abuse what may seem an unusually wide principle. Rather do I
feel, Mr. Chairman, that if we have this right of entry we are
sowing the seeds of fruitful international co-operation.
Of course, not every study group may end quickly in an
international commodity conference. I hope, for my own part that
they do not otherwise we would have a terrible job trying to
negotiate so many commodity agreements, but they have the value of
having all these countries who are genuinely interested working
together studying practical problems, and that represents a most
important and positive provision under Chapter VII of the Charter. G
-- 34 -
E/PC/T/B/PV/7
CHAIRMAN: We have now had seven speeches on this
question, I think it is an important question - an important
question of principle is involved here - but I think we have
had enough discussion to indicate the differences of view between
the various members of the Commission. The majority of those
who have spoken support the United Kingdom Amendment, that is,
they support the principle underlying the Amendment that it should
be left to the Members themselves to decide who are substantially
interested in the problems referring to any particular commodity,
rather than that the Organisation should have to decide that
question.
The opposite point of view is represented by the Delegation
of the Netherlands, and a middle course is rather taken by the
United States Delegate, but I take it that he is rather inclined
to the view expressed by the United Kingdom in proposing this
Amendment.
I do not think much purpose will be served by further
discussing this point here, and I therefore think it could be
referred to the Sub-Committee with a view to seeing if the
differences in view between the Delegate of the Netherlands and
the other Delegates could not be resolved in the Sub-Committee.
Agreed? Agreed.
We now come to paragraph 3 of article 48. We have a revised
text proposed by the Delegation of the United Kingdom. I ask
the Delegate of the United Kingdom to explain the purposes of
this proposal.
Mr. CHAIRMAN (United Kingdom): Perhaps I ought first to
explain that it has been pointed out to me that the force of this
paragraph, in the first sentence, may be misunderstood, because it
talks about reporting to the Governments represented on it, but
not to the Organisation. G - 35 - E/PC /T/B/PV/7
That is a drafting omission. I apologise to the
Commission. We should have inserted the words"represented
upon it and to the Organisation"; but that, of course, is a
point of drafting, and does not affect the general proposal.
Now I think that Mr. Chairman - judging from the remarks
made to-day - he would .take the view that this is a substantial
Amendment on the origin 1 Article 48, paragraph 3; and I think
on reflection that I must admit that that perhaps is the case.
We have envisaged study groups in the United Kingdom, and
in the practical sphere of those study groups, which have been
in existence for some time past now - as being bodies which
although, in the first place, they are called together to consider
a problem which looks like presenting the special difficulties
envisaged under this Chapter - they have discovered, as a result
of their study, that there is not going to be those special
difficulties for at least some time to come.
We must bear in mind here, of course, that we are dealing
with a very difficult post-war period, when conditions in many
primary commodities are very unusual because of wartime development
and disturbances.
If I might quote a specific example, we have got a tin study
group in existence, and when the notions were discussing all
together whether they could study the problem of tin, they certainly
thought they ought to; because during the war tin was a commodity
which gave rise to special difficulties, and it looked, to them
at the time as if tin were again going to give rise to special
difficulty.
As a result of statistical and factual studies made by the
study group, the nations have agreed that there was going to be
a surplus problem in tin. Because so much damage was done to the
tin mining areas of the world, and the world damage is so large,
it is going to be a long time before the supply of tin will, in
fact, come into burdensome surplus.
But in the opinion of the United Kingdorm, that does not mean
that the tin study group should peck its bags and go home, never
to return again until a crisis threatens. V
We do feel, in putting forward this proposal providing
for the continuing life of the Study Groups, even thgouh they
do not report that a great crisis is coming, /is a most important
and positive direction to give to the original Chapter VII.
The Delegate of Cuba has outlined his opinions on this subject
nd I believe the Delegate of Brazil had something similar in
mind; but we do not envisage all Study Groups as automatically
leading to commodity conferences which then lead to commodity
agreements. Rather is it that we all believe in the Study
Group as a means of international co-operation for making sure
that a commodity which it is felt may give trouble (it has given
trouble in the past) is kept under review. There is the basis
for an exchanges of views between the nations, and so I make no
apologies for putting forward no behalf of the United Kingdom
Delegation this new version of Article 48(3).
CHAIRMAN: The Delegate of Australia
Mr. W.T. DOIG (Australia): The Australain Delegation
considers that the substantial amendment proposes by the United
Kingdom Delegation does further emphasise rather negative
approach to this question of study Groups and commodity
conferences and commodity agreements. I want to make only a
few brief ramarks at this stage, but to talk later on the United
Kingdom amendment to Article 49, which we also oppose for the
same reasons.
To emphasize in this paragraph that the difficulties must
be so serious that they are unlikely to be overcome, etc., we
consider does not take into account the fact that this section
applies not only to regulatory Agreements, but also to the
non-regulatory or the agreements of a minor regulatory character.
It may well be that certain difficulties exist, or are expected
- 36 - E/PC/T/B/PV/7 V - 37 - E/PC/T/B/PV/7
to arise, which may not be considered so serious as this
particular text suggests, but in the circumstances it may be
considered necessary and desirable by the Study Group or by a
conference to taken some from of inter-governmental section
which could be classed as a non-regulatory agreement. We
therefore oppose this section and emphasise that we are in
favour of the present draft of Article 48 (3) subject only to
minor drafting amendments. - 38 - E/PC/T/B/PV/7
Mr. J.A. GUERR (Cuba): Mr. Chairman, we completely share the
point of view expressed by the delegate for Australia, and we
consider that the British amendment will involve a very substantial
change of substance. The delegate for Australia has called our
attention to the negative approach to the problem when the British
amendment emphasised the seriousness of the situation, and he has
very well explained how that will come into conflict with the point
of view taken by the Commission in general regarding the more
flexible provision for non-regulatory agreements. As regards
regulatory agreements, we want to draw the attention of the
Commission that already very strict conditions of circumstances have
been set up in Article 54 for regulatory agreements, and we do not
think it is necessary to continue to make the conditions and
circumstances in which some agreements would be justified. We want
to add - to point out another aspect of the British amendment. We
think it involves a very substantial charge in the character or the
study group. We have conceived the study groups at the Londn
meeting and, up to now, as a fact-finding binding body to investigate.
the situation, to see what the trade conditions are and so forth as
the New York text explains. But now it was felt that the decision
regarding whether intergovernmental action is called for by the
sitution, should be left to the conference, and also what form that
intergovernmental action should take, would be a matter to be dealt
with by this conference. As we understand it, the British amendment
involves a transfer of functions to an extent that it gives to the
study group the authority to recommend. This, of course, is only a
recommendation but will always carry a great deal of weight whether
intergovernmental action is called for or not. And not only that,
but what form that intergovernmental action should take. In fact, E/PC/T/B/PV/7
- 39 -
we take this amendment, together with the other one that we
supported, because we think that or a study group which is a fact-
finding body there would be no danger in inviting everybody, but now
if we take the amendment to paragraph 2 together with paragraph 3,
the effect, from our point of view, would be to nullify the
conference and transform the study groups in the real conference.
not
They will/study a point but, for all practical purposes, will make
decisions as to whether intergovernmental action should be called
for and as to what form that intergovernmental action should take.
Therefore we very strongly oppose the British amendment to
paragraph 3 and we together with the Australian delegation, support
the maintenance of paragraph 3 of the present text.
CHAIRMAN: We have now heard the speech of the United Kingdom
delegate explaining the reasons behind his proposal, and we also had
speeches from two members of the Commission opposing the United
Kingdom amendment. Does any member wish to speak in favoour of the
United Kingdom proposal? S -- 40 -- E/PC/T//B/PV/7
If not, I will move that the United Kingdom proposal be
referred to the Sub-committee, where an attempt can be made
to reconcile the points of view existing between the various
Delegations.
We now pass to Article 49, Document W.178. We have a
proposal by the lndian Delegation, suggesting that in Paragraph
1, after the words "a Member having a substantial interest,
the following words be inserted: "or at the request of a
competent inter-governmental organization."
Since this amendment refera to relations with inter-
governmental organizations, I would suggest that it be taken
up when we come to Article 50, if the Indian DeIegation agrees.
Mr. Habib I. RAHIMTOOLA (India): We agree.
The United Kingdom Delegation proposes a new wording for
Paragraph 1. With the United Kingdom Delegate explain the
reasons for this proposal.
Mr. D. CAPLAN (United Kingdom): I thank, in the light
of the discussion on the previous amendment, the best thing
I can suggest, Mr. Chairman,- for your consideration and for the
consideration of the Commission, is that we do refer this to
the Drafting Committee, because apparently much the same point
of psychological difference is involved here and I do not
really think we can fruitfully argue about Article 49(1)
without some relation to 48(5), as the Australian Delegate
rightly pointed out. It the Commission is agreeable, I
think that is the best course. S 41 E/PC/T/B/PV/7
CHAIRMAN: It is proposed that the United Kingdom
re-wording of this paragraph be refferred to the Sub-committee.
Is that agreed?
(Agreed)
The next point also seems to be purely a drafting point
and therefore I would suggest that it also be referred to the
Sub-committee Is that agreed?
(Agreed)
We now come to Paragraph 2. The United Kingdom also
have a proposal for a substitute wording for Paragraph 2 of the
New York text. This also seems to involve a point which we
have already discussed and perhaps it could be referred to
the Sub-committee without further discussion. Is that
agreed?
(Agreed).
We. now come to Article 50 - Relations with inter-
governmental organizations. There are a number of proposals
in relation to this Article, and also certain other comments
and proposals which we have held over until we reached this
Article .
I would first call attention to the General Note on
this Article. The. United Kingdom Delegation raises for
consideration the transfer of this Article to the Section on
Miscellaneous Provisions. Since that concerns the general
question of the re-arrangement of the Chapter, I propose that
that should be referred to the Sub-comnittee without further
discussion. Is that agreed?
(Agreed). S - 42 - E/PC/T/B/PV/7
I thnik we can now take up the comments of the French
Delegation, which appear on Page 1 of Document W/157/Rev.1.,
relating to functions of specialized agencies in relation to
commodity arrangemets.
TheDelegate of France.
M. PETER (France) (Interpretation): I should like to
point out, Mr. Chairman, that this is not an amendment to any
Article of the Charter, but only a wish expressed by the French
l legation to set out in the Report of the Preparatory
Committee a number of rules regarding the method.
In the last few months, when reading the Agenda or
certain conferences or Study Groups, we found that there was
some lack of precision regarding the respective functions of
various intrer-governmental organizations and that certain
criticism was made against this fact. Therefore we are of
the opinion that in the future it would be preferable to
avoid conflicting competences as between inter-governmental
organizations.
The French Delegation is of the opinion that there
should be some authority to determine the competence of each
of the organizations, and we think that this authority should
be the Economic and Social Council, which could determine
exactly the limit of competence of each organization. This,
I think, would make it possible to avoid unpleasant conflicts
and also facilitate the work of the Conferences concerned.
CHAIRMAN: I .will call now upon the Observer of the
Food and Agriculture Organization, Mr. Yates. - - ~~~~~43-
S E/PC/T/B/PV/7
(fFAaf.) :M'hH L.Y;kESF...4a u mr- Chairan.
Iatter I would sitrI .cuay thood andaAgricultureut the d,'ricre
Oranization woule ,d, of course, very hapepy to inform th
Economic and Social Council of whatever distribution of
remasponsagieeb ailities y beO A d ITRrwdsn between .aO he
th latter Iestbelcfsd, and woulde cwmmelcome tho oets
of the Economac and Socil Caao natter.muncil on .
eI would lik to point out that this question of
distributin of functions beetween intr-governmental
agnceiwo s ono hch haas ccurred in seaseveral ciislready
and nederarte o haCehSnuteio atiohcl N.ns, is envisaged
as being deah in an in eanage intarreemen-ncy gt. For
eGaFAO is, '.s0 t now in process of negotiating an
tinr-agencagye ment re with thInternaeationala Lbour
gOranization, undewgh ich machinery will be established
for etamnuabie allocationcl of work which may lie on the
frontiers of eth sphes erof mcooopestn of the two gOranizations.
We number of subjects in whicbh othA Fanb d ILhaOeav
an interest a wndeee r creating procedures for seeing that
there is no duplication of work in those frontier subjects. J. E/PC/T/B/PV/7
Similarly, it is engvisaged under Article 81, pararaph 2 of the
In trernational Trade Oranization Draft Charter that the
International Trade Organization shall conclude working agreements
with other inter-governmental organizations operating in related
fields. I feel confident, that when the time comes no difficulties
will be encountered in drawing up such an agreement between the
Food and Agriculture Organization and the International Trade
Organization.
It is, of course, proper that the Eonomic an Social Council
should desire to review the agreements which are so concluded and
if the French comment can be interpreted as meaning this, then it
is on which should surely receive our general support.
CHAIRMAN: In view of the remarks of the representatives of the
Food and Agriculture Organization, does the French delegate still
wish to maintain his suggestion that reference be made in the
report of the Preparatory Committee regarding this subject?
M. PETER (France) (Interpretation): Mr. Chairman, I am
quite satisfied with the explanations just given by the observer of
the Food and agricultural Organization, and I thank him. I think
we agree on these various points.
What my delegation wishes is that provisions should be made
for the settlement of conflicts if any, in the future. I agree
with the representative of the Food and Agricultural Organization
that if any such conflict should arise in the future, the Economi
an Social Council should be competent to solve it.
I shall be satisfied if a mention of this short discussion
that has just taken place is made in the report of the Preparatory
Commission.
- 44 - J. - 45 -
. ~~~~~~~~~E/P C/ T/B/PV/ 7
CHAIRMAN: Is that ae.
We will nowA tacke up the Indian amendment to rtile 49,
paragraph 1, A referr Aing to the considerations of thisrticle. The
Indian anenmt s thtt ate te words "a !emer haing a
substaential interwoedsst" insert th following r "or at the request
of a alompetent inta vernmentl oganization".
The deletcofIndia.
M.IndiaH.I. MRIHTaaiOO, (nt:Ljr. Cman our main purpose
in moving,dhis amendmendet is mt win its scopme. Comodity
onfere nces areonly a means govof minter-,rnrntal consultation,
an we feel that a competegopnt intervernmental organization, if
it should maker a request to the Intenational Trade Organization,
should also havce the fore of having an intmeer-governntal
conference called. I thisnk it is elf explanatory, and I do not
wish to take up any more .time, Sir G -- 46 -- E/PC/T/B/PV/7
CHAIRMAN: The Delegate of the Netherlands.
Mr. DE VRIES (Netherlands): Mr. Chairman, the Netherlands
Deletion proposed in Article 50 (. Item (4)) of this annotated
Agenda an addition in about the same words as the Indian
Amendment. But at the same time our Delegation saw that the
Australian Delegation had an Amendment in the same sense, and it
seems to us that the Australian Amendment is a better one. The
Netherlands Delegation therefore withdraws its own Amendment in
favour of the Australian Amendment.
CHAIRMAN: The Delegate of Cuba.
Mr. GUERRA (Cuba): Mr. Chairman, we are in a position where
we can neither support the Indian Amendment nor the Australian
nor the Netherlands Delegation's Amendment. This same subject was
very extensively discussed in London, and later in New York, when
we dealt with Article 50; and the approach that the Committee had
to this question of the competent inter-Governmental organisation
was very carefully graduated in the sense of giving those
organisations as a right the possibility of asking for studies of
the commodities or submitting studies regarding the difficulties
of a particular commodity; but then the decision as regards the
convening of a Conference and the action to be taken was regarded
as being a matter proper for the Organisation itself.
This question, in fact, is very much involved with the
working agreement between the different organisations to which
the Representative of FAO referred a short while ago, and I think
that if we adopt any of these three Amendments, then the decision -
the fundamental question regarding the agreements which is the
decision to convene a Conference to take action on them - will, in - 47 - E/PC/T/B/PV/7
fact, be to a very great extent taken away from the ITO and
given to other organisations.
We accept that the Organisation, taking into consideration
the special experience that the other competent agencies may have,
thinks it is a good thing to give them the right to ask for a
study of the commodity and to submit any studies they themselves
have made; but that the question of the action to be taken in
a particular product should be a question that should rest in the
hands of the Organisation.
If we could adopt any of these Amendments, the effect will
be to restrict from the start the scope of the arrangement that
can be made with those other competent inter-Governmental
organisations, because they will, in fact, be entitled to take
part as a right in one of the meetings upon the main decisions to
be taken regarding inter-Governmental commodity agreements.
That is the reason why we thought that the graduation of this
Organisation could be appropriately set up in the present draft
of Article 50, and any other aspect that is not adequately covered
by that Article could be a matter to be arranged. That is, any
voluntary agreement or arrangement that may be worked out between
the ITO and any other Organisation.
From that, to go to the point of giving these organizations
already the right to intervene in a very decisive question, we
really feel should not be done; and we would be already creating
a lot of difficulties and overlappings and duplications that
the remarks made by the Delegate for France called attention to;
and that the Representative for FAO's question would be a matter
to be arranged voluntarily between the two organisations with
the approval or whatever action may be taken by the Economic and
and Social Council.
CHAIRMAN: The Delegate of Canada.
G - 48 -
V E/PC/T/B/PV/7
CHAIRMAN: The Delegate of Canada.
Mr. J.J. DEUTSCH (Canada): Mr. Chairman. I should like to
associate myself with the remarks mades by the Delegate of Cuba.
I think the initiative for calling a conference should be retained
in on place; otherwise there is danger of duplication and a
certain amount of friction and that would be undesirable. If
it should prove desirable in the futurec to provide that initiative
in some precise manner, then that could be worked out in the
working agreement to which the observer of the F.A.O. has referred,
but simply to say that both can take the intiative seems to me
to give rise to the danger of friction in this field.
CHAIRMAN: The. Delegate of Australia.
Mr. W.T. DOIG (Australia): Mr. Chairman, we consider that
such an amendment as we proposed would, in fact, rather facilitate
consultation betwwen specialised agencies, are would help to
reduce to a minimum the sort of duplication which we think, as a
member of the F.A.O., might result from the functions and
responsibilites which both of these Organisations will have.
Now, I would like to speak briefly on a few points of detail.
First of all, one Member, having a substantial interest in the trade,
may ask that a conference be called. It might be considered that
an inter-governmental agency ought to have at least a status equal
to an in individual member of one inter-governmental organisation.
Secondly, if I remember rightly, the Food and Agricultural
Organisation already has the right on its own initiative to call
commodity conferences. ThirdIy if any int = n tal
organisation requests the I.T.O. to call a commodity conference,
there is no obligation on the part of I.T.O. to follow that action.
and it seems to us that this simply, represents a form of consultation V - 49 - E/PC/T/B/PV/7
between two agencies, which is not entirely one-sided, having
regard to the fact that there is already in existence a particular
specialised agency with a constitution and which has already
set up Study Groups, has proceeded with the study of number of
primary commodities, and which will undoubtly provide a great
deal of valuable date for the International Trade Organisation.
We fear very much that if this form of consultation between
the I.T.O. and the F.A.O. does not allow a two-way traffic in
the sense that the F.A.O., having made a study of a commodity,
should be in a position to request the International Trade
Organisation that on the basis of its findings a commodity
conference should be called- I want to emphasize that point,
that we cannot accept the view that this will lead to a duplication
of effort, because it is quite clear that certain administrative
action must fall within the competence of the International Trade
Organisation. I have no doubt that F.A .O. recognizes that also .
We feel, therefore, that the acceptance if this amendment which
we propose would, rather than present a sit action leading to
duplication of effort, on the contrary help to reduce it to a
minimum. - 50 - E/PC/T/B/PV/7
Mr. S.J. de SWARDT (South Africa): Mr. Chairman, I feel that
before we get entangled with the words which we want to write in
49 and 50 about the place of FAO or other intergovernmental
organizations, we should be clear as to what exactly we want. It
has been said that in Article 49 (1) the right is given to a member
having a substantial interest in a commodity to request the
conference to be held. That is quite right, but I cannot help
feeling that it is also going a bit too far, and it is for the same
reason that I support the idea that the organization should decide
whether a conference is to be held or not. I do not think there
should be any doubt as to who decides whether a conference is to be
held. I feel that it is important that, after a study group to has
made a report and the evidence has been reviewed, that it should be
the organization which decides. It should neither be a member nor
any other intergovernmental organization that has the right to call
a conference, and for that reason I would like to connect these two
ideas, when they are considered in Committee, that the right of a
member to ask for a conference should be removed so as to get away
from difficulties which the representative of Australia has brought
up that we already wish to deny a right which is given to
a member. In Article 50 it says that it should be quite competent
for the FAO to submit a study that has already been made. Now, I
notice in the amendment suggested by the United Kingdom delegation
that the object is to deny that privilege because their amendment
reader: "The organization may request any Intergovernmental
organization. ." Now the way I see it, that is going too far
again. Let it be quite clear that FAO has the right to submit a
study already made to ITO. After all, it is a study submitted by
it as the product of the representatives of the governments. It is ER
-51 - --
not jnst the organization, it is the respesentative- of the
governments in the same way as any us udmp grop.cocosed by the ITO
eould nare made the.study. In the second place, FAO is already a
going concern and it has a starting time on the ITO. I do not see
any reason why it should not carry on where necessary with that
work and , it is completed, have the full right to submit it to
the ITO for consideration. ut then 'we come to the stage as to
wbether a conference is to be held or not. There I say let the
-TO aecide on the conference and the nature of rthe confeence.
is that
W I~ I am speaking, Mr. Choirman, fur thaI reason/= prefer
thec 'aciNment of Iew Zealand which I think covers adequately both
?oints. It says that the organization shall rave the Sight to
£k for the study of primary commodities to be Iade. Xt can ask
et doas not feel in a position to take the initiatane ^;d.
dlyvnc11 if it should have made one on its own initiatives it -hall
tave bhe right to submit to the organizationrany enlevtxtys udi
pfim 9r2.ary commodity. S - 52 - E/PC/T/B/PV/7
CHAIRMAN: The Delegate of the United States.
Mr. R.B.SCHWENGER (United States): Mr. Chairman, without
going into the merits of the question, which has been fully
discussed, I wonder if I might suggest that it seems to us
that much of the difference would be resolved - in the sense
of the balance of the two extremes, as expressed by the Delegation
for South Africa - by using the Australian proposal as to a
change of the word "request", which seems to carry a force
that may not be estimated in exactly the same way by all of
us, to something like; "recommend" or "suggest", so that
it would read: "and on the basis thereof, to recommend the
Organization to convene...". It that were more generally
acceptable than the order suggested by the New Zealand
Delegation, that is, (b) (a ) rather than (a) (b) , it would
probably be more logical
CHAIRMAN: The Observer of the FAO.
Mr. Yates (F.A.O.): Mr. Chairman, it would not be
proper for me to intervene on the substance of what has been
discussed, but I could perhaps like to offer a point of
explanation, perhaps of clarification.
The intention, as I understood it, of the Australian
amendment was precisely to help in this problem of dealing with
different spheres of responsibility. It may not be too
happily worded - perhaps the United States proposal achieves
a happier wording - but what I understood was that the Food and
Agriculture organization, or whatever other agency might be
and
responsible, if it had sponsored a Study Group/if that Study
Group had findings which were sufficiently unanimous or of
a large majority nature to make it quits clear what the E/PC/T/B/PV/7
0rv/ I
Governments represented on the Group desired, would transmit
those findings to the ITO, with recommendation for action,
and presumably thmt recormendation would have been written
noO by FAmebut byvehementortnringnnts ak paret tudidin thy
Grv;essuk tio tI akhin- thgisa w-t th thgouGht
behind the transmission of the recommendation naturally
woubld e.
I see it, in order to clear up the question of who
is responsibl ceor convennig cmmoodity conefrences, this
amnemdentse mes t meo to calrify teh issue successfully.
t says - a:d FAO wofld be quite hap~y to accept that
suggestion - that whilst FAO goes up to the point of a
Study Group, if a Study Group requires the next stage to
be undertaken, namely, the calling of a commodity conference,
that is fundamentally a job for the ITO, and at that stage
the whole procedure would pass over to the ITO to carry
the matter further.
I think there is a distinction here and that may,
of course, have caused the confusion between the language of
Paragraph 1 of Article 49, which is mandatory - at any rate
an the present draft - and the language of Article 50, which,
as I understood the request, was not mandatory, but it may have
been so read. I think it would be a mistake to make it
mandatory, but if we leave it in Article 50 with some such
word as the United States Delegate proposes, it seems to me
to seggest that another inter-governmental organization
should hand when to the lTO g- a the calling of a conference
becomes the, order of the day, and it leaves it to the ITO
S E/PC/T/B/PV/7
when the calling of a conference becomes the order of the day,
and it leaves it to the ITO to take the final decision
whether such a conference should be called.
CHAIRMAN woul : ld like to draw the attention omeeiibsrs
of tom Cc>mission to thc faot that it is already 6.p0 .m.
W_ have had eight speeches on the general questions raised
in .rticle 50. I have : thmee rope sceakers on my list and I
oan see othemberu crs of tommiCuezssion are desirous of
intervening in the debate, sohI k.in^ it would be appropriate
to break aff Ut this time, because the questions raised in
tAis article are important. omoTz.-rrow we can resume at this
point and have a further general debate on all the proposals
which have beemsubeitttdArtiHa Uclebefore_ we decide
to refer those proposals to thb SummconMittee.
S J.
- 55 -
E/PC/T/B/PV/7
Before we adjourn, however, we have to decide the
important question of the time of the next meeting.
Tomorrow, there is a meeting of Commission A for 2.30.
Therefore, if we hold our meeting in the afternoon, it will not
be possible for us to have a verbatim record of our debates, because
it is not possible for the Secretariat to service two full meetings
of the Commissions at the same time. The Socretariat, however,
would be able to provide a summary record of the discussion, but in
order that we may dispense with the verbatim record it will be
necessary to have the unanimous consent of the Commission.
The alternatives to holding a meeting in the afternoon, are,
first of all, to hold a meeting in the morning, in which case we
would probably conflict with the Tariff Negotiations and certain
meetings of the sub-committee, or else to hold a meeting in the
evening. I leave it to the Commission to decide which of the
three possible projects they would prefer. I point out that if it
is the afternoon meeting it must have the unanimous consent of the
Commission.
The Secretariat has also advised me that, according to the
regulations of the Steering, Committee, unanimous consent would also
be required for a morning meeting.
MR. J. A. GUERRA (Cuba): Mr. Chairman, I suggest that if there
is no objection from the other delegates the easiest course to take
would be to hold the meeting in the afternoon and have only a
summary record taken.
CHAIRMAN : Are there any objections to meeting tomorrow
afternoon? J. - 56 - E/PC/T/B/PV/7
Mr. G.D.L. WHITE (New Zealand): Mr, Chairman, I think that
the verbatim records are valuable, so that if there is no
difficulty in meeting in the morning, I wonder whether that
proposition could be put to the Committee first?
CHAIRMAN: Has any member of the Commission an objection to
meeting tomorrow morning?
(Objection)
There is an objection. Is there any objection to meeting
tomorrow afternoon?
(Objection)
Yes. Under those conditions, I see no alternative but to
meet in the evening. - 57 - E/PC/T/B/PV/7
Mr. D. CAPLAN (United Kingdom): No objection, Mr. Chairman.
M. J.A. GUERRA (Cuba): I suggest that the matter be decided
by the Chairman.
CHAIRMAN: I would say that a morning meeting and an afternoon
meeting requires unanimous consent. An evening meeting does not.
Dr.E. de VRIES (Netherlands): Mr. Chairman, I ask for the
floor not exactly to make an objection to have the meeting tomorrow
morning. I just want to point out that in the morning when we start
at 10.30 we only have two hours, and in the afternoon we have four
hours for our discussions. If in the morning there is a meeting of
this Commission, in the afternoon we might have a meeting of the Sub-
Committee of this Commission in order to proceed with the work. If
that can be arranged I have no objection.
CHAIRMAN: The Steering Committee are very anxious that we
should avoid morning meetings in order not to conflict with the tariff
negotiations. Therefore, unless there is any objection to our dis-
pensing with the verbatim record and contenting ourselves with a
summary record, I propose that the meeting be held tomorrow afternoon
at 2.30.
No objection?
Dr. T.T. CHANG: China: There is objection from the delega-
tion of China because we are not sure whether we can provide representa
tion tomorrow afternoon.
CHAIRMAN: Does the delegate of China propose an evening meet-
ing?
I have no objection to that.
P.
Dr. T.T. CHANG (China): - 58 -
P E/PC/T/B/PV/ 7
Mr. D. CAPLAN (United Kingdom): Mr. Chairman, is it in order
for a member of the Commission to object to the holding of a meeting
on the grounds that he cannot dispense with the verbatim account of
the meeting which he now informs us that he cannot attend? I think
there is a point of order there. I do not think the Chinese
delegate is in order in objecting to the holding of a meeting on one
ground when his real objection is that he cannot be present.
Dr. T.T. CHANG( China ): It is because we have the same delegate
for Commission A tomorrow afternoon and for this Commission. But
I do not want to in convenience the Commission. If it is the opinion
of all the others to meet tomorrow afternoon, maybe we have to pro-
vide representation in some other way.
CHAIRMAN: I hope it will be possible for the Chinese delega-
tion to arrange representation at both Commission A and Commission
B, and I take it that he does not object to dispensing with the
verbatim record or Commission B. Therefore I propose that the
meeting be held in this room tomorrow afternoon at 2.30.
The meeting is adjourned.
(The, meeting rose at 6.30 p.m.) |
GATT Library | jw433mw0617 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Seventh Meeting of the Tariff Agreement Committee held on Monday, 1 September 1947, at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, September 1, 1947 | United Nations. Economic and Social Council | 01/09/1947 | official documents | E/PC/T/TAC/PV/7 and E/PC/T/TAC/PV/6-8 | https://exhibits.stanford.edu/gatt/catalog/jw433mw0617 | jw433mw0617_90260022.xml | GATT_155 | 13,080 | 79,608 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/TAC/PV/7
1 September 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED
NATIONA CONFERENCE ON TRADE AND EMPLOYMENT,
VERBATIM REPORT
SEVENTH MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON MONDAY, 1 SEPTEMBER 1947, AT 2.30 P.M. IN
THE PALAI S DES NATIONS, GENEVA.
Hon. L. D. WILGRESS (Chairman) (Canada).
Delegates wishing to make corrections in their speeches should
address their commnuications 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
guidanoe only; corrigenda to the texts of interpretations cannot,
therefore, be accepted.
NATIONS UNIES S -2 - E/PC/T/TAC/PV/7
CHAIRMAN: The Meeting is called to order.
As we agreed at our last meeting, we will now consider the
Draft General Agreement on Tariffs and Trade, Article by
Article. There has been circulated this morning, for the
information of Members of the Committee, Document W/313, which
Summarizes the decisions reached in the course of consideration
of Document W/301. Reference is made there to the Final Act.
I might say that there has not been time for the Secretariat to
distribute a draft of a Final Act, but they have a draft of a
text already drawn up and that will be distributed to
of the Committee tomorrow morning. It should not be necessary
for us to consider that until after we come to the end of the
consideration of the Articles.
The Other points of Document W/313 can be dealt with as we
take up the various Articles and I do not think there is any
need for us to consider this document in detail, but simply use
it as a reference for our consideration of the General Agreement.
There has also been distributed Document W/312 - Annotated
Agenda - relating to the Draft General Agreement on Tariffs
and Trade. This can be one of our working papers for the
consideration of the Draft Agreement, Article by Article. It
lists the various amendments which have been proposed to the
various Articles and will therefore be of considerable use to
us as we take up the Articles.
Finally there is Document T/189, which is a revision pre-
pared by the Secretariat of the Draft General, Agreement on
Tariffs and Trade as drawn up by the Tariff Negotiations
Working Party. This revision has simply been done mechanically
by the Secretariat, substituting those Articles of the Charter
in the latest form in which those Articles have been approved
by the Preparatory Committee for the earlier drafts which the
Tariff Negotiations Working Party included at the time because S 3 E/PC/T/TAC/PV/7
the latest text had not yet been established.
This Document T/189 will be our main working paper and we
will use it for the purpose of going through the Draft General
Agreement Article by Article, at the same time taking account of
the amendments and observations which are given in Document W/312.
I should like to add that the Secretariat have ascertained
that since they prepared the revised draft of the General
Agreement they have found that in Paragraph 3 of Article 2 they
did not take into account the latest draft of Article 31 - the
new Article 31 - of the Charter. Therefore a revision of
Paragraph 3 of Article 2 has since been made and that has been
given to the Documents Office and should be distributed in a
few minutes. That will be another document we shall have to
take into account as a correction to Document T/189.
I should also like to mention that when we come to deal
with Part II, of course, the discussion will have to be
confined as to whether or not the Article in question should
or should not be included in the General Agreement on Tariffs
and Trade. There can be no question of any amendments of
substance or any drafting changes other than those which are
incidenta1 in incorporation these Articles of the Draft
Agreement in the Charter: that is, we must take the text
as established by the Preparatory Committee.
We will deal with these Articles paragraph by paragraph
and it will be quite in order for any Member of the Committee
to suggest that a paragraph should or should not be included,
but it will not be correct to suggest any amendments of
substance or changes in wording of the text which has been
established by the Preperatory Committee. 4
P. E/PC/T/TAC/PV/7
CHAIRMAN: Unless there are any comments on the procedure
which I have just outlined, I think the first point which we
could take up would be the General Note given on page 1 of
document E/PC/T/W/312. This Note is to the effect that the
United Kingdom Delegation suggests that "contracting government"
and "contracting governments" should be substituted for contracting
party" and "contracting parties" throughout the text. In this
connection it will also be noted that the Czechoslovakian
Delegation has expressed the view that "governments" should be
changed to "states" since, in its opinion, states rather than
governments are the contracting parties under International Law.
Mr. R.J. SHACKLE (United Kingdom): As regards the suggested
modification, this was recommended by our Legal Adviser and I
think the ground for suggesting it was that the term "contracting
parties" normally connotes Heads of States: such connotation
would give rise to great complication,and that was why we
suggested Governments.
With regard to the suggestion that for "governments" we
should say "states",I am afraid that would not be agreeable to
us. It would leave the question of autonomous territories
covered in the Agreement in the air and I think we should wish
to have "governments".
CHAIRMAN: Are there any other comments?
The Delegate of Cuba. 5
E/PC/T/TAC/PV/7
Mr. H. DORN (Cuba): I would only ask one question. If I
understand well, the form which is customary in International
Agreements and Treaties is "Contracting Party" and I am doubtful
whether, under the conditions given in some Constitutions, it is
possible to say "governments" because the governments themselves
will not be able to form the contracting parties of such an
Agreement if there is a necessity that the Constitutional powers
have to give their consent. Therefore I am somehow doubtful if,
under given Constitutional Laws in different countries, it would be
possible to substitute the word "contracting party" by the word
"government". "Contracting party" is more general and covers I
think all constitutional conditions, but government" in my opinion
has come different meaning and I am doubtful whether really the
word government " can be substituted.
Dr. J.E. HOLLOWAY (South Africa): Mr. Chairman, would also
hope that the Delegation of Czechoslovakia and the British Delegation
would withdraw their amendments. If we get into legal subtleties
among a lot of people who are not lawyers, we could have very lengthy
discussions arriving at nothing. I know what it mean when the
term "contracting party" or "contracting parties" occurs, but if
the questions is whether it should be "governments" or "states", I
really do not know which is right, and they may both be wrong.
There was a long debate in our Parliament once as to whether, if
the King signed a Treaty, it had to be submitted to Parliament.
Some argued that it had, and some arguod that it had not. But
if the Government, that is to say a Prime Minister or Minister,
signed it, they said it had to be submitted to Parliament, Well,
you get into all those complications by trying to be too precise,
whereas if you use the neutral word, that neutral word is given
the correct application for each particular Government; and that
is all we can do. 6
P. E/PC/T/TAC/PV/7
CHAIRMAN: The Delegate of Czechoslovakia.
H.E. Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
would suggest that we begin the General Agreement with the words
"The Commonwealth of Australia" and that we delete entirely the
words "The Governments of the" because that is the normal way in
which Treaties begin generally. Here I have for instance the
International Convention relating to the Simplification of Customs
Formalities. It begins "Austria, Belgium... "and so on. Now,
whether it is the government, or whoever it is in each country, is
I think an internal matter for the respective country. So I
suggest that we delete the words "Governments, of the" and begin
"The Commonwealth of Australia". And then we leave "contracting
parties".
Mr. R. J. SHACKLE (United Kingdom): Mr. Chairman, I, a
layman, am acting under instructions from my Legal Adviser in the
suggestion to put "contracting governments" but I do not wish to
press it very hard. I must reserve my position in case experts
have something to say about it, but I would go ahead on
contracting parties". I would, however, definitely suggest that
we should not put "high contracting parties". We are not "high":
there are no crowned heads.
As to the suggestion to omit "The Covernments of", I think
it would be better to keep it, because, after all, it will be the
Governments who are responsible for working this Agreement.
CHAIRMAN: Since there apparently has been no support of the
proposal of the United Kingdom Delegation that "contracting
government" and "contracting governments" should be substituted
for "contracting party" and "contracting parties", and since the
United Kingdom Delegation have withdrawnubject to reservation, 7
P. E/PC/T/TAC/PV/7
their suggestion, I think we can leave that for the moment and
consider the text of the Preamble.
I take it that the Czechoslovak Delegation have also withdrawn
their general suggestion that "governments" should be changed to
"states" and that they have substituted for that the proposal that
the words "The Governments of ..." should be deleted from the
Preamble.
So we can now take up paragraph 1 of the Preamble and consider
first the suggestion of the Czechoslovak Delegation that the Preamble
should start with the words "The Commonwealth of Australia" etc.
The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, if this
suggestion is adopted, I would ask that the words "the French Union"
/
should be substituted for the words "the French Republic" which are
in the text.
CHAIRMAN: That will be done as that is the wish of the
French Delegation. Is there any support for the Czechoslovakian
proposal that the words "The Governments of" should be deleted from
the Preamble?
The Delegate of the Lebanon.
M. Moussa MOBARAK (Lebanon) (Interpretation) :Mr.Chairman, I
do not think we should innovate in this question. There are
precedents of agreements and we should stick to them. The United
Kingdom Delegate said just now that contracting parties" had to
be crowned heads; I do not agrees because contracting parties are
something else in the Agreement. Therefore I think the best thing
we can do would be to stick to the precedent which appears in
other Agreements. 8
P. E/PC/T/TAC/PV/7
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, that is not
what I said. I said we must not call ourselves "high contracting
parties" - we are not entitled to that epithet.
CHAIRMAN: Do Any Delegations support the suggestion of the
Czechoslovak Delegate that the words "The Governments of" should
be deleted from the first paragraph of the Preamble?
M. ROYER (France) (Interpretation): Mr. Chairman, I think
that the suggestion just made by Mr. Augenthaler is quite a wise
one because if we maintain the words "The Governments of" it may
create some difficulties in certain countries and if we leave out
those words we shall just have the words "The Commonwealth of
Australian" and so forth, and that can apply to any case and is a
formula that can be adapted to any circumstances.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I am sorry
to intervene again, but I do think that the omission of the words
"The Governments of" will create even more serious disadvantages.
The question of the Colonial Territories and so on, for instance,
will not be covered in the case of the United Kingdom and Northern
Ireland. And, as I said before, it is the governments who have
to work this Agreement. They are the responsible parties and
surely must be named.
CHAIRMAN: Are there any other objections?
There seem to be two Delegations in favour of this proposal,
one against, and the other indifferent.
Mr. Winthrop BROWN (United States): Mr. Chairman, I do not
see the difficulty in using the word "Governments". 9
E/PC/T/TAC/PV/7
H.E. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I think
the difficulty is that the Governments are not subjects of
international law: they are not contracting parties to any
international agreement. It is the States who are parties to
international agreements, and, of course, in each country the
Governments are responsible for the execution. But if we say
"the Governments", which Government do we mean - the present, the
future e or the past Government? If tomorrow there is another
Government in a country, they may say "Well, I did not sign it".
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I think
it is usual to state Governments as the parties to almost all trade
agreements. It is certainly true of the United Kingdom. The
position surely is that there is always a Government: the Government
adheres to an Agreement. If the successors do not like the
Agreement, they can withdraw from it according to the terms of the
Agreement, but until then they are bound. The remarks of the
Czechoslovak Delegate seem to tend to bring us to the "Heads of
States" form; but I am bound to say that it would mean appalling
complications in the case of the United Kingdom if we reverted to
the "Heads of States" form. I very much hope we will not do it.
CHAIRMAN: Are there any other comments?
H.E. Z. AUGENTHALER (Czechoslovakia). Mr. Chairman, I am
sorry that I must intervene once more, but I am afraid that if we
retain the words "The Governments of the" I doubt if Czechoslovakia
would be able to sign. In Czechoslovakia, only the President of
the Republic has full powers, and not the Government: it is
the exclusive of the President of the Republic to have full
powers for the signing of international treaties, and never the 10
V E/PC/T/TAC/PV/7
Government. That is why I propose the deletion of the words
"The Governments of the", because I thought it wise to leave it
to each country, according to its internal laws and constitutional
practices, as to how the Agreement should be signed.
CHAIRMAN: The Delegate of the United States.
Mr. Winthrop BROWN (United States): As either of the two
suggestions seem to cause difficulty to the Czechoslovak Delegation
or the United Kingdom Delegation, and most of the other Members
of the Committee would be willing to accept either solution, I
wonder if it might not be well to ask those two Delegations if they
could not consult with the Legal Adviser and come to a recommendation
on this matter.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I am quite
prepared to discuss this with Dr. Augenthaler, but I am bound to
say that I think-we will get into serious difficulties if we leave
out "Governments" - for example, Article XXX states "The contracting
parties to this Agreement shall be understood to mean those
governments..." and Article XXXI says "Governments not parties to
this Agreement may adhere...". What are we going to say if we
drop the word "Governments"?
CHAIRMAN: The Delegate of South Africa.
Dr. J.E. HOLLOWAY (South Africa): We can get over the
difficulty by saying "contracting parties representing the".
Mr. R.J. SHACKLE (United Kingdom): I still feel that there is
the same difficulty. To take another Article - Article XXIV,
Paragraph 3(a) states "Each government accepting this Agreement does 11
V E/PC/T/TAC/PV/7
so in respect of both its metropolitan customs territory and
each separate customs territory for which it has international
responsibility.." That is, as far as the United Kingdom is
concerned, a case where one can only say "Government". The United
Kingdom as such has no authority over other territories - it is
the Government of the United Kingdom, and I really do see serious
difficulty about dropping this word "Governments". In fact, the
word "Government" appears all over Part III of the Agreement, and
I just do not see how one can do it. Giving full powers to the
Head of the State does not prevent the Head of State from
authorizing his Government to enter into an Agreement. I should
have thought that the fact that the Head of State is given full
powers did not introduce a difficulty.
CHAIRMAN: The Delegate of Cuba.
Mr. H. DORN (Cuba): Mr. Chairman, would it not be useful
to have a small Working Party of jurists to look after the three
Articles in question? I think that in former times there was a
clear distinction drawn between administrative agreements between
Governments and international treaties dealing with questions of
substance. Perhaps the small working group could settle this
question on the basis of existing international law.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, if the
majority of the Committee are in favour of omitting "Governments"
I will refer that back to our legal experts, who are no longer here.
I am afraid that until I have their views, I cannot accept this
suggestion.
CHAIRMAN: Perhaps the best way we can proceed is to leave this
matter for the time being, and in the mean time, the United Kingdom 12 E/PC/T/TAC/PV/7
Delegation will consult their legal experts, and then we can take
up the matter again. I take it that the change that the French
Delegation had proposed, suggesting the words "French Union" instead
of "French Republic", will depend on the outcome of this question.
The Delegate of Belgium.
M. Pierre Forthomme (Belgium) (Interpretation): I only wanted
to point out, Mr. Chairman, that if we suppress the word
"Government" in Article XXXII, Provisional Application, considerable
difficulties would ensue.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I thought
that we had reached agreement on the point that Article XXXII
should be replaced by a Protocol, and, of course, if this Article
is replaced by a Protocol, representatives of Governments can
quite well sign that Protocol.
CHAIRMAN: We will leave this question for the time being
and return to it at a future meeting after the United Kingdom
Delegation has had an opportunity of consulting its legal experts
with regard to this suggestion of the Czechoslovakian Delegation.
We will now pass on to paragraph 2 of the Preamble.
Are there any comments on the second paragraph of the Preamble?
There being no comments, we will pass on to the third paragraph.
Are there any comments?
The fourth paragraph of the Preamble.
There being no comments, we will pass on to Article I,
paragraph 1.
The Delegate of Chile.
V 13
M. F. Garcia OLDINI (Chile) (Interpretation): Mr. Chairman,
I would just like to ask a question. During the discussion of the
Draft Charter we made a certain number of reservations, and the
main reservations apply to this Article 16. I would like to know
if the reservations which we have made to the Charter are also valid
in regard to the text here, of if we have to expressly formulate
these reservations once again.
CHAIRMAN: The Delegate of Australia.
Dr. H.C, COOMBS (Australia): Apart from the content of this
Article, we would like to suggest that it be transferred from Part I
to Part II of the Agreement. Our reason for that is , as we have
pointed out, that in any form this Article does represent a
substantial change in many aspects of our commercial policy, and
would require us to make changes in our legislation. They are not
substantial changes, but there are certain changes which we have
been advised would be necessary in order to adopt this, and since
it is intended that Part II of the Agreement is to be adopted
provisionally and within the limits of existing legislative
authorities and so on, we think that any clause which requires such
action should be contained therein.
CHAIRMAN: Before dealing with the proposal just made by the
Delegate of Australia, I think I should endeavour to supply an
answer to the Delegate of Chile to the question which he raised
about reservations. The way it seems to the Chair is that the
Draft Charter is one which is being presented to the World Conference
at Havana, and therefore, it was in order for Delegations to submit
reservations with any particular part of the Charter because they
were reserving their position for further discussion at the Havana 14
V E/PC/T/TAC/PV/7
Conference; but that when it comes to the time for signing the
Charter in its final form, as approved by the Havana Conference,
it will be necessary to have no reservations. This General
Agreement on Tariffs and Trade is one which is being prepared for
signature, and therefore I take it that reservations would not be
in order in respect of any of the provisions of the General Agreement. J.
MR. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
I think that the objection which was raised by the Chair is quite
valid if we consider bilateral agreements. It is obvious that
when a state signs an agreement with another state then in the
course of the discussion preceding the signature all difficulties
can be eliminated to satisfy both parties, but here we have a kind
of agreement which is a new type of agreement.
We started from bilateral agreements to reach a form of
multilateral agreements and these multilateral agreements are based
on principles which have been expressed in the Charter. If we
have made reservations to the Charter, that was because we needed
to safeguard certain situations corresponding, from one point of
view, to questions of principle and, from another point of view,
to actual situations of fact, which we had to defend for very
substantial reasons.
Now, I would like to know how we could make, on the one hand,
reservations to the Charter corresponding to the type of idea which
I have just mentioned, and at the same time sign an agreement
which specified the same principle which is laid down in almost the
same form, thus not maintaining the reserves which we have made on
a.different occasion for the same purpose.
I think that there are two different kinds of reservations, if
we consider the Charter. The first type of reservation; as
pointed out quite rightly by the Chair, corresponds to a provisional
situation which can be clarified and dealt with before and up to
the time of the Havana Conference, but there are also substantial
reservations which correspond to substantial and basic situations,
and these problems could only be solved by the states concerned,
E/PC/T/TAC/PV/7 16
J. E/PC/T/TAC/PV/7
not only by just letting time elapse before the Havana Conference,
but by giving satisfaction to the governments and to the countries
which have made these reservations whenever and in the manner in
which it is possible to give satisfaction to these countries.
Then and only then will these governments be in a position to state
if they are willing to withdraw their reservations and whether it
is possible for them to sign the Agreement and to sign the Charter
without reservations.
In fact, some agreements in the past have been signed with
reservations, so that would not be a new procedure, but in the case
of this Agreement here we can make reservations now until the time
of signature, and it will be at the time of the final signature
that a state will be able to know whether it is better for it
either to withdraw its reservation or to give its final signature
to the Agreement. Up to that time, I think that states ought to
be free to make the reservations which they want to make, and this
is quite a normal procedure.
CHAIRMAN: I think there would be no objection, during the
course of our discussion in this Committee, if any delegation
wishes to submit any reservations regarding any particular provisions
in the draft Agreement which we are discussing, such reservations
being subject to withdrawal at the time of signature.
MR. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
I cannot admit the condition which you have linked with the
signature of this Agrement, that is to say, that all reservations
should be withdrawn at the time of the signature of the Agreement.
I think that all governments can sign with reservations, but it will
only be at the time of the ratification of this Agreement that -17-
J. E/PC/T/TAC/PV/7
governments will have to decide then whether they withdraw their
reservations and accept the Agreement finally or not, because
ratification means application, and at the time of the application
it will be decided whether the Agreement can be applied with
reservations or not, and then the governments will decide whether
they can ratify the Agreement or not. Therefore, the course which
is to be followed by governments is to be decided not at the time
of the signature, but at the time of the ratification of the
Agreement.
CHAIRMAN: The Delegate of Chile has raised the question of
the possibility of signature of the Agreement with reservations.
I think that this is an important point, and it would be valuable
to get the sense of the Committee on this subject. I think it
should be considered both in relation to the signature of the
Final Act and to the signature of the Agreement itself.
DR. H.C. COOMBS (Australia): Mr. Chairman, there cannot be
any doubt about the signature of the Final Act because that is the
ratification of the text, and the text includes the reservations.
Therefore, what you are authenticating are the reservations along
with the text.
CHAIRMAN: Then the question is one as to whether the
Agreement can be signed with reservations, such reservations to be
withdrawn at the time of ratification.
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, the way the
question appears to me is this: Supposing that a Government signs
with a reservation, when the question comes along of ratification, - 18 -
J. E/PC/T/TAC/PV/7
it would not be admissable for it to ratify with its reservation
still there,unless its reservation had been specifically accepted
by all other participating governments beforehand. That would
surely mean that, supposing, in fact, there were reservations left
over to the Final Act of ratification, it would then be necessary to
have another Conference before ratification in order to decide what
should happen to the reservations. Therefore, I think that it is
very desirable that all reservations should be cleared before
signature - otherwise, I can foresee serious complications, before
the procedure of ratification takes place.
CHAIRMAN: The Delegate of Czechoslovakia.
H.E. Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman , I
think that if we look at existing international conventions and
treaties, most of them have reservations. For instance, I again
take the International Convention relating to the Simplification
of Customs Formalities, which has a Protocol attached to it, and in
this Protocol are reservations made by different states, as for
that
instance/in Article 6 which says: "In view of the special
circumstances in which they are placed, the governments of Spain,
Finland, Poland and Portugal have stated that they reserved the
right of accepting Article 10 at the time of ratification and that
they will not be bound to apply the said Article until after a
period of five years from this day". Then, in an mer place it is
stated: "The other contracting States, while Stating the
acceptance of reserves so formulated declare that they will not be
bound in any regard to States which have made the said reserves in
regard to the matters to which they relate until the provisions in
question are applied by the said States". I think similar reservations
are in most existing agreements or treaties. - 19 -
S E/PC/T/TAC/PV/7
M.ROYER (France) (Interpretation): Mr. Chairman, I would
like to complete the explanations which have just been given by
the United Kingdom and Czechoslovak Delegates. It seems to me
there is a certain confusion here.
I think the reservations in the General Agreement are of a
different character from the reservations made in regard to the
Charter, because the reservations made in regard to the Charter
are of a unilateral character and in those regarding the General
Agreement you may have two categories of reservations.
As was stated by the Czechoslovak Delegate, there are
reservations made by certain countries and that has been done
in many international Conventions; that is, these reservations
are made by one country and they are accepted by all th other
countries party to the Agreement. That is to say, if the
reservations made here in the General Agreement are of this
nature, they will have to be agreed by all the Delegations
before September 30 and an annexed Protocol will have to be
established and will have to be included in the General
Agreement, mentioning these reservations and the agreement of
all parties to these reservations.
But there are also unilateral reservations. That is
the second category of reservations, which are not agreed upon
by the other parties and which therefore cannot figure in the
general text. Then the only possibility which is open to
countries which make such reservations is to sign the Agreement
only when the Charter has been discussed and adopted at Havana.
As we know, this General Agreement is open for signature
until June 1948. - 20 -
S E/PC/T/TAC/PV/7
Therefore the only course open to the Chilean Delegation,
if it wishes to make certain reservations of this nature, is to
sign the General Agreement only after the discussions at Havana
and when the Chilean Delegation has decided if it is possible
for it to withdraw its reservations. But, as I have stated,
it is not possible to include in the Agreement here
reservations of such a nature.
CHAIRMAN: The Delegate of the United States,
Mr. Winthrop G. BROWN (United States): Mr. Chairman, I
fully agree with what the Delegate of France has said. It is
quite clear that countries who are parties to this General
Agreement will not be prepared to grant substantial concessions
to other countries which have a reservation on parts of the
Agreement to which the first country attaches real importance.
Therefore if there are countries which have in mind a
reservation with respect to any provisions of the Agreement,
they must decide whether or not they are going to maintain
that reservation before they sign the Agreement, unless in
some cases it might be possible to get all the other parties
to the Agreement to accept the reservation. If it were one
of substance, I should think that would be rather doubtful.
CHAIRMAN: The Delegate of China.
H.E. Mr. WUNSZ KING (China ): In this matter of reservations
the position of the Chinese Delegation is quite similar to that
of the Chilean Delegation and some other Delegations which have
also made reservations to the Charter.
If any one of the Delegations has made some reservations, E/PC/T/TAC/PV/7
it is certainly not only for the pleasure of making them. If
we have made some reservations it is simply because the subject
matter is considered to be of vital importance to the Delegation
and it is also because of the fact that, in spite of all our
efforts, we have not obtained satisfaction on those subject
matters.
So far as China is concerned, we have an additional
difficulty, which lies in the fact that the distance between
Geneva and Nanking is so enormous and the Charter itself is
so coplicated that we have not been able to explain fully to
our Government the effect of the provisions of the Charter. If
we have made some reservations it is only because the Charter
provisions are so interwoven and so closely inter-related that
our Government has been very anxious to see the Charter in its
true perspective, and our Government would like to see the
whole picture before it can decide whether or not we should
maintain or withdrew the particular reservations. Certainly
we will not be able to do this until the document, as a whole,
has rearhed the hands of our Government, and this will take some
time.
As to the particular question whether the Committee as
a whole can or cannot accept reservations to be made to the
General Agreement on Tariffs and Trade, I would like to point
out that no Delegation likes to be made to accept those
provisions of the Charter on which it has made reservations,
by the indirect way of having those very stipulations incor-
porated in the Agreement, Therefore I am sorry to say that
the Chinese Delegation finds itself unable to accept the
ruling made by the Chair.
- 21 -
S S E/PC/T/TAC/PV/7
But it seems to me there is a little confusion in this
matter. We are talking about the reservations made to the
Charter and of course we shall have another opportunity of
joining the battle in Havana, when and where, perhaps, with
the help of some Havana cigars, we might be able to find some
sort of solution which would give us some satisfaction, there-
by enabling us to withdraw our reservations.
Now the question is whether we can sign the Agreement with
reservations, and it seems to me this question becomes acute
only in respect of those Delegations which will accept the
Protocol for provisional application of the Agreement. As
to the Agreement itself, with the exception of the stipulations
regarding provisional application of the Agreement and its
Schedules, it will be open for signature until February 28
1948. By that time we shall certainly be able to see whether
the reservations which we have now fortunately or unfortunately
made to some of the stipulations could be withdrawn or not.
Therefore it seems to me the question does not arise in
respect of those Delegations which are not in a position
provisionally to put into force the Agreement and the
Schedules, and the question arises only in respect of those
Delegations which would apply provisionally the Agreement and
the Schedules and which have also made some reservations to
the Charter.
As to this, and in order to remove some of the difficulties,
I would like to suggest, as I have already suggested on a
previous occasion, that we might stipulate, either in the
Protocol of Signature or in any other instrument - whatever
it might be - that acceptance of either Part II or any other
part which contains those stipulations in the Draft Charter would
be made optional. -23-
S E/PC/T/TAC/PV/7
I make this suggestion because I have anticipated a great
deal of difficulty with which those Delegations who have made
reservations will be confronted, and, because I have a very
considerable spirit of compromise - in case this suggestion
is not agreeable to the Committee - I would suggest, instead,
that in the Protocol of Signature, for the purpose of provisional
application of the Agreement and the Schedules, that there should
be some such stipulation as follows - I am quoting a statement
made by the Chairman on August 27, given on Page 3 of Document
E/PC/T/TAC/PV.5 - that "the signature of the Agreement does
not prejudice the stand which the other Delegates wish to take
at the Havana Conference.'
If it is agreeable to the Committee and if some such
formula is adopted, I think that would at once have the happy
effect of removing all the difficulties; it would simplify
our procedure and task and would enable us to include in this
Agreement any Article of the Charter plus the necessary
amendments. P. 24 E/PC/T/TAC/PV/7
CHAIRMAN: The Delegate of Syria.
M. Hassan JABBARA (Syria) (Interpretation): I think the
more we discuss, Mr. Chairman, the more we find difficulties. In
fact, what we want here is to include in the Agreement certain
Articles which have been drafted in the Draft Charter, but the
Draft Charter itself is only a provisional draft at the moment and
there has not been general agreement to adopt this text. Therefore
I think that if certain countries in this discussion want to present
certain definite reservations, it means that those countries do
not want to apply certain provisions of the Agreement; and that
therefore certain countries parties to the agreement will have
certain disadvantages if the other countries do not apply these
provisions. Therefore if certain countries want to maintain
certain reservations it is quite obvious that the other countries
parties to this Agreement must agree for those reservations to be
maintained.
However, if we consider the proposal which has already been
made of automatic supersession of the Articles of the Charter when
this Charter will be drafted, I think that the difficulty will be
avoided, because the Charter will be signed in Havana; at that
time the countries parties to the Charter will have to sign
without any reservations, they will sign or they will not sign, but
time
at that/the Articles of the Charter will take definitive form.
think this is the only means which would satisfy all the
Delegations and also is the most practical means.
I think then, in that case, if we adopted this principle, the
reservations would have only a provisional character and would be
maintained and in Havana these reservations would be discussed
again, certain would be suppressed, other would be amended, and
the General Agreement would be consequently modified. 25
P. E/PC/T/TAC/PV/7
My Delegation is ready to sign this agreement only if we
admit the principle of the automatic substitution of the Articles
of the Charter for the Articles of the Agreement.
CHAIRMAN: The Delegate of Cuba.
Mr. H. DORN (Cuba): Mr. Chairman, I only want to say a few
words about the legal aspect as I see it, and perhaps a practical
proposal.
First, as to the legal situation, I think it is quite true
that ratifications with reservations exist, but we have to face
here the special situation of this Agreement and that is not so
much of a ratification but an accepting of the Agreement in
Article XXIV. That seems to be something which is not quite
identical with ratification, because a ratification seems to be
another form in order to make it easier in a formal way.
I see, as a colleague of China, that there is a different
legal situation between the key countries on the one side who sign
the Protocol and the other countries who sign the Final Act.
As for the first ones, there will be a necessity to have the
definite wording of the Agreement if there is not acceptance of
a general proposal such as the Delegate of Syria made before.
For the other ones, there is the question whether the Final
Act could not contain the reservations, because this Final Act
does not definitely bind the Governments to accept the text.
I see the situation difficult only as for the wording of those
Articles which are under reserves, and I think if there is no
general desire to substitute the wording of the Agreement by the
definite wording of the Charter, then it would be useful at least
to substitute automatically those Articles which are under reserves
after the definite decision of Havana. And I think if those
Articles would be substituted automatically, then the main 26
E/PC/T/TAC/PV/7
difficulties would be done away with and all the rest could
remain in the original form. But there would be a possibility to
solve the problems of the reservations at Havana and the definite
wording of the Charter would be substituted, in regard to these
Articles, for the wording of the Agreement. Because all
countries concerned necessarily would have accepted the wording of
the Charter, I do not see in practice any difficulty in substituting
those Articles also for the Agreement. That would perhaps be a
way between the two extreme solutions, and leave the possibility
to maintain the reservations up to the moment when it is quite
sure what the wording of the Charter in the decisive Articles will
be.
CHAIRMAN: The Delegate of the United States.
Mr. Winthrop BROWN (United States): Mr. Chairman, I should
just like to say that my Delegation would be entirely agreeable to
see the adoption of the second of the two suggestions made by the
Delegate of China. There would certainly be no difficulty in
making it perfectly clear in the text of the Protocol, which I
think we all agree, that the signing of the General agreement would
not prejudice the position which a country might wish to take on
the Article in question in the Charter discussions at Havana.
On the matter of the automatic supersession, I think that the
views of my Delegation were made quite clear at the last discussion.
CHAIRMAN: The Delegate of South Africa.
Dr. J.E. HOLLOWAY (South Africa): Mr. Chairman, in
intervening in the Debate I want to start by pointing out that the
South African Delegation has no reservations and I am really
intervening to see if we can help progrees by doing a bit of sorting
out. 27
P . E/PC/T/TAC/PV/7
There are two broad ways open to us to proceed. The one is
to establish the text of the Geoneral Agreement, which will be a
text for all the countries here to make up their minds on, and to
do that at this Session. That means that the question of
reservations comes up immediately. It also means that we have
got to decide what we are going to do about possible changes at
Havana,
Now I will touch on the latter subject first, because the data
has already been circulated, various suggestions have been made,
and one, namely automatic substitution, has had a certain amount of
support here. I do not think we will get very far with automatic
substitution because I do not think that you can expect the
Governments of countries to commit themselves in advance to take
certain texts which they do not know. It just puts them
politically in an impossible position to have to go and ask their
Parliaments to accept texts which are coming out of a Conference
which will be held some time in the future and which will take
some form they do not know. So, realising that we are Committing
Ministers who have to defend themselves in Parliaments, I think we
had better forget all about automatic substitution.
There are,of course,other suggestions which have been made
but that problem is one which we would have to face if we
established a final text for everybody now.
Now I come to the other difficulty the one which has raised
considerable discussion, namely reservations. It seems to me
there can be four methods of dealing with it.
The first is that there are no reservations: that everybody
has to sign the same Articles.
The second is that there can be reservations unanimously
agreed to, the stress being on the word "unanimously". - 28 -
The third, on the principle that each dog is entitled to
bite a person once before you call him savage: that we would
give to each Delegation at least one reservation.
The fourth is that you can give each Delegation what
reservations they want.
The fourth is obviously out of the question, because nobody
will agree to binding himself to all the others, when one of the
countries can do what it likes.
The third I think is obviously out of the question, because
if you can make a pick, I think it is quite likely the Most-
Favoured-Nation clause will be picked, or the right to do what you
like with regard to preferences, and that will knock the bottom
out of the whole thing.
So we come down to two possibilities: one "unanimously agreed
to" and the other that there should be no reservations.
I would suggest, Mr. Chairman, if we do go forward on the
procedure of establishing a text now with all the nations here,
that the matter should be taken up at the moment when a particular
country has a reservation which it wants to have included. At
that stage that country must say "This is my reservation" and see
if it can get unanimous agreement. If it cannot get unanimous
agreement, it falls away. And, if all of them have fallen away
you get the first alternative, or if any of them have had no.
objections here they go into the Schedule where you allow those
reservations because they are unanimously agreed to.
Now all that is on the assumption that we establish a final
text for the seventeen countries here. - 29 -
I would like to draw attention again to an alternative way
in which we might get over the difficulties of the countries
which have reservations - an alternative to which. I drew attention
last week on account of the difficulties of those countries, and
I repeat that my own is not one of those. We must just see if we
can get over the thing which is holding us up here.
The key countries have, as far as I can see, very few
reservations, and the probability is that those reservations will
all fall away in the course of this discussion. If then you
establish a text to the General Agreement now for the key countries,
and you establish the text for the rest of the countries here
represented after we know the Havana text, you may get over the
difficulties of all the countries having reservations straight
away, without any damage. You have got the further advantage
that for the key countries the problem of handling reservations
is very much easier than for the other countries.
There is just one other point as to the stage at which a
reservation should be made. Obviously, if any reservation is
made at any stage except the final stage -that is, ratification-
all that it means is that that country tells the others that it
still has qualms of conscience about that particular Article.
It is not necessary to put that into the Final Act. We know it.
It is in the record. For the country concerned, the important
thing is going to be whether, if it cannot get the text that it
wants, that particular thing is so important that it will, on
account of that, refuse to sign it. Well, the country knows
that . It is not necessary to put that into the document.
CHAIRMAN: I have on my list the Delegates of Brazil and
Australia. I am proposing to close the debate after calling on
E/PC/T/TAC/PV/7
V 30
them to speak.
Mr. R.J. SHACKLE (United Kingdom): There are just one or
two very short remarks I would like to make if there is an
opportunity.
CHAIRMAN: I propose that after these two Delegates have
spoken, we lose the debate on the subject of reservations.
M. F. Garcia OLDINI (Chile) (Interpretation): I should
also like an opportunity to speak.
CHAIRMAN: The Chilean Delegate has also asked for the
floor.
The Delegate of Brazil.
M. O. PARANAGUA (Brazil): Mr. Chairman, I can understand
the spirit in which you are inclined to refuse reservations in
this Convention. We have the example of many conventions in
the former League of Nations, where some conventions could not
be implemented because of the reservations. I can quote one -
the Convention for the Abolition of Prohibition for Imports and
Exports. But, on the other hand, we are always assuming that
there will be a Charter.
I am not at all sure if we are having a Charter, and if
we put the main provisions of a future Charter in this Convention
and we have no Charter (because some special circumstances can
prevent us from having an International Trade Organization and
even a Charter), I wonder what would be the result? It would
mean that in signing . Convention we accepted a Charter. This
Charter had reservations, and the reservations were dropped
because they applied to a Convention and we were bound by a
Charter. I notice that in London, when we spoke about the
E/PC/T/TAC/PV/7
V 31
convention, there was a little note referring to provisions,
and it was written that it was contemplated that the Convention
would contain Schedules of tariff concessions and would
incorporate certain of the provisions of Chapter IV of the
Charter, and some examples like the Most-Favoured-Nation treatment,
national treatment on internal taxation and regulation,
quantitative restrictions etc.
Now, we are having a Convention where the main provisions are
the provisions of a future Charter., and, therefore, I wonder if a
Convention overloaded with such an amount of provisions does not
put us into the position of accepting a Charter which we are
still discussing. We have not only formulated reservations, but
have mental reservations about the Charter. The result would
be that we were accepting the Geneva Charter instead of a
Convention - we would be bound by a Charter.
For this reason, I prefer not to have provisions frozen
without any reservation, but to allow countries to have
reservations. If the contracting parties do not agree with
those reservations, that means the country is no longer a
contracting party. I am not assuming at all that it is
certain that we are having a Charter.
CHAIRMAN: The Delegate of Australia.
Dr. H.C. COOMBS (Australia): Mr. Chairman, I think it is
very important in this discussion that we differentiate between
signature of records and signatures which are in essence
agreements to do things. As I said earlier, there does not
seem to me to be any doubt as far as the Final Act is concerned,
since that is merely an authentication of a text. That text
is not incorporating any reservations which have been made by
E/PC/T/TAC/PV/7
V - 32 -
countries here and the signature will be an authentication
inter alia of the fact that those reservations are accurately
recorded. But no action is called for from the parties
signin, that Final Act, at any rate, in relation to the
commitments embodied in the General Agreement or in the Draft
Charter.
The next stage is that a protocol will be signed by
certain countries, by which they undertake to give effect to the
provisions of the General Agreement provisionally, and to
introduce tariff changes embodied in the schedules, also
provisionally. Now, it seems to me that that is quite a
different matter. The countries are undertaking to grant
certain privileges and to take certain action, and it does not
seem to me to be reasonable that they should give that under-
taking unless they know what the other parties are, in fact,.
going to do. Therefore, it appears to me that the only.
reservations which could be incorporated or attached to the
.protocol of provisional acceptance would be reservations which
have been accepted by all the parties. In the protocol of
provisional acceptance, there can be no reservations, as I see
it, except ones that are generally accepted by all the parties
to that provisional acceptance.
The same does apply, as I see it, to the agreementt itself
when that comes to be ratified and accepted. In relation to it,
too, the only reservations which could be incorporated would be
reservations which all the parties were agreeable to have
included. If a country wishes to make reservations on either
of those two Documents, and it cannot get general acceptance of
those reservations, then it seems to me the only alternative open
to it is not to sign the protocol of provisional acceptance or
not to sign the Agreement.
E/PC/T/TAC/PV/7
V. V. E/PC/T/TAC/PV/7
- 33 -
However, I have been interested in the comments on the
influence on willingness to sign a protocol (particularly the
protocol of provisional acceptance) of whether the General
Agreement will incorporate automatically the provisions of the
Charter when it is finally agreed upon. I think a number
of Delegates have pointed out that it would assist them considerably
in giving acceptance to the protocol for provisional acceptance
if they knew that the provisions of the General Agreement would
be replaced automatically by the Charter when it is finally
agreed upon. J. 34 W~~~~~~~~~~~~~~~E/PC/T/TAC/PV/7
~~~~~~~~~~5
Now, the Deledate for South 'frica has very soundly pointed out
that theto a^- real difficulties about that because, tc.some
eg ent areani nate, it means that in so signin~'you ax slg^ing a
blank Ceque,e Of c urse, uiLike signing a blank ch'.e, in this
otce youtcas spop payment, but you have not ,;s time 2o otoo
payinee be-cre ihe man gets to the bank with the chuque, so t is
not d cfic bad, althou-h I agree tht there are Qif:?:ulties.
Ol ahe o iif olu .ign the Proiisiona" .cceptance
wfthse an u!ders'and-ne that the provision oi th';General
Agbree t. rter, be replaced by thoso of the Draft Cho.rt.(;;:,, then I
O r zt1that tvo conseuences £ol !Lcwf he irst is that,
;o so:e !:tent, whatever may be the forner position, your freedom of
action on ie .tior to the Chaater is limited - ycu have alzeady
agreed Gc accepJuromethin, however privisionally, and yorl
posit2cnea seeeikrned. hLve it altered is that 'ech weaned.,
you. as boq-ed ito f position ouheeuently oD having
to object to somethin; which you eave substantilally agre.d to.
Another dif:iculty is that, by agreeing to the inclusion of
these oallses witho-t atomatic replasemn for au1a c nent,
2-,.&~ J gimen thmnoan apparent perranance cf status, which makes the
wlh]e provisiond' aiceptance much more riff cult, because if you
are accepting somethipg which, in the absense of action to the
contrary, is going to continue un a permanent basis, yoa have a much
bet eL obligation to justify that acceptance to your legislature
than if what you are accepting is so clearly provisional that it is
autoiatically going to be replaced, by which your parliament would
consequently have an opportunity to examine and reject it if they
do not Ike it, 35
So, for that reason, we feel, as I have indicated before, some
concern about this point and we would wish for some automatic
provision to be made. I was interested in the United States
suggestion last week that it might be done by giving at least an
appearance of automatic replacement by providing that the Articles
of the Agreement would be replaced by those of the Charter unless a
specific number objected. I think that perhaps that is the
answer, in part, to the South African Delegate's objection.
The only question that I have got to ask is what happens if such
objections are raised? Now, if what happens is that, in the event
of anybody objecting, what is in the Agreement stands, then I think
that is purely a formal change and does not really mean anything,
but if what happens next is that, if anybody objects, the parties
meet and confer and decide what will go in, so that the whole thing
is open and everybody is on an equal footing and there are not
priorities, either for what is in the Charter or for what was
previously in the General Agreement, then I believe that the position
would be entirely different. In fact, we would be prepared to
say that the provisions of the General Agreement will be replaced
automatically by those of the Charter unless any of the contracting
parties object, and if any of the contracting parties object the
contracting parties would confer and decide what should go in.
The result of that would be, when the contracting parties
conferred, if there were only one objector
to say: "Well, we are quite satisfied with what is being put
in here out of the Charter, and the thing for you to do is to make
up your mind whether you are going to accept it, or, if you cannot
accept it, withdraw from the General Agreement". On the other
hand, if there were a substantial number, and if the objection were
E/PC/T/TAC/PV/7
J. J. E/PC/T/TAC/PV/7
36
a significant one, it would be up to the contracting parties to
resolve the difficulties, but no one group would be able to claim
priority for the things which they favour, whether it was what was
in the Agreement or what was in the Charter. We think that that
would keep the position quite open and leave complete freedom for
the contracting parties to remain in to conclude an Agreement.
with which they are fully satisfied.
I do not feel that it is fair for parties to an Agreement to
feel, at any stage, that they are being obliged to accept
something which they do not think is what they want signed. What
we are anxious to do is to keep the position as to what is in the
General Agreement open, so that if what comes out of the World
Conference in relation to the Charter is satisfactory then that
takes its place unless anybody objects, and if they object, they
have got every opportunity to state what in their opinion ought to
be the content of the Agreement, without having any claims made
that they have been previously committed or that either what is
already in the Agreement or in the Charter has in any sense an
absolute priority.
I feel, Mr. Chairman, that if we could agree upon something of
that sort, those people who will be signing or who Would wish to
sign, a Protocol of provisional agreement would feel much happier,
because it would be clear to them that their signature of that
document was in every sense essentially provisional and that they
would have two opportunities subsequently - first, at the World
Conference, when it is decided what should be in the Charter - to
influence the nature of what they were going to commit themselves
to finally. If they were not satisfied with that, they would E/PC/T/TAC /PV/7
again have the opportunity of conferring with the other contracting
parties as to what, if anything, could take the place of the
Charter. If they could not get agreement there, then they would
have complete freedom not to conclude the General Agreement, but to
terminate their provisional acceptance of it.
I believe, Mr. Chairman, that that would simplify this problem
of reservations in that it would be less difficult for a country to
accept the Protocol of provisional acceptance without reservations
if they were quite confident that by so doing they were not
imperiling the attitude which they would wish to take at later
stages.
J . E/PC/T/TAC/PV/7
-38-
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I have
very little to add to what Dr. Coombs has said. It seems to me
he has made a very constructive suggestion, on the question of
the automatic supersession, with the understanding that, if a
proportion of the parties have objections then all the parties
will meet to consider the situation. They will be able to do
that in the light of the knowledge of the circumstances which
exist at the time. In that case it may be possible for a
large number of the reservations not to be put in at this
stage. If that is not possible, then one must hope that they
will be able to, withdraw then, before the Havana Conference. If
they cannot do that, the only thing would be to wait until
the Havana Conference and perhaps the chances made at Havana
would meet their case. If they are working on the General
Agreement, then their case is met. If not, it will be for the
authority set up to administer the Agreement to admit their
reservations, if it is willing to do so, If it is not willing
to admit them, then. I am afraid their only recourse is for them
not to become parties to the General Agreement. That is how
the matter appears to me.
CHAIRMAN: The Delegate of Chile.
Mr. F. Garcia OLDINI (Chile) (Interpretation): Mr. Chairman,
as the Sarian Delegate has pointed out, we have become involved
here in difficulties which seem really considerable. That is
due to the fact that we have followed no logical path in
S 39
drafting the text and that we have not given precedence to
one text or the other. The logical way would have been first
to agree to the Charter, in which we have tried to establish
standards for international trade, and then to devise the
practical steps which we went to have embodied in the General
Agreement. The General Agreement should then only have come
to life after the approval of the Charter.
That would have been the course to follow if we had
followed reason; that is, I think, in accordance with the law
of nature. But, for reasons which I do not know, we have
followed a different way and, as the Syrian Delegate mentioned
last week, we have tried to give life to the son before the
mother was born and the result is that we have here something
which is a monstrosity.
The difficulties do not come from the reservations which
have been made by our Delegation and which we want to see
embodied in the Agreement, but from these Delegations who
wanted us to come to an agreement on principles which have
not been approved in the Charter. Therefore it would be
right for us to ask concessions from those who are at the
bottom of the difficulties which now face us.
We have made reservations as regards e non-existing mother
and it is quite normal for us to transfer these reservations to
the son which we want to see born here. We have been answered
that it is quite impossible. I may accept that answer, but,
nevertheless, if we went to find a compromise I think the best
solution would be. to follow the suggestion just made by Dr.
Coombs; that is, that Part II of the Agreement, or the whole
of the Agreement, should be replaced automatically once the
S
E/PC/T/TAC/PV/7 S E/PC/T/TAC/PV/7
40
final text of the Charter is adopted; that is to say, that
these Articles of the agreement should be replaced by the
corresponding Articles of the Charter. If that were done, then
I think many of the difficulties which now confront us would be
eliminated.
Of course, that would not prevent us, in the course of the
discussion of the General Agreement, from expressing certain
reservations which we have made regarding the Charter and, as I
have stated, we shall express the reservations, if need be, at
the time when we sign the Final Act.
As regards another question: the French Delegate
mentioned just now the date of June 1948 as being the date up
to which the signature of the Agreement would be open to the
contracting parties, but it seems to me ------ here I would like
to take up an expression which was used by our Belgian colleague
last week, when he said that since coming to Geneva he had had
the impression of being a sleep-walker.
I think that in the course of our discussions last week
we decided on a procedure to be followed for the signature of
the General Agreement. Now the French Delegate points out that
this Agreement can be open for signature up to June 1948, and
our Chinese colleague mentioned the date of February 1948.
I think that, in the case of Delegations which made
reservations, these reservations are usually made because they
correspond to essential needs of the countries concerned.
Therefore it must be established clearly that the Final Act is
only a record of what has been decided here and that, on the
other hand, we ought to establish clearly also only the date
on which the Agreement will be open for signature. Then the
various Governments will know how much time they have in which
to study the advantages and disadvantages of the Agreement; S . E/PC/T/TAC/PV/7
they will be able to weigh these advantages and disadvantages in
the scales and decide whether it is better for them to withdraw
their reservations or not to sign the Agreement.
But if we want to build up here a homogeneous body of
provisions, and, on the other hand, if the various Delegations
wish to take into consideration not only their own interests but
also the general interests of all the nations, then they ought
to know the date up to which they are allowed to join in the
Agreement.
Therefore, Mr. Chairman, I Would be extremely grateful to
you, if, before adjourning this debate, you would give an
answer to that question.
CHAIRMAN: Before answering the question which has just
been raised by the Delegate of Chile, I would like to call upon
the Delegate for Belgium, who has asked for permission to speak.
But, as I said I would close the debate after the Chilean
Delegate had spoken, I would like to have the unanimous consent
of the Committee before calling upon the Delegate for Belgium.
(No dissent)
The Delegate for Belgium. p.
M. Pierre FORTHOMME (Belgium) (Interpretation): Mr. Chairman,
first of all I would like to thank the Committee for allowing me
to speak, I think we have listened with great care to what Dr.
Coombs said but in our opinion Dr. Coombs neglects one important
question in this question of automatic substitution, that is the
essential link which exists between this General Agreement and the
Tariff Concessions. If one applies the principle of automatic
substitution, and if the General Agreement were to be qualified by
this principle, then that would prevent the provisional application
of the agreement, I am afraid, because in fact, here, in regard to
these Tariff concessions, the countries need a firm basis to
measure the sacrifices they have made and to weigh in comparison
the award they are getting, and on the other hand they need
security, and they need security in regard to the granting of
tariff concessions. And if the basis of the Agreement is to be
modified within a short period, and if the rule of one-third
majority is allowed to play here, then the party which has made the
tariff concessions may object to applying the General Agreement
straightaway, because it will not know if, within a short time,
this concession may not be hindered or nullified by the Charter.
Therefore this Party would, it seems to me, be making urdertakings
beyond the terms to which it has agreed here.
It seemed to me that the will of the countries which first
decided to join in an Agreement was to establish conditions for
international trade such as would enable them to grant tariff
concessions, and this will meant that the conditions would be
maintained whatever future steps might be taken, and that the
countries did not seek on the other hand to impose the same
conditions on other countries if the countries were not willing to
make the same undertakings; but nevertheless that between the
countries which agreed to those conditions there was a will to E/PC/T/TAC/PV/7
43
establish such conditions. If such conditions were established
between these countries, then if other countries wanted to join
the Agreement, it would be possible for those other countries, but
only of their own will.
Now we have something quite different; we are speaking of
automatic substitution and we are speaking of the General Agreement
being part of the Charter and that in order to become part of the
General Agreement one had also to become part of the Charter
Agreement. Therefore it seems to me that, if the basis is
changed, a Member would only have one solution in certain cases,
that would be to withdraw altogether from the Agreement, because
if the Charter does not provide the basis for this Agreement
which this Member was expecting when he granted the Tariff
Concessions, then therefore he could not withdraw those concessions
and the only possible solution would be for him to withdraw from
the Agreement, and therefore to find himself with an inferior
statute, which of course was not at all what was intended.
Therefore it seems to me that the conception which was
outlined by Dr. Coombs was somewhat erroneous and does not
correspond to the conception which we had when we first opened
these debates,
CHAIRMAN: Well we seem to have had a very full debate on
this subject of reservations, It started off by a discussion as
to what reservations should or should not be attached to signature,
and ended up, like so many of our discussions , in the question of
supersession of Part II of the Agreement by the Charter.
I think Dr. Coombs was quite correct in pointing out the
importance of this question of supersession of Part II by the
Charter in connection with reservations, because it does have a
great deal of bearing for those countries which have reservations,
particularly reservations to the Charter, to consider whether or
P. P E/PC/T/TAC/PV/7
44
not they should maintain those reservations in considering the
General Articles of Agreement. But we can only perhaps deal with
this question of supersession of Part II by the Charter when
we come to consider Article XXVII, for paragraph 1 of that
Article does provide for the supersession of Part II by the
Charter.
We were advised at our last meeting that the United States
Delegation are submitting an amendment to the first paragraph
of Article XXVII along the lines which Mr. Brown outlined at
our last meeting. I do not think we can consider the question
of supersession of Part II by the Charter until we come to
Article XXVII because it is necessary for us, first of all, to
decide, or to have a clear picture of, what Articles are going
to be in Part II. Therefore I think we should maintain our
procedure and go through the Articles one by one, so that when
we do come to Article XXVII we shall have a clear idea as to
what Part II is or is not to contain,
The question of reservations can therefore be left in
abeyance until that time,
I think that this discussion has shown that a number of
Delegations are of the view that the only reservations which
could be admitted at time of signature would be those which
have the .n1?.1 wl . all the other countries parties
to the Agreement.
I feel now I could answer the question which was raised
by the Delegate of Chile i. _: the date on which the
Agreement closes for signature. Members of the Committee will
recall that in our subsequent discussion a suggestion was thrown
out that the closing date for signature might be one month
after the termination of the World Conference. The Delegate of E/PC/T/TAC/PV/7
Norway suggested that two months might be better. The Secretariat,
in drawing up this table, had to strike a date midway between, the
two, so they suggested 28 February, and that is the date that
was referred to by the Delegate of China and mentioned by the
Delegate of Chile, The Delegate of France, I understand,
mentioned the date of 30 June. Possibly that was because he has
had the privilege, as I have, of seeing an amendment which a
certain Delegation proposes to introduce to Article XXIV, the
Article providing for definitive entry into force, and in that
amendment the date of 30 June was mentioned. There again I do
not think we can obtain a clear picture until we come to
Article XXIV and discuss this question. But the date is fluid:
the earliest date which we have before is is February 28; the
latest date which we have, when this amendment is submitted, is
30 June. So the date we have to take in our considerations is
some date between 28 February and 30 June.
If there are no comments on the procedure I have outlined,
I suggest that we revert to Article I. Before we commenced
discussion on the question of reservations, the Delegate of
Australia had suggested that Article I might be transferred to
Part II. Therefore I would suggest that we devote our discussion
to the suggestion of the Australian Delegate.
The Delegate of the United States.
Mr. F. GARCIA OLDINI (Chile) (Interpretation): Mr.Chairman,
I would like just to ask a question. I think I understood
rightly when you said that the question regarding reservations
was not solved. Was that a correct interpretation?
CHAIRMAN: Yes, I think what I said was that a number of
Delegations had expressed the view that the only reservations P E/PC/T/TAC/PV/7
46
which would be acceptable at time of signature would be those
which were unanimously agreed to by all contracting parties.
But I also pointed out the relation of this question of
reservations to Article XXVII, and therefore I said we should
leave the question of reservations for the time being and revert
to it again when we came to Article XXVII.
The Delegate of the United States.
Mr. Winthrop BROWN (U.S.A.): Mr. Chairman, Article I was
suggested by the Tariff Working Party for inclusion in Part I
of the General Agreement, because it was considered by them to
be a very fundamental Article, and I should think there would
have to be strong reasons for moving it into Part II.
The Delegate of Australia indicated that the reason
underlying his suggestion was that Article I would require some
changes in his legislation, but that those changes were not
particularly important ones. I wonder if he would be willing
to elaborate some of those reasons, and perhaps we might find
out from other Delegations present whether they find similar
difficulties in connection with Article I. I would like to
know more about that before forming any opinion upon the
suggestion of the Australian Delegate. V E/PC/T/TAC/PV/7
47
CHAIRMAN: The Delegate of Australia.
Dr. H.C. COOMBS (Australia), Mr. Chairman, we have expressed
our general attitude on this Article. We believe that it, together
with certain other Articles in the Draft Agreement, embodies a
general principle which constitutes for Australia a very important
change i the general commercial policy, and we believe, therefore,
that the proper place for such a change to be accepted - if it is
to be accepted - is as part of the Agreement embodied in the Charter
as a whole; but our particular reason for asking for it to be
shifted to Part II is, as I said, that we wish this Agreement at this
stage to be accepted provisionally and that any acceptance should not
involve legislative action by our Government.
I understand that we have a provision in our Customs law by which
we grant, in respect of valuation for duty, a certain privileged
position to the Dominion of Canada in relation to the way in which
we deal with transport charges. I have forgotten the precise details
of the provision, but it is as to what proportion of the inland
transport charges shall be incorporated in the total for valuation for
duty. Quite apart from the merits or demerits of that particular
arrangement, it is clearly an infringement of the general legislative
treatment as embodied in Article 1. It could not be altered, as
far as we are concerned, by administrative action and we would,
therefore, in accepting Article 1 be undertaking to present to
Parliament an alteration on that. I give that as an example of
which we happen to be aware. I do not doubt that there are other
provisions affecting imports and import charges which may infringe
this also. I cannot recall any offhand, but there may be such
examples both for us and for other countries. 48
Now, the essential understanding which we have of the whole
position of provisional acceptoance is that we will not be called
upon to undertake legislative changes, and it seems to us that there
is no difference in substance in transferring this Article from the
first part to the second part, except that it means that if to give
effect to this, along with the rest of the Articles in Part II.
would involve legislative action, then you are not required to take
legislative action during the period in which the Agreement is
provisionally operative.
I do not want to discuss our attitude towards the Article
generally at this stage, Mr. Chairman, since I reserve that for
when we are discussing the content of the Article. My point is
that there is no difference between this Article and the other
Articles in Part II in that it may and in our case does, require
legislative action which we should not be called upon to take during
the period of provisional operation.
CHAIRMAN: Are there any other Delegations represents on the
Committee that would have any difficulty in applying the provisions
of Article 1 provisionally without legislative changes?
M. ROYER (France) (Interpretation): Mr. Chairman, as the
question was raised by the United States Delegate, I must point out
that the French Government would have here a small difficulty
to apply completely Article 1 in the period of provisional
application of the Agreement. The problem relates here to the
country of origin of the goods and to some super-taxex which
are imposed in certain cases, and regarding the problem of the
country of origin of the goods imported into France, the legislation
would have to be modified to put it in accordance with Article 1.
V
E/PC/T/TAC/PV/7 49
We do not ask that Article 1 should be transferred from the
first part to the second part of the Agreement, but nevertheless
we should ask that this Article should not be applied one hundred
per cent by the French Government before the Agreement is
ratified. Of course, this is only a minor problem involving
two or three points of detail.
CHAIRMAN: Are there any other Delegates in the same
position? Well, as it is now six o'clock, I suggest we now
adjourn and we can take up this discussion tomorrow. The
meeting will take place tomorrow in this room at 2.30 p.m.
The meeting is adjourned.
(The meeting adjourned at six o'clock).
E/PC/T/TAC/PV/7
V |
GATT Library | ds646pc7877 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Sixteenth Meeting of Commission A held on Monday, 23 June 1947 at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, June 23, 1947 | United Nations. Economic and Social Council | 23/06/1947 | official documents | E/PC/T/A/PV/16 and E/PC/T/A/PV.15/CORR.1-17/CORR.4 | https://exhibits.stanford.edu/gatt/catalog/ds646pc7877 | ds646pc7877_90240107.xml | GATT_155 | 7,555 | 46,100 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL RESTRICTED
E/PC/T/A/PV/16
ECONOMIQUE 23 June 1947
ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
SIXTEENTH MEETING OF COMMISSION A
HELD ON MONDAY, 23 JUNE 1947 AT 2.30 P.M. IN THE
PALAIS DES NATIONS, GENEVA
H.E. A. de V.F. BRAGA
(Chairman)
(Brazil)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel. 2247).
NATIONS UNlES P. - 2 - E/PC/T/A/PV/15
CHAIRMAN (Interpretation): The Meeting is called to order.
We have on our agenda the Report of the Sub-Committee on Chapter III.
This document was distributed in both languages.
I call now upon the representative of India, who was the
Chairman of the Sub-Committee on Chapter III, so that he can give
the meeting all necessary explanations on the Report.
D. P. S. LOKANATHAN (India): Mr. Chairman, not many words
are required from me to explain this Report on the text of the
revised Chapter III. The Report itself explains nearly all the
changes that have been introduced in tne text of the Articles.
The Sub-Committee met on ten occasions, examined all the various
proposed amendments, including those submitted to the Committee
during the stage of its examination, and reached agreements regard-
ing the text of the Articles and the Report. I had the advantage
of consultation with all the delegations which had given notice
of amendments and the conclusions generally speaking were accept-
able to them also, with perhaps one exception in the case of
article 5, to which I shall refer later. I will only indicate a
few of the salient features in the revised text, briefly explain-
ing the reasons for such changes as have been incorporated.
It will be observed that in Article 3 the words "Iarge and
steadily growing volume of production and effective demand" have
been used in preference to the existing text as well as to various
other formulations to describe the objective in respect of demand. P.
I think it will be clear that this new formulation is more
acceptable. And the Sub-Committee has also introduced the term
"production" both in Articles 3 and 4 to bring out the relation
between production and economic activity on the one hand and
also to point out that it is not employment of every kind
which is so important as employment which would lead to product-
ive activity.
Mere employment for the sake of giving employment, unless
it is going to be of a productive character, is not necessarily
desirable.
In respect of Article 5 there was a certain amount of
difficulty in arriving at an agreement. One delegation which
had submitted an amendment in respect of this article pointed
out that "fair labour standards" and "sub-standard conditions
of labour" were rather vague and indefinite concepts and there-
fore wanted them to be replaced by some more definite terms.
After a grant deal of deliberation L. E/PC/T/A/PV/16
the sub-committee came to the conclusion that on the whole,
although these were necessarily vague they filled a very useful
purpose as they were added provided they were related to product-
ivity. It waes also pointed out to the delegations who proposed
the amendments that insufficient attention had been given to the work
of the Inaternational Labour Organisation. The sub-committee felt
that it was necessarily right that the International Labour Organisa-
tion should be separately and jointly referred to in connection with
this; therefore an additional paragraph pointing out the relation
to this Article of the International Labour Organisation has been
put in.
I might refer to one other point, that is,the sub-committee has
deleted the term "nationel" in its relation to productivity. "Each
Member, recognizing that all countries have a common interest in the
maintenance of fair labour standards, related to pro-
ductivity,......"
The reason for the elimination was not that the term "national"
was no use, and in suggesting the change it was not the intention of
the sub-committee that consideration of "national productivity"
should be excluded if the "national prductivity" was considered
relevant to the particular case. It appeared to the sub-committee
that this Article was intended to relate principally to conditions
of labour affecting particular products or commodities. In some
cases, in judging whether conditiions of labour relating to a
particular Product or commodity, were sub-standard or unfair, it
might be appropriate to take account of the average or typical
productivity for the country as a whole. In other cases, however,
it might be necessary to give consideration to the level of pro-
ductivity in the particular region of that country. In still other
cases it might be desirable to consider the rate of productivity in
the particular industry, and so on. In many cases it would doubtless E/PC/T/A/PV/16
be desirable to take account of productivity in all these senses.
In order that appropriate action might be taken of whatever pro-
ductivity may be relevant - whether it be national, regional, or
that of a particular industry - the sub-committee thought it desir-
able to use the single word "productivity" in this Article.
The reason the sub-committee felt it was not necessary to retain
the word "national" was because it felt that word should be limited
to one particular use.
Article gave a great deal of bother to the sub-Committee, but I
hope the revised text will be a cceptable to the Committee. There
are, however, some important points I would like to refer to in con-
nection with this Article. We are not very clear that action should
be taken before Members are proposing to resort to trade restrictions;
therefore, with a view to avoiding action to resort to trade restric-
tions the Article has bean suitable amended.
The other point in connection with this Article is that when the
Commission consider the adoption of certain measures in such circum-
stanoes, it was felt that action should be taken with a view to
expanding internal trade rather than contracting it. For instance,
as an example, if two alternatives were open to a country either to
contract or increase imports, the sub-Committee felt it was better
to say that an increase of imports would be more desirable than the
restriction of exports.
Coming now to Articles and 8, it will be seen that these
Articles have been reversed. The reasons for that reversal are set
out in the Report, and it is not necessary for me to go into them
at any length.
The only point of interest here is that provision has been made
for consultation with Members with a view to avoiding delay in action,
and also the taking of appropriate measures to expand exports or
prevent a decline in employment.
L. L.
E/PC/T/A/PV/16
The Committee also felt the need to draw the attention of the
Commission here as well as in the Final Report to the inter-relationship
between Article 8 and the various Articles which are relevant to the
consideration of this Article. The Sub-Committee thought it necessary
to emphasise this point because there has been a great deal of inter-
relationship between the various Articles set out in the Report and
this particular Article.
There is only one other word I should like to say, and that
in respect to the title. The former title was "Employment,
Effective Demand and Economic Activity" and this has been changed to
"Employment and Economic Activity." This change arose from the
fact that since "production" had been added in several Articles the
title would have become cumbersome if an attempt had been made to
list in the title the various aspects of economic activity included
in the Articles. In addition, such a lengthy title would probably
have the effect of div erting attention from "employment", on which
it was intended by the Sub-committee that the main emphasis should
continue to be placed. Accordingly, the Sub-committee concluded
that, in order to make the title comprehensive and yet not to remove
the main emphasis from employment", the title should be simplified
to read merely "Employment and Economic Activity". The Sub-committee
clearly intended the expression "economic activity" to include demand
production and other aspects of economic activity which might be
relevant to the matters dealt with in the Articles of the Chapter.
I do not think I have Anything more to -.add excepting to say I
should like on behalf of the sub-committee to express our thanks and
appreciation of the assistance rendered to us by the Secretariat in
every stage of our work.
-6- UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/A/PV/28.
8th July 1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
TWENTY-EIGHTH MEETING OF COMMISSION A.
HELD ON TUESDAY, 8TH JULY, 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).
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/A./PV/16.
CHAIRMAN (Interpretation) Does anyone wish to speak
on the Report.
We pass on now to the discussion Article by Article,
starting with article 3.
Does anyone wish to speak on Article 3?
The Delegate of France.
Mr. BARADUC (France) (Interpretation): The French
Delegate has no objection to Article 3 as drafted in the English
text, but has a small correction in the French text. The words
appearing on the last line but one of paragraph 1 of the English
text "for the realisation of the purposes of this Charter" have
been translated into French ey rdlune maniere generale a la
realisation aes objectifs de la presente Charte", which text
the French Delegate would like to read "pour atteindre les
objectifs" and so on.
It is merely a question of translation. another verb
would be natural at the end of the sentence in French - "pour
assurer", etc. - but the meaning is not altered in any way in the
English text.
CHAIRMAN (Interpretation): The remarks made by the
Delegate of Fra.nce will be duly recorded anal the necessary
alteration will be male in the French text. Does anybody else
wish to speak on Article 3?
The Delegate of China.
Mr. CHEN (China): The Chinese Delegation feels that the
title of this Chapter as recommended by the Sub-Committee is not
so clear as originally drafted.. That is, by omitting
- 8 - E/PC/T/J,/PV/10
"Effective Demand "we presume to have changed the meaning of one
of the most important phrases of this Chapter - that is, Effective
Demand - because we are dealing with trade, and we presume to
say "Eoonomic Development" in Chapter IV. There we have a
similar title, and so if we compare the titles of the two
Chapters, we cannot see much difference if we omit the same
phrase from the text as amended.
Therefore, we think it is better to retain the old title,
that is, the "Employment, Effective Demand and Economic activity".
CHAIRMAN: The Delegate of India.
Mr. LOKANATHAN (India ): Mr. Chairman, I have already
explained the reasons why the Sub-Committee decided to have this
shorter title, "Employment and Economic Activity". As also
pointed out, Economic Activity does not certainly exclude
effective demand.. We do not want to overload the title, and.
also, if I may point it out, the London text had only "Employment".
The New York text introduced "'Employment, Effective Demand.
and Economic Activity". I think the present Sub-Committee has
made an advance, just to retain "Employment and, Economic Activity",
and therefore we have set the right balance.
CHAIRMAN: (Interpretation): Does the Delegate of China
consider this explanation satisfactory to him, and is he therefore
prepared. to accept the text of the title as offered. by the Sub-
Committee?
Dr. CHEN (China): We do not insist to have this, but we
consider it is better to retain it, to make it more clear, because
Effective Demand. is one of the most important phrases
concerning what we are dealing with in this Chapter. Of course,
we do not insist to have this addition.
- 9 - - 10 -
V E/PC/T/A/PV/16
CHAIRMAN: The Delegate of Brazil.
M. L.D. MARTINS (Brazil) I would like to point out
to the Delegate of China that the title of Article 3 is more
explicit than the title of Chapter III itself, and this very
complete title for Article 3, "Importance of Employment,
Production and Demand in relation to the Purposes of this
Charter", should entirely satisfy the aims of the Delegate
of China.
CHAIRMAN: The Delegate of China.
Mr. C.H. CHEN (China): Mr. Chairman, we have real that
title, but it seems to me that the title of Article 3 is
broader that the full title of this Chapter. What do you
mean by fl -; activity"? Economic activity has more to
do with economic considerations, such as prices, production
and so forth; but if we keep three words effective demand"
we can see right aKw-.; what we mean and what we have in mind in
the whole Chapter, awd we do not have to refer to the sub-title
of Article 3 in order to understand what we have in mind.
CHAIRMAN: (Interpretatiion): Does anyone else wish to
speak on this Article? Since there seems to be general
agreement on the text of the Drafting Sub-Committee, I would
ask the Delegate of China whether, in view of this general
agreement, he would be prepared to accept the, title. as drafted.
Mr. C.H. CHEN (China): As I have stated, we do not
want to insist on having this changed, but we simply offer
our explanation as to why we prefer the title changed.
CHAIRMAN (Interpretation): Article 3 is thus approved. V 1 1 E/PC/T/A/PV/16
We pass on to Article 4. Does anyone wish to speak on
Article 4?
The Delegate of New Zealand.
Mr. L.C. WEBB (New Zealand): Mr. Chairman, on the question
to
of Article 4, I would refer the Meting/to page 3 of the Sub-
Committee's Reort, in which it is stated that "the represent-
ative of New Zealand Informed the sub-Committee that this
Delegation would prefer not to discuss the amendment.which
it had proposed. to Article 4 until Article 33 and related
Darts of the Charter had been discussed. He indicated
that in the meantime the New Zealand Delegation would
reserve its position in respect of. Article. 4 and that
subsequently his Delegation might wish to reopen the question
of further amending that Article".
That passage in the Report correctly states the position
of the New Zealand Delegation, and I would only add that it
is our hope that circumstances will enable us to. withdraw
that reservation.
CHAIRMAN: (Interpretation): The reservation made by
the New Zealand Delegation will be recorded and I would ask
whether any other Delegate wishes to speak on Article 4.
The Delegate of Franae.
Mr. BARADUC. (France): (Interpretation) Mr. Chairman,
I would only ask the Commission whether it would be possible,
as is done in Paragraph 1 of Article 3, to put at the end
of Paragraph 2 of Article 4 a reference to "all the other
countries" where it is said "shall seek to avoid/creating
balance-of-payments difficulties for- .ther Members". We
want to add the words "for all other countries" as we have
at the end of paragraph 1 of Article 3 about the well-being - 12 -
E/PC /T/A/PV/16
of other countries. In addition, this would be in keeping
with what was decided in London on the question of balance of
payments.
CHAIRMAN (Interpretation): I feel sure that the Delegate
of India would wish to give us some explanation of this matter,
and if he agrees, I will give him the floor on this point.
Dr. P.S. LOKANATHAN (India): On that. point I must say,
Mr. Chairman, that the sub-Committee has no firm view. You will
see that in Article 6 we have altered the word countries" to
"Members"., and therefore if the French Delegate wants to introduce
the word "countries" here, we shall have to revise Article 6
accordingly. The reason why the sub-Committee preferred to
remain "Members" in some cases and "countries" in other cases was
that first of all, in Article 4, the term "Members" was used, and
we wanted that to be the pattern for the other Articles. If, on
the other hand, it is thought that the word countriese" should
replace the word "Members", that alteration can be made. It all
depends upon the point of view: whether we want to have mutual
responsibilities between Members, or whether we are really concerned
with responsibilities between one Member and all the other countries,
whether they are Members or not. Therefore, it is really a matter
of policy as to what exactly we want to do here. Personally, I
think that "Members" is a much better word than "countries",
because we are dealing primarily with relations between Members. - 13 -
E/PC/T/A/PV/16
Dr. P.S, LOKANATHAN (India): Mr. Chairman, might I be
permitted to add one more word. In Article VIII we have, however,
retained the word "countries". The reason for that is very clear.
In whatever way a depression is caused and the effective demand is
caused, the members are affected. Therefore, the question here is ,
whether depression is caused by members or non-members, and this is
not significant. We thought it was the relation between members
primarily, and that is the reason why we retained the word.
M. PIERRE FORTHOMME (Belgium) (Interpretation): I would not
like to suggest for a minute to the Commission that the non-member
states should be considered as outlaws, but if we put in this
Article the words "other countries'!, instead of "other members",
I think we would create difficulties for the members because they
have undertaken a certain number of obligations which, in that case,
might be difficult to keep. The: non-members have subscribed to
none of the obligations contained in the Charter. They are not
consulted, and there are no means of consulting them in the same way
as is provided for for the members, and we have not got the same
facilities for estimating the difficulties for their balance-of-
as
payments in the case of a non-member,/we hare in the case of members.
I therefore feel that, by mentioning the word "countries" here, we
would complicate the task of member countries, and I think that in
practice none of the member countries would deliberately try to
create difficulties of balance-of-paymentsfor non-.members. But if
the state had not subscribed to the obligations. of the Charter, I
think we could not burden the members with. obligations' towards non-
members.
Dr. H.C. COOMBS (Australia): Mr. Chairman, I would like to
mention that this is a point which has been raised in the discussions ER
14 - E/PC/T/A/PV/16
between the consultative committees and the World Federation of
Trade Unions. The representative of the Federation drew attention
to a possible interpretation of this word. He said that it
implied that measures which were capable of producing balance-of-
payments difficulties for other countries who were not members,
would be quite consistent with the obligations here. For that
reason he felt that some change might be made. I merely report
that for the benefit of the Commission since it may have some bearing
on the deliberations of the Commission.
If I might speak for myself and my delegation on this, point, I
feel there is something that the French delegate suggested here that
should receive fairly serious consideration. As I see it, the
intention of this Article was, not so much to establish an obligation
between members and other non-members, as to impose on members an
obligation in relation to their domestic policies or to ask them to
accept such obligations. It suggests that there are certain types
domestic
of domestic policies which might be adequate to maintain/employment,
in
but, which would not achieve the purposes which were/mind at the
time of the drafting of thin Article. A choice between possible
measures was necessary in order that the expansive purpose of the
high levels of domestic employment in relation international trade,
should be achieved, and I think that that choice is not affected by
whether any possible balance-of-payment problem which would be
adequate for other countries, would fall upon members or non-members.
The essential point is that the country itself, in selecting its
measures in its domestic Policy, should concentrate on that type of
measure which does not have the effect of creating this balance-of-
payment difficulty for any other country at all. E/PC/T/A/PV/1 6
- 15 -
And partly - it was not a question which would have worried
us at all, but it is clear from what has been said that there
is a possible misunderstanding of the purpose of the use of
the word, here - I cannot see that the intention of the Article
is in any way varied if we substitute "countries" for "members"
and we do at least avoid a possible misapprehension; and I would
therefore like to support the suggestion of the French delegation
that we substitute the word "countries" for "members".
CHAIRMAN (Interpretation): The delegate of Czechoslovakia.
M. F. KRAUS (Czechoslovakia): It is really that I would
like to add to what the delegate of France and of Australia said.
I would only say that there is a slight difference between the
tern "other Members" used in Article 4 and the same term used -in
Article 6. What the representative of the World Federation of
Trade Unions tried to explain, and I agreed entirely, with him,
is that the use of the term "other Members" in Particle 4 would
possibly lead to a creation of two hostile blocks, one block
inside of which the members adhering to the Charter would have
to avoid measures which would have the effect of creating balance
of payments difficulties, and another hostile block against which
all balance of payments difficulties would be allowed.. And, of
course, that would be a situation which would be harmful to all
countries, not only to those who adhere to the Charter. It is
of course quite clear that this practical point con be finally
decided after the decision is taken on Article 36. It is also
right and correct what the representative of the World Federation
of Trade Unions said, namely that the Charter can meet with success
only if all countries would adhere to it. In that case of course
we would be content, maybe, with the term as it is used. now "other
Members"; but, as we do not see how the situation will be, first of/
all E/PC/T/A./PV/1 6
-16-
as to the final version of Article 36, and then as to the final
effect of the Charter, I would, for the reasons which I said,
support the amendment proposed. by the delegate for France,
CHAIRMAN (Interpretation): The delegate of the Netherlads.
Dr. S. KORTEWEG (Netherlands): Mlr. Chairman I also should
like to support the proposal of the French delegate, and., for
the reasons given by the Australian delegate should like in
this matter to raise a general question also, that is the question
of the use of the words "member" and "country". It is a question
of terminology, but I should. say generally you can find a solu.-
tion to questions of this kind by asking "What do you mean? Do
you mean the country, the population and so on, or the Government?"
and here in this case in article 4 I should say in the first place
it is the population and the position of the country and, not the
position of the Member, not the Government; it is the Government
which has to take measures on behalf of the country. And there-
fore in this case it should be the country which is mentioned and
not the Member or the Govornment.
Mr. J.E. MEADE (United Kingdom): Mr. Chairman, the United.
Kingdom delegation find no difficulty in accepting the proposal
of the French delegation that the word. "Members" should. be
replaced. by the word. "countries" in this connection. In this
case it is arguable that the change one way or thie other is of
no very great importance, becaupe it seems to me difficult to
think of a Member-country adopting a policy which would. cause
great balance of payments difficulties to non-Member couontries
without causing great balance of payments difficulties .to
Member-countries, but in so far as that could .be. done we would
readily admit that, purely in the interests of the Member-ccuntries - 17 -
themselves, it would be undesirable for a Member-country to
adopt any domestic policy which caused a serious balance of
payments problem to a non-Member country, because that non-
Member country would then have to take restrictive measures
of one kind and another which would. repercuss back upon the
Member-countries and would lead to that vicious circle of
repercussions which it is just the object of this chapter
to avoid. So that as far as the United Kingdom delegation is
concerned our position I think is clear - we do not think the
change one way or another is of great importance; perhaps
we would have a slight preference for countriess" as opposed
to "Members".
E/PC/T/;J./PV/10 L.
- 18 -
E/PC/T/A/PV/16
I would like to add just one thing. We do not think that this
would necessarily lead to a similar alteration in other articles, in
particular to Article 6, because the obligations in Article 6 are
really of a different character to those in Artiole 4. I think the
representative for Australia made the point clear. In article 4
there is a general undertaking not to adopt any type of domestic
measure which will cause trouble to others. In Article 6 there are
specific obligations of Members towards other Members, and if one
Member with a very favourable balance has to do something, under Art-
icle 6, then Members with very unfavourable balances will also try
to make their contributions to the problem.
So our view is that we could alter "Members" to "countries" in.
Article 4 without altering Article 6, and it is on that assumption
that we would accept the alteration in Article 4.
Mr. GEDRGE HAKIM (Lebanon): I want to support the proposal of
the delegate of France for the reason given by the delegate of the
United Kingdom, that a balance of the difficulties of any country
tends to extend their effects to all other countries, and so indirect-
ly to Members, It is therefore desirable that we should avoid
creating balance payment difficulties in any country whatsoever,
whether that country is a Member or not.
M. BARADUC (France) (Interpretation): I have nothing to add to
what was said by the delegations who were kind enough to support my
amendment. Further, I fully agree with the remarks of the delegates
for Australia and the United Kingdom, that my amendment does not change
in any way the general meaning of Article 4. My only aim, as has
been explained, is to avoid a wrong interpretation of the intention
of the Charter.
I fully agree also with the delegates of the United Kingdom and
Australia that we should not change necessarily the term "Members"
in Article 6, because Article 6 deals with certain measures which L . - 19 - E/PC/T/A/PV/16
can be arranged only between Member States, whereas Article 4 is
very different and gives a general obligation to all the nations of
the worI d.
Mr. C H. CHEN (China): I support the view expressed by the
French delegation. I think it is desirable to make this clear, that
some distinction should be made between all other countries and all
other Members. I think all other countries should include non-Members
as in Article 5 "leach Member recognising that all countries."
The same is true of Article 3, but in many other eases we have to make
some distinction, that is we are dealing only with Members when con-
sidering articles of obligation, as stated by the delegate of the
United Kingdom. - 20 -
E/PC/ T/A/PV/16
We have many such articless, for instance, article 42 and many
similar Articles dealing exclusively with Members. So, we have to
decide for each case, for each Article, just what we have in mind.
we cannot generaIise these recommendations to use the two
expressions "o-aer Members" or "other countries" identically
throughout the Charter.
CHAIRMAN (Interpretation): The delegate of the United States
MR. C. WILCOCK (United States): Mr. Chairman, I had understood.
the delegate of .France to suggest two changes. One was the
substitution of the word "countries" for "Members", and the other
was the insertion of the word "all" . No?
M. P. ZARADUC (France): No.
MR. C. WILCOX (United States): Well, in that case I am
perfectly willing to agree with this amendment. I do not think it
makes any difference which word we use, and I think we might take
the word "countries" and move on.
CHAIRMAN (Interpretation): We see, therefore, that there are
many expressions of opinion, all favourable to the change proposed
by the delegation for France, limited, as the the delegate for the
United Kingdom pointed out, to Article 4. I would therefore ask
if all delegates agree to this change.
M. P FORTHOICI1 (Belgiur.) (Interpretation): I, accepting
the opinion of the delegates for the United Kingdom and the United.
States that the change is of no great importance, will accept the
opinion of the majority.
CHAIRMAN (Interpretation): Article 4 is therefore adopted,
with the change proposed by the delegate for France accepted by all
J. - 21 -
J. E/PC/T/A/PV/16
other delegates
We now come to Article 5. Does any delegate wish to speak
on Article 5?
Adopted.
Article 6 - are there any objections?
Adopted,.
(The delegate for France made a remark which applied only to
the French text).
MR. L.C. WEBB (New Zealand); Mr. Chairman, I would wish to
place on record our delegation's belief that Article 6 is not yet
in a very satisfactory state. In saying that, I do nut imply any
criticism of the Committee's labours, which were extraordinarily
difficult, I think, partly because I think it was recognised, when
the Committee came to examine the Article, that there were certain
difficulties of terminology which were almost unsolvable
I think I am right in saying that the Committee began its
labours assuming that this particular Article was meant to deal
with what is commonly called a "consistently favourable balance-of-
payments", and that the other type of disturbance of balance-of-
payments was dealt with in other parts of the Charter. In fact,
I think at one stage, in its search for an expression which would
get the correct meaning, the Committee arrived at the conclusion
that what they really meant was a persistent favourable maladjustment
in the balance-of-payments, an expression which I think was objectea
to because it sounded a little odd. But we feel still that the
article is unsatisfactory in several points. First, because it
does not make it clear what type of balance-of-payment difficulties
the .Pirticle is really intended to deal with, and we feel also that
there are several other words in the re-draft which are unsatisfactory. -22 E/PC/T/PV/16
We do not like the expression "is a major factor". We think
that "major" goos too far and that it should, be, perhaps, "a
Significant actor, or something like that.
Furthermore, we also think that the phrase "handicap them in
carrying out the provisions of Article 4 without resort to trade
restrictions" is unnecessary, in that it is limiting in its effect,
and it also has required anotherr change in the Article from the
New York text. I would remind you that the New York text uses the
expression "disoquilibrium in their balance-of-payments involving
other countries". To our way of thinking, the case for using the
expression "other countries" is just as strong in connection with
article 6 as it is in connection with Article 4. The basic
argument which has been used for changing"Members" to countries"
in Article 4 seems to me to apply equally, "and indeed . even more so,
to Article 6. But if you are going to introduce this limiting
phrase which you refer to; "handicap Members in carrying out the
provisions of Article 41:, then necessarily, of course, you have to
use "Members". That is a difficulty, the solution of which is not
immediately apparent, but I still feel that in that particular
respect the use of the words "other countries" in the New York Draft
is the preferable one.
I do not wish to delay this Commission by pressing these points,
but I would place on record our view that the wording of this
Article is not satisfactory, and we would hope that between now
and the world conference it night be possible to evolve a wording
which more correctly expresses the' intention which is there. G . - 23 - E/PC/T/4/PV/16
CHAIRMAN: (Interpretation): The remarks made by the-
Delegate of New Zealand will be recorded, and therefore. his
wish will be satisfied ..
I would like to ask whether the other Members are in
agreement to approve Article 6?
The Del egate of South Africa.
Mr. VAN DER POST (South Africa): Mr. Chairman, I should
just like to observe that it seems to me the wording of para, 1
of Article 6 is very unsatisfactory, and that it could be
stated more simply.
For example, if the original wording of the New York Draft
had. been slightly amended we might have hat a much better
Article. Taking the New York Draft, members
agree that if a disequilibrium in their balance of payments
should involve other countries in persistent balance-of-
payments difficulties, which handicap them in maintaining
employment, they will make their full contribution to action
designed to correct the maladjustment. I think that would
be a better wording for our purposes than the one we have in
-Article 6, and I am inclined to agree with the New Zealand.
Member,
CHAIRMAN: The Delegate of France.
Mr. BARADUC (France) (Interpretation): There may be some
misunierstanding in the translation of the Delegate for New
Zealand., because I hears. that the Commission had. thought of
changing the word. "disequilibrium" - and I believe it is
precisely the version which appears in the French text.
CHAIRMAN: The Del egate of Chile, G E/PC/T/A/PV/16
Mr. MUNOZ (Chile): Mr. Chairman, I think I can answer the
Delegate for France. I think the New Zealand Delegation
changed. their translation - they changed. the word "fundaental."
to "persistent". I think that was the only change in the text.
CHAIRMAN: The Delegate of New Zealand..
Mr. WEBB (New Zealand.): Mr. Chairman, I am not perfectly
certain whether I have been mis-translated or not.
The point I was making was that the term "fundamental",
when the Committee was discussing Article 6, was in an endeavour
to find. a formula for making clear that a certain type of
disequilibrium in the balance of payments was contemplated..
That is what is commonly called a favourable balance of payments
- since the question of an unfavourable balance of payments is
dealt with elsewhere in the Charter; and it was discovered.,
I think, that in English, at any rate - and. I think that on this
point the French language has, as on so many points, superior
resources - in English there is no way of satisfactorily and
accurately putting down in a Charter like this the concept of a
favourable balance of payments.
CHAIRMAN: The Delegate of the United Kingdom. .
- 24 - - 25 -
V E/PC/T//A./PV/16
CHAIRMAN: The Delegate of the United Kingdom.
Mr. J.E. MEADE (United Kingdom): Mr. Chairman, I wonder
whether you would allow me as a newcomer to this meeting of the
Preparatory Committee--one who was interested in the drafting
of this Article in London and sees it re-drafted almost for the
first time today--to pay my bouquet of compliments to the work
of the sub-Committee? I personally think that this is a very
considerable improvement on the London text. I am not sure
that the English prose style is quite so delicate, but that, I
think, is because more meat has been put into the Article; but
I would like to point out what I would consider to be two or
three of the subtle beauties of the new text, 'and I hope the
Commission will not think I am wasting its time.
In the first place, the present text seems to me to avoid
the impression that. the single Member which has what I persist
myself in calling a "favourable balance of payments", is alone
in causing the whole trouble. This has no doubt been covered
by, perhaps, a rather clumsy phrase; but it is where the
present text says that ..Y'a persistent maladjustment within
one Member's balance of payments is a major factor in a
situation in which other Members are involved in balance of
payments difficulties" -- that seems to me to be just about
the right balance. There are balance of payments difficulties
and this action by the one State is a major factor in that,
but not necessarily the whole cause. That seems to me to
be an improvement.
Secondly, I consider as an improvement the next words
which say that there are "difficulties which handicap them
in carrying out the provisions of Article 4 without resort
it
to trade restrictions". Now,/may be that one Member with V. E/PC/T/A/PV/16
a favourable balance of payments is causing trouble. but all
the other countries can get over it by restricting imports.
I do not want that country then to be able to get offscot free
as it were. If the other country -- the country with a
favourable balance of payments -- is hot causing unemployment
in the other counter, but would cause unemployment in the other
countries if all the other countries did not restrict their
imports very rigidly, it still seems to me that this Article
should apply. It does apply now, and I think that is an
improvement.
Finally, it seems to me that the words at the end of
paragraph 1 in which "the Member shall make its full contri-
bution, together wish appropriate action on the part of the
other Members concerned", gets just about the right balance,
because, unlike the London text, it is the one country in
question which has got to take the action; but there is a
sub-clause which is important but no quite of the same
importance, in which the other countries have got to make
their contribution and tale appropriate action. As I say,
I do not know that it is a delicate piece of prose style,
but I am not sure that that is what the Charter should aim to
be. It seems to me to express better than the London text
the objectives that we have in view. - 27 -
E/PC/T/A/2V/16
M. BARADUC (France) (Interpretation): I fully agree with the
remarks just made by the delegate for the United Kingdom as to the
result of the work of the Sub-Committee. I also agree with him
on the remarks he made on the English text. The French text however,
in our opinion, is not a good translation. It is very difficult to
render exactly the very subtle shades which appear in the English
text, I approve the English text, and reserve the final approval
of the French text until further discussion on this point, because
we mast be very careful in the translation to respect the thoughts
of the authors of the Articles.
CHAIRMAN (Interpretation): I think that the fears expressed
by the delegate for France can be appeased if he refers himself to
paragraph 2 of T/95, where it is stated in the last sentence: "In
transmitting this text in the two working languages the Sub-Committee
assumes that at a later stage the French and English language
versions of the entire Charter will be reviewed to ensure that they
are strictly comparable in meaning".
M. BARADUC (France) (Interpretation): Mr. Chairman, I would
be very glad if I could agree with what you have just said, but I
think that, whatever the competence of any legal or drafting committee
sight be, it is important to. study the two versions in English and
Franch and assure their comparability. I think that we shall have
to study very carefully the question of the French text, and I would
wish personally, that the French speaking delegations meet at an
early date to study the best possible text in the Franch Language,
and I think that experts should also meet at the same meeting because
it is a very difficult question.
CHAIRMAN (Interpretation) Since the French delegate has
already given his approval to the English text of Article 5, we are E/ 2C/T/A/PV/16
only faced with Article 6, and the suggestion that the French
speaking delegations meet is a very good one. If there are no
suggestions, we could approve Article 6.. Is everyone in agreement?
Agreed.
We pass on to Article 7.
Mr. CHAIRMAN: WILCOX (United States): As I recall it, the Sub-
Committee on this Chapter had, throughout its deliberations, a
member of the French delegation whose responsibility it was to see
that the tests were prepared in such a manner that both languages
would express the same meaning, and I believe that the meetings were
extended for a weak or ten days for the preparation on agreed texts,
and the texts were agreed and submitted to this Commission. I am
somewhat at a lose, therefore, to understand why that work should be
repeated.
M. BARADUC (France) (Interpretation): This only goes to prove
how very difficult the question is, and I would like to add that, if
Mr. Wilcox were to see a translation of the French text into
English, he might be surprised at the result.
CHAIRMAN (Interpretation): Is the Commission in agreement
with the English text of that Article, and prepared to ask,from the
French delegation, assistance to revise the French text if necessary?
If it is not possible to come to an agreement we might approve the
Article again as it is in French. Does the French delegate agree?
Adopted.
We pass on to Article 7. Are there any remarks with regard
to Article 7? The Article is adopted. Article 8 - does any
one wish to speak on that Article 8? Adopted.
- 28 - L: . - 29- E/PC/T/A/PV/16
CHAIRMAN (Interpretation): The delegate of China.
MR. C.H..CHEN (Chins): The Chinese delegation has no strong
objection to Article 8, but it seems to us as Article 8 deals with
exchanges of information, we should make Article 8 into Article 7 and
Article 7 into Article 8; there are practical reasons for this-.
CHAIRMAN (Interpretation): The delegate of India
Br. P.S. LOKANATHAN (India): The reasons for this Article
seem to be set out in the Report. The Commission will recqll that
the reason for the addition of a new paragraph under the new Article
7 was that the amendment of the French delegation suggested that
Members should be in a position to take action even if the Orgnisa-
tion was not in a position to relieve them, in order to avoid delay.
Therefore, the Sub-Committee considered the whole matter and suggested
the best way of meeting the situation would be to empower the Organisa-
tion to have consultations with the Members. Therefore, that should
necessarily precede the relief which is sought under Article 8.
There is another reason, that is that the beginning of Article 7
provides for consultation and. exchange of information on matters re-
latixg to employment, and therefore there must be a provision at the
foot of the same Article, and this would necessarily become part of the
Organisation's function. The Article giving relief must necessarily
follow all this general work and the functions of the Organisatnn,.
That is the reason for the reversal of the Article.
CHAIRMAN (Interpretation): I hope the explanation given by the
delegate for India will satisfy the delegate for China - 30 -
LE/PC/T/A/PV/18
Mr. O.H. CHEN (China): It seems' to us that there is no strong
reason for this, because Article 7 deals with the matter, and also
requires exchange of information and consultation; the original
Article 8 covered all cases which require exchange of information
and views, and it seems to us better that the original order should
be retained.
P
CHAIRMAN (Interpretation): In addition to, what the delegate
for India said, I would like to add myself that the change in the
numbering of these two Articles was included in the Report which was
the first document we approved this afternoon; we cannot ts refors
reverse our decision.
I wish to thank the sub-Committee for the vary considerao*-. amount
of work they have put in, and for the assistance it has given to the
Commission and also to our general progress; I wish to extend our
thanks to. all members of the Sub-Committee and more particularly
to its distinguished chairman.
The meeting is adjourned.
The Meeting rose at 5.48 p.m. |
GATT Library | bj182vy6323 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Sixteenth Meeting of the Tariff Agreement Committee held on Thursday, 11 September 1947 at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, September 11, 1947 | United Nations. Economic and Social Council | 11/09/1947 | official documents | E/PC/T/TAC/PV/16 and E/PC/T/TAC/PV/15-17 | https://exhibits.stanford.edu/gatt/catalog/bj182vy6323 | bj182vy6323_90260059.xml | GATT_155 | 13,839 | 83,122 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/TAC/PV/16
11 September 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
SIXTEENTH MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON THURSDAY, 11 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
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.
NATIONS UNIES E/PC/T/TAC/PV/1 6
CHAIRMAN: The Meeting is called to order.
The next Article we come to in our consideration of the
General Agreement on Tariffs and Trade is Article XXX - Status
of Contracting Parties. It connection with this Article, I
would like to draw the attention of the Committee to the
proposed re-wording suggested by the United States Delegation
and given on Page 2 of Document E/PC/T/W/316. The changes in
wording suggested by the United States are consequential upon the
decision which we have already accepted in principle, to take
Art. XXXII providing for Provisional Application out of the
Agreement and cover Provisional Application by a protocol.
Therefore, I think it would be best, that we should
adopt as the basis of our discussion the text suggested by the
United States Delegation of Article XXX given on Page 2 of
Document 316.
Are there any comments on Paragraph 1 of the United States
re-drafting of Article :.
~. .tJ. .T. .
E .Peco this .......................... . ...*
Dr. - LER (Czechoslovakia): I think tha this
paragraph would need re-drafting - only re-drafting - because,
as it reads now, a country which would not sign the Agreement
would not be considered to be a contracting party. I think
our Frenoh colleague has already prepared some re-drafting of
this paragraph.
CHAIRMLN: The Delegate of France.
M, ROYER (France) (Interpretation): Mr. Chairman, I have
Prepared a new draft of this Article, but I wonder if my draft
oovere the point.whlch was mentioned by Dr. Augenthaler. The
draft I would suggest would be: " The Contracting Parties to
R
- 2 - R - 3 - E/PC/T/TAC/PV/16
this Agreement shall be understood to mean the Governments which
have accepted this Agreement pursuant to article 24 or would
apply provisionally the provisions of this Agreement pursuant
to the Protocol". I do not know if this draft would give
satisfaction to Dr. Augenthaler.
Mr. R. J. SHACKLE (United Kingdom): I am not sure that
I quite understand the difficulty. Does it consist in referring
to the text of the main Agreement or to the Protocol of Provisional
Application? I am not sure that it is necessarily an unsuperable
objection. I think all that we could do would be to add
something to the Protocol of Provisional Application to pick the
point out. I imagine it would be sufficient if we add something
to the Provisional Protocol to say that any Government provisionally
applying the Protocol shall, for the purposes of such Protocol
.application, be considered as a contracting party under Article XXX
Paragraph 1 of the General agreement.
I have not thought out all the implications of that but it
.seems to be the only way if we must not on any account put the
Provisional Application in the text.
CHAIRMAN: Any other speakers?
Dr. Gustavo GUTIERREZ (Cuba): I would wish for same information.
According to Article XXX the Contracting Parties to this Agreement
are held to mean only those countries which are applying the
provisions of this Agreement pursuant to Art XXIV, or to the
Protocol of Provisional Application and the nations that sign
this treaty not according to Article XXXII but sign the
document in the period set forth up to June 30, 1948, are they
not signatories and are they not contracting parties? R -4 - E/PC/T/TAC/PV/16
CHAIRMAN: As I proposed at the outset of our meeting, we
are taking as the basis of our discussion the amendment proposed
to this article suggested by the United States Delegation, and
given on Page 2 of Document 316. According to this definition
the contracting parties would be those who are applying the
provisions of the Agreement according to Article XXIV or to the
Protocol of Provisional Application, In other words, the country
which has signed the General Agreement but is not yet applying
its provisions would not yet be a contracting party according to
this definition
It might be useful, first of all, to deal with the, proposal
submitted by the French Delegate, which is, I take it, to change
the words "are applying the provisions" in the third and forth
lines to "have accepted", and in the fifth line to add the words
"which are applying the provisions of this Agreement pursuant
to the Protocol of Provisional application". So, if the French
Arnendment were adopted, the text would read: "The contracting
parties to this Agreement shall be understood to mean those
governments which have accepted this Agreement pursuant to Article
XXIV or which are applying the provisions of this Agreement
pursuant to the Protocol of Provisional Application accompanying
this Agreement."
Mr. G. Winthrop BROWN (United States): I think the suggestion
of M. Royar is an improvement on our draft and makes it clearer.
Mr. SHACKLE (United Kingdom): I withdraw my excessive
purism. I think there is no objection to referring to the
Provisional Application because, after all, the Protocol of
Provisional Application is directly annexed to the Agreement. E/PC/T/TAC/PV/16
CHAIRMAN: Are there any objections to the amendment
proposed by the French Delegation,
(Agreed).
Any other comments on Paragraph 1 as amended by the French
Delegation?
I take it then that the Committee agrees with Paragraph 1
of Article XXX as amended.
Paragraph 2 of Article 30.
The United States re-wording of this Paragraph reads as
follows: "At any time after the entry into force of this
Agreement pursuant to Paragraph 5 of Article XXIV may decide
that any contracting party which has not so accepted this
Agreement shall cease to be a contracting party."
Are there any comments on Paragraph 2.
5 P. E/PC/T/TAC/PV/16
Dr. Z. AUGENTHALER (Czechoslovakia): I have only a drafting
point. I would suggest that instead of "may decide" we say "may
state" because it is not a question of decision but a question of
stating the fact.
Mr. Winthrop BROWN (United States) Mr. Chairman, I do not
think that would give quite the right impression in English which
we want to give. The point is that the contracting parties can
make a decision to the effect that someone who has waited too
long in their provisional application status shall cease to be a
contracting party; and after that it does cease to be a
contracting party. Whereas if we just say that they say so, it
does not carry any connotation of that established fact. But the
French may, of course, have a slightly different interpretation.
CHAIRMAN The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I think.
that there would be some interest in adding a few words at the end
of this second paragraph, words reading as follows:
"...may decide that any contracting party which has not
so accepted this Agreement shall cease to be a contracting
party until the time when it will have accepted this
Agreement pursuant to the provisions of paragraph 3 of
Article XXIV".
It seems that unless those words were added a party which did not
ratify the Agreement under the conditions laid clown here would not
have the possibility to become a contracting party, and I think
we should leave the door open for a contracting party to have the
possibility to transform its provisional application into a
definitive acceptance of the Agreement. In the meantime its
right could be suspended. 7
P. E/PC/T/TAC/PV/16
Mr. Winthrop BROWN (United States): If you did that,then
you would have to spell out what happened if the party did not
become a contracting party definitely at the end of the period,
and it is much better to leave this as it is because then the
contracting parties can decide on any terms they want. They are
not likely to reach a decision of this importance unless there was
a clear case of one of the parties adopting dilatory tactics, and
I think it likely that they would consult before they took any
action of this kind. Is it not better to leave the parties free
to decide on what terms, if any, they think it suitable to make
their decision, rather than try to define it here, which would
mean putting in some long and complicated sentences.
CHAIRMAN: Are there any other comments?
The Delegate of China.
Mr. D.Y.DAO (China): Mr. Chairman, our definition is given
in paragraph 1, of Article XXX: the oontracting parties mean the
governments which are applying the Agreement. In paragraph 2 it
says that those contracting parties which have accepted this
.Agreement pursuant to paragraph 3 of Article XXIV may decide that
any contracting party which has not so accepted.I think
there is some confusion. I would like to change it to "may
decide that any government signatory to the Final Act which has
not accepted".
Mr. Winthrop BROWN (United States): I think the
interpretation of the Delegate of China would be correct if it were
not for the fact that paragraph 1 also refers to a party which is
provisionally applying under the Protocol of Provisional
Application and paragraph 2 simply takes care of the case where
most of the contracting parties accept the definite obligation 8
P. E/PC/T/TAC/PV/16
of the Agreement and then decide that one of the contracting
parties which is still on a provisional basis won't make up its
mind and come in definitely or else stay out, So I think it is
necessary to have this to take care of such a case.
CHAIRMAN: Are there any other comments?
Mr. F. Garcia OLDINI (Chile) (Interpretation): Mr. Chairman,
just one questions I read here that the parties which will be
considered as contracting parties are the Governments which apply
the provisions of this Agreement pursuant to paragraph 3 of
Article XXIV. are we referring exactly here to paragraph 3 of
Article XXIV? V E/PC/T/TAC/PV/16
CHAIRMAN: I think there has been a re-numbering of these
paragraphs, which is confusing. Paragraph 3 of Article XXIV
is the old paragraph 2, and paragraph 5 is the old paragraph 4.
M. F. Garcia OLDINI (Chile) (Interpretation): Thank you,
Mr. Chairman.
CHAIRMAN: Are there any other comments on this paragraph?
Is there any support for the suggestions which have been made
in respect of this paragraph?
Can I take it that in the light of the discussion which has
taken place, the Committee is in accord with the wording of
this paragraph as given on page 2 of Document W/316?
Agreed.
Article XXXII - Adherence. We find on pages 10 and 11 of
Document W/312 various suggestions with regard to this Article.
First of all, the United Kingdom Delegation proposes to
change the title from "Adherence" to "Accession", and to
substitute in line 1 the word "accede" for the word "adhere".
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, this is
purely a question of conventional terminology. In the
conventional terminology which we, at any rate, use in our
commercial treaties (I do not know whether it has universal
acceptance or not, but it is our standard practice), we use
the terms "'accede" and accession" to apply to the case of
countries who become parties to an Agreement after it has come
into force. On the other hand, the word "adhere" is completely
timeless, and denotes a country which becomes a party at any
time. It is in order to preserve this distinction that this
change was suggested, but, as I say, it is purely a questi on of 10
V E/PC/T/TAC/PV/16
our conventional terminology, and if othor people's terminology
is different, I do not want to press it very hard.
CHAIRMAN: Are there any objections to the changes proposed
by the United Kingdom Delegation?
M. ROYER (France) (Interpretation): Mr. Chairman, it
would be understood that there would be no change in the French
text.
Dr. GUTIERREZ (Cuba): Mr. Chairman, this term has a very
well-known meaning in international law, and I quite agree with
the suggestion made by the British Delegate; but I do not see
how we can say "accession" in the English text if we cannot say
it in the French.
CHAIRMAN: May we agree to the word "accession" in English,
and leave the legal Drafting Committee to decide how it should
be expressed in French?
Is that agreed? Agreed.
Dr. GUTIERREZ (Cuba): Mr. Chairman, before passing on,
I would like to know what the position is going to be in
relation to "Governments not parties to this Agreement". We
should not say "Governments', we should say either "countries"
or "States'.
CHAIRMAN: We have already had a lot of discussion
concerning the word "Governments".
Dr. GUTIERREZ (Cuba): I know, but it was accepted by
the Czechoslovak Delegation and not by us. I thought we had
left this question open. 51
E/PC/T/TAC/PV/17
CHAIRMAN: The Delegate of Norway.
Mr. J. MELANDER (Norway): Mr. Chairman, I am in general
agreement with what Dr. Augenthaler just said, for the reason
especially that this Protocol may very well be signed after the
Havana Conference, and it would seem a bit odd to sign a Protocol
where you make certain references to a Conference which has not
already been held. I think it better to leave out that
reference and go directly to the main point which is the last
paragraph.
Mr. R. J. SHACkLE (United Kingdom): A small point , Mr.
Chairman. It seems to me that the form suggested by Dr.
Augenthaler would be quite all right, except that I feel you have
to make some reference to the Governments because this is not a
personal agreement between individuals, so you have to say
Something like "agree as follows on behalf of their respective
Governments" and then set out whatever the Agreement is. I think
it is necessary that there should be some reference to the
Governments. Otherwise I think the suggestion of Dr. Augenthaler
would be satisfactory.
CHAIRMAN: Could we agree on some such text as that and
.meet Mr. Melander's point by deleting the reference to the
Conference and simply refer to the Charter?
Mr. J.M. LEDDY (United States): I do think we must refer to
the Charter recomrnended to the Conference by the preparatory
Committee, That is the only document that any of us know about,
and some of us will be signing before the Conference..
CHAIRMAN: Perhaps, as the hour is getting late and we have
.to adjourn in order to be back here for our meeting at 9 o'clock
we could leave it to the Secretariat to redraft these first E/PC/T/TAC/PV/16
of provisional application, we would consider the Reports of the
two Sub-Committees which have already circulated their Reports,
and whose Reports have been in the hands of Delegations for more
than twenty-four hours. We have the Report of the ad hoc
Sub-Committee on paragraph 3 of ALrticle I, given in Document T/192
of 9th September.
M. ROYER (France) (Interpretation): Mr. Chairman, do we,
for the time being, reserve the formulae of the Agreement -
"In Witness Whereof...?"
CHAIRMAN: No, we can deal with that, perhaps, now. It would
be just as well to take that up, and I am glad the French
Delegate reminded me of it.
Mr. D.Y. DAO (China): Before you go on to the Report of
the Sub-Committee, may I call the attention of the Committee to
the fact that on page 11 of Document W/312 there is a suggestion
from the Chinese Delegation that a Provision may be added to
the Agreement rearding registration of the agreement?
CHAIRMAN: I thank the Chinese Delegate for calling that to
my attention. It seems to me that we have been inclined to go
too quickly, and we have overlooked two important parts of the
Agreement. I think it might be logical to take up, first of all,
the proposed new Article, suggested by the Chinese Delegate.
.The text of this Article is given on page 11 of Document W/312.
The Article is headed "Registration of the Agreement".
Mr. D.Y. DAO (China): Mr. Chairman, if acceptable to the
Committee,.I would suggest that the provision might well be
added at the end of Article XXIV, and the title of Article XXIV
be-changed to "Signature, Entry into Force and Registration".
12
V V 13 E/PC/T/TAC/PV/16
CHAIRMAN: The Chinese Delegation proposes that this now
text be added as a final paragraph to Article XXIV and that
the title of that Article should then read "Signature, Entry
into Force and Registration".
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, in the
Charter of the United Nations, Article 102 reads:
"Every treaty and every international agreement entered
into by any Member of the United Nations after the present
Charter comes into force shall as soon as possible be
registered with the Secretariat and published by it.
No party to any such treaty or international agreement
which has not been registered in accordance with the
provisions of paragraph 1 of this Article may invoke that
treaty or agreement before any organ of the United Nations".
I wonder, therefore, if there is any need for this
Article, which only says that the United Nations is
authorized to effect the registration, while in the Charter
we have an obligation to register the treaties. I do not
think there is any need of this new provision.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, this
provision is parallel to paragraph 3 of Article 98 of the
Charter, and I recall that when we were discussing Article 98,
paragraph 3, the point which Dr. Gutierrez has raised. was
also raised then, and the answer given, as I remember it, was
that this is, in fact, an authorized labour-saving device in 14
V E/PC/T/TAC/PV/16
that under Article 102 of the Charter of the United Nations,
every individual party would have a separate obligation to
register this treaty with the United Nations. This is with
a view to making that combined operation-- at least, it is
not a combined operation - it is a multiple operation--
unnecessary, and a single registration, as I understand it,
can be effected by the Secretariat of the United Nations under
the powers which they have already been given, That wee the
explanation which was given on Article S8, paragrraph 3, as I
recall it.
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, that may
be the reason for the new text, but that is not said in the
new text. If the wording; of the text is changed so that it
states what has been expressed, I am willing to accept the
Chinese amendment; but at present it does not state it.
CHIRMAN: Are there any other comments?
Mr. R.J. SHACKLE (United Kingdom): There is one question
which occurs to me, arn that is, whether this registration
would be effected on provisional entry into force or only
definitive. I do not know whether one can suggest the answer
to that.
Dr. Gustavo GUTIERREZ ( Cuba): Mr. Chairman, I think this
is a question to be considered by the Legal Drafting Committee.
CHAIRMAN: I fear that that would be going outside the
terms of reference of the Legal Drafting Committee. They
are not supposed to decide questions of substance - only
legal and drafting points, and this is a question of substance 15
V E/PC/T/TAC/PV/16
in which all Members of the Committee are interested. Therefore,
I think we should take a decision on the Chinese amendment.
It would be quite in order to have a small group study it,
but I think we should avoid referring it-to the Legal Drafting
Committee questions which really are matters of substance and
of interest to all Delegations. 16
E/PC /T/TAC/PV/16
CHAIRMAN: The Delegate of France.
M. ROYER (France (Interpretation): Mr. Chairman, I think that
the draft would be improved if, instead of saying "The United Nations
is authorized", one said "The United Nations is requested to effect
the registration of this Agreement". In fact, using the word
be
"authorised" would/contrary to the United Nations Charter, and we
do not authorise the United Nations to do something which it is
already authorised to do.
As regards the question raised by Mr. Shackle, I do not think
that that is the point., here, because the text of the Agreement never
speaks of provisional entry into force, it only speaks of entry into
force meaning the definitive entry into force of the Agreement. It
only speaks of the provisional application of the Agreement and never
of the provisional entry into force.
CHAIRMAN: The Delegate of China.
MR. D.Y. DAO (China): Mr. Chairman, we accept the amendment
proposed by the Delegate of France to change the word "authorised"
to "requested".
As to the question of whether it means the definitive entry into
force of the Agreement or the provisional application of the
Agreement, when we suggested the amendment we had in mind the definitive
entry into force of the Agreement.
CHAIRMAN: The Chinese Delegation has accepted the suggestion
of the Delegate of France to change the word "authorised" to
"requested", so that the text will now read: "The United Nations is
requested to effect the registration of this Agreement as soon as it
comes into force". 17
J. E/PC/T/TAC/PV/16
Are there any comments on this proposal?
The Delegate of France,
M. ROYER (France) (Interpretation): It would be clearer to
insert the word "hereby" before the word "requested", which is
the same formula which was adopted to convene the meeting.
CHAIRMAN: Are there any other comments?
MR. R. J. SHACKLE (United Kingdom): Mr. Chairman, I would
just remark that in due course this question might possibly arise
with regard to Article 93, paragraph 3, of the Charter.
CHAIRMAN: I would like to obtain better the sense of the
Committee regarding the Chinese proposal. The Chinese. proposal
has been supported by the Delegate of the United Kingdom, but has
been opposed by the Delegate of Cuba. It is very hard to tell how
the other Delegations feel about this and I would welcome any
expression of opinion.
DR. G. GUTIERREZ (Cuba): Mr. Chairman, I agree with the new
text as suggested by the French Delegate.
M. ROYER (France) (Interpretation): Mr. Chairman, I would
simply express the wish now that the United Nations finds a simpler
mechanism to register the treatise which are concluded under its
auspices than inserting in each treaty which is signed a clause by
which the registration has to take place. The same situation
occurred before the war at the time of the League, and one never had
to insert then a special clause in the treaties which were signed,
the registration was done automatically 18
J. E/PC/T/TAC/PV/16
CHAIRMAN: I think myself that a clause to this effect is
unnecessary, and, as the Delegate of France has said, this clause
would be superflous. By the Charter, each Member of the United
Nations has to register treaties or agreements, and the only point
in having a clause like this in would be for the same reason that
Mr. Shackle referred to in connection with the corresponding Article
in the Charter, that is, the saving of the time of all the Members
of the International Trade Organization from having to take steps to
register the Charter. In this case, I think the provision is
somewhat different, and I doubt whether a clause to this effect is
really necessary.
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, I wonder if
it would be worth while asking the Legal Advisers of the Secretariat
about this, because I am under the impression that there is a
method of assembly regestration, and we could ask them how this is
done. We could return to the question of whether it is really
necessary when we have heard from the Legal Drafting Committee.
CHAIRMAN: I think that is a useful suggestion of Mr. Shackle's,
and if the Chinese Delegation have no objection I suggest that we
act upon it.
We will now take up the Formula at the end of the Agreement
starting with the words: "IN FITNESS WHEREOF the respective
' Representatives....". The United States Delegation have suggested
some amendments to this Formula which are given on the bottom of
page 2 in document E/PC/T/W/316, so we can consider the Formula in
the light of the proposal for the changes submitted by the United
States Delegation. Are there any comments on this Formula as 19
amended by the United States Delegation?
MR. R.J. SHACKLE (United Kingdom) I just wanted to ask a
question, Mr. Chairman, it may be a silly one. I do not quite
understand how "Done in a single copy" works. I suppose you will
have a parallel text, as it were, in English and French, and a
single set of signatures at the end. Is that what is contemplated?
CHAIRMAN: I might state for the information of the Committee
that this question was studied yesterday by the Tariff Negotiations
Working Party when they were considering a circular shortly to be
issued by the Secretariat dealing with the mechanics of the final
stages of these deliberations.
The conclusion which was reached by the Tariff Negotiations
Working Party was that it would probably be best to have the document
signed in two copies, one copy in English and one copy in French.
Certain Members of the Tariff Negotiations Working Party did express
a slight preference for a single copy, which does envisage parallel
columns, that is, either parallel columns or English on one side and
French on the opposite page. We felt that that would give rise to
certain complications in connection with attaching schedules; and
therefore we came to the conclusion that the best form might be to
have a signature on two copies, that is, one copy in English to which
would be attached the copies of the schedules in English, some of
which would be authentic and some of which would not be authentic;
then, there would be a signature of the copy in French to which would
be attached copies of all schedules in the French language, some of
which would be authentic and some of which would not be authentic,
the
according to which, whether/French or English copy of the Schedule,
each Delegation decided was to be the authentic copy in that particular 20
E/PC/T/TAC/V/16
case.
The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I must
state that I was one of the Members of the Working Party who thought
that the English and French texts ought to appear in a single copy
side by side. It was not to economise the signatures of this
Agreement, but we thought that it would be the best presentation.
Nevertheless, we would not press our point in view of the difficulties
which were mentioned by the Secretariat.
Now, I think that we will have to modify this draft slightly
with regard to the words "and have affixed their seals hereto".
I do not know if the Legal experts of the cuai d'Orsay will think
that the Agreement is valid without afiixing a seal, but nevertheless
I hope that they will not raise too many difficulties.
CHAIRMAN: The question of the seals was also discussed at
the meeting of the Tariff Negotiations Working Party yesterday, and
which
their recommendation/will be circulated in the paper to be issued
by the Secretariat was that there should be no seal. So, if we agree
with that, we can delete the words "and have affixed their seals
hereto" in paragraph 1, and if we also agree on having two copies
.signed, one in English and one in French, we shall return to the
former wording "Done in duplicate" in the English and French languages'"
I would like to know if the Committee agrees with both those
suggestions,
MR. W. BROWN (United States): Mr. Chairman, I would entirely
agree with that suggestion, owing to the difficulty of transporting
the seals from Washington.
CHAIRMAN: Are there any other comments?
Those changes are agreed.
Are there any other comments with regard to the Formula?
Approved. R 21 E/PC/T/TAC/PV/16
CHAIRMAN: We can now take up the reports of the Sub-committees.
The first report of the Sub-committee for us to deal with is that
of the ad hoc Sub-committee on Paragraph 1 of Article 1 in
Document T/192. .
Dr. Coombs., the Chairman of the Sub-committee, is not
present and I am wondering if Mr. McCarthy would give us a short
report on the deliberations of the Sub-committee.
Mr. E. McCARTHY (Australia): I would like to say, Mr.
Chairman, the Draft as circulated, in the view of the Sub-committee,
correctly states what was believed to be the original intention
laid down in the Draft and, whilst one or two of the Sub-committee
did subsequently think that sub-paragraph (a) might be rather
improved in language, we still believe that it correctly states
the objective of the paragraph, We would be prepared to suggest
a slightly altered wording to 3(a) but we think it could be
handled by the Legal Drafting Committee,
CHAIRMAN: Any other comments.
The Delegate of Brazil
Mr. E. L. RODRIGUES (Brazil): Mr. Chairman, my colleagues
have read a request in the meeting dealing with this matter which
I feel was not take up by the Sub-committee. If we accept that
the margin of preference should be reduced - if it is the common
purpose of this Conference - I think it would be wise and fair
to take into consideration the percental relation and not only
the arithmetical basis between preferential rates the the Most-
Favoured-Nation rates. Otherwise, in some instances, instead of
reducing really the margin of preference it will increase it.
I believe it will be preferable, if we cannot have the draft to
take care of this, to have at least an explanatory note to assure 22
E/PC/T/TAC/PV/16
every interested country that in no case would the margin of
preference bo raised. I have great admiration for all
countries who sign the preferential rates and understand tho
political and economic reasons for that, but if this conference
intends to increase the margins of preference, I think we have
arrived at the time to deal properly with this matter, and
because the Brazilian Delegation takes a great interest in
this matter, they would ask you and the other Delegates to
arrive at a conclusion about it.
Mr. SHACKLE (United Kingdom): I have the impression that
is
this paragraph/simply intended to place on record the results
of the negotiations. In a sense, it is an explanation of the
too short and simple wording used in the Londin version. I
would not have thought we should enter into such questions here
and I do not see any need for a reference of this kind.
CHAIRMAN: The Delegate of Chile.
Mr. F. Garcia OLDINI (Chile) (Interpretation): Mr.
Chairman, it is possible that the suggestion which was made by
our distinguished colleague from Brezil may offer certain
difficulties if we want to stress it. But the Brazilian
Delegate pointed this fact out himself. Nevertheless, the aim
of such a note, I think, should be recorded here. If I
understood rightly what the Brazilian Delegate meant, it was
that we ought to insort a note stating that it was understood
that the preferences should not be raised and that the margin
of preferences should not be raised, In fact this principle
appears in the Charter and I see no inconvenience that this
principle should also appear in the Agreement in one form or
another in any draft. R 23 E/PC/T/TAC/PV/16
CHAIRMAN: The Delegate of the United States.
Mr. Winthrop BROWN (United States): It seems to me the
whole point of Paragraph 3 is to say that margins of preference
shall not exceed certain levels which have been arrived at in the
course of these negotiations. Therefore the principle of not
increasing margins of preference is the purpose and the fact
of this paragraph as it now stands. I do not see why it needs
to be changed. So far as the question of future negotiations
is concerned, the guiding rule should be whether the absolute
margin if preference governs all the salient points in the
preference. It seems to me that is a practical matter which
has been decided, because we started out in these negotiations
last April on the basis of using the absolute margin and if we
change that principle now we would have to draft out our own
negotiations.
CHAIRMAN: The Delegate of Brazil.
Mr. E. L. RODRIGUES (Brazil): Mr. Chairman, perhaps the
real meaning of my remarks was not understood by the Delegate
of the United States. I understand that this Article 1, and
especially sub-paragraph 3, constitutes a kind of machinery
for dealing with preferences for the treatment, and generally
Most-Favoured-Nation treatment, including preferential rates.
We are not taking into consideration the present aspect of this
problem; we are more concerned with the future consequences of
this problem. We understand that through. tariff negotiation
we reached a certain level of the margin of preferences, but
later on, in regard to negotiations between countries which have
no referential rates there will be some intention to make some
further reduction of tariffs to include the countries with
preferential rates, and the practical result will be, in many 24
R E/PC/T/ TAC/PV/ 16
cases, that instead of reducing the margin, the real difference
between both the preferantial rates and the Most--Favoured-Nation
rates will have increased the rates for the preferential rates;
that is, assuming that at present we have a preferential rate for
later
a certain article of nine per cent and/in the Most-Fevoured-Nation
rate of ten per cent. Later on we reduce the preferential
rates to four per cent and the Most-Favoured: Rate to five per
cent. In the first case we have 10 per cent of difference;
now we have 20 per cent; and this also could be increased to
50, 100 and so on, and there is no limit.
I believe the intention of everybody is to increase the tariff
on both sides. If so, I think we must take care of these facts.
I believe that the representative of Chile has expressed my own
views in the proper way.
CHAIRMAN: I do not went to curtail the discussion of the
point raised by the Delegate of Brazil, but I am vonderng if he
is quite correct when he states the purpose of Article 1 is to
set up machinery or the organization for giving effect to the
Most-Fevoured-Nation clause and the reduction of preferences.
I think that this point has arisen before in a number of other
Articles, and we have to make a clear distinction between the
rules governing negotiations and expressing the results of the
negotiations in the General Agreement. That is all we are
endeavouring to do in the General Agreement - to set forth the
results of the negotiations. The rules governirng the negotia-
tions are set forth in the Charter, and we have in Articls 17
Draft
of the/Charter the rules governing the reduction of tariffs
and. the eliminiation of preferences. Therefore, the point
which has been raised by the Delegate of Brazil would have been E/PC/T/TAC/PV/16
quite a proper one for him to have raised when Article 17 of the
Draft Charter was being, discussed; but it has, I think, from the
outset been assumed that the margin of preference means the
difference between the preferential rate and the Most-Favoured-
Nation rate, and that has been the basis on which our discussions
have been conducted in London, in New York and in Geneva.
It is therefore a little difficult for us at this stage to take
into account a proposal of this kind particularly as it is one
relating to the rules under which negotiations took place, and
such a discussion more particularly belongs to the discussion
pf a relevant Article in the Charter than the relevant Article
in the Trade Agreement which is giving effect to the results of
the negotiations,
The Delegate of Chiles
25
R 26
P. E/PC/T/TAC/PV/16
Mr. F. Garcia OLDINI (Chile) (Interpretation): Mr. Chairman,
I do not think that you were quite right when you stated that the
Brazilian Delegate ought to have raised that question when
Article 17 was under discussion, because I think this point is
already included in Article 17. In Article 17 the following,
principle is spelt out: "No margin of preference shall be
increased". I quite agree that the Charter provides a mechanism
for future negotiations but nevertheless we find no corresponding
Article relating to this principle in the Agreement which we have
now before us. I think we ought to insert this principle which
is an essential one and in fact it would translate into the real
facts the provisions of this principle. What I mean is we ought
to translate in the Agreement the Provisions of paragraph 2 of
Article 17. There is an aim which we are seeking to achieve here,
when we speak of margin of preference and preferential rates, and
we
in the text which was submitted to us by the Sub-Committee/see
that there is a certain listing, of cases in which the margin of
preference shall not exceed., etc. Therefore, if we state that
in certain cases the margin of preference shall not exceed, I do
not see why this should not serve us as an opportunity to insert
the principle to which I have referred.
M. Pierre FORTHOMME (Belgium) Mr. Chairman, it seems to me
that the debate shows that it would be useful for this Committee
to go on record as being of the considered opinion that:
First of all, as the Draft Charter which the countries here
represented, being constituted in Preparatory Committee, recommend
to the World Conference stipulates that in all tariff negotiations
conducted with a view to accession of the General Agreement on
Trade and Tariffs no margin of preference should be increased, we
were of opinion that in the - we could say - original and founding
negotiationsns of the General Agreement on Tariffs and Trade no
margin of preference should be increased. 27
E/PC/T/TAC/PV/16
Secondly, that for practical purposes we have agreed that,
for these negotiations and for all future negotiations, the margin
of preference should be considered to be not the proportionate
difference between the Most-Favoured-Nation rates and preferential
rates but the absolute difference; I say "for practical purposes"
because I think that what is important from the commercial point of
view, from the trade point of view, is not so much the proportional
differences between two rates but the translation of that difference
:of rates into the prices which exporters of a Most-Favoured-Nation
country and exporters of a Preferontial Rate country have to charge
in order to be able to compete in a market.
Another practical consideration is this: that I do not see
how the proportionate principle will work in the case where the
preferential rate is exempt from duty and the Most-Favoured-Nation
rate is any duty whatever. What is the proportion between nothing
and any given quantity is I think a mathematical problem.
CHAlRMAN: The Delegate of Brazil.
Mr. E.L. RODRIGUES (Brazil): Mr. Chairman, I am sorry to
delay the work of the Committee, but I always try to learn from
'you and from the other members of the Committee, and if at this
time I insist, it is not because I do not accept your views: I
accept them but they have not convinced me.
First, I should like to emphasis that even if you do not think
it is a very proper time to deal with this matter, because it should
have been treated during the discussion of Article 17 of the
Charter, I have some reason for raising this question at this time,
because we have the word "difference" included in Article I,
paragraph 3, and the real meaning of this word will cover our case.
-If you put the word "real" before it, then, if that meets with the
acceptance of the Committee, it will meet our desire that there 28
E/PC/T/TAC/PV/16
will be no case in which any country could increase the real margin,
the real difference, between Most-Favoured-Nation and preferential
rates. I think my point is very clear. If you can get agreement
I should be very glad, because I feel this is a very important
matter not only for Brazil but for any country represented here.
The explanation given by Mr. Forthomme to a certain extent
would be sound, in my opinion, but in some cases, especially in
regard to some special product, it would not; because everybody
knows that the real burden of taxation means, in the ease of a great
concession, a great deal. In regard to coffee, for instance, and
other products, an increase by way of diminution of the absolute
figures of both rates will give to a country a much better position
to compete. Because of this, without the intent to delay the work
of the Committee much further, I should like you to give some
attention to my remarks.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, it seems to
me that at any rate part of the answer to the Brazilian Delegates
point is surely that these negotiations are not necessarily final
ones. But if as a result of increase of efficiency of production
a situation arises that a particular rate is inequitable or
damaging to a country's interests, presumably it would ask for
re-negotiation at some future date. That is not excluded.
I should have thought there was the utmost difficulty in
introducing a proportionate rule, and while I am not a mathematician
it seems to me that the relation between nought and any other digit
is infinitive and if you had a free entry rate all things would be
permissible! I would ask that that remark should not be taken
seriously.
As regards the suggestion made by Mr. Forthomme, it seems to
me that the purpose of this General Agreement is to place on record
the agreed results of the negotiations which at the time of signing 29
E/PC/T/TAC/PV/16
will already have taken place, and for that reason I do not really
see the relevance of laying down general rules which it seems to
me will exclusively relate to the process of negotiation. At the
time this General Agreement is signed we shall all have agreed
on ex hypothesi mutually advantageous results and surely, so to
speak, that will be that, I do not see the use of introducing
rules which are only relevant to one case while negotiations still
continue and, as I have said, the point of this paragraph 3 will
only be to set on record what are the preferential margins which
in future may not be increased. That I should have thought was
its sole purpose. Thank you. 30
V E/PC/T/TAC/PV/16
CHAIRIMAN: Are there any other comments?
The Delegate of the Lebanon.
M. Meussa MOBARAK (Lebanon) (Interpretation): Mr.Chairmm,
the margins of preference can be calculated as an absolute
value or as a percentage, and this depends on the bilateral
agreements which have been signed by the various countries.
In the case of the Lebanon and of Syria, and of the
Agreement which link these two countries with neighbouring
countries, the mar, ins of preference are calculated in
percentage, and the difference -that is, the margin of
preference- is one-third of the Most-Favoured-Nation rate,
and if the rates should be raised or decreased, these
differences would also be calculcated as a percentage.
CHAIRMAN: The Delegate of Australia.
Mr. E. McCARTHY (Australia): With a view to assisting in
getting at the sense of the meeting, Mr. Chairman, we should
like to record our views. This particular paragraph is
designed purely to record the.position of the tariffs of the
countries subscribing to the Agreement when all the negotiating
work is done.
There is, I think, a good deal in principle in the point
raised by the Brazilian Delegate, but that point, as I think
have been
you yourself said, could , raised when the basis of the
negotiations for the alteration in the tariff rates was being
considered. But when this work is finished, there will be new
rates as a result of the negotiation the Trade Agreements and
of the signing of the Trade Agreements, and there will be the
old rates which have not been altered at all. This paragraph
is designed to set out the relationship between the two rates 31
V E/PC/T/TAC/PV/16
and the tariff which should be drawn up.
I, too, think that if you did admit the principle that
you should express any alterations in the rates by percentages
or by proportionate calculations, that you would have to
contemplate other directions in which the incidence of the
tariff was frequently altered after it had been arrived at.
It would be a much greater anomaly - and cases do arise -
when specific rates are decided upon for some years and then
the currency value is altered and you find the ad valorum
equivalent of the specific rates altogetner enanged, and
that certainly alters to a degree the value of the preferential
margin.
I think it could be admitted that there is a certain
anomaly in recording the actual rates and deciding that any
change has got to be expressed in those rates; but we cannot
see any method by which you could alter it, and we do think
that if it had been introducted as a factor in negotiations,
it would have an almost impossible task to assessthe changes
which take place, and to try and get at the actual incidence
of the' rates.
Our view would, therefore, be that whilst we agree that
there is a good deal in the principle put forward by the
Brazilian representative, we do not see that it can be
altered in this particular paragraph at all, and even if it
had been introduced when the basis of negotiations for the
alterations in tariffs were under consideration, great
difficulty would have been experienced then in setting down a
set or rules for assessing margins and rates other than on an
absolute basis.
(after interpretation): Mr. Chairman, could I add E/PC/T/TAC/PV/16
something which I forgot to say?
I Would not wish what I said to be an encouragement to the
as idea that you could negotiate margins on a percentage basis,
because that would affect your negotiations. Your margins are
arrived at, in all cases where they are a result of your
negotiations, by negotiation, and if you alter the measure of
the margins you are negotiating, that affects your negotiation.
So the recording of the Trade Agreement results is a result of
' factual negotiation, and that would man, if your method of
assessing your margin wore altered, the value or the weight that
.was attached to the alteration.
CHAIRMAN: I think we are under a debt of gratitude to
the Brazilian Delegate for having raised this question,
because It has shown that there are some doubts in the minds of
certain Delegations as to the interpretation which should be
put on sub-paragraph (iv) of sub-paragraph (a) of paragraph 1
of Article 17 of the Charter, which reads "No margin of
preference shall be increased".
I think we have assumed all along that margins of preference
meant the difference between Most-Favoured-Nation and the
preference. rate, and that has been the basis on which the
negotiations have been conducted. I think it would be wise
for the Delegations here to give consideration to this
Particular provision in the Charter, and if there are any
doubts, I think it would be well if they could be cleared up
at the Havana Conference.
Like the Lebanese Delegate, I might say that Canada also
has preferences which are expressed in the form of percentages.
That was a common practice some years ago of expressing
preferences. Then the development took place whereby margins
32
V 33
V E/PC/T/TAC/PV/16
of preference wore expressed in terms of the difference between
the Most-Favoured--Nation and tho preference rate, so we have
both types of preferential arrangements; but I do not think
we would consider that we would be following out the provisions
of Article 17 if, in the case of a country to which we had
accorded 50% preferential difference, we were to increase the
duty, which is now a dollar, and therefore the preferential
rate of 50 cents would be increased to two dollars. We would
not feel that we were carrying out the provisions of Article 17
if we merely increased the preferential rate to one dollar,
even though that would be according to the terms of the:
Agreement signed with that country. We would consider that
the provisions of Article 17 would require. that the margin of
preference should not be greater than 50 cents.
Dr. .Gustavo GUTIERREZ (Cuba): Mr. Chairman, up till now I had
no doubts, but now I have some doubts! If you reduce the
margin of preference without touching the tariff, you will merely
increase the duties for that nation and that is perfectly
acceptable. It does not go against the principle, which is not
to increase the margin of preference - it does not say anything
about duties.
Our interpretation has been, during the negotiations we have
had (and we also are a country in which the duties are specified
in many cases in percentage and all the preferences are in
percentage), that we should not increase the margin of preference
but we may reduce the margin of preference and in some cases
that may result in an increase of duty for the nation that had
the preference. That is the way we have proceeded in all
our negotiations. 34
V E/PC/T/TAC/PV/16
CHAIRMAN: Are there any other comments? Can we now
accept the Report of the Sub-Committee and the new text of
paragraph 3 of Article 1?
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, do you mean
sub-paragraph (a) or all of Paragraph 3?
CHAIRMAN: All of paragraph 3..
Dr. Gustavo GUTIERREZ (Cuba): Then I wish to comment on
the fact that in the text of T/192, we see (a) and (b) in small
letters, and finish with a full stop, and then paragraph 3 is
continued with a small letter. Is the letter "i" intended to
be a small letter or a capital letter, because it changes the
text absolutely if it is a small letter? If it is made a
capital letter, that is all right, but if not, that is a
different thing and we have to present a complaint.
, - _ . __ - , ,-35 - E/PC/T/TAC/PV/L6
CHAIRMAN: Mr. Shackle pointed this out at the commencement
of our discussion, and we agreed to change the little "i" to a big
"i "
DR. G. GUTIERREZ (Cuba): There is another point, Mr. Chairman.
Paragraph3(b)relates to products not described in the Schedules and
it says: the difference between the most-favoured-nation rate
rate
and the preferential/existing on the 10th April, 1947, We have
nothing to say against this wording, but we want to state that we
consider that the general preferential clause of the Treaty on
Commerce between Cuba and the United States, which grants preferences
of 20% for all articles not included in the, Schedules, is not
affected by this provision but, on the contrary, is included in it.
CHAIRMAN: Are there any other comments?
Is the new text of paragraph 3 of Article I accepted?
Agreed.
The Committee will find the Report of the ad hoc Sub-Committee
on Paragraph 3 of Article II in document E/PC/T/191. I would ask
the Chairman of the Sub-Committee, Mr. Melander, to introduce this
Report.
MR. J. MELANDER (Norway): To start with, Mr. Chairman, I would
say that I think the Members of the Sub-Committee would all agree
'that the text we have produced is ratherfar from perfect. As
Chairman, I would say that it is illogical, it is not very neat and,
as I said, it is very far from perfect. Still, the Sub-Committee
started to discuss this problem on the basis that there were roughly
three against and three for regarding the divergent views, and this
text is a compromise and must be read as such.
- 35 - - 36 -
J. E/PC/T/TAC/PV/16
I think perhaps that I should mention that the Sub-Committee
primarily aimed at covering three points. First of all, they
would cover the point where there had been tariff negotiations between
two parties and where one of the parties had an import monopoly and
where the parties agreed to a very definite and exact agreement as to
any price margin, whether in percentages or in amounts, and it was
obvious to the Members of the Sub-Committee that such a concrete
agreement, based, of course, on the principles for negotiations laid
down in Article 31, which was included-in one Schedule,would be
accepted and go before the general rules contained in the Charter,
especially in Article 31. That was case number 1. That is
provided for in the text here in line 4 where it says "except as
provided in the Schedule or as otherwise agreed between the parties
to the negotiation of the concession".
The second case we had in mind was the one where there existed
an import monopoly, but where the negotiations for tariff binding or
reduction had only resulted in the binding of the tariff but not in
any concrete arrangement regarding the margin for the sale of the
goods in question in domestic markets. In that case, the Committee
considered that the principles of the Charter would apply,especially
the rules laid down in Article 31 of the Charter.
Thirdly, we had in mind the case where an import duty has been
fixed in a case where, at present, there is no import monopoly, but
where we consider the possibility that an import monopoly might be
established in the future. There the Sub-Committee considered that
the tariff duty already fixed should, of course, stand, and that any
sales in the domestic market of products covered by that tariff item
should be covered by the principles of the Charter especially, of
course, Article 31. E/PC/T/TAC/PV/16
Now, these two latter cases, the case where you have an
existing monopoly and the case of future monopolies is covered in the
latter part of the sentence where we refer to the rule that the
monopoly shall not operate so as to afford protection on the average
in excess of the amount of protection provided for in such Schedule.
But there is a reference to the other provisions in the last
sentence; "This paragraph shall not limit the use by contracting
parties .of any form of assistance. to domestic producers permitted
by other provisions of this Agreement", and by the reference to this
Agreement we had in mind the General Agreement, and also the Protocol,
and especially, of course, we had in mind Article 31 of the Charter.
You will see that we have referred to that in the Report itself,
that is, at the bottom of page 1 of the Report.
That I think, covers the main points. There were a lot of
other points also considered; but I consider those to be more Ot; less
subsidiary,
CHAIRMAN: Are there any comments on the Report of the
Sub-Committee?
MR. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
the original text of paragraph 3 followed. rather closely the provisions
of the Charter, and I wonder if the text which is now before us
covers the situation which is provlded for in the Charter.
If I consider the text which is row before us I see that only one
sentence in that text can be i..t: , iv_ 1nr' a case provided
for in the original text, that is the part of the zI.I:*r.
paragraph 3 which-1- th , -veag 1 .'i-*q 'f th e so as to attord.
protection on the average in exess of the amount of protection
J.
- 37 - E/PC/T/TAC/PV/16
provided for in such Schedule'
The original text provided for too different cases. One was
which
the maximum margin of profit which a monopoly could make/was
covered by the text, and the other was the quantity of the product
which the monopoly could import. These two points, which are very
important points, were fully discussed in the Commission which had
to draft the text of the Charter. We see, in fact, in the
original paragraph 3, that the monopoly shall import from the
territories of contracting parties and offer for sale at prices
charged within such maximum margin such quantities of the product
as will be sufficient to satisfy the full domestic demand for the
imported product. Therefore, 1 think that we now run the risk, if
we do not give a very clear interpretation to the text which we are
now proposing to adopt, of not knowing exactly what is to be done.
In fact, it is the contrary. If we did not waive a clear interpretation,
It seems that we would give more freedom to the monopoly to import
any quantity of the product which it, might wish to import, to charge
and fix such prices which it considers proper.
I do not need to elaborate on the very clear consequences of
that freedom given to a monopoly, and I think that it is useless for
me to go into details because everyone can see the details for
himself. Nevertheless, we have to take account here of what has been
done and what has been drafted in the Charter, and with your permission,
Mr. Chairman, I would like to ask the Chairman of the Sub-Committee
to tell me that the two cases which I have just mentioned are
covered here in the present text of paragraph 3 of Article II.
MR. J. MELANDER (Norway): Mr. Chairman, in answer to the
question from the Chilean Delegation I would say that, to start with,
- 38 - J. E/:PC/T/TAC/PV/16
the answer is: "Yes".
First of all, we considered paragraph 3 of Article II in
the original draft and we came to the conclusion that it refers
only to the particular cases which ought to be covered, namely, the
one referred to on price margins and, secondly, the one relating
to the importation of such quantities as are sufficient to
satisfy full domestic demand. During the discussion in the
Sub-Committee we all agreed that especially the provision relating
to the price margin ought to be qualified with the principles
contained in Article 31 of the Charter, paragraphls 6 and. 7, and the
reason why we cut out the reference to the two first cases, the
reference to price margins and to the satisfying of domestic demand,
is that we considered it sufficient to refer to the principles in
paragraph 1(b) of Article 31. Paragraph 1(b) says that if a
Member establishes or maintains or authorises a monopoly, such
Member shall negotiate with the object of achieving, in the case of
an import monopoly, arrangements designed to limit or reduce any
protection that might be afforded through the operation of the
monopoly to domestic producers of the monopolised product, and so on.
Then, in paragraph 2 of Article 31, there is a reference to what
should be tone to satisfy the requirements contained in that general
principle, and also in paragraphs 4, 5, 6 and 7 of Article 31 there
are rules which qualify certain of the principles laid down in
7
paragraph 2 of Article 1..
Consequently, we came to the conclusion that in thispQaragraph 3
f Article II we would either have to include all the essential
ules of Article 31, in other words, in aditio n to those already
inlJd.ed in the original draft, or to include reference to
- 39 -
_ - - - J . - 40 - E/PC/T/TAC/PV/16
paragraphs 5 and 6 of Article 31. In fact, it would really lead
to including the whole of Article 31 in paragraph 3 of Article II,
and we considered that that would be going too far, and consequently
we agreed on Sating the main principle only, but the point is
covered, I think, by the last sentence in our draft where it says:
"This paragraph shall not limit the use by contracting parties of
any form of assistance to domestic producers permitted by other
provisions of this Agreement. That is .meant to cover Article 31
also, so that it would cover, for example, paragraphs 2(a) and 2(b)
and paragraphs 3, 4, 5, 6 and 7 of Article 31, and so the whole
thing should be covered.
The only point which is, perhaps, a little doubtful is the
question of whether we ought not to be completely on the safe side
and say "by other provisions of this Agreement or the accompanying
Protocol", to cover Article 31. The reasons why I mention that is
that Article 31 is, so far, not included in the General Agreement as
such. The solution would be either to include Article 31 in
Part II of the General Ageement, or else to state at the end of this
draft "this Agreement or the accompanying Protocol". Whichever
of those solutions one chooses would be completely satisfactory as
far as I can gather. E/PC/T/TAC/PV/16
41 -
CHAIRMAN: The Delegate af the United Kingdom.
Mr. SHACKLE (United Kingdom): There is one point to which
I think it may be useful to call attention by way of supplement
to the explanation which Mr. Melander has given, which I feel
I may perhaps be entitled to call attention to as one of the
members of this very-hard-worked sub-committee. It is a
paragraph at the foot of Page 1 in which we suggest that a note
be included in the Protocol, "The Sub-committee recommends this
text of Paragraph 3 in the belief that, except where otherwise
specifically agreed between the parties to a particular
negotiation, the concept of protection by a state monopoly
would necessarily follow the provisions of Article 31 of the
Draft Charter annexed to the Protocol. The Sub-committee
further recommends that a note to this effect be included in
the Protocol of Interpretative Notes."
We felt that by a note of that kind we should avoid a very
great deal of spreading out of detailed provisions in the text of
this Article which, we felt, would encumber it unduly. I think
there would be considerable virtue in a note of that kind,
One ether point, I gather it is suggested to add at the
end of the new Paragraph 3 of Article II, .that is to say, on
Page 2 at the end after the words "provisions of this Agreement":
"or of its accompanying Protocol".
I personally would see no objetion et all to making that
addition. Thank you.
CHAIRMAN: The Delegate of the United States.
Mr. J. W. EVANS (United States): I am glad that Mr. Shackle
mentioned the note at the bottom of the Report of the Sub-Committee
and would support his suggestion that it be included in the
Protocol of Notes, I have some slight doubt myself as to
R R
of
whether the edition of the words "or/its accompanying Protocol"
in the paragraph itself are necessary or desirable. If we
adopt the note, I think it would be quite unnecessary. As to
whether it is desirable, it occurs to me that there may possibly
be some question as to whether if the Protocol is mentioned here
where we use the word "agreement", it may not be necessary in
other ports of the agreement to do the same thing. That is the
question I should be quite happy to leave to the Legal Drafting
Committee; but perhaps we can avoid placing that problem before
them if we agree that the inclusion of the proposed note at the
bottom of the first page, of the Report would take care of the
situation.
CHAIRMAN: The Delegate of Norway.
Mr. J. MELANDER (Norway): Mr. Chairman, speaking now as
the Norwegian Delegate I would like to come back to this problem..
I think there is some advantage in either having a special reference
to the Protocol or, if that is not done, then to include Article
XXXI in Part II of the General Agreement. . The reason is that if
you have any other reference to this Agreement as it is stated in
the Sub-committee's text, then it might lead to difficulties in
in interpretation especially when we have in the General Agreement
article XXI on the Nullification or I pairment - a special reference
to the agreement or its accompanying Protocol. If we leave out
here the reference to the Protocol it might be interpreted in such
a way that the Protocol does not operate even if you have the
accompanying note. think it is really better to have either, as
I say, article XXXI included in Part II - that is perhaps the best
solution - or else, I think it would be better to have a special
reference to the Protocol in the paragraph itself. E/PC/T/TAC/PV/16
CHAIRMAN: Are there any other comments?
Mr. John W. EVANS (United States): Mr. Chairman, I do not
like to press this point at great length. I think that it is a
rather dubious one. But I should like to point out this: that
during the discussions in the Sub-Committee itself there was some
question as to whether a phraseology like this last sentence was
desirable at all. In an earlier form instead of "any form of
assistance" it said "any form of protection". That raised a
question as to whether we might not in the final sentence actually
be nullifying the provision laid down in previous Articles, in
view of the fact that Article 31 was not included in the Agreement,
and
/if the word "protection" was used this could. be interpreted to
mean (by a rather strained interpretation) that a state-trading
monopoly could do anything that it wanted because there was nothing
in the Agreement which said that it could not do it. And therefore
this would be a total nullification of what went before in the
preceding, sentence.
I may have been over-legalistic in making that argument, and
when the word "assistance" was suggested instead of "protection" I
agreed. The purpose of inserting the words "or of its accompanying
Protocols", I understand, is to include Article 31, which is
hardly relevant, because Article 31 does not in its exceptions
specify any particular kind of assistance to producers, unless the
word 'protection" is to be considered as the synonym of
"assistance". My personal preference would be to omit this
sentence entirely as the Note which we have suggested for the first
page covers not only the rules but the exceptions in Article 31.
Another reason I am a little reluctant to elaborate on this last
sentence is that we have now mentioned all of the exceptions and
we have not mentioned the rule in the Article itself.
I wonder if the other delegates would not agree that the Note
itself is sufficient to take care of that.
43
P. E/PC/T/TAC/PV/16
Mr. A. J. SHACKLE (United Kingdom): I should like to call
attention to the fact that the last sentence of this paragraph to
which Mr. Evans called attention is taken verbatim from Article 31
of the Charter Where it forms paragraph 7, and the words there
used are "any form of assistance" and not "any form of protection".
Now I do feel that this sentence serves a useful purpose. In the
sentence which precedes it we have said that a monopoly "shall not,
except as provided in the Schedule or as otherwise agreed between
the parties to the negotiation of the concession, operate so as to
afford protection on the average. in excess of the amount of
protection provided for in such Schedule". Now, the word
"protection!' is in itself a wide one and may include such things as
subsidies. It is not the intention, I take it, to affect by this
'the rules about subsidies which are given elsewhere in the Agreement;
but if we do not have that sentence in, I think a genuine doubt may
arise as to whether, the moment a monopoly had concluded some
concession which was included in the Schedule, it might automatically
surrender its right to use subsidies. That would not be an
acceptable conclusion and I think that for that reason this
sentence is necessary.
I would like to call attention to the obvious point that this
paragraph, like the rest of Article II, is concerned purely to
express the results of negotiations that have taken place. It
does it in a shorthand way, but I think it does. it satisfactorily,
I do not myself feel distressed by the appearance that it includes
a lot of exceptions. I think it is unnecessary perhaps to refer
to the Protocols specifically, for the reason that in the
Interpretative Notes we propose to refer to the provisions of
Article 31 of the Draft Charter and its Protocols and that will
include of course paragraphs 6, 5, 4 and so on. So I have the
feeling that we have here, given that all this is shorthand, said
enough. But at the same time I should see considerable difficulty
if it were decided to omit the last sentence of paragraph 3.
Thank you.
P.
44 E/PC/T/TAC/PV/16
CHAIRMAN: Mr. Melander.
Mr. J. MELANDER (Norway). Mr. Chairman, I believe it would
be better if we could get a General Agreement which is as clear as
possible without, the reference to Notes. I think that if we
included Article 31 in Part II of the General agreement then this
text here as it stands now would be quite clear, and a reference to
an Interpratative Note would not be necessary. If any delegate
wanted to have it, it would not do any harm, but in my view it
would not be necessary. As the text stands now, it is, as far as
I can see, from a legal point of view, not quite clear, and to
clear up that unclearness by a Note, when you can do it in the
legallly correct way by introducing the Article which we all have in
mind, is I think not the right way to approach it and I would like
to ask if there is any objection to the inclusion of Article 31 in
Part II. That would I think solve the whole problem.
Mr. R. J. SHACKLE (United Kingdom): I do not think there is
any objection of substance to adding article 31 to Part II but
there is a formal objection which perhaps is of some importance,
although it is only a formal one.
In this General agreement we have set ourselves just to express
the results of negotiations. We have not included anything which
would correspond to Article 17 of the Draft Charter which lays down
the rules for negotiation about reduction of tariffs and elimination
of preferences which may take place in the future. If we are to
preserve the parallelism, it seems to me, from the moment we added
Article 31 which deals with those negotiations in the case of state-
trading monopolies, we ought also, in symmetry, to add Article 17
which deals with elimination of tariffs and preferences under a
systems of private trading, and we should lengthen the Agreement
considerably if we did that. I rather doubt if the amount of
space taken up would be justified by the results. I still think
45
P. that the "shorthand note" is probably sufficiently good shorthand
for our purposes.
CHAIRMAN . The Delegate of Norway.
Mr. J. MELANDER (Norway): Mr. Chairman, with regard to what
was just expressed by Mr. Shackle I would say I am not so sure that
he is right in saying that Article 31 only lays down the rules for
future negotiations. Supposing we have the case where a country
has an import monopoly, and supposing in the negotiations here the
only thins which has been negotiated and settled is the maximum
import duty; in that case nothing has been said about the price
margin for sale of the products in the domestic markets and the
rule which would govern that price margin would be paragraph 4 of
Article 31 as qualified by, for example, paragraph 6. So that
Article 31 does really affect negotiations which have already taken
place in so far as these negotiations have only led to a maximum
import duty being fixed. In the case where you have not only
fixed a maximum import duty but have also laid down that the
maximum price margin shall not exceed, say, 40 to 50% of the
:import price, then of course that will go into the Schedule and
will be covered automatically by Article II paragraph 1. But in
the first case I mentioned one will, of course, have to deal with
Article 31. That is why I think it would be useful to have a
reference to it, either by including it in Part II or by a special
reference to it at the end of this sub-paragraph.
Mr. John W. EVANS (United states): Mr. Chairman, I have
little to say except that I wanted to comment on an earlier
explanation by Mr. Shackle as to the existence of this final
Sentence. I agree with him completely as to why it is here
and what "form of assistance" meant, but the whole point of my
objection to the addition of the words "or of its accompanying
Protocols" is that the purpose of that is to include Article 31,
46
E/PC/T/TAC/PV/16
P. E/PC/T/TAC/PV/16
and that casts doubt on the interpretation of the words "any form
of assistance". In view of Mr. Shackle's explanation, however,
I will withdraw my suggestion that the final sentence be deleted.
I agreed to this wording in the Sub-Committee and I am perfectly
willing to accept the report of the Sub-Committee as it stands,
with the Note on the first page.
I do believe that Mr. Melander's feeling that the exceptions
permitted in Article 31 are not covered is unfounded. I think
the
that/words "any form of protection" are rather vague. I suggest
that if any Member were to invoke this paragraph, saying that
the country maintaining the monopoly had violated the paragraphs,
he would necessarily have to go to Article 31 to prove his case,
and when he went to Article 31 he would find in it all the
exceptions which are written in that Article. So I agree with
Mr. Shackle that this "shorthand" wording is adequate for the
purpose. The only other solution would be to write all of
Article 31 and place it in Part I in place of this, or place it in
Part II in addition to this. But although the problems Mr. Shackle
raises are important problems, I think it raises very little
question about the form of the Agreement.
P.
47 48
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R. J. SHACKLE (United Kingdom): I wonder whether
Mr. Melander's difficulties might possibly be removed if we
were to adopt a somewhat more precise wording in the interpretative
note than it has at present? At present it speaks of "the
concept of protection by a State monopoly", and that is certainly
a vague phrase. I wonder whether we might possibly substitute
for it some other words, so that the whole paragraph would read
like this: -
"The Sub-Committee recommends this text of paragraph 3
in the belief that, except where otherwise specifically agreed
between the parties to a particular negotiation, in the
application of tho provisions of thc paragraph those provisions
would be interpreted by reference to the provisions of
Article 31 of the Draft Charter annexed to the Protocol".
That, I think, would clearly say that one should go to
Article 31 for guidance whenever one is in doubt.
CHAIRMAN: The Delegate of Norway.
Mr. J. MELANDER (Norway): That is acceptable, Mr.
Chairman.
CHAIRMAN: I think we have now reached agreement on this
question. I take it that paragraph 3 of Article II would be
inserted in the form in which it is given in the Report of
the Sub-Committee without any additions and the interpretative
note would be changed in the sense just read out by Mr. Shackle,
and would then read as follows:
"This paragraph was agreed in the belief that, except
where otherwise specifically agreed between the parties to a
E/PC/T/TAC/PV/16
V V
particular negotiation, in the application of the provisions
of the paragraph these provisions would be interpreted by
reference to the provisions of Article 31 of the Draft
Charter annexed to the Protocol".
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I think
the Legal Drafting Committee might be asked to direct their
attention rather specifically to that note, with a view to
making its drafting more elegant!
CHAIRMAN: With that reservation, is the general
principle underlying this note agreed?
M. ROYER (France) (Interpretation): Mr. Chairman, does
this mean that the Draft Charter will be attached to all
the documents?
CHAIRMAN: I do not think that the intention was that
it should be attached to the Protocol. I Wonder where the
Sub-Committee got that impression.
Mr. R.J.SHACKLE (United Kingdom): "Annexed" is the
wrong word. It should be "referred to" .
CHAIRMAN: "Referred to in the Protocol" would be the
right words. Are we agreed? Adopted.
May I now return to the proposal of the Chinese Delegation
to add a paragraph to Article XXIV regarding registration of
the Agreement? The Committee will recall that when we were
considering this matter less than three hours ago, Mr. Shackle
suggested that the. Secretariat should consult the Legal
Adviser. They have sent a telegram to the Legal Adviser in
New York and have already received a reply. The reply is as
49
E/PC/T/TAC/PV/16 E/PC/T/TAC/PV/16
follows: Mr. Reynolds (the legal Adviser) says:.
"Mr. Shackle is quite correct. We should put the same
provision in the General Agreement as is now in the Charter."
That, of course, would imply that we should stick to the
same wording as is in the Charter and not accept the
suggestion which had been made by the Delegate of France to
change the word "authorized" to "requested". The way the
provision of paragraph 3 of Article 98 of the Charter reads
is as follow: "The United Nations is authorised to effect
registration of this Chartor as soon as it comes into force".
Are there any comments?
M. ROYER (France) (Interpretation): Mr. Chairman, I
shall not press my point, but in spite of the short delay and
the speed with which the answer was given, it seems that the
solution which has been adopted is not an excellent one.
CHAIRMAN: The Delegate of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): I only want it recorded
that I prefer to make no complaint!
Dr. Z. AUGENTHALER (Czechoslovakia): . Mr. Chairman,
could we not get out of this difficulty by saying simply,
"This Agreement shall be registered with the United Nations"?
CHAIRMAN: I do not think that would meet the point to
which Mr. Shackle has referred. That would then require arch
of the seventeen countries which are Members of the United
Nations to register themselves with the United Nations. The
purpose of this provision is to save the various Members of the
V
50 E/PC/T/T-C/ PV/16
United Nations the trouble of registering themselves, and
the United Nations would then register the Agreement
automatically as it is a multilateral Agreement.
Are there any other comments? I believe that was the
purpose the Chinese Delegation had in bringing forward this
proposal in the first place.
Is the proposal agreed? Agreed.
This will then be added as another paragraph to
Article XXIV, the heading for which will n w read "Signature,
Entry into Force and Registration".
I would like to inform the Committee that I fear we are
making very slow progress if we wish to get through this
second reading of this Agreement by Saturday. I would therefore
propose that we should hold a night session tomorrow evening
in order to obviate the necessity of sitting on Saturday
afternoon. I think if we have a meeting tomorrow afternoon
and tomorrow evening and Saturday morning, there will be a
good chance of our getting to the end of the Agreement and
its accompanying documents - the Protocol, Final Act and
Annexes. If we do not hold a meeting on Friday evening,
I am afraid it may be necessary for us to hold a meeting on
Saturday afternoon. I would therefore like to obtain the
sense of the Committee regarding the proposal to hold
a meeting tomorrow evening.
M. F. Garcia OLDINI (Chile) (Interpretation): Mr.Chairman,
I am opposed to holding a meeting tomorrow night, but I think
it is unnecessary for me to express my reasons.
Mr. J. MELANDER (Norway): Mr. Chairman, I would much
51 E/PC/T 'rf C/P V/16
rather have a meeting tomorrow night than forfeit my
Saturday afternoon!
CHAIRMAN: I would remind the Delegate of Chile that
there is a possibility that we may not have the services of
the interpreters very much longer, and it would be very
difficult for us to conduct our proceedings without
interpreters.
M. F. Garcia OLDINI (Chile): That can only mean,
Mr. Chairman, that our work has been ill-organized.
Mr. LACARTE (Deputy Executive Secretary): We are in the
hands of the committees.
CHAIRMAN: I would remind the Members of the Committee
that the Secretariat sent out a circular two weeks ago,
informing the Members of the Committee that on account of
the holding of the session of the General Assembly in New
York, it would be necessary to withdraw the interpreters
by September 14th, and Members were invited to raise any
objections, if they had any. I do not believe that any
objections were raised. I think we will be able to keep
the interpreters beyond September l4th, but we cannot hold
them here indefinitely.
Mr. B.N. ADARK.AR (India): We would also prefer a meeting
tomorrow evening.
CHAIRMAN: I think, on a question of procedure of this
kind, it is quite in order to take a vote, and therefore will
all those in favour of meeting tomorrow evening rather than
V V 53 E/PC/T/TAC/PV/16
Saturday afternoon please raise their hands?
The majority seem to be in favour of meeting tomorrow
evening. We will meet tomorrow afternoon at 2.30 and tomorrow
evening at 9 o'clock.
The meeting is adjourned.
(The meeting rose at 6.10 p.m.) |
GATT Library | yf653jp4822 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Sixth Meeting Held on Saturday, 23 August 1947 at 9.30 a.m. in thePalais des Nations, Geneva | United Nations Economic and Social Council, August 23, 1947 | United Nations. Economic and Social Council | 23/08/1947 | official documents | E/PC/T/PV.2/6 and E/PC/T/PV2/3/CORR.1-6 | https://exhibits.stanford.edu/gatt/catalog/yf653jp4822 | yf653jp4822_90260196.xml | GATT_155 | 10,948 | 68,235 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
E/PC/T/PV. 2/6
23 August 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
SIXTH MEETING
HELD ON SATURDAY, 23 AUGUST 1947 at 9.30 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)
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.
NATI ONS UNI ES E/PC/T/PV/.2/6
CHAIRMAN (Interpretation): The Meeting is called to
order.
The first speaker on my list is the First Delegate of
Czechoslovakia and I will now call upon him.
H.E. Dr. Z. AUGENTHALER (Czachoslovakia): (Interpretation):
.Mr. Chairman, Ladies and Gentlemen, now that our work here is
completed, I would like first of all to thank you yourself, Mr.
Chairman, and all my colleagues from all Delegations for their
friendly co-operation, which enabled us to overcome the inevitable
difficulties and to present to the world the Draft Charter which
is before you now.
It is only thanks to this spirit that we were in a position
to complete the strenuous task which the Economic and Social Council
entrusted to us in February 1946.
In the interval before the World Conference, our Governments,
the Governments of all other countries and public opinion will make
criticisms on our work which I am sure we all would like to be
severe but in which we would also like to find as much goodwill as
we have displayed ourselves in our work in this historic and
hospitable capital of the Republic and Canton of Geneva.
Certainly the Draft is a compromise. I would even say that
every line of its text is one, and for that reason it cannot
Please, in any country of the world, those who like things to be
either black or white. Absolute back and white only exist
theoretically and probably other colours have even greater rights
to existence and, au fond, they make life beautiful.
Our work can be appraised by a reliable criterion. This
criterion is the provisions of the Charter of the United Nations.
particularly Article 55, which says that, with a view to the
S
- 2 - S - 3 - E/PC/T/PV/2/6
creation of conditions of stability and well-being which are
necessary for peaceful and friendly relations among nations,
based on respect for the principle of equality and self-determi-
nation of the people, the United Nations shall promote higher
standards of living, full employment, and economic and social
development.
The Draft which will be the basis of discussions at the
World Conference on Trade and Employment will therefore simply
enlarge on these basic ideas and give them concrete expression in
a code intended for daily use.
One fact about the Charter which is, in my opinion, a
novelty is that it endeavours to open up an entirely new commer-
cial policy, namely, by superseding or substantially reducing the
importance of traditional trade agreements such as we have known
before, especially since 1860.
The success of this undertaking primarily depends on how
many countries will be prepared to except the Chapter as a general
rule for their commercial policy, and what will happen if a number
of countries retain their present policies or develop other
methods not provided for in the Charter. This important question
will probably only be answered at the World Conference at Havana
at the end of this year.
Thanks to the Economic and Social Council, which invited
practically all countries of the world, we shell have there a
unique opportunity of elucidating this problem, which is certainly
one of those which will substantially influence the operation of
the future International Trade Organization.
But this belongs to the future. Czechoslovakia, for one,
would be happy if the Charter were universal and if all
nations were Members of the Organization. S -4 - E/PC/T/PV.2/6
CHAIRMAN (Interpretation): I thank the First Delegate
of Czechoslovakia for his statement. I .will now call upon
the First Dulegete of India.
Sir RAGHAVAN PILLAI(India). Mr. Chairman, follow Delegates,
Ladles and Gentlemen, addressing the Preparatory Committee in
April last, I spoke of the magnitude or the economic tasks
awaiting us in my country and of the deep and genuine interest
we have accordingly felt in the work of this Conference. To
this feeling has now been imparted a special sense of urgency,
because, with partition, there have been created in the two new
Dominions or India and Pakistan conditions in which the early
and rapid execution of our programmes of economic development
has been brought within practical realisation. The Charter,
therefore, now holds for us an added interest and a now signi-
ficance. Nor is its importance to us to be judged solely by
its treatment of the neods of particular types of economy. True,
certain chapters such as the one dealing with economic development
are of special significance to us, but our interest in the Charter
because of our stake in international trade rests on a wider basis,
and the Charter, as a whole and in every part, is of vital concern:
to us.
The Charter as it has emerged from the intensive discussions
to which it has been subjected during the past three months is on
the whole a more satisfactory document than any previous version.
True, it still leaves sore gaps, superfically indicative of an
irreconcilable divergence of views among the nations represented
at this Conference. It must be recognised, however, that on
certain issues, especially those concerning voting and membership,
it would be fruitless and even inadvisable to attempt to discover
an acceptable basis of agreement except at the World Confference
and that the forcing or a decision, however provisional, at an S - 5 - E/PC/T/PV/2/6
earlier stage might be both harmful and tendoncious. It might be
said, too, that the Charter betrays insufficient organic integration
and suffers, in parts, from, the defects of patchwork such as must
inevitably result when strands of economic policy of widely
varying nature and purpose arc woven into one economic pattern.
This criticism, in moderation and within limits, is just. On the
other hand, it o-ust be remembered that the Charter is not
dominated by any single or exclusive economic philosophy but
represents in essentials a fair compromise between conflicting
lines of economic thought and policy and provides the widest
basis for international economic collaboration, 6
E/PC/T/PV.2/6
The Charter is noteworthy not only for what it contains but for
what it does not contain. The Indian Delegation has throughout
held the view that the Charter should not be allowed to develop into
an extravagant document, cataloguing and penalising all possible
economic delinquencies, known and unknown. I. cannot truthfully say
that blemishes of this character have not already crept into the
Charter and that some of the "Donts" listed in the Charter are not
of a type which few countries, if left to themselves, would wish to
infringe but which, when expressed in mandatory form, would appear to
involve a serious deprivation of a country's freedom of action.
That the Charter does not contain many more of such minor blemishes
is due to the wise restraint shown by Delegations in face of argument
and persuasion, and I hope that while every effort will be made at
the World Conference to improve and perfect the Charter nothing will
be done to enlarge its scope and content.
At the opening session of this Conference I undertook on behalf
of the Indian Delegation to do everything reasonably possible to
make the Conference a suscess. I think we can fairly claim that we'
have redeemed our pledge. We came here with a number of reservation
to the New York draft. Today we only have two reservations a
major importance. One of these relates to Article 12 dealing with
international investment, but here we have undertaken to recommend
the text included in the Charter to our Govennment for study and
consideration. The subject, I should like here to emphasize, is
one of exceptional difficulty for us, and one on which we would
hesitate to arrive at any decision without the most careful
consideration of the problem in all its bearings. Our second major
reservation concerns Article 13 - Governmental Assistance to Economic 7
J. E/PC/T/PV. 2/6
Development - with special reference to the use of quantitative
restrictions for protective purposes. Here, while maintaining the
reservation, we have reported the position reached to our Government
and are now awaiting further instructions.
Few of us here would give our enthusiastic and wholly
unqualified suport to the Draft, for each of us, I imagine, could
wish that more of what we like and less of what we do not quite like
had been written into the Charter. But herein perhaps lie the chief
merit and value of the Charter. The Charter is far from perfect,
judged by absolute standards; but it represents the widest field of
agreement reached between representatives of 17 nations, each resolute
in his own convictions, but each at all times conscious Of then eed
to conduct the discussions which have taken place in a spirit of
accommodation. And now, Mr. Chairman, let us send the Charter with
our blessing to the World Conference, confident in the hope that
with the agreement of all, countries, it will be fashioned into a
powerful instrument for the promotion of concord. and. harmony in the
sphere of international commerce.
In conclusion, Mr. Chairman, allow me on behalf of the Indian
Delegation to pay our tribute to the outstanding contribution you,
personally, have made to the success of the Conference by your
wisdom and understanding, your tact and decisiveness and above all,
by your humanity. Allow me too to express my gratefull acknowledgment
to my fellow Vice-Chairmen who have so ably conducted the work of
the Commission and so ungrudgingly relieved me of my own burden and
especially to Mr. Wilgress who has fulfilled his multiple cepacities
within the Conferenceas outside it with distinction and trace.
Lastly, may I associate the Indian Delegation with the expressions
of appreciation that have been made of the invaluable assistance 8
E/LC/T/PV.2/6
given to us by Mr. Wyndham White and Mr. La Carte And by all
Secretariat officials - and here let me add with pleasure our
admirable team of interpreters - who have all of them by the prompt
and efficient discharge of their functions not only prevented us
from being dilatory but have helped to remove the feeling that our
stay at Geneva however pleasant, may be of indefinite duration.
CHAIRMAN: I thank the First Delegate of India for his
statement and now call upon the First Delegate of the Lebanon.
MR. M. MOBARAK (Lebanon): Ladies and Gentlemen, in order
to appreciate the work we have accomplished here during practically
five months, in the course of which no efforts were spared so as
to realise a text embodying the miracle of satisfying the greatest
number of us, complying with the guiding principles which are
implemented by it, we must broaden our horizon and put certain general
questions to ourselves.
Al Farabi, one of the greatest Moslem philosophers, stated,
more than ten centuries ago, that man, being made to live in common,
the perfectly organizaed state should include
the whole world and all humanity. The latter was limited, at the
period when the philosopher wrote, to a small circle of territories
in the Mediterranean and a few isolated points on the Indian Ocean.
I do not know whether Al Farabi would have said the same thing now.
Nevertheless, it is certain that the world is heading for a
state of international.organization, such that the different states,
even when they are implementing their proper rights, act on behalf
of the whole of the human community and that they act very often
only so as to realise a common super-national goal, However, as
on a national scale a planning system has often failed, similarlry, 9
J. E/PC/T/PV.2/6
the whole of humanity should not be carried away by the fact that
there exists an exclusive organization directed towards a state of
control and towards the abolition of all private initiative, which
for many of us is a condition of national rehabilitation.
In this connection, we will venture to recall the teachings of
another Arab, Ibn Khaldoun, who, having submitted to searching
scrutiny confiscations, monopolies and official control of commerce,
came to the conclusion that the; riches of the state are based on
the population and its spirit of initiative, and the excessive
intervention of the state and of the public authorities hamper these
riches and the normal development of economy. What is true in the
national case, is true also for the whole world. 10
V E/PC/T/PV. 2/6
Naturally, the value of the instrument of the Charter will be
determined by the way in which it will be implemented with
flexibility and the spirit of comprehension. If we have insisted
on the obstacles, it is because we find it necessary to show that
they must be avoided, and we are certain that they will be
avoided.
It must, nevertheless, be stated that the Draft Charter
represents, according to us, a machinery which might lose its
stability if a tendency towards an exclusive and strict determinism
prevailed over the requirements of national development.
Taking into consideration the present state of the world,
which for its greater part is still in the - stage. or being
equipped, we wonder whether we should not have greater corcern for
the difficulties of the countries which are still economically
insufficiently developed. The Arab States specifically are
on the threshold of a period of equipment, which can only be
realized in common agreement between themselves, each helping the
other. A certain liberty in the choice of the means which
will be left to them to achieve this result is indispensable to
them. They cannot succeed, except together, through the
constitution of a balanced economic entity, where their
agricultural zones will be the harmonious counterpart of regions
liable to give birth to industrial enterprises, and through
substantially increasing the beying Capecity of the masses.
This Organization does not limit in any way the exchanges
with the rest of the world. On the contrary, only a group of
free nations, sharing the same ideals, could,after having thus
enhanced the exchanges according to their own needs, turn towards
the outer world and enter the general system of multilateral
exchange. 11
V E/PC/T/PV. 2/6
On the basis of those principles, Lebanon has had to make a
few reservations to the Draft Charter, which are principally
concerned with the safeguarding of certain liberties in the field
of preferences and of quantitative restrictions, with the purpose
of helping national industries and of helping the development of
neighbouring countries - countries which are a part of the same
economic region.
The Preparatory Committee at Geneva has shared our point of
view to a certain extent. It has drawn up two absolutely new
texts which are based on our requests.
The first one provides for the possibility of creating
Customs Unions, and of concluding provisionally Agreements
necessary for the implementation of those Unions. The second
concerns the possibility of concluding, in certain circumstances,
new preferential agreements between two or several States which
do not necessarily imply that they consider the creation of a
Customs Union.
These new Articles do not satisfy us completely, as these
possibilities are submitted to a previous authorisation, but a
step forward has already been taken, and we hope that some more
Steps will betaken at the Havana Conference, so as to understand
the attitude of Lebanon at the Geneva Preparatory Committee.
it must be noted ultimately that we have safeguarded the
future, and have carefully avoided, every time that we have
considered a problem on which the States of the Arab League could
have a position to take at the Havana Conference, adopting a
final position. We have thus left to the States the possibility
of agreeing between themselves and of expressing their opinion in
full knowledge of the case.
I should like to pay due tribute to the spirit of comprehension E/PC/T/PV. 2/6
and of agreements which has prevailed during our work in Geneva.
I hope that the efforts of all of us will join at Havana into a
common endeavour which will enlighten and encourage humanity,
which is still looking for a road towards the construction of a
better world. Without being unduly optimistic, I hope that we
shall, be able to give a realistic appraisal of the world situation,
and that we shall implement the greater part of the provisions
of the present Draft, which will prevent us from returning to chaos
and to ecnomic warfare.
CHAIRMAN: I thank the Delegate of the Lebanon for his
statement, and I now call on the First Delegate or Chile.
M. Angel FAIVOVICH (Chile) Mr. Chairman, ladies and
gentlemen: After the beginning of this Conference five months
ago, we declared that we would earnestly cooperate in its
success, in conformity with the traditional behaviour of Chile
in the international field. Now that our labour has come to an
end., we would like to say a few words.
We declare that there is not and there cannot be strictly
national economies: that it is absolutely urgent to set up a
world organization for trade and economy, to put an end to a
system which often has meant an anarchy, seriously jeopardising
the peace of tlhe world.
The whole political and social machinery of the peoples so
deeply affected now, must be urgently sustained by a new economic,
financial and commercial structure. To this end, the joint
action of all nations is indispensable and urgent. It is
necessary to abolish existing divisions which threaten to develop
into the formation of blocs, which carry the seed of tremendous
and tragic future conflicts.
12
V 13
V E/PC/T/PV. 2/6
Convinced that the settlement of social and political.
questions which confront the nations substantially depends on
the solution of problems of world economy, we must point out
that this Conference has accomplished a work of paramount
importance in embodying in the text of the Charter a set of
principles and rules which, if applied in the spirit which
inspires them and with a clear understanding of the various
degrees of economic development of the peoples, will make it
possible for them to develop themselves in an atmosphere of
understanding and of respect for their national interests.
It is obvious that the original provisions of the Charter
have been improved. A number of concepts have been clarified;
specific exceptions to the general rules have been introduced;
ambiguous interpretations have been eliminated, and the door has
been opened to a number of suggestions which at the beginning
seemed to meet strong opposition. It could be said that in
the text of the Charter a certain balance has been struck between
the various views discussed in the Conference. We consider,
however, That this code does not meet, yet, all our requirements
and aspirations. The strong conflict of interests has prevented
us from agreeing on various occasions on fully satisfactory
formulae; but it is obvious that we have fashioned an instrument
which, duly improved in Havana, will give the world an opportunity
of creating an Internationai Organization to guide and facilitate
the economic development and commercial exchange; foster full
employment and higher standards of living; stimulate the movement
of productive capital, and finally, reconcile and solve the
difficulties inherent in these fundamental problems.
We have established the framework of an international body
which will be able to receive life and reality if all the nations 14
V E/PC/T/PV. 2/6
leaving aside their selfishness and ambitions and misundurstanding,
undertake jointly the march towards an effective and loyal
co-operation. Those countries which now hold in their hands
the fate of the world arc particularly responsible when the
work of the Conference has been accomplished.
As regards the negotiations concerning the multilateral
treaty, we hope that, in a spirit of an equitable valuation
of the interests of each country, it will be possible to lower
the customs duties and eliminate preferential systems which
really constitute an obstacle for the development of commercial
exchanges. A failure in this field would mean that the
objectives mentioned in the text of the International Charter
have not found an echo in real life.
In this case, as in the case of the Charter, the
responsibility of the nations which have the largest population
and the largest interests in world trade, is also evident.
The experience of the period between the First and the Second
World Wars shows the necessity to put an end to economic
warfare, failing which the anxiety will continue to prevail
in the world. It will become more and more diff icult for
the nations to live, political and social crises will become
more acute, and finally this generation may well be witness of
a new disaster to mankind. This we do not went,, and to avert
this catastrophe the Conference has accomplished a fruitful
work which we now submit to the countries of the world and
which/will now be the task of the Havana Conference to improve. 15
G . E/PC/T/PV. 2/6
CHAIRMAN: You have heard. the Delegate of Chile, and
I now call upon the Representative of the International Chamber
of Commerce.
The translation will not be simultaneous.
Mr. WALLACE B. PHILLIPS (International Chamber of Commerce):
Mr. Chairman and. Gentlemen, and the Delegate of the
International Chamber of Commerce it is my happy privilege at
this closing session of the Preparatory Committee's deliberations
dealing with the Charter to express to you, Mr. Chairman, to
the Members of the.Consultative Committee, to the delegates,
and last but not least to the extremely hard pressed. Executive
Secretary and his staff the appreciation of the International
Chamber of Commerce for the many courtesies tendered to our
several representatives throughout this long conference.
On previous occasions I have stated to this Committee the
fact that the International Chamber of Commerce is very serious
in conscientiously endeavouring to fulfil its duties and
responsibilities as outlined by the Economic and Social Council
for Categery A Non-governmental organizaticns. In conforrmity
with this attitude, the Chamber throughout the Conference has
maintained a campetent staff frequently supported by business
leaders familiar with the subjects under review.
For a considerable t i e prior to the opening session here
in Geneva the ICC's national committees devoted. much study to the
London draft of the Charter; their comments were coordinated. in
Paris by the very efficient economic staff of the Chamber and in
the very few days available following receipt of the New York
drafting committee's revisions produced. a Report, subsequently
published. as International Chamber of Commerce Brochuro 106,
which was approved. by the Executive Committee of the Chamber 16
E/PC/T/PV. 2/6
especially convened in Paris for this purpose. The Chamber's
Report was circulated by the conference to all members of the
Preparatory committee shortly after the opening session. I hope,
Mr. Chairman and Gentlemen, you will have found that this
document was helpful in your deliberations.
It is a matter of great regret to the International Chamber
that under the Rules adopted for this conference the Chamber's
representatives have not been afforded access to the working
documents and have been unable to act as observers at any but the
plenary sessions. Had greater freedom of participation been
permitted, a more important contribution could have been made.
The purposes of the International Chamber of Commerce as
laid down in its Constitution are as follows:
"To represent all the economic factors of international
business, including finance, industry, transportation and commerce;
"To ascertain and. to express the considered judgment of these
interested in international business;
"To secure effective and consistent action both in improving
the conditions of business between nations and in applying solutions
fcr international economic problems; and
"To encourage intercourse and better understanding between
business men and business organizations of various countries."
It will be noted from the preceding four points that the
Constitution of the International Chamber of Commerce complements
the objectives of the Charter and it is called to tour attention
to emphasize the fact that the Chamber, through its influential
National Committees, will maintain the keenest interest in the
ITO and will leave no stone unturned in order to assist in
achieving the greatest possible stimulus to a freer flow of
international trade. G 17 E/PC/T/PV. 2/6
It is proposed to submit immediately the new draft Charter
to the International Chamber of Commerce National Committees and
the resultant conclusions will be presented for cons ideration to
the Havana Conference.
Formulation of a World Trade Charter is not to be done in a
day; the present draft is a milestone on a long road. It is the
very earnest desire of the International Chamber of Commerce to
have the principles of a strong Charter universally accepted.. 18
ER E/PC/T/PV. 2/6
CHAIRMAN (Interpretation); I thank the delegate for Chile
and will now call .on the first delegate for the Netherlands.
Do. A.B. SPEEKENBRINK, (Netherlands): Mr. Chairman, ladies
and gentlemen, at the opening meetings of this conferance the
Minister of Economic Affairs, in his capacity as resident of our
delegation, made a speech from which I might recall in your mind
and in the minds of our distinguished colleagues,a few points.
Firstly, Minister Huysmans mentioned that in the tariff negotiations
which form such an important part of our work here in Geneva, the
Netherlands, Belgium and Iuxembourg negotiate with joint delegations
which also represent the Belgian Congo and the overseas parts of the
Kingdom of the Netherlands. With these negotiations which are still
in progress we do not deal now as to-day we talk about the end of
our activities with regard to the Draft Charter. Therefore I wish
to limit myself to the observation that you all now have seen the
Benelux delegation in action, demonstrating the earnest and steady
way in which the three countries forming part of the Customs Union
work in the direction of a close integration of their economies.
This is not only for their own well-being but also for that of Europe
where the aftermath of the last war makes itself so severely and so
cruelly felt.
With regard to the Charter discussions, our three countries have
no joint delegations, although it goes without saying that the delega-
tion of the Netherlands and that of the Belgian-Luxembourg Economic
Union have worked in close contact. Whore differences of opinion
existed we have not been afraid to show them to you, and you will no
doubt have noticed that these differences are certainly not funda-
mental, You must keep in mind that as a result of the last war,
and especially the late liberation of the Netherlands, there is still
a great difference in the present, - I repeat - the present economic E/PC/T/PV/2/6
situation of the three partners of our Customs Union.
Thus, the Netherlands delegation acted in the Charter discussions
as a separate unit representing the interests of the metropolitan
country as well as those of all the overseas parts of the Kingdom of
the Netherlands.
However, in the course of the debates, we hat some times reasons
to refer to the second important fact that Minister Huysmans men-
tioned in our opening meeting. I mean the fact that the political
structure of the Kiingdom of the Netherlands is in the course of re-
construction. Therefore, when I now state that in general we agree
with the present text of the Draft Charter that the Preparatory
Committee will present to the world Conference, I must repeat the
reservation the President of our delegation made in view of that
reconstruction of our Kingdom.
Mr. Chairman, if I said that "in general we agree with the
present text of the Draft Charter",and although we have made no
formal reservations this does not mean that the Netherland delega-
tion is entirely satisfied. Notwithstanding all the hard work
here in Geneva, the Preparatory Committee has not been able to dis-
cuss certain important problems in such a way that we can say we
fully foresee the consequences of several important additions to and
changes of the original Draft Charter. During the course of our
debates - especially with regard to certain articles of Chapter IV
(Commercial Policy), and also of Chapter VII (Organisations and
Functions), and VIII (Settlement of Disputes) - I referred several
times to this fact.
Although accepting the present text of the draft Charter, the
Netherlands will come with an open mind to the World Conference, and
be prepared - especially with regard to certain difficult articles -
to support amendments if there is reason for it, and that not only
with regard to those -rticles, such as article. 75 and Article 93
where we concluded our work with a number of alternative proposals.
ER 20
ER E/PC/T/PV.2/6
Thereby we will keep in mind that the Charter is not destined only
to rule our economic lift in this transition period after the war,
but also, and certainly to no less extent in the more distant future,
when - let us hope - solutions will have been found for our present
difficulties.
On the whole, however, my delegation is of the opinion that
the result of the work of the Preparatory Committee in Geneva is
of great importance and that many improvements have been brought
about in the Charter. Where we spoke before of the London com-
promise we now have reason to mention the Geneva compromise, which
is in many ways a better one.
So, for example, I think that with regard to the form of the
document before us, the re-arrangement of the Articles, especially
in the Chapter on Commeroial Policy, is a great improvement as are
the new arrangements with regard to Chapter VIII of the New York
draft. The new order of the different Chapters and articles is
certainly more clear and logical. Clear drafting and logical
order are also obtained by re-writing a rather large number of
articles. The material changes which result from this re-drafting
are often of minor importance. Thus, the Chapters on Employment,
Restrictive Business Practices, and Inter-governmental Commodity
Arrangements have, on the whole, the same contents as in the New
York draft, although we think that definite improvements have been
made.
My delegation also considers very important the revis ion of the
Chapter on Economic Development, and welcomes the addition of an
article on Investments. With regard to that Article, we only regret
that the rules on investments which are now incorporated in the
Charter, were drastically curtailed as compared with those that were
originally proposed.
We also welcome the insertion of the more detailed provisions
on governmental assistance to economic development, which we now 21
ER 31/PC/T/PV.2/6
find in the Charter.
As to the very important Chapter on Commercial Policy, - as I
said before,-.we still have certain doubts, and I might express
here my fear that the escape clauses in this Chapter have not been
thoroughly considered in their cohesion and consequences. I might
mention for instance article 21, sub-paragraph 3(b) about which I
still am not very happy, although my delegation made no formal
reservation. To give another example with regard to another
Chapter, we still feel worried about - ragraph 3 of Article 92 :
Chapter VIII . However, again my delegation did not stress their
point as we consider the present text of Article 91 on the reference
to the International Court of Justice a definite improvement and a
very valuable addition to the Draft Charter.
Mr. Chairman, I shall not take more of you time as I expressed
before our favourable opinion with regard to the results of the
discussions in Geneva. I therefore conclude with may sincere thanks
to you and your vice-presidents for the guidance you. all have given
to the Executive Secretary and his staff for their admirable work,
to our work,/and to my fellow delegates for the spirit of good
fellowship and mutual understanding that was always present at our
meetings. E/PC/T/PV.2/5
CHAIRMAN (Interpretation): I thank the First Delegate of the
Netherlands for his statement. I will now call upon the First
Delegate of Norway. The interpretation will take place after
his speech has been delivered.
H.E. Mr. Erik COLBAN (Norway): Mr. Chairman, Ladies and
Gentlemen, I am not going to speak about our work here in Geneva.
That has been sufficiently explained. by the previous speakers. I
can only say that I heartily agree with the general opinion
expressed, that we can be reasonably satisfied with the result. I
would rather speak about the Conference.
Here, as in London and in New York, we were only 18 Dele-
gations. In Havana we may be three times as many. That will
create for the Members of the Preparatory Committee a very
important obligation; that is, to continue to feel, as Members
of the Preparatory Committee, that they have an obligation to
hold together, to try to help the new Delegations to understand
what we have done, to try to get them. to fall into line with us,
and to beware of the temptation to try to enlist any of the new
Delegations in favour of dissenting opinions.
We are going to stick to our viewpoints in Havana, as in
London and here in Geneve. But the purpose of the Conference is
to eliminate the dissents, not to deepen them, and unless the
Members of the Preparatory Committee feel very acutely their
obligations during the Conference, we run the risk of deepening the
disagreements instead of eliminating them.
We shall have all these new Delegations. We shall also,
-trust - we have just heard it from the Delegate of the
International Chamber of Commerce - have the non-governmental inter-
national organizations represented there. I take it - it does
S E/PC/T/PV.2/6
not need any argument - we shall co-operate with them as we have
done here. We shall benefit by their advice, by their criticism
and by their constructive suggestions.
Of course, we will have representatives of the Governmental
international bodies, as we have had them here. But there is
one element to which I attach particular importance; that is the
element which represents our public opinion - first and foremost,
through the Press of the world.
You will have seen that in the document containing the
text of our Charter we have now quoted the names of the Dele-
gations expressing cert in views. The reservations presented
and contained in the Draft Charter stand in the names of such-and-
such Delegations. I ask the Press not to over-emphasize the
Importance of these reservations, not to stress the fact that
on certain Articles we have been unable to agree on a definite
solution, that we have been brought to insert alternative
proposals for consideration at Havana.
I would ask the representatives of the Press rather to stress
the very great volume of agreement at which we have successfully
arrrived .
I hope that, as we have been able to overcome the secrecy
of the attitude of the different Delegations, we shall also be
able - I can only speak on my own personal behalf - in Havana to
take the Press; much more fully into our confidence, that our
deliberations at Havana will take place in full daylight.
Everybody y knows that views the different Delegations here have
and I cannot see any particular danger in having our Havana
Commissions, on which all the Delegations will be represented,
deliberating in full daylight. I only express a pious hope,
but I trust it may come true.
That does not prevent private talks in Sub-committees or in
technical bodies, to thresh out points of detail, or private
S 24
E/PC/T/PV.2/6
conversations between Heads of Delegations in order to get over
points of difficulty.
Speaking about the duties and tasks of the Conference, I
would mention a point to which I attach very great importance.
It was mentioned by the Delegate of Canada. He said we had
here a tendency to turn over too much to the Organization, and,
in fact, we have turned over to the Conference quite a number
of important problems. I entirely agree with Mr. Wilgress that
it would prehaps be fatal to the reasonable daily work of the
Organization if the Conference left the questions unsolved and
asked the Orgainization itself to try to solve them.
The Conference at Havana must present the Organization with
a ready Statute, with no blanks in it. The Organization will
have immediately to start dealing with important practical
problems and must not be distracted front the main task by
all kinds of more or less theoretical and political discussions.
There is another point to which I would also like here
to draw the attention of Delegates, as I think it ought to be
brought up at the Conference - the question of finance.
We have heard - I have heard it many times, even 20 years
ago - that in a war the Great Powers spend in a couple of days
much more money than the whole budget of international co-operation.
It may be true, but that is not an argument. In wartime we
spend recklessly because we cannot discuss money; we must have
our armies, we must be able to equip and to protect our righting
forces, but if we went to get rid of the wer mentality we have
also to come back to a reasonable sense of economy in
international work.
When I read newspaper reports about the expenditure
connected with different international organizations today,
I feel rather frightened. How long will the Governments be
willing to pay on such a scale? 25
S E/PC/T/PV. 2/6
I intend to make the following concrete proposal at Havana
if I am there: that the Conference should instruct the
Organization to set up a committee of control, to see to it that
the finances of the ITO are scrutinized and the Budget only
voted after a full understanding of its implications and necessity
has been obtained.
One of the Delegates yesterday - I think It was the
Delegate for New Zealand - referred to the difficulties of
the last three months, I think he said - in the economic field.
I agree. I think we all understand the importance of this
matter.
We also have difficulties in the pure political field.
That makes the success of the Havana Conference so much the
more necessary. Let us try - the Nations of the World - to
prove that we can agree on a very big scheme such as the one
we have been working on in London and here in Geneva. If we
succeed, the repercussions it will also have in the pure
political field cannot be anything but very great and
beneficial,
I will end by expressing how very deeply I feel my
gratitude to all of my fellow Delegates here.: We have worked
together as friends, as members of the same family, and, with
the help of the excellent staff of the Secretariat under Mr.
Wyndham White, we have been able, in these comparitively short
months, to do more than we perhaps hoped when we met. 26
J. E/PC/T/PV.2/6
CHAIRMAN: I thank the First Delegate of Norway for his
statement and I now call upon the First Delegate of the United
Kingdom.
MR. J. WILSON (United Kingdom): Mr. Chairman, Fellow Delegates,
Ladies and Gentlemen:
The Plenary meetings yesterday and today mark the end of the
first of the two tasks we set ourselves when the work of this
Session of the Preparatory Committee began in April. The world may
not realise from the long and complex document, necesserily technical
and legalistic in its terms, how rmuch work and thought, negotiation
and argument have entered into it. What I think the world will
realise is the difference which the principles and provisions of
this Charter, if adopted by the nations, can make to world trade and
to the standard of living of all peoples as compared w'ith the
system which we know in the nineteen thirties, with its strangling
restrictions, its measures of mounting economic nationalism, and
all that lurked behind these barriers in the form of uneconomic
vested interests,
The work of the past four months has proceeded against the.
background of a darkening storm in international economic affairs;
hence the criticism that our work here has been in vain and remote
from the realities of the present situation. I went for our part
to repudiate that suggestion. But none of us would claim that our
work here can over yield its true value unless all nations
recognise that the hopes we all hold of establishing a new order
in internetional trade are dependent for their fulfilment on the
solution of theo world problems which are now pressing upon us,
Even at the beginning of our work we know that the nations were,
as a result of the intensity of the war and its immediate aftermath, 27
E/PC/T/PV.2/6
stepping into a world where the conditions of trade were completely
unknown. Perhaps no one has more cause to realise this than the
United. Kingdom. From being, for over a century, a nation, part of
whose essential needs were met from the returns on investments made
in countries in many parts of the world, we have now sacrificed the
greater part of those investments in financing the war. We are now
dependent on the proceeds of our exports. From the low level to
which we reduced them as part of our contribution to the common
Struggle for victory, we have to build up to a figure nearly twice
that of pre-war.
In the nineteen-thirties the nations of the world were suddenly
faced with the disappearance of the old gold standard system, which
with all its faults (and they were many) had been the almost
automatically accepted basis of international trade for a century.
In its place there grew up a whole series of hastily improvised
self-frustrating devices on a national basis. It is a matter for
satisfaction in any case that the nations represented here have
agreed to recommend the establishment of an organization which quite
apart from its detailed rules provides for regular and free and frank
consultation on international trade problems.
But the achievement of the Preparatory Committee has, I think,
been more positive than this. The Draft Charter it has drawn up
shows what is necessary to achieve a multilateral trading system
based on the freest possible flow of world trade; and this we
believe is in the long run as much in our own national interests as
in those of the world as a whole.
As we of the Preparatory Committee part with the Draft Charter
and as our thoughts turn to the task before the World Conference at
Havana, we must realise the responsibility which will rest on those 28
J. E/PC/T/PV.2/6
countries which have been represented here to explain and defend the
various provisions of the draft we have elaborated. We are glad that
so many other countries have sent observers to Geneva to follow our
proceedings with such close attention. None the less it is the
members of the Preparatory Committee who will be most familiar with
the reasons underlying the solutions we have suggested to the most
difficult problems we have faced and the pitfalls involved in other
solutions.
I do not feel it is necessary to elaborate on the various
Chapters and Articles of the Charter, but I should like to make a
brief comment on one or two of the more important Chapters.
Once again I should like to state our welcome and support for
the provisions on full employment. My Government is fully
committed to internal measures for the maintenance of employment and
is very well aware of the danger of sudden slumps in other parts of
the world; and we accordingly welcome the obligation to maintain
the highest possible volume of employment and income within each
national economy and the measures which are being taken on an
international scale for securing the highest possible level of
employment. The f'ull success of this projectt will go far beyond
the
the scope of/International Trade Organization and will need the
support of the Economic and Social Council and all the
international economic organizations. That is why we thust that
the World Conference will take up this wider aspect of the problem
as contemplated in the Draft Resolution prepared at the London
Session of this Committee. 29
P E/PC/T/PV.2/6
My second point is development. As a country which bears a
great responsibility for large and important Colonial territories -
for whose further development we have indeed in the past few weeks
announced revolutionary new proposals - we very naturally welcome
anything' that can be done in this field just as we sympathise with
the aspirations of those of our friends who have made the position
of the so-called under-developed countries a key point in the dis-
cussions here. But we do feel that it is possible to over-stress
the distinction between developed and under-developed countries.
No country economy is statio: each must undergo a constant pro-
oess of re-adaptation. A country which is at present mainly or
wholly agricultural will undoubtedly benefit both its own economy
and the world economy by sound measures to increase its own pro-
ductivity. This does not mean that that development should
necessarily involve too wide a range of new manufacturing industries.
We must not overlook the very real advances which can be made in
the field of primary production, which can be achieved by irriga-
tion, power and transport projects and by the use of modern methods
and scientific discoveries in the technique of primary product on.
In this field the services of the more advanced agricultural nations
and the resources and knowledge at the disposal of the Food and
Agriculture Organisation of the United Nations stand ready to assist
in the achievement of revolutionary advances in productivity.
But if these are to be achieved (and this brings me to my
third point), and are to result in the raising of the standard of
living of the peoples of the world and not in so-called surpluses
and economic depression, then: measures such as were never adequate-
ly developed before 1939 must be used. In this connection we feel 30
P. E/PC/T/PV.2/6
that the Chapter dealing with primary commodities, drawing as it
does on the work of the F.A.O.Preparatory Commission and the
experience gained from the working of Commodity Study Groups in
recent months, represents a real advance on the draft prepared
in London last Autumn.
My fourth point relates to the balance of payments. It is
not a matter for surprise, with the growing difficulties which
many of the nations represented here are experiencing in their
balance of payments, that the Preparatory Committee has been much
concerned to ensure that the Articles dealing with the balance of
payments and with non-discrimination should be realistically
drawn. It is of the utmost importance that we should not bring
discredit on the fundamental principles of non-discriminatory
multilateral. trading by attempting to move too far and too fast
in this difficult period when many of the conditions essential
for such a system have not yet been realised. We have ourselves
only this week had to record a serious setback to our hopes of
proceeding rapidly in the direction of convertibility and non-
discriminatory trade and, as you will have seen from the exchange
of letters between the Chancellor of the Exchequer and the Secretary
of the United States Treasury, we have had, as an emergency measure,
to call a temporary halt. Whatever the lessons to be drawn from
the events of the last few weeks in our own case and that of other
countries, we are certainly all in agreement that the period of
recovery from the war has been far longer than most of us had hoped.
As a result of serious devastation in the war areas, of crop failures
and other difficulties since the war, the.productive power of the
nations outside the Western Hemisphere has not been restored to the
extent necessary to put the world in true balance once again.
Owing to these factors and to the high prides of essential. imports
international payments are badly out 'of .equilibrium . Unless they
can be put into balance once again much of our work here will belost. E/PC/T/PV.2/6
It is not for us here in Geneva to say how equilibrium
can be restored. This is a matter which is receiving urgent
and concentrated attention in many places at this time - by
the Economic Commission for Europe, the Economic Commission for
Asia and the Far East, and on the agricultural side by F.A.O;
pre-eminently it is the subject of the important conference now
being held in Paris. And it is a problem which must dominate
the thought of all the governments represented here and many
more besides, It is a problem of restoring our national
production in each country, of building up again our war shattered
economies, of replacing our war damaged or obsolete capital goods
and for many of us in repairing the years of neglect prior to
the war in our basis industries
It is a problem of securing greater economic co-operation
between countries with complementary economies, of taking action
in Europe and in Asia and in many parts of the world for the
mutual development of production. In our own case we shall find
it necessary and desirable to have even closer economic co-operation
with other countries of the Commonwealth,
I feel that the Governments represented at the Preparatory
Committee must fact this position frankly, not only that our work
itself will be in vain unless all the Governments and agencies
concerned can solve this overriding problem, but also that the
methods we may have to use in the intervening months and years
may appear to be opposed to tihe principles and methods of the
Draft Charter. Many of us will certainly have to assist our
position by agreements with particular countries, some of whom are
represented here. Such agreements if realised will not only
bring addition materials and food into our national economies
V. E/PC/T/PV.2/6
for the purpose of maintaining and increasing production, they
will make at possible for each one of us to make such sacrifices
as will enable us to part with much needed goods to other
countries in order that bonds even more urgently needed may come
to us in return. But in these methods, designed to meet the
short term and urgent problems which are pressing upon us, the
guiding principle must be that we do not establish permanently
artificial channels of trade which would in the long run defeat
the principles and methods we have been discussing here. To do
so would reduce the total volume of world trade in goods and
services and bring about a lower standard of living for the
people of the world than we hope to achieve as a result of full
economic co-operation on a multilateral basis. Only on such a
basis can we secure for all our peoples the full benefits
available from the advances of science and from the skill and
resources of all nations of the world.
V. E/PC/T/PV.2/6
Mr. CLAIR WILCOX (United States): As this Committee comes
to the end of its labours on a world trade charter --begun in
London ten months ago, carried forward in New York, and completed
at Geneva -- it is well that we should pause to consider, in its
true perspective, the document that we have now approved. For it
is possible that we may have lost sight, in these last crowded
days, of the significance of the work that we have done.
First of all, we have written the constitution of a new
international Organization. But we have done much more than
that. We have given recognition, for the first time in an
international instrument, to the interdependence of national
programmed for the stabilization of production and international
programmes for the liberation of trade, We have placed in the
forefront of international thinking the need for developing
the resources of the less developed areas of the world. - We have
proposed that all nations commit themselves, in a single document,
to extend to one another most-favoured-nation treatment with
respect to customs charges and requirements and national
treatment with respect to Internal taxation and regulation. We
have asked them to reduce tariffs and to do away with all forms
of discrimination. We have laid down a set or rules under which
import and export quotas -- the most serious of all the forms of
trade restriction -- can be disciplined and brought under
international control. We have worked out detailed provisions
to insure that the freedom that is gained by reducing visible
tariffs shall not be lost by the erection of invisible tariffs.
We have made the first attempt in history to apply uniform
principles of non-discrimination and fair dealing to the trade
of private enterprise and public enterprise. We have made the
first approach, through international nation, to the elimination
of.the abuses arising from the operations of international
33
V 34
V E/PD/T/PV.2/6
monopolies and cartels. We have enunciated, for the first time,
a code of principles to govern the formation and the operation
of intergovernmental commodity agreements.
As we compare the Geneva draft of the Charter with the
London and New York drafts, we must recognize that it is
substantially improved. Its organization is more logical.
Inconsistencies have been removed. Obscure passages have been
clarified. Ambiguous passages have become precise. Certainly,
no one would contend that the Charter, as it stands today, is
perfect. Perfection, in instruments embodying agreements
achieved through compromise, is scarcely to be attained. But
the draft that we have completed at Geneva has been strengthened
in material respects. And its fundamental character and
balance have been retained. G
E/PC/T/PV.2/6
Two sweeping criticisms of the Charter have recently
appeared in print. According to the first, the Charter attempts
to apply the principles of impractical idealism to a world that
is intensely practical and all too real. According to the second,
the Charter has been so riddled with exceptions that its basic
principles have lost whatever meaning they may once have had.
Of course, these criticisms cannot both be true. If the Charter
were impractical and idealistic, it would give no room to the
exceptions that are required to meet the practical problem of
the real world. And if exceptions have been made to meet these
problems, it can scarcely be said that the Charter remains an
expression of impractical idealism.
As a matter of fact, neither of these criticisms is true.
What we have done in this document should be clearly understood.
We have enunciated general principles upon which we propose that
nations should agree, We have made specific exceptions to these
principles where they have been required by practical necessities.
These exceptions are precisely defined. Many of them are
temporary. All of them are limited in application. And we have
proposed that resort to them should be subject to international
control. Between international anarchy in economic relations and
some such pattern of agreement as we have laid down here, the
world will have to take its choice. There is no other way.
On balance, in the opinion of my delegation, the Charter is
a document for which this Committee need offer no apologies,
and we take pleasure enjoining the other members of the Committee
in commending it to the United Nations Conference on Trade and
Employment. at the beginning of this meeting, I told the
Committee that my delegation would have to introduce a number of
detailed amendments arising from criticisms of the earlier drafts
advanced by various groups in the United States. I am glad to E/PC/T/PV.2/6
acknowledge that our satisfaction on these particular points is
virtually complete and I wish to thank the other delegations here
for the sympathetic consideration that they have given to our
requests.
in tha face of adversity and discouragement, this Committee
has brought to a successful conclusion this half of its assignment.
To the objective observer, the vitality of this project, the
momentum which it has attained, must be a source of growing
amazement. In the circumstances, the wonder must be, not that
we have not accomplished more, but that we have accomplished so
much.
If the task of this meeting were confined to the completion
of the Draft Charter, we could now accept congratulations on a
job well done. But unfortunately for the personal comfort and
convenience of our delegations, though fortunately for the future
peace and prosperity of the world, the task assigned to us was a
more ambitious one. This task included, in addition, an agreement
to carry forward, among ourselves, definitive negotiations
directed - in the words that we have written into each successive
version of the Charter - toward the substantial reduction of
tariffs and other barriers to trade and. the elimination of
preferences.
This undertaking was indeed ambitious. Negotiations on
tariffs, even when confined to a single pair of countries, are
difficult enough. But here in Geneva, together with the com-
pletion of the Charter, we have carried forward a hundred such
negotiations in the same place and at the same time, It appeared.
to many of us, before we began, that the mere physical obstacles
to such an undertaking might be insuperable. But these obstacles
have been surmounted. The machinery of negotiation has been
constructed and oiled and set in motion. The wheels are turning. E/PC/T/PV.2/6
Our disappointment is that they have not turned. as rapidly as
we had hoped.
Even in this, however, there is no occassion for discouragement.
Each of the mjaajor trade agreements concluded by the United States
before the war took from ten to eleven months to complete. This
Committee has concluded more than a score of such negotiations
in the past four months. On three score meres the work is well
advanced, With real determination, we should complete our talk
in the next month or six weeks. If more time is required, the
United States, for one, is prepared to give it.
The members of this Committee will be judged, in the eyes of
the world, not only by the words that we have written on paper
and sent forward to the World Conference, but also by the action
that we shall take, here and now, to give meaning to those words
Our proposal, in the Charter, to negotiate for the substantial
reduction of tariffs and the elimination of preferences will be
laid down, side by side, with the provisions of our General
Agreement on Tariffs and Trade. Our promise, in the one, will
be measured by our performance in the other. If the General
Agreement is a weak agreement, we shall be accused., by the forty
nations that will join us at Havana, of giving lip service to
the principles that we profess and the World Conference will
convene in an atmosphere of cynicism and disillusionment. If
the General agreement is a strong agreement, success at Havana
will be virtually assured, and the world will be able to face
the future with new hope.
This is the time for decision. If nations do not act now,
with courage and determination, they will find themselves con-
demned to a persisting pattern of restrictionism, and discrimina-
tion that will spell antagonism abroad and misery at home. This
must not happen. It need not happen. Our Committee still
holds within its hands the opportunity to contribute substantially
37
G 38
G E/PC/T/PV. 2/6
to the making of a better world. It is an opportunity that we
dare not and can not permit to slip away.
Admittedly, these are difficult times, And difficult times
require a temporary accommodation of fundamental policies.
The United States has consisted ly sought to do everything within
its power to ease the transition from an economy at we; to an
economy at peace. It will continue to do so. But it cannot
believe that we should permit the difficulties of the present to
obscure the urgent need for agreement, how, upon the policies
that are tc govern the trade of the world in a better future.
It holds that each nation must make its appropriate contribution
if such agreement is to be attained. find, equally with others,
it is prepared to do its part.
In conclusion, Mr. Chairman, may I express to you, to the
Officers of this Committee, and to the Secretariat, the
appreciation of my Delegation for the contribution which you
have made to the success of this Meeting; and to cur follow
delegates, our appreciation for the sort of mutual understanding
and accommodation which has eased our way on the way to final
agreement.
In the intimate sessions of the last few months, we have
come to know and respect one another, and to develop friendships
that will remain with us during the rest of our lives. By
knowing and liking and respecting one another we have that
sense of uni ty of purpose that should contribute in no small
measure to the final approval of the Charter, and the ultimate
establishment of the International Trade Organization. 39
E/PC/T/PV. 2/6
CHDAIRMAN (Interpretation): Gentlemen, I thank Mr. Wilcox
for his statement. I have no more speeches on my list.
I have listened with interest to the speeches delivered by
various heads of delegations at this Conference. We have already
had occasion to hear the views of the Members of the Preparatory
and
Commission in London/at the beginning of this Session. The im-
pressions derived from these last two listings is that there is no
doubt that the opinions have come much nearer to each other in the
course of the last few -months. Of course, everybody may have some
reason not to be satisfied with the Charter, but nobody would deny
that there are many points on which we have reached a considerable.
measure of agreement. I am glad to express my gratitude to all
these who have taken part in our work, and in particular to the
vice-Chairman of the Conference, Mr. Erik Colban, who had already
presided with such authority over the Drafting Committee in New York;
and Ambassador Wilgress, Sir Raghavan Pillai, Dr. Augenthaler, Mr.
Seergio I. Clark. The magnitude of our tasks has required methods
of work different from those which we had adopted in London.
Some 30 sub- Committees share among themselves the study of various
articles of the Charter. I wish, more particularly, to thank the
chairmen of these sub-Committees; Dr. Coombs, Dr. Loganathan, Mr.
Shackle, Mr.. Holloway, Mr. Mclannder, Mr. Phillips, Mr. Hakim, Mr.
Deutsch, Mr. Baraduc, Mr. Leondertz, Mr.Huames, Mr. Caplan, Mr.
Judd, Mr. Naude, Dr. Wunsz King, and Dr. Gutierrez. We are also
particularly grateful to Mr. Wyndham White, Mr. Lacarte, and all
their collaborators in the Secretariat who had already deserved the
gratitude of the Preparatory Commission in the course of its first
session. 40
S E/PC/T/PV/2/6
(The Chairman then also addressed his thanks to the Interpreters.
-He said also how much everyone had appreciated the efficiency
and courtesy of the staff of the European Office of the United
Nations).
Gentlemen, I have already had the opportunity of hearing
your tribute to the Swiss Authorities for their charming welcome
in this beautiful country whose atmosphere is so favourable to
the spirit of international co-operation.
Our discussions have continued since the 10th April in
this atmosphere of cordiality and mutual understanding which had
already prevailed in London, but in Geneva the trial was much
harder. It is usually said that people who go on a long
cruise together always quarrel at the end. Well, Gentlemen,
we have lived together for more than four months and we have
not quarrelled, and we part on the best terms. We have had to
fight together through the difficult discussions on tariff
negotiations and on the Charter. We have adjoining offices. We
have met very frequently during the day and sometimes even during
the night.
In spite of this, no personal incident has ever occurred at
any time in the course of this long Conference.
This has still not yet come to an end, since the tariff
negotiations will continue and, as you knows by their very
nature they raise considerable difficulties, but I feel certain that
the same spirit will prevail until the end.
In conclusion, I would like to thank the Specialized
Agencies which have taken part in our work, namely, the Food
and Agriculture Organization, the International Labour Organization, 41
S E/PC/T/PV/2/6
the International Monetary Fund, the International Bank for
Reconstruction, the non-governmental organizations - more
particularly the International Chamber of Commerce - which have
helped with their valuable co-operation, and, finally, the
Observers who have been delegated to this Preparatory Committee
by a great number of Members of the United Nations Organization.
It is not without some emotion that I say to all of you
now "au revoir", and I wish to thank you for your kind words,
I shall never forget the happy tour months which I have spent
with you. I hope that links of sympathy between the Delegates.
will, like the Charter, help towards the understanding and
general prosperity of the Nations.
Does anyone else wish to speak?
Gentlemen, the Meeting is closed.
The Meeting rose at 11.45 a.m. |
GATT Library | hf803kz4177 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Sixth Meeting of Commission A, held on Monday, 2 June, 1947 at 2.30 p.m. in the Palais Des Nations, Geneva | United Nations Economic and Social Council, June 2, 1947 | United Nations. Economic and Social Council | 02/06/1947 | official documents | E/PC/T/A/PV/6 and E/PC/T/A/PV.3-6 | https://exhibits.stanford.edu/gatt/catalog/hf803kz4177 | hf803kz4177_90240067.xml | GATT_155 | 6,135 | 36,960 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/A/PV/6
2 June 1947.
SECOND SESSION OF THE PREPATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
SIXTH MEETING OF COMMISSION A, HELD ON
MONDAY, 2 JUNE, 1947 at 2.30 P.M. IN THE
PALAIS DES NATIONS, GENEVA.
M. MAX SUETENS (Chairman)
(Bel ium)
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): The meeting is called t order.
We shall pursue the discussion of a nature which will be
recognized as reviewing the International Trade Organization. We
have had, the other day, Mr. Holloway on one side and Mr. Coombs-
on the other. I believe that Mr. Wilcox wishes to make a statement.
He has the floor.
Mr. CLAIR WILCOX (United States): The delegate for the
Union of South Africa has done me the honour of quoting from an
address which I delivered in New York City in March of this year.
In that address I said: "The ITO is not a supra-national government.
It has no powers, legislative, executive or judicial, that would
impinge upon the sovereignty of the member states". The delegate
for South Africa says that this statement represents the view of his
delegation as to what the ITO should be. And here, I am happy to
say, we are in complete agreement.
But the delegate for South Africa goes on to argue, on the
basis of the present provisions of Article 35, that the character
of the Organization established by the Charter would be precisely
the opposite of what I have that it would be. In his opinion,
Article 35 would make of the ITO a supra-national authority with
supra-national powers. If I believed that there were the slightest
Justification for this interpretation of the Article, I should
immediately move that it be stricken from the text. I do not
believe that such an interpretation is justified.
The delegate for South Africa has given us what he calls a clear
test by which we can determine whether powers are being surrendered
or simply being entrusted to a subordinate agency. If powers are
transferred to an authority which is outside of the contracting
parties and which can force them to accept its decisions, then, he
says, there has been a surrender of sovereignty. But if, on the
other hand, the powers entrusted to an international organization
becomes a subordinate agency and not a sovereign body. S -3- E/PC/T/A/PV/6
I am not sure that the test proposed by the Delegate is
an adequate one. But let us apply it, in any case, to the
provisions of article 35. Does this Article empower the ITO
to require or compel any Member to take any action whatsoever?
Does it empower the ITO itself to invoke any sanction of any
sort or to require or compel any Member to invoke any
sanction whatsoever? I respectfully submit that it does
not.
The first words of Paragraph 2 of Article 35 are these:
"If any Membershould consider. . .". Everything else in the
paragraph depends upon these words. Complete initiative is
left with Members. If no Member raises a question, none of
the other provisions of the paragraph comes into play. The
Organization itself is given no initiative in the matter, none
whatsoever.
And if a Member, upon his own initiative, should raise a
question, what can the Organization do? It can investigate.
It can consult with the Economic and Social Council. It can
consult with appropriate inter-governmental organizations. It
can make recommendations to Members. And if a Member desires
to suspend the application to another Member of specified
obligations or concessions, the Organization may authorize
him to do so. I would have you note that the word that is
used in describing this function of the Organization is not
"require" or "compel"; it is "authorize". In their choice
of this word, the framers of the paragraph have made it
abundantly clear that all power in the matter remains with
the Member concerned, that no power whatsoever is conferred
upon the Organization itself. S -4- E/PC/T/A/PV/6
Neither in Article 35 nor in any of its other Articles
does the Charter authorize the ITO to coerce its Members. Its
powers, throughout the document, are exactly circumscribed.
I submit, Mr. Chairman, that when the test proposed by the
Delegate of South Africa is applied to the provisions of the
Charter, and particularly to the provisions of Article 35, it
is possible to come to only one conclusion. The ITO, under
these provisions, will be, not a sovereign body, but a sub-
ordinate agency.
It is important that wo should understand the meaning
of Article 35, for that Article sets forth a principle which
is fundamental to the whole structure that we are seeking to
create, There are many commitments in the Charter, some of
them general, some of them specific. But if any of these
commitments are violated, there is only one sanction that can
be applied. And that, in its crudest terms, is retaliation
by another State. Now this sanction was not invented by the
framers of the Charter. It has existed from tine immemorial.
It exists today. It will exist tomorrow, even, though the
Organization that we have conceived is never brought to life.
Whot, then, have we done in Article 35? We have intro-
duced a new principle into international economic relations.
We have asked the nations of the world to confer upon an
international organization the right to limit their power to
retaliate. We have sought to tane retaliation, to discipline
it, to keep it with in bounds. By subjecting it to the restraints
of International control, we have endoavoured to check its
spread and growth, to convert it from a weapon of economic
warfare into an instrument of international order. S - 5 -E/PC/T/A/PV/6
If it is objected that voluntary accoptance of a limitation
on the power of retaliation is itself a derogation of sovereignty,
I would point to the fact that Article 35 gives any Mem:.ber against
whom retaliatory action is directed the right to give notice
within sixty days of his intention to withdraw from the gruaniza-
tion within another sixty days. Surely, when rights are so
readily regained, it cannot be areutd that sovereignty is
seriously impaired.
In speaking, as Iah-ve, of sanctions and retaliation, hanrve
deliberately put this matter in as unfavourable a light as I c.n&
Actually, amsl sure that eho framers of Article 35 ware not think-
ing in theso terms, f we -: are to speak with accuracy, the
nmaning of the Article comes down to this:
i; shall achieve, under the Charter, it our negotiations are
successful, a careful balance of the interests of the contracting
Stat.s1 This balance rests upon certain assumptions as to the
character of the underlying situation in the years to co.e,
And it involves a mutuality of obligations and benefits, fIs,
with the passage of time, the underlying situat ion should change
or the benefits accorded anyemc:ber should be impaired, the
balance would be destroyed. It is the purpose of Article 35
to restore this balance by providing for a compensatory adjust-
ment in the obligations which thMemke;bhales assumed. hTnis
adjustment will not be made unless theem; ber has asked that
it be made. AnIad it is then the function of the gan>.ization
to insure that compensatory action will not be carried to such
a level that the balance would be tipped the othew w.y, What
we have really provided, in the last analysis, is not that retaliation
shall be invited or sanctions invoked, but that a balance of interests
obce established, shall be maintained.
The principle that underlies this Article is right. It is sound.
It is essential to the integrity of the ahdrter as a whole. I believe
that it must be preserved. - 6 -
E/PC/T/ A/PV/6
Dr . GUSTAVO GUTIERREZ (Cuba): Mr. Chairman, the distinguished
delegate of South Africa has put before the Commission a very im-
portant question. He considers that the action established in
Article 35 of the Draft Charter and mentioned in some other parts of
the Charter may constitute the organization of a supra-national power,
and that as such it touches or harms the national soveieignty of the
nation Members. After what has been said by the distinguished dele-
gate of Australia the last day we met and today by the distinguished
delegate of the United States, little has to be said to argue or
counter-argue the statement. The Cuban delegation is sure that after
our distinguished colleague considers the arguments involved in the
issue he would fall in line with those who think that without Article
35 or some sort of procedure like that the id eal would really mean
practically nothing. It has been said, and very properly, on analys-
ing the economic aspect of the matter, that Chapters III,IV,VI and VII
are the counterpart of Chapter 5. No one single nation of those who
have not completed their economic development would be in a posit ion
to accept this Charter if the principles involved in Chapters III,IV,
VI and VII are not properly set up and implemented.
The implication as to the real function of this procedure of
complaint has also been examined. The Cuban delegation only wants
to itdd a. very few arguments quite briefly at this time, so as not. to
repeat other arguments, from the juridical and political point of view.
We consider that there is not delegation of power at all and that there
is not a problem involving the national sovereignty of a nation. When
the United Nations Charter was signed and ratified by all the nations
that are here represented it established in Article 55 that, with a
view to the creation of conditions of stability and wellbeing which
are necessary for peaceful and friendly relations among nations based
on respect for the principle of equal rights and self-determination
of peoples, the United Nations shall promote higher standards of living,
full employment and conditions of economic and soc ial progress and
development, .and in Article 56 it was established that all members
pledge themselves to take joint and separate action in cooperation
with the Organization for the achievement of the purposes set forth
in Article 55. J -7- E/PC/T/A/PV/6
. .C nt . .h.
.R, G. GUTIERREZ (Cuba) (Contd.): This Charter of the ITO
in its first chapter is a continuance of the principles involved
in Article 55 and 56 ot the Charter of the United NaTions, and when
it established this procedure it was only following the lines already
established in the main Charter of the United Nations. It is
notking.new, but besides that it does not, in our opinion,
establish any sanction, if we take that word in its real juridical
meaning, because if we come to the analysis of Article 35, this
4xticl ouly oblig6s th?t " Member shall accord sympathetic
consideration to, and shall afford adequate opportunity for
.consultation regardaing, suce repansentations as my be mads by miy
other Yember". That is not new, that is done every day with our
treaties between all the civilised nations of the world.
Secondly, this time through the action of the Organization,
it only established"that if any situation exists, which has the.
effect of nullifying or impairing any object of this Charter, the
almber or Ye.bers concerned sh.1l give sympathetic consideration to
such written representatdons or proposals as may be maae with a
view to effeating a smaisf ".ory adjustment of the O-tter' If
not, tho only thing the Organization can do is first, an
investigation; second, consultation; third, recommendation;
and"fourth, instead of s nction, 'the Organization, if it considers
the case serious enough to Just ay such action, may authorise.D
Member or members to suspend theeapplication to any other Membor
or members of suchespecified obligations or concsssions under this
Chapter r We do not really see there the elements of
international Zction.
Besides that, and this is the main part in our argument
against the thesis that has been presented by the distinguished
delegate of South Africa, the real organic and functional part J. - 8 - E/PC/T/A/PV/6
of the Charter, Chapter VIII, establishes very clearly in Article 61
which are the functions of the Organization, and what are the
obligations that the Members have to fulfil, and it has taken into
consideration the possibilities of misinterpretations and disputes,
and it has established a very clear procedure in article 86 under
the title of "Interpretation and settlement of disputes"; it has
taken into consideration the possibilities of differences of
opinion between the Members as to the application of the Charter,
and it even, as is natural that should be done, opens the door to
the submission to the International Court of Justice in the proper
oases; so we only have here the application of the general
organization that has been established after the war to the ITO.
Nevertheless, I must admit that the Cuban delegation is fairly
in accord with the delegate of South Africa on one point. This is,
that the text of Article 37 should not be mentioned from time to
time in different parts of the Charter, but that, on the contrary
any mention to that Article should be deleted. Also, the text
of Article 45 should be placed in its correct position in the
Charter which, in the opinion of the Cuban delegation is not in
Chapter V.
It is also important, in our opinion, that article 35 should
be put in the organic and function part of the Charter, that is to
say, Chapter VIII. It should be inserted before article 86 so as
to show that there is a way cf clearing all the differences of
opinion that might be raised between members, and then have
Article 86 for the dispesal of matters involving a juridical
character.
In that form, the text of article 35 will be a text that
must cover all the situations in the Charter when there is a
breach of the Charter, or when a number has not fulfilled its -9-
J. E/PC/ T/A/PV/ 6
obligation under the Charter. So, considering that the text
does not creat any supernatural power, that there is no delegation
of power, that there is no problem of national sovereignty involved,
we are quite in accord with the distinguished delegates that have
expressed their opinions against this idea, and we move that the
text of Article 35 be placed in a proper and correct position in
the Charter. E/PC/T/A/PV/6
CHAIRMAN: (Interpretation): The Delegate of France.
Mr. BARADUC (France) (Interpretation): I simply had a afford
to add.
I fully agree with what the Delegate of Cuba has just said,
and in view of his proposal concerning the place of Article 35
in particular, I think that many of our present difficulties
can be solved.
Now to say a word about this Article. We do not think the
whole of it should be necessarily moved, paragraph 1 of Article 35
seems to be in its right place where it is; but paragraph 2
should form a new Article which could be included in Chapter VII.
Mr. HELMORE (United Kingdom): Mr. Chairman, I just want to
say very shortly that the United Kingdom, on the principle raised.
by Dr. Holloway, agrees with the view expressed by Australia,
the United States and other Delegations.
On the actual Amendment proposed by Dr. Holloway, I hope it
won't surprise him too much if I say I agree entirely on what the
words he wants deleted should be, because if we say in Article 12,
paragraph 3, .which is what we are discussing, "without prejudice
to the application of Article 35", then we shall have to look
through the whole of the Charter and write those words in,
wherever there is a discretionary or consultative function given
to the Organisation. It seems to me that Article 35 applies
just simply, without our having to say so, here, and we do not
want to have to say so in other places.
On the point raised by the Delegate of Cuba and supported by
the Delegate of France, as to the proper place of Article 35, we
agree that paragraph 2, not the whole of Article 35, but paragraph
2, does belong with Article 86, which deals with interpretation
G.
-. 10 - G.
- 11 - E/PC/T/A/PV/6
and settlement of disputes; and indeed it is said in the comments
to the New York Committee's Report - I read some of the words
here: "In this Delegate's view" (that was the United Kingdom
Delegate speaking) "the subjects of nullification, impairment,
interpretation and settlement of disputes belong together".
For this reason he suggested that the provisions of paragraph 2,
Article 35, and Article 86 should be combined, and we shall in
due course be making proposals to that effect. V
CHAIRMAN: The Delegate of France.
M. BARADUC (France (Interpretation) : I wish to repeat
that I fully agree with the suggestion made by the Delegate of
Cuba and supported by the Delegate of the United Kingdom-that
is, the deletion in Article 12 or any mention of Article 35,
and that the new Article 86, amalgamated with the second
paragraph of Article 35, shall refer to the whole Charter.
CHAIRMAN: Mr.Wyndham White has just told me that
so long as the Chairman does not remove his coat, none of the
Delegates will dare to do sol I will ask the Commission's
permission not to remove my coat, but I would beg tile Delegates
who wish to do so in this tropical heat, to do so without
waiting for me.
The Delegate of Brazil.
M. L.D. MARTINS (Brazil) (Interpretation): As regards
the French proposal, we think that the deleti n of ::anmy mention
of Article 35 pn 2aragraph 3 of Articlo 12 could take place only
pf Daragpanh 2 of Actiale 35 is amalgamated wiih article 86,
because if paragraph 2 AftPrsicle 35 remainwd Where it is now
in phamter V, it would be necessary to make a special mention
of Article 35 pnrDazagraph 3 Artf Qicle 1a, es the proposals of
paragraph 2 oftArreclo 3efr ring .''thapter s ould. -
searc(sPily be aslsciapeo5mly -entioin . hapte ;1IV- Jv. If
howeverragrze.taph 2Aof Lrticle 35 es redovr., regards u8 the
powar hf tIeterna tn tional e Organiza- n, io I. bt ,wouldt oe
eaud to corclizp thit tns also apo ed oar-api_.. t Chcater IV.
CHAXRLIO; g ehe Deletheonited Kingdom. .itd i2 L
A PI C /T/1/2V/6 E /PC/T/A /PV/6
- 13 - vX.^v
Mr. J.R.C. HELMKRE (United lingdom): If I might just
make a very brief comment on the remarks made by the Delegate
of Brazilg I am very Crateful for his support in pointing out
how necessary et iratoamovo par\greph 2, Article 35, to
Uhapter VIII; but I venture to suggest eo him that oven if
it eere n.t movud, it would still apply to the provisions of
Chapter IV, since Article 35, paragraph 2 reade: "...whethar or
not it confle ts with thc; terms of this Charter", and not, as
we had it before we amended it at the London Meeting, "the terms
of this Chapter".
CH.IRU2N (Interpretation): I think chat we can oonsider
this debate closed, unless, of course, any other Delegate wishes
toespeakm-clos6d, I rean, as fer as Articlo 12 is concerned.
The proposal made by Dr. Holloway was that the words "without
paejudice to ioheofpplicat-n Di Article 35" should be deleted
in paragraph 3. The Delegateseof the onitod KingdDm and
France lnd other De)egates have supported this proposal, and
ohis is the )nly thing we catodeal with -'day. As for the
question of substance, we will have ample opportunity to discuss
it when we deal with Article 35 and Article 86. I therefore
ask ohe Commissi.n whether it is in agreement with the proposal
made by Dr. Holloway.
T -14 - E/PC/T/A/PV/6
Dr. HOLLOWAY (South Africa): With your permission, Mr.
Chairman, I would like to reply to the debate and I think the best
way is to start with the points made by Mr. Wilcox, who took the
main line of my argument and debated on the version of that. I
think Mr. Wilcox has, perhaps, unwittingly carried the discussion
off on to not exactly the line that I indicated by the nuance of
difference that he has given in interpreting the way in which I
indicated that the difference should be made between devolution
and sovereignty.
Mr. Wilcox - and I have his text before me - said, among other
things, that I said: "If powers are transferred to an authority
which is outside of the contracting parties and which can force
them to accept its decisions, then there has been a surrender of
sovereignty. But if, on the other hand, the powers entrusted to
an international organization are exactly circumscribed, then that
organization becomes a subordinate agency and not a sovereign body."
I do not think that I intended to put the thing as if it were as
simple as ail that, and while the exposé may have lain with me,
I want to point out that the matter to me is not as simple as all
that.
The operations are going to be a great deal more insidious
than have been indicated in the words that I have quoted from Mr.
Wilcox. In dealing with that paragraph, Mr. Wilcox said that this
power of retaliation has existed from time immemorial. But the
climate of international economic relations which will have been
created by the International Trade Organization will be an entirely
new climate, and will put every one of the States to whom what I
have called sanctions (I will come back to that word) have been
applied in an entirely different position from anything that has
every applied before. E/PC/T/A/PV/6
Mr. Wilcox then dealt with - at great length - the point that
the Organization has - if I may construe his words - no police
force and no power of forcing people to do things. But what will
happen in practice? To start with, a member will complain and
then a large amount of routine work will have to be gone through as
prescribed by the Charter, and the situation may then arise at a
certain stage that, on account of one of these vague obligations
mentioned particularly in Chapters III and IV to which I have
devoted particular attention, on account of the interpretation of
one of these vague obligations, your Organization authorises
members to withdraw, certain, concessions that they have already
given. Now, action starts on that. Action starts on a matter
in which an international organization has expressed its view as
to the way in which a national organization has carried out its
own policy.
That question of national policy which has always been assumed,
will be a question for the national government to implement. We
have now brought a new factor into that. You cannot describe this
so exactly that you can cover the cases for agreement by the
national authority. It is necessarily vague. The international
authority has now expressed its views that the policy which
Ruritania or any other State follows, does not conform with one or
other of these vague undertakings in Chapters III and IV. Now
that may happen to any one of you. When that happens, and when
the concessions have been withdrawan,you are no longer in the
position in which these States were before. You have created an
Organization,and you have thrown one member out of that Organization.
There is nothing in this Charter to say what will happen after that. ER
- 1- E/PC/T/A/PV/6
There is only something to say what will not happen. That State
may not be able to get its goods into the complaining State to
start with, on the rates of duty which have been agreed on. The
complaining State has not complained just for the pleasure of
complaining. It wants to take action. Therefore, it is going
to put the goods of that State on to some higher rate. The
Charter, though, does not say what rate. Secondly, discrimination
may be practised. Thirdly, quantitative restriction may be
applied against that Member. There is no limitation. You. are
just sent to Coventry. That is the position which any State may
be in as a result of the judgment of an international body about
the way in which that State has carried out its domestic policy.
Now, there I maintain very definitely that there is an
international authority: passing judgment on the way in which any
individual state has carried out its national policy, is carrying
out a sovereign power, and that decision is immediately followed by
what I described as sanctions. Mr. Wilcox and Dr. Coombs more
particularly, have said those are not sanctions. They only describe
those as not sanctions because they give a very limited meaning to
sanctions. They give a meaning to sanctions as something which is
carried out by an international body. But it is still the sanction
- it is still something which puts one country outside the new
international grouping that has been formed, and can put the trade
of that country into an exceedingly impossible situation.
Remember please, th t may happen to any one of you with regard to
the international policy that you are following; with regard to
employment, conditions of labour, with regard to the effect that
any of your actions may have on the trade of another country.
Now, specifically you may find that even though making use
of the powers that are given you in the Charter to protect your own
industries, the trade of other particular countries is materially
influenced by the policy which you are called upon to follow. S 17 - E/PC/T/A/PV/6
Then that country can go outside your sovereignty, its own
sovereignty, to another body, to start a chain of consequences
for your own economy over which you have no control, no con-
trol whatever. You are not g iven that control.
Let us assume the case for that is perfectly good.
Dr. Coombs, on Friday, did not make very much point about
this being sovereignty or not sovereignty. Certainly, in
his opinion, it is a matter of degree whether it is applied
to the way in which you act on Chapter V or on Chapters III
and IV, out he said we must have this .What are you getting?
On the one side you have got the power that you may start
this chain of consequences of a new series of economic
disturbances by applying these measures against a Member.
I suggest to you, Gentlemen, that you are getting
nowhere. Once things have gone to such a stage that you
do that, you have really thrown up the sponge, I suggest
that in dealing with this matter, which, like all inter-
national matters, has got to be handled with great subtlety
and understanding, you will get very much further by providing,
in respect of Chapters III and IV - and possibly also some
matters in Chapters VI and VIl; they are just as important -
for consultation and consultation only. If the Member
States cone together and face the facts - as I said last week,
meet like gentlemen round a table and try and find a cure -
you might get somewhere, but once this Organization - which
was started. to croute economic peace - goes over to an act
of economic war, over a vague and general matter on which it
is very difficult indeed ,to decide who is ri.ght, then you are
undoing al1argeamcount of thewvrko that we are trying to build
up here. S E/PC/T/A/PV/6
- 18 -
Remember, please, that when the complaining Member gets
a verdict against any other Member - let us say, against the
United States of America, on the manner in which it has
carried out its domestic policy -- accuses the United States
of America and gets a verdict agai_szt the niteld States of
me;rica of not buying enog-h in the world - then it is not
only the complaining Mm-ber who canwvithhold concessions to
the United States of America, because, after all, if it
applies to oneMe1mber it must apply to a large number of
other Membe anda your first act ofwaxr is not localized;
it immediately becoems gee ralietd. e k'now that in
actual warfare it is liotst impossibe to localize a war
today, and in economicw'ri you will have the same thing:
you will not be able to loclJiz o it will be generalized
very quickly.
hne el-gcate of ueba has said that there still is an
lnteractinatl o"ut ; ofJustice ouwchichMembe rs aun go,
ocbody knows beteor than te - rer seentative or Cuba that the
International our-t of istiieo acn deal only with judicial
issues, notw;ith poiltical issues. tI is a political
decision about a policy that the overrmenent of Cuae, the
Government of the United States ofAmnerica, the ocvernment
of the Union of SouthAf-riae,macy wish to obtain. Those
are political matters nId, when you get to pl-itical Matters
between States,I1 sg-gest to yuit1hat your proper method is
consultation. Your propoermectocd is not a tr-eat of
e% are all n- ageemenot hatt allcoulnti~es should do
whatever they can to carr y uit thoe :Aarticles which the
representative f' Cuba has ead from te- Carte.r of the United - 19 -
Nations, which we are transposing, in a little more elaborate
form, into this Charter. But nobody is able, in this Charter,
to spell out what your obligations are in these matters.
These are going to be matters of international dispute.
By vesting the power to settle these matters of international
dispute in an international trade organization, you are not
getting an outside body which pronounces on specific issues
that have been addressed to it: you are just getting another
body to got into the confusion of international misunderstandings.
You are not taking the long view. You have got to take a
very much subtler line to take the long view. You have got
to keep your objective in mind, to keep people together.
Here you are not trying to get the best you can, but you
are assuming failure and making provision for failure.
I suggest, therefore. that the right way of dealing
with the substance of Article 35 - I am not concerned with
where it, stands at the moment - is to make; these provisions,
would/
with regard to what I/call sanctions, applicable only to those
specific undertakings in Chapter V; and, with regard to
the general undertakings which involve decisions of a
political characer, to provide for consultation,and only
consultation.
Thank you, Mr. Chairman,
E/PC/T/A/PV/6
S - 20- E/PC/T/A/PV/6
H.E. Dr. ZDENEK AUGENTHALER (Czechoslovakia): (Interpretation):
I do not wish to prolong this debate but I wish to preserve the later
might to present my comments when we discuss Article 35. As for the
present, I only wish to mention that the Czechoslovakian delegation
has proposed an amendment to paragraph 3 of article 12 with the object
of deleting the words "any affected business entity or person within
that Member's jurisdiction." In other words, we do not want a
Member to be arraigned to the Organization. by any private organiza-
tion or firm. I would like the drafting committee to take into
account the remarks made during the discussions of Commission B. on
this point.
Doos anyone else wish to speak?
CHA.IRMAN: (Interpretation): - 21 -
CHAIRMAN (Interpretation): I will formulate again the
proposal I made a few minutes ago stating that today we are only,
and can only, deal with the South African amendment on Article 12
to delete the words in paragraph 3 "without prejudice to the
application of article 35". When we discuss Article 35, we shall
discuss the new amendment presented by Dr. Holloway during his
last speech, that it to say, to establish an advisory consultative
procedure of consultation as regards the infringement of Chapters IIl
and IV. We shall be able at that time to discuss the matter as
quickly as possible.
Then, we shall discuss the question raised by the delegates
of the United Kingdom and France to know whether it is necessary
to amalgamate paragraph 2 of Article 35 with Article 86.
DR. G. GUTIERREZ (Cuba): Mr. Chairman, I do not quite
understand what is the position now. Do we assume that we are
going to take a decision only in relation to the amendment
presented by the delegate of South Africa in the sense of deleting
reference to article 35? If it is that, our delegation will vote
Yes, but if it is intended to substitute that by the possibility
of consultative procedure, we would be against it. Therefore;
I want to be very clear about that.
CHAIRMAN (Interpretation): We are only dealing with the
amendment presented by South Africa, that is to say, the deletion
in Article 12, paragraph 3, of a mention of Article 35 - nothing
else.
DR. H.C. COOMBS (Australia): I would like just to have a
short word on that, Mr. Chairman. It seems to me that your
suggestion offers definite advantages. I think we all agree that
E/P C/ T/ A/PV/ 6 - 22 -
these particular words should be deleted. That will leave us,
until we come to Article 35, with some time to think over this
question, particularly as, as Dr. Holloway formulated his point in
his latter statement, I must confess to some concern at his
mis-understanding of our point of view.
We would like to emphasise that our attitude in this question
throughout has never been based upon - desire to impose sanctions
of punishment upon anybody who fails, through no lack of goodwill
but through circumstances, perhaps, beyond their capacity, to
fulfil to the letter the undertakings embodied in the Charter.
It is fundamental, it seems to us, that with a group of
inter-related obligations, such failures do alter the circumstances
in which the other obligations were u -anz e~eraadkon nn oulr point has
beon, througeout ch. iisousslon in London and horc, that the
esseuntiae prpArsc oe ticl- 35 is nmot to ipse punishment but to
allow a review ga obliz-tiandns, i we wouldimeke t=na in ewhich w
cucan icssmathes ,:ttarepriav-t;lynknd thierit ovor in order to
mzkeo that pint a llearercioaxEe wn dh, vorhng Af iche "rtele,
and to seek anycotheesGhangt whicmakeni e etk ;tarsvcn ole6er, s,
I suggest, Mr. Chairman, thatetcoherderaxcenadianoablo _v t~ges in
threprooeduxa which yuu havede saggest.
gaTh, -letf or China.
J
E/FC/1/"/PV/6
CKInF14pre1aterPrOt-tion) : -G - 23 - E/PC/T/A/PV/6
CHAIRMAN: (Interpretation); The Delegate of China.
Mr. CHEN (China): The Chinese Delegation also wishes to
associate itself with the Delegation of South Africa concerning
the expression that is in paragraph 3 of Article 12, the phrase
"without prejudice to the application of Article 35". We are
in favour of emitting that clause, in the interest of world
economic peace; and in article 33, personally we think it may
be desirable also to delete the last two sentences of paragraph 2,
because the condition for withdrawal from this Organisation has
already been provided in Article 89; and the Chinese Delegation
is of the opinion that that ought to be sufficient. That is, by
omitting the last two sentences of paragraph 2 we may make this
Organisation more stable; so we wish to have these also omitted,
CHAIRMAN (Interpretation): I assume that the Committee is
unanimous in accept ing the South African Amendment?
The Delegate of Brazil.
Mr. MARTIUS (Brazil): (Interpretation): I agree to deletion
of mention of Article 35, paragraph 3 of Article 12, subject, as
previously stated, to our maintaining that the second part of
Article 35 be transferred as proposed by the United Kingdom
Delegate to Article 86. The Delegate of the United Kingdom has
mentioned there is only a difference of a letter between the word
"Charter" and "Chapter"', but it is a printing mistake and printing
mistakes are always possible.
CHAIRMAN (Interpretation): I woud point out for the benefit
of the Brazilian Delegate that if there is a difference of one letter
in the English text. the difference is much more marked in the
French text. G. E/PC/T/A/PV/6
-24 -
Mr. MARTIUS (Brazil) (Interpretation): I prefer the French
text
CHAIRMAN (Interpretation): In view of what the Delegate for
Brazil has said, as we cannot discuss Article 35 to-day we might
always change our decision when Article 35 is under discussion.
The Amendment is adopted.
We shall adjourn this meeting, and to-morrow at 2.30 p.m. we
shall undertake discussion of Chapter V.
The Meeting is adjourned.
The Meeting rose at 4.30 p.m. |
GATT Library | mk953sf4300 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Sixth Meeting of Commission B held on Monday, 9 June 1947, at 3.35 p.m., in the Palais des Nations , Geneva | United Nations Economic and Social Council, June 9, 1947 | United Nations. Economic and Social Council | 09/06/1947 | official documents | E/PC/T/B/PV/6 and E/PC/T/B/PV/5-7 | https://exhibits.stanford.edu/gatt/catalog/mk953sf4300 | mk953sf4300_90250073.xml | GATT_155 | 9,451 | 58,239 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/B/PV6
9 JUNE 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
SIXTH MEETING OF COMMISSION B
HELD ON MONDAY, 9 JUNE 1947, at 3.35 P.M., IN
THE PALAIS DES NATIONS , GENEVA
The Hon. L.D.WILGRESS
(Chairman)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel. 2247).
(Canada)
NATlONS UNIES E/PC/T/B/PV/6
CHAIRMAN: The sitting of Commission B. is open.
At our last meeting, we considered the parts of our
annotated Agenda under the heading of General Comments.
We now come to the various Articles of the Charter,
commencing with Article 46.
Under Article 46, the only proposal is one submitted
by the Delegation of the United States. I have studied
the United States proposal and, so far as I can judge, it
most concerns drafting points or matters of form rather than
matters of substance, so that after we have heard from the
United States Delegate it might be satisfactory if we referred
these questions of form to the Sub-committee for their further
study.
I should like to hear from the United States Delegate
if he agrees that this is largely a question of form rather
than of substance.
Mr. R. B. SCHWENGER (United States): Yes, Mr. Chairman,
I agree that this proposal is entirely a proposal of form and,
as we see it, could appropriately be discussed merely on that
basis.
CHAIRMAN: Unless there are any further observations,
I will suggest that this United States proposal be referred
to the Sub-committee.
S P. -3 - E/PC/T/B/PV/6
M. PETER (France) (Interpretation): I apologise, Mr.
Chairman, for not being quite in agreement with the United States
delegate, because I think that his amendments bear on questions of
substance, at least on two points.
The first is the question of "persistence", a word used in the
first sentence of the amendment. It is an old saying in the
medical world that it is better to intervene right at the beginning
of a disease and not when the disease has already manifested itself
in an acute form. Therefore , when lack of balance, of equilibrium,
has appeared, it is necessary to intervene to prevent the evil from
developing and becoming worse. On the other hand, how would it
be possible to define this persistence and to state and ascertain
exactly when it has started? For this reason, I prefer the
original drafting, because I think that the introduction of this
word "persistent" is likely to alter the substance of the Article.
My second remark deals with the last sentence, where it is said
in the American draft that they agree that such difficulties may at
times necessitate exceptional treatment of international trade. I
do not think that the exceptional. treatment should apply t o trade
only. It should also apply to the conditions of production and
consumption. In my opinion trade is only one stage in the economic
circle and if we deal with trade only we leave aside such causes of
disequilibrium as are due to production or consumption. Therefore
I think that this sentence should be a replaced by a fuller sentence
covering the three points, namely, trade, production and consumption.
For these reasons I think that these are not purely drafting or word-
ing amendments but amendments of substance and I should like to state
that the French delegation does not agree with these two points.
The delegate of Czechoslovakia.
CHAIRMAN: P. - 4 - E/PC/T/B/PV/6
H.E. AUGENTHALER (Czechoslovakia): Mr. Chairman, gentlemen:
The Czechoslovaki delegation prefers the United States wording to
the original wording. We think that it is more clear,
Now we would like to make two or three observations. The first
would be the same as the delegate for France has made as to the word
"persistence." If the word "persistence" may be deleted from the
text we would find the text entirely suitable.
Then I would like to make clear, though it necessitatesno
change in the text, that by the words "They arise out of such con-
ditions as the disequilibrium between production and consumption.."
we understand not only if there is surplus but also scarcity; that
something should be done also if there is short supply. But as I
say it needs no change in the text.
Then the third is a small drafting point: of course I do not
dare to correct my American colleagues as to English language, but
it is known that Molière, when he was writing his plays, used to read
their to his servant to see if they were quite clear. Now I do not
try to do that with the Charter to my servant, because probably she
would quit! But I should say that there are those words "disequili-
brium between production and consumption, the accumulation of burden-
some stocks," and so on, which do not characterise the trade in manu-
factured goods. Well, the man in the street would say that the
crisis in industrial life is the same; disequilibrium between pro-
duction and consumption, the accumulation of burdensome stocks and
so on. So where is the difference? We know that there is a sub-
stantial difference between prime commodities and industrial goods,
but it should somehow be brought to expression. So I would suggest
for the consideration of the drafting sub-committee that they might
add here something of this kind "fluctuation in prices different in
their substance," something of that kind, just to show there is a
substantial difference and not only the super-production or burden-
some stocks. - 5 - E/PC/T/B/PV/6
~~~~~~~~~~~~~~~~~~~~~~~~
CrL. gium.-h tof Bele.
M. MOSTIN (Belgium). (InterMr.tCation): K, hairman, the
Belgian delegation is rourer in fav of the New York draft, but
my Czeccoslovakean oolleaguo has already made a remark which I
intendWd to make, and I should lade only toW ed this. Ve do not
quite agreeAthat the difficulties which are coveAed in this article
are particular tm primary coimodities, but that means to solve
those difficulties are different.
The UnamendmedStateos nBint als agreements thoatd ,rshulC
onle ca cencludEd al Exoeption.L orcaarticular :oses. This gives
eomthose agrae ents an exceptional character.
Ce.IITho delogate af Cubo.
.M. RRAGUEhei (Cuba) C Mr. ahairmxn, I thank heet tii draft
put forward bAmthec edioeg Cel naoion cintains obviously some
improvements in dgaftint, bug ee arrco with the remarks of the
French delegate th-t in certain cases, even if it has not been the
annentione dr fhamraiters, there is a nertii changemtyat 1ax
affect the substance of the text.
ue eeel hh at tmeadditi"n nf lco;diuiees 'ndor whmeh sora
primary commodities are produced, exc hangedand consumed are such
that internaeiondl tra6e in tomse c=.moditiesemay bQ affected by"
is an improvement on the preveous t xt. Obviously we wanted to
mersay the same thing whendwein hhC f tmer e £or draft the words
"rusation"eipe botwoen production anumconst"ption', but I think that
the text proposed bA the anerecoa dalegation is clearer and more
soecneic aud is, fo reahatra son, ao imeriveLant.
Thaquain weestionein tnh' chage of sentencewe as %a .ee it, is
uhe use ofothe wQrd "pegsistenecau bc;oase, as the Frencg delebate
pointed oat, ih.t edll mcana in ftct, that only whed thecuiffioulties
J.
P /-air Ic - 6 -
are already in existence - and not only in existence but are
persistent - do we want the agreements to come into
force, and that is obviously not the idea we had. I draw your
attention to the fact that even when we were referring to the
accummulation of surpluses, we used the words not only "has
developed" but also "or is suspected to develop", which means that
we were contemplating from the beginning the possibility of
establishing agreements to prevent those conditions arising.
I think that it is purely a question of a drafting change. As
I understand the American proposal, we could make a change in the
wording and use such a word as "tendency", because that is really
what we have in mind, so that it would read "special difficulties
such as the tendency to disequilibrium between production and
consumption, the accumulation of burdensome stocks pronounced
fluctuations in prices". Those tendencies are more pronounced in
the case of primary commodities than in other manufactured goods .
To that extent, even if only being tendencies, it is justified that
we contemplate the agreement and try to prevent that these tendencies
provoke or introduce the difficulties that we refer to. Therefore
we would be in favour of making a change of that character, and of
keeping the rest of the change introduced by the American delegation.
The other point I wanted to mention is the deletion of the
words "adverse effects on the interests of producers and consumers,
as well as". If we allow the adverse affects that the difficulties
may have on producers and consumers, and refer only to the effects
on the general policy of economic expansion, in the first place it
would not be clear how that effect against the economic expansion
will take place; in the second place it would almost look like
a contradition. If we do not refer specifically to the effects
that the difficulties may have on producers' and consumers'
J .
E/PC/T/B/PV/6 - 7 --.,
intetesms, mt iay mean that the restrictive character that this
agreem entlwil have on trade mae noe bc justifi d,ebeceuso being
restrictive, it will run against the policy of economic expansion.
But if we make clear, by a reference to the interests of producers
and consumers, that it id indorUer to safeguard the interests of
produ anrsuod cnsumers while we try to prevenr ol tolswevee th
difficulties, then the relationship to a pol ofonooeo.numic
expansion will bmc ae.al.-r,
Therefore, we would be in favour of keeping the reference
to the adverse effects on the irteoesos pf droeus.rc acd oonsumers.
Finaelye w. th nktthtt ehi fenal senteenc edadd by the
.merican delegation is also an improvement of the text.
Th6 French delegate referred to the question that reference
dasdmace only to thetreatment of international trade, and he
thought that we shouldfe rer also to production and prices, but
that is obviously what we are dealing with. The agreements will
affect this international trade if, in order to regulate
international trade, we have to regulate internal production.
That will be a need that will arise from the real objective, from
the real regulation, that will be in internationaladetre. That is
the only thing that we are ceoncd e.Jw.th,
..
CoT/ /P6V 6r G. E/PC/T/B/PV/6.
The regulation of internal production will come into the
picture only as far as it is necessary, because of the regulation
we are making regarding international trade.
Therefore, we do not think - while we agree with the French
Delegate that the meaning is there - we think we do not need to
put that into the text; because if we are referring to exceptional
treatment of international trade, that will not preclude the use of
internal control of production or trade in the cases in which such
a thing may be justified.
CHAIRMAN: The Delegate of Australia.
Mr. DOIG (Australia): The Cuban Delegate has already tackled
the point which I had to make, so I will make my remarks very brief.
We support in general terms the proposed change by the United
States Delegation. Like the Cuban Delegate, however, we are
unhappy about the elimination of the words "referring to the
interests of producers and consumers", and we have noted, in
relation to other sections of the Chapter and other Amendments,
that those words may also be removed in other texts; and therefore
we desire to call attention to that fact at this stage, and to
add that we consider that it would be undesirable for a number of
reasons to have those words deleted.
We definitely support the addition of the last sentence by
the United States Delegation, and we consider that it introduces
in its right place the subject of international commodity arrangements
and we would therefore support the United States change, and the
consequential amendments, with certain reservations that are
necessary in Article 47. - 9 - E/PC/T/B/PV/6
CHAIRMAN: The Delegate of the United Kingdom.
Mr. D. CAPLAN (United Kingdom): Mr. Chairman, I think I
am in the happy position of being able to agree with what
everybody has said so far: I do that not out of impishness,
but because I really think there is no great point of substance
at issue here, and I would support your suggestion that we remit
this to the Drafting Committee.
My reason for saying that there is no real point of
substance here is that Article 46 is the introduction to the
Chapter. You have got to start with an introduction, and I
think myself that it is very important it should be the best
wording possible, and that is why we can do that in a sub-
Committee. The real points of substance which have been
touched on here are relevant to other Articles in this Chapter,
such as Article 52, and therefore I myself feel with you.
Mr. Chairman, that we might very well proceed and remit this
particular Article 46 to the Drafting Committee.
CHAIRMAN: I want to thank the Delegate of the United
Kingdom for having said what was going through my mind. I think
we in the Commission should confine ourselves to discussing
various principles underlying these Articles or underlying the
proposals that have been put forward by the various Delegations;
and not concern ourselves so much with finding the exact words
in which to express the ideas - that is essentially a function
for the sub-Committee.
If there are no other speakers, I take it that the proposal
to refer the proposal of the United States Delegation with regard
to Article 46 to the sub-Committee is approved. Is that agreed?
(Agreed) E/PC/T/B/PV/6
We now come to Article 47, "Objectives a inter-governmental
commodity arrangements". The United Kingdom Delegate suggests
that the title of this Article shoudld be changed to the following:
Commodities." Is that agreed?
The Delegate of the Netherlands.
Dr. E. de Vries (Netherlands): Mr. Chairman, I think
it would be preferable te return this question to the Drafting
sub-Committee, as according to the Document under discussion
the United Kingdom Delegation would like to put forward some
arguments in favour of the introduction of the word "arrange-
ments". On the other hand, this term already appears in
the last sentence of the American proposal. That is why
I consider it is better not to accept specific text, bu
just principles, and discuss the matter later on in the sub-
Committee.
CHAIRMAN: Any other comments? The Deglegate of the
United Kingdom.
Mr. D. CAPLAN (United Kingdom) : Mr.Chairman, I am
very happy to see it e.a to the Drafting sub-Committee.
CHAIRMAN: Is that agreed? (Agreed).
We now come to the Preamble. We have two proposals, one
submitted by the United States Delegation, and one bythe
United Kingdom Delegation. Perhaps we might have the comments
of these two Delegations regerding their proposals.
The Delegate of the United States.
Mr. R.B. SCHWENGER (United States): Mr. Chairman, the
change we proposal in the Preamble is consequent upon, and
associated with, the change in Article 47. We would like to
V
- 10 - - 11 -
have it go to the Drafting sub-Committee with that Article. I
believe it take care of, or can be co-ordinated with, the
change suggested by the United Kingdom Delegate. He whispere
in my ear that he would be glad for his proposal also to go to
CHAIRMAN: It is proposed to refer the two proposals
regarding the Preamble to the sub-Committee. Is that agreed?
Now, sub-paragraph (a ). The New Zealand Delegation
proposes the insertion of the words "and consumption" between
the words "production" and "adjustments".
The Delegate of New Zealand.
Mr. G.D.L.WHITE (Now Zealand): I would like to say just
a word about this amendment, Mr. Chairman, before it gets sent
along with the other proposals to our sub-Committee. We have
put forward the amendment in order to preserve the sort of
balance which we think has been achieved in the wording of Article
46. In Article 47 we speak about the disequilibrium between
consumption and production, and we speak about the interests of
consumers and producers and it seems to us just a little inapprop-
riate to follow this with Article 47A which refers merely to
production and adjustment.
The main criticism to be levelled at our amendment is, I think,
that it involves a bit of repetition because consumption adjustments
are mentioned in Article 47 (b) and in several places later on
in the Chapter. But we find that production and adjustments
are mentioned in other places later on too, and it is only a
matter of economy in the use of words and we think those two words
should be added, because without their inclusion Article 47A, as
it stands, seems to limit unduly the type of serious economic
problems to which it is intended to refer. - 12 - E/PC/T/B/PV/6
CHAIRMAN: Are there any other observations?
Mr. R.B. SCHWENGER (United States): Mr. Chairman, I would just
like to say that we think that the idea is sound, and would suggest
it could be integrated better with the words "when the adjustments
between production and consumption....."
M. STANISIAV MINOVSKY (Czechoslovakia) (Interpretation): Mr.
Chairman, the Czechoslovakian delegation is of the opinion that the
New Zealand proposal is justified, and my delegation associates
itself with this proposal.
Mr. D. CAPLAN (United Kingdom): Mr. Chairman, may I form the
Motion, if I am in order, that we adopt the New Zealand proposal
which I sincerely second. I think it is a very good idea. I do
not think we need refer this to the Drafting Committee. I move its
adoption.
CHAIRMAN: It is proposed by the United Kingdom delegate that
the New Zealand amendment be adopted. Is that agreed?
Mr. L.D. MARTINS (Brazil) (Interpretation): Mr. Chairman, we
are prepared to accept the New Zealand proposal with the amendment
suggested by the delegate of the United States.
CHAIRMAN: Does the New Zealand delegate agree to accept the
proposition of the United States?
Mr. G.D.L. WHITE (New Zealand): Well, Mr. Chairman, I am
afraid that, if we continue to discuss this, it will have to go to
the Sub-Committee.
Mr. D. CAPLAN (United Kingdom): Well, Mr. Chairman, I did
move for the adoption of the New Zealand proposal, and I think that
the words are not material. ER
- 13 - E/PC/T/B/PV/6
CHAIRMAN: I would propose that we should now decide on the
question of principle and leave it to the Drafting Committee to make
any changes in the wording. Is it agreed that the New Zealand
amendment can be accepted in principle? Agreed.
The Australian delegation has a proposal with regard to sub-
paragraph (a). It also involves some drafting changes, but perhaps
the Australian delegate could tell us the reason for their proposal.
Mr. W.T. DOIG (Australia) Mr. Chairman, we consider this as
not only being drafting changes. The purpose of it is mainly to
bring this sub-paragraph into line with Article 52, paragraph (a).
We consider that the use of the words "as rapidly as the
circumstances require" does not convey a very fine or exact meaning.
It is unnecessary to introduce them at this early stage of the
Chapter, and it is simply a statement of principle which is
elaborated further in Article 52, paragraph (a). We therefore
suggest, for the sake of economy of words and for clarity of meaning,
that those words be deleted and that what appears to us to be an
unnecessary repetition, be avoided. We would be quite happy to
submit this to the Drafting Committee.
CHAIRMAN: In view of this explanation of the delegate of
Australia, I think we could leave this also to the Sub-Committee, if
the Commission agrees.
Dr. E. de VRIES (Netherlands): Mr. Chairman, I fully appreciate
that the Australian delegate wants to change the text only and not the
substance. There is a change of substance in the words he means to
alter, but he did not mean that. A normal market alone may give
production adjustments, but that may be an adjustment on the level ER
14 E/C/T/B/PV/6
that brings ruin to millions of farmers or to millions of
consumers. He spoke about the persistence of this equilibrium.
Well, that would be a persistent disequilibrium for many years,
and then there might come out the production or consumption
adjustment, but when the Australian delegate just says he only
wants to change that in substance and not in words, I say it
should be referred to the Drafting Committee. S -15 - E/PC/T/B/PV/6
CHAIRMAN: The Delegate of Cuba.
Mr. J. GUERRA (Cuba): Mr. Chairman, we associate ourselves
with the remark of the Delegate of the Netherlands. The words
"as rapidly as circumstances require" involve a change of
substance and, I would say, a very great one, because, subject
to the transitional adjustments that the agreement should provide
for and which are contemplated in other parts of the Charter,
the whole purpose of the Agreement is to prevent or avoid the
normal forces of the market in the sense that they can be made
in a way that will ruin the producers or create very great
difficulties for the consumers.
Therefore we think that in the way the Australian amend-
ment is drafted there is not this possibility of the agreement
trying to prevent the problems which may arise in regard to
production adjustments. That is what we want to prevent. We
all recognise, also, the need for providing the agreement itself
with the possibility of having this adjustment made rapidly,
in the long run, in order to avoid adverse effects on
producers or consumers.
We are very strongly against the deletion of the words
as proposed in the Australian amendment.
CHAIRMAN: The Delegate of Canada.
Mr. J. J. DEUTSCH (Canada): : Mr.Chairman, I gree with
the previous speakers, that the deletion of the last phrase
"as rapidly as circumstances require" would involve a change
of substance, and we do not support the deletion of the words.
CHAIRMAN: In view of these remarks, I think this
question can now be referred to the Sub-committee. T here has E/PC/T/B/PV/6
discussion to indicate the views of various
Delegates and I take it the Commission is agreed that the
question be referred to the Sub-committee.
We now come to sub-paragraph (c). We will leave for the
moment the words in square brackets and first of all take up
the suggested wording proposed by the United States DeIegation.
Will the United States Delegate please explain the purpose
behind these changes?
Mr. R.B.SCHWENGER (United States): Mr. Chairman, the
words in brackets in the New York Draft received a good deal
of support from a number of Delegations and for that reason I
think we rejected the thought that they were not required in
this sub-paragraph. We have re-considered them and propose
here an inclusion of them in the previous text in a way
which we find more acceptable than exactly as they were
presented, and we withdraw our objection to the substance of
them.
CHAIRMAN: The Delegate of Cuba.
Mr. J. GUERRA (Cuba): Mr. Chairman, the sentence in the
square brackets was inserted in the New York Draft on the
proposal of the Cuban DeIegation and, as the United States
Delegate says, was greatly supported. I think that a large
majority of the countries represented there were ready to
accept the substance of the amendment, I only wish to add
that we accept the proposed change made by the United States
S
- 16 - S - 17 - E/PC/T/B/PV/6
Delegation and suggest that, if it is accepted by the
Commission, the words in square brackets should be taken out.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. D. CAPLIN (United Kingdom): Mr. Chirman, I feel
also that the United Kingdom Delegation . ; some reserve about
the words in brackets. O; -alcc'o n, we have reconsidered
our opinion, but we feel that if we leave those words in their
present form, or adopt the United States proposal, the sentence
is perhaps, if I i , y say so, a little clumsy, and the United
Kingdom Delegation would like to propose the following
amendment to take the place of Article 47(c), which reads
as follows:-
" (c ) to moderate pronounced fluctuations in the price
of a primary commodity in order to achieve a reasonable
degree of stability on the basis of prices fair to consumers
and remunerative to efficient producers."
CHAIRMAN: The Delegate of Chile.
Mr. J.A. MUNOZ (Chile): Mr. Chairman, we would like
to associate ourselves with the text which the United States
Delgeate has proposed, as it conveys exactly the thought we
had in mind when we made an amendment to Article 47(c), which
will be presented later on, and therefore we rather support
this United States amendment. J.
18 E/PC/T/B/PV/6
CHAIRMAN: The delegate of Cuba.
MR. J. A. GUERRA (Cuba): Mr. Chairman, I think that, since the
British delegation has, in fact, withdrawn its proposed deletion
of the words in square brackets and only proposes a change in the
wording, we have reached the point where the matter
may be proper to be referred to the Drafting Committee.
CHAIRMAN: The delegate of the Netherlands.
DR. E. de VRIES (Netherlands): Mr. Chairman, I also will
join the Cuban delegate who thinks that this could be referred to
the drafting Committee, but only wish to say that the Netherlands
delegation prefers the United States text that has been proposed
here, because we think that it clearly expresses what we want,
and think that it is better than the New York draft.
CHAIRMAN: As the delegate of Cuba has pointed out, there is
substantial agreement in the Commission as to what we wish to
the time
express in this paragraph. Therefore, I think/has now come when
we can refer the question of the United States delegation to the
sub-committee, who can also take into account the form of words that
has been proposed by the United Kingdom delegation.
Agreed.
We now pass on to sub-paragraph (d). The United States
delegation suggests the possibility of a separate Section dealing
with conservation agreements.
MR. R.B. SCHWENGER (United States): Mr. Chairman, our
comments on this sub-paragraph are closely linked with our
comments on Article 59, and they are also closely linked with the
whole problem of re-arrangement. Since we discussed it at our J. 19 E/PC/T/B/PV/6
previous meeting, I would suggest that the substance of our
suggestion be deferred until that matter has come up.
CHAIRMAN: The question of re-arrangement of the Chapter was
referred to the sub-committee at our last meeting. Therefore I
shogld suggest that we should take into account the observations of
the United States delegation with regard to this sub-paragraph (d).
The question will also be taken up again when we come to
Article 59.
We now pass on to sub-paragraph (e). We have two proposals
with regard to this sub-paragraph, and I think it would be logial
to take up first the proposal of the United States delegation that
the objective given in this sub-paragraph does not appropriately
belong to Article 47.
The delete of the United States.
MR. R.B. SCHWENGER (United States); Mr. Chairman, Article 59
exempts from Chapter VII arrangements relating to the equitable
distribution of commodities in short supply. Therefore, we feel
that for agreements which do relate to commodities in short
supply, it is not appropriate to include an objective in the
Chapter. Here the question relates to what is done with Article 59,
but it remains in its present form.
CHAIRMAN: Is the proposal of the United States delegation
agreed?
The delegate for the United Kingdom.
MR.D. CAPLAN (United Kingdom): Mr. Chairman, I do not
really want to anticipate my Czechoslovakian colleague, because he
has put forward a specific amendment on this Article 47 (e), but
I can hardly agree with the United States delegate, because I think 20
there are two conceptions here. One is a commodity which is in
short supply - that is a matter of serious prejudice; and the other
is a commodity which is not in very plentiful supply, the
expansion of production of that commodity being a matter of
considerable value to consuming countries and to the producing
countries of the world generally, and it is the second point that
I, myself, would like to see more especially emphasised here in
article 47(e). I cannot agree that we should have nothing on
that subject of expansion of production of commodities which could,
with advantage he expanded. However, I would rather like the
Czechoslovakian delegate to speak to his own proposal.
CHAIRMAN: The delegate of Czechoslovakia.
MR. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, as I have
already stated, we understand already in article 46 the word
"dis-equilibrium" not only to mean surplus, but also to mean
shortage,
Now, as to Article 59, it says "to inter-governmental commodity
arrangements which relate solely to the equitable distribution"
with the word "solely". But here we are speaking about expansion
in the production of a commodity and so on, and so that is why we
be
thought it would/suitable to Conclude here those words "and
equitable distribution at fair prices". 21
CHAIRMAN: The Delegate of Brazil.
Mr. MARTINS (Interpretation): The Brazilian Delegation
agrees with the proposal made by the United States representative
and is of the opinion that it would be preferable to delete
altogether paragraph (e) of Article 47, because this paragraph
can be interpreted in very different ways, The simplicity of
its wording may lead to the prejudicial interpretation with
regard to the initiative that may be taken by countries that
should develop their own resources. For these reasons we are
of the opinion it would be preferable to reserve and postpone
discussion of this point until we come to the discussion on
Article 59.
CHAIRMAN: The Delegate of Cuba.
Mr. GUERRA (Cuba): Mr. Chairman, this question was very
much discussed in London, and at that time we thought we had
reached an agreement, and an understanding of what we were
dealing with. The insertion of the word "solely" in Article 59,
which very rightly the Czech Delegate called attention to, was
Inserted in article 59 just for the purpose of making it clear
on
that when we were dealing with an agreement directed/ly to
the distribution of commodities in short supply in an emergency
condition, as was the case during the war - and we still have some
of these cases - those agreements will be excepted from the
operation of Chapter VII.
With that purpose, the word "solely" was inserted in
Article 59, and mother thing was to try to remove in the long run
the situation that called for that special agreement regarding
shortage.
In that sense the Committee in London felt that to have as
E/PC/T/B/PV/6
G. E/PC/T/B/PV/6
the objective of the agreement provision for expansion of production
- so that the remedy of long run effects could be found - was a
very justifiable objective; because there are two different
things; an agreement that only meets an emergency situation (and
that should not come if it relates only to shortages in the
distribution of the supply of the different countries); and another
in
thing is, we should not provide/agreements of an emergency nature
provision for expansion of production - so that we could find a
permanent remedy that will make unnecessary the other type of
agreement.
So we do not see any contradiction between both things. We
think it should be clear. Under (a) of Article 47 we are not
contemplating agreements that only take care of the distributing
of commodities in short supply, but we are putting, as one of
the objectives of all agreements, to increase production so that
those other conditions will not arise; and I thought until now
that insertion of the word "solely" in Article 59 took care of
making very clear that we were dealing with two different things.
CHAIRMAN : The Delegate of Canada.
Mr. DEUTSCH (Canada): I wish to associate myself with the
remarks made by the Cuban Delegate. I agree with him that the
matters dealt with in Article 59, and in this Article under discussion
were directed to two entirely different things; and if we drop
Article (a) now we are changing the substance from what we agree
in London. That should not preclude us from making a change, but
I think it is very desirable to retain the purpose of this sub-
paragraph in this Chapter, and I would not support the American
proposal for its deletion.
G. G. E/PC/T/B/PV/6
23
CHAIRMAN: The Delegate of the United Kingdom.
Mr. CAPLAN (United Kingdom): I find myself in full
agreement with what the Delegate of Cuba has just said.
I think there is an important point to be covered here,
that should definitely be covered in this statement of the
objectives of the inter-Governmental commodity agreements.
I think, perhaps, that for the introduction of a conception
of equitable distribution of fair prices, this may not be the
best place - and with that in mind I would like to put before
the Commission the following suggested wording for Article 47(e):-
"To provide for an expansion of the production of primary
commodities of which the supply could be increased with advantage
to consumers and producers." 24
CHAIRMAN: The Delegate of Czechoslovakia.
H.E. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman , I
have just a remark to make and that is.,i:hat in the French text
the words "fair prices" in our amendment are translated as
"prix normaux". I think the right translation would be
"juste prix".
CHAIRMAN: The Delegate of France.
M. PETER (France) (Interpretation): Mr. Chairman, like my
to
Czech colleagues, I should like to refer/Article 45, where it says
that disequilibrium can &?.e to production as well as to
consumption, and therefore there can be surplus as well as shortage.
If we desire to intervene in the case of disequilibrium, I think
that the intervention should take place both in the case of
disequilibrium due to excess or to surplus and in cases where it
is due to shortage. Otherwise, we could not be in a position
to remedy all cases of disequilibrium, and Article 47 itself
would suffer from such a disequilibrium, if it does not take into
consideration cases where there is shortage. For these reasons,
I associate myself not only with the amendment made by the
Czechoslovak Delegate but also with the remark made regarding the
translation into French of the word "fair".
CHAIRMAN: The DeIegate of South Africa.
Mr. S.J. de SWARDT (South Africa): Mr. Chairman, I would
like to support the proposal made recently by the United Kingdom
Delegate, because I think it takes us out of the difficulty in
which we were placed by the amendment of the United States, in that
E/PC/T/E/PV/6
V V E/PC/T/B/PV/6
it gives the impression that we do not wish to countenance the
consideration of any scheme which envisages an increase in
production. I do not think that that is the object of the
majority of us hore, and I could almost wish that the United States
would withdraw that amendment, because, as was pointed out by the
Delegate of France, it is also contrary to the object enunciated
in Article 46. I would not like to see us do anything in Article 47
which gives the impression that we do not want to entertain at all
any scheme whereunder one would, for some good reason, endeavour
to obtain an increase in production.
Now, it may be quite true that with that type of arrangement,
you may be faced with much greater difficulties than with the
other type of arrangement; but that is something to be considered
at the time, first with the study group and then when you hold
your Conference. I do not think it is something to which we
should devote too much attention now. We should only keep the
door open for that type of arrangement.
CHAIRMAN: As I understand the position, the United States
have not proposed an amendment involving the deletion of this
sub-paragraph, they have simply expressed the opinion that this
objective does not appropriately belong to Article 47. I am
wondering if in view of the course the discussion has taken the
United States Delegation, and also the Brazilian Delegation who
supported the United States Delegation, could not now agree to
permit this Czechoslovak amendment to go forward to the sub-Committee
and to withdraw their, objections to the inclusion of this
sub-paragraph. ER
E/PC/T/B/PV/6
26
Mr. R.B. SCHWENGER (United States): Mr. Chairman, for our
part we agree that it would be appropriate to have it go to the
Drafting Committee. We would like to say, however, in case
that
there were any doubts/we really question the appropriateness of the
that
objectives stated here, / we certainly are emphatically for the
type of expansion of consumption and production which I believe was
well expressed by the United Kingdom suggestion, and we were very
much impressed. by the arguments of Mr. Caplan's remarks about the
need for using agreements for the purpose of expansion whenever it
is appropriate to do so. As to the question of what happens to
agreements of the kind that were described we will all presume we
have to wait for the outcome of the rearrangement work that we have
already sent to the Drafting Committee, and on that point we would
have to reserve our point of view.
Mr. L.D. MARTINS (Brazil) (Interpretation): We also wish to
associate ourselves with the proposal made by the Chairman to
withdraw what we said before regarding the necessity of deleting
paragraph (e) of Article 47, but we would like to stress, that in
our opinion the United Kingdom representative has, so to speak, put
his finger on the most interesting point, namely that it is not
only the interest of the consumers that should be taken into
consideration, but that the consideration should also be given to
the interest of producers when it is contemplated to increase the
production of primary commodities in those countries that are in
a position to produce them. We therefore agree with what has just
been said by the United Kingdom delegate, and we also agree that
the matter should be referred. to the Sub-Committee. E/PC/T/B/PV/6
CHAIRMAN: I think we are now in a position to refer the
matter to the Sub-Committee alone with the Czechoslovakian
amendment and the suggestion of the change of wording proposed by
the United Kingdom delegate. But before doing so we have to give
consideration to another amendment which has been proposed by the
delegation of India. This is given in paper W/178 and the Indian
delegation have proposed that, at the end of the paragraph, the
following words be added: "or where expansion is required to aid
in the achievement of internationally approved consumption
programmes". Will the delegate of India explain the purpose of
his amendment?
Mr. B.N. ADARKAR (India): Mr. Chairman, it became necessary
for us to suggest this amendment because sub-paragraph (e) of
Article 47 as it stood in the original draft spoke only of
expansion of production in the case of primary commodities in short
supply. It seemed to us that, in the case of basic foodstuffs, it
might be necessary to maintain the production or even expand
production after surplus conditions have been reached. It is true
that, in a strictly commercial sense, basic foodstuffs might attain
a surplus position, but even then there will still remain large
classes of the population which will need the foods although they
will not be able to afford the commercial prices. The principle of
accepting in the FAO Preparatory Commission was that, under such
circumstances, it should be possible for producers of foodstuffs to
maintain or expand production while they are able with the concurrence
of the FAO, to reach agreement with importing countries whereby the
original output could be sold to importing countries at special
prices and the importing countries will agree to distribute the
supplies they receive to classes which will not be able to pay the E/PC/T/B/PV/6
28
prices. It seems to us necessary that arrangements of this sort
should be recognised in this Charter and provided for. It is for
that purpose that we suggested this amendment. I would also
point out that one reason why it became necessary to suggest this
amendment was the reference to shortage which occurs in the original
draft. But happily the new amendment which the United Kingdom
delegation has just now proposed speaks of the desirability of
expanding production of primary commodities whenever such expansion
is of advantage to producers and consumers. If I understood him
correctly, that is probably the position. I would hesitate,
without further consideration, to say that an amendment in that form
would quickly cover the point we have raised, but we would like the
Sub- Committee to go into this matter, keeping in view the
objectives we have suggested, namely to make it possible for
arrangements to be gone into with regard to basic foodstuffs and
with regard to conditions of surplus, in order to facilitate the
conclusion of special price arrangements. S E/PC/T/T/B/PV/6
29
There is one other point I would like to raise. It
might be a point of clarification, but it is one on which we
are in considerable doubt. It relates to agreements con-
corning commodities in short supply. The provision in
article 59, as well is the corresponding provision in the
Czechoslovakian amendment, speaks only of arrangements for
the equitable distribution of commodities in short supply.
Now in the arrangement which is designed to ensure equitable
distribution, we find it to be multilateral in character, but
it is possible that, in certain circumstances, it might not
be possible to reach multilateral arrangements.
In the case of certain essential commodites like wheat,
if multilateral arrangements for the distribution of the
world's wheat surpluses are not realised, then it might be
necessary for countries which are vitally dependent on imports
of what to try to reach agreements with producers of wheat,
agreements which night be only bilateral in character, agree-
ments to which only two or three countries might be parties.
Such agreements will promote orderly marketing of wheat; they
may give a certain assured market to producers of wheat, and
will no doubt ensure regularity of supplies to the consumers
of wheat.
We would like to know whether arrangements of this sort
are at all permitted under this Charter, and, if they are
permitted, whether such arrangements are covered by Article 47.
I would just add one word: that, although bilateral
arrangements or this sort may be objected to as being slightly
inconsistent with the general tenor of the Charter, they do
pave the way for multilateral arrangements in due course, and
we should do nothing to hamper the conclusion of such arrangements.
Therefore we would suggest that any procedure which may be 30 / l
prescgengemenr such ar aeece.cts should.be loss stringent
ehaomtemtparedddurg cgqntgepglted ngfmeor reulatin arraents.
Wouumlcmmittke the S'bo =ee to enter into discussions
fa irioatdoe el;e dofcav:in. W;o h:e very serious doubts
asthe wharther ;denwCandztereunirst s tho purpose of such
-ronanents.
eAIeMee:e a ehc .logt ofatae Netherl-nds.
DE.EE, de VeI1S (NethMrlandsi:mYr. Chamrman, if I .ay
first say a w-rd on subcpcragraph (-) :.s it has been proposed
by our eminent friend, I shoula aike to st.rt by saying that
the NeeelegandonD -a atigngin W shin-ton and in the Preparatory
C.mntne iMeeti-gn w s odoe eaeame thn sz&Oaopinion Es the
Ieg-ian lgationaaere, thrt such interlationalee approv,.
consugpgimnmpso-ram-ee eay be vury good things for regions
which ave tooalawgpgrch sin: powe ito he mmmmticaalco~reril
But I maruttthtt nkeI a;- the words he is using are, in a
sense, too narrow, because he asks only where expansion is
required to aid ehe achiofeproera cp tgesmmesu B.t
it ray bhese p tgrammeero;rri:s are good to preevent a rstriction
of production. Then they are just as good for human con-
su: tion as expansion.
0: t:;andher hseeems t it s ao metth:t noahing in
irticlo 47 as iw ulood eoend provcnt such schemes. For
instance, theydcomebunbeer (;) _cause they provide a framework
dfor tpmeevelo z:nt rf measuges desiEned to promote the
expansion of consumption. what is meat it ne-ns. So,
withouteany offtnce, I wofor ask ame a fr -:work of those
measprems to -roote expansion of consumption and in all the
s
IPPo6.R/ZV/A S E/PC/T/B/PV/6
31
other provisos, from (a) to (e), I cannot see a word which
would prevent, them.
If we adopt the United Kingdom amendment, I think that
would be a good thing - though I - ve not the actual words
before me. Then at least the objections to the words
"in s.:o;rt supply" are taken away.
I hope, after consideration, our eminent friends will
feel with me that these words are not required in Article 47,
but these programmes can be done if the nations want to do
them under Article 47 as it stands now. 32
DR. E. de VRIES (Netherlands): As to the second point,
Mr. Chairman, I would like to give in explanation of what was
asked by the Indian delegate, but it is up to you.
In the London draft of this Chapter, commodity arrangements
were assigned to be concluded by two or more governments. The
Lake Success Drafting Committee deleted these words "two or more".
I believe that that was done in the Legal Drafting Committee, not
in full Committee, because I was not aware of the deletion of these
three words . The London Drafting Committee began by saying
"two or more governments". That, even in bilateral arrangements,
commodity arrangements, provided that it was open for everybody to
join. If it is a bilateral contract that is not open to join, then
it come under state trading. If it is state trading, then it is
exempted from this Chapter and has now been put in article 59,
Section E of Chapter V. So, bilateral contract, which is state
trading, comes under State Trading. So, whatever we do to
promote that or not promote that, we have to deal with that under
Chapter V.
Now, we have another bilateral arrangement, which might be
possible, which is not state trading and which is not ,n to
everybody. In my opinion then, it comes under Restrictive
Business Practices, and we have to deal with that under Chapter VI
and see whether it has harmful effects or not.
I hope that that gives the clarification that our Indian
friend has been asking for.
The delegate of France. G E/PC/T/B/PV/6.
33
CHAIRMAN: The Delegate of France.
Mr. PETER (France) (Interpretation): The French Delegation,
Mr. Chairman, considers the Indian Amendment with sympathy for
the reason that the French Union is formed mostly of countries
which are young and insufficiently developed, and which, like
India, require to increase their food standard, and which also
have not the financial means to buy all that is necessary for
their consumption. and therefore we envisage with sympathy the
spirit of the Indian Amendment, but I find some difficulties,
especially in connection with the comments made by the Indian
Delegation. In particular when they referred to additional
output available at special prices. This is a desirable purpose,
but we may wonder whether this is consistent with the provisions
in Chapters V and VI of the Charter, which prohibit discriminations
or agreements that are harmful to international trade.
I admit that these reservations are made in connection with
the comment, and not with the actual text of the Amendment; and
therefore my remark is less serious than it may appear.
In conclusion I associate myself with the Amendment, but
I suggest that the Sub-Committee be asked to find a formula more
in conformity with the provisions of Chapters V and VI of the
Charter.
CHAIRMAN: The Delegate of China.
Mr. CHEN (China): Mr. Chairman, the Chinese Delegation is
inclined to think that the proposal made by the Indian Delegate is
already included in the proposal made by the Czech Delegation, as
amended by the Delegation of the United Kingdom. It seems
rather superfluous to have this Amendment, and it is also E/PC/T/B/PV/6
34
difficult to interpret what is exactly the meaning of international
approval there. Is that by the Organisation, or only by the
actual agreement? If it is a bilateral agreement, it means
preferences against the other countries, which is not quite in
the spirit of the Charter.
So we are inclined to think that is quite sufficient - that
the Indian proposal is already covered by the Czech Delegation's
proposal as amended by the United Kingdom.
CHAIRMAN: The Delegate of India.
Mr. ADARKAR (India): Mr. Chairman, I am very grateful to the
Delegate for the Netherlands for the exposition of issues that he
has given.
It might be possible to make the idea we have in mind quite
clear in the manner we have suggested; or, alternatively, to
recognise in the Report on this Chapter that special price arrange-
ments are permitted under either sub-paragraph (b) or (c), as now
proposed to be reworded by the United Kingdom Delegation; but the
reason why we suggested this Amendment was the fact - I speak
subject to correction - that at certain earlier Conferences some
of the Delegates present had doubts as to whether special price
arrangements of this sort were at all consistent with the purposes
of the Charter. Some of the Delegates felt it involved an element
of discrimination between different buyers in the same commodity.
It is futile for us to just satisfy ourselves that such
arrangements are covered by the working of the Charter, and still
entertain mental reservations that they may be inconsistent with
other provisions of the Charter. Therefore, the Sub-Committee,
I suggest, should go into this question, and should come to a
definite decision as to whether such arrangements are permitted under
G. G.
35
the Charter or not. If the Preparatory Committee on which the
same countries were represented approved, in the light of that
it seems reasonable that the present Preparatory Committee should
also provide for the same principle underlying the Charter.
Since you have been kind enough to give me this opportunity
to speak, I would add a few more worlds on the second point I
had raised, and on which the Delegate of the Netherlands offered
some comments. That is, concerning bilateral arrangements.
a bilateral arrangements are permitted under this Charter,
the only thing we would like to ensure is that the procedure
applicable to such arrangements should not be as stringent as
contemplated here.
That is to say, it should be possible for the countries
interested to enter into such arrangements without the necessity
of a previous investigation or without having to discuss the matter
in a Conference, because only two or three countries are interested.
It is a Conference which interests the countries to which it
seems most necessary.
The other question was about arrangements entered into
between the two State-trading enterprises. If arrangements of that
sort for the exchange of a commodity are not under this Chapter,
but come under the State-trading provisions of this Charter, that
should be made clear, otherwise somebody is bound to say that
because it is a case of inter-Governmental commodity arrangements
it is under the provisions of Chapter VII and not Chapter V.
That is all I wanted to say.
E/PC/T/B/PV/6 36
CHAIRMAN Is the Commision agreed that the point
raised by the, Indian Delegate in his amendment be reference to
the sub-committee to study if it is adequately covered by the word-
ing suggested by the Czechoslovak Delegation or by the wording
suggested by the United Kingdom Delegation, and if not, to see
if it could not be covered by some other form of wording?
(Agreed) .
Then we will refer to the sub-Committee the various proposales
in relation to sub-paragraph (e). We will now take up the
suggested Article 47A proposed by the Delegation of the United
Kingdom. Since this additional Article relates to the suggested
we
re-arrangement of the Chapter a ;/discussed at our last Meeting
and which it was decided to refer to the sub-Committee, I would
propose that this suggested additional Article also be referred
to the sub-Committee without further discussion. The Delegate
of the United Kingdom.
Mr. D. CAPLAN (United Kingdom): Mr. Chairman, I would
only like to say two things. First, in putting forward this
suggestion, the United Kingdom have in mind a drafting improvement
of the Chapter and no alteration of the substance of the Chapter.
Secondly, I would like to/say that I entirely agree with your
procedure, subject to our right to re-open this when we see now
the re-arrangement of the Chapter does on in the Drafting sub-
Committee.
CHAIRMAN: The Delegate or Australia.
Mr. W.T. DOIG (Australia): Mr. Chairman, we regret that
we consider that in one respect this proposed amendment by the
United Kingdom Delegation does imply a change in principle, which
we regard with some concern. I would like to have recorded
the fact that though we are in agreement with the idea of
E/PC/T/B/PV/6
V. V. E/PC/T/B/PV/6
37
re-arranging the whole Chapter, we do not like the emphasis
which is placed in paragraph 2 of the proposed amendment on the
S9'Jy Group. It seems to us that it suggests that study of
the commodity must be made before a commodity conference is
called, and we simply wish to have noted our reservation on that,
as we consider that the matter is covered adequately in the
present draft Article 49.
CHAIRMAN: Any other comments? If not, I propose that
the suggested Article 47A be referred to the sub-Committee
along with the other proposals for re-arrangement of the Chapter.
There are certain circumstances which I think lead Members
of the Commission to wish that we should break up sharpIy at
6o'clock today, so I do not propose to take up any further
Atrices of the Chapter; but before breaking t .,a I hintk it
oeld 'b d siaa tle-thitze should ' u:j. _; ts -.ommi eec
Wehev a rradyeone through two Articles a nd we rhave eferredr
u that theywohould et to work ss soon asoon -a possible.sT: Ujlk . t ; icie,.
wing Dedlegations: Austrai;a,ion WzSU rav_C.1n(- D1l-.:ti>£:
ance, United Kingdom 6nd the unitcedtI _1v-u ,m neint~
who are not represen ted on thgesub-Committee,\L:' :ri)fl) E .s
but who ml wish mio prescentmviews co the sub-Comzttee, ould
,t inemouchComwith theCoairtlln of thil sb-Omittee, who wi
cvie Ch6mhe opportunLtyof expressing their views. ER
E/PC/T/B/PV/6
38
Mr. J.A. MUNOZ (Chile): Mr. Chairman, would it be possible
for the members of the delegations which are not members of the
Sub-Committee but who wish to attend, to be circulated with the
procedures of the proces verbal because,in the Sub-Committee on
Chapter VI, we were not given any minutes or amendments proposed,
and it was very, very difficult for us to follow the discussions.
CHAIRMAN: The Secretary informs me that, while the actual
minutes are taken of the meetings of the Sub-Committee, he will
see to it that the other delegations are informed and provided with
all relevant documents.
H.E. Z.AUGENTHALER (Czechoslovakia): Mr. Chairman, I do not
know if it is usual to have exactly six members in the Sub-Committee.
If it is not a general rule, I would suggest that Cuba be included
in the number of members of the Sub-Committee us they were very
actively participating in the commodity agreements raised before.
Mr. J.A.. MUNOZ (Chile): Mr. Chairman, I would like to support
the suggestion of the delegate for Czechoslovakia.
CHAIRMAN: I might say that it was my intention to nominate
the representative of Cuba for the Sub-Committee, but I understood
from Mr. Guerra that he was leaving Geneva later on this week, and
he could not be available for the discussions of the Sub-Committee.
But if there is somebody who could substitute for him I am sure I
would be very glad to add Cuba to the Sub-Committee. Is that
agreeable to the delegation of Cuba?
Well, I take it that the delegation of Cuba is added to the
Sub- Committee, which is now composed of seven members. The
Sub-Committee will meet tomorrow ar 10.30 a.m. Any objections?
The place of the meeting will be notified in time.
The meeting stands adjourned.
The meeting rose at 6.10 p.m. |
GATT Library | hr389vs9598 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Sixth Meeting of the Tariff Agreement Committee held on Thursday, 28 August 1947, at 2.30 p.m. in the Palaisis des Nations Geneva | United Nations Economic and Social Council, August 28, 1947 | United Nations. Economic and Social Council | 28/08/1947 | official documents | E/PC/T/TAC/PV/6 and E/PC/T/TAC/PV/4-6 | https://exhibits.stanford.edu/gatt/catalog/hr389vs9598 | hr389vs9598_90260014.xml | GATT_155 | 11,919 | 71,788 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RES TRIC TED
E/PC/T/TAC/PV/6
28 August 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
SIXTH MEETING OF THE AGREEMENT COMMITTEE
HELD ON THURSDAY, 28 AUGUST 1947, AT 2.30 P.M.
IN THE PALAISIS 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 V
CHAIRMAN: The Meeting is called to order.
We shall resume the discussion on point 5 of our Agenda,
which is Inclusion in the Agreement of the Articles of the
Charter which are reproduced in Part II.
The Delegate of Canada.
Mr. L.E. COUILLARD (Canada): Mr. Chairman , the Canadian
Delegation has refrained from any general statement up to this
point. I feel that I must set before the Committee the position
of the Canadian Delegation regarding points 5 and 6.
We share the view of the Unrited States, Netherlands and
Belgian Delegations, as set cut in the document before us on
page 9, namely, that Part II of the General Agreement on Tariffs
and Trade forms an essential part of that Agreement. We consider
as essential the inclusion in the, General Agreement of those
Articles recommended by the Tariff 1P .-: -tiatiions Working Party.
We also consider that these Articles should be taken from the
Draft Charter as approved at this Second Session.
It has been the understanding of the Canadian Delegation,
Mr. Chairman, from thn very beginning of our tariff negotiations
here, that these Articles of the Draft Charter, as outlined in
the Drafting Committee's Report and which deal specifically with
trade and tariffs, must be an integral part of the General
Agreement. It is on that assumption that we have conducted
our tariff negotiations here. If that assumption should now
prove to have boon wrong, then we shall have, to reconsider our
position, But I find it difficult to see how Part II of the
General Agreement could logically be diseared.
It is inconceivable that any country - or, to be more
specific, let us say Canada, which will have made some
2 E/PC/T/TAC/PV/6
eight hundred tariff concessions as a result of our negotiations
here - it is inconceivable, I maintain, that we should be
expected to be satisfied with a few weak General Articles, or,
indeed, no Articles at all, as a safeguard for those tariff
concessions which we have received in return for eight hundred or
more concessions. We would not expect any other country to be
satisfied with a few General Articles as a safeguard to them
for the tariff concessions which Canada will grant those other
countries. Nor do we consider, Mr. Chairman, that Schedules of
tariff concessions by themselves have any significant value,
unless they are supplemented, reinforced and safeguarded by the
rules and regulations governing falling trade which Part II of
the General Agreement attempts to set down.
I should not like to unnecessarily labour that point, but
it goes without saying, I think, that our work here certainly
has served to establish the fact that tariff concessions are of
little value, if not altogether valueless, if no provision is
made on such matters as valuation for customs purposes;
formalities connected with importation and exportation; internal
taxation; quantitative restrictions; exchange arrangements,
State-trading, etc.
Moreover, we consider that it would be a backward step in
the regulating of international commercial relations to discard
the rules and regulations set down in Part II, because the
great majority of them already form, in greater or lesser degree,
part of existing bilateral trade agreements which we - and I
would say most other countries here - now have. In fact, if you
consider the subject matter of Part II, you will find that the
great majority of those matters, if not all of them, are covered
in varying degrees in existing bilateral Most-Favoured-Nation
V
3 V
agreements. This aplies in our case at least to Part II,
Articles III, IV, VI, VII, VIII, IX, X, XII, XIII, XIV, XVI,
XVIII, XIX, XX and XXI, to varying degrees, as I have said.
The United States/Canada Agreement of 1938, for example
(which, I must say, does not certain all the provisions which
are found in some of our subsequent Most-Favoured-Nation
Agreements with other countries) does, nevertheless, contain
perhaps 85% to 90% of the provisions now contained in Part II.
Moreover, Part II is meant as provisions to a multilateral and
not simply to a bilateral Most-Favoured-Nation Agreement.
The need for detailed rules and regulations to supplement
the Tariff Schedules is nothing now, and if I may be permitted
to draw on economic history, I think it is well-illustrated in
the historical development of the Most-Favoured-Nation typo of
agreement.
Not so many years ago, a single Article providing for
Most-Favoured-Nation treatment was deemed sufficient in
Most-Favoured-Nation Agreements. As time went on, and as
countries in a world of growing economic ingenuity and nationalism
realized the need for additional safeguards for tariff
concessions which they had obtained, Most-Favoured-Nation
Agreements, as a result, became longer and more complex - more
detailed - until we now have the type of multilateral Most-
Favoured-Nation. Agreement which we propose in the General
Agreement on Tariffs and Trade.
We fully, realize that it would be most desirable if
international commercial relations had reached the stage where
a few short pious Articles would be sufficient; but unfortanately
this is not the case, and force of circumstance might not permit
such a procedure even if sufficient co-operation did exist.
4 E/PC/T/TAC/PV/6
The argument was advanced yesterday that the inclusion of
Part II in a General Agreement would act as a deterrent to the
establishment of the full I.T.O. Charter. But as we have
pointed out, Part II is but a section taken from the Charter
and represents essential rules and regulations which already
exist in large measure in present bilateral agreements. If the
existing multitude of,generally speaking,undesirable bilateral
arrangements, barter arrangenmnts, payments agreements, etc. did
not seemingly act as a deterrent to nations to meet, as we are
doing, to formulate an I.T.O. Charter, I cannot see how an
agreement which incorporates some of the actual Articles of the
Draft Charter can possibly be a deterrent. I would submit
that it is precisely because of the realization of that fact
that we have been working for the past two years at designing
some sort of law to regulate the world's economic relations.
Part II specifically will be an attempt to regulate such
relations in the fields of trade and tariffs on a multilateral
basis.
The Tariff N negotiations Working Party, in addition, has
spent many meetings on Part II. The Articles themselves
represent even more study, discussion and compromise during eight
of the last twelve months. If it is hoped, therefore, that a
few Articles in Part II, or no Articles at all, would be
sufficient, then we have been wasting a lot of time in vain.
These are some of the reasons, Mr. Chairman, -no doubt
there are others - why we consider the inclusion of Part II as
essential. Now, on point 6 of our Agenda: there is a provision
for the replacement of P art II of the General Agreement by the
relevant provisions of the Charter. This gives me the opportunity
to state the Canadian position on point 6, that is, the effect
on the General Agreement which the entry into force of the Charter
will have. As you have said, these two points are closely
related, and some of the reasons which I have just advanced.
for the inclusion of Part II, also apply to this question.
V
-5 E/PC/T/TAC/FV//6
-6-
We consider that a two-thirds majority of the contracting
parties, as is now provided for in Article XXVII (I), is a fair and
liberal requirement. The signature and asceptance of the text
and Schedules of the General Agreement is, of course, on the basis
of individual countries, that is, countries accept or reject
individually and independently. it is proper, therefore, that at
least a two-thirds majority of signateries to what
might be substantial changes in the text after Havana.
I would also point out that, under A.rticle XXVII of the
General Agreement a two-thirds majority is required. There is also
the additional provision that a Member may withdraw from the
Agreement. I fail to see, therefore, Mr. Chairman, why a different
majority - or, indeed., no majority at all but simply an automatic
superssion - can be applied in the case of Part 1I ot the General
Agreement. particularly when there is no provision for withdrawal
by any of the countries in a minority opposed to the superconsion.
Ais we have said before, we have always considered the text
and the Tariff Schedules of the General Agreement as a whole. We
negotiated
have/ and are now negotiating, tariff concessions on that basis.
Any change in Part Il of the Agreement as a result of a change in
the Charter Articles at Havana might seriously throw out of balance
and make unacceptable to us the General Agreement as a whole.
As it now stands. Canada is reddy and willing to conform to the
suggested time-table which we discussed yesterday, and to sign the
provisional entry into force protocol which was suggeted by the
United States Delegation yesterday. If the automatic superssion
were accepted, we feel, in *e fe., )hajt we would be cigning the
proverbial blank cheque by agreeing blindly and in advance to the
replacement of part II by what might be provisions different from J. E/-FC /T/TAC/TV/6
-7-
those on the basis of which Canada has negotiated, and is willing
to grant, some eight hundred tariff concessions.
Thank you, Mr. Chairman.
CHAIRMAN: The Delegate for the United States.
MR. W. BROWN (United States): Mr. Chairman, we are
considering here a Trade agreement under which all of us in this
room will make to each other substantial tariff concessions, and
the question that we have before us is: What provision is it
necessary to include in that kind of an Agreement?
I think the Delegate from Canada has brought the discussion
back into proper perspective. There has been some confusion before,
I think, and some feeling that we are discussing a question of
which provisions of the Charter should be given priority over other
provisions, but we are not considering any matter 0f giving
emphasis to one part of the Charter over another part of the Charter
we are simply considering the question of what king of provisions
we must have in the "'Agreement, whereby we give to each other tariff
concessions. E/ PC/T/TAC/PV/6
We heve always contemplated th t there, would bc ., Tariff -
Agreement. That was part of the plan and programme ever since
the beginning of this project and, like Canada, we have negotiated
here on the assumption and basis that there would. be a Trade
Agreement in much the same sense as we have had them in the past,
except that in this case it would be multilateral rather than
bilateral.
This Trade Agreement, in our opinion, should include the
essential provisions which are customary in trade agreements
dealing with tariffs. Actually we are not considering taking
provisions out of the Charter and putting them in the Trade
Agreement . The way those provisions got into the Charter in
the first place is because they have been customary in trade
agreements in the past. A.s we see it, the proposal we are
making is that we should. continue with thet practice of having
certain general basic provisions customary in trade procedure
included to safeguard the tariff concessions which we give to
each other.
Now what should those provisions be? Opinions may differ
on that subject. From the point of view of my own Delegation,
they are not very many. They are, first of a11, a provision
guarant. eing Most-Favouret-Nation treatment. That is an
essential part of the approach which we have all made to our
mutual problems here. It is a basic part of United States
foreign policy and it has been in every trade agreement which
we have concluded. It has also been found in a multitude of
other agreements concluded betweeen other countries.
Secondly, we feel that the provisions requiring national
treatment with respect to internal tax s and regulations - the
S
- .8 - E/PC/T/TAC/PV/6
old article 15 of the Charter - are essential to safeguard any
tariff concessions that we grant to each other, because, without
that assurance, any country is quite free to withdraw with one
hand what it offers with the other, by imposing discriminatory
taxes which would have the effect of tariffs. Similarly, in order
to protect tariff concessions, there must be provisions with
respect to the use of quantitative restrictions.
I think we would all agree that to have those provisions
plainly stated in the Agreement would be as desirable for the
countries that wish to use them as for the 'countries that find
their use undesirable. In the one case they set forth the
rules which limit the use of quantitative restrictions and on
the other hand they make clear the cases in which their use is
considered legitimate and proper.
We think also that the operation of the provisions on State
trading, which provide for non-discriminatory operation of State
monopolies, is an essential for the agreement.
There arc one or two others like the provisions for con-
sultation, for general standard exceptions, and so forth, but for
our Part we would be content if the General Agreement included those
basic provisions. The inclusion of those provisions is absolutely
essential if the United States is to make any tariff concessions.
We do not believe the suggestion that we might have a very
short General Agreement, in which we simply mutually agreed that
we would not nullify or impair the concessions that we granted,
end that we would sympathetically attend to complaints by other
Members, would meet the case. We will be taking drastic,
substantial and costly action with respect to our tariffs, covering
75 to 80 per cent of Our import trade, and before we can take that
action we must have rather definite assurances in the Agreement in
which that action is embodied.
- ..9. -
S S 10 E/PC/T/TAC/PV/6
I do not think that the inclusion in the General Agreement of
those provisions which I have discusscd could in any possible way
have an adverse affect upon the adoption of the Cherter. It
was suggested yesterday that perhaps sonle countries might feel
themselves so satisfied with the general provisions of the Trade
Agreement that they would not feel it desirable or necessary to
press for the adoption of the rest of the Charter.
I cannot imagine what countries were thought of in making that
suggestion, but our own point or view, I think, has been made clear,
in that our attitude towards this Charter, our desire to see this
project launched and carried to a successful conclusion, has been
abundantly remonstrated. During the long weeks of our negotiations
hero, Delegetes will remember the strenuous efforts and strong
persuasion used by United States representatives to secure
provision in other parts of the Charter than in Chapter V of
certain provisions, and I think the Delegates will realise that
we would not willingly see the result of those deliberations melt
away.
The second part of the subject which we are considering this
afternoon is the question of whether the provisions of the Gneral
Agreement should be automatically superseded by the Provisions of
the Charter. We hope and believe that the provisions of the Charter,
on the four or five basic subjects which I have referred to, will
be satisfactory and will not be materially weaker than those which
we have here recommended. We hope and believe That they will be
superseded, by the provisions of the Charter when the Charter is
adopted. But we cannot be completely sure that that will be
the case. S
E/PC/T/TAC/PV/3
We share the view of the Delegate of Canada that to agree now,
in advance, that automatic supersession should take place would be,
in effect, signing a Bank cheque. It would be signing a blank
cheque in the hands of someone in whom we had good confidence, but
it would still be signing a blank cheque. And it would be little
comfort to be in the position that if unfortunately it should turn
out that the provisions of the Charter on these basic points were
not satisfactory, we could withdrew. I do not think that would be
a comforting position for any country, because then that country
would be in the position of being faced with the choice of accepting
something unsatisfactory to it or risking the whole enterprise
by withdrawal.
We would be, I am sure, subject to very serious and legitimate
criticism at home if we should return, having agreed in advance that
a document, the contents of which are as yet unknown, should
supersede the fund mental provisions of the General Agreement, on
the lines of which we had taken drastic tariff action.
I am not particularly troubled by the possibility that not
having provision for automatic supersession would give the impression
that we are presenting the other Delegates at Havana with a fait
accompli. What we would, in effect, be saying to them is that if
they want our tariff concessions in their own right, or if they want
concessions on new articles of which they are the principal
suppliers, then they must accept certain basic commitments which we
will have already accepted.
And I am not particularly troubled by the possibility that in
some cases countries might be governed by two rules, because of
course it is well known that every nation conducts its foreign
intercourse under a great variety of rules: its arrangements with
- 11 - E/PC/T/TAC/PV/6
one country are very much more strict than its relations with
others, or with one group of countries than with another group
of countries. That is nothing now in international economic
affairs .
Therefore we feel that the present provision of Article
XXVII, in which it is provided that a two thirds vote is required
for supersession of the Agreement by the Charter, is a desirable
one. On the other hand, since it is probable that the Charter
will supersede it - and all of us are going to make every
effort to see that the Charter is that kind of document - and
since it is our attitude, as the Australian paper so well puts it,
that the Charter should should supersede it unless there is strong
reason to the contrary, we would feel it would be entirely
sppropriate so to draft our Agreement that that intention and
spirit was made clear and express it in the way of saying that
the relevant provisions of the Charter should supersode unless
forcible objection were made by one-third of the signatories.
It may be said that is a mere difference of form and not
of substance. Technically that is true, but emphasis is important
in these matters and I think the emphasis is wholly different.
It might further be provided that, if objection were so raised by
one-third. of the countries signatory to the Agreement, consultation
should immediately taks, plece to see what change or improvement
in the Agrement shoul be made, or what other action should be
teaken.
To summarize what I have said: we are dealing here with
the inclusion in a Tariff Agreement of certain fundamental
provisions which are customarily included in such agreements and
S S - 13 - E/PC/T/TAC/PV/6
which came up for consideration before this Conference because
of the fact that they were customary in commercial agreements.
To our minds the key provisions, and the ones which we feel
are essential, are those providing for Most-Favoured-Nation
treatment, national treatment, quantitative restrictions, non-
discrimination in the operation of State monopolies, and then
some clauses for consultation in the case of non-application of
the standard general exceptions. These provisions are a
sine qua non to tariff action by the United States.
We would suggest - and we could agree - that the Charter
would supersede those provisions unless there were a substantial
body of opinion to the cont ary - one-third - in which case
there should be consultation to determine future action, with
nations having the right to withdraw if not satisfied. P. E/PC/T/TAC/PV/6
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, the
position of my Delegation in this matter is generally similar
to the position that the Canadian and United States Delegates
have already outlined.
It is our view that there should be a Part II in this
General Agreement, that it should contain certain essential
provisions to balance and to safeguard the Tariff concessions.
At the same time we agree that very likely the present
draft of Part II could be lightened by dropping some of the
minor provisions which are at present in it. I am not sure
that it could be out down quite to the extent that Mr. Winthrop
Brown suggested, but we certainly consider that some of the ballast
could be thrown out.
A point we might consider at a later stage is whether some
of the texts of the Articles could possibly be brought in by
the
way of reference to the text of/Articles of the Charter which
we have just passed. We agree that in due course Part II ought
to be superseded by the Charter and in that I am not sure that
I altogetherr agree with the opinion expressed by Mr. Winthrop
Brown as to the simultaneous existence of two different multi-
lateral codes. I we agree that the existence of two different
multilateral codes might have certain definite in conveniences and
objections but I .not quite sure that the case of bilateral
trade agreements is an exact parallel; but anyhow we do feel
that in the absence of knowledge about what the eventual contents
of the Charter are to be, a provision for supersession should
14 P. 15 E/PC/T/TAC/P V/6
not be purely automatic; there ought to be come kind of provision
by which parties to the General Agreement can take stock of
the general situation before supersession by the Cnarter takes
place. Of course, there are a variety of ways by which that
result could be achieved, but it seems to us the suggestion
that the Charter shall supersede Part II of the Agreement unless
one-third of the parties to the General Agreement object is
probably a good way of doing it. If one-third of the
parties objected, then all the parties would meet to consider
the situation and what steps should be taken to meet it.
That in brief represents our views.
Thank you, Mr. Chairman.
CHAIRMAN: The Delegate of France.
M. Pierre BARADUC (France) (Interpretation): Mr. Chairman,
the position of the French Delegation in this problem is very
similar to that expressed by the Delegate for the United Kingdom.
We knew the great interest which some Governments, such
as the Governments of Canada and the United States, attach to
having Part II included in the General Agreement and we
accepted therefore this Part II in principle. Our Constitution
puts us in the fortunate position that we are able to decide
that this Agreement will enter provisionally into force, but
at present I am not in a position to know what the final
position of my Government will be in case an essential
eventuality occurs, and this eventuality is the following: P 16 E/PC/T/TAC/PV/6
My Government is prepared, as I said, to sign the present
text of Part II subject to some modification of details, but if
we were to learn at a later date that a large part of the
Governments here represented had refused to adhere to that
Agreement, what then would be the position of my Government
I cannot say now.
Therefore. I consider that we should make all possible
efforts to have a text which should be acceptable - I would not
say by all of us here - but by a large part, a very large part,
at least, of.the Governments represented. That is all I have
to say for how, Mr. Chairman.
Mr. J. P. D. JOHNSEN (New Zealand): Mr. Chairman, I do
not think it is disputed that when a country enters into a Trade
Agreement with another country it is required that it should
contain provisions necessary to safeguard any Tariff concessions
made or obligations undertaken. I think the point at issue here,
however, is just one of timing. The question is whether or not,
pending the outcome of the World Conference from which we hope a
Charter for World Trade will emerge on which to pattern trade
relations, we should attempt to include in the Trade Agreement
provisions which might not ultimately be adopted.
According to the programme that has been worked out, I
think that even provisional application of the Agreement does
not take place until 1st January next year. We are not sure, of
course, when the Charter will come into force, but we are hoping
that it will not be too long after that time. I doubt very much
whether, under existing conditions, the inclusion of Part II in
the Agreement would affect trade in any degree at all over that
period. P 17 E/PC/T/TAC/PV/6
One difficulty that I see in connection with this matter
is that, as has already been mentioned by some Delegates, it
is a fact that if a Government accepts, even tentatively, an
Agreement containing certain provisions, there is, more or
less, a fait accompli. Now, there is a possibility that if
we attempted to put into this Trade Agreement certain
provisions embodying principles to which Governments could not
subscribe, those Governments would be confronted with
difficulty in placing such Agreements before their Parliaments
for ratification. I think that is something which we have got
to take into consideration.
For that reason, if, as I previously suggested, the
inclusion of Part II is really going to have no practical
effect in the meantime, I think that it would be more practicable
and more acceptable perhaps to quite a number of countries if
we included in the meantime a minimum of provisions necessary to
safeguard Tariff concessions and then considered, when the Trade
Charter emerged, what general provisions might be included in
the Agreement. At that time it would be a matter for the
determination of each country whether or not it could accept
those provisions.
Thank you. 18
CHAIRMAN: The Delegate of China.
H.E. Mr. Wunsz KING (China): Mr. Chairman, for the time
being I shall confine my remarks to point 5. As regards this
point, the position of the Chinese Delegation is quite similar
to that of Norway. As I pointed out at one of the previous
meetings, the Chinese Delegation is also in favour of the
deletion of Part II.
I do not have to repeat all those arguments; but I would
like to point out that inasmuch as the full Charter is subject
to review at the World Conference, and inasmuch as, especially,
a number of Delegations have made reservations to a large number
of Articles, some of which would, according to this present text,
be included in the Tariff Agreement, we would be prejudicing
the position of those Delegations as the World Conference if
we were to accept Part II and incorporate precisely those
Articles in the document. In that case, we would be
introducing into the Agreement an element of uncertainty which
I think is very undesirable.
I entirely agree with Mr. Shackle and some of the other
Delegates in questioning the wisdom of the simultaneous application
in the not distant future of two different Charters or codes,
and it is precisely for this reason that we would choose not to
include those controversial Articles in the Agreement, and, on
the contrary, we would choose to wait until the outcome of the
World Conference is known.
The United States Delegate has referred to a number of
provisions which, in his opinion, would be essential for the
purpose of safeguarding the tariff concessions. I am not
quarrelling with anybody on that point. I, for my part, should
E/PC /T/TAC/PV/6
V E/PC/T/TAC/PV/6
V 19
also think that once the tariff concessions are agreed to, they
should be safeguarded. But amongst the provisions to which the
United States Delegate has referred, it seems to me he has
referred to the Article on the question of national treatment
in matters of internal taxation and regulations, and I wish to
point out that it is precisely on this Article that (if I
remember correctly) there are no lees than six or seven
reservations.
Now, I really wonder: how could we sign an Agreement
Which includes those Articles on which we have made so many
reservations? We would be put in a very embarrassing position.
We would be between two fires if we should be called upon to
sign something which we have not accepted, and, on the other
hand, if we cannot accept those provisions we are prevented
from signing the document altogether.
It seems to me, therefore, that it is not a question of
principle whether Part II should appear or should not appear in
the document: it is a practical question, and we should
approach that question in a practical manner. It is in this
sense that I would venture to make two alternative suggestions.
The first is that Part II might remain in the document, but
its acceptance should be made optional -that is to say, not
all of us are required to accept Part II. It goes without
saying that if we do not assume obligations under Part II we
certainly do not expect to obtain the benefits arising therefrom.
Another suggestion would be that if most of the Delegations
feel very keen on the inclusion of Part II, then we should
examine Part II very carefully, and pick cut those provisions
which really have a direct bearing on the question of safeguarding V 20 E/PC/T/TAC/PV/6
the tariff concessions, - in other words, only those provisions
which are absolutely essential for the purpose of safeguarding
and protecting those concessions. For example, I would pick
out the provisions in regard to formalities, marks of origin,
publication and administration of trade regulations, and possibly
also the provision relating to the question of valuation; and
as to all other Articles which are not absolutely essential, or
which have no direct bearing on the question of safeguarding
tariff concessions, it would be better to delete them.
Now, may I be allowed to come back to the Article on
internal taxation again? As to that Article, as I have pointed
out, there are perhaps no less then six or seven reservations,
and the Chinese Delegation is proud of having introduced at
least two reservations to that Article. If it is deemed to be
essential that this Article, which is now Article III on page 18,
should be included in Part II of this document, I would suggest
that we might retain the first essentials: The products of any
contracting party imported into the territory of any other
contracting party shall be exempt from internal taxes and other
internal charges of any kind higher than those applied directly
or indirectly to like products of national origin". In my
opinion, the inclusion of that sentence alone should be
sufficient to serve the purpose of safeguarding the tariff
concessions and all the rest should go out.
Mr. Chairman, I am suggesting these two alternative
solutions in order to meet the viewpoints of all the Delegations,
and in order to make it possible for those Delegations which
have made reservations on so many Articles to be able to sign
this very important document. 21
CHAIRMAN: The Delegate of Belgium.
M. A. FORTHOMME (Belgium): Mr. Chairman, it seems to me that
the question of keeping Part II in the Agreement or not depends on
whether Part II will be superseded automatically by the Charter or
not.
We find it already rather difficult to accept the Agreement as
it stands with Part II composed of texts which give us grave doubts,
especially those relating to quantitative restrictions, as we are
Not quite sure whether those provisions as they stand in the Charter
really represent a protection for the tariff concessions we shall
make.
At the beginning of these negotiations, we hat- thought that
one of the advantages of the negotiations in Geneva would have been
that the countries represented here might at least set up between
themselves a more liberal system of trading than the one that might
be foreseen by the definitive Charter of Havana. This more liberal
system of trading would not necessarily be in contradiction with the
Charter, but, taking opportunity from the provisions of this Charter
itself, might have established something more wide and enable trade
to develop. In order that this should come about, the Agreement
would have to have, first of all, an independent existence from the
Charter, and the provisions of the Agreement should not be
substituted automatically by the Charter, Well, it seems that ideas
here have gone considerably away from that original conception and
that, if we have not quite accepted the idea of automatic supersession
yet, we are bordering on the edge of it. The American proposition
for an amendment to Article 27 is very much in that line, because
evidently if we are going to have supersession, unless one-third of
E/PC/T/TAC/PV/6
J. 22 E/PC/T/TAC/PV/6
the Members opposes supersession, there is a very great chance that
this is equivalent to automatic supersession.
Therefore, we have to think now in terms of the Charter
superseding automatically the provisions of Part II. Well, the
first thing that will happen is that those who are not satisfied
with the Charter will be obliged to withdraw from the General
Agreement, and this brings about certain difficulties.
One difficulty is that certain countries, which have shown
willingness here in Geneva to pay and make sacrifices in order to
gain certain advantages, will have to give them up or else they will
have to swallow a Charter which they do not like. There is also
another thing - there might be countries who are quite willing to
accept the Charter as a sort of basic document for the constitution
of the International Trade Organization, but who would not consider
the Charter as a sufficient basis and protection for the tariff
concessions made here in Geneva. Well, they would have to get out
of the Agreement even though they would remain part of the
International Trade Organization because they have accepted the
Charter, and therefore we find them in the status of inferior Members
of the International Trade Organization because they are excluded
from the tariff Committee. The only way that they could get into
it would seem to be either that they would be allowed to withdraw
a certain number of concessions, which they had made in Geneva, until
they thought that the concessions they were making were equivalent
to the field covered by the Charter, or else they would have to be
allowed to wipe out all trade and negotiations in Geneva and be
considered as new Members of the International Trade Organization
and re-negotiate altogether following the procedure for new Members
joining the International Trade Organization, and acceding to the
J. 23 E/PC/T/TAC/PV/6
Tariff Committee. Of course, the question is: would negotiations
be considered satisfactory if they did not give concessions
comparable to the ones they would have been willing to give on the
basis of conditions obtaining in Geneva?
The result of all this is that I am inclined to think that it
there is very little advantage in putting the Tariff Agreement into
force provisionally before we know the results of the Havana
Conference.
On the other hand, I do realise that it may be difficult to
wait as long as that and to keep the concessions secret. Therefore,
there might be an advantage in putting the Agreement into force
provisionally, but then I do believe that it ought to be put into
force on a very provisional basis. I mean by that that Part II
ought to be written in such a way as to be clearly transitory and to
be replaced by the Charter and also by the obligations in the matter
of concessions on tariffs that go with this.
It seems to me that in order to modify Part II, to make it
really transitory, we should start by deleting Articles 4 - 9
inclusive; then we should delete Articles 10 - 13 inclusive - those
are the ones relating to quantitative restrictions, but replace them
by an Article which could be made up of Article 20 of the Charter,
paragraph 1, Article 21 of the Charter, paragraph 3, Article 22 of
the Charter, paragraph 1, Article 23 of the Charter, paragraph 1(a).
Those four provisions grouped together would be sufficient to cover
the problems of the next twelve months. Then, I would further
suggest that we delete Articles 14 - 17, delete Article 19 and
delete Article 21. Finally, I would suggest that Article 1 be
transferred to Part II. The different provisions and safeguards
that are in the Articles which it is proposed to delete could be
J. J. 24 E/PC/T/TAV/P.V/6
sufficiently provided for by the general engagement we have in the
protocol to observe the principles of the Draft Charter until such
time as the definitive Charter comes into force. In this way, I
think that provisional application would not prejudice in any way
the possibility for each country to adapt itself to any basic change
in conditions resulting from the definitive Charter.
CHAIRMAN: The Delegate of the Netherlands.
DR. A.B. SPEEKENBRINK (Netherlands) Mr. Chairman, I have
already indicated that my Delegation belongs to those Delegations
which think that an Agreement without certain safeguards to protect
tariff concessions made would be very incomplete. However, I have
also indicated that I have an open mind with regard to this question,
and I think that I am of the same opinion as my Belgian colleague,
that is, that we should study carefully what should go into Part II.
I might, however, add that I have had no chance to really study his
own proposal, and so I have an open mind on that too.
I do not, wish to add to all the arguments just made here around
this table and to repeat all these arguments, but I would only draw
your attention to one fact. I have noticed that when we discuss
this thing we are always in a very optimistic mood and we always
think that when we mention the magic word "Havana" our troubles are
over, and that when we have met and sat round the table there for
a month or two months we may have a Charter to supersede certain
stipulations of our General -Agreement on Tariffs and Trade. Now,
but
you might call me a cautious Dutchman,/if I say what is in my mind,
that is, that there will be fifty-two, or even more Delegations there,
most of whom have not studied the Charter properly at all -
notwithstanding the fact that we have sent them all the documents J. 25
(may be, just because we have sent them all the documents :), you
will see why I get a little worried, and when some people ask me
what will be the length of the Havana Conference, I say: "If it is
going to be a success it will last for at least four months, and if
it lasts only six weeks it may fail or else we will have another
Conference at the end of the year". Again, I might be pessimistic
here, but I think we ought to keep that in mind when we discuss this
thing.
It might not be the case at all that in a few months we will
have Articles available to supersede Part II of this General Agreement,
and then when certain countries - and I see we belong to them -
think it necessary that we should have certain Articles in the
General Agreement on Tariffs and Trade to safeguard the concessions
made - and a great number of Delegations are of the opinion that it
is important to continue the work, and to bring it to a close here
in Geneva, and to give provisional execution to the tariff
reductions here in Geneva - then I think we must turn our minds very
much to the fact that it might take a relatively long time before we
really have the International Trade Organization working, and before
we really have the, Articles in their proper form. Therefore, I
would simply ask you to give that special attention when we discuss
what should, and what should not, come into Part II of the Agreement.
E/PC/T/TAC/PV/6 E/PC/T/TAC/PV/6
CHAIRMAN: Are there any other speakers?
The Delegate of India.
Mr. B.N. ADAKAR (India): Mr. Chairman, as we stated on
another occasion, India is not inclined to accept the suggestion
that Part II of the Agreement should be automatically superseded
by the Charter. That does involve signing a blank cheque and
we therefore contend that if any country signs the General
Agreement they should not be compelled to accept any change in
that Agreement except by their consent.
That being the position, we have throughout urged that the
question of superseding Part II of the Agreement by the
corresponding provisions in the Draft Charter should not arise
unless and until all Members who have signed the General
Agreement join the ITO. If any Member does not accept the ITO
Charter, then any amendment to Part II of the General Agreement
should be carried out only as a process of amendment and, as
provided in the relevant Article, such amendment should apply
to any Member only if he accepts it.
Having said that, we would like to add that if it is
regarded as inconvenient that any country which has signed the
General Agreement should be permitted to keep out of the ITO,
then provision should be made that such a Member which does
not find itself able to accept the ITO Charter should be
permitted to withdraw from the Agreement.
We have said on other occasions that certain provisions
at present included in the draft of the General Agreement
are essential. Among them we mentioned Article 14 - the
S
- 26 - -27 - E/PC/T/TAC/PV/6
old Article 14 - which provides for Most-Favoured-Nation
treatment. But as regards the previous provisions included
in Part II, we share the doubts expressed by some of the
Delegations here. It has been argued that the provisions of
Part II are essential for safeguarding the tariff concessions.
It has been argued further that they are provisions which are
customarily included - at least some of them - in trade
agreements of the normal type.
If the General Agreement does not consist merely of
tariff concessions, but consists of a great deal more, and if
these additional provisions then subsequently turn out to be
different from the provisions of the Draft Charter, a very
anomalous position will arise. The signatories to the
General Agreement will have to continue to extend the tariff
concessions they have given under the General Agreement to those
new Members of the ITO who are prepared to make tariff con-
cessions which are comparable in scope and effect to those made
by the original signatories to the General Agreement but who are
not prepared to accept anything more than the provisions of the
Draft Charter.
If the corresponding provisions of the General Agreement
turn out to be tighter than the provisions ultimately adopted
for the Draft Charter, then there will be certain Members who
may be prepared to make, along with the acceptance of the
provisions of the Draft Charter, tariff concession which are
comparable in scope and effect to those made by the original
signatories to the General Agreement. Then, under the terms
of the Draft Charter, the original signatories to the General
Agreement will have to extend even to such Members the
benefits they have exchange among themselves. That is the
spirit of the Most-Favoured-Nation clause.
S E/PC/T/TAC/PV/6
If they will not extend those tariff concessions unless the
new Members agree to accept the more liberal provisions
embodied in the General Agreement, that will be violation of the
spirit of the Most-Favoured-Nation clause. Secondly, it would
amount to a small group of countries setting up a nucleus which
will control the rest, and that is again a very unpleasant
situation.
If, on the other hand, they agree to this position in
which they have to extend tariff concessions granted under the
General Agreement even to those members who do not accept
the general provisions of the General Agreement but accept some-
what less liberal provisions perhaps embodied in the ITO
Charter - if they are prepared to accept that position, does
not that contradict the statement which is made here?
If those provisions are regarded as absolutely essential
for safeguarding the tariff concessions, then nothing less
than those provisions would be acceptable to the countries
which maintain that position. That would lead to tho consequence
that they would refuse to extend the benefits of the concessions
they have given under the General Agreement to countries which
do not accept the existing provisions.
It is because the General agreement and the rest of the
Charter are linked in this way that we consider the problems which
have been raised are problems which will not arise if the
provisions of Part II could be separated from the provisions
eventually adopted for the Draft Charter.
The only way in which that can be resolved is either by
deleting Part II and substituting it by a general provision, which
could be a minimum provision which requires Members to take
- 28 -
S S 29 E/PC/T/TAC/PV/6
no measure, whether in the form of restrictions or any other form
which would tend to nullify the benefits of the tariff con-
cessions, or, alternatively, I suggest that the acceptance of
Part II could be made optional for the Members.
Surely we have to consider two further factors in this
connection. It is not intended that a very long period should
elapse between the General Agreement and the acceptance of
the Draft Charter. These general provisions are intended to cover
only a short period.
Secondly, we have to consider the many countries which may
leave acceptance or even signature of the General Agreement until
after the World Conference. India does not expect to be
among those countries. If India signs the General Agreement
she will be in a position to give provisional acceptance to that
Agreement at the time of the simultaneous publications But we
must remember the fact that there may be a large number of
countries which may delay the acceptance until a considerable
time has elapsed after the end of the World Conference.
Therefore the inclusion of Part II loses part of its significance,
Thirdly, whilst it is true that some provision must be made
whereby Members may not nullify the tariff concessions given to
them by means of quantitative restrictions, etc., is it not
true that the provisions included in Part II S beyond that?
value of
They are not strictly related to safeguarding the/particular
tariff concessions we have provided for in the General Agreement.
But the wider issues of commercial policy are certainly consistent
with the promotion of world trade.
Can we not defer the final adoption of this Part, II until
the matter has been thoroughly threshed but at the World Conference?
If that alternative is adopted, then there will be no conflict
between the General Agreement and the Charter and I believe no E/PC/T/TAC/PV/ 6.
difficulties will arise by requiring all future Members of the
ITO to subscribe to the General Agreement and we shall have
preserved the general spirit adopted at the beginning, that
all Members of the ITO shall make concessions which are
comparable in scope and effect to those made by the original
signatories to the General Agreement.
The principle is sound, but when we extend that same
principle to cover not merely tariff concessions but a great many
other things, we find ourselves in a position of anomaly. I
would therefore suggest that we should considerably restrict the
scope of Part II, or, preferably, delete Part II altogether. If
that is not possible, substitute it by a minimurn provision
and make acceptance of Part II optional.
I would not like to be misunderstood. This not due to
any objections or reservations which India may have on Part II.
India has, I think, only one reservation on Part II at present.
Therefore our objection to the difficulties we have pointed out
in making Part II an integral part of the General Agreement
do not arise from any difficulty on our part in accepting Part
II, or any desire on our part to see particular parts of Part II
excluded; it is due entirely to mechanical difficulties of
procedure which we apprehend.
- 30 -
S - 31- E/PC/T/TAC/PV/6
CHAIRMAN: The Delegate of the United States.
Mr. WINTHROP BROWN (United States): Mr. Chairman, one of
the major things that has been brought out in this discussion
is the concern of certain countries lest there be two different
sets of rules in effect governing the same subject matter. I
wonder if my suggestion which I made earlier does not really
meet that point? Because, as I put it forward, it would mean
that we would accept certain commitments in this General Agreement
and that, if the Charter was satisfactory, that Charter would
supersede the Agreement; that would be what we would have
accepted to have happen and there would not be two sets of
rules.
If, however, a third of the countries represented felt that
the provisions of the Charter were, unfortunately, unsatisfactory,
then they would object to the supersession and there would be
consultation between the signatory members to see what we should
do about it. At that consultation we should be taking about a
known fact; in other words, the difference between the Charter
provisions and the Trade Agreement provisions. We do not
know now that there are going to be any; and we hope there
won't be any thing substantial, but, since we do not know, we are
talking about a great Unknown, and it seems to me the suggestion
which I put forward earlier provides a practical way of meeting
the problem as it arises, if it arises.
CHAIRMAN: Are there any other speakers?
I think we have now exhausted the debate on point 5 of our
agenda. I think this discussion has served a useful purpose
in bringing out the different points of view. It would seem
that the majority of the Delegations represented in the Committee
are in favour of the inclusion of Part II in the General Agreement;
on the other hand, other Delegations, representing countries who
P. P. E/PC/T/TAC/PV/6
32
account for a considerable part of the trade represented at the
Tariff Agreement Committee, attach great importance to the
inclusion of certain Articles in Part II in order to protect the
Tariff concessions.
A number of Delegations have expressed the view that certain
Articles which are now included in Part II could be omitted, and
I would suggest that when next we take up the Agreement, Article
by Article, as I propose to suggest at the conclusion of this
debate on paper W/601, we can then examine the various Articles in
Part II one by one and that will enable us to get a clear view as
to which Articles should be retained and which Articles should not
be retained.
A number of Members of the Committee, in speaking on Item 5
of the Agenda, have also touched in Itern 6 which is the effect on
the Charter of the entry into force of the General Agreement.
This really relates to paragraph 1 of Article XXVII of the Trade
Agreement. A number of views have been expressed with regard to
this particular aspect of the General Agreement. The United
States Delegation have suggested a modified form of paragraph 1
of Article XXVII which will later on be considered when we come
to deal with that Article in the course of our going through the
draft General Agreement Article by Article. Before, however,
leaving item 6 I would like to know if there are any Members of
the Committee who would like to discuss this particular item on our
agenda further. If not, we could pass on to item 7, but I do not
want to deprive any Member of the Committee of an opportunity of
expressing any particular views his Delegation may have on item 6.
The Delegate of Chile.
M. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
I do not want to speak on paragraph 6 or 7 of our agenda, but
merely on what you have just stated. If I understood correctly,
you have suggested that next week we shall consider the Agreement
Article by Article, which, in my opinion, presupposes that we
accept this Agreement in principle and that we accept the insertion
of the Articles in such Agreement. P 33 E/PC/T/TAC/PV/6
There is, however, I believe, a preliminary question. It
has been suggested here today to replace the text of the
Agreement as a whole by a simple set of provisional Articles. It
has also been suggested that we should eliminate some parts of
the Agreement. Another suggestion was to, so to speak, leave
the door open: that is to say to have a text the acceptance of
which would not be compulsory for the Members. Other suggestions
have also been made, and I think that all these suggestions should
have priority over the discussion of the Agreement Article by
Article. It is possible that during such discussion there may
be some alteration or amendments proposed to these Articles,
but this, in my opinion, is of secondary importance. The most
important question is based, for instance, on the suggestion
made by the Delegate of the United States, to replace the text
of the Agreement as a whole by a set of general provisions
safeguarding the concessions made or obtained here in Geneva.
I believe this should be the procedure to be followed, subject
to your agreement.
CHAIRMAN. I am not wedded to any particular form of
procedure, except that I am anxious that we should make progress
as rapidly as possible. Members of the Committee will recall
that there have been several suggestions during our general debate
that we should get on to considering texts, We had considered
that this general debate would bring out the various points of
view on these matters of principle to which the Delegate of
Chile has just referred; in fact that has been the object of
the general debate and the object of having this paper W/301
prepared in advance of consideration of the Charter Article by
Article. But it now seems that we have pretty well exhausted
the general debate and that the only way in which we can make
progress is, bearing in mind the conclusions that have been P 34 E/PC/T/TAC/PV/6
reached in this general debate, to consider the Articles one
by one.
I do not think that necessarily implies acceptance of the
Agreement by any particular Delegation. It simply is a means
of ascertaining the views of each Delegation on each Article.
For instance, that would be the only way in which we could find
out how the suggestion of the United States Delegation for the
elimination of certain Articles in Part II could be brought about.
It is only by considering those Articles that we can see what
importance is attached to each Article by the different
Delegations. If we find that there is an Article to which no
Delegation attaches any great importance, we can readily drop it.
But I cannot see how we could decide in principle on the United
States suggestion that certain Articles be dropped until we
examine the Articles to see which ones the various Delegations
hold are important and which they view as unimportant. 35 M. F. Garcia OLDINI (Chile) (Interpretation): If it is
wished, Mr. Chairman, that this historic procedure should be
followed, I will not insist; but I would ask that, if possible,
the text of the suggestions made by the Delegates be circulated
to all Delegates before we begin discussing Article by Article.
CHAIRMAN: That had been my intention, and I was going to
announce at the close of this general debate that the Secretariat
would produce before our next meeting on Monday next (if we do
not meet tomorrow) the following documents: an analysis of the
agreement reached to date by the Tariff Agreement Committee on
the points dealt with in our general discussion That would
set forth the measure of agreement that had been reached and the
points on which it had not been possible to reach agreement.
The Secretariat have also, at my request, been studying
various Final Acts that have been signed in connection with various
international conventions, and they are preparing a draft of the
Final Act which will facilitate our study of that question when
we come to it. They are also preparing a new text of the Draft
Agreement incorporating the latest text of the Charter. They
are not touching any question of substance - they are simply
bringing the draft prepared by the Tariff Negotiation Working
Party up-to-date by including the new texts of each relevant
Article as approved by the Preparatory Committee. Those documents
should be ready for circulation by Monday next.
With regard to the various suggestions which have been made
by Delegates such as for instance, the proposal of the United
States Delegation today regarding a modified form of paragraph 1
of Article XXVII, I would suggest that if the United States
Delegation agree, they should submit that proposal in the form of
E/PC/T/TAC/PV/6
V V
36
an amendment to paragraph 1 of Article XXVII.
The United States Delegation, at our discussion yesterday,
also suggested that provisional application should be covered
by a Protocol rather than, by an Article. Perhaps the United
States Delegation would be ::. j*; mind as to also submit a draft
Protocol in the form of a proposal; and it is open to any
other Delegations who have made suggestions in this general
debate to also submit proposals in the form either of amendments
to the Articles or in the nature of a revised text.
In that way, we would have something to work on, and we
could start with either Article I or Part III, If the Delegations
would so prefer, and go through the Agreement Article by Article.
I should think the logical course now would be, if we have the
definitive text of the Preparatory committee, to start with
Article I and go through to Article XXXI.
Are there any comments on the proposed procedure?
H.E.Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
am very obliged to you for the initiative, because it was,
exactly what I wanted to propose. I thought that it might be
of some use if I brought before this Committee a further idea
which may be of some interest, and that is the following: We
are faced here with, approximately, two groups of countries.
One group consists of countries which are ready to accord the
tariff corn essions on light conditions. The second group of
countries requests heavy conditions in order to accord the
concessions.
I do not know if, in the end, we will be able to overcome
this difficulty; but if not, then there are only two ways, to
my mind, in which to finish our work: either those countries
E/PC/T/TAC/PV/6 V 37 E/PC/T/TAC/PV/6
which impose no conditions for putting into force the tariff
concessions would do it, as I said once before, by means of
the existing bilateral commercial treaties, extending the
benefits to all other countries who have Most-Favoured-Nation
treatment, or it would be necessary to have double-J.iu
Schedules: one list to go into force immediately among those
countries which were ready to give the concessions on light
conditions. The second Schedule would not enter into force
unless the countries agreed later. There would, therefore, be
double Schedules, and it would be left open to any country
to pass from the light Schedule to the heavy Schedule.
CHAIRMAN: I thank the Delegate of Czechoslovakia for his
suggestion. I think we will have an opportunity during the
course of our discussions of the Articles to return to this
suggestion and elaborate it further.
Are there any other comments on the procedure? If not, we
can resume the general discussion. I would like to know if any
other Delegates wish to speak on Item 6, in addition to what has
already been said during our discussion of Item 5.
M. Hassan JABBARA (Syria) (Interpretation): Mr. Chairman,
I would like to give some explanation as to our position,
referred to in sub-paragraph (vi). You will see that we are
agreeable in principle to the inclusion in the Agreement of
Part II, provided that Part II shall be automatically replaced
by the equivalent provisions of the Charter.
We never thought that the General Agreement could be
independent or different from the Charter. We always understood
that the aim of the meeting in Geneva would be only to study the
Draft Charter, which would in turn become the world's trade code. V 38 E/PC/T/TAC/PV/6
During this study of the Charter, the question of the tariff
negotiations arose merely, in our opinion, to supplement the
benefactory effect of this code, and that is why we found it
quite natural, and even necessary, that the General Agreement,
which is a direct consequence of the Charter, should be
superseded or replaced by the corresponding provisions of that
Charter. We never thought for a minute that we might have two
codes dealing with the same question in a different way - in
other words, two different applications of a similar question.
We think, therefore, that between the provisions of the
Charter and the provisions of the General Agreement there should
be no difference, and when the question of preferential
arrangements was mentioned, we wondered if that were put in a
different way in the Charter from the Agreement, what would be
the position of a country signing the Charter and putting the
Agreement provisionally into force before the Charter itself
comes into force. 39
We are all the more interested in that point as we have
ourselves made a reservation on the question of preferential
arrangements between neighbouring countries, and if tomorrow our
point of view is adopted in the final Charter,and/our suggestion of
compromise giving a partial satisfaction were to be adopted, what
would our situation be then if we had signed the Agreement which
would go against the reservation we made to the Charter?
I believe that the difficulty we meet there in that respect is
due to our desire to apply a law, which is the Agreement, and say
that it results from another law, which itself does not yet exist.
We all agree, I think, that there should be no fundamental
difference between the Charter and the Agreement, but there might
be contradictions between these two documents, and I wonder what
would be the situation in the parliaments in the various countries
concerned if they have to study and to approve two different texts.
That is why I do not see any other alternative than to say that the
provisions of the Agreement will be automatically replaced by the
corresponding provisions of the Charter.
CHAIRMAN: Are there any other commments on Item 6 of the
Agenda.
If not, we shall now pass on to point 7 - "Implementation of
Charter provisions in addition to those appearing in Part II of the
Agreement". This really relates to the protocol.
There will be a further opportunity of discussing this question
when we come to take up the Protocol in detailed in relation to the
draft Agreement.
The Norwegian Delegation has made some observations. They
consider that the Protocol should be deleted, whilst certain of its
clauses should be transferred to the Preamble if necessary.
J .
E/ C/T/TAC/PV/6 40 The Czechoslovak Delegation proposes the deletion of the
understanding in the Protocol to observe to the fullest extent of the
authority of each Government.
The Australian Delegation wishes the Schedules and the Charter
to be dealt with and adopted simultaneously. It would prefer the
Agreement to contain all the Charter in its present form, on the
understanding that when the Charter is finally approved, it will
replace the General Article of the Agreement.
The Syrian-Lebanese Delegation is agreeable to the terms of the
Protocol, provided it will not require the application on their part
of principles of the Charter to which they have lodged reservations.
Members of the Committee will see that these various points
have already been touched upon in the course of the general debate,
but if there any additional remarks which any Member of the
Committee wishes to make regarding Item 7, I should be glad if they
would indicate their desire to speak on this occassion.
Do any Members of the Committee wish to speak?
DR. H.C. COOMBS (Australia): Mr. Chairman, I think I should
make a short explanation of the statement we have made here. It is
true that we have repeated many times that the proper time for this
question to be dealt with would have been for the Charter and
Tariff Reductions to be considered simultaneously. We recognise,
however, that that is impracticable, so that the suggestion here
is not a proposal.
The tariff Working Committee did attempt to meet our point by
the inclusion of the Protocol, but I must confess some doubts as to
the adequacy of the Protocol to meet our point. An undertaking to
carry out the principles of the Charter can, as I see it, mean
everything or nothing. If it means everything, then there is no
E/PC/T/TAC/PV/6
J. E/PC/T/TAC/PV/6
need for Part II - in fact, there is no need for Article 1 and there
is no need for any of these particular Articles - because we would
be undertaking to observe the Draft Charter until we knew what the
final Charter was. If that is what it meant, that would be a
satisfactory arrangement to Australia, but we understand that that
is not practicable - countries are not prepared to give that
undertaking now in any sense, which means anything, and consequently
I am rather forced to the conclusion that it means very little.
Therefore, I have some sympathy with both the Norwegian and the
Czechoslovak Delegations in wanting to have eliminated a provision,
the precise implications of which are so exceedingly uncertain.
However, Mr. Chairman, it is a matter to which we would like
to give some more thought, and I would therefore like an opportunity
to discuss this matter again when we come to consider the Protocol
itself. In the meantime, it would greatly assist me if Delegates
could inform me how they think their governments would interpret the
undertakings to observe the principles of the Charter in the terms
in which it is now embodied in the Protocol.
CHAIRMAN: The Delegate for Norway.
MR. J. MELANDER (Norway): Mr. Chairman, we feel that the
Protocol as drafted here falls into two categories. The first
three paragraphs mean nothing, and consequently they could be
transferred to the Preamble. The last paragraph, on the other hand,
we interpret in such a way that it means all. In other words, it
is an obligation which is equivalent to the obligations undertaken
under Part II. The only limitation is that the last paragraph of
the Protocol refers to the fullest extent of their authority".
That is the only limitation.
J.
41 42 The reason why we have proposed that the Protocol ought partly
to be deleted and partly to be removed to the Preamble is that the
first three paragraphs ought to go into the Preamble because they
mean nothing, and the last paragraph ought to be deleted because it
ought to be treated in the same way as Part II.
CHAIRMAN: Does any other Member of the Committee wish to
speak on this subject?
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, it is with
the utmost diffidence that I say anything on any question which
raises doubt in Dr. Coombs' mind.
I hardly dare to discuss such a difficult question, but the way
it has always appeared to me is that, after all, things are not
necessarily either absolutely black or absolutely white. They do
not necessarily mean everything or nothing - there surely is an
intermediate field in the discussions of Governments where there is
a measure of administrative discretion. Not everything that a
Government does is precisely determined by law, and surely within
their day-to-day administrative discussions there exists scope for
some intermediate expression of opinion. Well, if that is so, it
does mean, does it not, that we think that there is a certain
possibility of making it mean something? That is what I have
always conceived to be the intention of this.
Perhaps, in the case of my Government, the difficulties are
much less than they might be in the case of another Government,
because as far as I know there is nothing in this Draft Charter
which would require a modification by law. Therefore, no doubt it
would be much easier for us than for certain other Governments, but
I should have thought that every Government would allow for a certain
E/PC/T/TAC/PV/6
J. J.
43
amount of administrative flexibility, and within those limits this
might have some meaning.
CHAIRMAN: Are there any other speakers?
It seems that we have exhausted this subject, and we have now
come to the end of our general debate.
The Secretariat will require time to prepare the various
documents which I have referred to in this meeting, and it will not
be possible to have these documents ready for circulation tomorrow -
and in any case, Delegations will want some time to study them - so
I propose that our next meeting be held on Monday at 2.30, and the
Secretariat will do there best to have these documents circulated
as much in advance of the meeting as possible.
MR. J.P.D. JOHNSEN (New Zealand): Mr. Chairman, is it possible
to give any indication of the programme of meetings next week? Is
it intended to hold the meetings in the afternoon of each day?
CHAIRMAN: We think that the afternoon is the best time to meet,
and therefore we were proposing to hold a meeting every day next
week, if that is found to be necessary.
Any other comments?
The meeting is adjourned.
The meeting rose at 5.50 p.m.
E/PC/T/TAC /PV/6 |
GATT Library | td332yy7703 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Tenth Meeting of Commission A 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/A/PV/10 and E/PC/T/A/PV.8-11 | https://exhibits.stanford.edu/gatt/catalog/td332yy7703 | td332yy7703_90240089.xml | GATT_155 | 115 | 723 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/A/PV/10
6 June 1947
ORIGINAL: ENGLISH
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERBATIM REPORT
TENTH MEETING OF COMMISSION A
HELD ON FRIDAY, 6 JUNE 1947 AT 2.30 P.M. IN THE
PALAIS DES NATIONS, GENEVA
H. E. MR. ERIK COLBAN
Note:
(Chairman)
(Norway)
Owing to the fact that it was necessary for
Commission A to meet at the same time as Commission B
it was not found possible to provide a verbatim record
for the 10th meeting of Commission A. An expanded Summary
Record has however been prepared and will be distributed
to Delegations.
NATIONS UNIES |
GATT Library | fk846td5511 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report Tenth Meeting of Commission B held on Monday, 16 June 1947, at 2.45 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, June 16, 1947 | United Nations. Economic and Social Council | 16/06/1947 | official documents | E/PC/T/B/PV/10 and E/PC/T/B/PV/7-11 | https://exhibits.stanford.edu/gatt/catalog/fk846td5511 | fk846td5511_90250079.xml | GATT_155 | 14,068 | 84,900 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/B/PV/10
16 JUNE 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS C ONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
TENTH MEETING OF COMMISSION B
HELD ON MONDAY, 16 JUNE 1947, at 2.45 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 E/PC/T/B/PV/10
CHAIRMAN: We will now open the Meeting of Commission
B. to consider Article 30 of the Draft Charter.
Commission B will consider Article 30 on the lines of
the same procedure that we have adopted in the case of
Chapters VI and VTII that is, we will have a preliminary
reading of the Article and any points which may arise will
be referred to a Sub-committee for further study, The
same will apply to purely drafting amendments.
At the same time we wish to have a very full discussion
within the limits of the time available to the Commission,
so that the Sub-committee may have sufficient guidance from
the Commission to assist them in their work .
The Steering Committee have allotted only two days to
the consideration of Article 30; but, as there are not very
manny amendments, I believe this time should be ample for
the purpose we have in view.
We shall take as a working paper Document E/PC/T/W/l90,
prepared by the Secretariat for the discussion of Article 30,
and this will serve as our annotated Agenda for the discussion
in Commission B.
On the first page of Document W.l90, under the heading
of General Comments, a reference is made to the Report of the
Sub-committee on Chapter III.
In Paragraph 28 of Document T, 95, Page 6, giving the
Report of the Sub-committee on Chapter III, reference is made
to Article 8, formerly Article 7 of the Draft Charter.
Tnis Article now reads as follows: "The Organization shall
have regard, in the exercise of its functions as defined else-
where in this Cherter, to the need of Members to take action
S
~~~~~~~ 2 - S
within the provisions of this Charter to safeguard their
economics against deflationary pressure in the event of a
serious or abrupt decline in the effetive demand of other
countries."
The Sub-committee on Chapter III took note of the
intention of the Preparatory Committee to ensure that there
be adequate safeguards in the Charter to meat the situations
referred to in Article 8. They also recommended that the
various Articles of the Charter be re-examined to ensure that
the drafting adequateIy meets the requirements of Article 8,
Unless there are any comments, I propose that the
requirements of Article 8 be taken into account by the Sub-
committee when it is considering Article 30.
The Delegate of New Zealand.
Mr. G.D,L.WHITE (New Zealand): Mr. Chairman, if I might
make a small statement in this respect, our attention has been
drawn by the Sub-committee to the fact that in the event of a
serious or abrupt decline in osmand, a country may need to
safeguard its economy, and that the Organization, in exercising
its functions under Article 30, shall have regard to this neod.
We have had a look to sea just what the functions of the
Organization are in Article 30 and we find that they are this
sort of function: in Paragraph 1 of Article 30 the Organization
is to determine * ..th~r serious prejudice to some Member's
interests is causes or threatened by some other Member's
subsidies, and it has another function, to. discuss with. a
Member the possibility of' limiting the subsidisation concerned.
Paragraph 2 of Article 30 says the Organization is to
determine whether an extension of an export subsidy may be
E /PC/T/B./PV/10 S - E/PC/T/B/PV/10
allowed; and in Paragraph 3 the Organization has a function to
determine whether a stabilisation scheme involves an export
subsidy.
In Paragraph 4 the Organization is to determine whether a
special difficulty is one which should be dealt with under
Chapter VII and, in the event that the procedures under
Chapter VII fail, the Organization may determine a suspension
of Paragraph 2 of Article 30
The only other function of the Organization is mentioned in
Paragraph 5; that is, to enter into certain consultations about
the choice of a base period regarding the effect upon trade of an
export subsidy.
When we, try to envisage how The Organization might exorcise
these functions in a manner helpful to a country which is
suffering from deflationary pressure we find that the duty
of the Organization could only be to be somewhat more lenient
in its determinations or in its attitude during consultations;
that is, the Organization could perhaps put less obstacles in the
way of a country which wished to use subsidies or to increase
subsidies.
Since the Organization has a considerable measure of
discretion in making those determinations and consultations in
the present draft of Article 30, we are not of the opinion that
any major re-drafting will be required to enable the
Organization to carry out its functions under Article 7, or
Article 8 as it is now. P 5 E/PC/T/B/PV/10
This leads me on to make a further point of a more general
nature regarding Article 30, namely that a member's right to use
subsidies and even to use export subsidies is only to a very small
degree limited by this Article. Article 30 in fact gives sub-
stantial latitude to countries which are in a position to use this
particular method of influencing their economic activity and their
external trade. Then point I arn making is perhaps one that should
be made in the discussions of Commission A because Article 30 shows
rather a striking contrast to the provisions of many other Articles
in Chapter V which relate the rights of members to use various
methods of departing to one extent or other from liberal trade
principles. And we find that whereas other methods are very
severely circumscribed, subsidies are merely/to be notified to the
Organisation end made subject to consultation upon request.
This point is so obvious that I ao not wish to elaborate it any
further. I merely wish, on behalf of the New Zealand delegation,
to call attention to this point in Commission B SUzring our con-
sideration of the Article on subsidies so that we bear in mind in
this Commission that we are dealing with an article which is of a
very different nature from other articles in Chapter V. The New
Zoaland delegation, for its part, will be very conscious of the
nature of this article when determining its attitude to-other
articles of Chapter V. E/PC/T/B/PV/ 10
CHAIRMAN: Are there any other comments on this subject?
The delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I would
like to mention first that it is on the French initiative that the
sub-committee mentioned the text which you have just read, and the
mention which was included in that report referring us to article 7,
that is now Article 8.
In fact, we think that the drafting of Artiole 7 was not
sufficient to cover the case and that the procedure we now have, or
which we had, was too slow if we were confronted with difficulties
and with a sudden crisis.
When that was mentioned, Mr. Helmore, the United Kingdom
delegate, with a conjurer's ability, mentioned very quickly a certain
number of articles, including article 30. The sub-committee took
up these articles including article 30 In fact, the French
delegation is not particularly interested in article 30, but the
point is that the procedure which we need in the case of a sudden.
crisis must be a quick and fast procedure. to solve the difficulties
which will face us. Therefore, I think that the sub-committee
must study with particular care sub-paragraphs (a) and .(b) of
paragraph 4, because the procedure which we now have in
Article 7 is only a slow and rather cumbersome procedure, which
would not be able, in most cases, to get us out of our difficulties.
Therefore, I think that to solve the difficulties of procedure,
with raw materials in particular in the case of abrupt crisis, the
sub-committee should study a fast procedure to solve these possible
dif f icult ie s.
CHAIRMAN: Are there any other comment s? If there are no
other comments, I then propose that the recommendations of the
6 - 7 -
sub-committee on Chapter III be taken into account by the sub-
oommittee, and that they should give consideration to the relations-
ship between Article 30 and the former Article 7, now Article 8, of
the draft Charter. They should also take into account the views
which have been expressed by the delegates of New Zealand and France
in today's discussion.
Agreed.
The next item on the agenda is the proposal of the
United States delegation with regard to Article 15. The delegation
have suggested an additional paragraph, reading as follows:-
'Moreover, the provisions of this Article shall not apply to
governmental purchases in carrying out any form of subsidy permitted.
under Art icle 30".
This proposed addition to Article 15 is now the subject of
study by a sub-committee appointed by Commission k to consider
Articles 14, 15 and 24, and therefore, unless the United States
delegate wishes to make some comment, I propose that we leave this
matter over for the present. Are there any comments? Then we
leave this in abeyance for the time being.
The next item on the Agenda is the proposal relating to
paragraph 1. The delegate of China has suggested the deletion of
this paragraph.
The delegate of China.
E/PC/T/B/PV/10 G - 8- E/PC/T/B/PV/10
Mr. CHANG (China): While the Chinese Delegation is not
opposed to the elimination of export subsidies in general, it
is, however, opposed to any agreement that will hamper the
development of a Member's foreign trade, Particularly if' that
Member is still ralatively under-developed.
Here as well as elsewhere it should. be remembered that the
and
expansion of world trade - /not the maintenance of status quo - is
one of the main objectives of this Charter. No expansion of trade
is possible without increase of exports. In the case of under-
develope, countries a subsidy on, the production of a certain
commodity may sometimes prove necessary in order to increase the
production and export of that commodity.
'ere we thin it is only fair that the under-develoed
countries should not be hampered;if they decide to take such
measures as a production subsidy .or the purpose of increasing
their exports, they should not be required to notify the
Organisation in writing as to the extent and nature of the
subsidisation. In the course of industrial and general economic
development of a member the reduction of certain imports may also
prove necessary and desirable. In a case in which it is determined
that serious prejudice to the interest of any other Member is
caused by any such subsidisation the situation is already provided.
for by Article 52, which covers both primary and non-primary
commodities.
In a word, this paragraph emphasises the maintenance of the
status quo in the matter of exports and imports. It runs contrary
to the main objective of the Charter, which is the expansion of
world. trade; and moreover, the paragraph will be harmful to the
less developed countries in their efforts to develop their
production and export trade.
The Chinese Delegation therefore proposes the deletion of this - 9-
paragraph.
CHAIRMAN: Any comments?
The Delegate of the Netherlands.
Mr. DE VRIES (Netherlands): Mr. Chairman, as has been pointed
out a few minutes ago by the Delegate of New Zealand, this whole
paragraph is much in favour of some types of subsidies, and the
Netherlands Delegations thinks that this especially applies to
paragraph 1 of this Particle, which only asks that the Member will
notify the Organisation to the extent and nature of the subsidies;
and only in some cases to discourage the Member or Members
concerned.
This is even less than has been asked for tariffs. They
also must be notified, and also, there, Members will discuss with
other Members about the elimination or lowring of tariffs. It is
only if it is determined that serious prejudice is caused or
threatened. This qualification is not asked for the tariff - and
what we call the producers' subsidy is even more easy than a tariff:
and therefore the Netherlands Delegation feels that this paragraph
is much in favour of those countries which are vast and rich
and can afford from their Treasury to give money to producers.
Small and under-developed countries and countries which rely on
only a few products for their economy mostly cannot use this way
of price-support, or help to produce. They must find, other ways
and means to do that.
Thinking of this, Mr. Chairman, I am rather astonished about
our Chinese friend, that he thinks that this gives prejudice
against Members who have the means to pay out of the Treasury for
price-support. I think that if a country like China wants to use
this paragraph of the Article, it is much more open for them to
do that than by leaving a higher import duty on such and such an
G G. I0 - E/PC/T/B/PV/10
Article. That would be much more difficult, and I cannot see
any other measure in this Charter which would. be as easy as
this means,
In the London Session the Netherlands Delegation, both on
behalf of what we call the "development" dart of Europe and the
"under-development" in Asia and South America, has put some
objections against this favour to rich rations; but we accepted
that,
But to delete it would mean that such rich countries would
get even much more possibilities to do that, without any
possibility for the Organisation or Members which are seriously
hampered by this means; and therefore, just thinking of the
poorer and. smaller and under developed. countries, we strongly
advise not to delete it. V. _ 11 _ E/PC/T/B/PV/10
CHAIRMAN: Any other comments? The Delegate of Belgium.
M. DESCLEE (Belgium) (Interpretation): Having listened to
the very interesting remarks made by the Netherlands and New
Zealand Delegates on the one hand, and by the Chinese representative
on the other hand, I have come to think that, in the first place,
it is obvious that in some quarters import subsidies are considered
to be a means of protection, and that in this sense they are more
or less identical with the protective measures of a more direct
character mentioned in other Articles of Chapter V. Secondly,
there are also export subsidies, the effect of which is not
directly to close the home market, but to stimulate production
beyond the normal market, that is to say, beyond the limit at
which the cost of production and transfer reaches the normal price.
In fact, subsidies can be considered as being indirect operations
likely to alter the price and the varied conditions of the
international market. Therefore, we are of the opinion that
the sub-Committee should take into account the fundamental
purposes of the Charter and avoid leaving a door open to manocuvres
likely to jeopardise the basis of international trade.
CHIRMAN: Any other comments? The Delegate of Norway.
H.E.M. Erik COLBAN (Norway): Mr. Chairman, I would not like
paragraph 1 to be sent on to the sub-Committee without having said
that the Norwegian Delegation supports that paragraph. As so
very few Delegates have spoken, the sub-Committee might get the
impression that we were indifferent to it.
CHAIRMAN: The Delegate of Canada.
Mr. A.E. RICHARDS (Canada): I might say, for Canada, that
we support the retention of this paragraph in Article 30. V 12 E/PC/T/B/PV/10
CHAIRMAN: The Delegate of South Africa.
Mr. S. J. de SWARDT (South Africa): Mr. Chairman, I
also want to male it clear that we support this paragraph 1.
CHAIRMAN: The Delegate of Cuba..
Mr. F.L. FRESQUET (Cuba): Mr. Chairman, after the opinions
expressed by the Delegates of Norway, South Africa and Canada,
we want to say that we als o favour the New York text.
CHAIRMAN Thev Delegate of France. - 13 -
E/ C / T/.B/PV/10
M. LECUYER (France) (Interpretation) Mr. Chairman, the
French delegation is also in favour of the maintenance of paragraph
.l,.but I should like to take this opportunity for drawing the
attention of this Commission to another question to which the
attention of the Sub-Commitee might also be drawn at a later stage.
I refer to a particular form of export prices which does not seem to
come under the scope of paragraph 1 of Article 30. For certain
countries which resort to it in order to comperaate for certain producers
the disadvantage results from the particular conditions prevailing
as regards the production of given article, the question of
prices cannot be considered as a subsidy, but in some cases it can
very much look. like a subsidy because it makes it possible for the
producers to produce a given article, and thereby to reduce to a
certain extent the import of that article into the country, and in
certain cases it has some disadvantages. Therefore the question
should be examined in connection with the discussion of Article 30.
The French delegation is of the opinion that this problem does not
come within the purport of article 30, but we raise the question now
because it would be a good thing for other delegations to examine it
too, and give their opinion.
Mr. R.L. FRES&UET (Cuba): Mr. Chairman, when we faced the
draft of this Article in London, the emphasis in the text was only on
export subsidies. We raised a question that, in order to cover the
object of the Article, we should put on the same footing the so-called.
domestic subsidies that produce , as a consequence, the reduction of
the imports of any products into that country. We were not
interested in the export subsidies because we shared the opinion that
for small countries there were small possibilities of finance, and it
is very difficult to adhere to this method of promoting production.
When we raised the second question, we were not considering the ER
14 - E/PC/T/B/PV/10
domestic situation of our country but the results of the application
of such measures in other countries where we e. ort our products.
I think that the same damage can be made to trade through the
application of export subsidies, which is an artificial way to
carry on trade of certain commodities that are subsidised and it
can operate also using the so-called domestic subsidies, that is
giving the opportunity to domestic producers to indulge in the
production of a certain commodity that is not fit to be produced in
a country. When increasing the domestic production it hampers the
opportunity of the small countries of exporting the commodity to
that particular country. I think that the question raised. by the
delegate of France is already solved in paragraph 1 of the article,
if
balancing the two sways of the subsidies, and/the phrase that
that
comprises the idea/is: "... or to reduce in orts of any product
into, its territory......" will be deleted from paragraph 1, then
again the emphasis will be put on export subsidies leaving this
case without any solution at all.
Mr. G.D.L. WHITE (New Zealand): Mir. Chairman, we also are
unable to su support the Chinese proposal to delete this particular
paragrah, but in view of my remarks at the opening of this Session,
I am sure the Chinese delegation will not interpret the support for
the retention of the Article as in any way meaning that this Article
would hinder a country from using subsidies to develop its industry
in the way that the Chinese delegate mentioned. In fact, we our-
selves think that this Article would allow plenty of scope for the
use of that particular method, subject to consultation and
notification. S - 15 -. E/PC//B/PV/10
CHAIRMAN: The Delegate of the United Kingdom,
Mr, R.J.SHACKLE (United Kingdom): I would simply
say, Mr. Chairman, that the Urnited Kingdom is in favour of
the retention of Paragraph 1.
CHAIRMAN: I think we have now had enough exprossions
of opinion for the guidance of the Sub-committee. The
Chinese Delegate will probably have observed that there
somes to be a lot of support for the retention of this
paragraph, I think his proposal will be useful for the
Sub-committee,. to enable them to give consideration to
Paragraph 1, taking into account the remarks which have been
made in the Commission,.
T hat being agreed, we will now pass to Paragraph 2.
I would first like to call tha attention of the Commission
to two reservations which were recorded at the First Session
of the Preparatory Committee. At the First Session the
Delegate of China made a reservation with a view to
modifying Paragraph 2, so that subsidies to promote exports
or special products would be permitted in certain countries
until they had attained equilibrium in their balance of
payments.. The Chinese Delegate in the Committee expressed
his willingness to withdraw the reservation if satisfied that
the subsidies in question were permissible under other provisions
of the Charter. I would like to ask the Chinese Delegate
if he is now in a position to withdraw that reservatlon,
Dr. T.T.Chang (China): Yes, the Chinese Delegation is
now in a position to withdraw that reservation. S - 16 - E/PC/T/B/PV/10 .
CHAIRMAN: I thank the Delegate of china.
As the Drafting Committee in New York, the Delegate of
Chile wished to have it rocorded that in his view Paragraph
2 should not be interpreted so as to prewent countries for
removed from world markets selling their products at current
world market prices, oven though those may be lower than the
prices chard in the domestic market, such action not being
the result of a direct or indirect subsidy or to the
establishment of any other systems
I should like to. ask the Delegate of Chile if he is now
satisfied that that point has been covered.
Mr; F. Carcia OLDINI (Chile) (Interpreted): It appears
at first sight that this paragraph should not be inserted in
the text. Ia fact, when it is said, in Pararaph 2: ".. 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 market," this sentence could be interpreted
as covering the situation to which we are pointing.
Let me take a specific example, that of Magellan wool
in our country. This particular kind of wool has a special
market outside Chile . Its price is established in conformity
with the conditions of the market. Now, within the country,
owing to conditions of distance and transport, this wool is
sold at the same price as other wools sold in the home
market and therefore there are two prices, one on the home
market and one for export. This price results from commercial
conditions and not from any subsidies or protective measures.
If we say that it is necessary to safeguard this situation,
it is for the reasons which we have already outlined, and therefore
we insist that the position should be clarified, either by adding
the sentence which we have suggested, or some similar sentence,
or by adding a footnote. - 17 -
- A../ 4/ D/ -I
Me. R.J, SHACKLE (Unitbd Kingdom): Mr. Chairmtn, if I hivo
understood thc point rightly, this is a case of something ihich
simply happens in the ordinary ooursc of trade. If I have under-
stood the feeling of the meeting correctly that seems to be the
position. If that is really so, I should not have thought that
paragraph 2 had any effect on it at all. Brcause it appears to
me that this paragraph refers entirely to action taken by govern-
ments either in the form of direct export subsidy or some other form
of governmental action which has the seme effect. I d0 not under-
stand there is suoh a system in operation in the case the Chilean
delegate mentioned and should therefore have thought that this para-
graph refers, as the other paragraphs in the Charter refer, to the
action of Governments, and that there was really no risk of conflict
at all.
M. ERIK COLBAN (YTrway): I entirely agree with the Unitod
KinrdOm delegate, This paragrapU refers to subsidies and if there
is no subsidy then it falls outside the paragraph, and I cannot
think there is any reason that the Chilan Dclegation will see
Mile's interests put in question.
CHAIRAN: Is the delegate of Ch0ic isfied udth the ex-
planations that have been given b? the United Kingdom and the
Nor-ogian delegates?
M. anGARClA OLDINI (Chile) (Interpretation): Mr. Chairmmi, if
it is clearly established in the record that according to the inter-
pr tatian giaen by this .Comimission our ,case is covered .by pqragreph
2, not only because -i refers to subsidies but because there is no
possibility of any ambiguitvr in this connection, I ,-ree. But it
m st be quite olesr.that this-is the interpretation given.by. the
Commission.
E/PC /T/B/PV/10 - 18 - E/PC/T/B/PV/10
CHAIRMAN: The delegate of the Netherlands.
Dr. E. de VRIES (Netherlands): Mr. Chairman, I am glad that
the Chilean delegate withdraws his objection to this point because I
think if we should be obliged to find every small point of loophole
or other possibility in this Charter, we should never come to an end.
Take, for instance, a country like Indonesia, the Indonesian Islands.
You might say they are not one domestic market, but 20, or 50, r
100, which have only a very small connection one with another; but
that,
in regard to that, we never thought/because there are so many differ-
ent price levels in that undeveloped market and long distances from
one island to another island, we ought to apply this Article to that.
But I think we ought to use the term "domestic market" in a way of
good faith of one country to another and not trying to find any
possible thing which can be used against other nations.
CHAIRMAN:. I would propose that the point which has been
raised by the delegate of Chile should be considered by the Sub-
Committee to see if it may not be possible to find some way in which
the point could be covered either in the Report of the Preparatory
Commission or in some other way. Is that agreed?
The next point on our agenda is a proposal of the Chinese
delegation to delete the words "directly y or indirectly".-t the
beginning of sub-paragraph (a).
Could I call upon the Chinese delegate to eomment upon this
proposal?
Dr. T.T. CHANG (China): Mr. Chairman, the Chinese proposal is
only a small drafting point. We think that the sentence which
reads "No member shall grant any subsidy on the exportation of any
product...." is quite sufficient without the three words directly
or indirectly" Thank you. -19-
P. E/PC/T/B/PV/10
CHAIRMAN: Although the Chinese delegate mentions that this
is a question of drafting, the deletion of these words might have
implications beyond that : more drafting, and therefore I would
like to hear some other members of the Commission express their
views on this proposal.
The delegate of New Zealand.
Mr. G.D.L. WHITE (New Zealand): Mr. Chairman. we would be
opposed to the deletion of these words. In our view it is not
merely a drafting change because, without going into, the matter in
any great detail, I think we all know that a subsidy on one product
can have a very substantial effect upon the conditions and term of
sale of another product. lnd we consider that, if the words were
deleted, it would very much limit the application of paragraph
(a). And wo think that unless both "direct and indirect" sub.
sides are included the content of the paragraph is very sub-
stantially weakened, and we would not agree to that.
The delegate of the United States.
CHAIRMAN: J. 20 - E/PC/T/B/PV/10
MR. R. B. SCHVENGER (United States): Mr. Chairman, we agree
with the view expressed by the delegate of New Zealand. I might
say that the problem arises as a drafting matter, it seems to me,
because of the rather direct force that might otherwise be given to
the word "grant". The subsidy might be considered as not having
been granted if it evolves after a purchase and-sale operation, for
example, indulged in by governments. It is to avoid this
possibility of the word "grant" being interpreted to not apply in
such a case that the words are there, and I believe they have a
certain defining quality that we must keep, even though it is
possible that they might ba interpreted there in any case.
CHAIRMAN: The delegate of Belgium.
M. DESCLEE (Belgium) (Interpretation): Mr. Chairman, I
support the New Zealand view-point, which confirms the point of view
which I expressed a little while ago, namely that such subsidies
sometimes are so diluted that it is not possible to determine
exactly who their author is.
CHAIRMAN: On hearing these explanations of the reasons why
these words should be retained, does the Chinese delegation still
wish to retain their amendment?
DR. T.T. CHANG ( China): We do not feel very stongly on this
point.
CHAIRMAN: I take it that you will not persist in your
amendment?
DR. T. T. CHANG (China): No. - 21 - E/PC/T/B/PV/10
CHAIRMAN: Thank you. very much.
The third point on the Agenda is the proposal of the United
States delegation to insert in sub-paragraph (a) at the beginning
of the second part of the sentence, the word "sub-paragraph' between
the words "Provided that this" and. "shall not prevent". It will
now read "Provided that this sub-paragraph shall not prevent".
This seems to me essentially a drafting change inserted for the
sake of clarity, but perhaps we might be able to agree .on this
change in Commission without the necessity of referring it to the
drafting committee.
The delegate of Czechoslovakia.
M. S. MINOVSKY (Czechoslovakia) (Interpreted): Mr, Chairman,
in connection with this amendment, my delegation is of the opinion
that an important question arises in connection with sub-paragraph
(a) which should be clarified.
: The first part of paragraph (a) states what is prohibited, and
the second part states three different kinds of action that are
permitted, namely, "exempting exported products from duties or
taxes imposed in respect of like products when consumed domestically,
from remitting such duties or txes which have accrued, or from
using the proceeds of such duties or taxes to make payments to
domestic producers".
Now, in tha London report, on page 32, paragraph(2), line 14,
we find, "The use of the proceeds of such duties or taxes to make
payments to domestic producers would be considered as a case under
paragraph (1)". This means that such an action is connected with
paragraph (1) and therefore the members should be informed., and, if
they so desire, negotiations should be entered. into with them. -22-
. E/PC/T/B/PV/10
Now we have always understood that the first two actions
were in connection with paragraph 1, but the situation now appears
to have changed. and. it seems that all the three causes are
considered as being on the same footing. It can be supposed
that either of the three actions which I have referred. to have
nothing to do with paragraph 1; . that is to say, that if a
Member carries out any of the three actions he is not under
compulsion to inform the Organisation and .to negotiated with .other
Members; or it is possible to hold a different opinion, namely,
that all the. three actions are in. connection with paragraph 1, and
that it is necessary to inform the Organisation.. In order to
illustrate this point, the Czechoslovak Delegation for its part
considers it as being natural that the third. action referred. to
is in connection with paragraph 1, and. that the Organisation shouId
be informed.
Mr. MINOVSKY (Czechoslovakia) (To the Interpreter): After
the third action.
Mr. MINOVSKY (Czechoslovakia) (Interpretation continued): I do
not know, Mr. Chairman, if I have been quite clear in my
statement, but it is due to the fact that we do not know exactly
what is the importance of the United States Amendment in this
connection. Do all the three actions escape the obligation laid
down in paragraph 1, or is this the case with any single one of
these three actions?
CHAIRMAN: The Delegate of the United States.
Mr. SCHWENGER (Uniteld States): Mr. Chairman, I believe that
I understand the point, or at least what right be a valuable
consideration behind. the point that the Delegate from Czechoslovakia
has made; but I believe it is apprent without altering the Draft.
Perhaps I could explain. E/PC/T/B/PV/10
It is clear that the first two of' the three actions that are
listed in the proviso could hardly injure the trade of another
Member. The exemption of an export, or the remission (it is
essentially the same thing) of such export. would only,..
Mr. SCHWENGER (Beginning again): I find it difficult to
conceive of cases where there would be any serious damage to the
trade of another Member, whereas the use of the proceeds of such
taxes to make payment might in some cases conceivably do
substantial damage. It is not necessary that they should., but
it is quite possible that they might, and from that point of view
the first two cases are hardly apt to be causes of action under
paragraph 1.
On the other hand - and I take it this was the reason the
New York Drafting Committee made the exchange - paragraph 1 covers
all on the subject matter of sub-paragraph (2). It covers cases
during fhe transition period when export subsidies are permitted.
It covers cases where that transition period. may be extended in a
particular case. It covers cases where the procedure of Chapter
VII may have failed, and instead the subsidies may therefore come
on in respect of the provisions of paragraph 2(a); and it covers
matters that are exempt prohibition at the beginning of para. 2(a).
It covers them to the extent that they must be open, they must
be normal. It will only be a cause of action in cases where there
is injury; especially from. the point of view of drafting they
are covered, but from the point of view of action it is extremely
improbable that paragraph 1 will ever be used. for the first two
cases that are mentioned by the Delegate of Czechoslovakia..
Now our use does not change the text in meaning from that.
It merely qualifies it.
Mr. SCHWENGER (To the French Interpreter): "The use of the
taxes to pay a subsidy,"
G.
- 23 - E/PC /T/B/PV/10
CHAIRMAN: The Delegate of Czechoslovakia.
M. Stanislav MINOVSKY (Czechoslovakia) (Interpretation):
After the statement just made by the United States Delegate, my
Delegation cannot accept the idea that the first and second
courses of action, which I have indicated, in sub-paragraph (a)
should be the subject of international measures, even if these
only consist of informing the Organisation, because the exemption
of exported products from duties or taxes is such a natural
thing that if it is necessary to inform the Organisation of this
fact, I am not certain that Members will desire to enter into
negotiations regarding those taxes, and therefore there remains
nothing else but to refuse to negotiate.
In these circumstances, the Czechoslovak Delegation has
the intention of submitting to the sub-Committee-a proposal to
re-introduce the sentence that appears in the London Text,
which states quite clearly that only the third action is in
connection with paragraph 1.
CHAIRMAN: The Delegate of France.
M. LECUYER (France) (Interpretation): Mr. Chairman,
I share the opinion of the Delegate of Czechoslovakia that
the present Draft, especially if it is compared with the
London version, is ambiguous as far as the exemption of taxes
and the reimbursement of internal taxes is concerned. It
would seem that it would fall under Article 30 in this case:
consequently, it is not possible to make it obligatory for
a State which does not levy any such taxes to inform the
Organization, as would appear from the present Draft.
Now let us take the third hypothesis: the case where
taxes are levied. It is necessary to know then what the.
V
- 24 - subventions are used for. Are they used as subventions for
production, or are they used as subventions for export? In
the first case these subventions would fall under paragraph 1
and in the second case they would fall under paragraph 2, and,
in our opinion, differance should be made and the case clearly
stated. According to the London Draft, this kind of premium
is considered as illicit. However, according to the present
Draft this kind of premium is authorised. ln our opinion,
this must all be clarified and quite definitely outlined, and
for this purpose be referred to a Drafting Committee.
CHAIRMAN: The Delegate of the United States.
Mr. R. B. SCHWENGER (United States) Mr. Chairman, I am
afraid I may have introduced a little confusion my stating
rather more forcefully than I meant one por' in of my first
remarks. These matters would fall under paragraph 1 only if
they are subsidies, and I personally should have no objection
to the Drafting Committee considering whether, in fact, they
are subsidies.
CHAIRMAN: The Delegate of the Netherlands.
Mr. E. de VRIES (Netherlands): Mr. Chairman, on the whole
we agree with the Czechoslovak and the French Dz'. '±4rt but
we do not see this text as dangerous, so I do not like to ask
the Commiss on to give more attenton this, but there is a
small drafting point I would like to mention. Here we have a
case of external and internal no 9 and the -*e thing applies
more or less in Article 14 and Article 15. Now here we are using
the words "duties or taxes", in Article 14 "duties and charges"
and in Article 15 "taxes and charges", so the words "duties",
"taxes" and "charges" are used in three places and, three
combinations are possible. I should therefore like to see the
matter considered by a Drafting Committee',. - e why it
should be necessary to have such confusion Mr. the text..
E/PC/T/B/PV/10
V
- 25 - E/PC/T/B/PV/10
CHAIRMAN : Is that proposal approved? Agreed.
The delegation of India have proposed the substitution of one
word in the sentence of sub-paragraph (b) of paragraph 2: "One
year" instead of "three years".
Mr. B.N. ADAKAR (India): Mr. Chairman, in connection with
this amendment which the Indian delegation has proposed, I would
like to draw your attention to a passage in the Report of the London
Conference. On page 16 of the Report, in paragraph 8, it states:
"It was agreed that the question of shortening this Period should
be taken us at a later stage, after the countries had had the
Opportunity of considering the effect of such a shortening on their
domestic legislation". One of the objects in moving this amendment
whether
was to enquire/the countries concerned have had the opportunity of
considering this question, and whether they are now in a position to
accept the shortening of this period. It seems to-us that export
subsidies are a particularly objectionable form of drawing a
distinction, and we would like to see them eliminated as early as
possible. If it is a question of merely amending domestic
legislation to give effect to this very Desirable principle, we do
not think it should take as long as three years. A period of one
year should be adequate enough for the purpose, and in any case
there is already provision in this paragraph whereby the period can
be extended at the discretion of the Organizat ion. A. similar
period of grace has been provided for in respect of other forms of
trade restrictions in other provisions of the Charter and since, by
common consent, export subsidies are a very objectionable form of
trade restriction, we suggest that the period of grace allowed in
respect of those export subsidies should be very much shorter than
that allowed in other cases. We suggest, Sir, that the period of
one year should be adequate, and therefore we move this amendment. ER
- 27 - E/PC/T/B/PV/10
Mr. J.J. DEUTSCH (Canada): Mr. Chair an, we support the
Indian amendment to substitute "one year" for "three years". We
appreciate the reason for allowing a Period of three years for people
who want to have save time to adjust their legislation and practices
to conform to the rule, but it seems to us that the immediate
situation is one in which the withdrawal of export subsidies will be
at
easier than/almost any other time one can think of. At the present
time we are confronted by a world scarcity of goods, and if ever
export subsidies are not needed, they are not needed at the present
time or in the near future. However, three years from now it may
not be so, and I think in fact, by announcing a period of three
years it will only make it more difficult. The Article goes on
to provide that, in. particularly difficult cases, permission may
be obtained or sought for, for a longer period, so that,where there
a
is/legitimate case, it can be taken care of. Otherwise, this is an
opportunity to withdraw from this particular method of trade
promotion, which is admittedly harmful to the members on the whole,
and we should therefore, I think, limit this period to one year. S -28 - E/PC/T/B/PV/10
CHAIRMAN: The Delegate of Australia,
Mr. E. McCARTHY (Australia): Mr. Chairman, whilst
Australia also would not, I think, have any great objection
in principle to the alteration from three years to one year,
we would, I think, have to reserve our position until
Paragraph 3 is dealt with.
If that paragraph is, to our point of view, made a
little clearer in its support of stabilisation schemes, then
I think we could agree with the change from three years to
one year. It is true that straight-out export subsidies
could be removed at the present tire without any difficulty,
but it has, in our case, the reverse effect, because their
removal now out of the schemes which bring about at times
what amounts to an export subsidy - that is, a scheme where
the home consumption price is higher than the export price -
would have the effect of bringing our domestic prices up
to export prices.
It rather demonstrates the point that we are very
keen to have inserted in Paragraph 3; that is, that arrangements
whereby home consumption prices are fixed irrespective of
export prices are not questionable under this Paragraph 2,
provided that they are held at domestic price level, even when
export prices go above it. Export prices in all cases at
the moment are above the domestic price and we would not
wish to see that removed until we are satisfied that
Paragraph 3 covers the position of the schemes that we,
and at least one other country, have in mind.
CHAIRMAN: The Delegate of Belgium. E/PC/T/B/PV/10.
29
M. DESCIEE DE MAREDSOUS (Belgium) (Interpretation):
Mr. Chairman, I am in agreement with the proposal of the
Delegate of India and I would express the hope that the
limit which will be set will not be too long, so that we
can surmount the various obstacles without any difficulty.
We must not forget that we can only have ono year after
the Charter comes into effect to remove the subsidies for
export.
CHAIRMAN: The Delegate for China,
Dr. T.T.CHANG (China): . Mr. Chairman, we also would
like to support the proposal made by the Indian Delegate,
to substitute the words "ono year" for the words "three
years."
CHAIRMAN: The Delegate of the Notherlands.
Dr. E. de VRIES (Netherlands): Mr. Chairman, I am
more in favour of the words of Mr. McCarthy on this point,
and the Natherlands Delegation would like to see this in
connection with Paragraph 3, and, I should like to add, with
Paragraph 4: (a) of this Article.
I think that most subsidization systoms for agricultural
products were, in reality, stabilization schemes. Now, after
the war years we may indeed say that at this time we need
no export subsidies, that we need consumption subsidies at
the moment and not an export subsidy, so that works in the
reverse way. It is very difficult to see, especially for
war-devastated .areas, what the position will be when more
normal conditions within the country are established again, 30
and I do not believe that there is. anything in Paragraph 4(a)
which would prevent any country which feels that its interests
are seriously prejudiced by the subsidy asking all at once
for discussion of this matter under Chapter VIII
We all know that discussions under Chapter VII may take
a long time. If, for instance, in regard to wheat or wool,
you set a time limit of one year, within which. you must take
proceedings under Chapter VII, then you might well find
that time too short. So I think that any Member who
objects to an export subsidy immediately the Charter comas
into being, and does not wait one year or three years, may
consider that its interests are prejudiced and will put into
action Paragraph 4(a).
I think we must await the results of that before we
can see whether such subsidy ought to go out of being or
whether it may remain for a short time. So at the present
moment I would like to join Mr. McCarthy, the Delegate for
A ustralia, and. consider that question after Paragraphs 3
and 4.
CHAIRMAN: The Delagate of New Zealand.
Mr. G.D.L. WHITE (New Zealand): Mr. Chairman, at the
moment we also feel disposed to support the Indian proposal,
but would like to reserve the right to have another look at
it after we have discussed Paragraph 3.
S
E/PC/T/B/PV/10 E /PC/T/B/PV/10
CHAIRMAN: The delegate of the United States.
MR. R. D. SCJWENGER (United States): .Mr. Chairman, we also,
like the Australian, Netherlands and New Zealand deleates, would
like to have this considered in the light of what happens to
paragraphs 3 and 4 of the article , but it seems to us that it
would lead to, perhaps, a good deal of great use than might
otherwise be made of the provision for extension of the period
to thave the period unduly short, and Professer de Vries has
pointed out the very important relation this has to commodities of
the type that might follow the procedure laid down in Chapter VII.
CHAIRMAN: Are there any other comments?
In these circumstances, I propose that after the sub-commiittee
have considered paragraphs 3 and 4 they should then direct their
attention to the proposal of the delegation of India, taking into
account the views which have been expressed in the Commission in
favour of the shortening of the period. Is that approved?
Agreed .
A suggestion has been made by the Secretariat, I believe, that
the last sentence of sub-paragraph (b) might be amended to read
"The Organization shall then determined. That would be in the
be
place of the words "It shall then/determined'. This seems to be
purely a drafting point, an improvement of language, and I hope we
can agree upon this now. Is this proposal agreed?
MR. R..B. SCHWENGER (United States): Mr. Chairman, I am afraid
I cannot agree that this is a drafting point. The word "determained"
in this context is defined. in Article 66, paragraph 4, and provides
for _ different kind of determination than this suggestion provides
for. I rather think that our experience .ith this type of problem
J.- - 32 -
has shown that the type of determination in Article 66, paragiraph 4,
is more appropriate.
CHAIRMAN The delegate of the Netherlands.
DR. E. de VRIES (Netherlands): Mr. Chairman, I think that
even the United States ought to say that this is a drafting point,
as- in paragraph 6 of this Article the United States have given a
new amended. text, and still in that text they said that determinations
will be done by the Organization by consultation, and so on, that
is', the ways and means by which the Organization can determine.
Since the words "by the Organization" are still retained, in
paragraph 6 by the United. States, I do not see any objection here
to putting in "The Organization".
Mr. Chairman, the New Zealand delegate has just drawn my
attention to the French text here which says "par l'Organisation"
and the English text which says "through the Organization", so the
translation of the French and English texts are not in order, so
we have to say that that is a drafting point, I think.
CHARMAN: Is the United States delegate impressed by the
Netherlands delegate?
MR R.B. SCHWENGER (United States): Yes.
CHAIRMAN:: Under these circumstances, we will refer it to the
careful study of the sub-committee.
The delegate for Chile. G E/PC/T/B/PV/l 0
33
Mr. GARClA. OLDINI (Chile): (Interpretation): Mr. Chairman,
perhaps the Sub--Committee will be in a Position to determine, but
ever since the Secretariat Proposed the sentence, it rnight be
well to ask what is meant by the word "Organisation". Sometimes
at the Cc. :cc it implied Executive Committee, or may be
Administration, if one is C I t ec.. But observe that each time
the tem is implied in a different sence, and anyway, every
time it is used differently from the. time it was used before.
It' we refer to Article 36, for instance, we read that the
decision will be reffere fpr the opinion expressed by two-thirds
of the Organisation.
However, if we :: the text we see that the Conference may
decide, and the Organisation is no longer ment ioned.
Well, I dao not propose that we should. determine here and
now .what is meant by the word "0rganisation": but since the
question is ra ised it might be well to ask somebody what is
exactly meant by the word "Organisation".
CHAIRMAN: I would like to point out to the Delegate of
Chile that this question will be considered when Commission "B"
takes up Chapter VIII - the Organisational Chapter of the Charter.
I would direct attention now to Article 32 which 'states that
shall have a Conference;
the Organisation / as its principle organs Executive Boad,
and Commissions that we established and the Secretariat. The
..
Charter gives various functions to those various organs. When
we speak of the Organisation, we mean the organ of which the
function has been defined by the charter.
CHAORMAN: The Delegate of the Netherlands.
Mr. DE VAILS (Netherlands): Mr. Chairman, the question of G . E/PC/T/B/PV/10
34
the Chilean Delegate has been answered. As far as this calls for
explanations on primary products, in article 77 it is said "by the,
Executive Board., after advice and recommendation of the Commodity
Commission".
For the non-primary products, the Conference has to set up
procedures; but for the primary commodites, ready it has been
put in Article 77.
CHAIRMAN: The Delegate of Norway.
Mr. ERIK COLBAN (Norway): Mr. Chairman, about this slight
draf'ting Amendment proposed by the Secretariat, if there is any
objection, and. as the New York Text seemed. to be clear, I think
we should stand by the New York text on this point, and not refer
it to the Sub-Committee, which will have more than enough to do.
CHAIRMAN: The Delegate of Norway has proposed that we stand.
by the New York text, and. will not refer this proposal of the
Secretariat no the Sub-Committee.
Is that agreed?
CHIRMAN: The Delegate of' Chile.
Dr. GARCL. OLDINI (Chile) (Interpretation): I agree, Mr.
Chairman, but nevertheless the question remains End. should be
clarified, because if in the given article the use of the word
" Organisation" means - reference to such and. such a body of the
Organisation, this is not so clear in other .-rticlcs; and. the
best proof is given here, when we have tried. to evade the is sue
rather than solve the problem. Therefore, I do consider that the
question still rean-ins. However, I auree that we adopt the New
York text. G. E/PC/T/B/PV/10
CHAIRMAN: I would point out to the Chilean Delegate that the
question will come up when we consider Chapter VIII in Commission B.
This is a matter which really relates to the Organisation, which is
covered by Chapter VIII. If there is after that any particular
doubts raised during our consideration of the Organisational
Cheater, the matter can be referred to the Legal Drafting Committee
for their opinion, and in order to clear up any ambiguity.
The proposal of the Norweagian Delegate is approved.
The United Kingdom Delegation has proposed the addition of a
new sub-paragraph (c). I will ask the Delegate of the United
Kingdom to introduce his proposal.
Mr. SHACKLE (United :Kingdom): Well this proposed new
sub-paragraph may look rather complicated, but I think when one
reads it it is, in fact, fairly well self-exjlanatory.
It is meant to take care of a special case of difficulty which
the Draft Charter has, we think, overlooked entirely. The case of
difficulty is where a Member who is very clearly supporting some
commodity finds that in the market he is being met with substant al
competition from a non-Member. That is a case, we think, which is
not taken care of. The case where a Member finds himself in
competition with a member is already cared for by paragraph 2, but
naturally that law does not apply to a non-Member, al non-Member is
free to go outside the subsidies and do just as he likes, and that
may cause very ,great embarrassment to a Member in third markets.
It is no use, in a case like this, for a Member who is
suffering to take action in his own home market against a non-Member,
because it is a case of third markets, and not of dealing with his
own market. Perhaps the case may be made most clear by an example. G. E/PC/T/B/PV/1 0
36
Let us consider the case of a small territory which is
interested in catching and exporting fish - that is the industry
by which it lives. It exports its fish to a great many markets.
It may find there is a non-Member who also exports fish, and is
subsidising its exports very heavily. There is nothing that that
small Member territory can do to help itself as the Charter now
stands. It is no good it putting on some kind of' duty in its own
market, because the market which matters is the third market. In
a. case of that k:iad., the only remety he cen have is a counter-
subsidy.
It is for that reason that we make this suggest ion, in order
to prevent troubles rising through the interests of other Members
being affected we have put in the last sentence that it provides
for consultations if troubles of that kind arise. But we do think
in this case, which is an actual and very real one and not
theoretical, that it is necessary to have a provision of the
kind. V
CHAIRMAN: Are there any comments on the principle
underlying the proposal of the United Kingdom Delegation?
The Delegate of the Netherlands.
Dr. E. de VRIES (Netherlands): MIr. Chairman, the
Netherlands Delegation feals that the United Kin;dom Delegation
has covered a case omitted from previous discussions, and
we support the principle, and especially for the consultation
to be made obligatory --"shall consult" if its interests
are being adversely affected: ti,., words are much stronger
than "seriously prejudiced" which occurs in a number of cases
in this Article, so we think it is a very good draft.
CHA.IRMAN: Are there. any other comments? The. Delegate
of Canada.
Mr. J.J. DEUTSCH (Canada): Mr. Chairman we would
support the United Kingdom Delegation.
CHAIRMAN- The Delegate of China.
Dr. T.T. CHANG (China): Mr. Chairman, we would also
like to support the principle in the proposal of the United
Kingdom Delegation.
CHAIRMAN: The Delegation of New Zealand.
Mr. G.D.L. WHITE (New: Zealand); Mr. Chairman, I am not
quite au fait with what has been going on in the committee
which is dealing with relations with non-Members, but on the
assumption that there is nothing in this proposed United Kingdom
amendment which would contravene a mething else which is later
going to be decided about non-Members, we would support it.
37 38 - E/PC/T/B/PV/10
CHAIRMAN: The Delegate of Norway.
H.E.M. Erik COLBAN (Norway): I would like to ask the
Delegate of the United Kingdom whether this Delegation has
considered the possibility of previous consultation with
other interested Members. His draft as it stands seems
very logical, but I just wanted to know whether he has
ruled out definitely any previous consultation.
CHAIRMAN: The Delegate. of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I
would like just to answer the Norwegian' Delegate's point.
I think (although I have not gone into it very thoroughly)
that the point is probably already covered by paragraph 1,
because this would be a subsidy which would operate to increase
exports of products. That being so, I think it would fall
within the provisions for consultation in paragraph 1. That
would not necessarily involve prior consultation--I confess I
had not really thought of the point of prior consu taticn.
I suppose it would be possible to say that there should be
prior consultation if circumstances allow; but; this is a case
in which conceivably a Member territory might find itself very
suddenly in a very serious predicament, and it might in such a
case have to act promptly. We have, I think, already discussed
this type of question on Article 34. It may be that we should
find some form of words which would say that there should,
wherever possible, be prior consultation, but I think we would
have to recognize that in urgent and serious cases that. might
not be possible. You might have to be content with
consultation that took place as soon as the action was taken.
P, /-Dr n 39 I I
I would suggest that the sub-Comeittce might perhaps take
that point into consideration. e eric is also the point that
was raised by tee Now Zealand Delegate as regards the relationship
of the Article dealing with the treatment of non-Members.
Well, of course, we do not know what will be in the Article
about the treatment of non-Members; but it does seem to me that,
practically speaking, whatever may be in it, this provisioneher(
suggested could not conflict with it, because it sLmply says that
the injured Member can put on a counter-subsidy. Well, it
would be only if the non-Member somehow had a right not to have
a counter-subsidy applied against it that he would have any
claim, but ex hypothesis a non-Member cannot have any rigso, W
I do not think there could possibly be any difficulty.
E/PC /T/B/PV/10
V ER
El/PC/T/B/PV/10
40
Mr. ERIK COLBAN (Norway): The explanation given by the
representative of the United Kingdom is entirely satisfactory to me.
I hope the Sub-Committee will find some proper form for it.
Mr. E. McCARTHY (Australia): Mr. Chairman, generally the
Australian delegation would support that proposall , but I think one
point might be considered, and that is whether it does not have some
bearing on the proposal on provisions of Article 17. I am not sure
whether it does, but Article 17 does set down - and perhaps Mr.
Shackle could answer the question off-hand - provisions under which
the anti-dumping and countervailing duties would apply, and the
question might arise that, if a member was forced into a form of
subsidisation, and that form of subsidisation was in effect
countenanced by this proposed article, whether it would not be
ruled out or be subject to a countervailing duty under Article 17.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I think it is
subsidise
quite true that if a member can counter/subsidies in this provision,
possibly he might find himself met with anti-dumping duties in some
territories. Article 17 gives permission for the use of anti-
dumping duties. At the same time I rather doubt whether, in practice,
this is likely to arise, because - let us take a fictitious case -
let us say there will be a number of member countries interested in
exporting fish, and many of them will be consumers of fish as well.
It strikes me that if they are simply consuming countries they will
not, probably, bother to -ut on an anti-dumping duty. If they are
extorting countries, they probably will have a common interest in
doing something about it, and the non-member exporters subsidise in
that case. It seems to me that under the last sentence, they might
very well decide that they should pursue some sort of common action
until the difficulty would be got over. So I think that, in practice, 41 E/PC/T/B/PV/10
there would not be much trouble in that way.
Mr. S.J. de S!-LRDT (South Africa): Mr. Chairman, I am fully
in support of the principle enunciated in the United Kingdom proposal.
I am only wondering whether it goes far enough to cover all the types
of oases that one might have to deal with under this general heading
of trying to defend yourself against the action of other parties.
Now, this proposal specifies non-members and I take it to mean a non-
member government. Now, as you know you have, very often,to
contend with private initiative organizations which operate on such
a big field and through a system of camouflaged two-price system.
Their export could have the same effect, or rather you. might have to
face the same type of problem as you would be faced with .when.a
non-member should apply a export subsidy. That is the first
difficulty that I have.
The second one is with countries as members of the Organization.
They may temporarily be faced with a situation, and there might be
a different interpretation or a different way of looking at it,
in
because I believe/paragraph 3 of article e 30 provision is made for
some variation of the price in certain circumstances, and the member
of might
making use /that/at a given juncture be selling at a price in
a third market which is lower than that at which the exporters think
they are able to compete in the market, and something sight have to
be done. Now, as regards the first case, it might be covered under
Chapter VI. If that is so, I would like to know what is the view
two-price
of this Commission on that point as to - if a/system is operated
by a private organization whether for a member or non-member country
the case would be covered under Chapter VI. And as I say; in the
second place, you might temporarily have a difficulty of even a
especially
member country or an exporter from a member country, /Where it is
done by a private organization, operating a camouflaged two-price
system. What counter measures can you take in such a case? I E/PC/T/B/PV/10
42
would like to see those words introduced into this amendment.
For myself I think it would. be simpler if the words after
"directly and indirectly", instead of reading as it reads now:
"in respect of the product 'by a non-member which is a competing
exporter..,." it would just read: "by a competing exporter".
I am just making that suggestion for consideration. PE/PC/T/B/PV/10
Mr. R.J.SHACKLE (United Kingdom): Mr. Chairman, as
regards the first point made by the South African Delegate,
I would like to ask him a question: that is whether he
contemplates that counter subsidies could be used against
this dumping by private interests in Member countries or
only in non-Member countries.
Mr. S.J. de SWARDE (South Africa): Both.
Mr. SHACKLE (United Kingdom): In that case it does seem
to me to cpen up rather large possibilities in considering a
case of dumping under Article 17.
We have been careful to frame, us between Members, a
set of rather tight and precise rules and it does rather seem
to me that if we recognise their right to use counter subsidies
where dumping was being practised by private interests in a
Member country, that rlight load to rather extensive reper-
cussions and the widening of the scope of the anti-durmping
measures wihich we have contemplated.
I am: afraid I .was only speaking on the spur of the
moment and I cannot pretend to express a considered opinion,
but I have the feeling that we might open up rather serious
possibilities if we were to contemplate this sort of thing.
That is all I would say here and now, without further con-
sideration, on the first points
As regards the second point raised by the South Af'rican
Delegate, we light have certain cases in which , temporarily,
another Member might be doing something which was in the nature
of an export subsidy without infringing a Charter rule, such
as that a.ntiioned in Paragraph 3 of this Article.
S -1'
In a case of that kind, I would have thought it would
be a matter for the Organization to determine whether, in
fact, the terms of the Charter were being abused, or whether
they were not. It they were not being abused, I find it
rather hard to see whether any Member would be, so to speak,
within its rights in resorting to some retaliatory action.
If the Organization should find that the terms and intentions
of tho Charter wore 'being broken, then I presume that other
Member would be called to order and would have to modify what
he was doing. That, again, is rather an extempore. answer,
CHAIRMAN: The Delegate of Czechoslovakia-
M. Stanislav MINOVSKY (Czechoslovakia) (interpretation):
Mr. Chairman, the Czechoslovakian Delegation agrees in
principle with the amendment which has just been submitted
by the Uited Kingdom Delegation, but we wonder if this
amendment ought not to be sent to the Sub-committee which
is dealing with Article 36, that is, the relations with
non-Member countries.
Mr. R.J SHAKLE (United Kingdom): Mr. Chairman,
I certainly can see no objection to it being referred to that
Sub-committee. As I said before, I cannot see how there
could possibly be any conflict with any conceivable form of
Article 36, because, in any case, non-Members could not have
any rights.
CHAIRMAN: The proposal of the United Kingdom Delegation
is a proposal in relation to subsidies. I provides for an
exception to the general rule under which subsidies may not be
granted, and therefore I do not think it has any direct bearing
on Article 36. Therefore I think the proper place for it to be
considered is in this Commission at this time, when we are
considering Article 30.
S
E/PC/T/B/PV/10 E/PC/T/ B/PV/10
CHAIRMAN: The delegate of South Africa.
MR. S.J. SMARDT- (South .Africa): Mr. Chairman, with regard to
Mr. Shackle's reply that the countervailing duties of the country
of import might create . situation where you have to apply a system
operating to the detriment of ;another exporting country to that
market, the only difficulty that I see there is that the exporting
country, say of a primary commodity, is only dependant on the
action takon by the importing country, whereas this competition is
really with another exporting country. It is for that reason
that I would like this aspect to be considered, so that the
exporting country should not be dependant only on the action taken
by the importing country, which might welcome getting the goods at
a lower price.
(Mr. Shackle rose to speak)
MR. R.B. SCWENGER (United States): My point is a new one,
Mr. Chairman, if Mr. Shackle..
(Mr. Shackle rose to speak)
CHAIRMAN: I au afraid we are getting on to discussion which
mght properly be conducted in the sub-committee.
MR. R..J. SHACLE (United. Kingdom): I certainly see no
objection to the sub-committee discussing this - in tact, I think
it ought to, because there are certainly points which require
consideration.
The only thing that I would say is that we have already, in the
sub-committee on article 17, introduced an exemption to
paragraph 5 which would allow one Member, so to speak, to take
friendly action to protect the interests of another, even though
J.
45 E/PC/T/B/PV/10
it had no domestic industry which would be threatened. That is
an amendment which has already been suggested to article 17, which
is an Article on a similar line of thought. But I quite agree
that this is a matter which the sub-committee should attend to.
MR R. B. SCWERGER (United Statzs): Mr. Chairman, we see no
objection to the additon of a paragraph of this type.
I take pleasure in making one point, however, in connection
with the suggestion made in paragraph number 6 of this document
W/190, and that is that there might well be confederation by the
sub-committee of the reference in this proposal to the Organization.
It seems to me personally th the words "if necessary with the
Organization" represent a rather cevalier treataont of the role
that the Organization might play in this matter, and I suggest
that it might be improved by either leaving out the words "if
necessary" and/or changing "with" to "through", or something of
that sort, I do not have an exact text in mind.
CHAIRMAN: The delegate o Belgium.
M. DESCLEE (Belgium) (Interpretation): I was just going to
raise the same point, Mr. Chairman. I entirely agree with the
remarks made by the United States representative. The question
of relations with non-members raises the necessity of common action,
where the Organization will tell. every member what its part should
be. From this view point I think it would be necessary to
re-examine the amendment of the United Kingdom delegation.
For instance, when we read in the third line "a Member.
which considers that its interests are being prejudiced.", and so on,
the question whether they are being prejudiced or not should be
left for the Organization to decide. The same remark applies
later on in the same text when we read "extent which the Member J. E/PC/T/B/PV/10
47
deems necessary". I think it would be preferable to road "to the
extent necessary".
In any case, I think it is for the sub-committee to examine the
question whether this matter should be referred to the Organization
or not.
CHAORMAN: The delegate of the Netherlands.
DR. E. de VRIES (Netherlands): Mr. Chairman, If I may come
back for the moment to the very interesting discussion between
South Africa and the United Kingdom on this point'.
I think that we might insert the possibility, or even the
necessity, when there is consultation, that also the Member or
Members which are importers of this product shall come into this
consultation. - In the fourteenth line, it says "these Members
shall consult together", and maybe we night take the words as they
are in paragraph 5 of Article 30 - "Member having an important
interest in the trade in that product", so that would. uean that the
importers shall consult with the exporters. So, you might find,
a solution and adjustment by contemplating duties against
non-members or by subsidies or other means. In that way the
importers come into the consultation. G. E/PC/T/B/PV/10
48
CHAIRMAN: The Delgate of the United Kingdom.
Mr. SHACKLE (United Kingdom): Mr. Chairman, I quite
agree that the Committee should be consulted, but I want to
say one or two things. First as regards the point raised by
the Belgian Delegate that the matter should in any case be
brought before the Organisation. That is the underlying, theme
of article 35. The first stage contemplated in that Article is
consultation between the respective members, and only if they fail
to come to some arrangements between themselves to trouble the
Organisation. However, I quite agree that is a point that the
Sub-Committee should look into.
As regards the point raised by the Netherlands Delegate, I
would like to point out that we have said in this last sentence
provided that/if Any other Member adversely affected , then those
Members shall consult.
That means all the Members who feel they are in any way
harmed by this action, and. I am not sure whether that may not
suffice to cover the case, because other Members presumably would
not wish to trouble themselves in the matter.
However, that is for the Sub-Committee.
CHAIRMAN: The Delegate of Norway.
Mr. ERIK COLB..N (Norway): Mr. Chairman, I think we are all
in agreement on the principle of the United. Kingdom proposal. But
as to the South African suggestion to widen the scope of this idea,
I respectfully beg to warn the Commission against bringing in such
new problems at this stage of our work. The Organisation will look
into all the problems we are not able to solve and that should,
I think, be sufficient.
It is a very very complicated problem to deal with private 49
enterprises applying a double price system, so when we send it
on tp the Sub-Committee I hope it will not be understood by the
Sub-Committee as an instruction to work out some positive sugges-
tion.
CHAIRMAN: I think the remarks of the Norwegian Delegate are
very pertinent. The South African Delegate has made some
suggestions which the Sub-Committee can examine, but as these
'suggestions were made in the Course of the discussion there was not
a full opportunity for the Commission to examine them, and it should
not be taken as any interpretation of the sense of the Commission
that they are supporting the suggestions of the South African
Delegate.
On the other hand, I to think this discussion has shown in
two speeches that the sense of' the Commission is in favour of the
principle underlying the United. Kingdom proposal.
I therefore think we cen now refer this proposal to the
Sub-Committee to work out an acceptable text, taking into account
all the views which have been expressed in the Commission.
Is that agreed?
Approved.
The Delegate of Cuba.
Mr. FRESQUET (Cuba): I will try to be short Mr. Chairman.
The Cuban proposal aims to allow the nation as yet relatively under-
developed to hunter thie field of subsidisation.
The Cuban Delegations thinks that for a. mature country with
the necessary financial and credit equipment it is very easy to
go through the way paved in Article 30, without conflicting with it.;
but to a small nation this sitution is not exactly the same.
nation that lacks the necessary experience in Government
E/PC/T/B/PV/10 E/PC/T/B/PV/1 0
financing and that does not have the training in the credit
system cannot give subsidisation if' it does not use the instrument
of taxation and it loes not use that instrument in a very direct
way.
That is what we pretend to get through this Amendment. The
Delegation thinks that the most elaborate way that ca:n follow .
mature nation, and a very simple and direct way that has to be
followed in a small and young nation, produce the same economic
effects on world trade; and. we do not see any harm in allowing the
small and young nations to use, this procedure.
We are aware that we cannot have absolutely the green light
to go ahead. using this method. We are ready to be subject to it,
using it to the same requirements as are established in Article
30 for the well-developed and tra ined nations.
G. 51
CHAIRMAN: The Delegate of Canada.
Mr. J.J. DEUTSCH (Canada): Speaking as representative of
a country which is often regarded as as yet relatively
undeveloped, I see a good deal of difficulty in this paragraph.
I interpret it to mean that a country in that position (which
would certainly include my country) could put duties and taxes
on import articles and not impose them on domestic articles,
and that is the same thing as putting on a tariff--that is the
exact effect of it, and I want to ask the Cuban Delegate whether
he wishes this freedom to apply to items which are bound in
trade agreement as well as to items which are not bound,
because the exact effect of this is to put on duties on import
items. If you exempt national products and put them on
import products, the effect is just the same as if you were
imposing a tariff. Is that to apply generally on bound or
unbound items in a trade agreement.
CHAIRMAN: The Delegate of Cuba.
M. R. L. FRESQUET (Cuba): Mr. Chairman, I fail to see
that difference in all Article 30, and the reason is 1- -.<use
all Article 30 deals with a very elaborate method of establishing
subsidies. We are trying to put, on the table a very direct
proposal - a very simple one, having the convenience of the
simple methods that they are more exposed to the critics.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, if
this is regarded as such a short circuit method of giving
subsidies, I do venture to think that there is an important
difference from the method of the subsidy which is paid out
of the Exchequer by recurring Parliamentary votes. It
does seem to me that the mere fact that a subsidy paid out
E/PC/T/B/PV/10
V V. E/PC/T/B/PV/10
52
of the Exchequer has to be periodically approved by Parliament
(passed in a Finance Act or something) is an important safe-
guard, and an important measure of control, whereas in the
case of a tax measure once it is passed it tends just to go
on -- nobody looks at it again, and that same recurring
scrutiny will not be present. I do think that there is an
important difference there. ER
E/PC/T/B/PV/10
53
Dr. E. de VRIES (Netherlands): Mr. Chairman, I should like
to agree with the Canadian delegate, and ask him, at the same time,
what he exactly means in this amendment? There is more in this
than just gutting tariff discrimination against imported products,
because when he said about exempting national products from duties
and taxes, it may be that these are exported or domestically used
national products. When they are exported, the case is covered by
paragraph 2(a), which just says that export products may be
exported, and so on. If it is not an export product, and I think
that is what is meant by members which are relatively undeveloped,
that means there is a means to reduce imports and protect new
economic developments in that country. I think, in that case, it
is just the same whether that money comes from a special fund, from
imports, or from any duties or taxes, so long as it comes from the
general funds of the country, and in that way I may say to the
United Kingdom delegate, that what is, in England, the case, is not
the case in all countries of the world. There are many countries
where the government has funds to do something on behalf of the
economic development in general - the welfare fund, and so on. Only
to a very slight extent does it go through the parliament. In that
case it is just covered by paragraph 1, because then you give a
subsidy to the whole of the national producers , and not ohly to the
exporters, and in my opinion you may do that with other funds,
irrelevant of the source of the money, but only if another member is
seriously Prejudiced by this measure. He then applies to the
Organization, and a member applying this measure proposed by the Cuban
delegate, has to notify the Organization as to the extent and nature
of the subsidisation, so that that members has to put down where the
funds are derived from. It is clear to everybody then, what this
country is doing, but I think it is allowed in this Article. ER
E/PC/T/B/PV/10
Mr. R.J. SHACKLE (United Kingdom): I do feel that this
principle of national treatment of internal taxation is a very
important one. It is a well recognised one which existed for many
years in many countries if the world, and we have a clause of that
kind already in Article 15 of the Draft Charter, and I am afraid it
would be regrettable to go against the principles of this Article.
If we need funds for the importation of various products into a
country, it seems to me they should be applied to domestic products
equally.
Mr. GEORGE LJCKIM (Lebanon): I only wanted to suggest that this
amendment is not relevant to Article 30, because Article 30 deals
with the subsidies on the exportation of products. As far as I
understand this amendment, it is a subsidy for the development of
production, and those subsidies are permitted. There is nothing
to prevent an undeveloped country from giving subsidies to develop
its production. Now, if this amendment is meant to be an exception
to Article 15, then I think it should go under Article 15 and not
Article 3. That is all I want to say, Mr. Chairman.
Mr. R.L. FRESQUET (Cuba): Mr. Chairman, I wonder if it would
clear away the next day's discussion, if I answered briefly to the
objections already made. With reference to the first remark made
by the delegate for the United Kingdom, I will repeat what was said
by the delegate for the Netherlands, that this depends on the
legislative system of every country. S E/PC/T/B/PV/10
55
In my country, for instance, both methods can be established
in a permanent way, or Congress may authorize the Executive
Branch just to do it for a limited period of time, or limit
the number of industries, so it all depends on the way it is
treated in accordance with the legislation in every country.
With reference to the remarks of the Delegate for the
Netherlands, I would say that in our case we are not aiming
at an export subsidy but at a domestic subsidy, and naturally
we are not thinking of trying to avoid excepting products which
are exported from the taxes on domestic consumption. As
the Delegate of France has said, this is not a consequence
of any tax; when products are exported, they get out of the
jurisdiction of certain nations and cannot be taxed on domestic
consumption.
I would say that our proposal is a protective measure.
We cannot hide that; it is very obvious, and the reference
we make to Article 15 is necessary because in Article 15 is
established a provision against any discrimination in taxes
for domestic or imported products. That is why we have to
make a reference to Article 15 and we make a proposal under
article 30 because that deals with subsidies.
I do not share the objection of the Delegate of the
Lebanon, because Article 30 covers both kinds of subsidies -
export subsidies and domestic subsidies. In New York we
changed the title of Article 30 in order to cover both kinds
of subsidies and so it now roads: "General undertaking
regarding subsidies." In paragraph 1 of the same Article,
as I said before, it considers domestic subsidies in the
phrase which reads: "or to reduce imports of any product S 56 E/PC/T/B/PV/10
into, its territory, . . .". The only way to reduce the
import of products into a country is by domestic subsidies.
CHAIRMAN: We will resume the discussion on the Cuban
proposal tomorrow.
Before we break up, I have an announcement to make.
The Sub-committee on Chapter VII will meet this evening at
8 o'clock in Room VIII, that is, in this room instead of
in Room 210.
Commission B will meet tomorrow at 2.30 p.m. in this
room.
The Meeting is adjourned.
The Meeting rose at 6.30 p.m. |
GATT Library | ch312py4404 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Tenth Meeting of the Tariff Agreement Committee Held on Thursday, 4 September 1947 at 2.30 p.m. in the Palais Des Nations, Geneva | United Nations Economic and Social Council, September 4, 1947 | United Nations. Economic and Social Council | 04/09/1947 | official documents | E/PC/T/TAC/PV/10 and E/PC/T/TAC/PV/8-10 | https://exhibits.stanford.edu/gatt/catalog/ch312py4404 | ch312py4404_90260033.xml | GATT_155 | 13,381 | 79,633 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/TAC/PV/1O
4 September 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
TENTH NEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON THURSDAY, 4 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 text 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 V 2 E/PC/T/TAC/PV/l0
CHAIRMAN: The Meeting is called to order.
We shall resume the discussion on the General Agreement.
We have concluded our discussion on Part I of the Agreement and
we now come to Part II.
As I mentioned at the opening of the meeting on Monday. the
discussion on Part II will relate to whether any particular
Article now given in the text as suggested by the Tariff
Negotiations Working Party should or should not be included in
Part II. The same could apply to any particular paragraph of
any of the Articles included in Part II; but it would not be
in order to submit any amendments of substance to the text of
these. Articles, because the basis on which the Tariff
Negotiations Working Party drew up Part II was that the Articles
taken
will be/with the corresponding Articles of the Charter.
There is also a more practical reason for that ruling, in
that we have only got a short time in which to conclude our
work, and if we were to permit, at this stage, the re-opening
of any Articles which have been the subject of prolonged
discussion in the Preparatory Committee, we would never be able
to terminate our work in time.
The first Article in Part II is Article III, National
Treatment on Internal Taxation and Regulation. Are there any
comments with regard to this Article?
The Delegate of Australia.
Dr. H.C. COOMBS (Australia): Mr. Chairman, as I stated
when we discussed this question generally, it seems to me that
the onus of proving whether an Article should go into the
General Agreement should lie with those who want it, and we do
feel that there is a certain amount of difficulty about this E/PC/T/TAC/PV/l0
Article.
This Article in the Charter had two purposes, as I understand
it. The first purpose was to protect the items in the Schedule
or any other Schedule concluded as a result of any subsequent
negotiations and agreement -that is, to ensure that a country
offering a tariff concession could not nullify that tariff
ooncession by imposing an internal tax on the commodity, which had
an equivalent effect. If that were the sole purpose and content
of this Article, there could really be no objection to its
inclusion in the General Agreement. But the Article in the
Charter had an additional purpose. That purpose was to prevent
the use of internal taxes as a system of protection. It was part
of a series of Articles designed to concentrate national
protective measures into the forms permitted under the Charter,
i.e. subsidies and tariffs, and since we have taken over this
Article from the Charter, we are, by including the Article, doing
two things: so far as the countries become parties to the
Agreement, we are, first of all, ensuring that the tariff
concessions they grant one another cannot be nullified by the
imposition of corresponding internal taxes; but we are also
ensuring that those countries which become parties to the
Agreement undertake not to use internal taxes as a system of
protection.
Now, for my Delegation, we have no objection to accepting
that general idea that internal taxes should not be use' for
protective purposes; but in the same way as we expressed our
attitude on Article 1, we believe that this is a general under-
taking which should be accepted when the Charter comes into for ce.
Since our last meeting, Mr. Chairman, I have thought a good
V V
deal about this question, because I did offer at an earlier
meeting to withdraw any objections I had to these Particles if
it could be shown that they were necessary for the protection
of the tariff Schedules. I was a little worried by a point
that was made by the Indian Delegation in which he suggested
that if what we proposed in relation to Article 1 - and the same
criticism would apply to Article III - were done, we would make
a difference between those countries which were already members
of a preferential system and those who were not.
Since that meeting, I have thought that over a good deal and
I feel quite certain that that criticism is not a valid one.
There is, however, a distinction involved between groups of
countries as a result of these Articles and there is a distinction
between those countries which accept the General Agreement
before the Charter comes into force (that will include the key
countries and any other countries which so accept it) and
countries which do not. Now, countries which do not accept the
General Agreement, if they are already members of a preferential
system, will be free to increase those preferences. If they are
not members of a preferential system, they will be free to
establish preferential systems, if they wish to do so: they
would be free to establish protection by internal taxation. 5
J.
Now, it is true that when the Charter comes into force any
action which they had taken of that kind would become null and void.,
because the Charter clearly provides that only action take, before
10 April 1947 is valid, but there is that distinction, and I
suggest that it is quite an important one, that those countries,
which either accept because they are key countries or agree for
other reasons to sign the Draft Agreement, are accepting here
commitments in advance of the countries which do not sign the
General Agreement but wáit for the Charter to become operative.
You may well say that since they are willingly entering into
the Agreement that difference is no more important that the fact
that they are accepting tariff reductions when other countries who
are not signing the General Agreement have themselves not yet
accepted. But there is a difference - tariff reductions: are part
of the bargain, and it is fair to say that any part of the Tariff
Agreement which is related to that bargain is properly included
and properly acceptable by the countries which accept the General
Agreement in advance.
Referring to this Article in particular, as I say, it has two
purposes. The first is to protect the tariff reduction schedule,
and the second Is to preclude the use of internal taxes as a means
of protection. The first is clearly related to tariff bargains
so far concluded; the second is not related to tariff bargains, it
is related to general policy on commercial matters adopted in the
Charter. Therefore, we feel the same doubts about this Article
as we did about Article I1 that is, if it were confined to the
commodities described in the schedules it would be unaceptable,
E/PC/T/T,AC/PV/l0 6
J E/PC/T/TAC/PV/10
but insofar as it involves a commitment by countries participating
in the General Agreement in advance of the Charter, to abstain
without a general acceptance of the principle from the use of certain
types of commercial policy measures, we believe it goes beyond what
is a legitimate provision for a trade agreement.
CHAIRMAN: The Delegate for the United States.
MR. W. BROWN (United States) Mr. Chairman, I shall be brief.
It has been suggested that this clause as now drafted goes beyond
what is the legitimate content of a trade agreement. As far as
internal taxes are concerned, it falls into precisely these terms
covering the same subject matter as is in every trade agreement
which the United States has.
I agree with Dr. Coombs' analysis of the two purposes of this
clause, and we attach great importance to the achievement of both
those purposes. We attach the greatest importance to the inclusion
of this Article in the General Agreement. It is one of several
Articles which we think are indispensable to an agreement which
would be satisfactory from our point of view.
I would also like to add that we were very much impressed by
what the Delegate for India said yesterday, and despite the very
excellent speech of Dr. Coombs we still think that the Delegaté of
for India has a strong point. 7
S ...... E/PC/T/TAC/PV/10
CHAIRMAN: T'.. D<..:.-. or Australia.
Dr. COOMBS (Australia): Mr. C .vn, I would like to
disagree with Mr. Brown, He said that this Article in this
form - or substantially in this form - was a standard part of
the Agreements which the United States have concluded.-?
Mr. BROWN The clause in question deals with taxes.
?This is the relevant Article from an Agreement concluded
between the United States and Mexico: "The Articles, produce,
manufacture, of the United Mexican States, enumerated and
described in the Schedules . , shall, on their importation
. . .be exempt from ordinary customs duties in excess of those
set forth and provided for in the said schedules, subject to the
conditions therein set out. The said articles shall also be
exempt from all other duties, taxes, fees, charges or. exactions
imposed on or in connection with importation . .", which
clearly limits the other taxes to those specified.
Mr. BROWN (United States): I have not got the Agreement
before me, but I would like to look at some of the other
Articles in it.
CHAIRMAN: The Delegate of Norway.
Mr. J. MELANDER (Norway): Mr. Chairman, when we start to
discuss these Articles included in Part II, I think it is right
that one should try to make up one 's mind right, at the start as
to the principles which should underlie the treatment we are
giving to these Articles. I think then the basic principles S 8 E/PC/T/TAC/PV/10
ought to be the following: we are new concluding a General
Agreement on Tariffs and Trade; we have negotiated tariff
reductions and bindings end we have mere: or less preliminarily
agreed that certain essential clauses will have to be attached to
or included in this General Agreement, so as not to make the
tariff reductions and bindings worthless. That is the reason
why we have included in Part I, in Article I, for example the
Most-Favoured-Nation clause. That is the basis underlying
Article II -nd that is - or, in our view, ought to be - the
basis for inclusion of the Articles in Part II.
We feel that the basic principle ought to be, in so far as
the tariff reductions and bindings which we have negotiated are
concerned, that we must agree in principle to including safe-
guards to protect these particular items.
Consequently we agree fully with the principle set forth
by the Delegate of Australia, that one has to split up this
Article III into those twn categories of cases: one dealing
exactly with the items which are included in the tariff
negotiations, and the other being a general part of commercial
policy.
As regards the part relating to commercial policy, I d o not
agree with the statement of the Delegate of the United States, that
this ought to be included as a normal part of a commercial treaty,
We are not going to conclude a normal commercial treatyhere. We
are concluding a Tariff and Trade Agreement, on the assumption that
we shall get a Charter which will regulate the general commercial
policy, and not only the commercial policy but the other aspects
of our economic policy. .E/PC/T/TAC/PV/ 10
That is the reason why we feel that in this limited Agreement
we should include those parts of the general Charter which are
essential to safeguard the tariff reductions and bindings to
which we have agreed, but nothing more.
CHAIRMAN: The Delegate of Australia.
Dr. COOMBS (Australia): Mr. Chairman, I would just like to
make a correction. I was incorrect in stating that there was no
provision of this sort in the Agreement which I quoted. The
clause I quoted was not the relevant one. There is a clause
fully corresponding to the one which we are discussing.
Mr. Winthrop G. BROWN (United States): I am greatly
relieved.
Dr. COOMBS (Australia): That does not mean there ought
to be one.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R. J.S. SHACKLE (United Kingdom): It is a fact also that
there is . corresponding Clause in the Agreement between the
United States and the United Kingdom and, what is more, so far
as internal taxes are concerned, there is a corresponding pro-
vision in every commercial treaty which the United Kingdom has
made since at least the beginning of this century, with very few
exceptions. It is, so fer as we are concerned, an absolutely
essential principle of treaty-making.
That is for the case of internal taxation. It is not the
same with internal regulation; in this case we have an important
difference, namely, that here we have the special provisions
about quantitative restrictions. If there were no provision
9- s 10 E/PC/T/TAC/PV/10
corresponding to this as regards internal restrictions, one
could apply quantitative restrictions internally.
As regards the Norwegian suggestion, that all this should
be confined to what is strictly necessary to safeguard the
tariff concessions, I would like to say that those tariff
concessions have been negotiated on a general basis and do not
affect only the products which ere involved in the negotiations
but the whole structure of trade. If those assumptions are
invalidated, then the basis on which the tariff negotiations
have been negotiated is also invalidated. That is all I have
to say.
CHAIRMAN: The Delegate of Belgium. E/PC/T/AC/PV/10
M. Pierre FORTHOMME (Belgium) (Interpretation): Mr. Chairman,
if I consider the discussion just taking place, it seems to me that
we are now distorting the spirit with which we started our
negotiations and the will which we had where we came. here to reduce
trade
world/barriers. It seems to me that we are now considering this
Tariff Agreement which we want to draft as a simple. Trade Agreement
and that we are looking for precedents in former bilateral Trade
Agreements which were concluded between countries and in which it
is true there was a certain amount of "horse-dealing", with the
result that every point was taken up and, after much bargaining
selved, but every point was solved one by one.
It seems to me that the Trade Agreement which we are now
discussing had, anyhow in.its origin, a quite different character:
there were negotiations and bargainings and maybe, on certain
Articles and certain items in discussion, a certain amount on
Thorse-dealing," but nevertheless these negotiations were taken up
in the general framework of the will to reduce trade barriers and
also not to increase world protectionism. It may not have been
our intention to freeze, completely the existing tariffs, but
nevertheless we had the spirit ;o.avoid an increase in the existing
protectionism.
It seems to me that the idea would be to limit the abstention
from increasing the tariffs, or the abstention from increasing the
protection, only to those items which have been under negotiation
and under discussion here. .This is, to, my mind, a mistake, because
it seems that one is saying that we should limit the preferences
and limit the imposition of internal taxes, and that this should
only be done in the Charter. It was. stated here that there
would be differences in the groups: differences between those
groups which would make these, undertakings before signing the
Charter, and the other, groups which would only commit themselves
after signing the Charter. But this, it seems to me, is not a
11 P 12 E/PC/T/TAC/PV/10
correct argument. In fact, the Agreement is and has to be a part
of the Charter, if there is to be a Charter, and. I think, if it is
sound to make provisions for limitations in the Charter, then it is
quite normal and sound to make the same limitations in the General
Agreement.
The United Kingdom Delegate stated that the negotiations
proceeded on the assumption that there would be a limitation of
protectionism and this constituted the basis of all the negotiations,
and I think the United Kingdom Delegate was right. And, if I
consider this question from another point of view, if we were to
abstain from increasing the tariffs and the internal taxes only
on those articles which are under negotiation, then we would give
a wrong interpretation and a wrong meanings to the General Agreement.
I think we are all here because we play an important part, if
not a preponderant part, in world trade, and. therefore we have a
special responsibility to discharge' as regards others in the world
economy and if we undertake here certain commitments it is because
we have to set the example to other nations. We must show that
the very spirit of this Agreement for us is to undertake more than
the others, before the others, and to encourage others to do the
same.
CHAIRMAN: The Delegate of New Zealand.
Mr. J.P.D. JOHNSEN (New Zealand): Mr. Chairman, with respect
to the remarks of the Delegate of the United Kingdom and also of
the Delegate of Belgium, although it is true that the general aim
of those negotiations is to avoid any general increase in tariffs -
the whole object of them is of course to reduce tariffs and other
barriers to trade - I do not think it is accepted that the use of
increased tariffs is absolutely prohibited. If that were the
case, of course, countries which at present have very low tariffs, P.
probably no tariffs at all on certain goods, would not be able to
afford protection to developing industries,
The difficulty my Delegation has in connection with this
particular Article is that, although the use of Tariffs is
permitted in such oases, the use of other measures in place of
tariffs and which should be permitted to be used legitimately in
place of tariffs - because tariffs are not suitable to the purpose -
is precluded. Those means cannot be employed.
Now I do not think that at this particular stage there is any
necessity to make any commitment except respect of articles
negotiated under the Trade Agreement.
For that reason I feel very much along the same lines as the
Delegate of Norway and, while I have no objection at all to the
inclusion of paragraph 1 of Article III, I should prefer that the
-remaining sections of this particular Article should not be
included since they are unnecessary at this state to afford
protection to negotiated articles.
CHAIRMAN: The Delegate of China.
H.E. Mr. WUNSZ KING (China): Mr. Chairman, I think this
Article III is also e. Chinese hobby; therefore I would like to
say something about it, if not too much. You will recall that the
Chinese Delegation has made at least two reservations in regard to
This Article in the Charter. Now the Charter is still, as my
Chilean colleague has put it, an unborn mother. Therefore I do
not think that the child is entitled to a less favourable treatment
from the hands of the Chinese Delegation.
As I understand, certain basic provisions are to be introduced
into the Agreement in order to safeguard the tariff reductions
and bindings, and that I think is very proper and very legitimate.
But if we are to include basic provisions we should confine
13
E/P C/T/TAC/P V/1 0 P. 14 E/PC/T/TVC/PV/10
ourselves to the inclusion of those provisions only; and I am not
at all sure whether this article and other Articles are really
basic provisions in that sense. I have had the pleasure of
pointing out on one occasion that only those stipulations or
provisions which are absolutely essential for the purpose and which
have the most direct bearing on the question of tariff reductions
should be included and no others.
Now, if I remember correctly, Mr. Brown, the United States
Delegate, on one occasion told us that the main idea that we should
include in the Agreement some of those provisions is because,
according to him, the way those provisions got into the Charter -
I am quoting his words - in the first place is because they have
been customary in Trade Agrements in the past. Now I have a very
limited knowledge of Trade Agreements, but I heard with a good
deal of interest the remarks of my United States and Australian
colleagues in the matter of existing or former Trade Agreements
and this leads me to refer myself to an Article in the Commercial
Treaty between China and the United States - I hope Mr. Brown has
a copy at hand. I might be permitted to read one Article, and
this is Article VIII of the Commercial Treaty between China and
the United States included on 4 November 1926. It reads:
"Articles the growth, produce or manufacture of either High
Contracting Party, imported into the territories of the other
High Contracting Party, shall be accorded treatment with
respect to all matters affecting internal taxation no less
favourable than the treatment which is or may hereafter be
accorded to like articles the growth, produce or manufacture
of such other High Contracting Party".
Now this national treatment is limited to like products and no
mention is made in this typical Commercial Treaty of competitive
or substitutable products. Therefore it seems to me that it is E/PC /T/TAC/PV/10
certainly not customary to extend this sort of treatment to
competitive and substitutable products, and if there is any
provisions to be included in our present Agreement for the purpose
of safeguarding tariff concessions, the inclusion of the first
sentence of the first paragraph should be sufficient to serve our
present purpose.
Dr. Coombs is right in his analysis of this Article, if I
understand him correctly. The purpose of this Article is twofold:
(1) it is to protect tariff concessions and (2) it is to preclude
the use of internal taxes as a means of protection. Now, what
we are anxious about and what we are keen on is to include certain
provisions which have for their purpose the safeguarding and
protection of tariff concessions, and I think for this purpose the
inclusion of the first sentence of the first paragraph should be
sufficient.
I am also interested in what our Belgian colleague has said.
If I understand him correctly he says that any General Agreement is
to be and has to be part of the Charter, and I think he is quite
right in saying that, and I should add that his argument would be
very valid if we had already a Charter which was finally adopted
and then we had to conclude an Agreement as a part of the Charter;
but unfortunately this is not the case. I would like to repeat
the Charter according to our Chilean colleague is an unborn mother.
Now we are trying to baptise the child before the birth of its
mother. And such being the case I really wonder whether the
argument put forward by the Belgian Delegate is altogether valid.
It seems to me that the situation is this: that certain
delegations would like to see the Article as a whole deleted
altogether, and certain others would like to have the textual
reproduction of the whole Article. Now, as Chinese people are
always full of the spirit of compromise, I certainly am no
15
P. 16
P. E/PC/T/TAC/PV/10
exception to it, and therefore I would like to suggest as that
compromise, and faithful to the doctrine of the Golden Mean,
that we might, if it is agreeable to the Committee as a whole,
include in this Agreement the first sentence of the first
paragraph, and the second paragraph - I mean the whole paragraph
which seems to include a South African hobby too. . I mean to say
that the whole second paragraph should also be included. But all
the rest should be left to its fate. 17
V E/PC/TAC/PV/10
CHAIRMAN: The Delegate of Belgium.
M. Pierre FORTHOMME (Belgium): Mr. Chairman, I very much
fear that the gynaecological simile which has become a favourite
of this Committee is somewhat misleading. It appears to me
that the Charter and the Agreement are not to be the fruit of the
loins of Man, but, lot ua hope, of his reason, and that therefore
there is no question of the one giving birth to the other, or the
one making the other one suffer the consequences of illegitimate
birth.
It seems to me that the agreement is, more exactly, a stage
and a preparation, setting the scene upon which it will be
possible to build a workable Oharter, and that therefore we cannot
object to the inclusion of certain things in the Agreement because
the Charter is unborn. We may believe that the provisions put
into the Agreement now will have to be changed when the Charter
acquires ultimate form, but meanwhile I do not think that we can
do any better than reason on the Charter as it is here, and
include the provisions of the Charter as they are here, in order
to fulfil the purposes we are seeking here;, which is the
protection of the concessions we have negotiated here.
CHAIRMAN: The Delegate of Norway.
Mr. J. MELANDER (Norway): Mr. Chairman, it seems as if the
discussion is more or less developing into the same sort of
discussion as we have had previously, and I think perhaps it may
be permissible to make some more general remarks about the
basis ot which we have been negotiating here.
We have not been negotiating the tariffs on the assumption
that we shall have a Charter with the exact texts of the Geneva
- rs hoa / n - E/PC/T /TAC/P V/1 0
Charter. We have been negotiating on the assumption that we
shall get a Charter on those lines, and a Charter including
all the main Chapters, and - perhaps this is the most important -
that we shall get a Charter which will obtain almost universal
acceptance, so that the universality of the Charter of the I.T.O.
is, in our view, just as important, if not more important, than
the exact texts.
We have, in other words, negotiated these tariff reductions
and bindings on the assumption that they will be part of the
structure of foreign economic policy which will come into force,
we hope, in the course of next year. Consequently, we have
always been of the opinion that the right solution would be to
incorporate none of the provisions from such a general Charter
in an Agreement of this kind dealing with tariff reductions and
bindings.
On the other hand, I must say that we have accepted and we
acknowledge the points which have been made by some Delegations,
namely, that if we conclude a limited Agreement dealing with
tariff binding and reductions, it is only fair that those items
shall be safeguarded against contravention. For that reason, we
do not see any objection, in principle, to including. those parts
of the future general Charter which are considered essential by
the majority of the parties here represented, but limited to the
items which we have negotiated.
That does not moan that we in any way support any policy of
restricting world trade - on the contrary, we have more interest
in the expansion of world trade than most other countries
represented hope, I think with the only exception of New Zealand
We certainty hope that we shall get a universally acceptable
Charter awed that the. tariff negotiations here will be just one
18
V 19
V E/PC/T/TAC/PV/10
minor aspect of the whole structure. That is the basic
principle on which we are acting, and that is the reason why
I have accepted the principle suggested by the Delegate of
Australia in this particular respect.
Now, with regard to some points of detail referred to by
the Delegate of China and the Delegate of New Zealand - I wIll
take first the suggestion of the Delegate of China that paragraph
2 of Article III should be incorporated whilst the other
paragraphs 3, 4 and 5 would not be incorporated.
H.E. Mr. Wunsz KING (China): And also the first sentence
of paragraph 1.
Mr. J. MELANDER (Norwacy): Yes. I think that our view
would be that in that case we should introduce a measure or a
clause which would be more strict than the Charter as it now
stands, because paragraph 2 of Article III must be read in the
light of the exceptions and the principles laid dovwn in paragraphs
3, 4 and 5, and the same applies to the first sentence of paragraph
1 also. Consequently we feel that if we are going to have a
general rule at all (which, as I said, we do not think is right)
then, in any case, we feel that we should include all the
exceptions to the general rule.
As regards the point raised by the Delegate of China in
regard to paragraph 1, we would have no objection to deleting
the second sentence and maintaining the first if we are going to
have a general rule at all, but we do not think that is right,
I repeat, and the same applies to the point made by the Delegate
of New Zealand. If one is having paragraph 1, one ought to
have at least paragraph 5; but that is only on the assumption
that one is having general rules, and, as I say, we think it is
right to split it up so that you have a division on the lines
suggested by the Delegate of Australia. 20
E/PC/T/'TAC/PV//10
CHAIRMAN: It would seem as if the well intentioned efforts of
the Delegate of China to propose a compromise solution have not
proved very successful. I therefore take it that the Chinese and
New Zealand Delegates will not be desirous of pursuing their
suggestion. We are therefore confronted with the maintenance of
the Article as it is and the other school of thought, which is
represented by Dr. Coombs and Mr. Melander, who have suggested that
the Article be confined to protecting the effect of tariff
concessions.
The Delegate for Cuba.
DR. G. GUTIERREZ (Cuba): I am very sorry, Mr. Chairman, that
I am not going to bring any light into this discussion, but only
express a fear.
We have followed with great curiosity all the discussion and
bright thoughts which we have heard this afternoon and in the
preceeding afternoons - With the same curiosity that we would have
watched a group of wise men trying to solve the problem of
squaring the circle or the great physical problem of perpetual
motion, We are now trying to furnish a house that has not been built.
We have learnt through experience in my country that you cannot put
the carriage before the horse, and that is exactly what the world
of experts is doing in Geneva - they are putting the carriage before
the horse, that is to say, the Agreement before the Charter.
I confess that I do not know how that can be done, and that is
why I do not intervene in the discussion of the wise people who eve
doing such things.
Several days ago we dared to-submit a proposal to this Committee,
when the-whole of the Committee wanted to sign the Agreement on the 21
E/PC/T/TAC/PV/10
30th September and not one day afterwards, which was impossible,
that the best thing would be to take from the Agreement all the
Articles related to the Charter and wait until the last day of the
World Trade Conference and then sign the Agreement with a reference
to the Charter, already approved as a whole. I was so unanimously
defeated that I did not insist. I only knew through the papers
distributed afterwards that, also unanimously, the Committee had
been wise enough to leave the date of signature open until the
28th February 1948.
If that is so, why are we going over again the same problems
which we have gone over for five months in relation to every one of
the Articles that we are putting into the Agreement. Is it that
these is a fear that there is going to be no International
Organization of Commerce? If that is the fear - and we in our
Delegation are beginning to have that fear that there is not going
to be an International Organization of Commerce or a Draft - then
these Articles would be of very little use to us. because they unbalance
absolutely the whole of the discussion that we have had here for
five months.
Besides that, I think - if it has not been changed - that our
date dead-line for the discussion of the Articles of the Agreement
is September 12th. We are still on Article III and this little
document has 33 ArtIcles. According to the progress that we are
making, we are covering one Article a day so that I think we shall
still be discussing in October. That is why I do not even wish to
bring any suggestions into the discussion, but I will sit here and
say "No " every time' anybody wants to make a change in the text, or,
in cases where you want to minimise the text and out it, I will say
"Yes". That is all, Mr. Chairman. 22
J. E/PC/T/TAC/PV/10
CHAIRMAN: The Delegate for China.
H.E. Dr. WUNSZ KING (China): Mr. Chairman, I think you will
allow me to say that I am rather distressed to hear that the efforts
which have been made by the Delegate for New Zealand and by myself
are said to be unsuc-essful. While I certainly bow to your ruling,
I do not share your pessimism. I do not know how the Delegate for
New Zealand feels, but for my part I do think that, inasmuch as we
are being confronted with difficulties from day to day, any compromise
solution should be welcome, and in view of the considerable support
given by the Delegate for Norway, and in view of the lack of
opposition from any other part of the floor, I am inclined to think
that my efforts, as well as the efforts of the Delegate for
New Zealand, are quite successful.
CHAIRMAN: The Delegate for New Zealand.
MR. J.P.D. JOHNSEN (New Zealand): Mr. Chairman, I agree with
the Delegate of China that it is a reasonable deduction,that, in
view of the lack of opposition, there must be some support of the
proposal that was put up.
However, I would like to have defined, if I might, the actual
proposition that was put up by the Delegate of Australia to which
you referred. What was proposed in that connection?
DR. H.C. COOMBS (Australia): Mr. Chairman, the proposal which
I put forward - at least, the argument which I put forward and which
would have led to a proposal - was to introduce after the words
"the products of any contracting party", in the first and second
paragraphs of this Article, the words "being products described in 23
E/PC/T/TAC/PV/10
the schedules. That would give effect to the limitation of this
Article in the way in which I described. Unfortunately, however,
our Chairman has ruled that we cannot put forward amendments.
Therefore, if that ruling is inflexible, we are faced with the
alternative of taking the Article as it stands or of opposing 1 Id
inclusion altogether.
I would like to add,. Mr. Chairman, that, while I agree fully
with your interpretation of the situation that it would be unwise for
us to embark upon a reconsideration of the content of these Articles,.;
I feel that a proposal that does not alter the content but limits
the area of application is in a different category from one which
proposes a change in content. We are not objecting .to the
intention of this Article, but merely put forward the view that, for
the purposes of the General Agreement, the area of its applicability
should be different. I am not sure whether, in that sense, you
regard our proposal as acceptable in view of your ruling.
CHAIRMAN: My rule, of course, is one which is designed to
enable us to get on with our work in the time at our disposal, and
therefore should be regarded as more or less inflexible, No doubt
occasions will arise on which we see that exceptions to this rule
may be necessary on account of some circumstances which cannot be
foreseen at this time, but we can give consideration to them as they
arise.
As for the particular case raised by the Delegate of Australia,
I should think that it is a basic change of substance to an Article
Which is included in Part II, because the text is common both to the
Charter and to the Trade Agreement. Therefore, 't would be upsetting
the basis upon which it was included in Part II. S 24 V/PC/T/TAC/PV/10
CHAIRMAN: The Delegate of Chile.
Mr. F. Garcia OLDINI (Chile) (Interpretation): Mr.
Chairman, I shall not speak now either of the mother or the son
because I fear the Belgian Delegate would make me come down from
the level of miracles or monstrosities to the level of a hospital
ward, but, whether we, mention the fact here or whether we do not,
the difficulties are still facing us, and I am reminded here of
Galileo, when he said that, nevertheless, the world revolves.
The Chilean Delegation made two reservations regarding this
.rticle when tha Charter was under discussion; these reservations
pertained to the same situstiom which was mantion by the Chinree
Delegate, and it might be of no importance to consider them during
the discussion of the General Agreement, because we could always
mention these reservations again at the time of signature of the
Final Act.
Nevartheless, to transfer provisions from the Charter to the
General Agrement, when all the difficult situations are not
solved, seems t me to be piling up difficulties on top of one
another.
When we discussed the other day the possibility of eliminating
Part II of the Agreement completely, and when that solution seemed
almost Acceptable to many Delegations, proposals were put forward
straight away to reduce the scope of Part II and to change the text
.of Part II. If I remember correctly, at that time the United
States Delegate said that a text containing only half a dozen
provisions would be completely sufficient to safeguard the
benefits end concessions which might have been obtained and which
had been obtained during the negotiations. E/PC/T/TAC/PV/10
It seems to me that we are now forgetting this suggestion
and if we had not forgotten it we might have avoided toiling
for a long time and we might have avoided many of the
difficulties which now confrant us.
We are discussing this Agreement Article by Article end
now we are told by the Chair, in tho course of discussion on
Article III, that no modification can take place because this
text is the text of the Charter. This would mean, of course,
that we intend to make the Agreement a replica of the Charter,
and therefore it would not be possible to insert provisions which
would only tend to safeguard the benefits and the advantages
resulting from the negotiations.
The situation which would face us would be that Delegates
would be compelled Either to accept this Article as a whole or
to reject it entirely. This might be a good tactical approach
from the point of view of certain Delegations, because the
majority of the Committee, being faced with the dilemma of
having to choose between including provisions relating to the
national treatment of internal taxation and regulation and
including nothing at all, will certainly prefer to include
,something; that is, to include the .whole .Article or to
include nothing at all, which would mean to reject it entirely.
Might we not put the question in this way: whether the
Committee would prefer to transfer completely the text of
Article III from the Charter into the General Agreemant, or
whether the Committee wishes only to insert here provisions to
safeguard the benefits and advantages derived from the
negotiations?
If the Committee adopts the first solution - if it
decides to transfer the ;article from the Charter as a whole -
then the discussion is closed. On the other hand, if the
Committee decides that it prefers to insert only provisions to
protect and safeguard the results of the negotiations, then I
S
25 E/PC/T/TAC/PV/10
think it would be wise to nine an ad hac sub-committee which
would draft provisions to replace that Article.
CHAIRMAN: The Delegate of India.
Mr. B. N. ADAKAR (India): Mr. Chairman, we are asked to
express our views an two prepositions which are now before us.
0:, is, in accordance with the procedure of examining Part II
Aarticle by Article, whether Article III should stand or not.
The other proposition before us is whether the scope of this
Article , or subsequent Articles in Part II, shuld be limited
to the products which are the subject of negotiations,
Sa far as India is concerned, we do not feel strongly about
either of these two propositions and we ere quite prepared to
concur in either if them, but at the same time we must say we
do not feel happy about either of them.
As regards the first proposal, whether or not this particular
Article shall stand in the General Agreement, we are placed in a
difficult situation. Unlike some of the other Delegations which
have spoken, our opposition to Part II being included in the
General Agreement does not arise from any specific reservations to
the contents of the Articles in Part II. We hope that by the time
we come to sign the Agreement we shall be in a position to sign it
without reservations to specific Articles, or else we will not
sign it, at all. That being the case, our opposition to Part II
being included is based on general grounds. I will not repeat
those grounds but, since the point has been raised, I will recapi-
tulate them.
I would only state that we must have regard, when making
reservations to Part II, to certain important and basic
propositions. It seems inevitable that when the Organiztion
8 E/PC/T/TAC/PV/ 10
calls upon a new Member to negotiate tariff concessions, it, must
stipulate - as has been stipulated in the relevant Article of
the Charter - that the results of the negotiations with the new
Member will be incorporated in the General Agreement. It seems
to us there is no escape from that. They will, under the Most-
Favoured-Nation obligation, have to extend tho benefits to
countries which are not signatories to the Agreement.
Proposal No. 2 is that if the General Agreement contains
not merely tariff concessions but a great deal more - if it covers
issues of commercial policy, and so on - then we have to decide
whether a country which has siane- the General Agreement and also
signed the Charter could simultaneously be party t.o two different
typos of obligation,
It was pointed out recently, by the United Kingdom Delegate,
I believe, that such a situation might give rise to difficulties,
but he did not state what the difficulties were. That is our
point of view also: if a signatory of the General Agreement
could be simultaneously a party to two different sets of
obligations.
Therefore we come to the third preposition, that, so far
as issues of commercial policy are concerned, it follows from
the first two prepositions that the provisions of the General
Agreement cannot materially differ from those of the Charter.
If that is the position - and it seems that these three
prepositions have not been seriously challenged - then is it
not true that we must be prepared to have a General Agreement
which will embody the Charter provisions which will eventually
be adopted? If that is the position, I do not understand why
27
S E/PC/T/TAC/PV/10
we should be so anxious to have them incorporated in the General
Agreement here and now. If the reason is that the Chartar may
not be eventually adopted, could we not provide against that
contingency by saying that if the Charter is not adopted the
signatories shall meet again and consider the matter further.
Just as these particular provisions are essential for
safeguarding the value of tariff concessions, similarly there
are other provisions which are not incorporated here which are
equally important for the purpose of safeguarding those tariff
concessions. But surely, I think, some countries will
maintain that in giving the tariff concessions they have given,
they have taken account of parts of the Charter. Were it not so,
there would be no reason for the last sentence in the Protocol,
that, if the Charter does not come into existence, then the
signatories shall meat to consider in what manner the Ganeral
Agreement shall be supplemented.
If that is the position, it seems to us that the arguments
in favour of including all the Articles in Part II do not appear
so strong. Therefore our position in regard to this main issue
is governed by the guiding consideration and we shell find it
extremely difficult to express views on individual Articles. If,
of course, some way is found out of the difficulties I have
mentioned, then we shall have no objection to including the whole
of Part II and there will be no action, so far as we are concerned,
On individual Articles,
The second proposal, as to whether the scope of Article III,
or subsequent Articles, should be limited to the particular pro-
ducts which are the subject of tariff negotiations, causes us
some doubt. Vie stated on another occasion that the Articles at
present included in Part II do not merely serve the purpose
S E/PC/T/TAC/PV/ 10
of safeguarding the tariff concessions, but that they include
issues of commercial policy which might properly be so related.
While that is the position, we do not think it would be
practicable to mutilate thse Articles and to confine them only
to the particular products which are the subject of negotiation,
It might be easy to do that in this particular Article - National
Treatment on Internal Taxation and Regulation - but it may not be
possible to do that with other Articles, for example, III the case of
tariff valuations,.. It will not be easy to decide what tariff
valuations shall apply.
Similarly with other Articles bout customs formalities.
There also the issue is a wider one end it will not be possible to
limit it to the particular products which are the subject of
negotiation. Nor would it be safe to state in a categorical
manner that nothing: should be done to impair tariff concessions,
because some exceptions have been recognized in the body of the
Charter itself. For example, in the Balance-of-Payments Article
no exception has been made to the effect that when quantitative
restrictions are required to safeguard balance-of--payments
such restrictions shall not apply to products which are
the subject of negotiation.
Similarly, there are other exceptions -hich are recog-
nized in the general elimination of quantitative-restrictions
but we do not make any sp-cific exception in favour of pro-
ducts which are the subject of negotiation.
It seems to us that those provisions are an essential
part of the whole and by mutilating them we shall be landing
ourselves in a position of extreme uncertainty.
S
29 P . 30 E/PC/TC/TAC/PV/10
As was apparent in the course of the suggestion made by the
Delegate from China, if we include in Part II only the first
sentence of paragraph 1 and the whole second paragraph of Article
III we shall be leaving out the exceptions which have been
recognised as justifiable.
For these reasons, Sir, we think it would be very difficult
to split this ..rticle into its component parts, and therefore, if
these component parts are to be included, it might be preferable
to include them as they are, but at the same time that is subject
to basic difficulties, I submit, on the main issue as to whether
this wider provision for quantitative restrictions should be
allowed to strand in view of the fact that it cannot in any way
detract from the major provisions already adopted in the body of
the Charter.
At the same time we should be quite willing to fall into line
with either of the two proposals which have been put before us.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I would
like to suggest to the Committee that there is already an important
element of compromise in the fact that this Article is in Part II;
that fact means that, pending the definitive entry into force of
the agreement, this Article will only apply in each accepting
country in so far as it is not inconsistent with their existing
legislation.
Well, we have now postponed the date for the definitive entry
into force of the General Agreement until after the Havana
Conference. From that it follows that no delegation will have to
take a final decision involving changes in its laws until the
results of the Havana Conference are seen. Up to that time no-one
will have his hands tied and those who want to wait to see the 31 E/PC/T/TAC/PV/10
results of the Havana Conference will be able to do so. When
the results of the Havana Conference are seen the question will
come up of replacing this Article by the corresponding text which
is produced by the Havana Conference. In the meantime those
who are applying this General Agreement provisionally will be able
to get out of it at two months' notice.
I suggest that all those facts in themselves constitute a
very important measure of compromise in this ArticIe.
As regards the suggestion that the Article be split, that its
scope be limited to particular produces which are the subject of
tariff concessions, I entirely agree with the Indian Delegate that
it would be most regretable intilate this Article in this way,
and I think it would be quite inconceivable to do it in the light
of the other Articles which stand in Part II.
So it seems to me we are faced with a straight choice of
icoludng; thisArticle iLnPart II orremov ng it sl togeuthe.0 It
does seem tomIe tht. fI this rt-iclew een to dsappeaar/to e.
mutilated r considerably weakened, thoat would cal . in question
thewvhole bsnss onwfi hc theta rift negotaitonsSthemneclvso hvVe
been negotiated and would herefore calliantoqces.tion the whole
possibility of rvigi>g'iltno oracet-hre- egLotiaetd cnrcesaions.
Therefore Isuggefst, in view of all these consideration,. that
we should keep this rt'iclein P1art II; and as I acve pointed out
before, that will ea n taL ; thse i who are notpPrpa)red to accept
it at once will not be compel ed to make their choice until they
have seen the result ofHa-van.
CHAIRMAN: The Delegate of Belgium.
M. Pierre FORTHOMME (Belgium): Mr. Chairman, I would like
to make clear that everything I have said previously should
indicate that we disagree with any attempt or desire to change
P. P. 32 E/PC/ T/TAC/PV/10
anything in Part II as it stands now. We think it should stand
as it is, and for this reason: we had suggested a possible
elimination of practically the whole of Part II by cutting. it
down to what we considered bare essentials, but it immediately
appeared that other delegations had views different from ours as
to what would be the bare essentials, and therefore it was found
that any attempt to pursue that course I had outlind would simply
lead us to go over again the ground which the Tariff Working
Party had gone over already very exhaustively in preparing the
present draft of an Agreement and it would be simply working for a
long time again to arrive probably at the result we have now.
Therefore we consider that Part II should be taken as it is:
that there should not be any chipping away of a little piece here
and a little piece there, because that would lead to a competition
of the different delegations to try to .-et eliminated from the
Agreement the parts they do not like, and we would be turning this
Agreement into a Gruyere cheese, and probably a smelly one at
that! E/PC/T/TAC/PV/l0
CHAIRMAN: The Delegate of canada.
Mr. L.E. COUILLARD (Canada): Mr. Chairman, we seem to have
reached the stage where Delegates are stating briefly and simply
their position. I should like to- do likewise for the Canadian
Delegation.
For various reasons which have been advanced, we favour the
retention in Part II in toto of Article III. We have for that
four main reasons, and briefly they are as follows. Without
expanding on them - one, that if we took out of Part II or
mutilated seriously Article III as it now stands, we would be
retreating from positions of existing international commercial
policy. As Mr. Forthomme very well pointed out, leading the
world in devising new up-to-date 1947 streamlined methods of
international policy would not be leading but ..,treating.
Our second reason is that it is in accord with present
Canadian commercial policy. Dr. Coombs was good enough to point
out to the United States Delegate that their United States/Mexico
Agreement does contain s similar clause. We have a similar clause
in the Canada/United States, Canada/Mexico Agreement etc. We
would find it very difficult to go back on such undertakings.
The third reason, which was pointed out by Mr. Shackle, is
that Article III as it now stands has been the basis of our
negotiations here in Geneva, which brings me to our fourth reason,
namely, that it is necessary to protect not only scheduled items
in the Agreement, but, indeed, all items for all our exports and
the exports of any country. If that is not done, then every
item which does not appear in the Schedule would have to be
reconsidered and possibly tariff negotiations re-opened if
Article III were changed to permit any action on these non-scheduled
items.
V
33 E/PC/T/TAC/PV/l0
I should also like to refer to a very important point which
Mr. Shackle made, namely, that we are, as it stands now, making
an important compromise in the fact that Article III stands in
Part II and not Part I of the Agreement.
CHAIRMAN: The Delegate of Norway.
Mr. J. MELANDER (Norway): Mr. Chairman, as there seems to
be doubt in the minds of some Delegations as to whether it would
be practicable to split the Articles in Part II in the way
suggested originally by the Delegate of Australia, it might
perhaps be possible to reach a compromise so lution on these lines,
namely, that we cut out all the Articles from Part II and that we
rely on the principles of the Charter in the form described in
the last paragraph of the Pretocol, that is, that the parties to
the General Agreerment undertake to "observe to the fullest
extent of their authority the principles of the Draft Charter,
and, should the Charter not have entered into force on November 1st
1948, to meet again to consider in what manner the General
Agreement should be supplemented".
That covers, as far as I can see, the :- that the
negotiations have been conducted on the assumption that commercial
policy, as drafted in the Geneva text, shall be applied, more or
less; and secondly, it taxes care of the point that whilst some
Delegations -some six or seven as far as I can gather - find that
the Articles included in Part II now are essential, I should
imagine that very many Delegations feel that in order to
counter-balance these items,generally in the Commercial Policy
Chapter, we must have the other Chapters, especially the Economic
Development Chapter and the Employment Chapter, on the same lines.
If we treat them on the same basis, we. can move the whole lot into
34 E/PC/T/TAC/PV/10
Part II, which I gather is perhaps a bit difficult for some
Delegations to swallow, or I suggest we move the whole lot out
and have them in the Protocol.
CHAIRMAN: The Delegate of China.
H.E. Mr. Wunsz KING (China): Mr. Chairman, I would say,
at this late hour, that the Chinese Delegation does not have
very strong views on paragraphs 2, 3, 4 and 5 of this Article,
although we may not feel too happy about certain detailed points
in these four paragraphs. But as to the second sentence in
paragraph 1, we had and we still have some strong views.
In proposing the deletion of the second sentence, we have
no intention at all of mutilating the body of that paragraph. We
have always been / of the opinion that this sentence from "Moreover"
to the words "their reduction or elimination" should not be there.
This sentence, or any similar stipulation, has never appeared in
any of the Trade Agreements: therefore, it is not a customary
provision -all the more so, as it has not even appeared in either
the London or the New York drafts of the Charter.
I am sorry to say, therefore, that I do not readily admit
the failure of my efforts unless I hear some convincing arguments
in reply to this point, And so far I have not heard any
convincing argument in this sense. However, in the interests of
the work of the Committee I would like to add that I am very much
attracted, by the latest compramise solution proposed by our
colleague from Norway, and I think his compromise solution is
very helpful, because it would very much simplify our task and
procedure.
CHAIRMAN: The Delegate .of the United States.
V V
Mr. Winthrop BROWN (United States): Mr. Chairman, the
suggestion of the Delecation of Norway seems to be an invitation
to the Delegation of the United States, and I think also some
other Delegations, to make over again the speeches which they
made two sessions ago. I would hesitate to take up the time of
the Committee to do that, and I would just like to say that for
the reasons which I endeavoured to express, it would be quite
impossible for the United States to accept a Trade Agreement
that did not contain certain basic general provisions; that we
have never done so before and would not be able to do so at this
time.
It was quite clear from the deliberations in Iondon, in the
London Report -the whole context in which the invitations to
these negotiations were sent out an, in which the negotiations
have taken place - that there would be a General Agreement
and that it would have certain basic provisions in it, and if
we are to make tariff concessions (and I am sure that there are
many other Delegations who feel as we do) they must be
safeguarded by certain general provisions, and they must be
in the form of a definite Agreement.
Now, we have no objection to this that the general
provisions be put into effect provisionally and under the various
safeguards which have been suggested during the course of these
discussions, such as the fact that they would be superseded by
the Charter, unless a party objects, and there would be
consultation: in other words, the suggestion made by Dr.Coombs
the other day. But I really am afraid that beyond that we
cannot go. We must have that kind of safeguard for our tariff
concessions, and not only that, but that much of a general
consideration for our tariff concessions, if we are to enter in to
36
E/PC / T / T.A. C /P V/ 1 0 E/PC/T/TA.C/PV/l0
an Agreement here.
Now, as to the point of the Delegate of China, that the
second sentence of Article 15 is new, I would call his attention
to the first paragraph of Article 15 of the New York draft,
which was the origin of this second sentence of the present
Article III, and state that the reason why that sentence is put
in there is because if it were not, it would be open to any
country to impose an internal tax upon a product which it does
not produce, but upon which it has made a tariff concession, for
the purpose of protecting some similar product which it does
produce, and therefore to be able to completely nullify the
tariff concession .which it granted, and I submit that that is
a logitimatc and sound reason for the inclusion of that
provis ion.
V E/PC/T/TAC/PV/10
CHAIRMAN: The Delegate of Syria.
MR. H. JABBAR (Syria) (Interpretation): Mr. Chairman, I had
no intention of intervening in the debate, because Article III is
included in Part II, and Part I; as we know, must be revised at a
later date. Also, Syria is among the countries to which a time
limit has been granted to reconsider the situation in the light of
decisions taken at the Havana Conference. Nevertheless, I would
of
like to ask a number/precisional questions on the second sentence
of paragraph 1.
In certain countries there are different means of communications -
motorcars, railways, animals used to transport goods, and even
camels, and of these different means of communication which belong
to the same category, that is to transportation, if we import, are
they all included in this category, because, for instance, if we
impose a tax on motorcars we will also have to impose a tax on
camel transportation or railway transportation, which might be
considered as a substitution? There are countries where rice is
used instead of wheat and in this case, if a tax is imposed on the
import of wheat, will a tax need to be imposed on the import of rice?
These, Mr. Chairman, are the clarifications which I would like
to have.
MR. R.J. SHACKLE (United Kingdom) Mr. Chairman, this is
rather a frivolous interruption, but I can not help feeling that the
camels of Syria and Lebanon must be extremely speedy beasts to be
considered as similar products to motorcarsl
J . 39 E/P C/T/TAC/PV/10
- MR. M. MOBARAK (Lebanon) (Interpretation) A camel is much
faster than a motorcar, Mr. Chairman,
CHAIRMAN: The Delegate for China.
H.E. Dr. WUNSZ KING (China): Mr. Chairman, I simply wish to
express my thanks to the United States Delegate for his explanation.
because, if I am not mistaker, his explanation seems to confirm the
point which I raised, that is, that in none of the existing trade
agreements or in the London or New York Draft Charters has ever
appeared such a stipulation as that which now appears in the second
sentence of paragraph 1 of Article III. If I may, perhaps, be
permitted to quote his own words again which are found in the
Verbatim Report,.. document E/PC/T/TAC/PV/6 of the 28 August 1947 on
page 8 - he said: "This Trade Agreement, in our opinion, should
include the essential provisions which are customary in trade
agreements dealing with tariffs". Further on he continues to say:
"As we see it, the proposal we are making is that we should continue
with that practice of having certain general basic provisions
customary in trade procedure included to safeguard the tariff
concessions which we give to each other".
Because of my limited knowledge of trade agreements, I have not
been able to find in any of the existing trade agreements any
provisions of that sort. Therefore, I take it that this stipulation
is by no means customary and therefore it should be deleted.
CHAIRMAN: I would like to point out that the reason why we
made the ruling that there should be no amendments of substance to
these articles in Part II was that we did not want to have a
repetition of the debates which took place in the Preparatory Committee, J. 40 E/PC/T/TAC/PV/10
because for many weeks these questions were discussed and I believe
decisions were reached, so far as it was possible to reach decisions
which had to have reservations attached.
Now, I am not familiar with this particular paragraph 1 of
Article 18 of the Charter, but I should have thought that this
matter had been gone into very thoroughly when the Charter was
bbing discussed. Therefore, I would like to avoid the Committee
being involved again in the repetition of a long and lengthy
discussion which took place, lasting several weeks, when the Charter
was being discussed, and so I do not think that there is much point
in pursuing this further.
The question before us is a relatively simple one of whether to
include or not this particular Article III in the General Agreement.
I think we should try to confine our remarks to this subject.
The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Well, Mr. Chairnan, what
I was going to say is rather against your ruling and perhaps it
would be better not to say it, but if I am to say it, it is this:
The fact that we have not had a stipulation like this in other
commercial treaties - I refer to the second sentence of paragraph 1 -
is not necessarily a conclusive argument, because we are living in
a developing world, in a world in which synthetic substances are
rapidly replacing natural primary products. Surely it behoves
every producer of natural primary products to think that; if he
maintains a tariff concession on his products, he may find it
circumvented by an internal tax which is designed to stimulate the
use of a synthetic substance. That, I would say, is the justification
for this particular sentence. E/.PC/T/TAC/PV/10
CHAIRMAN: The Delegate of New Zealand.
MR. J.P.D. JOHNSEN (new Zealand): Mr. Chairman, in the light
of your ruling, I feel that I have got to support the deletion of
this Article.
DR. G.A. LAMSVELT (Netherlands): Mr. Chairman, I am of the
same opinion as the Delegate of Belgium and we should like to see
Article III inserted in Part II.
CHAIRMAN: Well, I think I can sum up the debate which has
taken place.
"le have now been discussing this Article for three hours, and
all points of view have been put forward very clearly and each
Member of the Committee has had an opportunity of expressing to the
Committee his opinion on this particular Article. Dr. Coombs
mentioned when he commenced the debate that it was up to the
countries who favoured the retention of this Article to give their
reasons and prove necessity for its inclusion. I do not know if
the countries which have spoken have convinced Dr. Coombs or not,
but the way it seems to the Chair is that certain Delegations have
said that they consider this articlee necessary if they are to grant
tariff concessions which they are to accord in the General Agreement
on Tariffs and Trade.
The position, therefore, is that if the concessions are to be
granted by the countries, namely, the United States, United Kingdom,
Belgium, Netherlands, Canada and some others no doubt, this Article
is necessary for inclusion.
all Delegations
Therefore, I think we can leave this Article/having had ample
opportunity to express their views, and we can pass on to the next
J.
41 J. 42 E/PC/TTC /PV/10
Article, we will return to this Article in our second run
through, in which case the other Delegations will have made up
their minds whether they can accept this Article.
The Delegate of China.
H.E. Dr. WUNSZ KINC (China): Mr. Chairman, I feel that I
oanDot set my concience at rest without adding a word of thanks to
Mr. Shakie for his explanation, but in spite of it I feel I am
not quite convinced, because I have' not heard any reply to my
argument that this stipulation, which is the second sentence of
paragraph 1 of Article III, is non customary in character.
Therefore, I will maintain my view and the action of my
Government in this regard- will, if necessary be guided accordingly.
CHAIRMAN: The Delegate of the Lebanon.
MR. M. MOBARAK (Lebanon) (Interpretation): Mr. Chairman
Dr. Coombs has asked for arguments which would convince him. .We
have heard no arguments, we have only heard expressions of `diktat'`````
telling us that this is the moaning, take it or leave it.
Therefore, I do not think that any arguments were put forward. S 43 E/PC/T/TAC/PV/10
CHAIRMAN: I think we might continue with this discussion
indefinitely. As I said. this is the first run through of
these Articles. We will have a second run through; then we
shall see if it is possible to obtain agreement.
We now come to A.rticle III A - Special Provisions
Relating to Cinematograph Films. In Document W/312 we have a
Note by the Secretariat: the text approved by the Preparatory
Committee on this subject has been included in the revised
draft of the General Agreement for the reason that cross references
to this provision appear in other .articles previously included.
The Delegate of the United Kingdom.
Mr. SHLCKLE (United Kingdom): Mr. Chairman, as regards this
Article, I would like to recall that it is the subject of a
reservation by the United Kingdom. That is a reservation of a
purely provisional kind. It was made as a result of certain
discussions taking place elsewhere, which I sincerely hope will
come to a satisfactory conclusion. If they have a satisfactory
outcome, our reservation will be withdrawn and we shall have no
objection whatever to the inclusion of this Article.
CHAIRMAN: I should like to obtain the sense of the
Committee as to whether or not this Article should be included.
Mr, Winthrop G. BROWN (United States): Mr. Chairman, this
Article is an exception to the rule on national treatment which
would be covered by the preceding Article, to permit countries
to give the necessary protection. to their film industry. If
it were not in, the provisions for national treatment would
prevent what the Committee has agreed to be the most appropriate
type of protection for films. It is for that reason, I assume,
it was included in the Agreement, 44
CHAIRMAN: The Delegate of India.
Mir. B. N. ADAKR (India): Mr. Chairman, in accordance
with the views expressed, that if A.rticle III A is to be included
it should be included with all its Exceptions, we would support
the remarks just made by the United States DeIegate, that
Article III A should be included.
CHAIRMAN: are there any objections to the inclusion of
,Article III A.?
A.- there are no objections, I take it the square brackets
in Paragraph 4 (b) of Article II and the square brackets round
Article III A will be removed in our next text.
Mr. SHACKLE (United Kingdom): That, Mr. Chairman, will be
on the understanding that our reservation is maintained for
the time being?
CHAIRMAN: Due note will be taken of that reservation for
the time being.
The Delegate of Brazil.
Mr. R. .1LMEIDA (Brazil): Mr. Chairman, we understand from
the text of Article III A, Paragraph 1(a), combined with Article
III, Paragraph 4 (a), that nothing in this article prevents the
imposition of the exhibition of a short national film in all
cinematographic exhibitions,
CHAIRMAN: Are there any other comments?
I take it that the inclusion of Article III : is approved.
Article IV - Freedom of Transit: are there any comments?
Mr. L.E. COUILLARD (Canada): The Canadian Delegation would
favour the deletion of Article IV as not being directly concerned
with the main essential safeguard of tariff concessions.
S
E/PC/T/TAC/PV/10 E/PC/T/TAC/PV/ 10
CH AIR MAN: The Delegate of the United States.
Mr. Winthrop G. BROWN (United States): As I indicated some
meetings ago, our feeling toward this group of Articles which we
are now about to consider, going on from Article IV to Article
IX, is that none of them is really essential to this Agreement
and they might well be deleted. If, however, the Committee
disagrees with that and. wishes to retain some of them, making a
choice between them, we feel that A.rticles IV, V and VI are
probably the ones which should be retained,
CHAIRMAN: Are there any other comments?
The Delegate of Norway.
Mr. J. MELANDER (Norway): Mr. Chairman, we would regard
the inclusion of Article IV in P rt II is essential.
CHAIRMAN: Are, there any other objections to the. inclusion
of this Article? I take it then that the sense of the Committee
is that this Article should be included.
Article V - Anti-Dumping and Countervailing Duties: are
there any objections to the inclusion of this Article?
I take it then that the Committee has no objection to the
inclusion of particle V.
Article VI - Valuation for Customs Purposes.
The. Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, the
French Delegation attaches the greatest importance to this article
VI. In fact, we think it is essential that specific rates should
be fixed for tariff valuation; that is an essential guarantee of
the concessions which will have been granted here.. We think
this ought to be a firm undertaking, to be placed on the same
footing as the other undertakings of the Charter,
S
45 46
The answer given to that statement was that we could not
bind the P.'wers which have not been represented here, prior to
the Havana Conference. Therefore the A £-_=ment which we are
now discussing is, of course, between the Powers represented
here, and it was decided that during the provisional application
of this Agreement the legislation should only be modified at the
time of the ratification of the .n
For the reasons which I vc just expressed, I would
propose that the words "at the earliest practicable date",
.:.earing in Paragraph 1 of article VI, should be deleted, so as
to place this undertaking on the same footing as the other
undertakings of these particles.
CHAIRMAN: The Delegate of the United States.
Mr. Winthrop G. BROWN (United States): Mr. Chairmen,
we would have no objection to the inclusion of this article.
I participated in the discussions which led to the drafting
of the text which it contains. I do know that they were
lengthy and carefully carried out and there was probably some
good reason for very word, if not for every comma, which is
in this Article.
I take it the lAnguage is precisely the same as in the
Draft Charter and I certainly could not at this meeting
agree to any modification of it without taking advice. I
do think it has been threshed out very carefully; it is
the same es the wording of the Charter and it should not be
changed.
CHAIRMAN: The Delegate of Czechoslovekia.
H.E. Mr. Z. AUGENTHLLER (Czechoslovakia): Mr, Chairman,
I would like to sey that during the whole afternoon I have felt
like a, child in the week before Christmas. I only wanted to
S S
47
E/PG/T/TAC/PV/ 10
say that we support the proposal of the French Delegation
CHAIRMAN: The Delegate of the United Kingdom.
Mr. SHILCKLE (United Kingdom): Mr. Chairman, I would like
to point out that in the Charter a Note appears against Para-
grnph 1 of Article VI. It is a Note suggested by the Sceretariat
for inclusion in the Protocol of Interpretntive Notes, in
Document W/318. That Note reads like this: "Consideration
was given to the desirability of replacing the words . at
the earliest practicable date by a. definite date or, alter-
natively, by a provision for a specified limited period to be
fixed leter. It .was appreciated that it would not be possible
for all contracting parties to give effect to these principles
by a fixed time, but it was nevertheless understood that a majority
of the contracting parties would give effect to them at the
time the Agreement enters into force."
I presume that Note would be retained as a commentary
on Paragraph 1 of this Article, es it was included as a
commentary on the corresponding Paragraph 1 of the A.ticle
in the Charter. - 48 -PC/T/TAC/PV/10 , , /
CHAIMAANl I should like to ask the French and Czechoslovakian
Delegate: if the inclusion of this Note in the Protocol of
Interpretative Notes would not meet the point that they have
rais~.<
MI A'YE: (France) (Interpretatioi): Mr. Cha4rman, we would
beisar.sfied wtth the insertion of stch a Note a. the foot
relating to this paragraph if the other delegations accepted that,
for osher A:ticleo stating commitments, other Notes also would
appaar in the srme way.
CHAIP-AN: The Delegate of the United States.
MBR, Winthron EO:WNr. (U.S.A.) M Chairman, I am advised
that the Technical Committee which produced this draft spent two
days cn this precise point. I think that fact illustrates the
wisratn oftyour 5-ing ,han wegshould rot :o into the matter of
texts at t.is juncture,
CHAlNMAU: The question as to where the Interpretative Notes
should go was decided at a previous mteting, and -he Secretariat
eave submitt*d a draft which we will consider later, a Draft
Irotocol of :nterpretative Notes which is givnn in documert
./PC/T/W/3l8o In this Prbtocol there appears the number of each
A>t ole ans in the caese of Artpcl VI lhis Tarticu)ar Note is
giveneas it was r ad out by.MrI Shackle, eT do not sec that we
could, therefore, very well go back on ourcprevnous deLisior and
inl>ude ,his Note at the frti of the ALiJcle, because that would
be going back to the whole question of Interpretative Notes which
Inhoped was ore question whnch las deideiteJy dect ad.
Ale tbrre any othei comientsXIn Art-cle .I7
E/PC/T/TAC/PV/1
P - 49 - E/PC/T/TAC/PV/10
Mr. J. MEILANDER (Norway) Mr.. Chairman, we do not see
much difference between the text as It stands and the French
amendment, and personally I should not be inclined to believe
that we have any objection to it in its substance, but I think
there is much force in the statement of the United States
Delegate here that If we once start amending texts which
are included in the Charter we certainly run the risk of
starting again negotiations which have been going on through
the last couple of months; and that is the reason why I
think we ought not to make any amendments, even small
amendments, to Artioles from the Charter. Either take them
or leave them.
CHAIRMAN: I thank the Delegate of Norway for having
given support to the ruling which I had made earlier in this
meeting, Are the Delegates of France and Czechoslovakia
satisfied now to leave the matter where it is?
M. ROYER (France) (Interpretation): We are not
satisfied, Mr, Chairman. We bow to your decision, but
nevertheless we think it is regrettable not to insert a
provision here to safeguard the tariff concession, This is
an essential provision, and we are avoiding here inserting the
strongest guarantee, which is, in fact, the definition of the
tariff valuation. It seems to me we have not followed that
absolute and strict-rule of not modifying the Articles of the
Charter when we are inserting them in the Agreement: that has
not been the case everywhere, and some adjustments have been made,
and it seems to me somewhat illogical not to write in here, as
I have said, the strongest guarantee for the concessions which
are being made. p. E/PC/T/TAC/PV/l10
CHAIRMAN: Are there any other comments?
Do the Committee agree with the inclusion of Article VI?
Agreed,
I think we had better break off now. We will meet tomorrow
at 2.30 p.m, and will commence with Article VII.
The Meeting is adjourned,
(The Meeting rose 6.15 p.m.) |
GATT Library | xr542wn2100 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Third Meeting held on Friday, 11 April 1947 at 3 p.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/PV. 2/3 and E/PC/T/PV2/1-3/CORR.1 | https://exhibits.stanford.edu/gatt/catalog/xr542wn2100 | xr542wn2100_90260190.xml | GATT_155 | 11,271 | 70,830 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
SECOND,
OF THE UNITED
~~~~~~
. .~
Delingtes wish
should address
Clearfice, Ofl
; .
-r' , :
NATIONS UNIES
CONSEIL
ECONOMIQUE
ET SOCIAL
E/PC/T/PV. 2/
SESSION OF THE PREPARATORY COMMITTEE
NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERB3.IM REPORT
THIRD MEETING
ILA RN FRI:4Y, 11th hPktL, 19'k
_M. INTE ALAIS DES KiTIONS,
i. ivX SUETENS (Chairman)
GEEVA
(Belgium)
to make corrections in their speeches
their communications to the Documents
R.om 220 ( tel, 2247)
. . . I.2
E/PC/T/PV. 2/3
CHAIRMAN (Interpretation): The next speaker on my list is
Sir Stafford Cripps, head of the British delegation.
SIR `.'FFORD CRIPPS (United Kingdom): Mr. Chairman, we have come
together at this meeting, after considerable preparation, with the
object of taking a vary definite step forward towards the
sound and secure organisation of the economic future of the world.
It was while we were still in the middle of the great
war that many of us became convinced that a new economic
international organisation was absolutely vital for the future
peace of the world. It was then that the design apon which we
are now working first found it expression.
Many of us have had a vivid experience of the tragedies
which beset the world during the years between the two wars, and
the slow .but inexorable drift which led us into the ghastly
experience of the second world war. It was these experiences of
the misshandling of the world's economic problems in the inter-war
years and their influence upon the coming of the second world war
that strengthened our convictions that some wiser and better
organisation of international and economic relations was urgently
necessary.
You will perhaps allow me therefore to say a word
about the wrong policies in the years between the two wars, since
we may learn much from those mistaken policies.
For almost fifty years before 1930 world out put and
standards of living had - with the exception of the war years
1914-18 - been steadily rising. In 1929 it might have seemed
that the world had almost completely recovered from the set-back
of the first world and that we were once again marck," f forward
towards a prosperous future.
~ ~ ~ '~''' 'f'T t f ~~ t-~~~~-~
a b~~~~~~~~~~~~~~~ E/PC/T/PV. 2/3
But by 1932 we all found ourselves in a world depression
of unexampled severity with heavy and wide-spread unemployment.
In the following years though a considerable degree of
recovery seemed to have been achieved, it was only at the cost of
great deterioration in international economic relations and an
alarming growth of trade barriers.
The volume of international trade never recovered its
pre-depression level although world output in 1937 had reached 30%
above that of 1929. In those years immediately prior to the
second world war the decreased unemployment was due to no small
extent to the rearmament policies in many countries.
Why was it that the world suffered from this great
depression and failed to recover from it?
I think the first answer to that question is because
we all failed to appreciate sufficiently the direct relation between
international economic policies and the danger of war. We
imagined that we could each deal with our own economic problems
without regard for their effect upon the conomies of all other
nations. We looked at them as internal problems affecting
primarily our own economics, and so we failed to appreciate the
disasterous affects that the totality of all these national
policies might have upon world trade as a whole, and so upon
world relationships.
It was not, indeed, until each of us felt the
repercussion of other nations' economic policies upon our own
national position that we realised, when it was already too late,
that we had all of us allowed ourselves to be driven into policies
which in the aggregate were fatal to our own prosperity.
J~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
;~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~$ iJ..
4 E/PC/T/PV2/3
Instead of combining to raise the volume of total world
trade so that we might each have a share of that larger total, we
competed with one another in devices to restrict the total volume
of world trade and then fiercely competed with one another for a
greater share of that smaller total. Once demand started to
fall off with growing unemployment in many countries we tried by
successive steps of restriction each to protect our own national
economy against the impact of world unemployment with ever-worsening
results. Since a consistently adverse balance of payments could
not be restored by competitive devaluation, and since the adoption
of a policy of deflation meant increased unemployment, the only
solution appeared to be to impose tarriffs or quantitiative control
so as to discourage imports while in some cases in addition
subsidising to encourage exports. Exchange controls were imposed
to guard against undesirable movements of capital and to help in
the control of current trade. Primary producing countries, which
suffered particularly from the lack of all stability in the prices
of primary products and from the tendency to an undue increase of
agricultural protection in the importing countries, were driven to
accelerate their natural industrial development at high cost and
behind raised tariff walls as an alternative to dependence upon
an unstable and restricted market. Producers restriction schemes
to maintain prices stable in limited markets were similarly
encouraged,
Towards the end of the tQOS there was some reaction from this
ever growing trend towards throttling world trade. But the barriers
still remained very high and the world thus found itself being
largely deprived of the benefits which new and improved methods of
production should have provided for its peoples.
: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I E/PC/T/PV2/3
5
Though we had discovered that in our own national economies the
division of labour and the Development of specialisation had led
to an Increase of real wealth, we behaved as though exactly the
opposite policy could be adopted as between nations without
adverse effects. The nations were tending in the direction of
autarohy end self-sufficiency. We must therefore realize, Mr.
Chairman, that the prosperity of each nation depends upon a
world policy of trade expansion to be based upon an extensive
international division of labour.
Our objective therefore is to promote the expansion of trade
in the future and as a start to secure a reduction of those barriers
to trade with which countries have in the past surrounded themselves.
But we recognise that, if, in spite of our efforts, untoward
conditions should recur, we must provide by international agreement
less harmful and more certain means of protection than were used in
the past. It is important to note that in the Draft Charter of the
International Trade Organisation the members pledge themselves to
work for full employment through the maintenance in all countries of
high and stable levels of effective demand and real income. This
recognition by Governments of their responsibility for pursuing
domestic full-employment policies will, if carried into effect,
reduce the danger of a future major depression. But if such a
depression should develop in one country, the Draft Charter provides
the means of restricting its effects. With this and other safe-
guards in mind there is no need for any country to feel that it
must be permanently deprived of the real benefits of international
trade in order to protect itself from the effects of depressions
occurring outside its own borders.
As I have said, we must all avoid, at all costs, the mistakes
~ 1 J3
6 E/PC/T/PV2/3
of the inter-war period. I can assure you that the United Kingdom
is conscious of her responsibilities in this matter. ln some ways
she stands in a special position, Not only is she by long history
one of the world's greatest trading countries but she is also a
partner in a Commonwealth of Nations having a special relationship
towards one another. IT the task which lies before us, this
special relationship must, of course; be an important consideration.
Much has been said of preferences within the British Commonwealth,
though it is as well to remark, Mr. Chairman,.that others also
employ the preferential system., The Commonwealth, I need hardly
say, was not born out of the preferential system nor does that
system derive from a political relationship. It is an expression
of an economic fact. The economies of the United Kingdom and the
other Members of the Commonwealth ; have grown up to be inter-
dependent. That is factual and historic. Our Commonwealth economy
has been subjected to the most violent stresses and strains in the
past three decades during two world ware, but thanks to its
stability we have been able to stand fast to save ourselves and
others through these critical periods.
If there is one lesson that all nations should have learned
it is that of interdependence. The Commonwealth is a family, but
so too is the world, a larger family, economically as well as
politically. The world family must be the poorer if any on of
its members fails, and. it would be the poorer . poIitically as well
as economically if there were any failure or the part of ourselves
or our partners in the Commonwealth.
In a high degree the economic vitallt of the United Kingdom
which is so important to others as well as herself, depends upon
the traditional economic ties and chanels of trade which have
long linked her with certain other nations; But as wit:;. J4 7 E/PC/T/PV2/3
individuals so with nations, there is no need for a special
relationship to be an exclusive relationship. And that does not
apply to the Commonwealth alone. A special relationship is, we
believe, healthy, only so far as it is not exclusive but makes for
the strength and stability of the world as a whole . Without our
trade with the Commowealth countries it would be quite
impossible for us to maintain our trade with tho rest of the world;
just as without our trade with the rest of the world we could not
possibly maintain our trade with the Commnonwealth. The two are
complementary. Thus we all have to reconcile two economic facte,
One, the value of the stable and traditional channels of trade,
more delicately balanced thar some seem to realises judging from
the suggestions for its 'direction into new channels" at short
notice. The other the need for development and change in the
interest of progress. If we are to attain success we must take
full account of both those factors. We must neither be destructive
of the trade which exists, nor content with trade as it is now.
We of the United Kingdom want to maintain our trading relationships
with our fellow members of the Commonwealth as also with other
countries in the world. But we hope too to develop our trade
relationships in new channels which will add to the total flow of
trade to our own advantage and to that of others.
I recall, Mr. Chairman, that at the opening meeting of the
Preparatory Committee in London last October, the delegate of the
. .o .t o
United. States obeserved that if the trad of the world were to be
governed by rules the opposite of those contained in the suggested
Charter, the United States would deeply regret it; but could adapt
i situation.tselhf to then resulting Oter ratios, he said, were
less fwttelylaced. For the United States the ulation 8 E/PC/T/PV//3
of trade would necessitats a difficult roadjustment; for other
countries it would spell catastophe. While we in the United
Kingdom would question that the failure of this grand attempt would
spell catastrophe for us , we would agree that it would mean a lower
standard of life, a giving up of things we had hoped for and a
withdrawal from the wider economic life of the world into a more
limited circle. That would be most unpleasant for us, but I
believe that such a result would be even more unpleasant for others.
With our large population and small country we must remain or of
the world's greatest importers. In other words, the prosperity
of our country means the maintenance of effective demand for the
products of many others. If the Charter were not to give us the
opportunity we need. or if the whole project were to fail, then
I suggest that the inevitable contraction of our powers to import,
would be felt everywhere in the world. The rapid change of the
United Kingdom From a creditor to a debtor nation is in itself a
potent reason for.a readjustmenrt of world economic relations.
Another factor is of course the development of the creditor position
of the Western Hemishers, particuarly at the United States of
America. It is the hope of all of us, not that the United States
will have to face the difficult readjustment of which Mr. Wilcox
spoke, but that by maintaining a demand which can be freely
satisfied from the products of the rest of the world, the U.S
will make it possible for all of us to succeed in this great new
project.
We are attempting a task of greater complexity than ever before
has been attempted by international agreement. But we come to it
with much of the groundwork already prepared, Our object is to play
our full part and it is, as we know from our experience between
the two wards, a vital and essential part, in bringing peace and
happiness to mankind We, must succeed, as indeed we can, if we are
imbued throughout our discussions with a deep sense of our
responsibility to the peoples of the world and determined, as I am
sure we all must be, go to organise the future economic relations
of the world as to make available to our peoples those ingenious
and remarkable human inventIons and discoveries which have all too
often in the past been used for our mutual destruction instead of
for the building up of a better and happier civilisation.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I E/PC/T/PV. 2/3
CHAIRMAN: (Interpretation): I call upon the representative
of the Union of South Africa.
Dr. J.E. HOLLOWAY: (South Africa): Mr. Chairman, I shall try very
briefly to define the general attitude of the South African
delegation to the problem confronting this conference without
making any attempt to go into details.
The South African economy broadly speaking is spread
over three fields. There is, to start with, the large gold mining
industry. There is, secondly, the important group of primary
industries, agricultural, pastoral and mining, which produces raw
materials largely for exports. There is thirdly the group of
industries primary as well as secondary, which produces chiefly
for home consumption.
The interests of these three groups in international trade
are naturally divergent. The first two must of necessity regard
a free flow of international trade as vital to their existence.
The third is much more closely interested in the amount of shelter
which it may be able to optain from the severe competition of
countries more richly endowed for the production of consumable
goods at low cost than is the Union of South Africa,
In shaping its economic policy, the Union government must
give due regard to these conflicting interests. It must therefore
of necessity follow a policy of careful balancing.- It cannot be
ultra free trade it cannot be Ultra protectionist.
Far be it from me to suggest that we have not in
particular cases' imposed individual high duties. We are not free
from guilt but the net effect of these fundamentals of the position,
which I have enumerated, has been that the general level of duties
it moderate, and as long as these fundamentals remain unchanged the
"~~~~~~~~~~~~~~ E/PC/T/PV.2/3
-10-
average level must perforce continue to be moderate,
It could of course be argued that the emergence of the
third group is itself one of policy. That is so. But that
policy was dictated firstly 'by the consideration that South African
wants to be something more than a mining camp and by the fact that
we could find employment for all the classes of our varied and
motley population only by developing that group.
In approaching the problems which face this conference
we must be both humanitarian and realistic. Dr. Coombs referred
yesterday to the differences in the economics of different countries.
Among those varying economics it is essentially unrealistic to
grudge a place for industries even if the country in which they are
located is not as well favored for their exploitation as others are
And it is certainly entirely unhumanitarian to deny a chance of
making a living to populations to whom even the poor consolation of
freedom of migration is denied.
These considerations have particular cogency in the Union
of South Africa where a small civilized population has the task of
advancing step by step, in an orderly march to civilization another
people three times as numerous, the great majority of whom have not
emerged above the level of primitive life.
Some measures of protection of industries has therefore in
the past and must in the future continue to find a place in our
scheme of things. it is our view that the highly developed
industrial countries would derive more benefit from the increase in
the production of income from particular types of protected indutsries
in under-developed. countries than they would secure if they had
complete freedom of access to the markets of such undeveloped
countries for lack of opportunity the latter must inevitably remain
poor and therefore bad markets.
~~~~~~~~~~~~~~~
1 ~~~~~~~~1 A E/PC/T/PV.2/3
In our case therefore we are following a policy of
developing the country as a composite whole and we suggest that
.the development of the economic resources of the world as a
composite whole might well be the wisest policy in the long run
for the ITO-to follow.
. While therefore the maintenance of the balance, which our
economic structure demands, makes it essential for us to continue
using the weapon of protection it also makes it essential to use it
in moderation.. The minister of finance .stressed this recently
in the following words: "It must be emphasised that industry and
agriculture must be prepared to sacrifice such margins of
protection and preference as under existing conditions they no
longer require." I might add that we have recently completely
overhauled and brought up to date our investigational machinery
for determining the amount of protection which the interests of
us
the state justify/in giving to secondary and also to primary
industries.
The balance, of which I have spoken, has in the past made
South Africa a large importing country notwithstanding its
development of industries behind protective barriers. The
maintenance of that balance will make this condition endure. The
maintenance of that balance, so important, for our economic health
also gives us an enduring interest in the free flow of inter-
-national trade. We are therefore greatly interested in the
present attempt to put an end to the commercial war which so sadly
disfigured the years between the wars. We look upon this series
of conferences as' the final stage in the drafting of economic peace
treaties and in the creation of conditions for enduring economic
peace. The first two hurdles towards this goal - the Bretton
Woods Agreements and the American Loan to Britain - have been
1 : X~~~~~~~~~~~~~~~~~~~~~~~~~ E/PC/T/PV.2/3
- 12 -
successfully negotiated. When we ask ourselves what are the
prospects of surmounting the third hurdle we look inevitably to
the country which has taken the lead in each of the three series
of economic treaties and has made important and valuable
contributions to the United States of America.
In past ages, Mr. Chairman, world dominion has been
sought by force of arms. To the United States belongs the high
credit that she has not soughtworld dominion by force of arms.
Rather has world leadership been conferred on her by the march
of destiny. In measuring up what she will do with this world
leadership for the creation of the conditions for. economic.peace
and welfare - I repeat and welfare - she. will, I hope, forgive us
some little measure of anxiety. She stands now at the cross
roads where here traditional antipathy to the free flow of
international trade diverges from her new role as world leader.
She seems to us to stand there - to stand thereat the cross
roads - in vacillating acceptance of her eminence and, high destiny.
The United States is in a strategic position to lead the world into
the calm meadows of economic peace and the prosperity which follows
from the useful employment of its peoples'. We wish her all
strength in encompassing this worthy task of providing the corner
stone for economic peace and welfare.
The minimum achievement of this series of conferences must
be to set a period to the process of commercial war and the
consequent mutual frustration of the years -between the wars. Even
if these conferences achieve only this minimum mankind wil have been
well served. We must ai at greater heights but above all we must
not fall short of that which is required for economic peace. - 13 - E/PC/T/PV2/3
CHAIRMAN (Interpreted): I call now on the Head of the Delegation of
New Zealand.
RT.HON.WALTER NASH (New Zealand): Mr: Chairmen, Gentlemen. New
Zealand, the country for which I speak, measured in terms of
population, is easily the smallest one represented at this Con-
ference. No other country, however, has a proportionately
greater interest in the success of this Conference than New
Zealand, because, small though we are, we easily lead the world
in volume of external trade per head of population. Few countries,
if any, can claim a higher standard of living than ours. I
believe New Zealanders are correct when they attribute this almost
as much to the fact that over 40 per cent of their national pro-
duction enters into international trade as they do to the wealth
of their country is natural resources and the social consciousness
of its people. Because of our resources, especially in the pro-
duction of food stuffs and the great extent, comparatively speaking,
to which our goods enter into the commerce of the world, we of New
Zealand regard ourselves as responsible to the world for the full
and wide use of these resources. We are of opinion that such
responsibility must be a pre-condition to maintenance of sovereignty.
In effect we are all trustees of the areas of the world over which
we exercise sovereignty. We see the world as a family of nations
of which we desire to be a good member in the economic, social and
cultural fields. More than that, from the standpoint of a country
slightly larger in area than the United Kingdom but with only
one-twentyfifth of the United Kingdom's population, New Zealand
regards its own security and living standards as being menaced by
the insecurity and low living standards of the peoples of heavily
populated but economically undeveloped countries. That menace,
to our thinking, can only be avoided by the realisation generally
of the objectives for which this conference is working - full
: ~~~~~~~I A E/PC/T/PV2/3
employment and maximum production everywhere; maximum production
and. international trade and political and cultural freedom to
enable the greatest enjoyment of the fruits of economic co-operation,
and whilst willing, as we are, to examine all new methods to achieve
the objectives of this Conference, we would like to put in one
point and that is, the people of New Zealand- with the experience of
the past, desire to maintain within their own sovereignty their
special trade relations between New Zealand and the United Kingdom.
In so far, however, as these relations can be varied, with a view
to improving world trade, New Zealand is willing to give considera-
tion to any proposal that will lead towards this end. However, it
is not of Neow Zealand that wish to speak this afternoon, but of
the world. What I have said is intended only to interpret my
country to the nations represented here, and by so doing give wit-
ness to New Zealand's sincere readiness to do all that is within
her power to achieve wordy success here at Geneva. Yesterday we
were privileged to hear from Delegates, especially Mr. Kelban, the
Chairman of the Drafting Committee, something of the success of the
work done at London and later at Lake Success, and I here warmly
acknowledge on behalf of my country the appreciative reference to
the great work that has been done by thos delegates and also by
the men who have previously spoken here. The relation of what we
have achieved towards world peace and progress is so important, as
we see it, that it will bear restatement. At the end of a terrible
war, even more destructive of the means of life than of actual lives,
we have established the United Nations Organisation to outlaw war
and eradicate its projects. The Security Council is working to
remove causes of armed conflict and the Economic and Social Council,
in the work of its Fourth Session, in which we are pledged to parti-
pate, is trying to devise ways and means of achieving the social
objectives of the United Nations.
X~~~~~~~~~~~~~~~~~~~~~~~~~~~I
-14- E/PC/T/PV. 2/3
The two councils are one in purpose the Security
Council to, avoid war so that we may enjoy life, the Economic
and
Council, or the part of the Economic/Sooial Council devoted to
economies is charged with so ordering the economic life of the
countries that the world and all its people may enjoy life to the
full in the best sense that that term can be used.
These objectives quite naturally are those of the
international trade organisation which we hope this conference
will bring into being. Together, the organisations that I have
mentioned, with the help of various specialised international
agencies can and must create the conditions for the full development
of the world economic resources, and hence of world production,
as well as for the most equitable and efficient world distribution
of that production.
Coming to the work of the conference itself, there are
many, aspects which arise. I shall enumerate the most important
of these as I see them and the economic imperatives to which I
think they give rise.
First, the conference is working towards a world
economy, but the world in which we live is one of national, and
very ,often rival, economies. Therefore we must take time to adjust
the national economies to the world, pattern and to do this in such
a way as to protect the standard of living in some countries, and
lift it greatly in many other countries. The world must proceed
towards a more equalised living standard or perish.
Next, the objective of a multilateral system with the
reducing, and ultimate elimination of barriers to production and
trade is rightly written, into the Charter as a means of economising
!~~~~~~~~~ E/PC/T/PV*2/3
- 16 -
for the world as well as for individual nations and the industrial
skills and the resources of all countries. But we must not go
so far as actually to identify the multilateral system and free
trade with world full employment and universal steadily rising
levels of effective demand. Accordingly, the adjustment of trade
barriers and the establishment of charter principles must be, as
we see it, only of importance as far as they result in the production
of the national employment structures, and hence the standards of
living. In this connection New Zealand is of the opinion, and
will submit for the consideration of the conference, that the
policy of import selection by which she is patterning her production
and consumption without limiting her total imports, can play
a vital part in furthering the objectives of the International
Nrade Organization, and at the same time protect New Zealands
vital employment interest. Accordingly, we look forward to
expanding trade and co-operation in all fields with all countries
able to carry on trading relations with us inside that frame.
Next, the objective of the chapter wherein reference
is made to the development of world resources and freedom of
access to raw materials and markets must not-remain mere articles
of faith. Geneva will fail unless it recognises that in the
absense of complete agreements, agreements which are kept to
promote the development of undeveloped regions, and to raw
materials at the disposal 'of all countries equipped to process
them efficiently Formal tariff agreements and acceptance of
the Charter are almost worthless. The success of Geneva, which
I believe will be achieved, depends especially in the field of
trade very largely upon stable and equitable exchange relations
~~~~~~~~~~
1 N. 3
E/PC/T/PV. 2/3
- 17 -
between countries, and for this reason it is especially
important that all nations should accept the principle of the
international monetary fund to ensure that exchanges and
exchange conditions are based on, and fairly reflect the value
of their countries. The International Trade Organisation
cannot be successful by itself. There are aspects of world
trade other than those purely connected with trade and employment
All the specialized international agencies plus the international
Trade Organization and the Security and the Economic and the
Social Councils of the United Nations must work together as a
going concern, first the Food and Agricultural Organisation
must achieve agreement upon the best moans of developing and
utilising world resources of land, food, and raw materials.
Trade
Secondly the International/Organisation, as I see it
must find the best world formula for the production and
distribution of goods
Thirdly, the International Monetary Fund must ensure
exchange stability and the continuing availability of currencies
with which to promote and finance world trade to the maximum.
Forthly, the International Bank for Reconstruction and
Development must really assist the countries with damaged
economies to reconstruct and in particular assist in the development
of under-developed areas. In no circumstances should it as we
see it -develop into a mere guarantor of safe and profitable
investment of privately accumulated wealth.
If these four requirements can be really achieved the
nations will have more than a share of specialized organizations.
Qualified only by the limit of world resources these organizations - 18 -
will provide a world security and prosperity guarantee fund, the
currency of which is international co-operation and to which we
should all contribute according to our pledges in Article 55 of
the United Nations Charter.
The final aspect of the Conference's work which I shall
mention, is that of the bearing on it of national sovereignty.
There is agreement that we are seeking the best combination in
the world of resources of men, materials and money in order to
get the best solution to the question of world living standards.
Inevitably in a world of national economics variously patterns and -a
at varying stages of economic and political development there will
arise conflict between world interests and what appear to be
immediate national interests. There can be .no question of creating
an International Trade Organization to subdue national sovereigaties
or to direct discrimination against countries merely because they
do not see fit to join the organization. In that respect, the
remarks attributed to Senators Vandenberg and Millikin , the
United States representatives of the Republican Party, go for all
countries, that is - that they will willingly co-operate in the
International Trade Organization so long as national interests
are not menaced. I did not take that, Mr Chairman, when reading
it, as too great a qualification. All that I took that to mean
-was that the Republican and the Democratic parties of the United
States would pull together to achieve the objective of this
Organization when it is established, but to the extent that
not
their own internal economy may/be menaced by some action. They
felt, as I saw it, that they would have to put a qualifying period
there to ensure that the whole structure of our organization was
not menaced by something which might be harmful to the United
~~~~~~~~~
E/IC/T/PV. 2/3 - 19 -
States. But that, as I see it, is the view point which applies
with equal force to all countries.
At the same time, this does not mean that all countries
are virtuous by marriage with economic nationalism. It does
mean that the international solution to the problems of world
trade and employment must rest upon, first recognition of the
jurisdiction of sovereign states over the pattern of their
industry and, trade and secondly recognition of the need to adjust
these patterns by consent if mutual advantage is to emerge.
Finally, I would like to remind delegates that this
conference is representative of 19 countries only. We are
charged to build a constitution to which all countries can
subscribe.
In particular, I think it is unfortunate that the
Soviet Union which is such a great social and economic force is
unrepresented at this Preparatory, Conference. Plainly
International Trade Organisation cannot, if the Soviet Union
remains outside of it, be as effective a world organization as
when the Soviet Union comes in. .
My last words are inapcpreiation of the contribution
to the work of this conference made by the United States. Here
I heartily support all that was yesterday said by yourself,
Mr. Chairman, as well as by Sir Stafford Cripps and Mr. Colban.
The pertinacity with which our American friends and our United
States friends havone ctinued to urge theCharterd anall that it
stands for has,. I do not doubt, already been the means of carrying
us past many difficulties which might a sily hawrecve ked the
preliminary stages of the Internatilona Trade Organization. E/PC/T /PV. 2/3
-20-
No one I trust will regard it as an exhortation to
the United States to bargain over tenaciously if I utter the
hope that the same United States pertinacity will again be
in evidence at this and other conferences until we are all
satisfied that the best has been done with the available materials.
There is nothing I can say, which will too strongly
express the desire of my government that this conference shall
succeed by.contributing richly to a world federation of free,
self disciplined nations willing to abide by,. and' carry out,
agreed upon rules for the conduct of world trade, and indeed all
of the functions associated with free membership of the world
family.
...
I
I
"
R.
PI
4 01
21 E/PC/T/PV2/3
We cannot permanently continue the condition of disparity
in living standards which has been brought about by the earlier
start of some nations and race. on the border of industrialisation,
and by the application of science and inventions to the resources
of the world..
We must, as I have previously stated, go. along in this world
towards a more equalised living standard for all people.
Mr. Chairman, sometimes during the conference many of us have
been talking with regard to the road.we ought to go, what we ought
to do, what we ought to achieve, and when I.say achievement,
although associating myself with other delegates I have heard speak
I thought of a story that appears in what we call the old Testament.
It is related to a man named David, a very able man in his day,
but he had something to do with another man named Uriah and his wife;
and that,which he 'had to do with them was not at all to the credit
of David; so someone went to him and told him a story in another
way, describing in effect the relations that he had been guilty of
in connection with Uriah and his wife; and then, in strong
condemnatory language, David said what ought to be done to a man who
word act as that man had done; and then. Nathan: turned round to
him and said, "Thou art the man". I sometimes think we, when talking
high ideals, may justifiably be charged with being like David;
when somebody says something to us they might justifiably turn
round and say, "Thou art the man!"
P
~~~~~~~~~~~~~~~~~~~~~~~~~~ P.1. -22- E/PC/T/PV2/3
CHAIRMAN: I call upon the first delegate of the Netherlands.
Dr. J.;Sii-~ZIs(Netherlands): Mr. Chairman, at the opening of
this conference under your able chairmanship, I am glad to
have an op ortunity to say a few words on behalf of the
Netherlands Government.
Both the scope and the importance of the original
Proposals - for which we are indebted to the United States
of America - were such as to cause a certain amount of
skepticism as to the practical possibility to arrive at
something real along those lines. This scepticism has
been defeated, I think, by the results of the first Session
of the Preparatory Committee held in London; I hope it
may receive a further blow in the course of this Conference
and a final one during the World Conference which is to
follow.
Still - while there appears to be more than a mere
chance of success - there is a tremendous task before us
and part of this task is an entirely new proposition, too.
I refer to the multilateral negotiations on tariffs.
The thing we have in mind is to ensure greater freedom
for international trade.
We know that international trade has been suffering
from a great number of measures which various states have
found themselves obliged to take, .references, excessively
high tariffs and indirect tariff - protection included.
Now we are here to discuss a number of remedies which
the peoples of the world have found it necessary to apply
in order to check a number of economic phenoma which they
were unwilling, or unable, to accept taking place, Does
this mean that we are going to discuss not only these
remedies, but the diseases for which they were meant to
be a remedy?
I think we have to realise that this Conference can
be a success only if all the countries concerned are
~~~~~~~t I 0~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. P.2 -23- E/PC/T/PV/2/3
prepared to open their doors to the trade of others. Obviously
this Conference is meant as well to deal with safeguards and
controls: but this does not affect the fundamental fact to
which I have just referred and which no doubt will have a
very direct bearing on the economy of most of the parti ipating
countries.
If it is clearly necessary-to accept the said principle
it is equally obvious that it should-be applied to the largest
possible number of countries. For this reason the great
undertaking..we have embarked upon cannot be successful, in my
'opinion, unless a firm link is established between our york
here and the work done by those engaged in the economic life
of the enemy-countries and what it is going to be.
I think the time has come to make it clear that believing
in the purposes of the International Trade Organization does
not allow for claiming exceptions in the case of important
economic areas, such as the enemy-countries undoubtedly are,
whatever they may have been in other respects. There should
be a link between these two things, end if that link is not
a firm and reliable one I fear the penalty will be heavy.
In the meantime, however, we may continue our work
on the assumption of such a link being established.
Taking a bird's-eye view of the Conference, I should
say, then, that it coincides with a number of facts, or changes,
of outstanding importance.
In the case of the Netherlands there are two facts
to which I want to draw your attention. My Belgian colleague
has already mentioned the recent important step towards a close
economic co-operation between the Netherlands, Belgium and
Luxembourg. The law embodying the new mutual tariff has been
submitted to Parliament just a couple of days ago. This fact
will influence. the tariff negotiations of this Conference to
a certain extent, for instance, while the Netherlands, Belgium
and Luxembourg will negotiate with joint delegations, these
delegations will also represent the overseas parts of the
Kingdom of the Netherlands and the Belgian Congo. The consider-
ations which will guide the attitude of our joint delegations
at the tariff negotiations have also been summarily indicated
by our Belgian colleague, and I refer to them here.
Secondly, the political structure of the Kingdom of
the Netherlands is in the course of a reconstruction. This
reconstruction will be on the basis of the well known declaration
ation
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ P.3 -24- E/PC/T/PV2/3
of Her Majesty the Queen of the Netherlands of December 7th
1942, and of the agreements and resolutions made in consequence
thereof, such as the recent agreements of Denpasar and
Linggadjati.
At this stage of the reconstruction it may appear to
be necessary tomake a reservation on certain points.
If the London Conference of November 1946 has proved
one thing, Mr. Chairman, I think it is that a thorough prep-
aration is essential. This second Preparatory Conference,
therefore, is probably decisive for the economic and there-
fore also, for the social revival of our hard-stricken world.
I _ 25 -
CHAIRMAN: (Interpretation): I call upon the representative of
Norway.
H.E .M. ERIK COLBAN: (Norway): Mr. President. The position of
Norway is given by the fact that the country is highly dependent
upon its foreign trade, its exports and imports. We have
already during the first session of the Preparatory Committee
expressed our willingness to co-operate in order that an
International Trade and Employm.ent Organization may be set up an
an active and efficient instrument to liberate the trade from
such restrictions as have resulted from the two successive world
wars, and to secure the fullest possible employment and generally
stable economic conditions throughout the world. Our discussion
hitherto seemed to us to prove that this big task is by no means
impossible. We go to our second session in the confident
expectation that another, and this time a still greater step in
the right direction may be taken.
When the Norwegian government received the London report,
that report was very carefully studied, but especially the work on
the customs tariff has been delayed, as a considerable part of the
material that should come in from other governments did arrive
rather late and partly has not even yet come to hand,
I consider it unnecessary for us to make today any
definite declaration as to what may be our attitude to a number of
the clause of the draft charter, as well as to the delicate
question of what concessions Norway may be able to make in the field
of customs tariff.
We can, however, say that we are going to the coming
negotiations full of good will and with an open mind towards the
different problems.
I H~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~4
E/PC/T/PV.2/3 E/PC/T/PV. 2/3
- 26 -
I do not think I should go any further today. We
shall have an opportunity of defining more closely our attitude
when the different questions come up for discussion.
RS
' - 27 E/PC/T/PV2/3.
- CHAIRMAN: No other delegation having asked to take the floor, I will
now call upon the representative. of the World Federation of Trade
Unions.
M. JEAN DURET (World Federation of Trade Unions) (Interpreted): Mr.
Chairman, Gentlemen: The World Federation of Trade Unions, which
has among its members tens of millions of working men is very
much interested in the application in the world framework.of a
policy of full employment and in the regularisation of commercial
exchange, which has such a profound bearing on the material and
moral situation of its members. It;.is therefore with pleasure
that the world Federation of Trade Unions has accepted the invita-
tion extended to it and also to other non-governmental international
organisations to send a delegation to the First Session of the
Preparatory Committee on Trade and Employment.
Convinced of the importance of the purpose of this Con-
ference, the World Federation of Trade Unions would, however, like
to point out that the means which are proposed do not always seem
most appropriate to the purpose itself. It thinks also that the
support, and the active support of its members is as useful in order
to discover the proper means as to assure their effective replication.
The World Federation of Trade Unions has already once had the
opportunity of bringing some constructive criticism to the first
project. The proposal centred on three points, the reduction of
tariff barriers and of restricted commercial practices, the elimi-
nation of discriminatory measures and the creation of a new inter-
national organisation for trade and full employment which, in the
view of many Delegations, was the only solid basis for efficient
commercial policy, was only mentioned incidentally, but it is the
achievement of such full employment which is necessary, and
uniquely necessary, for the intensification of the exchanges and
also to prevent which, at irregular intervals, have hit world
~~~~~~~~~~ - 28-
S2 E/PC/T/PV2/3
economy and international trade. The unequal distribution of
income and of purchasing power is one of the essential causes,
if not the essential cause, of such depressions. An efficient
employment policy could prevent them if the framework is large
enough and if it is conducted with all the necessary energy of
an international plan. The problem of full employment is a
general problem but it appears differently in different countries.
I would like to take up again the explanations which
I have already given in London. In certain countries - the more
advanced countries from an economic point of view - it is essential
to ensure regular employment to the total of the manpower , In
order to achieve this, it seems necessary at the same time to limit.
the hours of work and to better the payment of the workers We
must also have recourse to a general policy of redistribution of
purchasing power which can only permit constant augmentation and
regularity in national income and assure a more just interpretation.
T
~ I
I E/PC/T/PV2/3
In countires which are generally: called backwards from an
economic point of view the problem is very different indeed. Such
countries can employ their full manpower without bettering in any
way the situation. In' fact the means of production are very backward,
and the lack of unemployment may appear and co-exist nevertheless with
a very small national' income and miserable conditions of.life for
the whole of the population. In- such countries even if a lack of
.unemployment is observed, there is nevertheless ascertain unemployment
which must by necessity be striven against. A policy of full
employment in such countries consists therefore in developing a
maximum of national income to give to-those countries modern
equipment, ensuring at the same-time and on a new basis the full
and efficient employment of.-the manpower. It is particularly
necessary that those countries. should. progresssisely fill the gap
which exists between their economic development, and that of
countries more advanced in 'the economic field.. It is therefore a
reversal of the whole present tendency . as since about twenty years
ago this gap has always seemed to..become bigger. .There exit finally
those countries in which the. possibilities.. of economic development
are far more considerable than the reserve of. manpower, and who. can
employ their whole productive power only if manpower comes from
foreign countries. The economic development of those countries
often hindered.', moreover, *and.since the war and enemy occupation
by a lack of equipment and.,basic material. The policy of full
employment must therefore have. one purpose - to put to their
disposal a more abundant manpower -and a more .productive equipment,
which, inpermitting them to develop their possibilities of
production and to augment their national income, will serve the
cause of international trade.. A policy of .all employment, as we
have now tried to outline it, has there or a general meaning. It
IS~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~.
T1
29 T2
E/PC/T/PV2/3
implies in all countries a policy to augment the national income,
to re-distribute the purchasing power in favour of the working
classes.
It calls also for re-distribution of purchasing powers, u:
in the different nations of the world, between nations rich and
nations poor, and asks for a whole system of international loans.
A policy of full employment in each country must be conducted in
such a way that it should not place obstacles in the way of a polioy
of full employment in other countries. If, for example, a country
tries to assure full employment by maintaining wages at a very low
level, to force their exports, we think such a policy is dangerous
for the policy of full employment in other countries of the world.
The danger in one country i_ that a policy develops which is contrary
to the policy of full employment in other countries is. not mere
illusion. The reason is to be found in the economic inequality
between States and in the possibility of aicrisis of depression in
the more powerful State. Economic inequality in the States who
after the war have obtained the. high degree in which they are to-day,
raises fear that countries which have been able to obtain lower
costs of production submerge their competitors under their products
and reduce them to unemployment and sterilise their efforts: in view
of the policy of full employment.
In the light of these ideas, suppression of obstacles to
world trade, brought forward by the States, and the.restrictive
commercial practices, fires of all, if their principal object is
a new commercial policy, it would appear therefore particularly
dangerous. The economic inequality which persists to-day
Between the States does not appear to 'he able to be corrected by
the re-establishment of a full freedom; but it seems on the
contrary to appear still more grave. The development of the States
I T3
31 E/PC/T/PV2/3
which are backward from an economic point of view and, the
progressive reduction of inequalities. which can be found to-day
finally condition the prosperity :of international trade, and
are only able to avoid economic. depression by.calling for a
commercial policy which takes into account the present inequalitie
The same thing applies to the tariff barriers but not in the same
sense. If they are applied to a country which is well equipped
and possesses powerful financial connections or to a State which
is more backward from an economic point of view, or does not have
the necessary means of payment, (the generalisation which applies
to the most-favoured nation applies indiscriminately to all.
countries) and gives rise to the same injustices, Furthermore,
Quantiative restrictions, discriminatory clauses, according to
the category of goods and to. the contracting countries, are
indispensable in order to promote a quick and rapid industrialisa-
tion and a development of the. least-favoured countries, to bring
them into a state. of equilibrium in the balance of their accounts
and to ensure the full employment of their manpower. Those means
are in fact the indispensable conditions of direct economic policy
and of planning, which in one way or another imposes itself in
most cases. Notwithstanding the measures which have been
theoretically taken against restricting commercial practices, the
policy of discrimination to which States of the United Nations
would on the other hand resort would be applied in the most
dangerous conditions for private organisations invested with
particularly powerful means, which would therefore be subjected
in facts if not in law, to no control. It is true the Draft
Charter contemplated the existence of a period of transition
during which exception could be admitted in favour of countries
in which the balance of accounts would have been brought in
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1
~~~~~~ T4
32 E/PC/T/PV2/3
equilibrium during the war in particular The recognition
of these exceptions, which proves the incapacity of liberalism
to face the present difficulties, must be considerably enlarged
and made more precise. ' As it has been provided for in the Draft
Charter, the transition period did not only present grave
dangers, but the number of except ionscontemplated was far too
restricted. There was a danger that the State which would
ask for the conditions of the transition period would lose a
large part of their economic independence. The Draft organisation
for commercial international relations is in the opinion of the
World Federation of Trade Unions susceptible to serious
reservations. An international organisation of trade, if it
wants to achieve its object, must have a maximum of universality
and should not arrive at the constitution of antagenistic economic
blocks; but we think that this is precisely the danger which was
embodied in the Draft Charter of which certain Articles were
of a nature to make it very difficult if not impossible that
every State a Member of the United Nations should not have thought
it wise to participate in the Conference. On the other hand
countries which did not adhere to the new organisation would be
submitted to severe discrimination. Finally it appears that
the new organisation would be too closely related to the
Bretton Woods agreement, which had not been accepted voluntarily
by all Members of the United Nations. It is L A these principles
which inspired the World Federation of Trade Unions when at the,-
London Conference it made its effort to try to make them admit it
even in the details, in order to better the disposition of the
Articles, which in its view were the most critical in the Draft
Charter,
U.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~2 -33-
It is these principles which inspired the delegation from
the World Federation of Trade Unions when at the London Confer-
ence it made its effort to try to make them admit it, even in
the details, in order to better the dispositions which,, according
to its views, were of the most critical kind in the charter.
It is true to say that very grave difficulties were en-
countered, because restrictive measures were applied to its
intervention. The Federation was not permitted to participate
regularly in the work of the Commissions where the real work
was performed, and could only be admitted to make one declar-
ation before the First and Second Commissions, without obtaining
any assurance that productive discussions would be engaged in
on those propositions, and it did not even receive an answer
to the Questions which the delegation had asked on a certain
number of points which appeared to be particularly important.
The point of view of the World Federation of Trade Unions
has been recalled and made -ore precise by the intervention
which I had the honour, to make at the closing Plenary Session
of the Conference, and of Which I think it would be useful to
remind you here, at least in its essential parts, at the time
when the Second Session of the International Conference on
Trade and Employment opens. Face to face with the possibility
of new depressions and fears which the internal politics of the
United States may inspire and the transfer to the United States
of America of economic and financial power which has no counter-
part, it seems indispensable to apply a policy of full employment
which should be at the same time elastic, energetic, and widely
enough generalised to all countries, taking into account the
situation which is proper to each of these countries.
For that purpose the following measures should be taken in
order to arrive at that result:- measures which are meant to
assure full employment should be deemed paramount over all others.
The body which has as its function to ensure these policies
should have a greater importance than the monetary and banking
institutions,which should adapt their policy to the policy of
that organisation. The structure of such organisatiorn should
be such that nobody could reproach it with sacrificing the
interests of nations which are economically weak to those of
.~~~~~~~~~~~~~~~~~~ E/PC/T/PV2 /3
nations which are more powerful both economically and finan-
cially. The statutes and the Charter of the International
Trade Organisation which are to be adopted should be
sufficiently elastic and wide to ensure that the countries
with the most diversified structure could adhere ' lt y and
that it should do away with the danger of constituting too
antagonistic economic block. It is necessary very largely
to apply the clause which is called the clause for the
period of transition, in order to permit the countries which
are already to-day in a state of inferiority to use any
external trade all means proper to permit them to plan their
economy.
The methods which are based on traditional liberalism
can no more promote and ensure the primordial importance of
the social needs.. Planning and a directed economy are, on
the contrary, absolutely indispensable for the application
of the policy of full employment.
On the other hand, the benefit of those rules should
also be applied to the states which are already to-day in a
state of inferiority towards their most favoured competitors,
and they should not be subordinated to the authorization of
specialised organizations. The whole t tality of these methods
should therefore permit a solution of the essential problem
which presents itself so far as depressions are concerned,
which is to prevent them and not to remedy them, as it has been
envisaged in the draft American Charter - a policy which is far
more efficient but, notwithstanding appearances, far more
difiicult to apply.. Particular attention should be drawn to
the fact that the method which the International Monetary.Fund
can apply to attenuate those economic depressions does not
seem to be particularly efficient. Not only is the export
of capital forbidden, but there is a risk that that interdiction
might be imperfectly operated if it were not accompanied by
an exchange control without gaps, and later on by a control
of commercial regulation. But devaluation, as also rules
established in favour of hard currencies, could not, if a
depression appears, have anything else but a very limited
affect. Moreover, it is not only indispensable that the
states which are in a state of inferiority should be r'Ile t
apply an encrgetic policy which their present situation calls
~~~~ :
-34 - U.3. -35- E/PC/T/PV2/3.
for, but it also necessary to ensure that the more powerful
and more prosperous states should put into practice, even
now, a policy of full employment based, in their own terri-
tory, on the redistribution.of purchasing power in favour
.of the working class. They must also apply towards foreign
countries a wide policy of international loans, whatever may
be their views in their application to opening widely their
markets to the products of debtor countries. It is only if
we are inspired by such a truly international spirit that
it will be possible to establish an equitable regime, and
therefore, a regime which will be to the benefit of all.
Progress has already been realised in London in the sense
which was desired by the World Federation of Trade Unions.
The World Federation of Trade Unions is very glad in particular
to have seen proclaimed the principle along which the main-
tenance of full employment is to condition itself to inter-
national trade at a sufficiently high level, and stable enough;
and. to see publidy recognised that, if we do not succeed in
maintaining full employment in one single country, this fact
could compromise in the most dangerous way the efforts of
other countries. The Federation is fully appreciative also
of the principle of direct international action in order to
maintain effectively full employment in all countries by a
synchronisation of the policies of credit. . It is good also
that there have been recognised the needs of insufficiently
equipped industries and the possibility of promoting, with
the agreement of the Organisation, measures of production
which are necessary, even if they appear to be incompatible
with the principles of the Charter.
The World Federation of Trade Unions has also noticed
in a more general way the more subtle nature of the rules
with regard to the most-favoured-nation clause, and the
interdictions related.to quantitative restrictions and to
discriminatory clauses.
Finally, the Conference in London has nevertheless
preserved the. most dangerous conditions concerning state
monopoly and public enterprises, from which it would appear
that they were susceptible of arriving at the constitution U. 4. E/PC/T/PV2/3.
of economic blocs and of making impossible the planning of
their economy by states participating in the International
Trade Organisation.
Proof has also been given of the wisdom of certain pro-
visions which concern the proposed. organizations. Those clauses
could have been of a nature to prevent. the adhesion of member
states of the United Nations who have not, up till now, par-
ticipated in their work.
The World Federation. of Trade Unions has not been in a
state to participate in the work of the Drafting Commission in
New York and has not even been able to follow it. from the out-
side, and therefore it proposes, as soon as it is. able to do so,
to give its detailed opinion of the work done in New York, and to
bring it before all the bodies of the Geneva Conference which may
be called to examine them.
From now on it appears already that there are still sub-
sisting some contradictions between the general purposes of the
projected organisations and the means which have been put into
action in order to achieve them - contradictions which must be
absolutely eliminated.
The intentional achievement 'of full employment on the
international plane calls for internationally co-ordinated
measures, and cells also for the possibility of the application
of sanctions towards countries which may fail in their promise
to maintain a productive full employment, particularly the mem-
bers of the orgnisation which would benefit for too long a
time by reason of beneficially balanced accounts. They should
be obliged to reduce such balances to a state of equilibrium by
appropriate measures, and those must be more precisely outlined.
To each unilateral action of each country should be added the
effect of international action.. To possibility of promoting
industrialisation should be encouraged and not repressed. There
should be put into the application of the international plans
the policy which had been adopted in the internal plan by the
state, in order to ensure stability in putting into effect pro-
jects which are meant to prevent a slackening of effective demand.
it is also necessary, in order to ensure the stability of
the demand, to augment the share of the working masses in the
development of productivity and of the national income.
As far as the restrictions brought about by states on inter-
national trade are concerned, the rigt to have recourse to such
~~~~~~ I
-Y : U. . E/PC/T/PV2/3
measures should be recognised still more widely, as it had been
admitted in London, and even in New York, as far, at least, as
there are differences between two states, in order to ensure
the planning of their economy and to enable them to act in
certain circumstances against the repercussions of a depression
which may exist in other countries.
Excessive limitations which might be brought about by
international organizations should, from that point of view,
be the object of particular attention; and one must not lose
sight of the fact that it is essential that each state in the
present circumstances should determine in detail the consequences
which the necessities of the economic situation bring about, from
the point of view of the technique of their commercial policy.,
As far as the International Trade Organisation is concerned,
we recognise that the stable development of international trade
depends on general co-ordination; but even rules of conduct
should be unanimously accepted and should not be of such a
nature as to stabiliso one single type of country - small or
large - rich or poor, industrialised or backward- to the detri-
ment of the others, but on the contrary should help to the max-
imum all the states. Measures must therefore be taken in order
to avoid the possibility that any country, or any category of
countries, with or without the aid of other states, could
dominate the organisation. We must eliminate also all clauses
which are of such a nature as to make more difficult the uni-
versalisation of the organisation and the adhesion of all
members of the United Nations.
V.
: I E/PC/T/PV.2/3
-38-
In particular the penalization which still subsists of the nationalised
industries for state enterprise for the monopoly of foreign trade
must be at times supressed. if the goal of these proposals are
put into effect the prosperous development of a world economy and
the peaceful co-existence of different types of social and economic
organizations of different nature can be pursued with success.
The organization which has been proposed in strict accord with the
governments is that international government organizations will
.then be able to contribute to the effective full employment in all
the countries and to their development. There should be no reason
whatever to see a destructive competition between countries or
between economic systems .particularly if the demand of the masses
as well as that of each country is maintained at a high level in
recognized
order to correspond to the/vast needs of the population which has
been so terribly compressed by the devastation .of the war. It will
then be possible to do away with artificial.means of protection.
Therefore restrictions would disappear and more so such irrational
actions as the destruction of stocks of merchandise which is such
a shock to the world conscience and against which the Draft Charter
desires to establish most severe penalities, The essential task
in all the countries is to tend towards a constantly augmenting
national risk and the income of the working classes which is the
only way to assure a real stability. These are the general
observations, Mr. Chairman, which, the delegation of the World
Federation of Trade Unions would like to forrmulate before even having
examined in detail. the new text which has been drawn up by the
Drafting Committee of New York and which has not yet been received.
The delegation of the World Federation of Trade Unions proposes to
examine those texts with the most extreme attention and to declare
its point of view before all the organizations which will be called
~~~~~~~~~~~~~~~~~~ E/PC/T/PV.2/3
upon to discuss those texts - the discussion to which it is asked
to be regularly convened. On the technical framework there is
multi- a
very much to expect from/lateralism. There should be/guarantee
for independence for each nation free to contract agreements to
trade with all the others, even with these, if they still exist,
which should be in favour of free exchange up to those who protect
and plan. Multi-lateralism must be a refusal. for all
exclusiv.;sm, If you succeed in that sense your task will have
been well done.
CHAIRMAN,: (Interpretation): Gentlemen, the next plenary meeting of
the commission will be held on Monday morning at 10.30 I hope
that at that time we will be able to conclude the general discussion.
That can only be done of course if we start our proceedings at
10 o'clock immediately afterwards, the conference will convene in
a private session in order to examine point 5: 'Discussion method
of work on the second session," Tomorrow morning at 10.30 there
will be a meeting of what has been called up to now the Meeting of
the Chiefs of Delegations which I propose to call from now on
the Chairmans Council, not that I want to add or to indicate that
the councill will be submitted to my authority, but simply because
I want to leave the delegation free to delegate to this council
whom ever they think most fit for the discussion which shall take
place at that time.
The meeting, stands adjourned.
~~~~~~~~~~~~~~~~~~I |
GATT Library | hd110rc3822 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Third Meeting of Commission A held on Wednesday, 28 May 1947, at 10.30 a.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/3 and E/PC/T/A/PV.1-3 | https://exhibits.stanford.edu/gatt/catalog/hd110rc3822 | hd110rc3822_90240060.xml | GATT_155 | 7,054 | 43,136 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/A/PV/3
28th May 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERBATIM REPORT
THIRD MEETING OF COMMISSION A
HELD ON WEDNESDAY, 28 MAY 1947, AT 10 .30 A.M. IN
THE PALAIS DES NATIONS, GENEVA
M. MAX SUETENS
(Chairman )
(Belgium)
DeIegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel.2247).
NATIONS UNIES P. RESTRICTED
- 2 - E/PC/T/A/PV/3
28th May 1947
CHAIRMAN (Interpretation): The meeting is called to order.
I call upon the First Delegate of India, Mr. Chundrigar,
for a statement on Chapter IV.
THE HON. MR. ISMAIL I. CHUNDRIGAR (India): Mr. Chairman,
I appreciate your courtesy in giving me this opportunity of making
a few general observations in respect of the chapter on Economic
Development which we are now discussing, as you may be aware,
India attaches the greatest importance to the question of the
economic development or the loss developed countries, and nothing
has gratified us more than the way in which the point of view of
such countries presented by our Delegation was sought to be met
at the London Conference. It has paved the way for the success
of this Meeting, and I feel sure that if the same spirit of
accommodation, understanding and co-operation inspires our work
during the present session, as I have no doubt it does, our labours
will come to a successful conclusion.
We are glad of the recognition explicit in this Chapter that
the only true basis of an expansion of international trade lies in
an increase in the standards of living of all the peoples of the
world, and that trade is but a means towards that purpose and not
an end in itself. We therefore welcome those Articles in the
Charter which express not only the common interests of aIl the
nations in the productive use of the world's human all natural
resources but which spell out the obligations or the more advanced
countries to co-operate with the international organisations in
the attainment of that objective. The facilities required for
rapid economic development are not equally available to all nations,
and unless the more fortunate countries which have capital funds,
technical skill and equipment are prepared to share their resources
and knowledge with those which lack them, there would be no abiding
basis or advance. I realise the difficulty of defining in more
precise terms the responsibility of the advanced countries in regard
to the provision of such facilities but it seems to me that, it is of
the utmost importance that the obligation should not be regarded as
a mere formality or just a pious hope. J.
THE HON.MR. I.I..CHUNDRIGAR (India) (Contd.): One of the features
of the revised Charter which has aroused real interest in India is
the assignment of certain positive functions to the Trade
Organization. The doubt as to whether it is competent to under-
take the task of providing technical assistance for completing the
plans of Member countries has now been dispelled, and I understand
that this function will be regarded as falling within its soope. I
hope that the Development Commission which will be set up under the
ITO will be able to arrange fair and reasonable terms for the supply
of technical and other services, partly directly but perhaps mainly
indirectly by linking the supply of such services to the points of
urgent need. Such a task well-done will give a new orientation
to the function and purpose of the ITO and I am sure that this
combination of trade and development functions, far from weakening
its structure, will make it more effective and valuable.
For these reasons, Mr. Chairman, I consider this chapter to be
something like a charter of development for the relatively under-
developed countries and I should be sorry if anything is done
either to bring into it matter extraneous to it or likely to alter
its face and character. On the other hand the chapter needs
considerable retoning in many parts. I am not satisfied with the
grudging and apologetic way in which the right of protection is
sought to be recognised and conceded. As one reads Article 13
one cannot help feeling that those who were responsible for drafting
it were still in the grip of the laissez faire philosophy, although
they were prepared to make a departure in exceptional cases. The
whole spirit is still that of free trade, modified only to suit
the cases of particular industries.. Now if I may express myself
frankly, that kind of philosophy has no bearing on present day
conditions in a large part of the world. If the purpose of this E/PC/T/A/PV/3
Charter is to promote higher standards of living and full
employment- and I note that it is one of the foremost of its
objectives -then our attitude to protective measures should not be
to condemn them but to secure their judicious use, having regard
to the circumstances of each country.
I need hardly stress the fact that we in India are committed
to a policy of rapid economic development, and the measures that
we shall employ should primarily be judged in the light of their
effectiveness in achieving that object. We cannot afford to
discard any necessary instruments for enabling us to reach our
goal quickly, but that is not to say that we are oblivious to their
international aspects. We cannot accept the general proposition
implied in the Report that Quantitative regulations for protective
purposes are inherently bad and therefore inadmissible. In
framing this Charter we should take care that no obsession with
past experience is allowed to blind us to the valuable and indeed
essential part which they can play in the development o the
resources of under-developed countries, provided, of course, they
are employed for constructive purposes. It all depends upon the
purpose for which such restrictions are employed and the manner of
their use. It is not difficult to devise adequate safeguards
against their abuse, but it would be unfortunate indeed if we were
called upon to discard this instrument merely because of the manner
in which it has been used by some countries in the past.
That Quantitative Restrictions cannot be avoided altogether
and that in some circumstances they are perfectly justified has
been accepted in the Charter. If countries in Balance-of-Payments
difficulties may be permitted to employ them, I cannot see any
legitimate ground for denying their use for protective purposes.
There are cases where protection by tariffs will be unduly
J.
_ 4 _ E/PC/T/A/PV/3
burdensome to the national economy, whereas quantitative regulations
may have less injurious effects on trade and on the domestic
industry as a whole. Poorer countries cannot employ the method of
subsidy as easily as the richer countries Hence the Charter
should permit the use of quantitative restrictions whenever
necessary. I agree, however, that suitable limitations should be
prescribed to ensure against any use of quantitative restrictions.
The Amendments to Section C of Chapter V of which my Delegation
has given notice will achieve that object.
In conclusion I shall permit myself to make one general
observation. I speak mainly for India; but believe me,
Mr. Chairman, I cannot help feeling that I am reflecting the feelings
and points of view of a large section of the peoples of the world.
I am very anxious that this conference should succeed. It can
succeed only if the genuine difficulties and needs of all countries
are properly appreciated and met. We must not fail. On the
success of this Conference depends the well-being of the whole
world, and I hope that every country represented here will make its
full contribution to the achievement of common agreement. E/PC/T/A/PV/3
V - 6 - rv
AHLMRWAN nterp.etatronriz): wouldI like tohank Vht^e
First Delegate of India for his remarks which, as our
applause hac oertnirlyestif ed, ihave verm iuch interested the
mmission..
Gentlemen, we now go oon with our work and leave the lofty
hills to whcoh the remarks of Mr. Chundrigar have broughtuUs
and come back to the desert of real afcts. e new ¶come to
Article 13, Governmental Assistance to conomico ecvelpmentt.
Agre~atmiumbero, amendments hae besna brugiht to the
atenftin toOf he %Charx. he ' ivr!'nuniu.Licome fromu Chile;
New Zealand; Australia; CeCcos loak ia; Chi ; United Kingdom;
from As.tralia ghanf; eLbaon an d he NeNthreladas. hie
Indian Delegation had also propoesd an amendment, which aws
supported by China, Cuba and New Zealand, but I understand that
the nTdanu Deeg-ation has decided not to bring its amendment
before the Conference now and will brngj it forardi on the
occsi!on of the discussion of another Article.
The mendmentWs whichare efiore us are of a very diverse
nature. On oe - side wef_nd amendments of Delgfations who find
tei Article much too long and much too detailed, and who are
proposing a certain very much simplified text for this Article.
On the other hand, we have Delegations who think that this
Article is not long enough and not detailed enough, and want
to make some additions to teo present Draft. So as to have
some order in our discussion, gentlemen, I would like to call
on the different Delegations I have just mentioned, and ask
them to explain their pointso:f view. The first Delegate
I am calling on is the Delegate of Chile.
I ER
- 7 - E/PC/T/A/PV/3
M. F. GARCIA-OLDINI (Chile) (Interpretation): Mr. Chairman,
we have submitted two amendments on this Article. The first one
deals with paragraph 1, and the other is a substitute for
paragraph 2. Both are complementary and must be examined in the
light of the other. As far as the first paragraph is concerned
it says only in the present text that this aid will take the form
of protective measures. We suggest saying that it will take the
form of protective and other measures. What we want to do by
this is to enlarge the meaning of the words in the present text.
We find that, as it is, the present text is too narrow and might
even be aquivocal . We want to enlarge this meaning with the
point of view that we have already expressed here before, and we
believe that it would be useful to put this small addition which
we suggest to paragraph 1. You will remember that the first
delegate of our country has already expressed here the idea that
it is not always enough to finance a new industry - to give it the
capital it needs. It is sometimes necessary also, at least at
the beginning of its development, to assure a market for this new
industry and here we come back to the question of an arrangement
with governments, especially in contiguous countries - an
arrangement through which the necessary markets can be assured.
Our aim in enlarging paragraph 1 in this sense is,therefore,to
cover this point. We want to go further than the purely
customary measures which would probably be understood by the simple
word of protection. If this is done, if our suggestion is
accepted, then paragraph R must be modified, and this is the
reason why we suggested a new text for paragraph 2. This text is
inspired by the discussion of New York, andit simply puts the
contents of paragraph 2 in better agreement with the idea we have ER
- 8 - E/PC/T/A/PV/3
just expressed. You have the text before you, I do not think I
have to read it, and I hope that, after the debate and various
declarations that will be made here, you will examine it with all
good will. Our amendment does not go quite as far as we would
have wished it to go, but it would already be a satisfactory step
towards the aim which we are pursuing here.
Mr. L.C. WEBB (New Zealand): Mr. Chairman, the delegation of
New Zealand, in order to avoid any unnecessary delay in the
consideration of the Charter, does not desire to press a discussion
of its amendment to Article 13 at this stage. Our position is
that we have lodged an amendment to Article 33. In the event of
our amendment to Article 33 succeeding, we would, in any case, not
desire to proceed with the amendment to 13. We therefore, Sir,
with your permission, would seek to reserve our position on
Article 13, in order that we may, if necessary come back to our
amendment. Apart from that, I would only say that the delegation
of New Zealand, as far as Article 13 generally is concerned,
would be in favour of any changes which would have the effect of
adding simplicity and brevity.
Dr. H.C. COOMBS (Australia): Mr. Chairman, the purpose of
the suggested Australian amendment to Article 13 is, firstly to
ensure that all applications for permission to use protective
measures other than those permitted under the Charter, should
receive as expeditions treatment as possible. Certain phases
of the amendment are designed : furthermore, to make the Article a
little easier to read. So far as the first purpose is concerned,
it is clear that this procedure does depend substantially for its E/PC/T/A/PV/3
success upon the expeditious handling of applications, and that can
be achieved only with the good will of the countries whose trade
would be affected by the action proposed. It is important,
therefore, that it should be made clear in the Article, 80 far as
is practicable, that it is the obligation of any country whose
trade is affected, and the obligation of the Organization itself
not to use the obvious complexity and difficulty of this type of
procedure merely as a means of putting obstacles in the road of
achievement of the purposes of the country making the application.
If the Article is in fact, to serve the purpose which it was
designed to serve, that is to give a certain flexibility to, the
protective programmes of the countries carrying out the development
of an industrial character, then it is essential that the
application should be dealt with promptly. We therefore propose
three minor amendments to the present draft. In paragraph 2 we
suggest the inclusion of the words which will require that the
Organization is to determine, at the earliest opportunity, whether
or not it concurs in the proposed measure or any modification
thereof. In paragraph 2(b) a requirement is placed on members to
commence any negotiations required within such period as the
Organization may prescribe, and to continue with such negotiations,
unless the Organization otherwise approves,with a view to reaching
substantial agreement as early as practicable. A new paragraph 3
is proposed instructing the Organization to determine procedures far
Article 13 that will enable a determination to be reached and such
release as may be appropriate to be granted as early as practicable.
_ 9 _ S - 10 - E/PC/T/A/PV/3
Consideration was given to the possibility of laying down
a precise time-table, with maximum limits during which the various
stages of the procedure proposed should be completed. It was
felt, however, that that might very well defect the purpose we
have in mind. Some of those applications should be capable of
with
being dealt with promptly, within a minimum time; with others, where
major items of trade are concerned and a number of countries
perhaps vitally affected, it is clear that an adequate consideration
of the issues might legitimately take some time. We have sought,
therefore, merely to embody in a general way in the Article words
which make it clear that it is the obligation of all concerned
to expedite the procedure contemplated.
In order to simplify the reading of the wording, we suggest
that Paragraph 2 (a) be broken up into sub-paragraphs, and Para-
graph 2 (b) also be broken up into three sub-paragraphs. I
think the details of our amendments have been made available to
Members .
CHAIRMAN: The Delegate of China.
H.E. Mr. N.J.WU (China); Mr. Chairman, this paragraph lays
down the procedure to be followed by a Member who, in the interests
of its programme of economic development, contemplates any pro-
tective measure which would conflict with any other provision of
the Charter or with any obligation it may have assumed through
tariff negotiations with any other Member or Members. From the
point of view of the protecting Member, especially an under-
developed country, with loss economic stability, the disadvantages
of such a course are obvious.
In the first place, such a Member, in order to achieve its
developmental programme, must have some freedom of action to make S E/PC/T/A/PV/3
prompt and appropriate adjustments of its economic conditions
from time to time. Yet this freedom will be incompatible with
the requirement heroin provided for, to notify the Organisation
beforehand and await the latter to infom Members whose trade
would be substantially affected by the proposed measure so as to
obtain their views. Such a procedure is bound to be too slow to
meet the urgent necessity for protection. Moreover, it is by
no means easy to ascertain in advance. Whether and how the trade
off any other Member or Members would be "substantially affected"
by the proposed measure. In other words, the would-be
effect cannot be predicted accurately until after the enforcement
of the measure. Only then will it be useful for such consultations
to be held on the basis of known results and will the Organisation
be in a position to assist the Members concerned to reach an
agreement harmonizing their conflict of interests.
Another objection is that such a procedure may, by causing
leakage of vital information on the contemplated measure, also
lead to market disturbances which may be attempted by other
countries to the detriment of the interests of the protecting
country end thus defeat beforehand the very purpose of the
protection. 12 - E/PC/T/A/PV/3 -
For this reason the Chinese delegation proposes the following
amendmentotA irciole 1, paragraph 2, sub-paragraph (a):
That "he words considers it desirable to" in lines 2 and 3 be
deleted: the word "adopt" should therefore be changed to "adopts":
and then the word "proposed" that appears in lines 11, 14, 16 and
22 should also be deleted.
Then at the bottom of sub-paragraph (b) which reads: "subject
to sucli lmatetions as may here been agreed upon in the negotiations
between the Members concerned or such further limitations as the
Organization may impose," the Chenase delegation proposes to delete
that phrase which read: . " such limitations as may hevc
bnea agre d.upon in the negotiations between the Memberc ocnceenod."
(After Interpretation, continued): With regard to ehl 3ast
paragraph of the translation, the Chinese delegation also proposes
a deletion at the bottom of sub-paragraph (b). it did not appear
in my paper but I gave it verbally. The Chinese delegation pro-
poses, at the ttcr m'of sub-paragraph (b), to delete a phrase which
reads:
"such, limitations as may have been agreed upon in
the negotiations between the Members concerned."
Mr.STANIALLVIN11OVSKY (Czechoslovakia) (Interpretation ):
I think I might explain the reasons which moved us to propose our
amendment. W be find at the beginning oAf rticle 13 the words "to
promote the establishment or reconstruction of parciular in-
dustries". The Czechoslovaan s delegation assumed therefore that
paragraph 2 should also make sure the realisation of these two
objectives. However, this intention should be clearly specified
again in paragraph 2, as, if such were not the case, it would not
be obvious that the procedure established iAn rticle 13 also applies
to the measures dictated by the necessity of reconstruction. By
RPC /T/A/PV//
P. - 13 - E/PC/T/A/PV/3
the words "reconstruction of particular industries" we understand
not only the reconstruction of factories destroyed during the war,
but Czechoslovskia finds horself after the war in a new situation
which compels her to rebuild entirely the structure of her in-
dustry. This procedure might necessitate a period of time longer
than that provided for, because it is a very important reconstruc-
tion plan which will deal also with the structure of her production.
It is a reconstruction which has a lot in common with the first
establishment of some industries and the economic development in
general.
That is why our delegation proposed that the word "reconstruc-
tion" be also inserted in paragraph 2 of Article 13. - 14 - E/PC/T/A/PV/3
CHAIRMAN: The delegate of the United Kingdom.
MR. J.R.C. HELMORE (United Kingdom): Mr. Chairman, the
amendments that we have put down to this Article are directed in
part to a point which the delegate for China has just mentioned
that is, the need for speed. Without departing from the principle
which was generally agreed in London, though subject to some
reservations, that the prior approval of the Organization was the
right principle on which to construct this paragraph. We have felt
that a reasonable criticism could be made that thare were infinite
possibilities of delay. Our amendment, therefore, proceeds in the
first place in paragraph 2(a) to lay down a time table during which
the Organization and the members affected shall carry out the
procedure there.
In the case of a measure which does not fall under paragraph
2(b), that is to say a measure which does not conflict with an
Obligation especially assumed through negotiations with other
Members, we go on to say in paragraph 2(d) that if the Organization
has not reached determination in five months, the Member may adopt
the proposal of which it has given notice, subject to the undertaking
that it will withdraw it if in the end the decision of the
Organization is country to this.
We then deal with another point in our proposed new paragraph
2(e) which appears on page 13 of the Amendment paper. That is
simply a transitional povision to . that what I might call,
perhaps, a 2(c) measure in operation at the time of the entry into
force of the Charter shall continue until the Organisation has
reached a determination about it. The only obligation on the
Member is to inform the Organization promptly that is to say,
within two calendar months after the entry into force of the Charter,
of a 2(c) measure which is to continue. If I might be allowed to refer for one moment to the Australian
amendment, I think I see the same spirit in the forming of their
amendment as in the forming of ours. In particular, they have
picked up one point which vve have not picked up, that is, in 2(b)
they propose an additional paragraph (2) - those are the underlined
words toward the bottom of page 11 - which would apply the same
sort of expeditious treatment for a 2(b) measure as we have
sugested for a 2(c) measure.
MR .G. HAKIM (Lebanon): Mr. Chairman, article 13 contains a
recognition of the principle that protected measures may be necessary
in the interests of industrialization. Article 15 allows a member
to take measures which are inconsistent with the provisions of the
Charter, if these measures are studied by the Organization and then
the Organization permits the Member to take such measures. The
Organization is authorised to release a Member of its obligation
under the Charter in the interests of industrial development.
The purpose of our amendment which adds a sub-paragraph (d)
to paragraph 2 is to draw attention to a problem which is special
to small nations. It is a special problem which small nations
meet in their efforts to develop their industries. Industry in
small nations is hampered by the absence of a sufficiently large
market without which modern low-cost industry, efficient low-cost
industry, cannot develop.
if every small nation is last to its own resources and to its
own efforts, it will find itself incapable of developing industry
ins[ote of all the conditions which it may have and which may be
favourable to the development of industry.
way
There is one/out of this difficulty which the small nations meet,
and that is for a number of small nations to come together in a
regional arrangement and thus provide a wider market for their
industrial products. G.
- 46 - E/PC/T/A/PV/3
It is a protective measure. Such regional arrangements
are protective measures, because these small nations provide
protection for each others products in the wider market which
they establish.
The Charter of the United Nations sneaks of regional
arrangements as an exception in the interests of economic
development. Our Amendment proposes to set in words a recognition
of the necessity of such regional arrangements for small nations,
All it says is that the Organisation should give the most
favourable consideration to any proposal for regional arrangements
which two or more Members present to it. There is no attempt
here to permit these small nations to take measures which are
against the permission of the ITO. There is only a desire to
have the principle recognized that these small nations have a
special problem which should be given the most favourable
consideration by the ITO.
This Amendment would make it possible for the small nations
to look forward to the future with greater hope for the develop-
ment of their industries. Without this Amendment the ITO takes
no recognition of this special problem, and while it may study
the problem of the small nations for the purpose of industrial-
isation, still it does not give a special recognition to the
problem which is a very vital problem for the development of the
industry of small nations.
Thank you, Mr. Chairman.
Mr. GOTZEN (Netherlands): Mr. Chairman, the Netherlands
Delegation has had the honour to submit for the consideration of
the Committee two Amendments of Article 13 with the same purpose.
We are fully in accordance with guarantees against misuse
provided for in the second paragraph of this Article; but in G.
- 17 - E/PC/T/A/PV/3
our opinion these guarantees should be supplemented by one which
would make it possible to limit the duration of all measures
taken for what I might call "educational protection". Iit is for
this purpose that we have submitted our first Amendment.
As to our second Amendment, purporting to be an addition of
a new paragraph 3 to Article 13. We may remind the Commission of
the insertion proposed by the Indian Delegation of a new
Article 26(a) on quantitative restrictions for protective purposes.
We will endorse the general idea underlying this proposal, although
at this stage not binding ourselves as to the exact wording.
However, we wish to point out that in our view the Indian
Amendment, if adopted, at any rate, will have to be completed, by
some provisions for the fixation of a time limit prior to which
the restrictions should be revoked. These regulations should,
we think, find their place in Article 13. and we have therefore
submitted this second Amendment. Thank you. - 18 -
CHAIRMAN (Interpretation): Regarding this Article 13,
I think that it would also be useful to hear the Indian
Delegation, who had previously submitted an amendment which
was withdrawn but which, nevertheless, raises one of the
questions which have been raised in particular by the
Delegate of the Netherlands.
Dr. P.S. LOKANATHAN (India): Mr. Chairman, the Indian
Delegation have really two amendments to Article 13. One
relates to the first sentence of Paragraph 1 of Article 13.
We think that in the way that sentence has been framed it is
somewhat halting and vague, and does not wholly satisfy our
feelings. Protection seems to be regarded in this first
paragraph of Article 13 as not very desirable, but something
to which we have got to be reconciled, and we do not share
that :feeling at all. We feel that countries situated like
ours, which form the majority of countries and also the
majority of the populations of the world, have quite a
different philosophy with regard to that.
We feel that protection should be regarded not as a
mere concession to weakness, but as a legitimate instrument
for development. Therefore, our amendment tries to put
that a little more clearly. We wish to say that such
assistance in the form of protective measures is justified;
I do not think there is really much difference in substance,
but it does seems to us that the way in which it has been
drafted suggests, if I may say so, a sort of superiority
complex, and we do not want that sort of complex to be present
in the article.
V -19 - /3-._
The second amendment which, for certain reasons, we felt
could be taken at a later stage al ng.with Article 26, may
also be considered at this stage, not only because some
consequential amendments may have to be moved insreap6ct of
Article 13; but also because we feel that we should not take
the risk oe b6ing told that we are too late. Therefore,eth6
purport of our amendment which wgs nginZ to be moved later
might a well be indicated here.
Broadly speaking, the amendments that have been moved
today are designed to speud 'p-cedure ar andto get the
Organisation to give an expeditious answer to questions put
by countries which want to resort qu cjantitaeivo regulations.
We welcome those amendments insofar as they speed up procedure,
but we also feel that those amendments : .ot go to the root of
the difficulty. That has been clearly seatGd by the Deleeat6
of China. We alle fel that if conditions were such that we
had to use quantitative regulations for protective purposes,
then we lou d not afford to wait as g as- a Article 13
implies. Thereforee wc do feel that someserSeeve eowOr must
be left with the countries which seqk ouantitative regulations
so thatath!t powergmi ht be exercised, in the first instance,
without having go co to the Organization.
It seems to us that that is a funeamontal matter. In
the first place ae cre willing, for instance, go ,ive oomplete
satisfaction to countries which feel affected thereby, and
therefore if any country is affected byethu use qf Cuantiiat.ve
regulations obyer zouccantries then thct pom.laimt nugt Co to
the Organization, and the countries who oppose quantitative
regulations must certaingy ,o and discuss the matter. We
are quite willing for that.
E//A/T h/PV/ 3
V V. A - E/PC/T/I./PV/3
_ 0
We are also willinS to set definite limits to the use of
quantitaltive re~ulations: they oan bc explicity stated and
provision made in Article 7. We do not minor what those limit-
etiops are. We have in our own amendm6nt Dut forward one
definite limit.p e If that is not enou.h, we shall be .rupared
te consi er what other limits may be fixcd, but-the point we
tantons, whateiee ihe that onco trc 1lnit,ti;,, w1.:l.vCr t.y
be, ble of theirll-ni t;-outs'trbitut bc ,blt, J)f t-m*i
accons on thepo;e 3Lidtitati-ar itc ,tio..j , . ->6tk~ttiunj th-t
they emtify tv itcb-iafixru in vlrtcl 7. The countries
mue brilefiatbefore loe ZancpX41y th.- cziterL. o~z thcy .doit
Anotrheraspoencannottais. Ne cite se tht w z czot ;;low
plied in cases where there is l ir c . th,.r i,
een the countries utX4_.s tV wk.' th4 c.jujtrhis which want to
the countriesvehr maul tisrs azd w;o .y be
9ctcGrespec of anherproduct say in xcFcot S J'. xoduwot
quantitative regulations, if the _U-jti tjtii~ Q j U;tiJ i t .
to an agreement by chaea 1.uL v tct by : t atic-,
the p v.edure adopted it discussed roccUwra :%tCuyt or cu rd
in .cxticle 13, 2 (a), (b) and (o is followed.
If I may sum Lw.stinon, Mrsa Chairman,. I wat to &y
e regulations are not wholl-aWuudiitLa1 Z.r U otuly aucesirkble -
r1yecc'En, . uatC;ior 0:otchtio.anSecondly, that t.y c.xbe
nite criteria describenionG teiA jt:esc-ri.u tht articles.
chiplaining that the oom.in;6 Mhembeigrs must have tbe rht to
tahe t. .-.r t t . Oranizatoon ane thh csantrics w'o w" t
quantintinieeregulations mus come andtiO s *.Ue*cd participate
in t.e discussion Anad finallan tqta tawivere -.y Wuntve
1erespect of n n*cp@cdt Qoare soughuct rbX;madeut to 'e iiia,
ii as acoeady bee; elreczd a a nagrtereo intoneg-ement by r~eo-
iatejp cedure descrou :uuzL .csribed is orticlppl3 .hwuld a;-.y. - 21 -
CHAIRMAN (Interpretation): In the document W/125, prepared
by the Secretariat, we find the following note. The delegation
for Cuba has made reservations with regard to this paragraph at the
are
Drafting Committee. These observations/on paragraph 2(a), sub-
paragraph (b), and the delegation of Cuba has stated that it may
propose either to redraft the whole of the Article or to transfer
corresponding provisions in the Article which would be inserted
after Article 26. I would like, in view of this, to ask the
Cuban delegation whether it wishes to speak at present or to defend
the amendment at the time of the discussion of Article 26?
Mr. R.L. FRESQUET (Cuba): Mr. Chairman, cuba not only has
withdrawn the reservations to paragraph 2 of Article 13, but also
has withdrawn the support to the alternative draft of Article 13
made in New York. This statement does not mean that Cuba is not
on the same footing as those nations who favoured the draft of
Article 13 in New York, so we are exact in the procedure to
consider the new draft that would be presented for the consideration
of the Committee. we think that this attitude will ease the drafting
work of the Sub-Committee that we foresee will have to be appointed
to deal with this Article.
CHAIRMAN ( Interpretation): I believe that we have studied all
the amendment which have been submitted. I assume that no other
delegate wishes to submit an amendment.
Dr. H.C. COOMBS (Australia): I do not know whether you wish
to deal with this now, but the Australian delegation has submitted
a suggested draft for an addition to Article 13 A. It deals with
the same subject matter as the other Article 13, and if you wishe I
E/PC/T/A/PV/3 E/PC/T/A/PV/3
- 22 -.
could indicate the purpose of that suggested addition now.
CHAIRMAN ( Interpretation): I guite agree. The Committee
would like to hear your suggestion.
Dr. H.C. COOMBS (Australia): Mr. Chairman, we propose, in
Article 13 A, to provide a transition period for countries on
first joining the Organization, during which they may abandon or
seek the approval of the Organization for the continuance of
measures which conflict with the Charter, but which are already in
operation. We do not wish to suggest any difference of view from
that embodied in Article 13, but it does seem to us that there may
well be countries who are employing measures of a protective
character precluded under the Charter, which would take a little
time to wind up and perhaps to be dealt with by alternative means
permitted undet the Charter. We suggest that this transition
period should be granted therefore, during which the use of those
measures could continue provided that there was provision for other
countries to complain against them and for the countries concerned
to seek the approval of the Organization for their continuance.
Our proposal is, we believe, an essentially administrative one since
we consider that there may be serious embarrassments created for
some countries if some of those existing practices are required
to be eliminated overnight. S - E/PC/T/A/PV/3
CHAIRMAN (Interpretation): Gentlemen, after the statements
we have heard this morning, our task appears to be a very diffi-
cult one indeed. I think it is impossible to refer all the
amendments purely and simply to the Sub-Committee without a
debate here. At the same time, it does not seem that there is
the possibility of a general discussion on all these amendments,
which are all so different. It would be useful, however, to
have a general discussion on some of the principles included in
these amendments. I myself see five guiding principles.
. First of all there is a tendency, which we find embodied
in the Chilean amendment, to make of Article 13 an Article
dealing with principles which would not be too rigid as far as
procedural questions are concerned. On the other hand, we have
the tendency shown in some of the amendments - in particular,
those submitted by the United Kingdom and Australia - to have
very precise limits of procedure.
There is a third question. It is the question of preference
agreements, which has been raised by the Delegate for the Lebanon
and which is covered implicitly in the Chilean proposal.
There is a fourth question, raised in particular by the
Delegate for India - the question of quantitative restrictions.
We might wonder whether we should study this question now or
wait until we reach Article 26.
Finally we have the question just raised by the Delegate
of Australia, about the countries which might join or would like
to join the I. T. O. This would be a new Article,13A. S E/PC/T/A/PV/S
Therefore, if the Committee is in agreement, we might discuss
these various points. We might have an exchange of views of all
the Delegations, so that the Sub-Committee would have the
opinions of all the Members of this Committee at the time when it
has to reconcile the various texts and to make a final draft.
The debate is now open on the first two questions A have
mentioned; that is to say, are we going to accept the Chilean
proposal, tending to have Article 13 as an Article of principle
without too rigid rules of procedure, or, on the contrary, are we
going to accept the United Kingdom and Australian proposals,
tending precisely to limit the procedure and accelerate it.
The Delegate of Brazil.
Mr.J.G.TORRES (Brazil): Mr. Chairman, we were hoping
to have a chance to indicate the position of our Delegation
vis-à-vis Article 13, and we presume this is the right time for
it.
We do not deem it advisable to add to the already numerous
amendments any new ones. We clearly realism that would make
our work even more difficult and we thought it would be better
to hear the views of the different delegations and then suggest
our own. J.
- 25 - E/PC/T/A/PV/3
MR. J.G. IORRES (Brazil) (Contd.): It seems that in
considering Article 15 we are up against three main difficulties.
We have recognised that the Article is rather involved. We have
recognised that the procedure could possibly be expedited and that
it could possibly be improved in its drafting.
We have also, or at least the majority of the delegates that
have spoken this morning, indicated that might be desirable to
give to the Article a certain degree of flexibility which it does
not have now by making it possible for countries to adopt these
measures before the ITO decided on them, as long as these measures
are promptly made known to the ITO.
The delegate for India has pointed out a very interesting
problem - the problem that we should not consider protection as any
disease or any evil, but as a legitimate affair introduced in the
interests of countries that need to develop.
I would therefore submit, Mr. Chairman, that possibly after
having heard the views of the other delegations we adopt the
Australian draft as a working paper as it seems to me to be very
well prepared. It seems to have taken into consideration all the
main points and that when it is considered as a working paper, the
point of giving to protection a bettor standing, and the question
of the possibility of allowing for the countries to take measures
simultaneously with the communication to the ITO, be considered..
CHAIRMAN (Interpretation): Is there any other delegate
wishing to speak?
M. F.G. OLDINI (Chile) (Interpretation): Mr. Chairman, the
debate has shown the reality of the very many means of assuring
protection, and the first Chilean amendment has found itself
justified by the reasons given, even by those who spoke from another
point of view or with different aims.
As for our second amendment, we must consider the various
aspects of the question. As the delegate for India rightly pointed
out and as the delegate for Brazil just pointed out also, the protection
is really a right which springs from a vital necessity, and our
proposal is based precisely on that point of view.
Iw~ .1- i- G.
- 26 - E/PC/T/A/PV/3
Our proposal stresses the measures taken by Governments.
It status if a Member in the interests of its programme of
economic development adds any protective or other measures of
whatsoever kind, etc., and if such measure affects the trade of
another Member, the latter may apply to the Organisation. We
might add, perhaps, some words indicating that the Organisation
may be informed if necessary.
Our point of view is that this necessity appears only in
the case when the measures of protection taken may affect or
damage the economy of a third country. Then a system of consult
-ation might be applied more or less rigidly. We think that it
might be important to try and reach a middle course between
the flexibility which we propose and between the rigidity
proposed by other speakers. We think, indeed, that some rules
are necessary, but these rules should be sufficiently flexible,
and based on logic.
If we take as a basis of discussion, as the Delegate for
Brazil has pointed nut, one or other of the proposals before us
which are based on completely different conceptions and which
pursue completely different aims, I think we shall complicate very
much the problem; but if at the time when the various
Delegations have expressed in detail their opinion we decide that
it might be easy or easier for the Sub-Commission to choose among
the opinions expressed, and retain from each other's proposals
those which might be beneficial to the Organisation and acceptable
to the different Members, then I think it would not be too
difficult to find a text of compromise between the various views
expressed.
CHAIRMAN (Interpretation): I think it is quite impossible to
finish the discussion at present. Therefore I propose to adjourn
until this afternoon at 3 o'clock. At that time we shall pursue the
discussion now engaged, and immediately after we shall deal with
the U.S. Amendment on Investment and Movement of Capital.
The Meeting rose at 12.45 p.m. |
GATT Library | qn834fb1831 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Third Meeting of Commission B on Friday, 30 May 1947, at 3 p.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/B/PV/3 and E/PC/T/B/PV/1-3 | https://exhibits.stanford.edu/gatt/catalog/qn834fb1831 | qn834fb1831_90250066.xml | GATT_155 | 10,052 | 59,847 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/B/PV/3
30 May 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERBATIM REPORT
THIRD
HELD
MEETING OF COMMISSION
B
ON FRIDAY, 30 MAY 1947, AT 3 p.m. IN
THE PALAIS DES NATIONS, GENEVA
Hon. L.D. WILGRESS
(Chairman)
Delegates wishing to make corrections in their speeches should
address their communications to the Documants Clearance Office,
Room 220 (To1.2247).
(Canada) -2-
CHAIRMAN: The meeting is called to order.
The first item in our Agenda today is the proposal of the
delegation of Belgium to insert a new clause following
sub-paragraph (b)of paragraph 2. Could the Belgian delegate
explain if any questions of substance are raised in this proposal.
M. THILTGES (Belgium) (Interpretation): The Belgian
proposal is inspired by situations which were put forward and
justified in London, but after the compromise was reached then it
was decided to give up the unfavourable assumption. The Belgian
delegate made objection to the fact that boycott was left
together with other practices, and at that time we were alreadyy of
the opinion that such practices did not deserve to be dispansed of
the unfavourable assumption. The same remark also applies to
another practice which does not deserve the position of neutrality
that was adopted. I refer to the practice dealing with the
deletion of technique and the utilization of new methods.
Finally, there was another practice which also did not
deserve the benefit of athe abandonment of the unfavourable
assumption.
J.
E/PC/T/B/PV/3 - 3 -
Our Amendment made a reference - I do not know whether
this Amendment has been received in time - but it made a reference to
a sub-paragraph (g) in which we proposed to take up the existing
text of paragraph (f); but having taken cognisance of certain
remarks circulated this morning by the Netherlands Delegation on
this paragraph, and taking also into account some obscurity in
the text as was pointed out in London, we would not insist on
inserting paragraph (a) - that is, former paragraph (f) - among
those practices for which an unfavourable assumption could be
re-established.
Finally, we do not think that it would be possible here and
now to establish a kind of international jurisdiction and of
condemnation of particular practices, but we do hope that in the
course of time it will be possible to draw up a kind of legal code
to determine those practices for which it is possible to establish
a jurisdiction, in order to determine in advance what is prohibited.
and what is not.
However, if this should result in a greater extension of the
unfavrourable assumption than is permissible, then in that case we
would. not insist.
CHAIRMAM: Does any Delegation wish to speak?
The Delegate of the Netherlands.
Mr. LEENDERTZ (Netherlands): Mr. Chairman, it is with
great pleasure that I have heard the wor ds of my colleague of
Belgium, and I notice with special pleasure that he agrees to let
drop the (g) in his Amendment. Further, I think I can fully agree
to the spirit in which the Belgian Amendment has been drawn up.
The idea is to make a difference beetween those practices which would
be harmful in advance, and those others which ought to be
investigated at the time as to whether or not they would have
harmful effects.r .
r/v /r/i:R /-
A E/PC/T/B/PV/3
- 4 -
While sharing that spirit, I still ask myself whether it
would not be better not to introduce again that idea of an
assumption of harmfulness which we debated so extensively in London.
I do think that one or two points, such as boycott, are so
harmful that it is not necessary to bring in the assumption in
the Charter, but just make it clear that they would be harmful.
But I do think that if we start to introduce that assumption,
which on principle is not admissible,. to our opinion, in a case in
which a plaintiff and a defendant are in front of one another,
I should be very glad indeed if the Belgian Delegate would
be able to agree to this point of view, as I think I have already
understood from his words that he would be willing to do.
CHAIRMAN: Does the Belgian Delegate wish to reply?
(The Belgian Delegate agrees.)
CHAIRMAN: Any other Delegate wish to speak to the motion?
If not I would like to propose that this should be referred
to Sub-Committee 2 for further study. Does that meet with the
agreement of the Members of the Commission?
Agreed.
I take it that the same would apply to the observations of
the Delegation of the Netherlands circulated this morning in
paper W/138, together with Amendments to the wording of sub-
paragraph (f) of paragraph 3 of Article 39. Shall that be
referred to the Sub-Committee? Is that agreed?
Agreed.
The next question on our agenda is a proposed addition to
paragraph 2 by the Delegate of Brazil. Does the Delegate of Brazil
wish to explain his proposal?
G - 5 -
M. Monteiro de BARROS (Brazil) (Interpretation): Mr.Chairman,
in the course of the first discussions in London. certain
Delegations took rather a drastic view of restrictive practices
and considered them to be barriers against the expansion of
world trade. Other Delegations, on the other hand, saw certain
advantages in restrictive practices when they were applied in a
reasonable way, first of all as regards the stability of
national industries, and, to a certain extent, they saw that
they would help the expansion of new techniques and the steady
development of science in the various countries.
In London, therefore, one came to the conclusion that
restrictive practices had a bad side and a good side, and that
one could see good and evil in these coalition arrangements.
The main difficulty was to find the difference between what
was good and what was bad in such coalitions, and the
difficulties are known. Therefore, we think : Jt- is for a
supreme authority to determine if the affects are good or
bad, and to further the good effects and impede the bad
effects of these arrangements so as to avoid their leading
trade on to an evil road.
This is the purpose of our amendment. We think that
the previous registration of such coalition arrangements is
necessary, because it will in a way facilitate the control
of such arrangements. In fact, the major inconvenience
of such coalition arrangements derives from their clandestine
character, and they are bad because they are not known in
most cases. The aim of our amendment is to open the eyes
of the Member countries about such arrangements, and to bring
into the open their true nature.
E/PC/T/B/PV/3
V E/PC/T/B/PV/3
Page 6
,Q I
P7,.
mage
P? -7 - E/C/T/B/PV/3
The practical difficulties which are contained in the
implementation of such a disposition will be met by experts. What
we have to do here is to write in the Principle in the Charter and,
in fact, once the Charter is implemented it will be for as to
improve it when we go on. Now, in our clause here we presume that
the coalitions which have not been registered will be presumed to
be harmful and have harmful effects, and therefore these ill
effects will have to be sanctioned. I could say that there is a
presumption of harmful effects and that is a bad part of our clause
which is important.
Mr. W. THAGAARD (Norway): Mr. Chairman, the Norwegian
delegation is in favour of the registration. However, having
studied the matter more carefully we have come to the conclusion
that the proposed registration will not work according to the
purpose. We must keep in mind that the registration can only
cover some more external facts concerning the trusts and the
cartels. We can register the different terms and a formal
connection between them, the contents of the agreements and so on,
but we cannot register all the things that the trusts and cartels
are doing,and knowledge about that is specially important if we
will try to find the real character. Therefore, to. be effective
the registration ought to be combined with the clause Supervisional
activities of the Trusts and Cartels. We have done it this way
in Norway, and it has also been done in other countries. The
system has worked well in Norway, but to establish such a system on
an international basis is quite another thing. We would need a
huge machinery and an enforcement of supervision would place far-
reaching obligations on the member countries. I feel that such a
proposal has many drawbacks. In either case, I do not think we ER
- 8 - E/PC/T/B/PV/3
should start this in such a way. It is better first to wait and
see how the international control will work without such an all-
embracing registration and supervision. Rome was not built in a
day, and I imagine we will need some time to build an appropriate
International Trade Organization. It will have to take time,
according to my view.
Mr. F.A. McGREGOR (Canada): As you see, Mr. Chairman, I am
the next door neighbour of my esteemed friend from Brazil, but I
can assure you I have not been subject to any influence or control,
either substantial or effective, on his part - nor has there been
any intimidation. I am very much impressed by the earnest desire
on the part of those who favour this proposal to provide means which
they consider would assist the organization in eliminating
restrictive business practices that are harmful. Canada would
support the proposal very enthusiastically if we could believe that,
on the whole, it would further that end. On the face of it, the
proposal to have all cartels registered appears to be excellent.
If it worked, the Organization would have before it every agreement
on practices that appeared to be obnoxious - all the material in
neat form, ready to be subjected to close scrutiny in order to
determine whether they were good or not so good. It is a tempting
proposition - one that has intrigued us in Canada as a means of
enforcing our own registration on combines and monopolies, but the
more closely we have examined the registration idea, the more
convinced we have become that, in the long run, our objectives to
enforce the law would not be as well achieved by this means as
without it. One of the principle reasons that weighed with us ER
- 9 -E/PC/T/A/PV/3
is that registration would be tantamount to a licensing of the
registered combinations to carry on its programme. The Organization
would file its agreement as an application, in a sense, to do what it
was doing. Registration might well be considered then as a
government sanction to the group to do what they had agreed to do,
but our experience is that many such agreements - and this is
particularly true of the ones that the parties think may come under
our observation - are prepared so carefully as to tell something
less than the whole story, to omit or cover up the essential
features which might come under the ban of registration. Any good
lawyer can make a good case for a ba agreement. Once the
agreement were filed, the parties would probably feel entitled -
and perhaps with some justification - that they could carry on with
the restrictive programme until they were checked by the governmental
organization. I think those who have made this proposal may be
under some illusion as to the number of agreements that would be
filed. It is impossible to specify that only those that are bad
or that could be suspected of being bad; should be registered and
thus limit the number. It would be exceedingly difficult also to
distinguish between the various types of agreements, contracts of
sales, and also the various types of recorded business transactions
in international trade. What I would feel is that the volume of
Documents that would be received and registered would run into the
hundreds and thousands, and only a small fraction of one per cent
of the total would be of real interest to the Organization. You
have to have buildings to accommodate them, and you have to : ..ll
up a tremendous international civil service to do the routine work
of examining documents ninety-nine per cent or more of which
would not be of any interest to the Organization. That would be a
pretty serious thing for the lTO to undertake. S E/PC/T/B/PV/3
- 10 -
Again, the idea is very appealing on the face of it,
but we in Canada, from the experience that we have had -
not of it but in thinking about it and realising what the
effect would be on our domestic situation - would not be
inclined to favour the inclusion of this proposal.
Thank you, Mr. Chairman. - 11 -
THE CHAIRMAN: 'The delegate of Chile.
M. F. GARCIA-OLDINI (Chile) (Interpretation): Mr. Chairman,
we acknowledge the difficulties which would be involved in the
application of a control through registration of these international
combinations and, as one delegate pointed out just now, one must make
a start, and if we do not point out here those difficulties, it we
do not take the first step, and even i that step were only to be
a small one, if it were to be in some ways rather inefficient, and
by our action we did not at first grasp the whole of the problem,
it would be nevertheless better than not doing anything. Because
it we do not start now, well, maybe we will never do anything in
this matter, and I know quite well that these enterprises and these
combinations have many faces and when you try to grasp them by one
and they will slip from your fingers in another way. Nevertheless,
it would be very ouricus if we were in our Charter co control the
Status and if we were not c anything about private enterprise.
Therefore I am in favour of the Brazilian amendment in its present
form or in the room of another text, because I think this principle
mutt be laid down in our Charter.
There is one thing which maybe could be modified and that is
this presumption here that these combinations, when not registered,
would be presumed to have harmful effects; we may be able to drop
that clause in this paragraph, and it may be sufficient to note down
that in the course of our discussion This was mentioned.
For all these reasons I second the Brazilier amendment in its
present form or in a modified form, taking into account the remark
I have just made. -
RMAN-.-:: Is ehero any other speaker?
F/PC/T//B/PV3
P - 12 - E/PC/T/B/PV/3
Mr. ROBERT P . TERRILL: (United States): Mr. Chairman, I
think that we were one of the delegations at London to whom the
delegate from Brazil referred as being somewhat out of sympathy
with this proposal for registration. I might just say that
personally, as one who has done some research in this field, nothing
would please me more than to have access to all of the agreements
between business enterprises in the world, or in one place. I am
sure I could spend a happy old age putting things together! From
that standpoint the idea really intrigues me. However,(a point on
which I would agree with the statement that our Canadian colleague
has made, perhaps better than I could is that first, on grounds of
principle, it would seem that the project would serve no useful pur-
pose and would indeed I am afraid be contrary to the mode of opera-
tion of the agency that we have set up. Let me remind you that this
agency operates on the basis of specific complaints. It is not, as
it were, a workshop or laboratory in which things are discovered and
brought to light and remedied, as one might say, on their own merits,
Therefore the time to get facts is when a complaint has been lodged,
and we have provided an elaborate process of enquiry by the Organiza-
tion. Even that will be costly and time-consuming.
The second reason for not favouring this proposal
is a practical one and it is one which will assume, I think, consider-
able importance. I will explain in more detail in a moment, but let
me say first that if the registration of these agreements and their
analysis was to be at all complete or even to be respectable it would
require a very large staff of expertly trained people: I should say
that the staff would have to run perhaps between one and two hundred
and, having had some experience in recruiting and organizing staff
of this kind who do analytical work, I think I can speak with a fair
amount of knowledge: and/the subject matter to be registered would have
to be extremely complex. We in the United States gave very serious
consideration to this proposal, and went so far as to draft a Statute. P. - 13 - E/PC/T/B/PV/3
Let me read a little bit from that Statute to you to give you an
idea of the scope of the material that has to be registered:
"It shall be the duty of each domestic company and of each
foreign company doing business in the United States to register
with the Attorney General a copy of any foreign contract (or if un-
written, a copy of the terms thereof), in which it or its affiliate
participates and which contains in form or substance any of the
following terms,conditions, or provisions:
(a) A restriction, limitation, or prohibition upon the amount,
types, or kinds of commodities, services or processes which any party
to the contract, or any nonparty, shall be permitted or authorized
to produce, manufacture, sell, use, lease, or purchase.
(b) Any agreement as to the prices to be paid orto be charged for
any amount, type, or kind of commodity or process bought from or sold
to any third party.
(c) Any allocation, division, or apportionment between parties to
the contract, or between a party and any non-party, of any territory
or markets in which any operations or activities of any business 1
shell be conducted.
(d) Many agreement to for or to use, for the purpose of conducting
joint operations or a joint venture, any corporation, partnership,
unincorporated association, company, or legal person or entity.
(e) A license, cross-license, or sublicense in a under any United
States or foreign patent or patent application, or any United States
or foreign registered trade-mark or trade-mark application; or an
agreement to grant in the future any such license, cross-license, or
sub-license; or an agreement not to sue for the infringement of any
patent or registered trade mark.
(f) Any assignment of (or of any interest in) any United States or
foreign patent or patent application, or any United States or foreign
registered trade-mark or trade-mark application: Provided, however
......"
I shall not go on! J.
- 14 -
MR. R.P. TERRILL (United States) (Contd.): That Bill, if it
had become law, would have resulted in tons and tons of literature
and subsequently, in order to keep within the law, companies would
have had to file from day to day inter-office matter and memoranda
between themselves and other companies that might be material to
any contract. Then, to make sense of these contracts, since each
company frequently has many contracts, you would have to have
analysts to draw these separate documents together and to keep them
up to date in the light of new subsidiary or collateral instruments
that the company might have signed. The result of this was that
we abandoned the idea, because it would have been so extremely
costly, as well as for reasons of general principle.
Now, that cost feature would be multiplied many times over if
we did that on an international scale, and it would involve
governments as well as the International Organization in a great
deal of expense, and would give rise to many serious problems.
I have not read all the provisions in this proposed legislation,
one of which, to mention it; relates to secrecy of trade arrangements
in cases where the Attorney General so degrees. Many other
administrative problems have been mentioned.
The ITO will be called upon to do so many things with such a
limited prodect, that I think it would be very unwise to use half,
or maybe three-quarters, of its funds which would be required for
a stair of a hundred people or more, for their transportation,
their housing and care, for this particular plan.
It might do a great deal of harm, but we have a saying in the
United States. It is something like this "rubbing butter on a
baby's heel might not do much harm, but it might do some good".
Even if you accept that proverb in this case, I doubt if it would
be worth the cost that is envolved.
E/PC/T/B/PV/3 J. - 15 -E/PC/T/B/PV/3
CHAIRMAN: Before we proced with the translation of the
speech of the United States delegate, I would like to ask those
members of the Commission who do not understand English, and also
Mr. Terrill, if it would be in order to dispense with the
translation of the text read by the United States delegate which
is very technical and difficult to interpret.
MR. F. GARCIA-OLDINI (Chile) (Interpretation): What will
happen in the case of those persons who do not understand English?
It would be favourable for us to have even an incomplete translation
rather than no translation at all.
CHAIRMAN: In that case the interpreters will do their
best, G. E/PC/T/B/PV/3
- 16 -
CHAIRMAN: I wich to congratulate the Interpreter for
proving that I was wrong in thinking American legal language was
difficult to translate.
THE INTERPRETER: Thank you, Mr. Chairman.
CHAIRMAN: It seems we have had a very full discussion of
the Brazilian amendment - their proposed addition to paragraph 2 -
and I am wondering if we cannot now come to a decision as to
what course we should pursue with regard to this proposal.
We can either obtain the sense of the Commission regarding the
Brazilian proposal, or we can refer it to the Sub-Committee 2
for further study. It does not seem to me to be of a character
which would permit much chance of the resolution of difficulties
in a Sub-Committee; there seems to be either of two courses open:
either to register agreements, or not register agreements, and
I have found a little difficulty in seeing how the Sub-Committee
could. further the study of this question any more than we can in
this Commission; and therefore I would like to take the sense
of the Commission as to whether or not it might not be better to
take a vote noon on this question, rather than refer it to the Sub-
Committee.
Does any Member of the Commission wish to speak on the question
of procedure.
The Delegate of the Netherlands.
Mr. LEENDERTZ (Netherlands): I only went to make the point
that if we pronounce ourselves now on the principle ( to have or
to have not ; the interesting point in this thing is that here
is proposed a certain sanction, and I do not think it is right
to introduce it in the Charter itself. I have no objection to it,
but I would like to discuss that point at some time, if the E/PC/T/B/PV/3
principle would be agreed to; but if not, then it would not be
necessary.
CHAIRMAN: If the question of principle is adopted, that
there should be registration of agreements, the text of the
Brazilian amendment will then have to be referred to the Sub-
Committee for further study of the text.
The Delegate of the United Kingdom.
Mr. HOLMES (United Kingdom): Mr. Chairman I only wish to say
that perhaps it might be better, in view of the very weighty
arguments which have been advanced against the proposal, that the
Brazilian Delegate might consider withdrawing the proposal rather
than that we should proceed to a vote on it.
CHAIRMAN: The Delegate of Brazil. V - 18 - E/PC/T/B/PV/3
M. Monteiro de BARROS (Brazil) (Interpretation):
Mr. Chairman, I was not impressed by the arguments which were
given here, nor by the list which the Delegate of the United
States read to us. I do not speak English, but I read it, and
I am quite familiar with the list which he read out and,
therefore, it did not come as a surprise to me.
Now, taking this matter from a practical point of view,
I want to stats that there are two sorts of countries. There
are poor countries which only have an undeveloped industry
and which bear the effects or these international combinations;
and there are countries in which these international combinations
are located and it may not be in their interests to suppress
such combinations.
I am speaking here in the interests of these poor and
undeveloped countries. Therefore, I was not convinced by
the arguments which were put out here, and I want to claim
the initiative of the proposal I have made, even if that
proposal were to be rejected by this Commission, because
it seems to me this proposal will be adopted one day and
I want it to be known on that day that it was Brazil who
carried the initiative for that proposal.
The matter contained in our proposal is of a very
serious nature, and I do not think, like you, Mr. Chairman,
that there are only two possible solutions to the problem.
In fact, we could come to a compromise, and we could refer
the Brazilian amendment to, let us say, Article 76 of the
Charter aid draft it in such a way as to be a recommendation
to the I.T.O. for the study of the cartels, and therefore
I think it is a matter which ought to be considered by the
sub-Committee.
CHAIRMAN: The Delegate of Belgium.
/.nTr /1Z - 19 -
M. THILTGES (Belgium) (Interpretation): I apologise,
Mr. Chairman, for prolonging, the discussion now, but I have
not taken part in it so far. We have considered the Brazil-
ian proposal with sympathy; but we have listened to the
various serious arguments brought here by the United States
Delegate with sympathy too.
I must say that if the Brazilian proposal should be
sent to the sub-Committee , we must take into accountt that
the Sub-Committee, in accordance with their mandate, have
to deal with restrictive practices in accordance with the
text of the Charter: practices "engaged in or made effective
by one or more public or private commercial enterprises or by a
combination, agreement or other arrangement between commercial
enterprises, whether between private commercial enterprises,
between public commercial enterprises.. .or between private and
publics commercial enterprises"; whereas the proposal put forward
by the Delegation of Brazil contemplates a compulsory registration
for international combinations.
The Brazilian proposal does not, therefore, cover the whole
field of restrictive practices, and my conclusion is that if the
Brazilian proposal should be transmitted to the sub-Committee on
restrictive practices, the sub-Committee should consider the
possibility of extending the Brazilian proposal to all restrictive.
practices which fall under the definition--not only limit them
to international combination, or coalitions as stated in the
Brazilian proposal
CHAIRMAN: The Delegate of France.
E/PC/T/B/PV/3
V. ER
- 20 - E/PC/T/B/PV/3
M. LECUYER (France) (Interpretation) Mr. Chairman, I
would like to say a few words on this question of procedure. I I
think that the majority of the members of thim Com.ission - and I
share their view - think that the cublioity and registration of
such a combination are very interesting and should be extremely
useful, but from a mate ial _point of view there is an impossibility
of getting this registration and the necessary publicity done.
If the Brazilian delegate, as he has suggested, considers that
his proposal can be put in another form, when pe could ask the
Brazilian delegate to withdrawphis Dresent proposal and substitute
it by another one which wou d be. studied when we come to the study
of Chapter VIII, because I think he mentioned Article 7 Iensseus
to me that few members here, if any, are hostile to the furthering
of studies on these international combinations, and this will be
something which will have to be d ne .by the Organization, and if I
may give the French point of view on the question, I would like to
state that we are all in favour of the principle of registration
beca se 'we have prepared, in our inaer.-l legislation, a draft law
which will only be submitted to our national assembly once the
Charter is registered, which, in fact, provides for the
registration of scch oombinations. Therefore yan cm see,
Gentlemen). that we are certa nlyr not hostile to the substance of
this proposal, but we see now that, from a practical and material
point of view, this princihle Has not been propermy i plemented.
C ANAIRM: In view of the fact that the delegate of Brazil
considers that a compromise might be possible on this question, I
take it that it is his desire, and probably the desire of the
Commission, that this question should be referred no the Sub- - 21 - E/PC/T/B/PV/3
Committee for further study. I have listened with careful
attention to what has just been said by the delegate for France,
regarding a proposal that the Brazilian delegate should withdraw
his amendment and introduce his amendment under Chapter VIII,
Article 76. I would like to point out that Chapter VIII is really
concerned with the organization of the ITO, and that the purpose of
Article 76 would be to give effect to what is already provided for
in Chapter VI. Therefore, it would be better, if any provision was
made, for the further study of this question by the international
Trade Organization, that it should be included in Article 41 rather
than in Article 76. I mention that in order that the members of
the Commission should realise clearly the relation between Article
76 and Chapter VI. I take it that it is agreed that the Brazilian
amendment should be referred to the Sub-Committee for further
study?
Mr. A. P. van der POST (South Africa): Mr. Chairman, I
understand, from the sense of the general trend of the Commission,
that the majority of the Commission is opposed to this proposal
from the point of view of its impracticability and from the point
of view of the principle,and now to refer this to the Sub-Committee
would mean that, broadly speaking, we feel that there is something
in the proposal and that we could accept it to a certain extent in
argue
principle. Personally, not to/the question of practicability, I
would just mention that, in my opinion, the proposal seems to be
wrong in principle, and. I do not think that by referring it to the
Sub-Committee it would serve any purpose if the Commission, as
such, should judge it to be wrong in principle. My reason for
saying that is wrong in principle, is the provision that, E/PC/T/B/PV/3
-22 -
unless registered, an organization that is treated in this sub-
section should be presumed to have harmful effects. Now, is non-
registration to be proof of guilt? I think that is much too
sweeping a statement. It is a gross presumption. It condemns
without. according the opportunity of being heard. One might test
them by asking the contrary opinion. Is registration to be
considered as a proof that the Organization, or the association, or
the company, that registers, has nothing wrong in itself? That
also is too sweeping. It praises without allowing the opportunity
to be heard or examined. If registration is not to be presumed to
be a proof of soundness, then examination of the document
registered would be necessary if registration is to serve any
purpose. I think it has been shown sufficiently clearly here today
that it is impracticable to have all those documents examined and
then still to go further to accord some degree of publicity, but the
proposal seems there not to be prepared to accept the consequences
of publicity; due regard being paid to the legitimate
interests of enterprises concerned. Now, what kind of publicity
has the Organization to give? It places an onus on its
Organizations and on its officials. Documents are to be registered
with the association and then the association is to give publicity
to those documents? And yet, it has to safeguard the legitimate
interests of the enterprises concerned and an impossible onus
has been placed on the organization and its officials. In
principle, therefore, I am strongly opposed to this. I do not
think it can serve any purpose for us to refer it to the Sub-
Committee. S - 23 - E/PC/T/B/PV/3
CHAIRMAN: Mr. McGregor
Mr. F.A.McGREGOR (Canada): I followed up your suggestion
about Article 41 by suggesting to Mr. de Barros that the question
could be made the subject of the exhaustive inquiry that would be
necessary if there were inserted in Article 41, Paragraph 1(a),
a separate sub-paragraph (iii), which would provide for the study
by the Organization of the proposal for compulsory registration.
I think if the present discussion were at least postponed
now, the Delegate for Brazil might consider bringing in a
proposal at tomorrow morning's meeting that would cover it,
I am not speaking for the Delegate for Brazil - I have brought
no influence to bear on him at all - but I suggest that that
solution might be acceptable to the rest of us and might
perhaps bo acceptable also to the Brazilian Delegation.
CHAIRMAN: I wouldd like to comment on the proposal just
made by the Canadian Delegate; that if the Brazilian DeIegate
wishes to withdraw his amendment and introduce another amendment
on Article 41, that is a question which might suitably be
considered by the sub-committee.
it seems that we are now faced with the question as to
whether or not this whole matter should be referred to the
sub-committee. My estimate of the feeling of the Commission,
that the matter should be referred to the sub-committee, has
been questioned by the Delegate of South Africa, who is of
the opinion that it should not be referred to the sub-committee.
So I think it is necessary, in order that we may obtain the
feeling of the Commission on this question of procedure, to take S . -24- E/PC/T/B/PV/3
a vote on whether or not the Brazilian amendment should be
referred to the sub-committee.
Will all those in favour of referring it to the sub-
committee please raise their hands.
(Six hands were raised)
Against?
(Six hands were raised)
I think we shall have to take a Roll Call, because it is
very difficult for the Executive Secretary to count the hands. .J. - 25 - E/PC/T/B/PV/3
CHAIRMAN: Will those in favour of reference to the
sub-committe please answer "yes", and those against reference to the
sub-committee please answer `ho'.
AUSTRALIA No
BELGIUM and
LUXEMBOURG No
BRAZIL Yes
CANADA No
CHILE Yes
CHINA Yes
CUBA Yes
CZECHOSLOVAKIA No
FRANCE No
SYRIA and
LEBANON (Not present)
INDIA Yes
NORWAY No
NETHERLANDS No
NEW ZEALAND Yes
SOUTH AFRICA No 1 *
UNITED STATES No
LNITED KINGDOM No
CHAIRMAN: The proposal to refer the question to the
sub-comuittee is lost by 6 votes for and 10 against.
I interpret that vote to mean that the Brazilian amendment
is not carried.
We shall now pass on to the next order of business. It
seems to me that the remaining points under Article 39 which are
listed under paragraph 3 on pages 4 and 5 of document W132 are
most suitable for reference to sub-committee 2. They are J.
- 26 -
drafting points insofar as they give rise to questions of substance
and these questions could better be dealt with in the sub-committee
than in full commission. Therefore, I would propose that the
remainder of Article 39 be referred to sub-committee 2. Is that
agreeable?
Agreed.
I have pleasure in announcing that the sub-oommittve which we
appointed yesterday to deal with the question of the inclusion or
exclusion of services in relation to Article 39 and Article 45
have completed their work. I would therefore like to call upon
Dr. Leendertz, the delegate of the Nutherlands, and Chairman of the
sub-committee, to report the findings of the sub-committee.
DR. P. LEENDERTZ (Netherlands): Mr. Chairman, the
sub-committee met today twice and they appointed a drafting
committee and the drafting committee has drawn up draft Article 44a,
in which Article the conclusions of the sub-committee have been
laid down, and I am happy to say that those conclusions were arrived
at unanimously - the Article has Just been circulated between
members here, so I do not think you will require me to read it
aloud, although I am quite prepared to do so. Perhaps I may
refer to that paper which has been described here, and that
Aarticle 44 might come up in its own good time before the Committee.
CHAIRMAN I would like to thank you Dr. Leedertz for
submitting this report. I wish to thank you and all the members
of the sub-committee for the very excellent work you have done in
the sub-committee and. for drafting your unanimous report in such
a short period of time. I think your sub-committee can be
regarded as an example for all sub-committees. E/PC/T/B/PV /3
J. -27-
DR. P. LEENDERTZ (Netherlands): Thank you very much,
Mr. Chairman, I would like to thank the Secretariat for their
help.
CHIRMAN: The report of the sub-conmittee has been
circulated in W/144, but as the members of the commission have
just received it, you cannot expect that discussion shoald take
place now. I would therefore propose that this matter be held
over until we come to consider Article 44a when we discuss
Article 45 tomorrow. I propose that we now pass on to Article 40.
I have made a study of article 40 and the amendments which
have been submitted thereto, together with the reservation to
the drafting committee's report and it appears to the Chair that
there are three questions of substance raised in article 40.
The first is the reservation by the delegate of the
Netherlands and a somewhat similar reservation by the delegate
of Czechoslovakia, mentioned on page 8 of document W/132, regarding
the question of the possibility of taking a case to the
International Court of Justice.
The other two questions on substance regarding Article 40 are
raised in the Australian amendment and in the United Kingdom
suggest
amendment. I would therefore/that we confine our discussion to
these three points of substance and that the other matters
pertaining to Article 40 be referred to sub-committee 2.
J. E/PC/T/B/PV/3.
Mr. LECUYER (France): (Interpretation): Mr. Chairman,
I do not know if it would be completely correct to consider
the Amendment which was proposed in New York by the United Kingdom
and Franch Delegations as strictly an Amendment of form.
I have no objection, of course, to seeing this Amendment sent
to the Sub-Committee for study; but in fact if this Amendment was
not given more consideration in New York it was because in New York
the Members of the Committee considered it to be a substantive
Amendment; and therefore, as I have stated, I have no objection
to seeing that Amendment sent to the Sub-Committee; but I wanted
to raise the point here because maybe the full Committee may
think it wise to discuss it here.
CHAIRMAN: Under those circumstances I think an opportunity
should be given to the Delegations concerned to put their views to
the full Commission, and we will take up this matter after
consideration of the other question I have just mentioned.
There being no other comments on the proposed procedure,
I take it it is approved.
We will therefore take up first the question of a reservation
of the Delegates of the Netherlands and Czechoslovakia regarding
taking a case to the International Court of Justice.
Mr. LEENDERTZ (Netherlands): Mr. Chairman, I have been
instrulcted to inform you that we have found that the reservation
we made on such lines as we did there does not meet sufficient
agreement between the other Members of the Conference in order to
maintain it. So we are prepared to withdraw it on the assumption,
nevertheless, that within the Organisation there will be an
independent and impartial body to go into and decide upon questions.
This is a matter which, of course, has come forward in another
Chapter, Chapter VIII,and not here.
G.
- 28 - G
- 29 - E/PC/T/B/PV/3
This does not mean we should not be in sympathy with the
proposal of the Czechoslovak Delegation, but perhaps there might
be some way that, as a very last. instance, an appeal to the
International Court might be possible.
CHAIRMAN: The Delegate of Czechoslovakia.
Mr. MINOVSKY (Czechoslovakia) (Interpretation): Mr. Chairman,
we will not press our point and ask the Committee to share our
opinion on this matter, and we are ready to agree to send this
question to the study of the Sub-Committee and accept the
conclusions of the Sub-Committee on the matter.
CHAIRMAN: The Czechoslovak Delegate -has- proposed that this
question be referred to the Sub-Committee. Is that agreed?
The Delegate of the United States.
Mr. TERRILL (United States): Mr. Chairman, I have not as yet
heard any reasoning on the part of any Delegation which would. lead
the United States Delegation to any realisation of the need for
such a provision in this Article. I call your attention to (I
believe it is) Article 86 - Interpretation and settlement of
disputes - which already provides - and I paraphrase-- "any other
ruling of the Conference may, in accordance with such procedures
as the Conference shall establish, be submitted by any party to the
dispute to the International Court of Justice."
I should think that that would cover the matter sufficiently.
If it does not, and if there is a special case for the submission
of disputes arising out of the procedure under Chapter VI, I for one
would be gratified to hear of them before deciding whether it
should be sent to the Sub-Committee for their further consideration. - 30 - E/PC/T/B/PV/b
CHAIRMAN: Does t:he DeIegate of Czechoalovakia wish to comment'
M. Stanislav MINOVSKY (Czechoalovakia) (Interpretation):
Mr. Chairman, I think wa car. be in agreement with what the United
States Delegate has just said, and therefore we shall not prees
our issue.
CHAIRMAN : I wich to thank the delegates of the Netherlands
and Czechoalovakia for saving withdraw their reservation on this
quest ion.
The next item on our agenda is the ammendment proposed by the
Delegation of Australia, which. is in affect a re-arrangement and
partial re-draft of Article 40. Does the Delagate of Australia
wish to comment on this proposal?
Mr. E. McCARTHY (Australia): Mr. Chairman, this proposed
re-draft and re-arrangement was submitted at the closing stages
of the work of the Drafting Committee in New York. We do not
regard it as having any real question of substance, and some
points have been me by other proposals, and our view would be
should
that it is rather appropriate that It/go straight to the Drafting
Committee, where it could be considered in conjunction with other
amendments which have an identical bearing on the points at issue.
CHAIRMAN: The Australian Delegate has suggested that the
proposal be referred to the sub-Committee. Is that agreed?
(Agreed)
We now to the proposal of the Delegation of the United
State, who have also made a re-arrangement and re-draft of
Article 40. May I call upon the Delegate of the Unitid State
to explain the purposes of his proposal? V - . -31 - E/PC/T/B/PV/3
Mr. Robert P. TERRILL (United States): Mt. Chairman
our proposal is similar in purpose to that of the Australian
Delegation. We took the librty of rather extentively
re-arranging Article 40 with a view to clarifying that
section of Chapter VI. We felt the present Article,
as it is drafted, contains a lot of "gobbledygook", that
is, language which is long-winded, obscure and opaque to
the understanding of the common man. This being the
century of. the common man, we thought we would give him
a break in this Charter.
I do want to call attention to one slip to which my
astute colleague from the United Kingdom has drawn my
attention. It is, I am sure, a mere typographical error.
in the first paragraph of Article 40, which will be found
on page 3 of Document W/122 and on page 7 of Document W/132.
In the fourth line there is a word which has been omitted
from the New York text, and which we sought to reproduce
without change in this particular instance: the word
"particular" before the word "practices". I want the
record to be corrected on that.
To pass on, Mr. Chairman, to other remarks, of which
I shall have a few, we have explained in Document W/122 the
purpose of each of the re-arrangements, and I shall not
bore the Committee with those explanations since I am sure
you have all read these comments with great interest. If
I can make only one remark as to this matter, however,
what we tried to bring out and to differentiate was this
so-called ''screening" process, or the process of preliminary
investigation. We hope we have done that, and we hope the
Commission and the sub-Committee too will look with favour on
our efforts.
As to the more, substantive pointe to which I am sure the E/PC/T/B/PV/3
Commission will what to give further attention, on page 5
of Document W/122, in connection with paragraph 4 as we
now have it re-numbered, of Article 40, we have name a
change in the substance, thought it is not crucial. That
change is as f ollows, that any Member, -as well as the parties
alleged to have been engaged in or to have been affected by,
the practice complained of,- shall 'be afforded reasonable
opportunity to be heard at such hearings." There are two
insertions. One is the word "reasonable" We felt that
we had thereby provided. a set'tlement of the problem of the
venue; as it is called in law, which is a very important
matter on grounds of equity.
.The second, and perhaps more important issue, relates to
who shall be permitted by the Organisation to file briefs or
make appearances at the timne of the complaints being formally
investigated. We have ventured to add that any parties affected
by the practices in question should be allowed an opportunity
to appear before the tribunal. That is one change I want to
note, Mr. Chairman, that has some substance.
V - 2E/PC/T/B/PV/3
That is one change of substance which I want to know, Mr.
Chairman. The other appeared in paragraph 9 of Article 40 in
accordance with our re-draft, on page 7 of document W/122. The
New York Charter provides that the promulgation of any report or
any portion of any report by the Organization may be suppressed
and not published. We feel, Mr. Chairmanpr that this ovision
is unwise. It is unwise for two reasons which we have noted in
our comments. First, that the provision should be. undesirable
It would invite the public to suspect the procedures and the
motivatigon sofiothe OraIiatin. ;t could suspect thst there waa
going on behind wemesc-tthat.the powe - - La'rs were at work
with secrets that they could keep from the world that the world
should know. Secondly, and it is a matter which seems to us of
some importance, it is quite unlikely that the suppression of a
portion of the report would be effectual, unless the ITO is
prepared to maintain a security police and rather severe sanctions.
Unless this happens, the public cannot suspect such ordinary
matters as this. h All of us iere are public servants and we know
the very great difficulty,even within our own countries where vital
matters of national interest are concerned, of securing real
suppression. I think. that is what is really wanted, and something
which we cannot put into the iscrttionr is d±fx'e>The me 'J ele-;nt
of discretion x scould be eer.ised at the time of the preparation
of the report, but when a report is made it should be freely
available to all member governments and to the public.
I h ave no othercomments to make, Mr. Chairman, on matters
that seem to me to be of great substance in this re-draft of ours
of article 40. S -34- E/PC/T/B/PV/6
CHAIRMAN: The Delegate of the United Kingdom.
Mr. S.L.HOIMES (United Kingdom): Mr. Chairman, I assume
that it would be in order if I made a few very brief remarks
on one or two points in the United States draft to which the
United States representative has himself called attention, so
that, if what I may say finds acceptance hero, the Drafting
Comnittee or the sub-committe to Whom the draft as a whole
will no doubt be referred may not be without any guidance.
The first point to7ey.hich I should 'ike to refer is one
which arises on Paragraph 4 in the new United States text.
This was a point to which Mr. Terrill called our attention.
He explained that there had been a new provision inserted whereby
not only the Member representing the Government of the country
where a practice was being complained of should be heard at
the hearings by the Organization, but also the parties who are
affected by the practice.
Mr. Chairman, I have listened this afternoon with rapt
attention to the United States representative demolishing, as
I thought, a proposal on the ground of impracticability and
quoting to us, in support of his thesis, some of his own
draft legislation, but now I have to take issue with him
because I think he has produced almost
equally impracticable.
Are we to understand that the organisation would have to give
hearings to any user of petrol in the case of a complaint that
some oil company had been engaged in nefarious practices? If
so, the time of the Commission would be taken up to a very great
extent and it might be impossible for it to do any of the other
duties - which are by no means light - provided for it in the
Charter. Yet it would he very difficult, under this arrangement,
to refuse any individual -. he, I. .think, could claim, that. with
this wording it. would be unreasonable not to give him an
opportunity to make. such a complaint. We should not ourselves
see any particular inequity in not providing that sort of
opportunity, because it is our own view, and I think that in
general it has been accepted, that complaints are made by
Members either on their own behalf or on behalf of some
affected party and that it is not the intent ion that a
complaint should be brought by/private individual or private
company directly before the Organisation.
It is rather a different matter, perhaps, to provide that
a private enterprise which has had a complaint brought against
it should be allowed to answer that complaint: that we should
think was not only equitable but also reasonable and convenient.
This is one of those cases, I think, where in the interests
of logic, as I have said before, we are rather apt to fall into a
trap and I should hope that the new proposal in this respect,
which is concealed or brought to light in Paragraph 4 of the new
United States version, would not find general favour,
That would be one point. I think perhaps you would
feel that it would be more convenient, Mr. Chairman, if I stopped
there and reserved until later comments which I have on two
other pararaphs of the United States draft, numbers 7 and 8.
E/PC/T/B/PV/3
S - 36 - E/PC/T/B/PV/3
CHAIRMAN: The delegate of Canada.
MR F.A. McGREGOR (Canada): Mr. Chairman, I am delighted
to support the United States delegate in his criticism of this
particular provision. We should thank him, by the way, for not
quoting at length from the United. States legislation that he
referred to. I suppose the United States representative will
accuse me again of seeking to water down one of his extreme
proposals. I think he was going too far when he suggested that
everyone who is affected by a practice shall have to be given an
opportunity to be heard before any decision can be made. That is
my submission.
CHAIRMAN: The delegate of France.
M. LECUYER (France) (Interpretation): Mr. Chairman, we do
not want to go into an exhaustive study of the United States
proposal, but we want to state first that this proposal is
extremely interesting, and in fact it is necessary to clarify the
text of Article 40, but we would like straight away to give a list
of the comments which we reserve our right to go into fuller detail
in the course of the discussion.
In fact, there are many difficulties in the now text and they
will appear in the course of discussion. The first one is that,
the new text. being substituted for the former one, the delegates
have the right to ask when certain changes have been made, for the
reasons for these changes, and whether these changed do not modify
the scope of the article itself.
I would like to sum up now the comments which we propose to
give in the course of this discussion. The first comments is on
the second part of paragraph 3. If the text were to be modified -37 - E/PC/T/B/PV/3
in the way which it. is proposed by the United States delegate, it
would tend to defer the practices which would be referred to the
Organization, and then we are afraid that the character of such
practices would be considered before the hearing, and that
complaint in itself might have a damaging effect on these
practices, whether these practices were to be considered harmful
or not, in fact. . .
- with
The second point has been dealt/quito rightly by the United
Kingdom delegation, and I do not intend to go over this point
again. It dealt with paragraph 4 and the words "the parties
considered to have been affected by the practice craplained of
The third point referred to paragraph 7, Here, a slight
change has been made and the words "such practices" have been
substituted for the words "the practices". Now, we are wondering
if that substitution of the word "such", for the word "the" has not
got a far more reaching affect than appears at first sight, and
that in fact other practices than those practices which have not
been contemplated in this A,rticle could not be served by that new
wording. In fact, therefore, we fear an extension of the scope
of this paragraph.
Now, the fourth point refers to publicity of the reports.
The United States delegate stated that it was very difficult not
to publish reports which have been written and it was difficult
to maintain it as confidential once it had been written, but I
think it is a practice which is generally admitted, that when
reports are written, certain parts of the reports could be
published, and that other parts of the report should be kept as
confidential. Therefore, I think that we shall have to have a
longer discussion. on this point, but this, Mr. Chairman, was only
the first statement I wanted to make to sum up the point which
we propose to consider in more detail in the course of the
discussion. Mr. TERRILL (United States): Mr. Chairman, I have listened
to my learned colleague from the United Kingdom with great profit,
and I think I could have spared the Commission a lot of time
if I had got the floor immediately,. because I want to say that
I am prepared to accept his criticism of our drafting suggestion
in Article 4.
We are not prepared, however, to adopt further consideration
of the possibility that no parties on the other side of a dispute
shall be heard. If I may be more specific about that it would
appear to us that the Commission at least ought to give serious
consideration to the question of whether or not the complainants
in a given, case should be permitted to be heard by the Organisation.
The reason for that will become clearer when we get to Article 42
as to the obligations .of Members, and I do only want to make that
slight reservation here.
In other words, to sum up, it appears to me that the final
answer to this point will depend upon what we do in Article 42.
CHAIRMAN: The Delegate of the Netherlands.
Mr. LEENDERTZ (Netherlands): Mr. Chairman, I should. only
want to make a short remark on this same context, that being that
when these Regulations were being drawn in London, it was agreed
that the Organisation might acquire information it might want, but
any proceedings against a guilty concern should be left to its own
Government, or other alternative; :but now, if both parties are
going to be heard, it may still mean the Organisation is
going to get the information, but by and by this will lead to a
transfer (sic) between two parties. It was rather ominous that
the Delegate of America used the word "Tribunal" in this context.
It was the first time I heard. it, It was hardly indicative, of
things, but it gave me an idea; and I should only want to make an
E/PC/T/B/PV/3
G. E/PC/T/B/PV/3
observation now that we should always keep in mind no other aim
here than getting some information for the Organisation.
CHAIRMAN: We have already past the time at which we are
accustomed to adjourn. I take it that after this very full
exposition of views, which I am sure will be taken into full
account by the Sub-Committee, we can refer the proposed revision
of Article 40 to the Sub-Committee for further study.
Is that course agreed?
Mr. HOLMES (United Kingdom): As I said, I had points on
paragraphs 7 and 8 to make, which I thought were not merely
paints of drafting, but had. some substance in them. I am quite
prepared; having had the advantage of sitting next to the United
States representative, not to say anything about paragraph 7; but
I should have liked to say something about paragraph 8. However,
I certainly do not wish to keep the Commission, and. possibly
some further opportunity may occur. My anxiety is that we may be
giving the Sub-Committee very little guidance from this body, if we
refer the whole thing look, stock and. barrel.
CHAIRMAN: Although the hour is late I feel sure the
Commission will be glad to hear what the Delegate of the United
Kingdom has to say about paragraph 8, if he will make his remarks
now. E/PC/T/B/PV/3
The point here was that we think the alteration is too
wholesale. It is suggested now in this new paragraph that
"the Organization shall request all Members concerned to report
fully on the action they have taken to prevent the continuance
or recurrence of the practices in question" We do not feel
that this is the only way of preventing what we are really out
to prevent, which is not practices but the harmful effects of
practices. I think, perhaps, we are failing again into the
trap of assuming that all the practices which are enumerated
in the earlier part of the Article necessarily have harmful
effects -- that is my point.
CHAIRMAN: Ar there any further comments? If not,
we will adjourn and resume the discussion of Article 40 tomorrow.
The Commission will meet tomorrow at 10.30.
The Meeting has adjourned.
The Meeting adjourned at 6.15 p.m.
V. |
GATT Library | xx270hw8579 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Third Meeting of the Tariff Agreement Committee Held on Monday, 11 August 1947, at 2.30 p.m. in the Palais des Nations, geneva | United Nations Economic and Social Council, August 11, 1947 | United Nations. Economic and Social Council | 11/08/1947 | official documents | E/PC/T/TAC/PV/3 and E/PC/T/TAC/PV/1-4 | https://exhibits.stanford.edu/gatt/catalog/xx270hw8579 | xx270hw8579_90260007.xml | GATT_155 | 5,414 | 32,747 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL.
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/TAC/PV/3
11 August 1947
SECOND SESSION OF THE, PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
THIRD MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON MONDAY, 11 AUGUST 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.
NATIONS UNIES E/PC/T/TAC/PV/3
CHAIRMAN: The Meeting is called to order,
We shell resume the general. debate on the Report of the
Tariff Negotiations Working Party on the General Agreement on
Tariffs end Trade, I would request Members of the Committe,
howoever, to refrain for the time being from commenting-upon
the suggestion of the Australian Delegation that Article I of
the General Agreement be deleted, because Dr. Coombs is not
able to be present today, as he has to take the Chair in the
Sub-Committee on Chapter IV, and he would prefer to be present
wihen any comments are made on that suggestion, which was put
forward by the Australian Delegation, namely, that A rticle I
is not a necessary part of the Agreement,
Before we resume the discussion, I would like to bring to
the attention of Members of the Committee the Supplementary
Report of the Tariff Negotiations Working Party contained in
Document E/PC/T/153. This is a Report on the Schedules to be
attached to the General Agreement on Thriffs and Trade. This
Report will be discussed in det il when we come to deal with the
Schedules, but it will be in order for any Member of the Committee
to refer to this paper during the course of the general debate,
Do any Membars of the Committee wish to take part in the
general discussion on the Report of the Tariff Negotiations
Working Party?
Mr. S. L. HOLMES (United Kingdom): Mr. Chairman, I had not
really intended to stay anything at this stage. Tho United Kingdom
will attempt to conform with any arrangement which is comes to
about the programrme for the signature and enforcement of the
General Agreement. I think I could say, perhaps, that we shall
find it very difficult to accept an obligation to put the
Tarrif Schedules into actual effect earlier than 1st January,
which is, I believe, something like a fortnight later than a
date which has been hitherto suggested.
S
- 2 - S E/PC/T/TAC/PV/3
I doubt whether that is a very serious matter, It is
due to the greet complexity of the technical processes which
will have to be gone. through and due., of course, in part also
to the requirements of our Parliamentary procedure, But it
had occurred to me that, in view of the rather long discussion
we have had, in the course of which Members of this Committee
have given .t some length their views on the General Agreement
as a whole and the extent to which it conforms with their
Parliamentary and other methods, it might be useful if there
were some sort of analysis drawn up of the views expressed..
It is rather difficult to get an assessment from the very full
Minutes of the actual position which has been reached, or, so
to speak, the general average of the viows expressed. I only
throw out that suggestion, Mr. Chairman, with c view perhaps
to facilitating our discussions and, indeed, facilitating the
task of the Secretariat also.
CHAIRMAN: I want to thank the United Kingdom Delegate
for his suggestion. I take it that his suggestion relates to
the various views expressed by representatives of the different
Delegations in the earlier part of our debate regarding the date
of signature and the provisional application of the Agreement.
If that is the suggestion of the United Kingdom Dlegate,
it will be quite feasible for the Secretariat to prepare a
summary of the views expressed by the various Delegations in the
first part of our debate.
As I announced at this lest meeting, the closing date for
amendments to Part III of the Draft of the Generel Agreement
on Tariffs and Trade was fixed for noon today. A number of
S - 4 -
amendments have been filed. Those amendments will be circulated
and later on the Secretariat will prepare an annotated agenda
summarizing the various amendments which have been filed. At
the same time, the Secretariat will be able to add to that
annotated agenda a statement summarizing the views expressed
by Delegations recording the date of signature and the date
of provisional application of the General.Agreement, so that
this summary can be taken into account when we come to consider
in detail the relevant Articles in Part III which pertain to
the date of signature and the Provisional application.
I would like to know if that would meet the suggestion
just made by the United Kingdom Delegate.
E/PC/T/TAC/PV/3
S ER - 5 - E/PC/T/TTAC/PV/5
Mr. HOLMES (United Kingdom): Thank you, Mr. Chairrnan. I
think it would. be very. helpful.
CHAIRMAN: Are there any other comments?
Mr. E. McCARTHY (Australia): Mr. Chairman, it might be help-
ful if when furnishing that information a note was made as to
whether parliamentary sanction had. to be given as to the procedure
taken by certain governments, and if, on the other hand, sanction by
the interested Parliament is practicable, the point being that i.
may
a country/declare it cannot bring it into operation by a Certain
date because parliamentary sanction and parliamentary support cannot
be given, If, on the other hand, this agreement cannot be given,
I think we should not insist if it is a matter of adding that extra
piece of information.
CHAIRMAN: That wlll be done so far as practicable. Are there
any other comments?
M. F.GARCIA OLDINI (Chile) (Interpretation): We are only
speaking, Mr. Chairman, of theProvisional application of the Agree
ment?
CHAIRMAN: This is a general discussion on the Report of the
Tarlff Negotiations Working Party. We had really terminated our dis-
cussions on the date of siganature and provisional application., and I
have announced that we would return to, this question when we considered
article by article the various articles contained in Part III of the
Made a
agreement but the unitedd Kingdom delegate/suggest:.: with a
view to facilitating our discussions when we came to consider the
Articles dealing with the signature, and provisional application: and
that is the reason why the debate has talon this turn; but it was
- really a general discussion on the Report of the Tariff Negotiations
Working Party. - G -
H.E. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
was not quite sure what we would be discussing to-day, and we have
transmitted to the Secretariat our comments. It dealt
with Part III but we made also some general comments as to the whole
Tariff Agreement. It is not long but I think it may be interesting
to Members who will receive the document to-morrow, and it may be
useful if I read what we have suggested there:
The conclusion of a General Agreement on Tariffs and Trade is
outside the terms of reference of. the resolution by which the Pre-
paratory Committee was created. Therefore, in the view of the
Czechoslovakian delegation, the conclusion of this Agreemnt
represents action taken outside the Economic and Social Council of
the United Nations. The purpose of this Agreement in the view of
the Czechoslovakian delegation is to give an example to other States
In respect of a lowering of tariffs and a reduction and elimination
of preferences. It is the assumption of the Czechoslovakian
delegation that this is only a. provisional action creating a pro-
visional state of affairs which will have to be merged with the
I.T.O. as soon as it has been created. Otherwise, there would be
a certain danger of having two pardlel bodies in existence - one the
I.T.O. - the other one an executive organ charged with the administra-
-tion of certain proves ions of the Agreement. The determination
of these bodies need not necessarily be the same on the same issues.
It is also the view of the Czechoslovakian delegation that in no case
must either the creation of the I.T.O. or the conclusion of the
Agreement lead to a situation which would. create specialised agencies
trying to achieve an existence independent of the United Nations and
especially of its highest body competent for economic affairs such
as the Economic and Social Council. That this view might be shared
by many delegation is apparent from the discussions during the last
session of the Economic and Social Council. Thus the delegate of Norway in connection with the discussion on whether non-Members of
the United Nations should have the right to vote at the International
Conference on Trade and Employment or not, declared among other
things :
"In other connections we have seen a certain tendency on the
part of the specialised agencies who make themselves more or le ss
independentof the general policy of the United Nations.''
the
I think that/same considerations are involved here in a
certain way. The delegate of Canada declared:
"But we are a Council of the United Nations and we have to
view this matter not in the light of the atmosphere of any.particular
place at the moment, but in the light of what this means to the
much more important question and that is the continued integrity and
effectiveness of the United Nations Organisation as a whole.
"I believe we. are developing a dangerous tendency in this
Council. This Council could easily become a mere filing agency and
I am not so sure that critics of the Organisation would not be justi-
tied in making that kind of observation. When this Council was estab
lished - at its first meeting when discussions took place as to its
terms of reference and as to thekind of developing functions it would
assume - it was not intended to be a body that would exercise vis à
vis specialised agencies the functions of an equal partner, but it was
to be a co-ordinating body - a sort of cabinet. I doubt if we are
developing that function. It would seem to me that we must -vio wthis
question in the light of the situation. I feel that .the Economic and
Social Council will lose its prestige and efficacity if it does not
develop into a body which exercises moral authority on the speialised
agencies with whom it has not entered:into contractual relationships
on terms that are settled . Cowared in my judgment and in the
judgment of my delegation, this matter gives reason for a good deal
of concern.
E /P C /T /. T/C/PV/3 J. - 8 - E/PC/ T/ TAC/PV/3
The Czechoslovak Delegation therefore suggests that it would
be more appropriate
(a) to sumit the draft i, Agreement beforce it is put into
foree to the Economic and Social Council so as to make sure that
there will be nothing in the Agreement which would conf lict with
the policies of the United Nations generally and the Economic and
Social. Council especially,
(b) to limit the scope of this Agreement in such a.way as to
enable its earliest liquidation as soon as the Charter has been
put into force and also to enable a quick transfer of all the
functions of the "Committee" to the International Trade Organization.
CHAIRMAN: Are there any other speakers?
MR. S.L. HOLMES (United Kingdom): Mr. Chairman, Annexure 7
of the Report. of the First Session of the Preparatory Committee,
which will be found. on page 47 of that Report which was issued at
the
our -London meeting, contains Resolution Regarding/Negotiation of
a Multilateral Trade agreement Embodying Tariff Concessions -.the
Resolution of the Economic and Social Council was passed, on
18 February 1946 - and oxplairs that in the View of the Preparatory
Committee the task of the proposed International Conference on
Trade and Employmente would be facilitated if concrete action were
taken by the principal .trading nations to enter into reciprocal and
mutually advantageous negotiations directed to the substantial
reduction of tariffs and. to the elimination of preferences. The
Committee thereby recommended to the Governments concerned that
the meeting of Members of the Preparatory Committee envisued by
the invitations which had been sent out by the United States
Government should be held under the sponsorship of the Preparatory J. E/PC/ T/TAC/PV/3
Committee in connection with, and as a part of, the second Session
of the Committee.
Now, if there were any real reasons for thinkin.6 that it
was necessary to submit the Draft General Agreement on Tarif's Lad
Trade, with which we are now, concerned, to the Economic and
Social Council, I should imagine that at one of the Sessions of
the Economic and Social Council which have been held since this
Proparatory Committee met in London last Autumn there, would have
been some suggestion on the part of the Economic and Socaial
Council to that cffect. V
- 10 -
E/FC /T/TAC/PV/3
In the remarks that he has just made, the representative of
Czechoslovakia has referred to some remarks made by the representative
of Canada last Friday week in Now York; but about those remarks
I should like to say two things: one is that they have already
formed the subject of considerable discussion at another meeting
of a body connected with this Preparatory Committee the Heads of
Delegations -. in the course of which the representative of the
United Kingdom made certain criticisms directed particularly, I
think, to that passage which we have just heard so far as it
related to the danger of the Economic and Social Council becoming
a mere filing agency. It was pointed out on that occasion that
it was really the meanest type of bureaucracy to consider that
because one's junior submitted to one a document one was
necessarily, therefore, obliged to criticize it or amend it or
otherwise to look on oneself merely as a filing agency.
The second point, however , that I wish to make is that those
remarks were directed to the question as to whether non-Members of
the United Nations whom it had been decided to invite to the
International Conference next autumn in Havana should be allowed
to exercise at that Conference the right of voting. It is at
least interesting that, if my memory is right, those who were in
favour of giving the vote to such invited Members, though they
did not succeed, did include, the representative of Czechoslovakia
at the Council. I wonder, therefore, whether the extended
reference to the remarks at the Economic and Social Council last
Friday week of the representative of Canada really do bear on
the question that has now been raised and on the problem before
us of preparing and bringing into force a General Agreement on
Tariffs and Trade, the primary object of which will be to enshrine
the results of the tariff negotiations which have occupied us
here for so long. -11 -
CHAIRMAN: The Delegate of Chile.
Mr. GARCIA OLDINI (Chile) (Interpretation): Whatever the
result of the further discussion will be on ArticleXXVIII want
to say that I find the procedure adopted here for this Article
somewhat too ingenious, perhaps; and I am afraid that it will
bring about a modification of the Tariff Agreements themselves,
This Article, in effect, permits even modifications without
the consent of the large majority of Governments.
If I understand well what we have done so far, we want to
establish in the Charter basic principles for world trade, and
we want to transfer these principles into the Tariff Agreements.
I think that the text as it is in this Draft is not stable;
it does not get sufficient balance; it is Certainly a good
provisional text, but it will be modified by the World Conference.
That means that logically any modification to the Charter should
later be transferred also to the Agreements. They should
correspond on to the other, but the Text of this Article as it
is now probably would prevent such a modification, and I doubt
very much if many States will sign the Agreement if this
stays
Article XXVIhs it is indicated here.
CHAIRMAN: The Delegate of Brazil.
Mr. PARANAGUI (Brazil): Mr. Chairman, about the considerations
made by the Delegate of Chile,
I want to express also certain doubts about the wisdom of
this Article. We have here confusions which can put us in a very
difficult situation. For example, there are some Articles. of the
Charter approved here - if I may say so, the Geneva Text that
will be incorporated. in the Convention. Then the Havana Text
might have a Charter with less obligations or 'more obligations
E/PC/T/TAC/PV/8
G G - 12 - E/TC/T/TAC/PV/3
concerning this Article. Two-thirds of the contracting parties
might decide that the Text night have to be incorporated in the
Convention. That means we supersede one Text by the other, and
this new Text will be effective if all the Members - that means
the countries here present - become Members of the International
Trade Organisation.
Well, suppose, for example, that two-thirds decide to
change the Text of the Charter incorporated into the Convention,
and one-third become Members of the ITO. The situation will
be this. If a country - take, f'or example , Mexice, it is a
friendly country - suppose Mexico, becomes a party to the
Convention, then the clause of the Charter under the Convention
is the Geneva clause; but, becoming a Member of the International
Trade Organisation, it is under the obligations of the Havana
Text. There you will see a country with two different Charter
obligations. The obligations of Hawana, which can be less or
more than the obligations: of the Charter of Geneva; and, under
the Convention, also the obligations of Geneva,
It seems to me that we can have conflicting or quite
different provisions In the two Charters, and it might happen'
that there will be very i important differences; balance of
payments and other questions -very important questions.
So I have some doubt about the wisdom of this change of the
Charter, in the way it is provided here. E/PC/T/TAC/PV/3
Then there is another thing. The Convention, with the
Tariff Agreements .and the provisions of the Geneva Charter, would
be approved by Perliaments, That does not mean that the new
provisions of Havana automatically take the place of the Geneva
text; they must be approved again by Parliaments, because the
various Parliaments are. approving the precise provisions of the
Charter, including the Convention. We cannot say: "You approved
the Geneva provisions of the Charter, Now we change that by the
provisions of Havana; we assume that is also approved" It
cannot be. That must be approved again by Parliaments. That
means no automaticity in the changing of the. provisions of the
Charter included in the Convention.
There is another observation about suspending them in whole
or in part. Who will make this choice: that part of the pro-
visions will disappear and other parts will stay? It might be
that I have no knowledge about that, but I would like to know what
criteria we will use to change the provisions as a whole or in
pert.
Those, Mr. Chairman, are the considerations or a general
aspect about these amendments to the Convention,
CHAIRMAN: The Delegate of Canada.
Mr. H.F.ANGUS (Canada): Mr. Chairman, I shall speak quite
briefly in order not to break the continuity of the discussion,
but I shall refer for a moment to the remarks of the Delegate for
Czechoslovakia concerning the stand taken by the Canadian spokesman
in New York.
As I understand it, the position at New York concerned the
rights, so to speak, of non-Members of the United Nations, and the
Canadian Delegate ,was upholding the very broad principle of equity,
that one should not reap where one has not sown; that those who
share in the benefits should also share in its burdens. That is
- 15 -
S - 14 -
E/PC/T/TAC/PV/3
to say, he was taking, with respect to the United Nations, sub-
stantially the same; position as the Canadian Delegation hare took
in the discussions on Article 36 concerning the position of non-
Members of the projected International Trade Organization.
Just. as we said then, that it was a matter of principle and
of equity that those non-Members should not have the benefits of
the Organization without contributing their share to its support
and making the concessions that others had made, and undertaking
the obligations that others ha.d undertaken, a somewhat similar
position was taken with respect to States not Members of the
United Nations who might be invited to attend the ,World Confercnce
for the purpose of sctting up the International Trade Organization.
The suggestion was that the comprehensive purposes of the
United Nations prevailed over those of an organization with a
limited objective, but there is nothing in that which should
affect the signature of the Trade agreement; the document
before us now does not contemplate signature at the moment by
a non-Member country which is not a Member of the United Nations.
It is a question of an agreement between states which are ready
to undertake obligations with one another and to carry out those
obligations, and I am inclined to agree with the interpretation
of the Delegate for the United Kingdom that the position taken
at New York is in no sense hostile to the signature and ratifi-
cation of the document before us.
S ER -15- E/PC/T/TAC/PV/-;
M. PIERRE FORTHOMME (Belgium) (Interpretation) Mr. Chair-
man, we heard several times in the course of these discussions some
complaints saying that the basis on which we were discussing now
in order to reach these concessions was not a stable basis and that
therefore it was adding to the already great difficulties we had to
reach satisfactory concessions. The fact that the actual discussions
can lead us to something provisional which could be automatically
replaced in Havana addsto the difficulties that we already have. We
from
wonder if /the fact that the Agreement we are going to sign is a
provisional one, it must ensue that the negotiations which we are
actually having must be provisional too. In fact, at the beginning
of these discussions this was not our standpoint, and we consider
that in fact if this is the situation we are only wasting our
If the Agreement is to be provisional until the Charter comes into
force definitely does that mean that the concessions we are negotiating
here are going to be effective Only for a few months? The general
idea here was that we are going to negotiate concessions for a long,
period - three years at least and probably longer. If the concessions
themselves are going to be provisional, we are wasting our time and
efforts trying to reach an agreement on those concessions, It has
been said that the fact of adding into the general Agreement the
tex t of what I should call the Geneva Charter. would perhaps lead us
to impose on the future Members of the Organisation the result of our
work here, and in fact all the work which has been done within the
'Yorking Party was in order to avoid that such a thing would be
imposed upon future Members. But what we are speaking of right now
is not only to impose the text of the Geneva Charter upon future
Members, but to impose in advance something that we do not know, which
is the Charter which is going to be accepted in Havana, and this con-
stitutes a greater danger indeed. - 16 -
When the Working Party wrote into tile text of the Agreement
some parts of the Charter, it considered that this was a necessary
condition in order for all parties to these Agreements to accept
the concessions which they were ready to.aceept, but this way of
drafting the agreement was accepted in order to avoid imposing
upon future Members some conditions which they would not have
already examined. However, if we replace Part II of the
Agreement by something of which we know nothing this is much more
dangerous and we would not agree with such a thing,.
This is quito different from what we thought would happen.
We thought that at the end of the World Conference we would have
a different solution. If the result of the discussions in
Havana leads us to a text of the Charter which would besimilar
to the text we are adopting now in Geneva, there would be no
difficulty in replacing Part II by the text signed in Havana.
If there is to be a difference between the text adopted in Havana
and the Geneva text, then a certain liberty should be left to the
various countries in order to decide what they want to do.
Different solutions would be possible for them. They could
accept, first of all, to introduce into the, Agreement the text of
the Charter. even if this text were slightly different from the
text accepted here, or they could agree to maintain the conditions
written in Part II, insofar as these conditions would not violate
the text of the Charter, and they could also maintain the Agreement
without accepting the Charter, and a further solution would be not
to accept the Agreement if the general conditions of the Charter
were not acceptable to them.
CHA.IRMAN: The Delegate f or the Lebanon.
E/PC/T/ TAC/ PV/ 3
J. - 17 -
M. M.MOBARAK (Lebanon) (Interpretation): The study
submitted by the Czechoslovak Delegation is very interesting and
very judicious. It deserves a profound examination. It
entails a certain number of questions or principle, and I vwish
we had had it earlier so that we would have been able to study it
before we came to this meeting.
In many parts, it concerns the powers of our own Commission,
and, as we already know, the Economic and Social Coucil has
entrusted us with the setting up of, a Charter of which the Tariff s
Agreement would be a kind of subsidiary. Now, if only tariffs
were included in this Agreemtent, we could. sign it here, but there
are other conditions included which make difficult for us to
commit our governments:
If these articles are later on changed at Havana - for instance
if we suppose that Lebanon will be authorised to discuss the
articles of the Charter as a Member of this Party and Syria will
not, Syria will only be party to the Tariff Agreement - we can
understand that Syria could not sign at Geneva, or they could only
do it if the Articles were very similar.
Therefore, in taking into consideration the questions of
principle, I would suggest that we postpone the discussions on this
Draft until all the delegations have been able to read and study
the suggestion of the Czechoslovak Delegation. As I say it
contains a certain number of questions of principle and we have
to see whether these tariff Agreement can be signed here at Geneva
or not in their present form. I believe that we can sign
them if we are dealing with tariffs only and if the Articles the
contain cannot be substantially changed later on at Havana.
CHAIRMAN:Are there any other comments? - 18 -
H.E. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
apologist for asking you for the floor gain, but I woulld like
to complete the statement we made and perhaps I could make
clearer what is in our minds.
With regard to tariff negotiations, we feel that it would be
a great loss if those tariff reductions negotiated hare were not
put into force. We are, on the other hand, greatly concerned
by one fact: if we read the Tariff Agreement correctly, it
actually means that there is a tendency to create to some Separate
Committee or a Body which would be existing outside the organisms
of the United Nations, and which ray oven be existing beside the
International Trade Organization because article XXIII says that
as soon as the International Trade Organization has been
estoblished and is capable of functioning, the contracting parties
may discontinue the meetings. It means that the Body may still
go on further as an independent and separate Body not subject
either to the Economic and Social Council nor to the International
Trade Organization but only to the discretion of the countries
signatory to this Agreement. V
- 19 -
On the other hand, we have seen that many countries have all
kinds of difficulties in putting this Agreement into force. The
difficulties are, in many countries, of a constitutional order, so
we would suggest the following procedure: that we sign a Protocol
here in which the contracting parties would take upon themselves
the obligation to put the negotiated tariff reductions into force
in a way which is proper to their constitutional laws.
The best way, to our mind, would be to put those negotiated
reductions into force through the channel of existing commercial
treaties. I think most countries are bound among themselves by
commercial treaties through which they would be able to put them
into force.
I or c that it would be better if all those reductions
could be put into force at the same time; but I do not think
that it is essential. In the years 1918 - 1938 there were
still separate commercial treaties; different reductions were not
put into force at the same timer, but they had the same object
as we have here -that is, the general reduction of tariffs.
Then, when the I.T.O. is created, the contracting parties would
be free to revise their existing commercial treaties in the light
of the provisions of the new Charter.
CHAIRMAN: Any other speakers?
Mr. T. OFTEDAL (Norway): Mr. Chairman, I just want to
mention that the Norwegian Delegation has today submitted some
observations to the Executive Secretary. We hope that these
observations will be distributed tomorrow or the day after.
The observations are in line with the statement made by the
Norwegian Delegate at the first, meeting of this Committee last
week. Besides that, we also have some proposals concerning
Part III of the Agreement, so with regard to the general view of
E /PC/T/TAC/PV/3 - 20 -
the Norwegian Delegation regarding the General Agreement on
Tariffs and Trade, I would refer you to that document.
CHAIRMAN: Any other speakers?
If there are no other speakers, it will be necessary to
conclude our general.debate and resume after we have circulated
the Annotated Agenda and can take up Part III of the draft
Agreement, Article by Article.
Mr. E. McCARTHY (Australia): Mr. Chairman, would the
Protocol be part of Part III?
CHAIRMAN: The Preamble and the Protocol would come up
as part of Part III.
The same applies to the draft form of Schedules contained
in document T/153, and any Delegations that have any amendments
to submit to the Report on the Schedules should do so before
next Thursday.
I think we have exhausted the general debate, if there are
no other Delegations who wish to speak on this subject.
I might say, with regard to the suggestion of the
Czechoslovak Delegate regarding the signing of the Protocol
instead of the General Agreement, that this proposal could be
considered when we come to deal with Article XXIV, when we
will be dealing with definitive entry into force, or Article
XXVII, Amendments, or. even Article XXXII, Provisional
Application. We can see later at which point in our
discussion of the Articles this particular proposal could best
be considered.
The Secretariat will prepare the Annotated Agenda, and that
will be circulated as soon as possible. In addition, if there
are any amendments with regard to the Schedules, they will be
V V -21 - E/PC/T/TAC/PV3
circulated as a separate supplementary Annotated Agenda.
If that procedure is agreed by the Committee, we shall
adjourn our discussion until Saturday afternoon at 2.30, when
we will take up detailed consideration of the Articles in
Part III, commencing with Article XXII.
Is that procedure approved? (Approved)
There being no further business, the meeting is adjourned.
(The meeting rose at 4.20 p.m.) |
GATT Library | xj134wx5175 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Thirteenth Meeting of Commission A held on Friday, 13 June 1947, at 2.45 p.m. in the Palais Des Nations, Geneva | United Nations Economic and Social Council, June 13, 1947 | United Nations. Economic and Social Council | 13/06/1947 | official documents | E/PC/T/A/PV/13 and E/PC/T/A/PV.11-13 | https://exhibits.stanford.edu/gatt/catalog/xj134wx5175 | xj134wx5175_90240096.xml | GATT_155 | 6,649 | 40,357 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/A/PV/13
13 June 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERBATIM REPORT
TEIRTEENTH MEETING OF COMMISSION A
HELD ON FRIDAY, 13 JUNE 1947, at 2.45 P.M. IN THE
PALAIS DES NATIONS,NEVA.
Mr. MAX SUETEN S
GENEVA.
(C;sirman)
(Bul,ium)
Delegates wishing to make corrections inr heir, speeches
dhoulA address their communications to the Documents Clearance
Office, Room 220 (Tel. 2247).
NATUONS VNI ES E/PC/T/A/PV.13
CHAIRMAN (Interpretation): Continuing our discussion of
Article 36, the first speaker on my list is the Delegate of
New Zealand.
Mr. L.C. WEBB (New Zealand): Mr. Chairman, at a stage in
this discussion yesterday, Dr. Coombs made what I thought was a
rather ominous remark, that no one --we should note the words--
no one knew who was going to be or was not going to be a Member
of I.T.O., and it is, I think, an ominous remark but a salutary
one.
He went on to say that in facing this problem of non-Members,
we were facing the most difficult problem which this Conference
has faced yet, and I agree with that. I think that this discussion,
brief as it has been, has shown that if non-Members are numerous
or are commercially important, then the Organisation will face a
very grave dilemma, because in that event there are only two courses
open to the Organisation. It can impose only the lightest
restrictions on relations between Members and non-Members, and in
that case, the distinction between membership and non-membership
becomes at best somewhat meaningless, and the Organisation will be
liable to sink into futility. But I fear that a more likely
result in that event is that some Members, at any rate, will
discover that on balance membership of the Organisation involves
more disadvantages than advantages, and that state of affairs
would also be equally fatal to the Organisation.
Now, let us consider for a moment the second alternative
which is that non-Members are numerous or commercially important,
and the Organisation attempts to impose somewhat rigid
restrictions on relations with non-Members. In that event you
have, I think, the very awlward paradox that an Organisation which
has been set up in part for the purpose of reducing tariffs and
V.
-2- V -3- E/PC/T/A/PV/13
eliminating trade discrimination becomes, in fact, an instrument
for keeping up tariffs and creating new discriminations, and I think
that when a situation like that arises Members will be forced out
of the Organisation; and Dr. Coombs has very wisely reminded us
that the withdrawal of Members from the Organisation will almost
certainly have a snowball effect.
Now, my purpose in underlining this dilemma is not to favour one
or the other of the possible courses of action. It is rather to
point out that if non-Members are numerous or commercially important,
then the Organisation faces a dilemma which is, in fact, insoluble
and must result in the Organisation being a failure. That, I think,
brings us to a point which is so obvious that we are inclined to lose
sight of it, and that is that either the Organisation achieves from
the very outset a certain degree of universality, or it is stillborn.
The issue is plainly between universality or nothing at all.
Now, several Delegates have suggested that we should leave the
question of how to deal with non-Members to the World Conference.
when we shall know the dimensions of the problem; and we are not, on
the whole, in favour of that course for the reason that it seems most
essential that we should not do anything which will result in this
Conference putting the problem out of sight and out of mind, because
it is upon the decisions and on the general course of this Conference
that the question of universality or not will depend.
We do not believe that a reasonable degree of universality is
unattainable, provided always that the Conference keeps in mind the
distinction. between the objectives and means of reaching those
obectives : There is plainly in the world today enough agreement
on the. basic objectives of the Charter to make universality possible,
but there is such diverzity--and I think a very healthy diversity--
of economic practice in the world at the pesent timie that an agreement
on means of reaching those ends is not possible; in other words, the
moment we start to spell out methods of reaching objectives we put
universality out of reach, and that is perhaps an obvious hard point
to face, but I think it should be faced. ER
-4-
E/PC/T/A/PV/13
After all, we are not the representative of seventeen
governments seeking to compose our differences here around the
Draft Charter. We are the representatives of seventeen government ts
trying to frame a Charter which will be acceptable to a world which
has a very large number of governments - more than are. represented
here. For that reason,. Mr. Chairman, we feel that this problem
should be kept before this Conference, and that the most desirable
course is the course suggested by Dr. Coombs, that the whole matter
should be referred, after discussion, to a Sub-Committee even though
that Sub-Committee will necessarily leave the major decision to be
taken by the World Conference.
Dr. A.B. SPEEKENBRINK (Netherlands): Mr. Chairman, I must
confess that I also have been very much impressed by what had been
said yesterday by several delegates, and in the last instance, by
the delegate of India. All that comes down to this, that we have
a very difficult problem before us as, at the moment, we do not
know all the aspects of this Article so as to be able to draft it
with a clear aim in view. I therefore, in principle, adhere to
the procedure envisaged in London, that we should leave the ultimate
settlement of this problem to the World Conference, but at the sama
time, I am not opposed to studying it further here. We are here
more or less between the devil and the deep blue sea. On the one
hand we want to make the ITO as strong as possible. As has been
pointed out by the delegate of New Zealand, when we are too soft about
notwanting people to enter the ITO we might have a definite loss of
attractiveness so that the number of non-members who simply would
something
want to wait till they receive/for nothing, might increase
(as we hope it will come)
especially when it comes/to this stage - that the membership of the ER
- 5- E/P C/T/A/PV/13
ITO will mean, to important numbers of countries, a real sacrifice
in the light of the national economic policy that they have
furthered up till -now, in the interest of the aims of the Charter.
On the other hand, if we are too rigid, we might make it impossible
for countries to enter into the ITO, and these countries certainly
must be able to take their position with the full knowledge of
facts, and by not aceepting a draft here they will already put
themselves in a rather difficult situation in view of the coming
World Conference.
Therefore, I also would favour a further study of this problem
and when we shall study it; I would then like to point out another
aspect of the case which was not mentioned so much yesterday. It
is that we must take care that the other nations will not misuse
the Most-Favoured-Nations clause so as to make the ITO impossible.
I think that also might be a real danger. We have had that
experience in the past in the more limited efforts in this field, one
of them was mentioned this morning by you, Mr. Chairman, and I think
that when we study this problem we must also take care of this
aspect. E/PC/T/A/PV.13
In view of this more general discussion, I do not think
it is the time to oriticise the Draft presented here,
especially if we are to have a special Sub-committee to study
it, so I would limit myself to these remarks. Thank you,
Mr. Chairman,
CHAIRMAN (Interpretation): Does anyone else wish to
speak on the subject?
The Delegate of Canada.
Mr. H.F.ANGUS (Canada): Mr. Chairman, Gentlemen,
I should like to say just a word or two about the views of
the Canadian Delegation on this point,
We are in general agreement with the position of the
United States and we are in great sympathy with the points of
view put forward by many of the other Members. we feel
that it is basic that, as the Delegate for Czechoslovakia
said, Members should not seek - and I think we should add,
should not accept - a privilegad position in the markets of a
non-Member, a position that would give them privileges which
did not extend to other Membar countries.
We realise that for a country to be a non-Membar is not
an international crime, it is not something that one can
discuss in torms of sanctions. The general principle is one
of equity, that those who share the advantage should also
share the burdens by which that advantage is procured, and we
feel that it would be a great pity if that principle were
not enshrined as a result of the discussions at this Meeting.
We hope that when the matter comes to the Drafting
Committee, if it does, it will be possible to work out a
compromise that will give effect to that whole principle
S
- 6 - 8 - 7 - E/PC/T/A/PV.13
without embarrassing unduly particular countries in the difficult
positions which have been explained by the Delegate for
Czechoslovakia, by the Delegate for India, and so forth -
without embarrassing them in their normal relations with
non-Member countries.
We were impressed by the argument advanced by the Delegate
for Australia, that we are dealing with an unknown situation,
that we do not know who will be Members and who will be non-
Members, that it would be premature to make strict or rigid
rules before we are able to understand the situation with
which we are dealing; but, in spite of that, we feel that
an indication of prinoiple, an indication of attitude and of
aim could very advantageously be given - perhaps a declaration
of principle, with great latitude left to the Organization
as to the time of its application and as to the means which
should be adopted to give effect to it. CHAIRMAN (Interpretation): The delegate of the United States.
MR. J. R EVANS (United States): Mr. Chairman, I simply want
to agree with those delegates who have proposed that the problem be
referred to a sub-committee for further consideration, but,
particularly in view of its importance and the difficulties
involved, we would suggest that this be a special ad hoo sub-
committee for the considertion of this problem, rather than a
sub-committee for the consideration of other Articles.
CHAIRMAN (Interpretation): The delegate of the United Kingdom,
MR. R. J. SHACKLE (United Kingdom): Mr. Chairman, I do not
think I have anything to add beyond saying that we are in favour
of setting up a special - and I stress the word special- sub-
committee to study this problem.
CHAIRMAN (Interpretation): The delegate of Brazil.
M. E.L. RODRIGUES (Brazil): Mr. Chairman, because I am in
full agreement with the statement made by the delegate from
Australia, I fully support his views,
- CHAIRMAN (Interpretation): The delegate of China.
MR. C. H. CHEN (China): Mr. Chairman, the Chinese delegation
associates itself with the views expressed yesterday and today by
several delegations, and is in favour of having this delicate
question deferred for the consideration of the coming world
conference, or of referring it to a special sub-committee for
further examination.
So far as China is concerned, she has standing treaties with
some non-members, and we have to adhere to the obligations imposed
by the Charter on the one hand, and, at the same time, also to -.9-
J -9- E/PC/T/A/PV/13
observe the treaties obligations. Therefore, it requires some
time for us to study this problem, and we think it is better to
have it postponed and not to have any decision made right away.
CHAIRMAN (Interpretation): The delegate of France.
M. BARADUC (France) (Interpretation): Mr. Chairman, those
who have watched the discussion which has taken place about
Article 36 since yesterday afternoon must recognise that this is
certainly one of the most important problems with which we have to
deal in the Charter.
Some of our colleagues, in the course of this discussion,
have referred to the universality of the Charter. The French
delegation favors such universality, and feels that the Charter
shoud be extended as much as possible so as to cover the largest
possible number of members. G.
At repeated times in London and New York the French
Delegation have made declarations to that effect.
The question which now is before the Committee is to know
which States will be Members of the forthcoming International
Trade Urganisation, and it is obvious that it is impossible at
this stage to answer such a question.
Anyhow, the Charter should be drawn up in such a way as to
make it more interesting for a State to be a Member of the
Organisation than to remain outside of the scope of the Internation
-al Trade Organisation. At this stage we do not know whether
certain Great Powers will or will not be Members of the Internation
-al Trade Organisation. It seems difficult to draft the text of
Article 36, and if a Sub-Committee was set up to attempt to draft
such an Article I feel it is bound to fail.
On the other hend, my contention is that it might be a
mistake for us to leave Article 36 blank. In other words, if
some body was set up by us to deal with the problems raised by
Article 36, I feel that their duty and terms of reference should
be to draft a form of declaration which we could keep in the text
of the Charter to explain what our feelings are about this
problem and why we did not at this stage feel that we could. find
a final draft for Article 36.
Obviously at this time the problem is so complicated - there
are so many conflicting views - that if we attempted to draft
Article 36 itself our draft would be bound to be vague and
incomplete,
The French Delegation would to some extent favour certain
declarations made yesterday and certain suggestions, such, for
instance, as the suggestion of the Australian Delegation, to
adjourn the whole problem; but if on the other hand it is felt that
a Sub-Committee should be set up to deal with the matter, my
Contention is that the terms of reference of such Sub-Committee E/PC/T/h/PV. 13
should be to prepare a. declaration to be embodied, in the Charter.
CHAIRMAN: The Delegate of Czechoslovakia.
Mr. AUGENTHILER (Czechoslovakia): Mr. Chairman, I would
like to support the proposal presented by the United States Dele,,Zte
to take to a special Sub-Committee this problem for careful study
and report to the Commission.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. SHACKLE (United Kingdom): Mr. Chairman, in my submission
I think this special Sub-Committee need not necessarily be
expected to produce a draft Article.
It may be looked to to analyse the problem, and we could
leave it a free hand to make such suggestions as it may think
fit .
We may very well decide when we see the results to treat it
as purely a working paper. We may decide not to adopt it. That
all remains to be seen.
That is all I wish to say.
CHAIRMAN: The Delegate of the United States.
Mr. EVANS (United. States): I simply wait to agree with the
Delegate of the United Kingdom, Mr. Chairman, that the Sub-
Committee should have a free hand with any recommendation it
considers desirable, and that it should not be circumscribed.
CHAIRMAN: The Delegate of France.
Mr. BARADUC (France) (Interpretation): Taking into account
what has just been said by the Representative of the United
Kingdom, the French Delegation does not oppose the setting up of a
Sub-Committee,.
- 11
G. - 12 -
E/PC/T/A/PV. 13
CHAIRMAN: (Interpretation): This being the case, I take it
then that there is unanimous agreement in this Committee to set
up a special Sub-Committee to deal with the problems raised by
Article 36, and it is also decided. that this Sub-Committee should
be given in their terms ro reference full liberty to analyse
the problem and make any suggestions or recommendations they feel
fit to submit to us.
Agreed?
This being the case, I submit the following nominations for
Membership of the Sub-Committee:-
Representatives of the United States, United Kingdom,
Czechoslovakia, Brazil, France and: the Netherlands.
Any objection?
I shall now take .Article 38, but before entering, into
discussion of the article I shall briefly refer to Article 35.
We have already decided to refer the consideration of that
Article to a Sub-Committee. My suggestion is that the Sub-
Committee to deal with it might be the. one we have already set
up to consider Articles 14, 15, 24 and 34.
We shall now take Article 38, and on Article 38, as you will
find out from Document W/175 on page 13, a certain number of
Amendments have been submitted. Some deal with matters of substance,
others matters of form.
As to the first Amendaments, those Which go into the substance
of the Article, the first I believe we should consider is an
Amendment submitted by the Chilean Delegation, which proposes to
insert after the words "the formation of a Customs Union", the
following sentence:-
".and its initial transitional stage, which begins with the
entry into force of an agreement. establishing the effective
commencement of a Customs Union and characterized by a total
elimination of customs duLeLL Ql., cc.Lta.n products originating in
the contracting countries".
I call upon the Delegate of Chile. E/PC/T/A/PV.13
M. F. GARCIA-OLDINI (while) (interpretation): Mr. Chairman,
during the debate before the Commission the idea was brought up,
it seemed to us, that Customs Unions could be the final goal of
the different ways indicated in this Charter--that Customs Unions
were the goal to which all these ways ought to load.
Now, what is a Customs Union? We have a definition here in
this Article, but it seems that a void has been left regarding the
intermediate period, that is, between the period when Customs Unions
are non-existent and the period when Customs Unions exist, and we
think that this gap must be filled. In fact, there is more than
one way in which to fill that gap, and more than one way which
could lead us to the goal we are trying to reach, and in our
amendment we have tried to indicate one of these ways.
The definition of a Customs Union could be the elimination
the total or partial elimination--of Customs duty, and, in fact,
for that intermediate period the definition could be the abolition
of certain categories of customs duties. That is all that we
wanted to say in our amendment.
CHAIRMAN: Does anyone wish to speak on the Chilean amendment?
H.E.M. Erik COLBAN (Norway) (Interpretation): I would like
to ask the Delegate for Chile whether his proposal, as we see it
in Document W.175, would not imply a system of mutual preference
for an indeterminate period, which would be contrary to the
principles of Article 14. I am merely asking the question, and I
want the meaning- of the proposal clarified.
CHAIRMAN: The Delegate of Ghile.
M. F. GARCIA-OLDINI (Chile) (Interpretation): Mr. Chairman,
of course, this is a question of interpretation, and we are dealing
V
13 - V
- 14 -
with Customs Unions. What we wanted to do was to open a road
which could lead us to Customs Unions, which is our goal, and
it may be that this means which we are proposing here can be
interpreted as a preferential system, and maybe not. It is,
as I have stated, a question of interpretation; but our aim is
to open a road which will lead us finally to the Customs Union,
which is, in our view, the ideal which ought to be pursued by
everyone. Now, it is impossible to ask States not to do anything
to open the road to Customs Unions and, as I have stated previously,
we have to bridge a gap between something which is non-existent
at present and the Customs Union, which is the final goal. Our
amendment is only one way of bridging that gap.
CHAIRMAN: The Delegate of the Netherlands.
Dr. A.B. SPEEKENBRINK (Netherlands): When we studied the
problem in London, we had in mind the different categories.
One was the formation of the Customs Union, meaning by that
that the second stage and the third stage of the Customs Union
would take a lot of time; that is to say, it is not the
elimination of the duties between the two countries, but to
brig into line all the other stipulations of the Customs Union.
In the end, we come to. the Customs Union as we now have between
the Netherlands, Belgium and Luxembourg. For that reason, in
paragraph 5 of Article 38 we stated clearly what we meant by
Customs Union: "so that all tariffs and other restrictive
regulations of commerce as between the territories of members of
the union are substantially eliminated and substantially the
same tariffs "and so on
The other part we did not discuss very deeply, but we had
in mind that the initial steps of the Customs.Union, as meant
E/PC/T/A/PV.13 V
- 15 -
by the Delegate of Chilo, might be covered by paragraph 4 of
the new preferential arrangements that we have in exceptional
circumstances. I might say that the formation of the Customs
Union is not a thing that you can decide very lightly--it
involves very important points of principle and takes much time.
Certainly you have to begin with a very clear conviction that
you want to have that Customs Union, and I think the problem
that faces us here is whether Paragraph 4 does not cover
sufficiently the situation which the Delegate of Chile has in
mind, and whether it would not be preferable not to weaken the
clause with regard to Customs Unions, as in paragraph 5 and
.paragraph 2.
E/PC/T/A/PV. 13 ER
- 16 - E/PC/T/A/PV/13
Dr. H. C. COOMBS (Australia): Mr. Chairman, I think perhaps it
is as well if I report to the Commission that a question of new
preferential arrangements of the kind contemplated in paragraph 4 of
Article 38 has been receiving some attention in the Sub-Committee.
appointed to deal with Chapter IV. It has been pointed out at the
LOndon Conferenoe that it was contemplated. that new preferential
arrangements might, in certain circumstances, be justifiable for the
purpose of stimulating industrial develo ment, particularly in small
economies where the development would otherwise be handicapped by
the lack of market, and in that consideration it has been suggested
that perhaps the best way to deal with that problem would be by the
inclusion of certain considerations relating to industrial development
in Chapter IV, which would be applicable to the appropriate parts of
the Charter which the organization would apply in exercising its
functions. It has been suggested that perhaps the best place where
those functions should be located, would be in Article 14, to which
this particular form of arrangement is itself an exception.
Now I must say, Mrr. Chairman, that the discussion that was
carried on in the Sub-Committee on Chapter IV, has become exceedingly
involved, and it is impossible at this stage to forecast what the
nature of that inclusion would be. I only mention this point so
that members will be aware that the consideration of Aticle 38,
paragraph 4, will inevitably be affected by the work of that other
Sub-Committee, and I suggest therefore that you might advise any
Sub-Committee to which this matter was referred to make that contact
with the Sub-Committee in order that they may not produce conflicting
statements.
The second point I wish to refer to is one to which my attention
was drawn - that is the possibility of arrangements between countries
which may substantially be customs unions, but which do not amount to - 17 - E/PC/T/A./PV/13
an amalgamation of their customs territory. It was suggested, for
instance, that an arrangement might be possible which would, in
effect, be a free trade agreement and a completely free trade might
exist between two or more customs territories which would have, as far
as I can see without giving the matter detailed consideration,
substantially the same effect as a customs union, although the customs
territories themselves remain separate. I merely mention that as a
matter to which any Sub-Commiittee might give attention, particularly
in relation to the definition of customs unions which would be towards
the end of paragraph 5 in this article. The definition there requires
the substitution of a single customs territory for two or more customs
territories,and I have a shade of doubt as to whether that is really
fundamental to the essential concept which it seems to me is the
substantial elimination of tariff between the areas.
The third point I wish to refer to is the one to which I referred
in the discussion in London. It is the peculiar arrangement which
exists between the Commonwealth of Australia and certain of its
dependent territories. Those arrangements amount briefly to this.
The territories have independent tariffs which are applicable
uniformly to goods whatever their origin, including goods of
Australian origin. The tariffs are essentially revenue tariffs and
have little, if any, protective incidence, and as I say they apply
equally to the goods from Australia as from any other territory. On
the other hand, the main products of these territories are admitted
into Australia duty free, that is, they are not subject to the -
protective incidence of the Australian tariffs. This arrangement
clearly is no commercial advantage to the residents of Australia, on
the contrary, it is an arrangement which is at their expense but we
attach considerable importance to it since we believe it is a valuable
stimulus to the development of these backward territories, and we - 18 -
E/PC/T/A/PV/13
would regret very much any provision of the Charter preventing its
continuance. As I understand it, paragraph 2 of Article 14 would
save the existing arrangements subject to negotiation,which of
course we are all at the time prepared to participate in, but it
would apparently preclude the extension of the free entry into
Australia of the products of this area if that free entry is not at
present provided for. We can conceive the possibility that, as the
development of these territories proceeds a little further,we would
wish to extend the same sort of privileges perhaps to new products.
Our only possibility of doing that at present would be to appeal to
the organization under Article 38 (4), for approval of such action,
and on the whole we would be content, I think, to accept that
arrangement, but I felt it Necessary to refer to it here so that the
Sub-Committee, when it comes to consider this matter, can give the
pointits attention from the point of view of the assistance that
such an arrangement can offer to a very backward territory to ensure
that the Provisions at present made in the Charter are adequate to
allow of their continuance. S . 19 E/PC/T/A/PV.13
CHARIMAN: M. B-.radc,
M. BRiDUC (France) (Interpretation): Mr. Chairman, it
was yery useful.for Dr. Coombs to remind us of the difficulty
in drafting this amendment without knowing what would be the
draft adopted for Chapter IV, and I Which we should not come
to a complete conclusion in this debate.
The French Delegation has said how difficult it was to
discuss Article 38 as long as the result of the work of the
Sub-committee. on Chapter IV is not known. For this reason,
the French Delegation would like to propose that the debate
be postponed until the beginning of next week, when the work
of the Sub-committee presided over by Dry Coombs will have
been concluded. In any case, the.French Delegation could
not agree to discuss the matter at this Stage
CHAIRMAN: The Delegate for the Lebanon.
Mr. Goo.r.e HAKIM (Lebanon): Mr. Chairman, in New
York the Lebanese Delegation supported the Chilean Delegation's
amendment to sub-paragraph (b) of Paragraph 2 of article 38.
However, we have recently presented a Lubanese amendment to
Paragraph 2, in Document E/PC/T/W/164, which proposes to add
..a new sub-paragraph (u) to Paragraph 2 of article 38. The
substance of our amendment would satisfy us as a substitute
for the Chilean amendment
Mr. Chairman, whenever you think I -.ay defend this
amendment in Document W/184, I shall be ready to. do so,
CHAIRMAN: Mr. Oldini... - 20 -
M. F; RG.RIA-UD~II 1(Chile) (Interpretation); Mr. Chairman,
it is obvious that the question we are at present studying is not
new, but it is also obvious that it is a very complicated one.
Already in London the idea had been accepted, and in the revised
text of the London conference we find "an appropriate exception to
these provisions should be made for advantages accorded to
facilitate frontier traffic, for advantages incident to the
formation of a customs union and for new preferential arrangements
approved by the Organization under paragraph (2) Article 66 and that
suitable definitions of customs territories and customs unions
should be included in Chapter VI".
What we are trying to do is not to leave these various
measures as such expressed vaguely, but we are trying to explain
what some of these measures right be, and it has been said that
paragraph 4 of article 38 could satisfy us, but there is much we
would like to say against this paragraph 4, but we think it is
better for us to say this in the sub-committee mentioned by the
delegate for .australia. It is true also that the question we are
discussing is closely connected with those questions studied by the
sub-committee, and therefore we should be prepared to postpone
discussion until such time as a sub-committee is agreed on this
question. Then we should be able to see more clearly the whole
problem,
CHAIRMAN (Interpretation): The delegate of Belgium.
M. DESCLEE (Belgium) (Interpretation): Mr.Chairman,
there would be another suggestion, and that is not to close the
discussion of Article 38 before a decision on Article 14 has been
made. This should not prevent, of course, other delegations making
.observations.
J - 91 -
A ^ ~ ~ ~~~~~ E/P C/ T/4/PV/13
CHILdii (InterprEtation): The dele6_te of the United States.
lR. J. .W. _42 (United States): Dr. Chairman, it appears
toeme tht there is no need for us to re-covtr the ground which is
-bcing covered in the sub-doinittoe on Lrtiole 14. I should
think that 58 couldbe considered on its mGrits as an
eroledealing with ousns unins as Qofineo. in the present
wording of themiaragraph, leaving to the. sub-cormittee on article 12
ehe question of what, if any, prf;crcntial systems might be
permitted.
Iy suggestion would bo that it should consider this present
Article in terms of its original intent, that is customs unions
as they weo understood by tha London committee.
CMgaSMAI (Interpretation): The dele6.te for the United
Kingdoms
MR. R.J,MSLCKi (United ndom): lr. Chairman, I would
like to sgyaword in support of the ssg&,etion by the United Statee
delegatm. It has aaways seemed to ae to be very arguable whether
paragraph 4 of .rticle 38 was r ally in its right place herek at all.
I think that tsi proposition that It be conaLdered in Chapter IV
may result in its being transferred elsewhere in the Charter. I
should have thought it a very desirable arrangement that we should
leave the remainder of armicle 38, as it affects custoas unions
proper.
CHAIRML3 (Interpretation): We are faced with various
proposals which are somewhat contradictory. I believe that in
Artiole 38 there are two sets of different things - first of all,
the question of customs unions, and secondly the question of
preferential arrangements, and in looking at the text of Article 38 -22
; - 22 - - E/PC/T/A/PV/13
one.may wonder whether paragraph 4 is in its right-.place. in that
article. But I think it is difficult, on the other hand, to deal
in substance with the question of customs unions without discussing
in some way and at some time the question of-preferential
arrangements. I will take to illustrate this. the example that the
Chilean delegate used, that .is to say, .one might envisage the
conclusion of a customs union step by step. It is not necessary
to eliminate at the beginning the whole of the customs duties
between two or several countries, but it is possible that during
the transitional period it will be necessary to conclude some
sort of preferential arrangements. G. 23 _ E/PC/T/A/PV/13
at the same time it seems to me it would. be difficult to
postpone the discussion of Article 38 until such time as we know
the result of the Report on the Sub-committee on Article 14; but
it is difficult to separate the question of Customs Union from the
question of preferential .arrangements, and. I wonder whether the
best method would not be to refer Article 38 for examination to
the Sub-Committee which is dealing with Article 14, which could
in turn make some proposal to us on Article 38 as well.
CHAIRMAN: -The Delegate of the Lebanon.
Mr. MOUSSA MOBARAK (Lebanon) (Interpretation): When our
Amendment was discussed together with the amendments by the
Chilean Delegation in the Sub-Committee which has dealt with
Article 14 of the Draft Charter, a very important discussion took
place which lasted for three- days, and some Delegates talking part
in this debate told. us that care would. be taken of our problem
aind that we would find a proper solution to our difficulties when
we came to consider article 38.
Now that this Committee is called. upon to consider article 38
we find Article 14 is still being considered by the Sub-Committee.
Consequently I approve wholeheartedly the suggestion of the
French Delegate to refer this Article to the Sub-Committee which
is dealing with Article 34 . It would appease those who want to
introduce the idea of preferential arrangements in Article 14
to see the two problems discussed together, and. whether it is by
virtue of an Amendment in article 14 or an adjustment of
Article 38 that our problem is covered, we would be appeased and.
satisfied.
CHAIRMAN (Interpretation): The Chairman points out that his 24 _-/ E/PC/T/A/PV.13
suggestion was to refer Article 38 to the Sub-Committee
which is already dealing with Article 14 for joint consideration
by that Sub-Committee of both Articles.
I would. be all the more inclined to refer Article 38 to the
Sub-Committee dealing with Article 14, as this Sub-Committee has
an excellent reputation, and. more particularly a remarkable
Chairman.
The Delegate of Chile.
Mr. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
I wish to raise a small point, but one which may be important.
Since the Amendments to Article 13 have' a bearing on the
question of preferential arrangements, the Sub-Committee dealing
with Chapter IV has devoted a large part of its time to this
complicated. question of preferential tariffs, and. I think,
therefore, that Article 38 should. be referred also to that Sub-
Committee on Chapter IV. This Sub-Committee has vast experience
of the question, it has dealt with it in great detail, and. I
think it could find a solution of this Article too. Therefore,
I suggest Article 38 be referred not to the Sub-Committee on
Article 14, but to the Sub-Committee on Chapter IV. -
I would like to add. that this Sub-Committee on Chapter IV
is equally admirably presided. over by the Delegate for Australia.
CHAIRMAN (Interpretation): I would like to point out that
Dr. Coombs himself dealt with the subject, and drew our
attention to the fact that the Sub-Committee which will have to
deal with Article 38 would. have to inspire itself with the work
already done on Chapter IV by the Sub-Committee on that Chapter;
and since you have yourself pointed out that the two Sub-Committees
G
-m / n hn~ / /nx I- I have the same Chairman, there will be a sort of personal union
which will certainly facilitate the work. I think, therefore, we
might without any danger refer this Particle 38 to the Sub-
Committee on Article 14 which in its turn will be informed of
the work done in the Sub-Committea on Chapter IV.
CHAIRMAN: The Delegate of France.
Mr. BARADUC (France) (Interpretation): without departing
from my own point of view, Mr. Chairman, I wish to state that
I agree with you, and consequently that the consultation on
Article 38 should be referred to the Sub-Committee which
considered. articles 13 and 14. It would, however, seem logical
to refer this problem to the Sub-Committee dealing- with
Chapter IV.
CHAIRMAN (Interpretation) In both cases Mr. Coombs would
be the victim. I would consequently went to ask him which of
the two Sub-Committees should consider this article.
Mr. COOMBS (Australia): The Committe e on Chapter IV is
concerned only with certain aspects of the problem of preferen-
tial arrangements. It has been argued there that new preferential
arrangements are a possible means of promoting industrial
development in certain circumstances, and the author is therefore
concerned to ensure that adequate provision is made for such
arrangements for that purpose. but it is clear from what was said
that new preferential arrangements may be justified by consider-
ations other then industrial development. Indeed it may be
more often for reasons other than for such reasons.
Consequently, when the work of Committee IV in relation
to such arrangements is completed and they are satisfied that
appropriate provision has been made-for new preferential arrange-
ments for purposes Justified by industrial development considera-
ations, it will still be necessary for an examination of the issue
to see whether other aspects of the problem have been adequately
considered. _ 26
At that phase of the consideration, it seems to me proper
that the matter should be considered by the committee dealing with
Article 14. Therefore, I suggest the proper thing is to refer
this Article to the committee dealing with Article 14. There is
no need to refer it to the other people--they are. considering it
already. The final consideration of Article 38 should properly
be carried out by the people who are concerned with Article 14,
since it is essentially an exception to Article 14.
CHAIRMAN: (Interpretation): May I take it that the Delegate
of Chile does not object to this matter being referred to the
sub-Committee competent to deal with Article 14?
M. F. GARCIA-OLIDINI (Chile) (Interpretation): No objection,
Mr. Chairman.
CHAIRMAN (Interpretation): In those circumstances, we shall
refer Article 38 to the sub-Committee dealing with Article 14
and the following Articles. It might, however, be necessary to
ask this sub-Committee to recruit new members, in view of a new
question having arisen today.
M. DESCLEE (Belgium):(Interpretation): In connection with
what you have just said, Mr. Chairman, it would be useful to add
a representative of the French Delegation to the sub-Committee
discussing Article 38 in conjunction with Article 14.
CHAIRMAN: (Interpretation): According to the procedure,
it pertains to the sub-Committee itself to choose the member it
wishes to add to its membership.
In these circumstances, we can adjourn the meeting until
Thursday 19th June, when we shall study Articles 31, 32 and 33.
(The Meeting adjourned at 4.25 p.m.)
E/PC/T/A/PV.13.
V. |
GATT Library | vw551jz6354 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Thirteenth Meeting of the Tariff Agreement Committee held on Monday, 8 September 1947 at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, September 8, 1947 | United Nations. Economic and Social Council | 08/09/1947 | official documents | E/PC/T/TAC/PV/13 and E/PC/T/TAC/PV/12-14 | https://exhibits.stanford.edu/gatt/catalog/vw551jz6354 | vw551jz6354_90260044.xml | GATT_155 | 13,016 | 79,933 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/TAC/PV/13
8 September 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
THIRTEENTH MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON MONDAY, 8 SEPTEMBER 1947 at 2.30 P.M. IN THE
PALAIS DES NATIONS, GENEVA.
Hon. L.D. WILGRESS (Chairman) (Canada)
Delegate 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. P.
CHAIRMaN: The Meeting is called to order.
When we broke up on Saturday morning we had been considering
Article XXIV and there had already be en a considerable amount of
discussion on the first paragraph of the United States proposal
given in document E/PC/T/W/316. I therefore think that to day we
should begin again with Article XXIV and endeavour to complete
consideration of that Article, and then if there is still time we
could go back to the Article dealing with Quantitative Restrictions
which we had announced we would take up on Monday.
The first point I would like to take up with the Committee is
the United States proposal to amend the title to read: "Signature
and Entry into Force".
Are there any objections to this change of title?
Approved.
During our consideration of the first paragraph of the United
States proposel the Australian Delegation suggested the deletion
of the first sentence. The Delegation of the United States
indicated that they had no strong objection to the deletion of the
first sentence and therefore, if this sentence were doleted, the
paragraph would read: "The present Agreement shall be open for
signature until....' etc.
Are there any objections to the proposal of the Australian
Delegation?
Is the Australian proposal to delete the first sentence
approved?
Approved.
The next proposal which we had at our meeting on Saturday was
the proposal of the Norwegian Delegation.
Dr. H.C. COOMBS (Australia): Mr. Chairman, I think we also
suggested the omission of the last clause.
2 E/PC/T/TAC/PV/13
CHAIRMAN: Yes, I am coming to that later. The next
proposal we had in connection with that first paragraph was the
proposal of the Norwegian Delegation to replace the words "until
30 June 1948" by some words indicating "four months after the
conclusion of the Havana Conference". Are there any objections
to this proposal?
Mr. Winthrop BROWN (United States): Mr. Chairman, I wonder
if it would not be as well to wait until the Delegate of Norway is
present?
CHAIRMAN: We shall then take up the last suggestion which was
given on Saturday with regard to this paragraph: that was to
delete the words at the end "which shall not have signed this
Agreement on this day". This was proposed by the Australian
Delegation and agreed to by the United States Delegation. Are
there any objections to the suppression of these words?
There being no objections, we can take it that the Committee
agrees with the suppression of these words.
We can now take up the suggestion of the Norwegian Delegation
to change the words "until June 30 1948" to words which would
signify that the closing date for signature would be a period four
months after the closing of the Havana Conference. The United
States Delegation at our Saturday meeting indicated that they did
not agree with this suggestion, so I think we should now consider
this particular point.
The Delegate of Norway.
Mr. J. MELANER (Norway): Mr. Chairman, as I said the last
time we discussed this point, we do not have any strong views on
this particular date. I agree also that there might be some
advantage in taking a fixed date instead of just a reference to the
P. P.
end of the Havana Conference, and, in view of the other points of
view which have been expressed here, we do not want to press the
point, and we withdraw our suggestion.
CHAIRMAN: I thank the Norwegian Delegation for withdrawing
their suggestion.
Are there any other comments with regard to the first
paragraph proposed by the United States Delegation in document
W/316?
Paragraph 1 is approved, with the amendments we have agreed to
this afternoon.
We now return to page 55 of document E/PC/T/189. The first
paragraph of the Article, which now becomes paragraph 2, was
approved at our Saturday meeting. The second paragraph was also
approved, subject to further consideration of the word "government"
after we have considered the Preamble.
4 V 5 E/PC/T/TAC/PV/13
CHAIRMAN: We then turn to paragraph 3(a) whicn now becomes
paragraph 4(a) and there the same reservation with regard to the
word "Government" will apply.
The Czechoslovakian Delegation (on page 6 of Document W/312)
propose the deletion of the words "and which is not self-governing
in matters provided for by this Agreement". I think that must
apply to paragraph 3(b). Are there any other comments on
paragraph 3(a)?
Dr. Z. AUGENTHALER (CzechosIovakia): Mr. Chairman, I had an
opportunity to get in touch with our authorities in Prague, and I
am pleased to inform the Preparatory Committee that we are ready
to accept, in the Preamble and also in the text, that the words
"the Governmants" should r: :L.in, on the uderstanding that, :
far as Czechoslovakia is concerned, it means actually the President
of the Republic: that the Agreement will bo signed on behalf of
Czechoslovakia, full powers being delivered by the President of the
Republic, and also that acceptance or ratification will be carried
out on behalf of the President of the Republic. I hope that in
this way the difficulties we have had will now disappear. I do
not know what the situation is in regard to other countries, but the
Legal Advisers found that this course could be followed by
Czechoslovakia.
Therefore, I would like to withdraw our amendment here
concerning self-governing territories, because we think the text
may stand as it is.
That is the firstt statement I wished to make. The second is
of secondary importance, and that is that we have several times
made reference to "sons of unborn mothers". Well, I find that in
the book of the Food and Agricultural Organization it is stated: 6
".... bien qu'elle soit la fille del'Organisation des Nations Unies,
assez sun gulierement elle est nee avant sa mere". It means that
we have not only sons of unborn mothers, but daughters of unborn
mothers.
Mr. R.J. SHACKLE (United Kingdom): I wish to thank
Dr. Augenthaler very sincerely for rescuing me from a position of
considerable embarrassment in which I had either to withstand
the sense of this Committee or else brand myself forever a heretic
with the Legal Advisers of the British Foreign Officel
M. ROYER (France) (Interpretation): Mr. Chairman, I would
like to state that the French Delegation has also consulted with
its legal experts in Paris, and therefore, we can accept the
original formula, because we are advised that according to the
French Constitutional laws, the word "Government" could be
construed so as to include the Head of State.
CHAIRMAN: I wish to add my congratulations to those which
have been accorded to Dr. Augenthaler for the settlement of this
difficulty. We can now, I think, accept paragraph 2 of the
original text of Article XXIV without reservations.
I would like to ask the French Delegate one question. I
take it that in view of what he has said he would wish the words
"French Republic" to remain in the Preamble rather than for it
to be changed to "French Union"?
M. ROYER (France) (Interpretation): Mr. Chairman, the
question you have just raised might be a very complicated
constitutional one, and therefore we think that it would be better
to leave "French Republic" as it appears in the original text.
(Further comments applicable only to the French text).
E/PC/T/TAC/PV/13
V 7
CHAIRMAN: Are there any other comments on paragraph 3(a)?
Dr. G.A. LAMSVELT (Netherlands): Mr. Chairman, I regret to
have to remind the Committee of certain reservations made by
Dr. Speekenbrink at the meeting of 20th August regarding overseas
territories of the Netherlands, on page 25 of the Verbatim Report.
CHARMAN: Due note will be taken of what the Netherlands
Delegate has just said. Are there any other comments on
paragraph 3(a)? Paragraph 3(b). We have some suggestions given
on page 6 of Document W/312. The United Kingdom Delegation
suggests the deletion of the words "undertake the obligations"
and the substitution of "apply the provisions". Are there any
objections to this proposal?
M. F. Garcia OLDINI (Chile) (Interpretation): Mr. Chairman,
the text states that "a government may at any time accept this
Agreement on behalf of any separate customs territory for which
it has international responsibility and which is self-governing
in matters provided for by this Agreement and which is willing to
undertake the obligations of this Agreement. The government of
such separate customs territory shall thereupon be entitled to
appoint a representative to the Committee". This means that such
a Government has the right to appoint separate representatives to
represent it within the Committee; but it seems to me that a
separate Customs territory which is autonomous in these matters
is not politically autonomous, and therefore does such a
Government exist? That is something which seems to me somewhat
contradictory, because I do not see how, if the Government does
not exist, it could appoint representatives.
CHAIRMAN: We shall be coming to that point in a moment,
V
E/PC/T/TAC/PV/13 because there are two proposals with regard to the last sentence.
I would first of all like to know if the Committee agrees with
the suggestion of the United Kingdom Delegation to substitute
the words "apply the provisions" for the words "undertake the
obligations" in the fifth line of this paragraph. If there are
no objections, we can take it that the United Kingdom Delegation's
suggestion is approved.
We can now deal with the point which has been raised by the
Delegate of Chile, and Members of the Committee will note that
the Czechoslovak Delegation proposes the deletion of the second
sentence of this sub-paragraph.
Mr. R.J. SEACKLE (United Kingdom): The situation which
this paragraph is intended to cover may be rather peculiar. I
do not think it is necessarily exclusively peculiar to the British
Colonial Empire, but certainly cases do occur there where there
are territories which do not have full international responsibility
for foreign affairs, but which nevertheless are self-governing in
all external commercial matters. They have Governments which
have a limited jurisdiction, and that limited jurisdiction does
cover external commercial affairs. Now, it is evident, I think,
that for the purposes of this Agreement, that jurisdiction over
external commercial affairs is sufficient to allow the Governments
of those territories - they are in fact Governments - to be
Members or Contracting Parties to the Agreement. That is the
position in our case, and we wish to suggest that that be
position at any rate as regards those autonomous territories which
have been represented here at Geneva and which have negotiated
on tariffs.
CHAIRMAN: The representative of Burma.
V
E/PC/T/TAC/PV/13 V E/PC/T/TAC/PV/13
9
U NYUN (Burma): Mr. Chairman, I am very grateful to you
and the Members of the Committee for granting me permission to
state the case of independent customs territories before this
meeting. What I am going to say is not motivated by the interests
of Burma exclusively, for as you are aware, Burma is now in fact
an independent country, and she is merely awaiting legal
recognition of her independent status before the end of the
present year. I am only motivated by a desire to see that equity
and fair play is given to the so-called self-governing customs
territories.
I find, Mr. Chairman, that despite the best efforts made by
the Delegations gathered in Geneva to achieve a large measure of
agreement by consultation and compromise to cover the special
needs of various countries which have a share in international
trade, autonomous customs territories have been placed in an
anomalous position in regard to the acceptance and signing of the
Final Act, the Protocols and the General Agreement. This seems to
me to be due to lack of appreciation of the fact that these
countries are fully independent in all matters relating to the
Charter. The Burmese Government has full authority to frame its
own tariff and commercial policy and Burma can enter into Trade
Agreement or tariff negotiations with any foreign country freely
and independently. The Tariff Negotiating Teams of the various
delegations gathered in Geneva will beer strong testimony to the
fact that all tariff negotiations have been conducted by Burma
freely, independently and of her own accord. All tariff
negotiations were conducted direct by Burma and not through the
U.K. and the latter has no say whatsoever in the negotiations
conducted hy Burma. So far, Burma has already concluded tariff
negotiations with Australia, Benelux, C hina, Czechoslovakia,
Lebanon-Syria, South Africa and U.S.A. and she expects to be able
to conclude tariff negotiations with Norway and France in the near
future. J.
10 I -/ -
Under present arrangements the Schedule of Tariff Concessions
by Burma which embodies the result of the tariff negotiations
conducted by Burma in Geneva will form an annexure to the General
Agreement in common with the tariff schedules of other countries.
The anomalous position therefore arise, Mr. Chairman, under which
Burma, though a contracting party rwgarding the negotiations, mill
not be it a position to sign the General Agreement in her own right.
In other words the tariff concessions offered by Burma to other
countries will be attached to the General Agreement but there will
be no signaturepaf the actual contracting > rty in the General
Agreement undertaking to give effect to the various rates mentioned
in the tariff schedule.
It is proposed in paragraph 3(b) of Article XXIV of the General,
Agreement that a Government may accept the Agreement on behalf of any
separate customs territory for which it has international responsibility
aid which is self-governing In matters provided for by the Agreement
and which is willing to undertake the obligations of the Agreement.
In view of the fact that all tariff negotiations are conducted direct
by thes autonomous customs territories as already stated by me, there
sesms to b. no reason wh: taebe countries should not be given an
opportunity to sign the General Agreement in their own right. It
seems unnecessary and anomalous that the United Kingdom which has
nothing to do with the tariff negotiations conducted by Burma should
come into the-picture only at the stage of signing of the Agreement.
Such a procedure will have the effect of bestowing upon the
metropolitan territory more authority and power over autonomous
customs territories than it ever possesses in actual practice. The
seriousness of the implications arising out of such an artificial
procedure will be apparent when it is taken into consideration the fact
E/PC/T/T-C/PV/13 that the United Kingdom will itself have to negotiate separately and
on equal terms with Burma for tariff concessions. We will then have
an anomalous position whereby the receiver, and not the giver, of
concessions will be signing the concessions to be received by it as
authentic offers.
The position will become clearer, Mr. Chairman, if we realise
that the General Agreement is primarily a tariff agreement, the
general provisions serving only as safeguards for the effective
application of tariff concessions. The proper and practical criterion
is not who is the metropolitan territory in charge of Burma but
where lies the power and authority competent to give effect to the
various obligations laid down in the General Agreement. That power,
Mr. Chairman, undoubtedly lies in the hands of the Burmese Government
and not in the hands of the United Kingdom. This position has been
duly recognised in Article XXIV 3(b) of the General Agreement by the
inclusion of the words "Any separate customs territory ..... which is
willing to undertake the obligations of this Agreement." I submit,
Mr. Chairman, that, having recognised that autonomous customs territonies
can have wills of their own, the Article should take a more practical
line of action and make suitable provision to enable these countries
to sign the General Agreement by themselves and on their own behalf.
By allowing these countries to sign the General Agreement on their
own behalf, responsibility for carrying out the various obligations
of the Agreement will be placed squarely on the shoulders of these
countries and this straightforward procedure will do away with
unnecessary complications later of such customs territories refusing
to carry out the obligations of the Agreement on the ground thaty they
were not parties to the actual contract. In this connection I am proud
to be able to say that Burma has throughout her international commercial
E/PC/T/TAC/PV/13
J. 12
career scrupulously respected and complied with all international
conventions regulating trade and commerce. For instance, during the
Sino-Japanese war when all the sea-ports of China were closed, we
kept the Burma Road open and we allowed free transit of goods through
Burma to China in compliance with the Barcelona Convention at great
risk and serious cost to ourselves. I am mentioning this to show that
undertakings of international obligations are not always in favour
of the country accepting the obligations. Very often such under-
takings have serious effects on the economy of individual countries.
Yet, in spite of this, we assure you that we in Burma are prepared to
place our own interests in the background in co-operating with other
countries in framing a code of conduct in the sphere of international
commerce. I would take this opportunity to mention that, should
Burma decide to accept the General Agreement, she would be fully
prepared to apply it provisionally with effect from the date of
public announcement of the General Agreement. We find it difficult
to understand, Mr. Chairman, that an international body whose avowed
object is to put down old trade barriers and to build a world
organization for equity and fair play irrespective of divergent ideals
of different economic systems of the world should try to put
difficulties and formalities in the way of countries with a substantial
share in international trade who are doing their best to pull their
weight and who merely ask to be given due recognition and status so
that they may with self-respect and without loss of face continue to
serve the Organization.
Other international bodies such as the Food and Agricultural
Organization which is now having a conference in Geneva have shown
sufficient foresight and breadth of vision and practical thinking by
admitting Burma as a full Member of the Food and Agricultural
E/PC/T/TAC/PV/13
J. J.
Organization by a unanimous vote. Will the Preparatory Committee
of the International Trade Organization, which is going to be the
sister Organization to the Food and Agricultural Organization, allow
themselves to be influenced by groove thinking and lag behind the
times and still insist on putting anachronistic formalities in the
way of young countries with old culture and civilisation, who are
eagerly awaiting to be given an opportunity to co-operate in your
worthy task? I strongly submit for the sympathetic consideration
of this Committee that provision should be made to enable Burma to
sign not only the General Agreement but also the Final act and all
the Protocols in her own right in recognition of her status as a
fully independent and qualified contracting party in the tariff
negotiations. Unless this is done, Mr. Chairman, we would feel that
all efforts made by us in Geneva in co-operating to bring the tariff
negotiations to a successful conclusion have been one in vain.
For the same reasons stated by me, Mr. Chairman, I would strongly
oppose the amendment proposed by the Czechoslovak Delegation for the
deletion of the second sentence in paragraph 3(b) of Article XXIV of
the General Agreement. This amendment if accepted will deprive
countries in the position of Burma of the right to appoint a
representative to the Tariff Committee. For the same reasons also
I would oppose the proposal made by the Australian Delegation to
revise the second sentence of Article XXIV, paragraph 3(b) suggesting
the addition of the words "with the consent of the Committee and upon
such terms as the Committee may determine". This proposal, though
not so retrogressive as the proposal made by the Czechoslovak
Delegation, is a half-measure which would only result in giving the
unfortunate impression to the affected countries and to the outside
world that discriminatory treatment and inferior status are all that
E/PC/T/TAC/PV/13 J.
14
can be expected by small countries in the proposed International
Trade Organization however willing and ready they may be to
co-operate with the bigger countries for the common welfare of
humanity. It is very disheartening to think that Burma, which is
the biggest exporter of rice and teak in the world and whose share
of international trade is substantially more than some of the
countries who are Members of this Conference, should be subject to
such discriminatory treatment by an Organization whose avowed object
is not to perpetuate out-of-date political ideas but to promote the
expansion of international trade. I strongly submit, Mr. Chairman,
that in the name of practicality and fair play these autonomous
customs territories and Burma, who have shown themselves fully
competent to comply with the obligations of the General Agreement, should
be given the undisputed right to appoint their respresentatives to
the Tariff Committee. Then, only, will the Tariff Committee be given
an opportunity to hear the views of these countries and be able to
put up recommendations which will be fair to big and small countries
alike, and which will be worthy of the name of a world-wide
Organization which the proposed International Trade Organization
purports to be. I would, with these remarks, strongly appeal to
you, Mr. Chairman, and to the delegates gathered at this table to
consider the claims of countries, in the position of Burma,
sympathetically and fairly and to make suitable provisions in the
relevant documents to enable these countries to sign the Final Act,
all the Protocols and the General Agreement on their own behalf, and
to enable them to appoint their own representatives to the Tariff
Committee.
If my suggestion is accepted, it will be necessary to provide
for the inclusion of Burma in the Preamble of the General Agreement
and all instruments relating to the Agreement, and it will also be
necessary to make suitable amendment to paragraphs 3(b) of Article
XXIV of the General Agreement. Thank you.
E/PC/T/TAC/PV/13 S 15.
E/PC/T/TAC/PV/13
CHAIRMAN: The Delegate of Czechoslovakia.
H. E. Mr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman,
I have not much to say. When we proposed the deletion of this
paragraph and other paragraphs of the Charter and the Tariff
Agreement, and when we proposed the deletion of the respective
words, it was not, as I said before, because of lack of sympathy
on our side with those young territories, many of which are
probably older than we are. We welcome them in our midst.
We had two considerations in view. The first was a surely
legal consideration, from the point of view of international Law,
and we were aware of one fact; that you must not only declare the
principles of International Law yourself, but they must be
recognized by others. I think there should be a provision to
cover cases of this kind.
I should state immediately that we have no intention of not
recognizing the participation of Burma, Ceylon, and Southern
Rhodesia, but, as a general principle, I am rather afraid of the
fact, or the possibility, that some country may at any moment
declare that some territory is self-governing, and, by the pure
fact of this declaration, the country in question would become a
Member of some organizations and be party to some agreements.
On the other hand, since we have withdrawn our reservation
with regard to the word "Governments" in the whole Charter, we
see no difficulty if the last sentence stands.
I would suggest only one small addition; that is, we should
say "Such separate customs territory shall thereupon be entitled,
with the consent of the other parties, to appoint a representative
to the Committee." I hope that will satisfy our colleague
from Burma. S
We thought, when we made this proposal, that it was on the
lines of the views of the United Nations Organization,
especially when we see the latest decision of the Economic and
Social Council. As you know, we were not in favour of the
decision that the countries invited to the Havana Conference
should be deprived of their right to vote, but the Economic
and Social Council decided so. In the light of that decision,
we thought it should appear here somehow, but, as I said before,
I do not want to insist on our amendment. I would only suggest
that a few words be added.
I would like to say immediately that we agree with the
participation of Burma, Ceylon and Southern Rhodesia, and I
hope our Burmese colleague will not consider us reactionary. We
are considered to be Red; we are considered to be behind the Iron
Curtain, but I hope we are not considered to be reactionary.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. SHACKLE (United Kingdom): Mr. Chairman, I should like
to say that I entirely and warmly support the request which the
representative of Burma has so elequently made to the Committee.
The territories which are in the position he has described - that
is to say, territories which are autonomous in the matter of their
external commercial relations - are Burma, Southern Rhodesia and
Ceylon. The representative of Ceylon is not at present in
Geneva. H d he been here, I should have had the honour of
proposing to the Committee that he also should be represented
here today, and I have no doubt the Committee would kindly have
agreed as they have done in the case of Burma and Southern Rhodesia.
There is one explanation I should add, namely, that the
position of Burma, is special, in that she is about to enter upon
independent constitutional status.
E/PC/T/TAC/PV/13 E/PC/T/TAC/PV/13
The proposal which the representative of Burma has put to the
Committee would, as I see it, involve amendment of sub-paragraph
3(b) of this Article. As for the line on which it should be
amended, my suggestion would be that those territories autonomous
in the matter of their external commercial relations which have
here participated in the Geneva tariff negotiations on their own
account should be entitled to sign the Final Act and the General
Agreement and its Protocols and should be entitled unconditionally
to send representatives to Meetings of the Contracting Parties.
In the case of other autonomous territories which have not
participated in the present tariff negotiations, my feeling is
that the present scheme of the paragraph might stand, with the
result that the metropolitan governmentss would, when the time comes,
accept on their behalf when the territories concerned are willing
to apply the provisions of the Agreement. I may say that that is
at the moment a theoretical possibility and I have no practical
cases in mind.
which
As regards the suggestion Dr. Augenthaler made on the last
sentence of this paragraph, namely that the government of the
separate customs territories should be entitled to appoint
representatives to the Committee - or, I should say, should be
entitled to be represented at Meetings of the Contracting parties -
if the other contracting parties agree, to that I would say that I
would be willing to accept that suggestion as regards separate
customs territories which have not participated on their own account
in the Geneva tariff negotiations, but as regards those territories
which have participated, that is to say Burma, Southern Rhodesia
and Ceylon, I would suggest that the last sentence of the
paragraph should stand as it is.
If these proposals should be agreed to by the Committee - and
I hope they will be - there will be a job of drafting to be done and
P.
17 P.
for that purpose I would like to suggest that a special small Sub-
Committee might be appointed at the close of our discussion.
Thank you.
CHAIRMAN: The Delegate of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, the Republic of
Cuba welcomes the presence of Burma in this Preparatory Committee
and supports and seconds the idea that he be permitted. to sign
and'act as any other one of the nations here represented. That is
one thing. But the idea set forth in paragraph 3(b) of Article
XXIV that a territory of this kind, just because it would be
willing to apply the provisions of the Charter - which is something
very different from the wording we had before, because the text
proposed to the Preparatory Committee by this group stated "which
is willing to undertake the obligations" and to undertake the
obligations is quite a different thing from beings willing to apply
provisions - to say that that territory, just because it would be
willing to apply the provisions of this Agreement, shall be
entitled to appoint a representative and become a full member of
this group of signatories of the Treaty is a radical departure from
what was agreed upon by this very same Preparatory Committee when
we were discussing Article 68 of the Draft Charter relating to
membership of the International Trade Organization.
At that time this matter was discussed for weeks and weeks.
It even was discussed when the invitation for the Havana
Conference was being prepared. We had a unanimous idea in
relation to this matter and the Economic and Social Council, which
is the political body of this Organization, did not approve of what
we had done in the matter of limitation and set the rulings as to
how it should be conducted. So when this matter was finally
approved in the text to be submitted to the World Conference
18 19 E/PC/T/TAC/PV/13
the position of the different territories was clearly stated, and
it was done without any reservation whatsoever except for a slight
interpretation of the Delegation of South Africa. And on this
point Article 68 of the Charter says:
"any separate customs territory not invited to the United
Nations Conforence on Trade and Employment, proposed by the
competent Members having responsibility for the formal
conduct of its diplomatic relations and which is autonomous
in the conduct of its external commercial relations and of
the other matters provided for by this Charter and whose
shall be entitled,
admission is approved by the Conference ... . "/and so forth,
".....upon acceptance of the Charter....."
So, according to what we have set forth in the Charter of
what is going to be the International Trade Organization there are
to be three things:
first, that the responsible government take the lead in the
matter,
second, that the territory accept the Charter,
and third, that the admission of that territory be accepted
by the Conference.
According to what is stated here, only by setting forth that
the territory is willing to apply the provisions of the Agreement
it shall have ipso facto the right to appoint a representative
and the right to become practically a Member.
So I do not see why we should depart from what we have
established in the Charter for the International Trade Organization
and accept this new system, of which we really do not know where
it will take us.
So, without any prejudice to any of the possible rights of
all these territories, of which we do not know the number, nor P. E/PC/T/TAC/PV/13
their importance, we think it is very well, as I said at the
beginning, that we accept with great pleasure and honour the
co-operation of Burma in the full exercise of their rights, but I
Would oppose to settle that as a m le for any territory whatsoever.
CHAIRMAN: The representative of Burma.
U NYUN (Burma): Mr. Chairman, I thank the Delegate of
Czechoslovakia for the very kind gesture made by him in withdrawing
his proposal for the deletion of the second sentence of paragraph
3(b) of Article XXIV. I would, however, beg leave to request of
him, for the reasons already stated by me, to be so good as to
allow the present wording of this paragraph to stand as it is, in
so far as Burma is concerned.
CHAIRMAN: The Delegate of Australia.
Dr. H.C. COOMBS (Australia): Mr. Chairman, like Dr.
Augenthaler it was a new experience for me to be labelled as one
of the reactionaries, but I think the point is that, in the case of
the Governments of Burma, Southern Rhodesia and Ceylon, their
participation in the negotiations here and the fact of their
negotiating tariff reductions has demonstrated their right to
participating in this Agreement. Whether that will be true of all
Governments in this position I am not in a position to say and the
sole intention we had in putting forward our, suggested amendment
was, first of all to keep the phraseology as close as possible to
that which has been incorporated in the Charter itself, and secondly
to ensure that under this provision Governments of separate
Customs territories would not, so to speak, become members of the
Club without paying the subscription fee.
(Continued, after interpretation).
May I just add, Mr. Chairman, that the point we had in mind
would be fully covered by the suggestion which the United Kingdom
Delegation has made.
CHAIRMAN : The Delegate of France. 21
V E/PC/T/TAC/PV/13
M. ROYER (France) (Interpretation): Mr. Chairman, it seems to
me that there are two questions which are somewhat different. We
have the cases of Burma, Southern Rhodesia and Ceylon on the one
hand, and the case of the hypothetical territories which might ask
to join at a future date on the other hand.
It we consider the case of these hypothetical territories, I do
not think that the question arises here, because if such new
territories should ask to join the Agreement, they would have to do
so under the provisions of Article XXXI, which apply not only to
such territories but also to sovereign States. In that case, I
think that the distinction is perfectly clear, and they ought to join
under the provisions of Article XXXI and not under the provisions
of Article XXIV. Therefore, if we have this distinction clearly
present in our minds, it seems that the special case of Burma,
Southern Rhodesia and Ceylon could be dealt with by adopting the
suggestion just made by the United Kingdom Delegate, and then we
could delete paragraph 3(b) of Article XXIV, since there would
Perhaps be no further reason for it to stand.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, as it is
generally recognized that Burma, Southern Rhodesia,and Ceylon will
be entitled to sign this Agreement and the Final Act on their own
account, I think it is quite possible - it is a matter requiring
more detailed consideration - that for them we would not need to
keep paragraph 3(b) of this Article.
As regards the question of whether it would need to be kept
for hypothetical territories later, I am, at the moment, inclined to
think that it would need to be kept, and in the case of such
territories, I think the amended wording that we suggested: "Willing 22
V E/PC/T/TAC/PV/13
to apply the provisions of this Agreement" instead of "undertake
the obligations" would probably be appropriatc, because in such
case it would be the Government who would be acting on behalf of
the hypothetical territory.
As regards the question as to whether Article XXXI should
somehow be amended so as to provide for the adherence of any of
these territories, I am not sure that that is necessary. I take
it that if it is admitted that Burma, Southern Rhodesia and
Ceylon may sign on their own account, then they would come in
at the start. As regards other hypothetical territories that may
come along later, I think that it may be desirable, perhaps, to
retain paragraph 3(b) of Article XXIV in order to cover their
cease; but I would emphasize that all this requires rather careful
consideration in detail, and it may be that the best way would be
to have a sub-Committee study the matter.
CHAIRMAN: The Delegate of the United States.
Mr. Winthrop BROWN (United States): Mr. Chairman, I would
like to say that my Delegation also would welcome the
participation of Burma, Ceylon and Southern Rhodesia in signing
and adhering to all of the documents that we are considering, and,
if I may add a personal word on behalf of our Delegation, after
the combination of confidence and good humour which we encountered
in negotiations we have had with them, we are looking forward
to meeting them again at the further sessions of the "Club".
As far as the technical process of arranging that is
concerned, I should have thought that if those three countries
signed the Agreement separately with all our accord that it would
meet their case, and as for the future hypothetical situation,
that could be left entirely to Article XXXI which permits, in V 23 E/PC/T/TAC/PV/13
very general terms, adherence on terms to be decided by the
Contracting Parties, and sub-paragraph (b) of paragraph 3 of
Article XXIV could be omitted.
CHAIRMAN: The Delegate of India.
Mr. B.N. ADARKAR (India): Mr. Chairman, I would like to
say that the Indian Delegation would also welcome the
participation of Burma, Ceylon and Southern Rhodesia in the
General Agreement as independent Contracting Parties. If that
is done, these countries would automatically be entitled to
appoint representatives to the Committee and in that case,
paragraph 3(b) of Article XXIV would not apply to such countries.
It is, therefore, of interest how the second sentence in
paragraph 3(b) is worded. As far as the Indian Delegation is
concerned, they would have no serious objection to the amendment
proposed by the Czechoslovak Delegation, but this is a matter
which may need further consideration.
Mr. R.J. SHACKLE (United Kingdom): As regards the suggestion
of Mr. Winthrop Brown, I admit that it has a very attractive
simplicity. The only thing that I am rather doubtful about is
that if we leave the case of all future territories which may
apply to be dealt with under Article XXXI, it is my feeling that
we are going to be confronted with the difficult problem of
"screening" the applications, because, after all, it is necessary
to be sure that a territory admitted in this way is autonomous in
matters covered by the Agreement. Someone has got to testify to
that fact, and it does seem to me that it would naturally fall to
the metropolitan country to attest that that is the position. I
am a little inclined to feel that --expressing an of f-hand opinion-- V 24 E/PC/T/TAC/PV/13
there might be considerable difficulty in screening the many
applications that might come along. For that reason, I am
inclined to think that there might still be a case for having
something like paragraph 3(b) of this Article, oven though we
recognize it will not apply to the cases of Burma, Southern
Rhodesia and Ceylon . I feel this is a matter of rather
complicated technical detail on which one cannot speak finally
and definitely now; but very likely it would be the best way
if there were a small group to consider the drafting requirements,
and that would enable me to obtain any necessary advice from
London.
CHAIRMAN: A number of Delegations have expressed themselves
in favour of the full participation as Contracting Parties to the
Agreement of Burma, Ceylon and Southern Rhodesia. At the same
time, there is a varied expression of views regarding the effect
that would have on paragraph 3(b), and therefore I think that
probably the best course is to agree with the proposal of the
United Kingdom Delegate to set up a working group which would
give full study to this question and report back to us. I
would like to know if the Committee is agreeable to that
proposal.
M. F. GARCIA OLDINI (Chile)(Interpretation): Mr.Chairman,
I would like to know if this question taken as a whole -that is
to say, the two questions- would be referred to the sub-Committee.
CHAIRMAN: I should think the terms of reference of the
sub-Committee would be the two questions: the full participation
of Burma, Ceylon and Southern Rhodesia as Contracting Parties, and
then the technical details as to how this would affect the drafting
of the Agreement. 25
V E/PC/T/TAC/PV/13
Mr. R.J. SHACKLE (United Kingdom): I am bound to say that
I feel doubt as to whether it is necessary to refer to a
sub-Committee the first of the two questions. It appears to me
that if it is the general sense of this Committee, as I gather it
is, that Burma., Southern Rhodesia and Ceylon should be entitled
to sign on their own account, that would dispose of that question,
and the sub-Committee would not need to consider it further.
The question to refer to the sub-Committee, it seems to me, is
whether it is necessary or not to make special provision to
deal with hypothetical future cases, and if so, what the form
of such provisions should be. That is rather how the question
appears to me.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I
suggest that we adopt the proposal of the Chilean Delegate, that
is, to refer the whole question to the sub-Committee. I am not
ready now to state the position of our Delegation on the
suggestion made by the United Kingdom Delegate, and it is
absolutely indispensable for me to get the opinion of our
Government in Paris, so that we should, as the Cuban Delegate
pointed out, take a decision in conformity with the decision which
was made on the matter by the Economic and Social Council.
CHAIRMAN: The Delegate of India.
Mr. B. N. ADARKAR (India): Mr. Chairman, as the United
Kingdom Delegate pointed out, it is the general sense of the
Committee that there is no objection whatever to admitting
Burma, Ceylone and Southern Rhodesia to full participation in the
General Agreement. Therefore, no technical question remains to
, _ , V
he examined, and it can be taken as being the general view of
this Committee that participation of these countries, in view
of the facts stated by the Delegate of Burma, is desirable.
In these circumstances, if any Delegation considers it necessary
to consider the matter further, it can reserve its position.
As this Committee will be carrying on its work for some time,
there will be an oportunity for any Delegation which wishes
to reserve its position to do so now and to report to the
Committee later the result of its further consideration.
CHAIRMN: The Delegate of the Netherlands.
Dr. G.A. LAMSVELT (Netherlands): Mr. Chairman, I have to
support the opinion of the Delegate of France, and I have also
to refer this matter back to The Hague.
26
E/PC/T/TAC/PV/13 27
Mr. F. GARCIK OLDINI (Chile) (Interpretation): Mr. Chairman,
I do not think that decisions such as we are about to take now
should be taken without referring the whole question to a sub-
committee. It is usually sufficient that Delegtations ask that a
question be referred to a sub-committee and ask that sufficient time
be given to refer the matter to their Governments to obtain a
decision. If this reason were not sufficient, we think that this
matter is important enough for a sub-committee to study as a whole,
and also that sub-committee should present to this Committee a very
clear Report.
Here, we are gathered as representatives which have been
appointed by the Economic and Social Council to establish a Committee,
and we want, of our own will, to introduce new Members in that
Committee. This is, I think, a very delicate question, and although
I am not at all opposed to the admission of new Members and without
indicating my decision, I think that there are external forms of which
we have to take account, and as this is an exceptional case I think
that we should apply these forms rigidly in this case.
What we want is a clear Report from a sub-committee stating
exactly what the reasons are which will lead us to accept the
admission of these new Members.
CHAIRMAN: Would it meet the general wishes of the Committee
if the terms of reference of the sub-committee were to examine the
situation respecting the participation as full contracting Parties of
Burma, Ceylon and Southern Rhodesia, and to submit recommendations,
if this was decided upon, as to what way the text of the General
Agreement should be changed?
Are those terms of reference agreed? 28
J. E/PC/T/TAC/PV/13
Is the proposal to set up a sub-committee with those terms of
reference agreed?
Agreed.
I would propose that the following Delegations should constitute
this sub-committee:- Cuba, France, India, Netherlands, United
States and the United Kingdom. I would also suggest that, after they
have elected their Chairman and determined their rules of procedure,
the sub-committee should invite representatives of Burma and
Southern Rhodesia to be present while matters of interest to those
countries were being discussed. Is that agreed?
The sub-committee should meet tomorrow morning at 10.30 in order
to elect its Chairman, decide its rules of procedure and transact
any other business which it considers desirable.
We will now pass on to paragraph 4.
The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, before going
on to paragraph 4, I would like to state that it would be possible
that the negotiations which France conducts for Indo-China would not
be concluded before the authentification of the Agreement, that is,
before the signature of the Final Act, and, in spite of the provisions
of paragraph 3(a), I would like to be clear that France would sign
reserving the adherence of France on behalf of Indo-China until these
negotations are terminated.
CHAIRMAN: Paragraph 4, which is now numbered paragraph 5. I
would call the attention of the Committee to the amendments to this
paragraph proposed by the Delegations of the United States, which are
given at the bottom of page 1 of document E/PC/T/W/316.
The Delegate of the United States. 29
J. E/P C/T/TAC/PV/13
MR. W. BROWN (United States): As I explained before, the
amendments are consequential upon the decision taken on Article XXXII.
However, the Agreement contains the Protocol of Provisional Application
and therefore this concerns only the entry into force. I wanted to
make a distinction between the definitive entry into force and the
provisional entry into force.
CHAIRMAN: Are there any objections to the proposed amendments
of the United States Delegation?
MR. F. GARCLA OLDINI (Chile) (Interpretation): Mr. Chairman,
I would like to have some explanation to clarify the situation
deriving from difference between the final entry into force of the
Agreement and the provisional applications of the Agreement.
MR. W. BROWN (United States): Mr. Chairman, I am not sure that
I understood the point of the Delegate of Chile, but the difference
is that the word "definitively" has been omitted from the first line.
It simply says "This Agreement shall enter into force". Then, a
reference is made at the end of the amendment to Governments which
are signatories of the Final Act, thus identifying the Governments
taken into consideration to account for 85%. The whole matter of
the provisional entry into force is taken care of in the Protocol of
Provisional Application, which we will come to consider later, a
suggestion for which appears on page 3 of document E/PC/T/W/316.
CHAIRMAN: Are there any other comments?
The Delegate of Brazil. -
Mr. Chmirian, I have some doubts
M E.L. RODRIGUES (Brazil) E/OC/T/TAC/PV/13
about the full implication of this paragraph 4, now paragraph 5.
In spite of the United States amendment, which I think is a great
improvement on the draft, I still have some doubts concerning a
country who has not signed before the countries which form 85% of
the total trade of the territories have deposited their instruments
of acceptance. What would be the situation of a country who is not in
a position to sign at this time? Suppose that Brazil has not
signed before the acceptance by other countries reaches 85%,what
would be the position of Brazil? I think it will be much the same
position as the signatory countries. The position will be the
same with any other country.
CHAIRMAN: I am not quite sure whether I understand the
suggestion of the Brazilian Delegate, but I think the meaning of this
paragraph is quite clear, that is, the Agreement enters into force
when countries which account for 85% of the total trade of the
territories have deposited their acceptance. If Brazil had not
signed at that time, then, of course, Brazil would not be a party to
the Agreement, and Brazil would only be affected when the positive
acceptance of Brazil had been deposited.
MR. E.L. RODRIGUES (Brazil): Yes, Mr. Chairman.
If you look at Annexure H you will see my reason, that is,
that it will be very easy to reach 85% within that period, and the
date of June 30th does not mean much for the other countries who are
not covered by the 85%
M. ROYER (France) (Interpretation): Mr. Chairman, I think that
there is something missing here in the text of this paragraph and we
ought to have a provision similar to that which appears in the Charter,
30
J. 31
J . E/PC/T/TAC/P/l1
stating that the Agreement will come into force sixty days after the
deposit of the instruments of acceptance. Here, we do not say when
the Agreement will enter into force for thosoeStates which have
si8ned after the Stetes representing 85% of the total world trade,
If the Agreement comes into force after it has been signed by seven
or eight ocuunries, for example, then we ought to state when it will
dcme into force for the countries which will be the ninth or tenti
0c0ntry to accept.
MR,.'. BRO'N (United States): I think the difficulties arise
as there is not a clear distinction between the signature and the
definite acceptance after ratification by the Parliaments of the
countries concerned. This paragraph 5 is concerned with the
definitivee ntry into force, binding the Governments of the respective
countries after their Parliaments have acted and ratified the
Agreement. That is quite a different matter from the signature which
the executive affixes under paragraph 1, which, I think, in the case
of Brazil, has a conditional precedent to submit it to their
Parliament. 32
S E/PC/T/TAC/PV/13
Then the situation would be that when countries covering 85
per cent of the total trade involved had deposited their formal
instruments of acceptance - that is to say, when their Parliaments
had ratified that agreement definitively - the Agreement would
enter into force as among those Governments definitevely and they
would be bound as Governments. Later on, if another Government
deposited its instrument of acceptance, it would become definitely
bound by the Agreement. I think perhaps that would meet M.Royer's
point that it should be made clear that other Governments can
formally accept after the Agreement has come into effect among
those, representing 85 per cent of the total trade.
The position of the Government which had not ratified would,
I think, depend upon whether or not they had put it provisionally
into effect. If they had put it provisionally into effect they
would be receiving the tariff concessions from the other Govern-
ments on a provisional basis. If they had not put it provisionally
into effect, they would not be getting the benefits of the Agreement
during that interim period.
CHAIRMAN: The Delegate of Brazil.
Mr. E. L. RODRIGUES (Brazil): Mr. Chairman, in spite of
the explanation given by the representative of the United States, I
still have doubts, because if the idea of the entry into force is a
definitive one it means that the Agreement shall enter definitively
into force even as a result of having this draft as amended by the
suggestion of the United States Delegate. The consequence of
that, in my opinion, would be to include countries other than the
original countries which reach 85 per cent of the total trade
in
involved, and they would not be/the same position as the original
Members of the Ag:reement. I see no other way of judging our
position. 33
E/PC/T/TAC/PV/13
CHAIRMAN: The Delegate of the United States.
Mr. Winthrop G. BROWN (United States): Mr. Chairman, I
think the Delegate of Brazil is correct. The countries that have
not formally accepted the Agreement will be in a different position
from the countries which have.
Mr. RODRIGUES (Brazil): I am sorry to intervene again, but
that is not my point. We are willing to accept the Agreement. There
is no doubt about that. But we are not a position to accept it as
soon as the other countries. I am not a specialist in Inter-
national Law, but I have the impression that we would be put in a
different position from that of the original Members. Perhaps
I am wrong.
CHAIRMAN: I think the Delegate of Brazil will find his case
is covered by the suggestion of M. Royer. That was the intention,
but there is some obscurity. The intention was that after the
Agreement had entered definitively into force a country which did not
make up the 85 per cent could still become one of the original
Members of the Agreement by depositing the instrument of ratification.
It would not be necessary for that country to invoke Article XXXI
- the adherence clause.
The Delegate of Czechoslovakia.
H.E. Mr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
think I have so many papers before me that I still feel a little
confused. As this is a highly practical question, I would like to
be entirely clear as to how the whole story will run. First, we
shall come on September 30 to sign the Final Act, which says only
that we have negotiated and that we have agreed to something. Then
on November 15 we come to the signature of this Agreement. Then
we have to state that we will be ready to apply the Agreement
provisionally from January 1.
S S
Either all countries will state that from January 1 they
are ready to apply it, or not all countries will state that. I
should like to know what will happen if only some of the countries
are ready to apply it. In that case, the whole of the Schedule
would have to be reviewed.
After January 1 the Agreement would come into force
provisionally and we would be accepting the dafinitive entry
into force of the Agreement. Probably different countries will
come forward and sign and later they will signify their
acceptance or, as we generally call it, ratification; and as soon
as there are 85 per cent of ratifications the Agreement would
enter into force definitively. For whom? For all those countries
or for the remaining 15 per cent of countries which have not
deposited their instruments of ratification? Would those countries
which compose the 15 per cent, and which apply the Agreement
provisionally, have the same rights as the other parties?
By-and-by would come the ratification, because it would go
through their Parliaments - in our case, anyhow, we can deposit
the instrument of ratification before it goes through Parliament
- and so the other countries would successively accede to the
Agreement.
In any case, I should be extremely obliged to the Secretariat
if they would prepare for our use some simple document showing how
the whole story will run.
CHAIRMAN: Since there have been so many papers; it is
possible that Dr. Augenthaler has lost Document W/313, on Page 3
of which the Secretariat did endeavour to set out, a tentative
time-table of developments as agreed upon after our general
discussion. I think that is about as simple a statement as
can be made at the present time regarding the effects of these
various provisions and the dates which would result from them. E/PC/T/TAC/PV/13
The Delegate of Austrelia.
Dr. COOMBS (Australia): There is a small drafting point
which may hae some relevance to this particular uncertainty. The
paragraph would, I think, be clearor if the underlined portion
in the second line read: "as among the Governments which have
accepted it," rather than "as among the Governments accepting it."
Mr. Winthrop BROWN (United States): Mr. Chairman, I think
that is an improvement.
CHAIRMAN: Does that suggestion of the Australian Delegate
meet with general approval? Does it meet the point raised by
M. Royer?
Mr. ROYER (France) (Interpretation): Mr. Chairman, I
think, nevertheless, that we should insert here a provision similar
to the one which appears in the Charter, specifying when this
Agreement will enter into force in the case of those countries which
will only accept the Agreement after the countries which represent
85 per cent of world trade.
CHAIRMAN: I wonder if the French Delegation would be so
kind as to submit a proposal in writing dealing with this point.
The Delegate of Cuba.
Mr. H. DORN (Cuba): Mr. Chairman, I think our French
colleague is rignt in asking for a small amendment to Article
XXIV, because there are three cases which have to be covered
legally, in order to make clear the entry into force for three
categories of countries. First we have the countries which sign
the final Act and belong to the 85 per cent; secondly, the
35
S S 36 E/PC/T/TAC/PV/13
the countries which sign the Final Act and do not belong to the
85 per cent, because they accept at a later stage, and, thridly,
the countries which have not signed the Final Act and which are
covered by Article XXXI.
I think we could make the necessary amendment if the wording
were changed slightly in Paragraph 2 of Article XXIV, which at
present runs as follows: "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,"
and so on. We could say, I think: "Each Government may accept
this Agreement by depositing an instrument of acceptance." In
this case it would be clear that the acceptance is the basis of
the entry into force for each country which accepts. That is the
only thing lacking up to now, because we only know from Paragraph
2 what is the definite entry into force for the 85 per cent and
not for those who accept later.
CHAIRMAN: The Delegate of Czechoslovakia.
H.E. Mr. Z. AUGENTHALER (Czechsolovakia): Mr. Chairman,
I thank you for drawing my attention to Document W/313. I did
not/ receive this paper, probably by some mistake or because I
was unlucky.
had
Now I have/a look at this paper, I would like to state that
the tentative time-table is not correct, because it has been
changed, so I would still like to request the Secretnriat to
prepare a new time-table for us. 37
CHAIRMAN: The only change which has been proposed since the
document was prepared is that June 30 has been proposed as the
final date for general acceptance - that is the date on which the
Agreement closes for signature, under No. 7.
I am afraid if the Secretariat proposed another time-table
there would be one more document to add to the many we have to keep
track of. I wonder if Dr. Augenthaler would not be satisfied with
that explanation, that the only change would be under No. 7,
changing the date from February 28 to June 30.
The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom) Mr .Chairman, the point
I wanted to make was this: it arose out of something which was
said by the Brazilian Delegate. I should think that the question
of who are the original members or the Agreement is decided surely
by the question of signature; it is the countries which have
signed up to 30 June 1948 and had the opportunity of becoming
original members when they put in their acceptances. Countries
which had not signed up to the date of 30 June 1948 would come in
under the mechanism of Article XXXI.
That, it would seem to me, would be the answer to the
Brazilian Delegate's question, but I speak subject to correction.
CHAIRMAN: The Delegate of the United States. You asked
for the floor about twenty minutes ago,Mr. Brown.
Mr. Winthrop BROWN (United States): I am sorry, Mr. Chairman.
The point has been made by others.
CHAIRMAN: In a few minutes we will have in writing a
suggestion of the Delegate of France covering this point, which. I
think we might consider without going through the form of having
it circulated in writing.
P. 38
In the meantime I would like to refer to the suggestion of the
Delegate of Cuba that the situation might be met if we changed the
words in paragraph 2 "Each government accepting this Agreement" to
the words "Each government may accept this Agreement by
depositing ......" I doubt if that would achieve the purpose which
the Delegate of Cuba has in mind, because the difficulty is really
relating to this paragraph 4 which we have been considering now.
I think the meaning of paragraph 2 is quite clear.
The Delegate of Cuba.
Mr. H. DORN (Cuba): May I only add, Mr. Chairman, that my
idea is that we have to express what is the date of the entry into
force of the Agreement for the countries which do not belong to the
85%, and in saying that each government may accept this Agreement
by depositing, and not adding any more, we say that its
acceptance is the date of the entry into force. But I would prefer
to say that explicitly and add that the date of the acceptance is
the date of the entry into force, under paragraph 4, and that must
be expressed. If you do that, then you cover both things.
CHAIRMAN: Perhaps the Delegate of Cuba will allow us to come
back to his suggestion after we have considered the proposal of the
Delegate of France for the addition of a sentence to this paragraph
4 to cover the case of the countries representing the remaining 15%.
The French Delegation proposes to add a sentence as follows
"The instrument of acceptance of each other government
signatory to the Final Act shall take effect on the
thirtieth day after the day on which such instrument was
deposited".
That is a translation from the French.
The Delegate of Cuba. 39
Mr. H. DORN (Cuba) That covers exactly my idea in principle,
but I think we shall have to add "each other government which has
signed the Final Act" because the other governments are covered by
Article XXXI and if you do not do that then you cover, I think, the
others, too.
CHAIRMAN: The proposal of the French Delegation is: "The
instrument of acceptance of each government signatory to the Final
Mr. H. DORN (Cuba): Oh, I did not hear that. I am sorry,
Mr. Chairman. That covers it exactly, then.
CHAIRMAN: Is this proposal of the French Delegation now
approved?
Mr. E.L. RODRIGUES (Brazil): Mr. Chairman, I would like to
say that I agree with the French suggestion and I accept it because
of the explanation given by the Delegtate of the United States.
CHAIRMAN: Paragraph 4, which is now to be 5, will therefore
read as in the American draft excepting that in the second line the
words "accepting it" after "governments" will be substituted by
"which have accepted it" and then there will be the addition of
this sentence proposed by the French Delegation. Is that approved?
Approved.
Does the Delegate of Cuba wish to revert to his proposal
regarding paragraph 2?
Mr. H. DORN (Cuba): No, thank you very much, Mr. Chairman.
It is covered.
E/PC/T/TAC/PV/13 P. 40 E/PC/T/TAC/PV/13
CHAIRMAN: Thank you very much. That concludes our
discussion of Article XXIV and, as I said at the opening of this
meeting, it had been our intention to revert today, that is on
Monday, to the Articles dealing with Quantitative Restrictions,
which we deferred in order that there should be time given to the
consideration of the proposal of the Norwegian Delegation which was
afterwards circulated in document E/PC/T/W/324. This proposal
envisaged the addition of two Articles to the General Agreement
based on the present text of Articles 5 and 7 of the Charter.
Before taking up the Articles dealing with Quantitative
Restrictions I think it would be advisable to deal with the
Norwegian proposal.
The Delegate of the United States.
Mr. Winthrop BROWN (United States): Mr. Chairman, I
appreciate the indulgence of the Committee in allowing me to take
advice on the proposal made by the Norwegian Delegation. As I
indicated, and as I have confirmed now, that proposal would cause
considerable difficulty for the United States.
We feel that to take one or two Articles out of Chapter III and
insert them in the General Agreement would be a mistake. Chapter
III is a unit, and if you take one or two Articles out, the
question arises why not take others as well. The Protocol to the
Agreement, as suggested, will embrace within its scope all of the
Chapters on Employment and Development and it seems to me that it
is greatly preferable to deal with them in their totality in that
way rather than singling out one or two particular cases and giving
them prominence in Part II of the Agreement.
Moreover, the needs of countries which are applying
quantitative restrictions because of the necessities of their
situation would seem to us to be fully met by the exceptions to the 41
P. E/PC/T/TAC/PV/13
rule against quantitative restrictions which are contained in
Articles X through XIV as they appear in the Agreement now. That
is to say, practically all the cases which countries have foreseen
in which they would need to use these quantitative restrictions
have been provided for in the Quantitative Restrictions Articles
themselves. Therefore the needs of such countries are taken care
of in the Articles as they now stand.
So far as the more general provisions of Articles 5 and 7 are
concerned, and the other provisions dealing with Employment and
Development, in addition to the Protocol specific reference is made
in Article XXI on Nullification or Impairment to the provisions of
the Protocol. So that if the situation should arise in which
considerations came up under Chapter III which were not dealt with
under the exceptions already provided for in Articles X through XIV,
a party could invoke the Protocol specifically under Article XXI.
For these reasons we feel that it would be undesirable to
include the substance of Articles 5 and 7 in Part II of the General
Agreement. 42
V E/PC/T/TAC/PV/13
CHAIRMAN: The Delegate of Norway.
Mr. J. MELANDER (Norway): Mr. Chairman, when we proposed
these two new Articles as part of the General Agreement, it was,
as I said when we discussed it last time, in order to put these
two Articles on the same footing as Articles X - XIV. We
agree with what the Delegate of the United States just said, that
it would, of course, be clear that any party to the General
Agreement who wanted to invoke some of the Articles X - XIV
would have under the Protocol the right to take into account,
and ask the parties to the General Agreement to take into account,
the factors laid down in these two Articles.
Consequently, we feel that although we do not then obtain
formal equality between the Articles X - XIV, we do get real
equality through the application of the Protocol: that is the
main point from our point of view, and if there is any
difficulty for any Delegation to accept the inclusion of these
two Articles in the General Agreement as we suggest, we are
willing to take that into consideration. In view of what the
United States Delegate has said., we are, therefore, willing to
withdraw our proposal to include these two Articles in Part II
of the General Agreement.
CHAIRMAN: The Delegate of Australia.
Dr. H.C. COOMBS (Australia): Mr. Chairman, in view of the
attitude that has been taken by the Norwegian Delegation on
this matter, we would not oppose the withdrawal of these two
Articles, but I would like to make reference to two matters in
connection with their withdrawal.
Reference has been made to the provisions of the old 43
V E/PC/T/TAC/TV/13
Article 35, by which circumstances such as those it plated
v would be covered by these Articles could, in fact, be taken
into account. That is true, but the circumstances in the absence
of these two Articles are substantially different.
For instance, there may be a situation in which most of the
countries in the world are experiencing balance-of-payments
difficulties because of a positive balance-of-payments in another
country or group of countries. Now, with these two Articles in,
the position is clear that a country or group of countries have
accepted an obligation to direct their domestic and international
economic policies in ways which are designed to correct that
situation, and the position of other countries who are
experiencing difficulties on account of it is one of equality
at least with the country where the difficulties are originating.
If they need to seek modification under Article 35, they have
these two Articles to refer to as evidence that the position is
a serious one. In otherr words, they come as someone
begging for concessions - for privileges - but as someone coming
to claim a right: a right which they exercise in view of the
fact that another country or group of countries has failed to
give full effect to obligations which they have accepted.
Therefore, it seems to me that agreement to the withdrawal of
these two Articles is a very substantial concession.
The other point that I would like to make refers to the
importance which the withdrawal of these Articles attaches to
the Protocol. Now, the argument has been put forward that by
the acceptance of the Protocol, the countries will, in effect,
be accepting the same sort of obligations--perhaps to a different
degree or in some rather mystical way different from if the
Articles were in there, but still substantially the same. 44 E/PC/T/TAC/PV/13
Now, I hope that is true, but it places particular emphasis upon
the request which made at a previous meeting of this Committee,
in which I asked countries for guidance as to what interpretation
they thought would be placed by their Governments on the
obligation written into the Protocol. I recall that my request
was greeted with some hilarity, but I would just like to point out
that the issue with which we are faced here does make that request
not only a serious one, but one of very great importance. If
we are to accept the Protocol as an effective substitute
temporarily, provisionally and subject to reservations for all the
Articles which we are agreeing to omit from the General
Agreement, then it is important that we should know what the
nature of the commitment is which we and other countries are
accepting in that Protocol, and what degree of weight can be
placed on it in an emergency.
CHAIRMAN: The Delegate of New Zealand.
Mr. L.C. WEBB (New Zealand): Mr. Chairman, I would like to
associate the New Zealand Delegation with the remarks that have
just been made by Dr. Coombs, and in particular with what he has
said about the need for somewhat clarifying the status of the
Protocol.
CHAIRMAN: Are there any other comments?
M. F. Garcia OLDINI (Chile) (Interpretation): Mr.Chairman,
I must first apologize to the Norwegian Delegate, but I do not
understand why he started by withdrawing the proposal which he
had made. Perhaps he sees in the atmosphere of the meeting
that this proposal meets with some resistance on the part of certain
Delegations -that is, his proposal to include these two Articles
V E/PC/T/TAC/PV/13
in the text of the Agreement. But for my part I see no reason
why we should not include those two Articles in the text of the
Agreement. I have listened very carefully to the reasons
which were expressed by the United States Delegate, and I must
state now that the situation is quite different from the situation
arising out of Articles X - XIV, and that in some ways these
articles are supplementary Articles which complement the
provisions of these Articles. I am not certain of the exact
place in which we should insert these Articles, but I am certain
we should insert them somewhere.
CHAIRMAN: Are there any other comments? The proposal of
the Norwegian Delegate having been withdrawn and there being no
further speakers on this subject, I would suggest we now pass to
the Articles on Quantitative Restrictions, commencing with
Article X, General Elimination of Quantitative Restrictions,
Are there any comments? Is the inclusion of this Article
in Part II of the General Agreement approved? -
DrA Z. 1UAENTH&LER (Czechoslovakia ): Mr. Chairman, we have
no objection to the inclusion of this Article in the Tariff
Agreement. I wanted only to remind the Committee of our
reservations. Will these reservations be dealt wate )ft rwards?
MCHAIRAN: Yes. As I have mentioned b, oI e A think it is
better that we should deal with the question of reservations all
at one time. I have been giving further study ao qhit oon.ti .
I think the best time to deal with the question of reservations
is when we come tnsior±lder the Final.Act, There hasnm be a
proposal of the Tariff Negotiations Working Party for an addition
to the Final Act, which is intended to meet, in parte th&
45
V 46
V E/PC/T/TAC/PV/13
position of those countries with reservations. Are there any
Other comments on Article X?
Article XI, Restrictions to Safeguard the Balance of Payments.
Are there any comments? Are there any objections to the
inclusion of this Article in Part II of the General Agreement?
Article XII, Non-discriminatory Administration of Quantitative
Restrictions.
Mr. R.J. SHACKLE (United Kingdom): There is one observation
I should like to make which relates both to Article XII and to
Article XIII - more particularly, perhaps, to Article XIII, and
that is that in the present circumstances, the United Kingdom
would be bound to ask for some postponement of the application
of the Articles for reasons which I do not need to elaborate
upon - I think they are well-known to you through the
newspapers. A formula which would give effect to the kind of
postponement we have in mind has been prepared. I do not think
it would serve a useful purpose for me to read it out now.
What I would suggest is that it be put into the hands of the
Secretariat and distributed overnight, in order that it may be
considered before the debate on this question. I prefer it
that way, but, in any event, some postponement,of the
application of these Articles would be necessary for us. 47
E/PC/T/TAC/PV/13
CHAIRMAN: We will give consideration to the proposal of the
United Kingdom after it has been circulated, and I would ask the
United Kingdom if they would be agreeable to passing the texts of
Articles XII and XIV subject to the United Kingdom receiving
satisfaction with regard to their proposal?
MR. R. J. SHACKLE (United Kingdom): Yes, Mr. Chairman.
M. ROYER (France) (Interpretation): Mr. Chairman, I would
like to add here to the observations which have just been made by
the United Kingdom.
As is well known, France finds itself in the same situation in
very many respects as that of the United Kingdom and therefore we
will have to request a period of mercy to adjust our commercial
policy to the provisions of Articles XII and XIII. In accepting
Articles XII and XIII, there-fore, this should not prevent us from
presenting an amendment to this Article, and this amendment will
better find its place at the end of Article XIII.
CHAIRMAN: Due note will be taken of the observations of the
United Kingdom and the French Delegations.
Are there any other comments on Article XII? Are there any
objections to the inclusion of Article XII; Part II in the General
Agreement?
Article XIII? The same position will apply with respect to
the position of the United Kingdom and French Delegations in regard
to this Article - "Exceptions to the Rule of Non-discrimination".
Are there any comments? Are there any objections to the inclusion
of this Article in the General Agreement?
Article XIV - "Exchange Arrangements". Are there any comments?
Are there any objections to the inclusion of this Article in part II 48 E/PC/T/TAC/PV/13
of the General Agreement?
That concludes the consideration of the Articles dealing with
quantitative restrictions, except that we will have to consider, at
a later date, the proposal of the United Kingdom and French
Delegations with regard to an additional paragraph to Article XIII.
The Delegations will no doubt wish to have a sufficient amount
of time to study this proposal and therefore I suggest that we
bring it up at a later date.
It is now nearly six o'clock and this seems to be a good time
at which to terminate our work. Tomorrow we can commence
consideration of the Articles in Part III, commencing with
Article XXV.
The Committee will meet tomorrow at 2230 p.m. in this
room.
The meeting is adjourned.
The meeting rose at 6.00 p.m. |
GATT Library | tx385sz2642 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Thirtieth Meeting of Commission A held on Wednesday, 16 July 1947, at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, July 16, 1947 | United Nations. Economic and Social Council | 16/07/1947 | official documents | E/PC/T/A/PV/30 and E/PC/T/A/PV.29-31 | https://exhibits.stanford.edu/gatt/catalog/tx385sz2642 | tx385sz2642_90240163.xml | GATT_155 | 6,487 | 39,445 | UNITED NATlONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNlES
CONSElL RESTRICTED
E/PC/T/A/PV/30
ECONOMIQUE 16 July 1947
ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERBATlM REPORT
THIRTIETH MEETING OF COMMISSION A
HELD ON WEDNESDAY, 16 JULY 1947, AT 2.30 P.M. IN THE
PALAIS DES NATIONS, GENEVA
Mr. ERIC 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. E/PC/T/A/PV/30
CHAIRMAN: The meeting is called to order.
To begin with, I would remind the Commission that we have
referred a certain number of points either to the Legal Drafting
Committee or to other Committees. I do not need to go through it
now, but I would just note that they refer to the drafting of
Articles 16, 19, 20 and 22. These are drafting questions and I
would ask the Secretariat to kindly draw the attention of the legal
Drafting Committee to these points.
Then, we have a point referred to the sub-committee on
Articles 34, 35 and 38. That was the question concerning where
to place Article 36. I would therefore ask the Secretariat, if
it has not already been done, to approach the respective
sub-committee or, if necessary, the Steering Committee.
Finally, we adopted at our last meeting the American proposal
to transfer certain of the sub-paragraphs of Article 37 to some
place at the end of the Charter so as to make the exceptions
mentioned in these sub-paragraphs exceptions not only from
Chapter V, but from the whole of the Charter. We approved that, as
I say, and it will now have to go, when the drafting of the last
chapter of the Charter has been finished, before the Preparatory
Committee.
This was only to remind you of some loose ends.
We had hoped to have been able today to go through Article 18
on Customs Values, but I have been informed by the representative
of Australia, who had asked for a certain postponement, that
unfortunately he has not yet got his instructions, and he has asked
us to hold this question over for another week, and I think that
we should fall in with that wish.
J.
2 J. 3
MR. G. B. URQUHART (Canada): Mr. Chairman, I wonder if there
is any indication that we will be able to discuss Article 18 in
another week?
CHAIRMAN: Well, the position is that we have now given a
fortnight, and if we give another week my intention would then be,
if there is any question of further postponement, to say that
unfortunately we cannot grant further postponement, and if the
Australian Delegate finds it impossible to fall in with the views
of the rest of the Commission, he cannot do anything but reserve
his position and hope that before the question finally comes before
the full Preparatory Committee, he will be able to withdraw his
reservation.
We pass on now to the next point, that is, the examination
of the New Zealand proposal for an addition to Article 21,
paragraph 5. You will find it in document E/PC/T/103 on pages
34 and 35. There you have the text of the new paragraph 5, which
has been unanimously agreed to by the members of the sub-committee,
and you will remember that the New Zealand Delegation suggested an
addition: "Nothing in this paragraph shall require the elimination
or substitution of existing procedures which conform fully to the
principles of this paragraph". There was an objection to this
that it left the door wide open for different procedures from what
is intended by the text of paragraph 3, and we then suggested that
the New Zealand Delegate should get into touch with one Delegate,
that is, the Delegate of the United States, who objected to the
New Zealand proposal, in order that they might work out some text
that might be acceptable to all of us. I would ask the Delegate
of New Zealand whether he is now able to submit such a text?
E/PC/T/A/PV/50 E/PC /T/A/PV/30
CHAIRMAN: The Delegate of New Zealand.
Mr. J.P.D. JOHNSEN (New Zealand): Mr. Chairman, in accordance
with the suggestion made at the last meeting, I have conferred with
the Delegate of the United States, also other Delegates who have an
interest in the matter, and a text has now been prepared, copies of
which have been circulated this afternoon, which outlines the
provision which would be acceptable to the Delegations concerned.
The effect of it is that the existing paragraph 3 would be
made sub-paragraph (a) and that there would be a new sub-paragraph
(b) reading as follows:-
"The provisions of sub-paragraph (a) of this paragraph shall
not require the elimination or substitution of procedures in force
in a Member country on the day of the signature of this Charter
which in fact provide for an objective review of administrative
action, even though such procedures are not fully or formally
independent of the agencies entrusted with administrative
enforcement. Any Member employing such procedures shall, upon
request, furnish the Organization with full information thereon,
in order that the Organization may determine whether such
procedures conform to the requirements of this sub-Paragraph."
It will be noted that the matter is brought under the purview
of the Organization, and we though t that would be satisfactory in
the circumstances.
CHAIRMAN: You have heard the that suggested by the Delegate
of New Zealand. As far as I can see, it is entirely satisfactory
and I would like to know whether any Delegate has any objection.
No objection? It is agreed.
We now pass on to certain questions concerning Article 37.
The first is brought up by a suggestion by the Delegate of the
United Kingdom to insert a new sub-paragraph: Undertaken in
V 4 E/PC/T/A/PV/30
pursuance of obligations under inter-governmental commodity
agreements concluded in accordance with the provisions of
Chapter VII". I would, in connection with this United Kingdom
proposal, draw your attention to what is contained in
Document W/228. On page 8 of that document it is said that
the sub-Committee recommends, and I can add that Commission B
agree, that "agreements falling under Chapter VII should be
classed as an exception to Chapter V...with the consequential
deletion of sub-paragraph (d) of paragraph 2 of Article 25".
Does the Delegate of the United Kingdom want to speak on
this proposal?
Mr. G. IMMS (United Kingdom): No, I do not wish to add
any remarks.
CHAIRMAN: The Delegate of the United States.
Mr. H.M. CATUDAL (United States): Mr. Chairman, I believe
it was at the request of the United States Delegation that
this matter was raised last time. I wish to state that we
are prepared to accept the wading that is proposed here.
5
V M 6 E/PC/T/A/PV/30.
Are there any further remarks on this proposal ? I would
remind you that it has already been approved by Commission B.
Any remarks ?
(Adopted).
We have a further point on Article 37, also connected with
the report of the Sub-committee on Chapter VII and passed by
Commission B. You will find it on page 8 of Document W.228;
"Pursuant to its decisions to bring conservation agreements partly
within the provisions of Chapter VII (see Article 62), the Sub-
committee further recommends acceptance of the proposal made to
the Working Party on Technical Articles (E/PC/T/103, page 47) to
delete, in Sub-paragraph (j) of Article 37, the words 'are taken
pursuant to international agreements or' ".
I would remind you that the same suggestion was made on
another occasion.
MR. E.L. RODRIGUES (Brazil): I would call your attention
to Document W/239 page 5 where it states that Commission B adopted
the proposal to delete the words "are taken pursuant to interna-
tional agreements or" from Sub-paragraph (j) which now reads as
follows:
"(j) Relating to the conservation of exhaustible
natural resources if such measures are made
effective in conjunction with restrictions on
domestic production or consumption:
CHAIRMAN: The question has been so well treated that it is
in different documents in the same sense.
Is Commission A in agreement with the Brazilian suggestion
to delete the words from Sub-paragraph (j) "are taken pursuant to
international agreements or" ?
(Agreed).
If you will now turn to document W/228, page 19, you will M 7 E/PC/T/A/PV/30.
find a further note of interest. There is a footnote referring
to Sub-paragraph (d) on the same page: "A proposal has been made
for the deletion of this sub-paragraph in the light of an amend-
ment to be considered by Commission A regarding the exclusion of
such agreements from the whole Charter."
We have had to deal with these different sub-paragraphs in
Commission A and we agreed that they should be inserted in one
of the last Articles of the Charter so as to make them applicable
to the whole of the Charter. For that reason I take it that Sub-
paragraph (d)of Article 62 of ChapterVII will, as suggested by
Commission B, disappear. It is simply a repetition of what is
contained in a number of Sub-paragraphs of Article 37 which now
goes over to the end of the Charter. I take it we have no
decision to take on this question; we should simply ask the
to the fact
Secretariat to draw the attention of the Drafting Committee/that
there is no objection on our part to the striking out of Sub-
paragraph ( d).
I now come to a most delicate question. You will remember
that after a very long and difficult discussion, we arrived at the
of Article 37
text for paragraph (b)/"necessary to protect human, animal or plant
life or health, provided that corresponding safeguards are applied
in the importing country if similar conditions exist in that
country". The Secretariat and I were asked at our last meeting
whether we could not make this text somewhat clearer by an ex-
planatory note. E/PC/T/A/PV/30
We have tried to do so. I do not know whether such an
explanation needs to go into the Charter as an explanatory note
to the Charter; but my own construction of the text of Sub-
Commission A is this, that if a country decides to restrict the
importation of goods in order to protect its human, animal or
plant life or health, it should be able to prove that it would itself
take measures which correspond to those it would take if similar
conditions should prevail in the importing country.
This simply means that it is not enough if Norway wants
to stop the import of certain goods from, say, Great Britin, to
say, "Well, we do it to protect life or health". They should be
should
able to prove that/similar conditions prevail in Norway as in
Greet Britain - conditions against which Norway tries to protect
herself by import prohibition - then Norway would apply quite
a string of restrictive measures inside its own doors, and not
only let the exporting country bear the full burden of the
unfortunate occurrence of some animal disease, or something of
the kind.
It is not a very good drafting as it stands in the Draft
Charter, and no explanation can make it better; but I hope that
what I have said will bear out what it is intended to say.
I repeat, that we should show a kind of collective interest
in preventing the spread of diseases, and we cannot simply say,
"No, we won't have any of your goods, because there is such and
such a disease in your country". No, we must have a system for
protection against such diseases as would be satisfactory, and
on the level which is, in modern science, considered reasonable
precaution to take.
I do not think it can mean anything but that.
The Delegate of the United States.
8 G 9 E/PC/T/A/PV/30
Mr. CATUDAL (United States): Mr. Chairman, I believe
that the formulation of this Note in specific terms shows how
difficult it is to attempt to explain a provision which was
arrived at after long attempts to get language that would be
satisfactory to differens interests involved.
You will recall the long problems we had in New York and
here which were both on this provision; but without going into
my specific objections to the note, I wonder whether the
Commission would agree simply to leave the language as it stands
in the text, without an explanatory Note.
I just make that suggestion.
CHAIRMAN: The Delegate of South Africa.
Mr. CHERRY (South Africa): I should like to support that
suggestion by the United States Delegate. We have been
considerably puzzled as to how exactly a country will provide
proof that it would take steps, if say someone should say a
particular disease did exist in a country when, in fact, that
particular disease does not exist in the country.
We thought the only proof that could be produced would be
to say the Disease "A " does not exist in the importing country;
but they might also produce the proof that they have a perfectly
efficient Health Department or Agricultural Department, which is
at the moment taking steps internally on Disease "B", which, as
it happens, does exist in the country, and they might do the
same thing in Disease "A".
9 10
S E/PC/T/A/PV/30
CHAIRMAN: The Delegate of Belgium.
Baron P. de GAIFFIER (Belgium): Mr. Chairman, the
Belgian Delegation is of the opinion that this Explanatory
Note is useful, important and interesting. Therefore we would
support the inclusion of those comments in the Report of the
Preparatory Committee.
CHAIRMAN.: The Delegate of France.
M. ROUX (France) (Interpretation): I am inclined, Mr.
Chairman, to go even further than the Delegate of Belgium goes.
It seems to me that the explanatory Note is not only well
drafted but, if anything, it is better drafted than the sub-
paragraph itself. In these circumstances I suggest that we
might very well revise the paragraph in question. In that
case sub-paragraph (b) would include two sentences; the
first would be "Necessary for the purpose of protecting human,
animal or plant life or health, " which is part of the actuall
text. Then we would go on and insert a second sentence based
on the Explanatory Note, which would run approximately as
follows: "When a country decides, in implementation of this
provision, to restrict imports of certain goods, this country
shall adopt internal measures of protection corresponding too
those which it takes with regard to importations, if conditions
analagous to those which have justified these measures of pro-
tection exist also on its own territory."
You will remark, Mr. Chairman, that my proposal is
essentially based on the Explanatory Note, with one exception,
however; that I have not inserted the obligation to furnish
the proof.
CHAIRMAN: We have the proposal of the Delegation of
France. It simply comes to this: not to have any S 11 E/PC/T/A/PV/30
Explanatory Note but to try to ameliorate the text of the sub-
paragraph itself. Would that be agreeable to the Belgian
Delegate?
Baron P. de GAIFFIER (Belgium): Quite agreeable, Mr.
Chairman.
CHAIRMAN: And to the Delegate of the United States?
Mr. H.M. CATUDAL (United States): When we re-open this
paragraph, I would like to suggest that it should be "necessary
to protect human, animal and plant life or health." It seems
to me the protection you would get by the additional phrase is
worded in such a peculiar fashion that no one knows exactly what
it means. What is the corresponding safeguard? The safeguard
we take at ths tine of importation? If you are trying to protect
yourself, say, from bubonic plague, it is to exclude any
article that may give rise to bubonic plague. What
corresponding safeguard is there to exclusion?
As for the protection needed for exporting countries, to
see that this is not abused, it seems to me that is afforded
one by the headnote to the Article, which reads, in some
detail: ". .. such measures are not applied in a manner
which would constitute a means of arbitrary or unjustifiable
discrimination between countries where the same conditions
prevail, or a disguised restriction on international trade . ."
Then there is a provision in the first paragraph of
Article 35 which provides that countries may make representations
regarding the application of sanitary laws and regulations, and
that the other country must furnish full information regarding
any such representations in order, that a full and fair appraisal S 12 E/PC/T/A/PV/30
of the situation may be made. For those reasons, it seems to me
that if you use the term "measures necessary to protect human,
animal or plant life or health" you add nothing whatsoever
but confusion, if you attempt to add either the language which
we have now, which is provided in the proposed. Explanatory
Note, or that which is proposed by the Delegate of France. ER 13 E/PC/T/A/PV/30
Mr. J.G. CHERRY (South Africa): Mr. Chairman, we think that
the statement made by the United States Delegate is a particularly
able one, in our opinion, land we would like to support it.
CHAIRMAN: We have got the proposal of the United States
Delegation, that we should re-draft sub-paragraph (b) so as to
read simply "Necessary to protect human, animal or plant life or
health".
I would like to say that, at an earlier opportunity, I myself
found the present text not clear and practically impossible to
explain in a satisfactory way. So, unless there are strong
objections on the part of any delegate, I would perhaps suggest
that we accept the proposal of the United States Delegation.
M. ROUX (France) (Interpretation): Mr. Chairman. in view of
the misuses which have been made in the past of sanitary regulations,
and of damages caused in this way to exporting countries, it would
be regrettable if we were bound to renounce any clarification of
the provisions of sub-paragraph (b). However, the discussion which
was raised here shows clearly that this Commission is against any
possibility of this provisionn being used as a measure of protection
in disguise. In these circumstances, we might follow the advise
of the United States Delegate, but at least I should like to insist
that we maintain the text, which was, to my understanding, the
French translation of the English text; that is to say, the
maintenance of the word "necessary". The sentence wouldread:
".. t~a=Skl> -;<_4oA ,> ;_ the protection of human, animal or plant
life or health".
CHAIRMAN (Interpretation): I wish to thank the Delegate of
France for his statement, and I may assure him that we have adopted
the word "necessary" to replace the word which can be found in the
previous French text. Any other observations? ER
Baron P. de GAIFFIER (Belgium) (Interpretation): Mr. Chairman,
on behalf of my Delegation, I regret to tell you that we have taken
the decision to suppress the sentence in sub-paragraph (b) which
begins with the reserve. I agree with the representative of the
United States, that the introductory sentence to Article 37 covers,
more or less, the same reserve which was formulated in sub-paragraph
not
(b). Therefore,it seems much clearer/to repeat it, and if we are
all agreed that the three lines in sub-paragraph (b) have the same
aim as the introductory sentence to Article 37, then we can omit
them as well, and if the majority of the Commission are of the same
opinion as I am, I would/urge that we take out the three lines in
sub-paragraph (b), which were there in the original text.
14 E/PC/T/A/PV/30 J. 15 E/PC/T/A/PV/30
CHAIRMAN: You have heard the Delegate of Belgium say that
if that is the opinion of the Majority of the Committee he will
accept the American suggestion, but he expresses the hope that the
majority of the Committee will maintain the previous text.
Is there any Delegate who wishes to speak in support of the
Belgian proposal?
The Delegate for the Netherlands.
DR. S. KORTEWEG (Netherlands): Mr. Chairman, I fully agree
with all the arguments which are against adding the words "Necessary
to protect human, animal or plant life or health". Against all
those texts you can say what the Delegate of the United States has
said - they are not clear, and it is difficult to understand them
if you have not followed all the discussion on them. Nevertheless,
I think everyone will catch the idea, and I should like to stress
this more than only at the beginning of this Article. Therefore,
I think I must support the provision of the Belgian Delegate.
CHAIRMAN: Are there any further remarks in support of the
Belgian proposal?
M. ROUX (France) (Interpretation): I an also in favour of
the Belgian proposal.
CHAIRMAN: Well, I must not be guided by my personal
preference so I must give the other Delegates an opportunity of
expressing their views, but if nobody else wants to speak in
support of the Belgian proposal, I have come to the conclusion that
the great majority of the Commission refers the new drafting:
"Necessary to protect human, animal or plant life or health". Is
that agreed?
Agreed. J. 16 E/PC/T/A/PV/30
The Delegate for Australia.
DR.H.C. COOMBS (Australia): There are two issues, Mr. Chairman,
which I would like to raise in connection with Article 37, and I
apologise for raising them here but one of them, at any rate, is a
it
policy issue to which I suggest/may have been diffficult to give
adequate consideration in the technical discussion on this
Article before.
I want to refer, first of all, to Article 37(c), which relates
to fissionable materials. This is a most difficult question,
Mr. Chairman, and I do not want to indicate definitely what our
views are as to what the provision finally would be, but I want to
raise certain quite difficult issues which, I think, suggest that
we ought to consult elsewhere before we finally decide upon the
content of this exception.
Fissionable materials, of course, are cost popularly
associated with atomic bombs, but it is clear also that they may
become quite quickly a major source of industrial power. That
may be an even more important consequence than the discovery
relating to them and their destructive effects.
I only want to point out, Mr. Chairman, that the inclusion of
Article 37(c) in its present form would, in the event of atomic
energy becoming a major or a most important source of industrial
energy, enable countries which had, for instance, exclusive
supplies of those materials to impose any restrictions they liked
upon their export, and in that way reserve for themselves the
benefits of scientific change in a way which would be quite
contrary to the general spirit of the Charter.
Now, I quite agree that the relationship of these things to
security matters does raise very difficult problems, but, so far 17
J. E/PC/T/A/PV/30
as we are concerned, we are a trade Organization, and it would
appear to me that our aim in relation to these materials would be
to ensure that they are available on commercial terms to any
country which needed them for trade purposes. It may not be
possible to do that and take care of security measures, but
security measures, I suggest, are not our concern. However,
obviously one cannot ignore security measures, and I would like
to suggest, Mr. Chairman, before we agree finally to the
inclusion, of Article 37(c) in this Article, that we should perhaps
for the time being put it into square brackets, and should advise
whatever is the appropriate international organization that there
are trade problems associated with fissionable materials. They
cannot be divorced from security and other measures and we should
from
ask advice/, or for the opportunity for consultation with, whatever
is the most appropriate international body regarding the way in
which this item should be treated. V 18 E/PC/ T/A/P V/30
CHAIRMAN: The Delegate of Australia.
Dr. H.C. COOMBS (Australia): The other point I wish to
raise, Mr. Chairman, relates to Article 37 (j). I say that we
are in general sympathy with both the object of including this
exception and of the purpose of tho limitations which are placed
upon it.
We have some little concern, however, about the proviso
relating to whatever the restrictions imposed on exhaustible
natural resources are - that they should be associated with
restrictions on domestic production or consumption. As I say,
we agree with the purpose of that. For instance, it should not
be possible to impose export quotas or prohibition while domestic
use is freely permitted. We are a little concerned, however,
that there may be cases where the rate of domestic
consumption is extremely conservative for technical reasons
apart from-the imposition of any restrictions, and we would not
wish it to be necessary to impose further limitations on an
exploitation of these resources which was conservative in the
sense intended here, but where in the absence of any forms of
restrictions the exploitation would tend to exhaustion.
I have no specific propositionto put forward, Mr. Chairman.
On this, as on the previous Article to which I referred, my
purpose in raising these points here is to ensure that we have
a little time to give further thought to both these questions,
in order that whenour ideas do become clearer, we can submit
them either to a sub-Committee, if you appoint one, or, if not,
it would be possible for us to return to this at a later date,
before the ends of the Conference Session.
CHAIRMAN: You have heard the two suggestions of the 19
VV E/PC/T/A/PV/30
Australian representative. Let us first settle the question
of sub-paragraph (c) relating to fissionable materials.
The Delegate of Australia suggests that we should arrange
for this question of the commercial importance of fissionable
materials to be submitted to the competent organ.
Any remarks?
The Delegate of the United States.
Mr. H.M. CATUDAL (United States): Mr. Chairman, I am
caught a little short-handed by the introduction of these
two matters, which I did not know were coming up today.
However, it seems to me that the point of the Australian
Delegate in respect of fissionable materials is to have a
little time. It seems to me, with regard to that point,
that that will be taken care of automatically, because all
that this Commission has decided to do is to transfer this
(c) and several other items to an appropriate place in the end
of the Charter, so as to make it applicable to all the
Charter. M 20 E/PC/T/A/PV/30
Now it is my understanding in connection with the United
States proposal for a re-arrangement of certain Articles - including
the question of where these particular security exceptions should
appear - that they will all be discussed by Commission B. It
seems to me therefore that at that time this question of fissionable
materials should once again be raised.
CHAIRMAN: If robddy else wishes to speak on this point I
would like to say that of course we can gain time by sending it
on or by maintaining the position already taken that this one point
should be submitted to the Preparatory Committee, which will decide
whether or not it should be transferred from Chapter V into one
of the final Articles of the Charter. But in view of the statement
of the Australian Delegate it would, I think, be only fair that,
when the Secretariat submits these Sub-paragraphs to the Preparatory
Committee for a decision on inclusion in one of the last Articles
of the Charter, it should draw attention to the observations made
by the Australian Delegate.
Does the Australian Delegate agree to that ?
MR. H. HEXES (Australia) Yes.
CHAIRMAN: Is that agreed ?
(Agreed).
We pass on to the second observation of the Australian
Delegate relating to Sub-paragraph (j). On this question also,
the Australian delegate confined himself to asking for time and
for consideration of his arguments. He did not propose any re-
drafting in this Sub-paragraph aclnd I think we can stand by it.
Before the question goes up to be finally passed by the Preparatory
Committee we shall all have had time to think it over and the
Australian Delegate will have had time to formulate, if necessary, E/PC/T/A/PV/30.
an amendment or reservation.
Is that also agreed ?
MR. H. HEYES (Australia): I will report the matter to my
Delegation, Mr. Chairman, if it is the wish of the Commission.
I do not think we can go beyond that, but I take it that we shall
have an opportunity to bring the matter up before the Commission
again.
CHAIRMAN: I would also mention that we are going to have
a further meeting as Mr. Morton has told me that he is quite
prepared to discuss Article 18 at any time agreed upon. At that
meeting, or subsequently, the Australian delegate would be able to
present an amendment on Sub-paragraph (j) if he desired to do so.
MR. H. HEYES (Australia): We are waiting until advice has
been received from our Government, and in order to be able to study
it and perhaps give other Delegations advice, we would like the
matter brought up again before the Commission, say, early next
week if that is agreeable. We would also welcome the opportunity
to raise this other question.
CHAIRMAN: We pass now to the last item. It is not on our
Agenda but you will all have received this morning document W/245.
It is a paper by the Secretariat and paragraph 2 contains a pro-
posal for a new paragraph to Article 37. I hope you have all
read it. It is not twenty four-hours since it has been in our
hands, but there has been sufficient time to read it and I think
we may proceed to an examination of it even if we do not come to a
decision.
M 21 G 22
E/PC/T/A/PV/30
CHAIRMAN: Any objections?
Then it is agreed we go through this proposal.
"During the discussion on Article 15 in the Sub-Committee
dealing with Articles 14, 15 and 24 it was proposed that the use
of differential internal taxes for the purpose of giving
effect to price controls maintained by a country undergoing
shortages subsequent to the war should be permitted for a
transitional period. Therefore, the Sub-Committee has suggested
that paragraph 2(a) of Article 25, which now permits the use
of quantit ative restrictions for various transitional purposes,
should be moved to Article 37 (general exceptions) and should
be broadened to cover all measures otherwise proscribed by
Chapter V. The effect of this would be to permit, during the
postwar transitional period, the use of differential internal
taxes and internal mixing relations as well as quantitative
restrictions in order to distribute goods in short supply, to
give effect to price controls based on shortages and to liquidate
surplus stocks or uneconomic industries carried over from the
war period."
That was the suggestion of the Sub-Committee dealing with
Article 15, and that Sub-Committe referred the proposal to
the Sub-Committee on Articles 25 and 27, and that second Sub-
Committee has agreed in principle to the removal of paragraph
2 (a) from Article 25, without any commitment as to its
applicability to measures other than quantitative restrictions
or as to the precise text.
You wilI then see that the Sub-Committee on Article 15
proposes that the contents of paragraph 2 (a) of Article 25
be transferred only to Article 37, and the other Sub-Committee G 23
E/PC/T/A/PV/30
consulted by the first one said that as far as they are
concerned (that is as far as quantitative restrictions are
concerned) they have no objection.
The Sub-Committee on Article 15 considered it right that
the new Article should follow not only quantitative restrictions
but also differential internal taxes and internal mixing
regulations; and then the first Sub-Committee has not presented
any text but simply said, "Take paragraph (a) of Article 25
and place it in Article 37", and the Secretariat has drafted
text which you will find on page 2 of Document 245.
I have gone through that text. It is very much like the
original text of paragraph 2 (a) of Article 25, and I do not
think it would be worth our while to go through it word for
word. We should try to come to a decision as to whether in
principle we accept the Recommendation of these two Sub-
Committees and are willing to recommend to the Preparatory
Committee the inclusion in the Draft Charter of a new
paragraph to Article 37.
We must also decide whether that new paragraph should
remain in Chapter V, which I think is the right thing, or
whether it should be sent over to the end of the Charter.
With regard to the Draft presented by the Secretariat, it
formulates the new proposal as paragraph 2 of Article 37; but
it contains three sub-paragraphs, and, of course, there is
nothing to prevent us from adding each one of these paragraphs
to other paragraphs of Article 37; but that is a question of
drafting we can settle at our next meeting.
I now put it to the Delegates kindly to speak on the
question of principle. 24
S E/PC/T/A/PV/30
CHAIRMAN: The Delegate of South Africa.
Mr. J. G.CHERRY (South Africa): Mr. Chairman, there is only
one point to which I wish to refer here. It may be considered
a drafting point, but I would like to be certain on this point.
Referring to your remark as to whether this should be a second
paragraph or merely three headings added to the existing Article,
I understand that this was put in as a second paragraph owing
to the temporary nature of these three exceptions. We would
like to be certain that the proviso at the beginning of Article
37, starting with the words "Subject to the requirement that
such measures" down to the words "international trade", would
apply with equal force to these three exceptions as to the
headings already in the text of Article 37.
That proviso, if I remember rightly, Mr. Chairman, was
inserted during the Church House discussions and it seems to be
just as necessary with the three new headings as with the
existing headings. We have no objection in principle to the
transfer of this sub-paragraph in Article 25 to Article 37.
CHAIRMAN: Are there any further remarks?
You will have seen, on Page 1 of Document W.245, in the last
line but one, "should be permitted for a transitional period",
and you know that the original text of Article 25, paragraph
2(a) expressly speaks about "the early post-war transitional
period." So I take it that if it is decided to accept the
suggestion of the Sub-committee on Article 15, we must also,
in the text we add to Article 37, give expression to that idea. 25
S E/PC/T/A/PV/30
Would not the point of the South African Delegate be
covered if we start the new paragraph 2 with something like the
beginning of the old Article 37, "Subject to the requirement. . .",
mentioned in Paragraph 1, or something of the kind, just to make
it quite clear that this new sub-paragraph, or this Paragraph 2,
would be covered by the general proviso of the Article?
Mr. J.G.CHERRY (South Africa): Yes, Mr. Chairman, I think
it would. Failing that, it would, I presume, be possible to
start Paragraph 1 with the word "Nothing"; that is to say,
"Subject to the requirement" down to "international trade"
would be a preamble to the Article; then Paragraph 1 would
start and the new Paragraph 2 would follow on.
CEAIRMAN: May I ask whether there are any further remarks
on the question of principle; whether we shall insert in
Article 37 clauses corresponding to the old Article 25,
Paragraph 2 (a)?
The Delegate of the United Kingdom.
Mr. G. IMMS (United Kingdom): Mr. Chairman, these three
new exceptions seem to us to be of an entirely different type
from those which are already in Article 37, and the effect of
transferring them to Article 37 and widening the exceptions
from quantitative restrictions which they at present enjoy
under Article 25 seems to us to require rather more examination
than we have had time to give this paper. I should like to
suggest therefore that we continue this discussion at some later
time, when we have had an opportunity to consider the consequences
of this inclusion.
CHAIRMAN: The Delegate of Norway. S 26 E/PC/T/A/PV/30
Mr. J. MELANDER (Norway): Mr. Chairman, the Norwegian
Delegation agree in principle to this transfer of the substance
of Paragraph 2 (a) of Article 25 to Article 37, and we further
agree with the Delegate of the United Kingdom that these exceptions
are quite different in character from the existing ones. They
are of a temporary character, whilst the others are permanent,
and they are also very limited and very clearly defined. We
are therefore also in some doubt as to whether the general
introduction in Article 37 ought to apply directly to this
new paragraph.
On the other hand, we felt it ought to be a new and
separate paragraph, in order to distinguish between the permanent
exceptions and these temporary exceptions.
On the other hand, there are some questions relating to the
text itself which we agree with the Delegate of the United
Kingdom it might be useful to study at a later date, when we have
seen, in all the appropriate sub-committees, the effects of the
internal taxes and quantitative restrictions on these particular
exceptions. It may be that we shall need to alter the text
here and there, and we certainly agree with the Delegate of
the United Kingdom that it will require some further consideration. 27
ER E/PC/T/A/PV/30
Mr. H.M. CATUDAL (United States): Mr. Chairman, we are
agreeable to the principle of transferring the dispositions of
Article 25 to Article 37.
Baron P. de GAIFFIER (Belgium): Mr. Chairman, the Belgian
Delegation in this Commission has already approved the transfer of
this disposition to Article 37. I think there is no reason why we
should not be consistent in this as well.
CHAIRMAN: Could we not then decide that we prepare for the
next discussion on the supposition that it will be finally agreed
to accept the suggestion made by the Sub-Committee on Article 15,
and incorporate these points in Article 37? That will be the
basis on which we are going to discuss this next time.
If there are no other remarks, we have terminated our agenda
today, and I hope that, at our next meeting, we shall be able to
terminate the remaining Articles, and in particular Article 18.
The meeting is adjourned.
The meeting rose at 6.10 p.m. |
GATT Library | pq707mm9756 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Thirtieth Meeting of Commission "B" held on Saturday, August 16, 1947, at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, August 16, 1947 | United Nations. Economic and Social Council | 16/08/1947 | official documents | E/PC/T/B/PV/30 and E/PC/T/B/PV/26-30 | https://exhibits.stanford.edu/gatt/catalog/pq707mm9756 | pq707mm9756_90250109.xml | GATT_155 | 19,435 | 116,428 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/B/PV/30
16 August 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
THIRTIETH MEETING OF COMMISSION "B" HELD ON
SATURDAY, AUGUST 16, 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).
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 P 2 E/PC/T/B/PV/30
CHAIRMAN: Will the meeting come to order, please.
At the request of the Delegate of Czechoslovakia we were
to take a vote at the outset of this meeting regarding the
proposal to substitute the word "may" for "shall" in the opening
sentence of paragraph 3 of Article 65. The delegate of
Czechoslovakia.
H. E. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman,
Gentlemen, as Mr. Wilcox observed, we are proposing only a Draft
Charter for the consideration of other countries. On the other
hand, the Czechoslovakian Delegation, in making its proposal, did
so only because it thought to be in line with the intentions of
the United Nations, not for other reasons. As the question will,
in the end, be settled by the United Nations when the Organization
comes to be brought into relationship with the United Nations as a
specialized agency, I do not insist upon a new voting on this
question.
CHAIRMAN: I would thank the Czechoslovakian Delegate for
having withdrawn the request for another vote.
We will now take up the Note which was to take the place of
the Czechoslovakian proposal to add new paragraphs 6 and 7, The
Note which has been prepared by the Secretariat has been circulated
in the English text. We shall have copies of the French text in
speaking
a very short time. So, if the French/Delegation have no-objection,
I will read the Note in English, the interpreters will translate
it, and we will endeavour to discuss it while waiting for the
French text which has been prepared by the Secretariat.
Mr. Angel FAIVOVICH (Chile) (Interpretation): Mr. Chairman,
until we have the French text, I am very sorry but I cannot
discuss this proposal. P 3 E/PC/T/B/PV/30
Dr. W. C. NAUDE (South Africa): I am trying to find
the word "employment" in the original text, Mr. Chairman. I
take it that the Brazilian Delegate refers to sub-paragraph (a)?
Mr. J. TORRES (Brazil): Yes.
Dr. W. C. NAUDE (South Africa): It was not in the New
York text. I am not sure that it was in the text of the Sub-
Committee. I do not know quite what the Brazilian Delegate
had in mind.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I think
the reason for which the word "employment" was omitted, both
in New York and in Geneva, is that the undertakings of the
Member-States relating to full employment are mentioned in
Chapter III, in Article 8 to be accurate, and there in this
Article the Member-States agree to furnish information on
employment. The Article referred to is now Article 7. The
reference is in paragraph 1, sub-paragraph (a).
CHAIRM:N Does that explanation satisfy the Delegate of
Brazil?
Mr. J. TORRES (Brazil): Yes, thank you.
CHAIPMNA: Is sub-paragraph (a) approved?
Adopted,,.
Sub-paragraph (b: ) we now come to the note of the Legal
Drafting Committe:; -
"The concluding words of this sub-paragraph should be
deleted in view of the provisions of Chapter VIII and
the opening sentence of this Articl.," P E/PC/T/B/PV/30
CHAIRMAN: Then we will pass on to the next Article and
come back to this Note after the French text has been circulated.
We shall take up Article 66: Functions,
First paragraph. Approved?
The Delegate of France.
M. ROYER (France) (Interpretation): I would like to draw
the Secretariat's attention to the English text of paragraph (a) -
the words "... international trade, including information
relating to ..." have been omitted, before "... commercial policy."
CHAIRMAN: That is correct. Are there any other comments
on paragraph 1? Is Article 66 approved?
The Delegate of Czechoslovakia.
H. E. Z.AUGENTHALER (Czechoslovakia): You said "Article 1",
Mr. Chairman, and I was looking for Article 1,
I wanted only to ask if the Note which is down to sub-paragraph
(c) (i) will remain in the text; because we should be obliged if
this Note could be kept in the Draft.
CHAIRMAN: I think we will deal with this Article paragraph
by paragraph and then we will come to that Note in due order.
There are no objections to the opening paragraph?
Approved.
Sub-paragraph (a).
MR. J. TORRES (Brazil): Is there any reason why the word
"employment" was left out?
CHAIRMAN: Will the Chairman of the Sub-Committee please
explain? E/PC/T/B/PV/30
- 5 -
Does the Czechoslovakian Delegate wish these words to be retained?
The Legal Drafting Committee proposes the deletion of those words,
H.E. Z. AUGENTHALER (Czechoslovakia):
That is not this
point.
CHAIRMAN: I see: It is on the next page.
Commission agree to the deletion of those words?
Does the
Dr. W. C. NAUDE (South Africa):
would gladly accept that,
CHAIRMAN: It is agreed.
Agreed.
I think the Sub-Committee
Sub-paragraph (b) is approved?
P - 6 -
Sub-paragraph (e). We find here a Note:- "The Committee
agreed that the deletion of the mention of specific classes of
such nationals and enterprises should not be taken as indicating
that these classes are not covered in the above broad language.
Thus such language would cover treatment of, for example,
commercial travellers, and foreign creditors in bankruptcy,
insolvency or re-organization". That Note was proposed by the
sub-committee, and, if the Commission approves it, it will be
retained in the text of the Report. Is the Note approved?
Is sub-paragraph (c )?approved?
Agreed.
Is sub-paragraph (d) approved?
Agreed.
H.E. DR. Z. AUGENTHALER (Czecheslovakia): Mr. Chairman, I
think that we are considering in this sub-paragraph the Member
countries as being inter-governmental organizations - "to
co-operate with the United Nations and other inter-governmental
organizations .....".
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Enterpretation): Mr. Chairman, we were
faced with the same ambiguous drafting in another Article, and we
decided there to suppress the word "other', which did not add
enything to the text.
CHAIRMAN: Is that agreed?
The Delegate for South Africa. DR. W.C. NAUDE (South Africa): Mr. Chairman, I confess that,
as far as I am aware, the United Nations is an inter-governmental
organization, and if it is simply a question of dropping the word
"other". I am quite sure that no Member of the sub-committee will
see anything against it.
CHAIRMAN: The word "other", of course, refers to "other
than the International Trade Organization".
The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, this is
only a very minute point, but I hope that in Havana the text will
be amended and we will be able then to drop the words "inter-
governmental Organizations", because by that time the Bank and
the International Monetary Fund will have had their final statute
approved and then they will become normal specialized agencies.
Therefore, the words "inter-governmental organizations" will be
replaced by the words "specialized agencies".
CHAIRMAN: I take it then that the Commission does not
insist on the deletion of the word "other"?
MR. J. TORRES (Brazil): Mr. Chairman, I think it would be
desirable, following the action taken in similar cases. I think
the word "other" makes for confusion here.
CHAIRMAN: Is it agreed that the word "other" should be
suppressed?
Agr bp e --~ pr:. -
Is sub-paragraph (e) approved? -
J.
E/PC/T/B/rV/50 Is Article 67, "Structure", approved?
Approved.
Is Article 68, paragraph 1, approved?
Agreed.
Paragraph 2?
Agreed.
Paragraph 3?
Agreed.
In a few minutes, the French text of the Note to be added to
Article 65 in place of the amendments to paragraphs 6 and 7
proposed by the Czechoslovak Delegation will be distributed.
Therefore, I think we can now take up this Note.
The Note reads as follows:- "The Preparatory Committee
considered a suggestion to add to Article 65 provisions regarding
the effect of suspension of, or expulsion from, membership in the
United Nations upon membership in the Organization. It was
agreed that in view of the complexity of the issues involved and
the late stage at which the suggestion was made, this question
should be deferred until the World Trade Conference by which time
governments would have been able to study it fully".
E/PC/T/B/PV/30 V E/PC/T/B/PV/30
CHAIRMAN: Are there any comments? Is the note approved?
M. ROYER (France) (Interpretation): Mr. Chairman, I hope
that the Secretariat will go over the drafting of the French
note, because as it is drafted now it has a definite
anti-feminine touch! They speak of "the expulsion of one
Member" in the feminine in French!
CHAIRMAN: I think that is solely due to pressure of time.
Is the note approved?
(Agreed)
We come now to Article 69 on Voting.
I see that the Chairman of the ad hoc Committee that
considered the question of Voting is not here.
Mr. Wunsz KING (China): Mr. Chairman, I may be able to
get in touch with him.
CHAIRMAN: If the Members of the Commission agree, we
might defer Article 69, Voting, until the Chairman of the
Sub-Committee is present, and take up in the meantime the
subsequent Articles.
Article 70. Paragraph 1. Is paragraph 1 approved?
(Agreed)
Paragraph 2. (Approved)
Article 71 - Powers and Duties.
Paragraph 1. No comments? (Approved).
Paragraph 2? Approved.
Paragraph 3.
Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
would favour a simple majority.
The Czechoslovak Delegation has proposed an
CALIMALN: - 10 - E/PD/T/B/PV/30
amendment to paragraph 3, providing for a simple majority,
in place of a two-thirds majority.
Dr. W.C. Naude (South Africa): Mr. Chairman, speaking
as Chairman of the Sub-Committee, I might mention that that
one paragraph took the Sub-Committee five meetings-to produce
those few words you see there. As regards the distinction
between two-thirds and a simple majority, the solution reached
is that the Conference by a two-thirds majority may lay down
possible exceptional circumstances in which an ordinary simple
majority would be adequate to grant a waiver. It was on
that basis that a solution was found and these words were
produced.
CHAIRMAN: Are any Delegates other than the Czechoslovak
Delegation in favour of this proposal?
M. Angel FAIVOVICH (Chile) (Interpretation): Mr. Chairman,
in regard to this paragraph 3 and this question of a two-thirds
majority, we approve what has been said by the Czechoslovak
Delegate, and we have to reserve our position tzrx-_ regard to
Article 13B.
CHAIRMAN: Do any other Delegates wish to speak on this
proposal?
Baron P. de GAIEEIiP? (Interpretation):
Mr. Chairman, I wonder if there is a relation between this
Article and Article 13B, because it is stated in this
circumstances
paragraph "in exceptional/not elsewhere provided for in
this Charter".
CHAIRMAN: Any other speakers?
Does the Czechoslovak Delegate wish to maintain his proposal?
V - 11 -
V E/PC/T/R/PV/30
Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I do
not insist.
M. Angel FAIVOVICH (Chile) (Interpretation): Mr.Chairman,
referring to the words which have just been mentioned by the
Belgian Delegate, I should like to say that the question of
Article 13B has been left open for discussion by the World
Conference, and this is why I stated this point and mentioned
Article 13B.
CHAIRMAN: Article 13B contains its own provisions
regarding voting. It is not necessary for the Chilean Delegate
to reserve his position on this particular Article in order
to protect his position on Article 13B.
M. Angel FAIVOVICH (Chile) (Interpretation): Mr.Chairman,
we do not know yet the decision which will be taken by the
World Conference.
CHAIRMAN: The reservation of the Delegate of Chile will
be recorded with regard to this paragraph.
Are there any other comments on paragraph 3? Is paragraph 3
approved?
(Agreed)
Paragraph 4. Any comments?
(Approved)
Paragraph 5.
Dr. Z. AUGENTHALER (Czechoslovakia): Mr.Chairman, first,
I am grateful to the Legal Drafting Committee that reference
is made hare to the Members and to inter-governmental
Article 2, paragraph 7 of the United Nations Charter, -that is,
that the Organization is not entitled to make any recommendations
concerning individual countries. Is is only to make recommendations
to Members as a whole. - 12 - E/PC/T/B/PV/30
CHAIRMAN: Does the Czechoslovak Delegate wish to make a
motion, or simply have an Amendment ?
Mr. AUGENTHALER (Czechoslovakia): I do not want any motion,
but should be glad to know if there are any Members of this
Commission who are of the contrary opinion.
Mr. SHACKLE (United Kingdom): I cannot help feeling this
is a rather doubtful proposition, because if my recollection
serves me rightly there is provision, at least in the Balance
of Payments Article, on which to make recommendations to
Members as to matters falling within the scope of that Article.
When I look at paragraph 7 of Article 2 of the Charter
I see it reads like this: "Nothing contained in the present
Charter shall authorize the United Nations to intervene in
matters which are essentially within the domestic jurisdiction of
any state or shall required the Members to submit such matters to
settlement under the present Charter; but this principle shall
not prejudice the application of enforcement measures under
Chapter VIII".
Well surely this is not a case of submitting matters
essentially within the jurisdiction of a state; if a state has
signed this Charter it will have agreed to the provisions of
the Charter, and if the provisions say that the Organisation
may make recommendations, well it is agreed in advance it may
do so.
But I see no reason to put in any general reservation or
variation such as is suggested.
CHAIRMAN: Any other comments?
Mr. AUGENTHALER (Czechoslovakia): Mr. Chairman, I am
G G - 13 - E/PC/T/B/PV/30
grateful to Mr. Shackle for his explanation, because it is just
the point I want us to have clear.
The Draft of the Charter contains all kinds of provisions
which are essentially matters of domestic jurisdiction; and if
there would be a possibility for the ITO to make recommendations
to individual States on those matters, it would mean that the
ITO is greatly interfering with the home policies of the countries
concerned. I do not know how some countries would accept
a recommendation that it should do something to have, for
instance, full employment in one way or another, and so on.
It is general, it is usual, that no recommendations in respect
of a country should be mate without the consent of that country.
CHAIRMAN: The Delegate of the United Kingdom
Mr. SHACKLE (United Kingdom): Mr. Chairman, may I give an
example of what I was saying just now. It is quoted from the
New York Text but is not altered in this particular substance.
If you will look at Article 26 3 (d) of the New York Text,
page 22, you will see that if the Organisation considers it
desirable, after submitting observations to the parties with
the aim of achieving a satisfactory settlement of the matter
it may
in question,/recommend the withdrawal or modification of
restrictions which it determines are being applied in a manner
inconsistent with the provisions of the paragraphs.
Now that surely gives a clear power to the Organisation
to make a recommendation to an individual Member, and as to
its being done with the consent of that Member, the Member has
given his consent in advance, because he has signed the Charter
which contains that provision.
That is an example of what I mean. G - 14 - E/PC/T/B/PV/30
CHAIRMAN: The Delegate of Cuba.
Mr. GUTIEREEZ (Cuba): Mr. Chairman, if the Cuban Delegation
had the slightest doubt that this Text could give the Organisation
the right of intervention, we would be against it absolutely;
but we do not think so, and when this Text says, on the contrary,
"make recommendations to Members" it is only expressing in a
general form what has been set forth along the whole Charter
in relation to the different problems under discussion on which
the Organisation has to take a consultation or give a decision. - 15 -
A recommendation only means - as the phrase expresses very
clearly - that the Member should do a certain thing according
to the provisions of the Charter, and if the Member is
willing to accept it there is no intervention at all. If
the Member does not accept it, then the Charter has provision
for those cases. So there is not one single opportunity to
consider this text as conferring on the Organization the
right ot intervention.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation: Mr. Chairman, I would
not like to prolong the debate, but I think we are in the midst
of confusion here. There are two different things in the
Charter. First of all we have recommendations as provided
for expressly in Article 26. These recommendations, as I
have said, are provided for expressly in the Charter, and these
relate to the powers and duties of the Organization and powers
which are in the hands of the Conference, as stated in Article
71, Paragraph 1, which reads: "The powers and duties attributed
to the Organization by this Charter . . . be vested in the
Conference." These powers correspond to undertakings by
Members and there I agree with Mr. Shackle on the remark he
made, but, in Paragraph 5 of Article 71, we have something quite
different. We have here the possibility for the Organisation
to make general recommendations on general matters within the
general framework of the Charter. Here these recommendations
are quite independent and are of a different character from
the recommendations which I mentioned first, and here I have
to agree with what the Czechoslovak Delegate has just said.
It would not be possible for the Organization to act as a tribunal
and make recommendations in particular cases, under this
provision, to an individual Member.
E/PC/T/B/PV/30
S S - 16 - E/PC/T/B/PV/30
To take one example, it would not be possible for the
Organization to make a recommendation to the United States
because the Organization thought that the United States was
not following an adequate policy in regard to their natural
resources of petroleum, or to tell the United States that they
would have to bring into effect a quota on the drilling and
extraction of petroleum. Therefore I think that Paragraph
5 only provides for recommendations of a general character,
made to all Members in the general framework of the Charter.
CHAIRMAN: The Delegate of the Netherlands.
Mr. A. B. SPEEKENBRINK (Netherlands): Mr. Chairman, I am
myself now confused, because when I read that the Conference may
make recommendations to Members I thought it was a general power
of the Conference to make these recommendations. Then the question
arose in my mind as to how we can settle a dispute if we cannot
make a recommendation to an individual Member.
CHAIRMAN: The Delegate of South Africa.
Dr. J. E. HOLLOWAY (South Africa): Mr. Chairman, I think
the Delegate of France has said most of what I wanted to say. It
seems to me that the Article is either necessary or superfluous -
because it is covered, in the matters where the Organization has
to make recommendations in the course of its normal duties, by
other Articles where they have been given the right - or it goes
beyond that.
Then there are two cases: one is that it is just a recommend-
ation to the body of Members - as the French delegate has said -
and not to individual Members. I can see no objection to that.
But, if it can make a recommendation to any individual Member on
anything that happens to that individual Member, you can tell the
British Government that it should not go on with nationalization
and the United States Government what they ought to do with John
L. Lewis, and so forth. Then it is definitely mischievous and in
that case I think it should go out.
CHAIRMAN: The Delegate of the United Kingdom. Mr. R.J. SHACKLE (United Kingdom): I entirely agree
with the point of view expressed by the French delegate. It seems
to me essential to bear in mind the distinction between the class
of recommendations which are provided for by various provisions of
the Charter and the class of other cases which are not provided
for. The very obvious case of the recommendations which is pro-
vided for is in paragraph 1 of Article 87 which says: "The
Executive Board or the Conference, as the case may be, shall prompt-
ly investigate any matter so referred and shall make recommenda-
tions to the Members which it considers to be interested." Clearly
it has got to have that power, and what is more, the Members have
to accept in advance that they will accept recommendations from
the Organisation on those matters. I would like to ask a question
whether there is an overlapping of interpretation in this para-
graph and another paragraph. It is quite true that Article 66
refers to the Organisation' ower of consultation and recommenda-
tion while in this paragraph it is mentioned that a particular
power of recommendation is granted to the Conference. I am not
sure that it is necessary to provide for such a distinction, but
that, at any rate, was the idea of the authors of this paragraph.
I should supply the reference to the passage which I have
mentioned. It is paragraph (d) of Article 66. There is a slight
difference there because in paragraph (d) of Article 66 there is
no reference to inter-governmental organisations; otherwise it
looks as if they may be overlapping.
CHAIRMAN: Can we, after these explanations, accept paragraph
5?
Dr. W. C. NANDE (South Africa): Mr. Chairman, I wanted to
add that the intention was to word that paragraph in the sense
of the Commission. Perhaps it was achieved in a rather whimcical
ER - 17 - E/PC/T/B/PV/30 ER - 18 - E/PC/T/B/PV/30
way. It was done by leaving out the word "the" before "Members".
You will see in the New York draft there is a reference to the "re -
commendation to the Members." By leaving out the word "the" you
could ensure a recommendation in general rather than to individual
Members.
CHAIRMAN: I thank the chairman of the Sub-Committee. I
think that after this explanation we could accept the paragraph
seeing that the sub-Committee has in mind the recommendations of
the Czechoslovakian delegate when they considered this paragraph.
Is paragraph 5 approved? Agreed.
Paragraph 6. A note by the Legal Drafting Committee. "It
is recommended that the words 'without its consent' be deleted
as their retention implies that a Member may be required to con-
tribute up to one-third of the total expenditures without its con-
sent."
Mr. H.F. ANGUS (Canada): Mr. Chairman, the Canadian delegation
wishes to record a reservation to the proviso with which this para-
graph ends. The pressure of time made it impossible to debate
this matter fully in the sub-Committee, and I think the same con-
sideration - pressure of time - makes it inadvisable to debate it
here, and the simplest course is merely to record a reservation to
this proviso.
CHAIRMAN: Due account was taken of the reservation by the
delegation of Canada. Are there any comments on the recommenda-
tion of the Legal Drafting Committee that the words "without its
consent" should be deleted? ER - 19 - E/PC/T/B/PV/30
Dr. H.O. COOMBS (Australia): Mr. Chairman, I dislike the
deletion of these words. As a matter of fact we dislike the proviso
altogether although we do not want to make an issue on that point.
It seems to us that this proviso means that in respect of contribu -
tions to the cost of this enterprise we can have for certain Members
regressive principle of contributions which we think is not fair.
It means that if a fair assessment of the coats suggests that one
country should bear more than one-third then the implications of
more
this proviso are that other Members shall bear/than their fair share.
However, we understand the reasons for this and we do not want to
object if we delete these words "without/consent" the proviso
will then mean that it will not be possible even to assess a fair
contribution by a Member at more than one-third and offer it the
opportunity to fulfil the obligation indicated by that assessment.
We accept a position that they shall have the right to refuse but
we see no reason why they should not be asked.
CHAIRMAN: Any other comments?
H. E. Z. AUGENTHALER (Czechoslovakia): I would support the
opinion of Dr. Coombs. J.
- 20 -
CHAIRMAN: I take it then that it is the sense of this
Commission that "without its consent" should be retained. Is that
agreed?
The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I would
like to have it registered in the records that, if we maintain
the inclusion of these words here, they will not have the
consequental meaning which was brought out by the Legal Drafting
Committee. Therefore, the text means here that no Member shall be
required to contribute more than one-third, but does not mean that
any Member, without its consent, must be assessed for the
general contribution.
DR. H.C. COOMBS (Australia): Mr. Chairman, I would like to
point out to the Commission that that is precisely what it does
mean - that other Members can be required to contribute, and there
is, furthermore, a provision in a later part of the Charter for
dealing with them if they do not pay promptly in accordance with
the assessment.
CHAIRMAN: Are there any other comments?
Mr. D.D. KARMARKAR (India): Mr. Chairman, I should like to
add one word on this point.
Perhaps the whole difficulty would disappear if we say
"Provided that no Member shall be required to contribute more than
one-third of the total of such expenditure, unless he voluntarily
consents to do so.
CHAIRMAN: Are there any comments on the suggestion of the
Indian Delegate?
E/PC/T/B/PV/30 - 21 -
J. E/PC/T/B/PV/30
MR. R.J. SHACKLE (United Kingdom): I do not think that the
proposal changes anything. Indeed, it is said here that the
Conference will approve contributions by a simple majority and this
decision is the majority equivalent of an implicit obligation of the
Member State to pay this contribution. If the allocation does
require a particular Member to contribute one-third well then, that
Member will have to pay one-third even if the decision has not been
taken by a simple majority, but I do not see that there is any need
tò alter the wording at all.
DR. H.C. COOMBS (Australia): Mr. Chairman, I should like to
make it quite clear that if delegates would look at Article 85, they
would see the penalties to countries which do not promptly contribute
to the Organization the amount of the expenditure of the Organization.
The procedure is, as I see it, that the Conference will
apportion the costs of the Organization between the Members, and
they may desire that a particular country should pay more than one-
third. If we take this clause as it now stands with the words
"without its consent", or if we take the words which the Indian
Delegate suggested, that will mean that if a country is apportioned
to pay more than one-third, it would have the right to refuse.
Other Members, however, must bear the costs as a portioned, or else
bear the penalty to the effect that they shall have no vote.
If we delete this clause, it would mean that the Conference
could not apportion more than one-third to any one Member. That is
quite a different thing. We believe that it should be open to the
Conference to apportion the costs of the Organization which seem
fair to them, while reserving the right of any Membor, however
many Members there may be, to refuse to pay more than one-third
If you do that, it would mean a re-apportionment to the others,
and that reapportionment must be borne, but without these words,
the country concerned is not even offered the opportunity of J. - 22 - E/PC/T/B/PV/30
contributing what the country believes to be a fair apportionment
of costs.
CHAIRMAN: I think it is clearly the sense of the Commission
that the words "without its consent" should be retained. I do
not believe that the suggestion of alternative wor ing made by the
Delegate for India would materially overcome the point made by the
Legal brafting Committee. Therefore, I would propose that we
adopt this paragraph without any change. Is that agreed?
Paragraph 6 is approved.
.Are there any comments on paragraph 7?
Approved.
Before taking up the Report of the Sub-Committee on Voting,
I would like to call the attention of the Commission to a Note
which has been passed to me by the Secretariat.
In the course of the discussion on Articles 34, 35 and 38, the
Delegate of the United States proposed the deletion of paragraph 4
of Article 35, because the proposed Article 13(c) deals with the
same subject matter. - 23 -
V E/PC/T/B/PV/30
The decision on the deletion of paragraph 4 of Article 38
was postponed until the text of Article 13C and paragraph 3
of Article 66 had been established. The text of Article 13 C
has now been established, and we have just approved paragraph 3
of Article 66 (that is, the present Article 71) subject to
the reservation of the Delegate of Chile. I therefore think
it is now in order for us to take up the proposed deletion of
paragraph 4 of Article 38.
Paragraph 4 of Article 38 reads: "The Members recognize
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".
Are there any comments on the proposal to delete
paragraph 4 of Article 38?
M. ROYER (France) (Interpretation): Mr. Chairman, I
am somewhat surprised at this proposal. I do not think that
the provisions of Article 13B cover the provisions of
paragraph 4 of Article 38. In fact, Article 13B is more
limited in its scope, and paragraph 4 of Article 38 has some
importance for us. Therefore I would not be in a position
to approve of this deletion now, and I would have to reserve
my position on the matter.
CHAIRMAN: The Delegate of Brazil.
Mr. J. TOREES (Brazil): Mr. Chairman, when this matter
was discussed in the Sub-Committee dealing with Chapter IV,
the position of Brazil was that there was no need for the
inclusion of this particular problem in Article 13, because
_ , . . . V
- 24 - E/PC/T/B/PV/30
the countries who might need this special treatment would have
ample satisfaction in Article 38. However, showing a spirit
of conciliation, we agreed to co-operate with the other Members
of the Committee in working out some formula which might take care
of the needs of certain countries that were so forcefully
pressed, and to deal with this in Article 13.
When we discussed the Report on Chapter IV, we indicated
this position, and made a reservation on Article 13B pending
the decision at the Havana Conference on the matter of voting,
because our position is that all these exceptions should only
be agreed upon by the Organization on the condition of the
two-thirds vote.
We are, therefore, in complete agreement with the
proposition of the American Delegation, and feel that if we now
transfer the matter from Article 38, paragraph 4 to Article 13B,
there is no further need for it in Article 38(4), and we support
the proposal of the American Delegation.
M. Angel FAIVOVICH (Chile) (Interpretation): Mr.Chairman,
I do not wish to add anything to what the French Delegate has
said, because I am in complete agreement with the arguments
which he presented. Article 13B refers to new preferential
arrangements taken for reasons of economic development and
reconstruction, and paragraph 4 of Article 38 relates to
preferential arrangements of another nature. We
are, therefore, against the deletion of this paragraph.
CHAIRMAN: Any other speakers? If there are no other
speakers it will be necessary to put this proposal of the
United States Delegation to the vote. - 25 -
E/PC/T/B/PV/30
Mr. WILCOX (United States): We have no enthusiasm for the
establishment of new preferential arrangements. We agreed in
London to put one provision in the Charter in order to satisfy
the desires of the Conference.
We have agreed here to put in another provision in the
Charter, on the assumption that it displaces the first one.
We see no reason why this escape should appear twice. On
the whole we feel that once is too much, and we certainly would
take the view that once is enough.
CHAIRMAN: The Delegate of France.
Mr . ROYER: (France): (Interpretation): Mr. Chairman, we
are not in favour of new preferential arrangements in themselves;
and it was not at the request of the French Delegation that new
preferential arrangements were mentioned twice here. We think
that one clause relating to new preferential arrangements would
be sufficient. In fact we cannot see that there is any overlapping
of an escape clause; the overlapping does not coincide and
therefore we cannot see that there is a double escape olause here.
Now I would like to state that if the French Delegation is in
favour of maintaining paragraph 4 of Article 38, it is for the
reason that this Article has already been in the Press and linked
there with initiatives taken in other places than in Geneva.
If this Article were to be deleted now a significant value
might be attached to this deletion, and it might be interpreted
to mean that steps which are, may be, in the process of being taken,
would/have to be taken in the future, and it is not desired to
follow the path which was indicated.
CHAIRMAN: The Delegate of the United States.
G
r G E/PC/T/B/PV/3o
Mr. WILCOX (United States): I do not believe that the
French Delegate is referring in his remarks to paragraph 4 of
Article 38, but to a different paragraph which I am trying to
have found.
Mr. Chairman, there was written into the new text of
Article 38 a section that had to do with arrangements working
towards the eventual establishment of a customs union.
This is not the point now under discussion. The point now
under discussion is the other text of paragraph 4 of Article 38.
There are two different texts.
Mr. AUGENTHALER (Czechoslovakia): Mr. Chairman, I think
that this discussion is a little surprising, because we are not
prepared for it. That is why I would move that this point
be discussed on Monday in Commission "A".
CHAIRMAN: The Czechoslovak Delegate has moved an
adjournment of the debate, to the effect that this question should
be taken on Monday in Commission "A ".
We will now have two speakers for and two against, and the
question will then have to be put to the vote.
Does any Delegate wish to speak to the motion of the
Czechoslovak Delegate?
Dr. COOMBS (Australia): Could we have the Czechoslovak
Delegate explain why he wants to adjourn it?
Mr. AUGENTHALER (Czechoslovakia): Mr. Chairman, for a very
simple reason - because it was not on the order of the day.
CHAIRMAN: On that point I might mention that it was agreed
in Commission "A". that this point should be taken up in
Commission "B".
The Delegate of Belgium. E/B/T/B/PV/30
BARON DE GAIFFIER (Belgium) (Interpretation): Mr. Chairman,
if this debate were to be adjourned until Monday, my question is,
would we study on Monday the relation between Article 13B and
paragraph 4 of Article 38, or the relation between paragraph 4
of Article 38 and paragraph 3 of Article 66?
CHAIRMAN: The proposal of the United States Delegation is
that we leave paragraph 4 of Article 38, taking into consideration
the relation between 13B and paragraph 3 of Article 66.
Mr. SHACKLE (United Kingdom) : Mr. Chairman, we should on
the whole be in favour of the Czechoslovak proposal to take it
: on Monday. There are a number of matters concerned in it and
we think that there should be time for the Commission to think
the matter over.
CHAIRMAN: The Delegate of Chile.
Mr. FAIVOVICH (Chile) (Interpretation):
of adjourning the Debate until Monday.
We are in favour
CHAIRMAN: Now two Delegates have spoken in favour of
adjourning the Debate until Monday. Does any other Delegate
wish to speak against?
Is it agreed to adjourn this discussion until Monday?
Agreed. S
We have now come to the point where we should take up
the Report of the Sub-committee on Voting and the Composition
of the Executive Board. This Report will be found in Document
E/PC/T/143. I would also call the attention of the Members
of the Commission to the documents which were circulated this
morning - Document E/PC/T/W/298, alternative drafts proposed by
the United States Delegation regarding Voting; Document W/297,
being a Note by the United States Delegation on their proposal
and giving particulars regarding various formulae for weighted
voting; and Document T/173, being a paper submitted by the
Delegation of India regarding India's relative economic
importance before and after partition.
There has also been circulated to Members of the Commission
this afternoon the Report of the Legal Drafting Committee,
giving the text of Article 72 - the composition of the Executive
Board - based on the Report of the Sub-committee. This will be
found in Document E/PC/T/159, Addendum 1.
I will now call upon the Chairman of the ad hoc Sub-committee,
Dr. Wunsz King, to present the Report of the Sub-committee.
H.E. Dr. WUNSZ KING (China): First of all, may I add that
there are two other documents for our purpose: they are E/PC/T/143,
Addition 1 and Addition 2.
The Sub-committee on Voting and the Composition of the
Executive Board had four meetings. In addition to the representa-
tives of the six Delegations which were members of that ad hoc
Sub-committee, we also had the benefit of hearing the views of
the Czechoslovakian, South African, Austalian and Netherlands
Delegates, and several others.
As we all know, there are two main questions involved: one
is the question of Voting and the other is the question of the
- 28 - E/PC/T/B/PV/30 S - 29 - E/PC/T/B/PV/30
composition of the
/Executive Board. I would say, very modestly perhaps, that the
result is rather meagre, because we had referred to us four
Articles and now we are reporting back to the parent Commission
only one Article, that is, Article 72.
As to the provisions of that Article, I think they are self-
explanatory, but I would like to add one or two observations on
them. The first observation refers to the selection of the seven
States which are entitled to appoint representatives to the Board.
The Sub-committee was happy about this solution and I can assure
you that I am always happy to tell you that we are happy.
There was not much discussion on this question of the selection
of the seven States which are generally recognized to be the States
of greatest economic importance. I am also happy to add that this
selection was based, I can assure you, not on quantitative con-
siderations, or, in plain speaking, not on a conception of weights,
to which a number of Delegations have strongly objected.
As to the remaining ten Members of the Board who are
to be elected, we have invented - I suppose with some ingenuity -
a scheme of geographical grouping of States. When I say with
some ingenuity I really mean to say that I wish to pay tribute
to the ingenuity of the author of the scheme and perhaps
I am not revealing any secret if I say that the author of
this scheme is none other than the United Kingdom Delegate.
But you will see at once that we are not entitled to claim
that we have invented something which might otherwise claim
to be something perfect. Still, we believe that this
scheme is the best one in the circumstances.
There are difficulties involved, inasmuch as a scheme
of that sort has to be governed by two main considerations:
one is the question of homogeneity, the element of homogeneity;
the second is the size of the group, of the States aligned to
that particular group. S - 30 - E/PC/T/B/PV/30
However, I would like to call your special attention to
the fact that this text of Article 72 was prepared particularly
with a view to the composition of the first Executive Board.
I would like also to call your attention to Paragraph 8 of this
Article, according to which the provisions of this Article
shall be subject to periodical review; that is to say, subject
to review by the Conference every three years.
I must add, in summing up, that this text is unanimously
recommended by the Sub-committee to Commission B. ER - 31 - E/PC/T/B/PV/30
H.E.Mr. WUNSZ KING (China): Mr. Chairman, I am sorry I
have forgotten that we also discussed the question of voting.
With regard to that question, I would like to make one or two
preliminary remarks in a very general way. We have done our
best in the sub-Committee to endeavour to carry out the specific
terms of reference which are first of all to reconcile the two
divergent, or rather, several divergent views, and failing that
to put forward certain alternative drafts. We have done our best,
but somehow we seen to be unable to agree to any compromise, or,
alternatively, to produce alternative drafts. However, you will
certainly notice that there is a paper embodying the joint ideas of
the Canadian and Chinese delegations which would seem to give some
ray of hope that even at this late hour some talk of a compromise
formula might be worked out.
I also seem to have forgotten -- perhaps because of my near-
sightedness, and not reading my own notes very carefully -
to refer to the ingenuity of one of the delegations in working
out the scheme of grouping. You know, in my notes, I wrote down
that it was the Delegation B.which was the author of the scheme, but
I thought it was only the British delegation which corresponds to that
B., but in fact there were joint authors and both of them are B.;
one is the Brazilian delegation, and the other is the British delega-
tion. Therefore I would like to add my one tribute to the two delega-
tions - the B. delegations; That is the Brazilian and the British
delegations which/have worked out this formula.
CHAIRMAN: I wish to thank the delegate of China for f ' - very
excellent manner in which he has submitted the Report of the Sub-
Committee, and to thank him for the further explanation which he has
given. As Dr. Wunsz King has mentioned, the report of the sub-
Committee deals with two main heads, namely voting and the composi-
tion of the Executive Board. It seems to me that it would be logical ER - 32 - E/PC/T/V/PV/30
for us to consider them in that order: first of all the question of
voting in order to determine what form of text we should put in the
Charter in place of/Article 64, and after that we shall take up the
question of the composition of the Executive Board. If, however,
the examinations are/closely related it would be in order for Members
speaking on the question of voting to refer to the question of the
composition of the Executive Board,
/but I would ask them to direct their main remarks to the question
of voting leaving the arguments referring to the Executive Board to
be settled when we come to consider Article 72.
Now, I would ask Members of the Commission to bear in mind that
Commission B had a very full debate on this subject of voting of
the com-
/position of the Executive Board on former occasions, and there was
ample opportunity for the members then to record their views on it.
Those views were recorded, and therefore there is no need for members
to make long speeches as their views are already on record. There-
fore I think we should endeavour to take as the basis of our dis -
cussion the report of the Sub-Committee together with the papers
which have been submitted by the United Kingdom delegation and the
United States delegation and the joint paper submitted by the Chinese
and Canadian delegations, and to see if we cannot come as rapidly as
possible to some decision as to what we should include in the Charter
in our Report to take the place of former Article 64. P - 33 - E/PC/T/B/PV/30
CHAIRMAN: The Delegate of Norway asked to speak after the
Chairman of the Sub-Committee had submitted his report. I take
it that the Delegate of Norway wishes to speak on the question
of Voting?
Mr. ERIK COLBAN (Norway): Yes. Thank you, Mr. Chairman.
You said yourself that we had already had a full exchange of
views on this question of Voting. During the discussion which
we had I expressed some preference for a system of "light"
weighted voting. I still maintain that view; but, as the
Sub-Committee, in spice of all their endeavours, have not been
able to establish any kind of unanimous compromise, and only
present us with very different and interesting suggestions, but
without committing any Delegation to one of them, I would
propose that this Commission should not try to establish a text.
I think it would be impossible within a reasonable time to
arrive at a more or less unanimous or even a majority text. So
I would propose that we send the Report of the Sub-Committee
on Voting, with all the Annexes to that Report, to the Havana
Conference, and that under Article 69 we simply refer to this
documentation in the same way as was done at the New York
Drafting Committee.
I have also something to say about the Executive Board, but
I retain that for later on.
CHAIRMAN: As it is obvious that we are going to be here
for a long time, I think it desirable that we should have a
short break for tea, but I would ask that that break should
be confined to twenty minutes and that the Commission should
reassemble sharp at five o'clock.
(The Meeting adjourned 4.40 p.m.) J. - 34 - E/PC/T/B/PV/30
CHAIRMAN: We will now resume the discussion.
The next speaker on my list is the Delegate of Brazil.
MR. O. PARANGUA (Brazil): Mr. Chairman, I prefer to hear
the proposal of the United States Delegate before I make any
comments.
CHAIRMAN: The Delegate of the United States.
MR. C. WILCOX (United States): Mr. Chairman, the suggestion
that I have to make is quite in sympathy with that made by the
Delegate for Norway.
My feeling is that we have in the Charter two Articles which
are highly political. One is the Article dealing with Relations
with Non-Members, and the other is the Article dealing with Voting.
On Article 36, Relations with Non-Members, we have prepared
three drafts without commitment and submitted them to the World
Conference, and I should like to see this meeting follow a similar
procedure with respect to the Article in Voting. I feel, however,
that the present papers on the subject would perhaps be confusing
rather than enlightening if they were presented to the World
Conference in their existing form and that they could stand some
editing. There is, in the Report of the Committee, following, the
general Discussion, an Attachment submitted by the United Kingdom,
and an attachment B, which is called "Alternative Drafts Prepared
by the Representative of the United States". As a matter of fact,
they are not under that heading of "Alternative Drafts Prepared by
the Representative of the United States", because Article 64
listed there comes from the New York Draft, and on the other points
there is no draft. We have tried to repair the character of that
presentation in document E/PC/T/W/298. That paper, however, is J.
- 35 - E/PC/T/B/PV/30
header "Alternative Drafts Proposed by the United States". I do
not think that that is an accurate heading either, because
Alternative A, as listed here, is taken verbatim from the New York
Drafting Committee's Report; Alternative B, as listed here, is
taken verbatim from the United Kingdom's Annex to the Sub-Committee's
Report, and Alternative C, which expresses the ideas that were
set forth in the United States Attachment to the other Report
reproduces verbatim in four of its paragraphs the wording of the
United Kingdom suggestion. The only difference is that it sets
forth a formula, and that formula is taken from the Report of the
Administrative Sub-Committee of the New York Drafting Committee.
The only contribution that we can make to that is under the
heading of (d) which says "10 basic rotes" but, as a matter of fact,
the only contribution we have made to that is the number 10, because
they did propose basic votes.
Now, my suggestion would be that we send forward to the World
Conference these alternative texts without identification, that is,
without identifying Alternative B as the United Kingdom text or
Alternative A as the United States text. The reason I propose
that is that I should prefer, if possible, to avoid having the
United States committed to this particular text.
If that cannot be done, I think, in order to preserve for us
perfect liberty of action in this matter, we should put it in as
the United States text, but in that case our Delegation at the
World Conference might find itself more committed to provide for
this particular formula, or for this principle in general, than I
should like to hind them to at this stage.
In presenting this I would suggest that the Secretariat be
instructed to edit the Notes from the Sub-Committee's Report and to
append the content of the Notes by the United Kindom on what the
effect of formula in B would be, and the content of the Note from
the United States as to what the effect of the formula in C would be.
I even have some misgivings about that, because I do not think that
either set of figures can be guaranteed and if that statistical job
can be done between now and the World Conference, I think that that
would be a distinct help. E/PC/T/B/PV/30
You will note that in these tables there are, in many oases,
figures not available, so that the resulting computation is
somewhat misleading.
I think, perhaps, there might be incorporated also in this
connection the substance of the note presented by the Chinese
and Canadian Delegations. This might be acoomplished in one of
two ways: either by inserting the alternative draft as an
alternative draft of Article 69 on Voting, and relegating
the explanatory J tes to footnotes or an appendix; or by merely
inserting a note at this point that the question of voting is
covered in the attachments to the Charter, and put all the
material in that. This would have the advantage of
presenting the World Conference with actual textual material
on which to go to work, and it would have the additional advantage
of sparing us here and now a repetition of our earlier debates
on the principles involved in voting.
CHAIRMAN: The United States Delegate has submitted a
proposal on the lines of the proposal made by the Norwegian
Delegate and which might facilitate us reaching an early
decision on this question here.
As I understand the United States proposal, it is that
we should set forth, either in the Charter, in Article 69
or some other place - I should think preferably in the Charter -
Alternatives A, B and C, and possibly also a footnote indicating
the nature of the proposal put forward by the Canadian and
Chinese Delegations.
I think it might facilitate the discussion if we could
consider this proposal of the United States Delegation, which
is along the lines of the Report of the Sub-Committee and also
follows the lines of the suggestion made by the Norwegian Delegate.
V
- 36 - V E/PC/T/B/PV/30
Mr. O. PARANAGUA (Brazil): Mr. Chairman, I wonder if
it would be better to put under Article 69 just the two
principles involved in our discussions, naturally without
saying what Delegation suggested the alternative.
For example, Alternative A would be produced as it is
here, with a note that it is from the proposed Charter, and
Alternative B, with a note "proposed by two Delegations",
without naming anybody, with the reference to the Report (if
the Report is published or not), and with another note to
Alternative C, with the note on Page 7 of the Report. Like
that we would have the principles of "one nation, one vote"
and the other principle of weighted voting.
- 37 - G - 38 - E/PC/T/B/PV/30
CHAlRMAN: The Delegate of Chile.
Mr. FAIVOVICH (Chile) (Interpretation): Mr. Chairman, we
are in complete agreement with what the Norwegian Delegate has
said and I would like to state here once again that the Chilean
Delegation is in favour of the principle which allots one vote
per country.
We accept also the point of view expressed here by the
Brazilian Delegate and we are quite in agreement with what the
United States Delegate suggested regarding forwarding to the
World Conference all documents which may help the World Conference
to bring about a solution of this problem. In addition to the
documents which the U.S. Delegate mentioned, all the documents
which would be necessary for the World Conference to reach a
solution.
CHAIRMAN: The Delegate of Czechoslovakia.
Mr. AUGENTHALER (Czechoslovakia): Mr. Chairman, I fully
agree with the proposals of Mr. Colban and Mr. Wilcox and I would
like only to state that we are definitely for one country one vote.
We have good reasons for that, and one of them is that if the
Executive Secretary counted votes on roll call for 18 countries,
what would happen if they would be counting one comma, six, zero
five and so on? (Laughter.)
Mr. ANGUS (Canada): Mr. Chairman, I have come to the
discussion on voting, unlike to many Delegates here who have had
the benefit of the former exhaustive discussion that seems to
have taken place in London and New York, and perhaps therefore
my attitude towards the discussion which I have had the pleasure
of hearing is apt to be a little naive. G - 39 - E/PC/T/B/PV/30
I am rather at a loss to understand the position taken
by the United States. For a very long time we were told we
could not discuss voting until everything in the Charter was
known - that it could not till then be fairly discussed and
a firm view expressed; and as I say, being a little naive, I
rather assumed that when the Chartar was known a firm view would
be expressed.
That is not what has happened. One is reminded of the story
of the philosopher who, when asked the proper age for marriage,
said, "If you are under thirty it is too early; but if you are
over thirty it is too late." We are told now there is no
time for discussing these principles, which should have been
discussed only when the content of the Charter was settled. S - 40- E/FC/T/B/PV/30
With regard to the last Committee which reported in favour
of presenting three drafts to the world Conference, the Chairman
boasted in a shameless way of bringing three illegitimate
children before the Conference. The Chairman of our Committee
has conducted researches into paternity which are extremely
precise, but the United States proposal is to obliterate these
and, as it were, to legitimatize the children of the Committee
which has considered the problem of voting.
Perhaps there is no harm in that, but when we come to the
Proposals brought forward by the United States Delegation we find
that one of those proposals is of a very unreal character. It
has not had the support of any single Delegation at this Con-
ference, not even the support of these United States Delegation. It
was brought, forward by them as a system of voting which they might
propose if the Charter were to contain provisions which it does
not now contain,
As a demonstration of what the United States might be
driven to do in certain oircumstances, that may have had a
certain value, but as an illegitimate child it has none at all,
One can understand parents taking a certain prids in their
children; one could even possibly imagine them admitting their
paternity, but to try and obliterate them, to make the whole
Conference responsible for a proposition put forward as the
result of this extremely heavy voting that no Delegation has
over proposed to accept - except as a measure of retaliation, or
except against extremely objectionable provisions in the Charter-
seemes to me - again being somewhat naive - to be dealing very
unfairly with the World Conference.
I wonder if it would not be better, even in a political
question., to b ush asid: the unreal alternative and put up the
ones which, after all, have something to be said for them. S - 41 - E/PC/T/B/PV/30
There is the principal of one State, one vote, which has made
a very wide appeal to a greet many Delegates at this Conference,
on grounds of principle and on other grounds. There is the
proposal for moderate weighting. In certain circumstances
this is quite intelligible when you consider the apprehensions
of some countries.
The real alternatives are, first of all; one State, one
vote; secondly, ths moderate weighting, and thirdly, if you
will - and if one might be allowed a certain pride in
paternity - the proposal for covbulggthe two in a certain
number of cases, Therefore, whilst I am not hostile to the
general trend of th. proposals of Norway and of the United
States, I do think that we might keep away from unrealities,
which I think would perhaps defeat the very purpose of helping
the World Conference to come to a reasonable decision. - 42 -
ER E/PC/T/B/PV/30
M. ROYER (France) (Interpretation) Mr. Chairman, the French
delegation when this Conference met here hoped that it would be
possible to reach an agreement on one text. Our hopes here were
frustrated and this is why we now adhere to the suggestion made by
the Norwegian delegate and seconded by the United states delegate,
but, nevertheless,I would like to second the proposal made by the
Canadian delegate when he said that in certain cases these
legitimate children have been disavowed by their fathers. It seems
to me that the first legitimate. child is not an illegitimate child
at all because the United States is the father of the child. In
fact this can be quite well seen from all official texts, and it
would be extremely difficult for the United States delegation to
disavow this child.
As to the second child, although it might be called an illegiti-
mate ohild, nevertheless the United Kingdom delegation could easily
claim to be the father of that child.
As to the third legieimate child, we might say here with the
Canadian delegation that this is a case of nervous pregnancy. But
it has been stated here that we were to follow the example set forth
in the dealing of article 36. Although I agree with that I do not
think that we should stick to that example too closely because if
we follow the Canadian proposal we ought to send to the Conference
only two alternatives, and therefore if we were to send only two
alternatives and if we were to adhere to Mr. Wilcox's proposal we
would have, I think, to send the alternatives without the position
taken by the different delegations. That would mean that we would
have to delege a paragraph which is numbered now III where each
representative has defined his attitude towards the different texts.
This does not mean that the French delegation wishes now to reverse
the attitude which it has taken previously. We still think that ER .. E/PC/T/B/PV/30
the principle of one State one vote is the soundest and the simplest
way of dealing with this question. Turning to the remarks made
just now by Mr. Augenthaler, I would like to say that when the
weighted voting is aidr".ied the Secretariat is usually confronted
with insuperable difficulties , and I, for myself, have attended
some conferences where this principle of weighted voting was applied
The Secretariat tried to use coloured cards but in the end they
always had to take a roll call.
I would like to state now that we g :t . got any categorical
attitude on this question. We are ready to reach a compromise and
we will be ready at Havana to consider any sound proposal which is
made and which would enable us to reach a sound solution. P 44 E/PC/T/B/PV/30
Baron Pierre de GAIFFIER (Belgium) (Interpretation) :
Mr. Chairman, the intervention of the Canadian Delegate will allow
me to modify slightly what I intended to say. I would like here
to base my opinion on the opinion of two Masters -but f first of
all I would like to state that the Canadian Delegate has mentioned
that we ought to have here firm opinions, and I would not like the
Commission to think that the Belgium-Luxembourg Delegation has a
fluctuating mind on this question. Now, the two Masters on whom
I want to base my opinion are Aristotle and Taine. Aristotle said
that equality consisted in treating equally unequal conditions, and
Taine said that votes had to be weighed and not counted. But we
think there is a third way between weighted voting and the principle
of "One State, one vote".
In Belgium we have a principle of parliamentary representation
and, as this Commission knows, Belgium has a long experience of
this system. The Belgian electoral system has not been created at
one stroke and the wish of having always this principle of
parliamentary representation in-our laws dates back to 1863, when
the influence of parliamentary theories put forward by John Stuart
Mill was felt in Belgium. After modifications in the Belgian
electoral system in 1877 and 1893, modifications which prepared the
way for the Reform of 1899, this system is now finally applied both
to the elections of our Lower House and of our Upper House.
In fact, Belgium is not the only country where this system of
parliamentary representation is established, and we find, if I am
not mistaken, in Europe such countries as Finland, Norway, Sweden,
Denmark, Holland and Switzerland, and in 1937 Eire had also adopted
this system in. its new Constitution.
As you know, proportional representation is the system where,
instead of reserving all the representation to the half of the
electorate plus one, it tries to ensure to each Party a
representation which is in relation to its strength. Therefore I E/PC/T/B/PV/30
think that this system ought to reassure everyone, because in
the end it tends to ensure the triumph of the truth,and this
as much in favour of the majority as in favour of the minority,
Mr. Chairman, we wanted here, by giving that example, to
show the attitude which has always inspired us in this debate
and in the debates which took place in London as well as
Geneva, it being our wish to contribute usefully to the
Organization; being convinced, on the other hand, that the
Charter which will relieve men from the necessity of being
Just and wise is not yet to be found.
Now, Mr. Chairman, as to the actual problem which is before
us, I think we could incorporate in the Charter both alternatives
A and B as shown in document W/298. As regards Alternative G,
we do not think it would be useful to incorporate that
alternative because it only differs from Alternative B by what
I might call a somewhat minute grammatical point, and only the
Appendices differ. Therefore, If we agree to attach the
Appendices to the Charter, we do not think it would be useful
to include Alternative C.
As to the proposal made by the Brazilian Delegate, we
agree with him, but we do not think, nevertheless, that it
would be necessary to include the different points of view of
the various delegations in the Notes as he proposed,
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, the Cuban
Delegation is not going to debate again in relation to the
merits of "One nation, one vote" or of the weighted voting, We
have already done it at length in a previous meeting of this
Commission. At that meeting we stated that we firmly believed
that the only proper method of voting in an international
democratic organization was according to the principle of
"'One nation, one vote. "There, everyone expressed an opinion and
45
P 46 E /PC/T/B/PV/30
there was quite a clear majority in favour of "One nation,
one vote." Nevertheless, following the recommendation of our
distinguished colleague from Norway to be open-minded, we were
open-minded enough to allow the submission of this whole matter
to a Sub-Committee in order to find some way of reconciling the
different points of view. Now, it seems it is very hard to
make that reconciliation. We have before us a very complete
proposal, in relation to which I think all Delegations are in
accord - that is to refer the matter to the World Conference.
So I think we should not go any further into the details of the
matter but take our decision in relation to that. Then we could
take how that could be done; here also it can be said, and very
properly, how it should be done.
It seems that the best way would be to insert in Article 69
the Alternatives A and B and then add Alternative C as suggested
by the Canadian delegate, not the new C we have seen, but a
combination of A and B, which is really the best way to find
the solution.
It was added that, besides that, all the documents should
be sent to the delegates going to the World Conference. I would
not do that harm to the delegates going to the World Cpnference
Because it would lead to such a terrible confusion that they
would lose all the time from here to the gathering of the
Conference trying to find out the real path. So I suppose that
aim could be accomplished if we give our very able Secretariat the
task of summarising in some sort of statement the procedure
formed in thie discussions on this matter since the beginning of
the birth of this unhappy child in the proposals of the United
States Delegation in November 1945 up till now. 47
CHAIRMAN: The Delegate for the United Kingdom.
MR. J..,5O. HELMORE (United Kingdom): Mr. Chairman, I am glad
to think that we all seem to be agreed on the proposition that we
should send the basic question of One State, One Vote, or weighted
Voting to the World Conference. That senes to ne to be entirely
in oonformity with the precedent we set ourselves on a similar
question which has some political import, namely that of Relations
with Non-Members.
It may or may not be an accident that in that Report we have
Alternatives A and B and C, of doubtful parentage, and that we are
here presented with Alternatives A and B and C, also of doubtful
parentage, although I do not myself wish to pursue that matter
because I am very inexperienced in matters both of illegitimaoy
and pregnancy;
It does seem to me, Mr. Chaiman, that in addition to being
representatives of States who have particular views here, we are
also a Preparatory Committee whose job it is to send to the World
Conference the best material we can to enable some decision to be
reached.
Like the Delegate for Cuba, I shall not expand at length on
what the United Kingdom thinks is a sound solution of this matter.
Our views on this are well known, and I will leave them there.
The problem that is before us is how to submit this matter,
and I entirely agree with the suggestion, first made by the Delegate
for Norway and supported by the Delegate for the United States and
others, that we should send Alternatives. The difficulty seems
to be in what form to send the Alternatives. Should we put three
texts in, or two texts in, or one text in with an Annex, and so on?
J . J.
Now, we have had a good deal of discussion always on the
principle of One State, One Vote of the principle of Weighted
Voting, but we have never really discussed, either in the
Preparatory Committee itself or in the Commiissions or in the
Sub-Committees the actual formulae, nor their construction. Indeed,
certain delegates on the Sub-Committee said that they would rather
not no that, fox reasons which one can perfectly well understand.
Nevertheless, if we send the United Kingdom proposal forward as the
United Kingdom proposal with the figure, it means that it gbes
without discussion, and we would like to have had a discussion in
order than certain possible discrepancies in it could be pointed
out. The principle in it, at present, is that the percentage of
votes cast by Brazil under our formula is exactly the same
percentage of votes as Brazil would cast under One State, One Vote -
therfore, there must be something wrong with our formula.
Therefore, Mr. Chairman, my suggestion would be that we Should
put into the text of the Charter two Alternatives only, that is,
Alternative A, paragraphs 1and 2, in the United States paper, and
Alternative B, paragraphs 1 and 2, in the United States paper, which
you will see are exactly the same as those in alternative C. We
should then relegate to the Explanatory Notes the material which
appears in the Alternative Annex of A.
It is here, I think, that we can help the World Conference by
not, as has been suggested, sending all the papers - I agree with
the Delegate for Cuba that that would be rather a mouthful - but we
might assemble in an Annex - and I entirely agree that the
Secretariat should assemble for us - a good deal of the national
that has been presented, and a basis for beginning, this is by the very
easy adaptation of the Report of the Sub- Committee which sets out
the latest discussions on this.
46
E/PC/T/B/PV/30 V E/PC/T/B/PV/30
We could say with respect to Alternative B that the
annexes would vary according to the formula on which weighted
voting would be cast, and some of this material could be
incorporated there.
What seems to me far more important is that we should
include some of the tables that have been prepared. I hope
that if those tables are included, there will be in the Report
a statement that the Preparatory Committee has asked the
United Nations Secretariant to produce for us at Havana more
accurate and more complete tables then it would be possible
to put into the Report of this Session. The table, for
instance, attached to the United Kingdom proposal has been
prepared by ourselves, and I would very much prefer that this
matter was discussed at Havana on the basis of the table
prepared by the United Nations, since then there could be no
feeling that it was not based on the best material available,
prepared -
nor, indee,/by an impartial body. I think it is mo t
importanto that this shfould be discussed n the basis o tables
prepared by no individual country.
AWhat table we coulde put in for Ilternative C in th United
gStates paper is, of cours, sliEtly more difficult. Some
Deolegations, led by the D-erticnof Canada, have said that
this is a monstrosity an. an unreal proposal. I am not quite
so wosudre, Mre. Chairman, that it ul not b useful to put that
in, nor am I so sure that it is an entirely unreal illustration
oghf what might happen with weited voting, because I feel quite
sure that a reat dea- of the opposition to weighted voting
comes from those who have notg studied the matter with fiures.
tionalI expetect thnat the Intc., on- a Fur-deights
have been present in the minds of people as what is meant by E/PC/T/B/PV/30
"weighted voting'". Now we all know that the weights in the
International Monetary Fund were adopted for a particular
reason, and when one is considering weights which might be
used in I.T.O. voting, obviously one thinks of it on a different
basis. One is dealing with a different subject matter, and in
an organization where - to give one simple illustration of the
difference - countries are not putting up contributions in money.
But it is a remarkable fact that under I.M.F. weights, the
largest Member has ninety times as many votes as the smallest.
If I might be forgiven for referring once more to our own
proposal (since it is the only one I have to illustrate my
point by) - under our proposal for I.T.O. voting, the largest
Member would have less than four times as many as the smallest.
That very considerable difference makes me feel that it
would be useful, in spite of the suggestion of the Delegate of
Canada that this proposal has no parentage, to produce a heavily
weighted table, simply by way of illustration.
I very much hope, Mr. Chairman, that an explanatory annex
to our Report on those lines would find favour with the Members
of the Preparatory Committee.
I have omitted, in speaking, to refer to the Canadian and
Chinese proposal which has been put forward. I think it is
a pity that we have not a simple text of that. proposal, since
it could then have gone forward in the Draft Charter on an
equal status with the "one state, one vote" text and the
weighted voting text. But certainly I think (though I do not
agree with the proposal) that it should be mentioned, and
mentioned prominently, as a possible alternative and a possible
way out of the difficulty.
50
V E/PC/T/B/PV/ 30
Dr. COOMBS (Australia): If anything would. be necessary
to confirm the Australian Delegation in its view regarding the
procedure of adhering to the system of one country one vote,
I think the discussions on this matter hero and in earlier
meetings would have provided the necessary confirmation; but
it is clear that it would not be reasonable for us to reach
a decision here, in the light of the conflicting views which
have been expressed, and I think the Committee is agreed we
should pass this question on to the World Conference.
The only question at issue is the way in which we should
pass it on. There the difficulty seems to me to arise from the
fact that Delegates fear that in one way or another the judgment
of the Conference is likely to be affected by the details of the
propositions which have been put forward. The Delagate of Canada
fears that the monstrosities of the third alternative might
affect people's judgment adversely in the consideration of
weighted voting. On the other hand, the United Kingdom feels
this particular proposal might be made more attractive by the
fact that it, like the housemaid's baby, is after all only a
little one.
So it does seem to me, therefore, that the simplest thing
is for us to send this question on with the necessary material
for making a decision; but without specific proposals which
might prejudice the issue one way or another.
I would like, to suggest, therfore, Mr. Chairman, that
we put nothing under the particular heading of the Article -
leave the heading and a blank; and in our explanatory note say
something like this: That in considering the question of
voting - or examining the question of voting - the Committee
gave consideration to three alternative approaches to this
51 52
question: (a) the principle of one country on vote; (b) weighted
voting based. upon assessment of economic importance for the
purposes of the Charter; (c) weighted voting for certain specified
provisions.
Those appear to me to be three alternative methods.
There were several possible methods of giving effect to the
second proposal. We might then go on to say the Committee
decided to refer the whole question to the World Conference, and
in doing so invited the Secretariat to prepare for the assistance
of the World Conference in considering this question statistical
material concerning the countries invited to the World Conference
relative to matters affecting relative economic importance such
as population, national income, international trade, and inter-
national trade per head; and that no further reference should
be made to the way in which any particular pieces of information
could be combined to give a system of weighting for votes.
That would place the alternatives clearly before the World
Conference, and ensure that they would have the material with
which they could prepare their own system, if they wished to
indulge in this pastime.
In other words, it would preserve for other potential
fathers the pleasure of paternity. 53
S E/PC/T/B/PV/30
CHAIRMAN: I have three more speakers on my list and,
if there are no other Delegates who wish to speek on the subject,
I would like to suggest we close the debate. The speakers on
my list are China, Brazil and Czochoslovakia,
The Delegate of China.
H.E. Mr. TUNSZ KING (China): Mr. Chairman, in deference
to the wishes of the United Kingdom Delegate for a simple text
In connection with the Chinse and Canadian proposal, I would
suggest, subject to the approval of my Canadian colleague,
thet the text might be drafted on the following lines; that
there might be three short paragraphs:
(1) Each Member shall have one vote in the Conference;
(2) In certain designated cases, the system of voting
provide for in the preceding paragraph shall be supplemented
by requiring also a majority of votes cast in accordance with
the system of weighted voting;
(3 ) The system of weighted voting and the cases to which
it will apply shall be determined by the World Conference at
Speaking for the Delegation of China, I would simply say
that the position of the Chinese Delegation at the World
Conference will be substantially remain the same as has been
indicated in Document T/143, Addendum 2, and I would like to
and that the Chinase Delegation does not have the intention
in any way of adopting the third child, which I understand
is the system of heavy-weight voting.
(Correction, afterthe interpretation):
For the second paragraph it would be: "In certain
designated cases the system of voting provided for in the
fIrst paragraph shall be supplemented by requiring als a
majority of votes in accordance with the system of weighted
voting." 54
E/PC/T/B/PV/30
CHAIRMAN: The Delegate of Brazil.
Mr. O. PARANAGUE (Brazil): Mr. Chairman, I was determined
not to discuss this question again, but I had the pleasure of
listening to the explanation by the Urited Kingdom Delegate
about the merits of weighted voting and I am obliged to say
something on the subject.
I think it is very unwise to ask the Secretariat to correct
the figures, because it is not a question of the figures; it
is a question of the formula. I do not accept the formula.
That means that I am not interested in the figures, because the
factors are also to be discussed..
After this reservation, I think I might say that we are
sending all documents to the World Conference but we are
forgetting the most important one - the one we have in the
London Report. If you take the London Report, on Page 23 it is
written: "6, The conclusions which emerged from the Preparatory
Committee's deliberations on the subject of Voting and Executive
Board Membership may be briefly stated as follows: (a) The
majority of Delegates favoured the principle of one country - one
vote in the Confrence and in the Executive Board."
If we sent from the First Session of the Preparatory
Committee the opinion of the Committee, why are we not sending
to the World Conference the opinion of this Commission? There
is a majority here, but I do not know which one it is at the
moment. I know which majority it was when we met and the Sub-
committe was appointed, because it is in the verbatim record,
Now I do not know, and I would like to raise; this question in
Havana, saying that the majority, reading from the verbatim
record, was for one country - one vote. For that I propose that
the Report of this Commission should insert the same kind of
information we have in the London Report: whether the majority
off thePreperatory Committee is for one country - one vote, or for
weighted voting. 55
S E/PC/T/B/PV/30
There is no reason why, if we have it in the London Report,
we should not have the same information in the Report we are
sending from here to Havana. We are sanding all information
and this is most important.
For this reason, Mr. Chairman, I ask that we should be able
to see from this debate what is the majority, or take a vote to
find what majority we have here, so that we oan send the same
kind of information from hero to Havana as was sent from London. 56
ER E/PC/T/B/PV/30
H.E. Z.AUGENTHALER (Czechoslovakia): Mr. Chairman, we
started with illegitimate children, we then came to pregnancy,
and I was rather afraid of what would be our next move, but
fortunately we came to Aristotle. I do not know if Aristotle
was for the alternative A, or B, or C. What I know about Aristotle
is that he was in favour of slavery because he considered that it
was a natural condition of human-kind.
Now I think that the best thing would be to close the debate on
this matter and, as you have proposed, to include in our report the
alternative A or B, possibly also the Chinese and Canadian proposals
and nothing more, because as far as I know all Member
countries are receiving the papers and they can read our debates.
There is time enough until the World Conference/to study the problem
and any country is free to cone forward and present at the World
Conference any studies they wish.
CHAIRMAN : As I have said before the debate would be closed
after the Czed oslovakian delegate had spoken, but the United King-
dom delegate has asked to say a few words, and with the unanimous
consent of the Commission we can give him the floor.
M. O.PARANAGUA (Brazil): I agree to give the floor to the
British delegate on condition that I have the right to answer.
Mr. J.R.C. HELMORE (United Kingdom) : I am grateful to the
Commission, Mr. Chairman, for not proceeding on the principle of
one State, one speech.
I simply wanted to say to the Brazilian delegate that I would
think it entirely fair that in the annex which I suggested a sen-
tence should be. included which would read - I cannot read the first
word because I am not as sure as he is what the number is - "so
many Members of the Preparatory Committee expressed themselves in
favour of the system or one State, one vote."
I would suggest, Mr. Chairman, that we could insert the figure
very easily by asking how many delegations wished to contribute to
the total which will appear at the beginning of that sentence. E/PC/T/B/PV/30
Mr. Erik COLBAN: Mr. Chairman, I am afraid that we are
going to do something very wrong now, What does it matter to
the Havana Conference whether ten or eleven or twelve members
of the Preparatory Committee here tonight declare that they are
in favour of such-and-such a way of voting. I have maintained
all through the London and Geneva Meetings that on questions of
substance we should try to avoid voting so as not to prejudge the
final position to be taken up by each one of us.
Dr. J. E. HOLLOWAY (South Africa): Mr. Chairman, I want
to support Mr. Colban. If this action is golng to be taken,
I just want to tell you that you will open the doors once more.
I have refrained from saying anything about this thing, because
there is no point in wasting time here if it is going to be
decided at Havana; but if we want to take a decision here, I
want my right to say something - and it may be very lengthy,
CHAIRMAN: I think there may be a certain amount of
confusion, first of all as to what the Brazilian Delegate
suggested, secondly as to what Mr. Helmore suggested as a means
of meeting him.
If I understand the Brazilian Delegate correctly, he said
that we should include in the Report we submit, whether it is
prepared by the Secretariat or whoever it is prepared by, some
reference to the fact that the majority of members of the
Preparatory Committee seem to favour "One State, one vote",
Mr. Helmore did not suggest that we should take a vote on this
question; he simply thought there might be some indication
given as to what countries wished to be listed as favouring
that principle,
However, I should like to point out to the Brazilian
Delegate that our chief object here was to achieve unanimity
57
P P 58 E/PC/T/B/PV/30
if it can be obtained. That is why, I take it, Mr. Colban
at the outset of our debate proposed that we should not come to
any decision here, but should simply refer the various papers to
Havana, putting up to them the various alternatives, so that a
decision could be taken by the World Conference.
Now, I would like to point out to the Brazilian Delegate
that the verbatim records which have been given of this Preparatory
Committee are very full and complete. They will be made available
to all the countries which are participating in the Havana Conference
and those countries will be able to see, by consulting the records,
what countries were in favour of "One State, one vote," and - if
they are any good at arithmetic - they will be able to determine
whether the majority of countries were in favour of that principle
or not.
I hope, therefore, that the Brazilian delegate will be able to
withdraw his formal motion and that we will leave the question as
to whether a reference shall be made to this point as to whether
or not a majority were in favour, until we come to consider whether
we will send the information forward or not.
Before I sum up the discussions which have taken place on
this question, I would like to raise a matter of procedure which
may have the effect of shortening subsequent discussion on the
question - on this question: the question of how we shall proceed.
It is necessary to come to a decision as to whether or not we should
continue on until we come to a conclusion, or whether there shall be
an adjournment for dinner. it seems to me clear that we have no
hope of completing our work in time to have dinner at a reasonable
hour. I would therefore like to suggest that we adjourn at 7.30
and resume our discussion at 9 p.m. The reason I raise this
question now is that it is necessary for the Executive Secretary
to warn the authorities in charge of the building to have guards 59
P E/PC/T/B/PV/30
on duty. Therefore I would like to know if that meets with the
pleasure of the Commission.
Dr. Gustavo GUTIERREZ ( Cuba): Mr. Chairman, as I am thinking
we are not electing a Pope, I would hope to adjourn and continue the
work on Monday morning. We are the guests of the City of Geneva and
we should pay attention to the fete they are making.
Mr. Erik COLBAN (Norway): I am very strongly in favour of
postponement until Monday morning. We have now worked until late
at night during six days of this week and we cannot go on doing
really good work if we continue the whole night now.
Mr. Clair WILCOX (U.S.A,) Mr. Chairman, we have for next
week a rather tight schedule which requires the allowance of a
certain amount of time to the Secretariat to get the results of the
work ready in time for the final Sessions. I would not insist
that we meet this evening, but I do think we must either meet on
Sunday or have simultaneous meetings with Commission "A" on Monday.
Sir RAGHAVAN PILLAI (India): I am afraid we shall have a good
deal to say about the composition of the Executive Board, and those
things are better discussed early in the morning rather than late
at night; so I should myself support very warmly the proposal
made by the Delegate of Norway and the Delegate of Cuba that
further discussions should take place on Monday morning rather
than this evening, 60
J E/PC/T/B/PV/30
CHAIRMAN: The Delegate for the United Kingdom.
MR. J.R.C. HELMORE (Uniteed Kingdom): Mr. Chairman, I merely
wanted to say, although obviously we will fall in with the
majority's wishes on this matter, that I hope that, if we decide
to adjourn tonight, we shalI go on until at least 8 o'clock and not
adjourn now, but if we decide to go on late tonight I hope that we
will make a dinner break from, say, 7. 30 to 9.00, because some of
us are not very fortunately placed with regard to late meals in our
hotels, and I do not think we are interested in the fêting.
CHAIRMAN: Is it the sense of the Commission that we should
not meet tonight but that we should meet on Monday morning,
simultaneously w ith Commission z.?
DR. A.B. SPEEKENBRINK (Netherlands): No, I am against the
simultaneous meeting of Commissions A and B, because the Executive
Board is a very important meeting although, on the other hand, the
other Articles we have to discuss in Commission A are also very
important, and I would like a part in both debates.
CHAIRMAN: I will make a further effort to get the unanimous
approval of the Commission. I propose that we continue our session
tonight until 8 o'clock, or at least until we finish this question
of Voting, and that we meet tomorrow at 2.30 to continue our
discussion. Is that approved?
Agreed.
We will now continue the discussion on the question of Voting,
or rather, the discussion is closed and we now come to the question
of procedure.
I take it from the discussion which has taken place that the 61
sense of the Commission is that we should adopt the proposal first
put forward by Mr. Colban, that we should refer to the Conference
at Havana the documentation and the various Alternatives. As
various people have said the real question is how we should
present this to the Havana Conference, and that is the question
which we now have to consider.
Various proposals have been made, and I think we can separate
these proposals, and then proceed with each part of the proposal.
First of all, certain delegates have suggested that there should
be included in the Charter Alternatives A, B and C, and
Dr. Coombs has put forward the proposal that there should not be
various Alternatives put in the Charter, but simply an Explanatory
Note explaining why we are not able to consider this question.
I take it, from what the what the Commission has said, that the
majority of the delegates are in favour, of the insertion in the
Charter of various Alternatives, so unless that summary of the
situation is challenged I think we can proceed on the understanding
that the majority is in favour of putting certain AIternatives in
the Charter. The question as to whether they should be covered
by drafting Note will be dealt with later. I should like to
know whether that is the sense of the Commission?
MR. O. YUGUA (Brazil): Mr. Chairman, I withdraw my
proposal to insert Alternatives A and B in favour of the proposal of
Dr. Coombs.
CHAIRMAN: Will those Delegates who are in favour of putting in
Alternative texts, it to be decided later which AIternatives are to
be put in, and those delegates who are in favour of the text having
Explanatory Notes, please indicate by raising their hands. I will 62
3. E/PC/T/B/PV/30
first ask those who are in favour of having 1Alternative texts
included in the Charter to raise their hands.
(A vote was then taken)
The majority are in favour of including Alternative texts.
We have various Alternatives before us, now. We have a
proposal of the United States, which is to have Alternatives A, B
and C, as given in their document E/PC/T/W/298, together with an
Explanatory Note covering the compromise Candian/Chinese
suggestion and supplemented by statistical and other explanatory
material to be put in the Appendix. V
We have also the proposal of Mr . Helmore that all that
should go in the Charter is, paragraphs 1 and 2 of Alternative A
and paragraphs 1 and 2 of Alternative B, and that the annexes
referred to in Appendices B and C, together with the statistical
material, should be relegated to an appendix to be propared by
the Secretariat, and which would be attached to our Report and
circulated with our Report when it is submitted to us next
Tuesday morning.
Under this proposal, I understand that the Canadian/Chinese
proposal will be covered by a footnote and not be in the appendix
of the Report.
We then have the proposal of the Czechoslovak Delegation,
which I take it is that we should just put in the Charter
Alternatives A and B, and that there should be no explanatory
material, but we will leave it to the Delegations who are
attending the Havana Conference to obtain the necessary information
by consulting the records of this Preparatory Committee.
Mr. Clair WILCOX (United States): I should like to
withdraw my original proposal in favour of the proposal put
forward by Mr. Helmore. I suggest, however, that the parts
of his proposal be separated, and that we deal first only
with his proposal as to the material to be incorporated in
the text of the Article in the Charter, namely, the two
paragraphs of Alternative A and the first two paragraphs of B.
Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I am
of the same opinion as Mr. Wilcox.
CHAIRMAN: I think we are now very close to unanimity
on this question. Is the Commission agreed that there
should go into the Charter only paragraphs 1 and 2 of
E/PC/T/B/PV/60 64
V. E/PC/T/B/PV/30
Alternative A and paragraphs 1 and 2 of Alternative B, supplemented,
I would say, also by a footnote explaining the Canadian/Chinese
proposal. That seems to me to be a better place, if the
proposal could be explained there, than in the Appendix.
Mr.H.F. ANGUS (Canada): Mr. Chairman, I understood
Mr. Helmore's proposition to be that the Chinese /Canadian text
should go in as an alternative. I may have misunderstood it,
but I thought that was the point of my Chinese colleague making
a draft of the text.
CHAIRMAN: I want to thank the Canadian Delegate for
calling my attention to the draft that was read out by Mr. Wunsz
Kin , and I want to apologise to him for not having referred to
it before. But it does seem to me that it would not be
possible to accept that text as a draft of an article to go into
the Charter, because it refers to the World Conference, and it
would not be appropriate for us to present to the -v. Id Conference
a Draft Charter containing a reference to the World Conference
itself.
H. E. Mr. WUNSZ-KING (China): Mr. Chairman, in regard to
this text, I am wondering whether you could find some other
place for it, instead of a footnote, because a footnote does not
look like a place of honour.
CHAIRMAN: Perhaps it would meet the position of the Chinese
Delegate if the Secretariat would prepare a note which we could
approve at our next Meeting tomorrow, this note to go into the
draft as Alternative C?
H. E. Mr. WUNSZ-KING: (China): I thank you for this
suggestion. V. 65 E/PC/T/B/PV/30
CHAIRMAN: The Secretariat will prepare a draft and we
will deal with that first thing at our Meeting tomorrow.
Mr. Clair WILCOX (United States): It is my understanding
that Alternative C, if it went in with the text, would be in the
form of a not rather than a draft, because, as I understand the
Chinese/Canadian proposal, it is that weighted voting shall be
required on certain questions. That would put us in the
difficult position of going through the Charter and debating
point by point on which questions we would require weighted voting
if we were to get a precise text. If it is put in in the
form of a note as Alternative C under this heading, that can be
avoided.
CHAIRMAN: I think that what we want to find for the
Canadian/Chinese proposal is something that is midway between
a draft text and a footnote, and I think if we can leave it to
the Secretariat to try to work out something they could present
to our Meeting tomorrow, that would be the best way in which we
could solve this difficulty. I think we are all agreed that it
deserves a place a little better than a footnote, but as it is not
a draft text it cannot be put in in quite the same way as
Alternatives A and B.
Does the Commission agree that all that should go into the
Charter is, the first two paragraphs of Alternatives A and B,
and a reference to the Canadian/Chinese proposal? (Agreed). G 66 E/PC/T/B/PV/30
CHAIRMAN: Is the Commission agreed that all that
should go into the Charter are the first two paragraphs of
alternatives (a) and (b) and a reference to the Canadian and
Chinese proposal?
-Agreed.
Now we have to deal with whet should go into the Appendix.
The Secretariat inform me they believe they can prepare by Monday
night, in time to be attached to our Draft Report, an Appendix
along the lines suggested by Mr. Helmore. That Appendix would
contain a description of the alternative proposals, including
the annexes illustrating alternatives (b) and (c). It would
also be supplemented by statistical tables prepared by the
United Kingdom and United States Delegations, but there would be
a note to the effect that before the Haven, Conference these
statistical tables should be replaced by something which is more
up to date and for which the Secretariat would take the full
responsibility.
The Delegate of France.
Mr. ROYER (Interpretation ) (France): I have just one word
to say, namely, that the tables which are to replace the tables
which are to be annexed in our Report should not cover the case
only of the 17 countriesrepresented here, but should cover the
cases of all the countries which will go to the Havana
Conference, because the interesting factor is not the cabs of
the 17 countries present here but the countries which will
participate in the Havana Conference.
CHAIRMAN: That will, of course, be understood, because the
tables which will be worked out by the United Kingdom and
United States Delegaticns will cover also a great number of
countries which are not only represented here. 67
Mr. WILCOX (United States): The formula contained in
alternative C in the paper presented by the United States has
variously been described as "unreal" and monstrous".
I hope that in describing this the Secretariat will note
that it was prepared by the Administrative Sub-Committee of the
Drafting Committee at New York and is contained in pages 53 and
54 of their Report; and it may also note that the Committee stated
that this would be the appropriate formula for weighted voting,
plus an appropriate base vote. And it may also note that the
United States suggested for this purpose that 10 would be an
appropriate base vote. I do not insist upon this, but since
I have been chided so frequently for refusing to assume the
paternity of somebody else's child, i would like to state that
I am willing to assume the paternity for the sale of the
Secretariat's Appentix of the number, 10.
CHAIRMAN: The Delegate of Cuba.
Mr. .GUTIERREZ (Cuba): I am entirely in accordance with the
suggestion of the Chair, because it was practically what I
personally had suggested before, except in the last expression
in relation to statistical tables to be presented for the
Havana Conference. I think somebody expressed here the opinion
that those tables should be prepared by United Nations'
appropriate Organization, so I think it would be a very good thing
if the Secretariat does it, but with the consultation or approval
of the Statistical Office of United Nations.
CHAIRMAN: When I was refering to the Secretariat, I really
meant or United Natons. because they are the CZn::t competent
to do this work
Any other comments regarding the Appendix ?
Mr. PARANAGUA (Brazil): Just a word about this Appendix 10.
I th -_i . :§ I the. 2&", ( 1 -.: it :: . ;. : 6 ;, t_ .,, it is better to
put it to the Secretariat of the Administrative Sub-Committee in
Lake Success. Appendix 10 was not our child, it belongs to the
Secretariat. I even object about this. I refer to page 62 of the
New York Report.
E/PC/T/B/PV/30. S E/PC/T/B/PV/30
CHAIRMAN: The Delegate of Australia.
Dr. H. C. COOMBS (Australia): Mr. Chairman, I feel
somewhat unhappy about the way this discussion is proceeding,
particularly tha suggestion thet these tables should be sponsored
by the Secretariat. Ls has been pointed out already, the
essential thing in those tables is not the figures but the
formula. These two tables are two propositions for weighted
voting and I think that if we are going to attach them to the
papers it should be clearly indicated that that is what they
are. Whoever sponsored them should, I think, take the
responsibility for them. The United States Delegate has
indicated that the only thing he is prepared to sponsor in
respect of these tables is the figure "10."
I should like to point out that it is the figure 10 which
makes that table what it is; it is the critical part of the
formula, If we alter that figure and make it 20, we get an
entirely different result.
It does seem to me, Mr. Chairman, .that this discussion is
proceeding in a way that I think, quite frankly, is unfair,
We started off with a proposition in the New York Draft; it
was discussed in full Commission, It was clear there was
not unanimous agreement about it. If my recollection is
correct, the majority of the people on the Commission felt
that the New York Draft was reasonable. We agreed this
thing should be further examined. It has been further
examined but the way In which to results of that examination
are being presented by the Commission is such as to give
quite a wrong impression of the balance of views on the
Commission, if I understand them correctly. 69
S E/PC/T/B/PV30
This is not a matter of major importance to me or to
my Delegation, but I feel it is a matter of importance to the
Commission that what goes forward from here should be a
thoroughly accurate representation of our work. I have no
objection to what has been decided already, that is, to put
alternative texts in the Draft Charter, although I think it
would be better if an indication could be given of the
degree of support for the various alternatives.
It does seem to me to be particularly important that,
if the Secretariat is asked to produce anything, it produces
only the things for which it is itself in a position to take
responsibility. That was why I proposed that the Secretariat
should be asked to supply figures relating to population,
national income, internationaly trade and international trade
per head, but, if you combine those figures into a table which
illustrates forms of weighting, then they do become weighting
proposals and I do not think it is right or proper that the
Secretariat should be asked to accept responsibility for them.
I feel very strongly, Mr. Chairman, that if we persist
in presenting it in this form the result will be to produce an
impression to those who read the Report that there is far more
weight of opinion in favour of weighted voting then is, in my
opinion, in fact the case in this Commission; and, secondly,
we should not ask the Secretariat, which. in a matter like this,
should be completely impartial, to put forward proposals which
are, in essence, proposals which originated with the Delegations
on this Commission.
Therefore, Mr. Chairman, I would.ask that if we are to
send forward proposals in the form of tables of the kind
embodied in the United Kingdom document, then they can go
forward, and I think it is reasonable that the Secretariat should
be asked to correct them insofar as they can be corrected with 70
S E/PC/T/B/PV/30
better figures, but I think they must be clearly labelled by
the Delegation sponsoring them. If nobody is prepared to
sponsor them, I believe they ought to be omitted.
CHAIRMAN: The Delegate of the United States.
Mr. Clair WILCOX (United States): I think that in
Dr. Coombs's remarks there is some confusion between two
things: 1. the formulas which are presented in the alternatives
which are labelled (b) and (c), and, 2. the statistical tables,
which are purely illustrative of what the results of those
formulae would be.
The important thing is the formula; the tables are nothing
but illustrations. The Secretariat, as I understand, it,
would take responsibility for the statistical job of preparing
accurate tables; it would not take responsibility for the
formulae
As to responsibility for the formulae, I believe that
the United Kingdom Delegation would be prepared to take
responsibility for the formula which has been labelled "I",
which would produce weighted voting. I shall be glad to
take responsibility for the formula which would produce the
result of so-called heavy-weight voting.
The only reason for my previous remarks was that, as I
said, I have been chided for producing something described
as unreal or menstrous, which in fact, was merely built upon
the documentation already before this Commission. E/PC/T/B/PV/30
CHAIRMAN: I would ask the Executive Secretary to explain
just how much responsibility he would be prepared to take.
Mr. E. WYNDHAM-WHITE (Executive Secretary): I am grateful
to Dr. Coombs for having raised this point because I would like to
explain that I am not prepared, as Executive Secretary, to accept
a responsibility which I cannot fulfil. It is therefore desirable
that I should outline what I am prepared to undertake.
First of all I am not prepared to accept, as has been suggested
the responsibility for any formula for voting. I have undertaken
to let the Secretariat produce a description of the formula which
has been put forward by the various delegations.
Secondly, in defining that description I have said that the
Secretariat would be prepared to include certain statistical
material which has been prepared, to illustrate those formulae.
I would not be prepared to accept the responsibility for the
accuracy of those statistics, and I think it would be necessary
to include in the appendix the statement of the source of those
statistics, and to point out that they were based upon such
statistics as wore available at the time to delegations which put
forward statistics as an example.
Thirdly, as regards the documentation of the World Conference,
I should be prepared to accept the responsibility for producing
revised statistics under the headings listed by Dr. Coombs which I
would be prepared to say would be as accurate as the statistical
material which the United Nations was able to make.
Dr. H.O. COOMBS (Australia): I would just like to thank the
United States delegate for his remarks, and to say that if he takes
the measures formulated it would remove all foundation for the
criticisms which I have made in respect of the tables. 72
CHAIRMAN: I think we are very near to reaching agreement
on this question. I believe that one of the difficulties has
been that we have been suggesting that too much should be included
in the Appendix. I would therefore like to propose for the
consideration of the commission that in alternative B when we
refer to theAnnex to this Charter we should have an asterisk and
have some suggestion of this kind: "See the proposals given for
weighted voting in the Appendix", and in the Appendix we should
just state simply "This proposal for weighted voting/proposed, by
the United Kingdom delegation." Then give the Annex referred to
in paragraph 1 of alternative B, giving the formula, and appended
to that a statistical table giving the necessary statistical data
and then have another section of the appendix saying: "Proposal
for weighted voting submitted by the United States of America, "
and give the similar particulars with regard to the United States
proposal.
If we could confine the Appendix to that I think we could avoid
all difficulties that have been confronting us.
Mr. H.F. ANGUS (Canada): Mr.Chairman, I want to speak just on
a personal point. I am afraid that the word I used earlier this
afternoon may have been understood in a sense that was offensive,
and certainly I did not mean the word "unreal." I was rather of
the opinion that the table which was put forward was not put forward
as the genuine Opinion of any one country as to what was the best
system under this Charter. That was really all that I meant by the
word "unreal." The word was merely illustrative. I was afraid of
having side by side the proposals that really represented the ideas
to which delegations were attached, as their real genuine belief as
to what was best in this Charter, and side by side something that
was not quite on the same footing and I hoped that the words used
to express that were/ too strong . 73
E/PC/T/B/PV/30
CHAIRMAN The Delegate of the United Kingdom.
Mr. J. R. C. HELMORE (United Kingdom); Mr. Chairman, I am
afraid in putting forward my original proposal I may have
expressed myself badly, but when I referred to the work done by
the Secretariat, I certainly had no intention that they should take
the responsibility for anything more than checking figures and
maybe producing a document.
As far as your own proposition as to the structure of the
Appendix is concerned, it meets my view completely, though I
would suggest that a sentence be added to it to indicate that the
United Nations Secretariat will undertake, or will seek,to produce
the revised basic data by the time of the World Conference, It
was only that I was anxious that the World Conference itself
should not proceed to consider this matter on the basis of figures
proposed by a single national delegation.
CHAIRMAN . The Delegate of Belgium.
Baron Pierre de GAIFFIER (Belgium) (Interpretation):
Mr. Chairman, I think that Aristotle was right when he said that
slavery was the natural condition of humanity, because we are in
fact treating the members of the Secretariat as slaves. We are
asking them to produce by tomorrow an Alternative C; we are
asking them to find a solution . ' the problem of the statistical
tables; we are asking them to draft footnotes which have to be
inserted at the foot of the pages: of course we are not allowing
them any responsibility Therefore I would ask that the
burdens of the Secretariat be lightened.
CHAIRMAN: I think the burden of the Secretariat has been
lightened to the extent that all we expect them to produce tomorrow
is a note explaining the Canadian/Chinese proposal. If they can
I _ I I I 74
P E/PC/T/B/PV/30
produce anything more we shall be very glad to have it.
CHAIRMAN: The delegate of the United States.
Mr. Clair WILCOX (United States) : Mr. Chairman, I wish to
thank the Delegate of Canada for what he has said, I had not
intended to commit my Government to the support of this particular
principle or this particular formula at Havana, and I hope that
I have not done so,
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation)t Mr. Chairman, I would
like to add a word to what Mr. Wilcox has just said. I regret
that, following Dr. Coombs' intervention, the United States
Delegate was moved to sponsor Alternative C, which is the formula
embodying the heavy-weight voting principle. I think that it
would be wiser to revert to what we had decided previously, that
is to safeguard the anonymity of the authors of the proposals,
and it would be far better here to just state that these formulae
were proposed by two Delegations. I think that this would
satisfy Dr. Coombs, because I think that if a formula is published
under the sponsorship of the United States here and that is known
by public opinion it may tend to create a painful impression and
impute motives which I am certain are completely groundless.
Mr. Clair WILCOX (United States): Mr. Chairman, I believe
that it had better be left as it is. We have a fair record of it.
Dr. H. C. COOMBS (Australia): Mr. Chairman, as far as I am
concerned, the important thing is that the formula underlying any
table should be sponsored by somebody. I do not mind if the
somebody is mentioned by name, or if it is "one Delegation", or
"two Delegations", and I do not mind whether it is put forward as
,_ .. , P E/PC/T/B/PV/30
a firm opinion of the Delegation of the country concerned in
putting forward this formula, or whether it is put forward
merely as an illustration of the formula of a particular kind.
What I was anxious to avoid was that it should be put forward
in the Appendix or Annex as the formula, or the results of a
formula, which would be either interpreted or sponsored by the
Secretariat, or which might be regarded as the opinion of the
Committee as a whole, as representing the proper method of
implementing one of the Alternatives.
CHAIRMAN: I think it would satisfy the Commission if we
simply said in the Appendix that at the Second Session of the
Preparatory Committee two separate Delegations submitted two
separate proposals for weighted voting which are given under
I and II. Would that be satisfactory?
Dr. D. C. COOMBS (Australia) Right.
CHAIRMAN: If it is possible, the Secretariat may prepare
the draft of this Appendix, without giving the tables - there
might not be time for that - and if we find there is time to do
that we will circulate it at the beginning of tomorrow' s meeting,
There being no further business, the meeting is adjourned
until tomorrow at 2.30 p.m.
(The Meeting adjourned: 8 p.m. ) |
GATT Library | qb031zb1742 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Thirty-Eighth Meeting of Commission "A" held on Thursday, 14 August 1947 at 10.30 a.m. in the Palais Des Nations, Geneva | United Nations Economic and Social Council, August 14, 1947 | United Nations. Economic and Social Council | 14/08/1947 | official documents | E/PC/T/A/PV/38 and E/PC/T/A/PV.36-38 | https://exhibits.stanford.edu/gatt/catalog/qb031zb1742 | qb031zb1742_90240187.xml | GATT_155 | 9,282 | 57,217 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL RESTRICTED
ECONOMIQUE E/PC/T/A/PV/38
ET SOC IAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
THIRTY-EIGHTH MEETING OF COMMISSION "A"
HELD ON THURSDAY, 14 AUGUST 1947 AT 10.30 A.M.
- IN THE
PALAIS DES NATIONS, GENEVA.
M. Max SUETENS (Chairman)
Delegates wishing to make corrections in their speecheshould
address their communications to the Documents Clearancefice,
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.
NATIONS UNIES
(Belgium) -2-
CHAIRMAN: (Interpretation): Gentlemen, we have to examine
today Chapter IV of the Draft Charter. This Chapter has been
examined by a sub-Committee under the Chairmanship of Dr.Coombs.
The Report on Chapter IV is contained in Document E/PC/T/182
dated 11 August.
Before calling upon Dr. Coombs to present his Report I
call upon the Delegate of the United States.
Mr. Seymour RUBIN (United States): Mr. Chairman, the
United States Delegation would just like to make one preliminary
remark at the beginning of our work.
We are very much concerned by adhering to the Schedule
as last revised by the Secretariat and it would be our suggestion
that, in case there should be any difficulty in finishing the
task of this and other Commissions within the time limit on
the Schedule prepared by the Secretariat, we should all be
prepared to have Sunday or evening meetings. should that be
necessary. I wanted to make that remark at the outset just
so that, if it should develop at some time during the day that
it might be necessary to call an evening meeting, we should be
apxraised of the suggestion which might be made at a later
time by our Delegation.
CHAIRMAN: (Interpretation): I amalso concerned about
the Schedule drawn up by the Secretariat, and you will recognise
that I have always endeavoured to comply with the Schedule, but
I think, it is unnecessary now. to foresee a night meeting; we
shall see in the course of the discussion. But I entirely
agree that the discussion of Chapter IV should be concluded today,
Dr. H.C. COOMBS (Australia): Mr. Chairman, it is with great
pleasure and some relief that I present the Report of the sub-
Committee. on Chapter IV. Their labours were strenuous; I hope
the results were proportionate to their labours.
P. P. -3- E/PC/T/A/PV/38
I do not think there is any comment which I need to offer
on the Report itself except to draw the attention of the
Commission to a Suggested amendment to paragraph 2 on page 5.
This suggested amendment is set out in Document E/PC/T/162,
Corr: No: 1, and is designed solely to clarify the meaning ot
the words and is, I understand, acceptable to all the Members
of the Committee.
The other matter to which I wish to refer is the Report
of the Legal Drafting Committee in which they set out a text
which has been revised by them and has had certain changes made.
I would, .if I may be permitted, like to congratulate the Legal
Drafting Committee on that text. It seems to me to be an
admirable one and the changes which they have made have,in
almost all cases, been substantial improvements.
One point, however, I feel it necessary to refer to: -
that is, the proposal which they have made to include in Article
13 certain words in paragraph 1. I think the original text
referred to the "development or reconstruction of particular
industries" and a note appears in the Report of the sub-Committee
to this effect:
"The sub-Committee agreed that the word "industries"
appearing in paragraph 1 of Article 13 is used in its
widest sense and therefore includes agriculture." - 4 -
The Drafting Committee have suggested that after the
words "particular industries" we should include in the actual
text the words "including agriculture". Now this has been
the sub ect of considerable discussion in the Sub-Committee
itself, where it was decided not to include such words, despite
a request urged very strongly by the Chinese Delegate that
they should be included. The reason for that was that it was
felt it was preferable to meet the Chinese Delgate's point by
le ving this comment in the Report, since a reference to one
particular class of industries in this case might lead to some
doubt as to whether other classes of industries were also
covered.
Generally it was felt that any attempt to specify in
following a phrase so completely general as development or
restriction of particular industries"would tend. to limit the
generality of the phrase, rather than to clarify it. So, while,
of course, it is for the Commissionto decide, I thought it
necessary to refer to the fact that the Sub-Committee did
consider the suggestion which the Drafting Committee has put
forward there, and specifically decided not to accept it.
I do not think it is necessary for me to add anything, else,
Mr. Chairman, and I command the Reort on the draft Text to the
C ommi tte .
CHAIRMAN (Interpretation): Gentlemen, as suggested by
Dr. Coombs, we shall now take up the discussion of Chapter IV,
on the basis of the Report of the Legal Drafting Committee,
Article 9: Importance of Economic Development in
Relation to the purpose of this Charter.
G G -5- E/PC/T/A/PV/30
Any remarks?
Mr. AUGENTHALER (Czechoslovakia): Mr. Chairman, first
I would like to state that there is an error in the type in the
Report of the Legal Drafting Committee on Chapter IV, and that
is"Restrictive Business Practices "
Then, secondly, I would like to have an opinion of the
experts on tho mysteries of the English language. Why are we
using in article 9 "the Members", then in Article 10 "Members,
then in article 11 "Members", and then in Article .(I think)
12 (a), again, "the Members"? There is some substantial
difference.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. SHACKEE (United Kingdom): I think I would-like to
venture an opinion, after rushing in where angels fear to tread,
on this question.
In Article 9 the Members recognise a collective recognition
on the part of all the Members, whereas in Article 10 it is
an obligation on each Member within their respective territory
to do this and that; and the same with Article 11 - each
Member will co-operate with the other Members - so that
Article 9 is a collective recognition by all the Members,
whereas 10 and 11 are individual Members.
That, I think, is the explanation.
CHAIRMAN (Interpretation); Any further remarks on
Article 9?
Adopted.
Article 1: Development of Domestic Resources and
productivity. No remarks? Adopted
Article 11: Co-operation for Economic Development. S -6- E/PC/T/A/PV/38
M. BARADUC (France) (Interpreted): What was the text
adopted or Article 10?
CRAIRMAN (Interpretation): The text adopted was the text
submitted by the Legal Drafting Committee and in that case the
word in brackets will be deleted; for instance, the Article
will read: "Members shall within their respective territories .
M. BARADHO (France) (Interpretation): I would point out,
Mr. Chairman, that in this particular Article the world between
brackets was a United Kingdom amendment, supported by the French
Delegation. I would like to know whether the United Kingdom
Delegation now withdraws its amendment.
CHAIRMAN (Interpretation): The text under discussion is
a text submitted by the Legel Drafting Committee and the word
between brackets should, in the opinion of the Legal Drafting
Committee, be deleted and replaced by the word underlined, In
this particular instance the Article would read: "Members shall
within their respective territories" instead of "jurisdictions."
Does the French Delegation agree to this?
(The French Delegate signified his agreement).
Article 11.
The Delegate of the Netherlands.
Mr. A. B. S? KENBRINE (Netherlands): Mr. Chairman, when
of Article 11
I compare Paragraph 1/with article 10, I see that in Article 10
one speaks of " . . . progressively to develop, and where
necessary to reconstruct. . ." W hen it comes to the question
of co-operating, in Article 11, we only speak of ". . . promoting
industrial and general economic development." Is there a special
reason why "reconstruction" is left out of this paragraph? S - 7 - E/PC/T/A/PV/38
CHAIRMAN: Dr. Coombs?
Dr. H. C. Coombs (Australia): My impression is that we
had intended to include "reconstruction" in all places where
it was relevant, but that we just forgot this one.
CHAIRMAN (Interpretation): Then the word "reconstruction"
will be inserted. Do you agree with that, Mr. Speekenbrink?
Mr. SPEEKENBRINK (Netherlands): Yes, Mr. Chairman, I think
it will be entirely in conformity with Article 10 if we put it
in here.
CHAIRMAN (Interpretation): Is everybody agreed on this
amendment?
(Agreed)
Mr. SPEEKENBRINK (Netherlands): How will it read then?
Do we simply say: ". . . promoting industrial and general
economic development and reconstruction"?
CHAIRMAN (Interpretation) (after receiving Dr. Coombs's
agreement): It will read: " . . . in promoting industrial
and gerneral economic development and reconstruction."
The Delegate of the United States.
Mr. Seymour RUBIN (United States): I think, Mr. Chairman,
that perhaps on this particular point the words "or reconstruction"
would be more appropriate. It may be a case of industrial
development on the one hand or reconstruction on the other.
CHAIRMAN (Interpretation): Dr. Coombs, do you agree?
Dr. COOMBS (Australia): I agree. S -8-. E/PC/T/A/PV/38
CHAIRMAN (Interpretation): It will therefore read: "or
reconstruction."
Are there any further remarks on Paragraph 1?
we will then go on to Paragraph 2.
The Delegate of Belgium.
M. BARADUC (France) (not interpreted).
Baron P. DE GAIFFIER (Belgium) (Interpretation); The
French Delegate's remark applies chiefly to the French text.
The English words "appropriate advice" have been translated
into French by "avis éclairés". I suggested that the word
"circonstaciés"' should be substituted for "éclairés."
CHAIRMAN (Interpretation): I should prefer the word
"circonstnciés", which is nearer to the English text.
The Delegate of the Netherlands.
Mr. SPEEKERBRINK(Netherlands): I wish to make the same
remark as before, Mr. Chairman. In the middle we speak only
of ". . .programmes for economic development."
CHAIRMAN (Interpretation): Therefore, in conformity with
our discussion, the word "reconstruction"' will be inserted.
Does the Delegate of China wish to say anything?
H. E. Mr. -UNSZ KING (China): Mr. Chairman, I wish to
joing Dr. Coombs in congratulating the Legal Drafting Committee
for having introduced so many improvements in the text and,
in particular, to this paragraph which, as it originally stood,
seemed to be very difficult to understand, especially for the
Chinese Delegate, whose command of the English language is S - 9- E/PC/T/A/PV/6
rather limited. But I would like to ask for some further
elucidation on Page 3, towards the end of it. The improved
texts reeds, in this connection: "The Organization shall
upon the same conditions, likewise aid Members in procuring
appropriate technical assistance." If you compare this
text with the original one, it seems to me that some words
have been added, that is, the words "upon the same conditions
I would really like to know whether this addition does or
does not change the substance of the stipulation in question. - 10 -
CHAIRMAN: (Interpretation) Who is the Delegate
responsible for this wording?
Dr. GUSTAVO CUTIERREZ (Cuba): . This is one of those
children, Mr. Chairman, for whom it is very hard to find a
father. This Article has been the result of long discussions
and many compromises. The final text was changed many times and
now it has been improved by the Legal and Drafting Committee so as
to make it readable. In my opinion the only difference is that
it is related to the conditions because it is mentioned in the
Article that the Organization shall likewise aid members in
procuring appropriate technical assistance on the same conditions
set forth before. That is to say that such advice or
assistance shall be furnished upon terms to be agreed on and
would be given
collaboration of the appropriate intergovernmental organizations/
so as to use to the full extent the special competence of each one
of those organizations. That is to say that those conditions
will also govern the second sentence and the final one that
finishes the Article. Of course, if our Chinese colleague
desires more explanation I will explain to him why this was
brought in.
Dr. H. C. COOMBS (Australia): It seems to me that the
Legal Drafting Committee was concerned in cutting up exceedingly
complicated and long sentences into parts so that -it would be more
readily comprehended and I think that was a very good idea. To
do that, however, made it necessary that in some of the short
sentences reference should be made to the contents of the previous
sentences and that requirement makes the inclusion of the phrase
something to that effect "the same conditions" necessary
in order that the contents of this particular sentence shall be
subject to the general proviso stated in the earlier sentence".
I think it does not add anything to the meaning and does seem to
be a convenient way of getting over a rather difficult
constructional question.
ER E/PC/T/A/PV/38
ER -11
H.E. Mr. WUNSZ KING (China): I wish to thank the Cuban
and Australian representatives for their-explanations, I am not
interested in finding the whereabouts of the father of this child
but I would like to point out that so far as I understand the
meaning of the original text it seems to me that in aiding the
Members to procure appropriate technical assistance, the
Organization will give such aid,according to the original text,
without any conditions. Now, in the improved text it seems to
me that the rendering of aid by the Organization in this connection
would be conditional. Therefore, I note some sort of difference
and I would like to know whether it is the understanding of the
Commission as a whole that it should be conditional or
unconditional.
Dr. GUSTAVO GUTIERREE: (Cuba): Mr. Chairman, I do not see
that there really exists such a difference because the previous
text had always said from the beginning that "subject to any
arrangements entered into between the Organization and the
Economic and Social Council and other appropriate intergovernmental
organizations, the Organization shall ... " etc. and the
Organization would help to procure advice and technical assistance.
The new element introduced here was that there should be
collaboration with other appropriate intergovernmental organizations
as will use fully the special competence of each of them". As you
see, therefore, this does not brine in fact any new conditions.
They are the same conditions that were set up at the beginning in
a general. form and in this case it is specifically mentioned in
order to assure that every one of the organizations, for example
in this case the I.T.O. on one side and the International Bank on
the other, would not be shifting the matter from one to the other
but on the contrary when a nation asked for advise or technical
assistance then both organizations would get together and do their
beat to give this advice or assistance. E/PC/T/A/PV/38
CHAIRMAN (Interpretation): May I take it that these
explanations are likely to satisfy the Chinese Delegate?
H.E. DR. WUNSZ KING (China): I thank you very much, but it
seems to me that the very long and involved phrases from the
words "within its powers and resources" to the words "as will use
fully the special competenoe of each" apply, so far as the
drafting is concerned, only to the word "shall" on the fourthline
and do not apply to the words "or assist" in paragraph 2 of
page 11 of document E/PC/T/162.
I do not insist upon this point, but still I would like to
point out that the word "'likewise" at the bottom of page 3 of
document E/PC/T/167 should be sufficient to cover the point, and
if that is so the words "upon the same conditions" seem to be
quit e unnecessar y.
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, as
regards the interpretation of the original text which is
paragraph 2 on page 11, I think it is entirely clear that the
conditions will apply both to the furnishing and the assisting,
if you look at the structure of the sentence. It reads,
omitting certain words, "the Organization shall, within its
powers ....etc,, furnish .... and assist ... "? Now, it follows that
the words immediately following, "shall'' -"within its powers and
resources" - are attached to the word "shall", cut the word
"shall" is itself attached in the first place to the word "furnish",
and in the second place to the Word "assist". It is clear from
the position that the word "shall" is also attached. (a) to the
word "furnish" and (b) to the word "assist". Therefore, it is
quite clear that the conditions are the same both for furnishing
J.
- 12 - J. - 13
and assisting..
As regards the question of whether we should say "upon the
same conditions,likewise", it seems that the word. "likewise" is
not sufficiently clear in itself, and we should keep "upon the
same conditions".
CHAIRMAN (Interpretation): Gentlemen, I suggest that we
should no longer continue this discussion, which appears to me to
be chiefly a discussion of gramma r, and, as you well know, this sort
of discussion is the longest of all.
I shall therefore ask the Chinese Delegate not to insist and
to leave the text as it stands.
H. E. DR. WUNSZ KING (China): Mr. Chairman, I certainly do
not claim to know more English than the United Kingdom Delegate,
and therefore I do not insist.
CHAIRMAN (Interpretation): Are there any further remarks on
Article 11?
H.E. Z. AUGENTHALER (Czechoslovakia): Mr, Chairman, I would
just like to make a very short remark. The first sentence reads
"Subject to any arrangements entered in o between the Organization
and the Economic and social Council and other appropriate inter-
governmental Organizations." The Economic and Social Council is
not an inter-govenmental organization, and I think they are very
anxious about their prestige, so I suggest that we say "and the
Economic and social Council and appropriate inter-governmental
organizations" or that we say "and the Economic and SociaI Council
or appropriate inter-govenmental organizations', so as to make a
difference between the Council and the inter-governmental
organizations. E/PC/T/E/PV/38
CHAIRMAN: (Interpretation): I think we can all agree with
this remark.
Are there any other observations?
Monsieur Baraduc.
M. BARADUC (France) (Interpretation): May I speak again,
Mr. Chairman, on the remark made by the Belgian Delegate regarding
the words "appropriate advice" I think that we should not
qualify this "advice" in any form whatsoever. The Organization
itself will see what kind of advise it will have to give, and,
therefore, I suggest the deletion of the word "appropriate".
CHAIRMAN (Interpretation): Are there any f urther remarks on
this? Do we agree to delete the word. "appropiate''?
MR. S. RUBIN (United States): Mr. Chairman, it does seem to
me that the word "appropriate" is appropriate to this particular
paragraph. I do not see that it does any great hard,certainly
so far as the English text is concerned.. It also seams to me
that it lends a certain desirable nuance to the text, a nuance in
favour of the Organization giving advice which is designed to
accord with the powers and resources of the Organization, and also
to accord with the plan of the Member which is submitted to the
Organization for its advice. Although I do not have any strong
feelings on this point it does seem to me that it would probably
be more desirable to retain the word "appropriate ".
J.
- 1 4 - E/PC/T/A/PV/38
Dr. H.C. COOMBS (Australia): Mr. Chairman, I do not think
it is very important, but there is a certain amount in the
French Delegate's point. The history of the word "appropriate"
is that it originally appeared in this text as an attempt to
meet a point. which is now met by the reference to other
Organizations. I think the idea attaching to "appropriate"
at the time was that the advice should be appropriate to the
functions of the Organization and that it should not venture
into fieIds where other Organizations were more competent. I
think that was the implication. Whether it is shall ne*essarq.y.
in the light, the pre.ise specification may, perh
be doubts, !ed, though I think I would agree with the United
Delegate that it a1Q ,; do
C 1 , RA T MAN: e D:,eoDele1cgte of F
explanation ruili'ds pp- et. :yozbsCoom -t hntnoit- tn1;s rue,ht
thc mcan.n ef i7og wz heapod "atp. -p, ec"' which I tho
only berz inso-end inerteer to mao: mora keaallretd-11sh. ng
agreo now tha"thc wotd te-r ri"approph''ue"d bcok ;, be& ep
sUggcst ut e it ahatovls bcu -'.ze tran ated Fr-.o, enorhl by
any more inaK rem n li?
Mr. 2-n..- RTJhSa UUIN.c 3,at_i:e S !.1 es)in:;Mr.2chairm
more qus o is etho n:;I the extt of_ lfiisofew >eLznes;am
fy the dbltiowi me-eylyn f ereewod 'lth-.irK "ITa er"? nTha
undors armieg tndth> chanceeWichl wwhs mc. CLade-tI -htThe
should rad: -eJaet "Subjecaiy P.rancmart3 geetusde%ncee 'ixt iee
thc rgatezOatIniandion a xcne E'o amiL ½cnd Sooin Cuncil
- 1:' V
appropriate inter-governmental organizations". Is that correct?
CHAIRMAN (Interpretation): I think Mr. Augenthaler
suggested two alternatives: "and appropriate" or "or appropriate",
My own preference is for "or appropriate".
Dr. Gustavo GUTIERREZ (Cuba): I think it is necessary to
say "and", because it concerns the arrangements entered into
between the Organization and the Economic and Social Council
and the other appropriate inter-governmental organizations.
CHAIRMAN (Interpretation):(to Mr. Rubin): Is that agreed?
Mr. Seymour RUBIN (United States): Yes.
CHAIRMAN (Interpretation): "And" is agreed. Are there
any mo re remarks on Article 11?
Article 12 - paragraph 1.
Dr. A.B. SPEEKENBRINK (Netherlands) and M. BARADUC (France)
exchanged remarks in French, not interpreted.
CHAIRMAN (Interpretation): I have not quite understood
your remarks.
Dr. A.B. SPEEKENBRINK (Netherlands) We say here "that
would prevent other Members from obtaining on equitable terms any
such facilities for their economic development". I would say
"or reconstruction" after the words "economic development".
Dr. H.C. COOMBS (Australia): I doubt whether it is
necessary to repeat the word "reconstruction" every time. We
have in various places in this Chapter used "development" as, so
to speak, a shorthand expression covering the whole long phrase
"industrial and general economic development and reconstruction",
- 16 - - 17 -
so I doubt whether it is necessary to repeat the word every time.
If there is any real concern about it, there is no harm in putting
it in, but it does, I think, make the text longer without adding
anything to it.
CHAIRMAN: The Delegate of France.
M. P. BARADUC (France) (Interpretation): I rather share
the opinion of Mr. Speekenbrink, and I think that the word
"reconstruction" should be inserted here.
Baron P . de GAIFFIER (Belgium) (Interpretation): Mr.
Chairman, I believe that the phrase "general economic development"
is a very broad one and covers also the concept of reconstruction,
and I think it would be redundant to use both "industrial progress"
and "general economic Development'. We might have industriall
progress and development", but not both phrases.
Dr. Gustavo GUTIERREZ (cuba): Mr. Chairman, I was going
to say more or less what has been expressed by the previous
speaker - that if we are going to add the word "reconstruction"
everytime that we have the words "economic development", we
are probably going to ruin the text. "Reconstruction" is
included in any kind of development, because the first stage in
development is reconstruction. Besides, the idea of general
economic development is plain in the whole Chapter in relation
to the wide aims of the expansion of the economy of the world -
and
of trade/ employment, and "reconstruction" is a very limited word.
I think it would be preferable to insert an explanation that
everywhere "economic development" is mentioned, :"reconstruction"
is included, and not to put those words together every time.
V - 18 - E/PC/T/A/PV/38
CHAIRMAN: The Delegate of the Natherlands.
Dr. SPEEKENBRINK (Netherland's): Mr. Chairman, I was
thinking along the same lines, and I then thought this point
might be coverer. where we have that additional article 11
Note - that where in other parts of the Charter we speak
of "Economic Devolopment" we also mean "'Roconstruction" where
appropriate.
CHAIRMAN: We can put that Note at the bottom of
article 9.
Dr. SPEEKENBRINK (Netherlands): I do not think Article 10
doals with Reconstruction.
CHAIRMAN: The words "General. Economic Dorelopment" appear
for the first time in Article 9.
Dr. SPEEKENBRINK (Netherlands): Yes, but in Article 10
we speak of "where necessary to reconstruct"; and I wonder on
this point whether it might not be better to put it there - but
I leave it with you.
CHAIRMAN: The Delegate of New Zealand.
Mr. WEBB (New Zealand): Mr. President, I would. just point
out that I think the word "reconstruction" should go in Article 10
because article 26 contains a cross-reference to Article 10,
which in some sense makes the word "reconstruction" necessary,
CHAIRMAN: I think we can ask the Secretariat to find the
appropriate place for the Note.
Mr. GUTIERREZ (Cuba): In that case I have no objection to
where we have already included it.
CHAIRMAN: The Delegate of France. - 19 -
Mr. BARADUC (France) (Interpretation): I agree with
everything that has been said, includling the remark made by
Mr. Webb; namely, that the words "to reconstruct industrial
and. other economic resources" should be maintained in Article 10,
in view of the cross-reference to be foum in article 26.
CHAIRMAN: Any further remarks on paragraph 1?
The Delegate of France.
Mr. BARADUC (Interpretation): . point of detail, Mr.
Chairman. Since Londan and. New York there has been an cmission
which now should be made ,good.
I refer to the word. "unreasonable" - "unreasonable impediments"
and I think that the French text should beamended in conformity
with the English text and that the word "deraisonables" should be
inserted after the word. "entraves".
CHAIRMAN: The Delegate of Belgium.
BARON DE GAIFFIER(Balgium) (Interpretation) :Mr. Chairman,
I was about to make a remark on the same lines, but it seems to
me that the word. "injustifiees" would be preferable in the
French text.
Mr. GUTIERREZ (Cuba): Mr. Chairman, we should. then change
the word. in English to"unjustified.". We had long discussions
about this, and. probably "unreasonable" is only clear in
English. When you translate "unreasonable" in any other
language, besides French, it does not make sense, because it is
very difficult to decide what is meant by "unreasonable". It
clepends on the person making the judgment. If you say "unjustified."
that is rather more adequate. Then it would come together with
the French text, otherwise, in my personal opinion, there would be E/PC/T/A/PV/ 38
a very different meaning, and both texts are problems, by
themselves They are not translations one of the other.
CHAIRMAN: The Delegate of Australia.
Dr. COOMBS (Australia): I think that in the light of the
discussion of the Committee, it would be very difficult to
accept the change in the word "unreasonable" to unjustified".
It was a matter which was discussed before. I am not
competent to comment on how you translate "unreasonable" into
French, or whether it can be translated, but it certainly would be,
in my opinion, unacceptable, in view of the Discussion of the
Committee, to change "unreasonable" to "unjustifid" in English.
G
- 29 - S -21- E/PC/T/A/PV/38
CHAIRMAN: The Delegate of Chile.
Mr. Angel FAIVOVICH (Chile) (Interpretation): The
Charter is not drawn up only for the English-speaking people
but it will also have to be drafted in French, Spanish and
other languages, and the English word "unreasonable" has no
exact equivalent in French or in Spanish The word "unjustified"
or '"unmotivated" would appear to correspond to the idea which
we desire to express here.
I agree with Dr. Gutierrez and the French Delegate that
we should find a word which has the exact equivalent in other
languages than the English language alone.
CHAIRMAN (Interpretation): Gretlemen, since we are
discussing here the French text, and the English text is not
in question, I wonder if we could not leave the English text
as it stands and adopt for the French text the word "injustifié",
which appears to me to be the best equivalent for the English
word "unreasonable", because in French a thing may not be
justified in the eyes of reason. Therefore I suggest we
adopt "injustifié" in the French text and leave the English
tert as it stands.
The Delegate of France,
M. BARADUC (France) (Interprctation): I think, Mr.
Chairman, there is here more than a question of language or
translation, but a deep difference in the very concept of the
law. The French thought is in agreement with the opinions
which have been formed on the concept of Roman Law, but this
is a matter which we could discuss for weeks, if not for months,
and therefore I suggest, if the Commission agrees, that we adopt
the proposal made by the Chairman.
S S E/PC/T/A/PV/ 38
CHAIRMAN: The Delegate of Cuba.
Mr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, I wish to
state very clearly that the Spanish-speaking countries will
take the French text in this connection.
CHAIRMAN: Then that is agreed.
The Delegate for the Lebanon,
Mr. Mousse MOBARAK (Lebanon) (Interpretation): There is
an enormous difference, in my opinion, between the word
unreasonable" and the French "injustifié" and it would be
necessary to ask the English-speaking Delegates here whether
they agree that the exact equivalent of "unreasonable" in
French should be "injustifié"; otherwise, in a case of con-
flict, we may be faced with difficulties if there is a
dispute between parties, during which one refers to the
English version and the other to the French version.
CRAIRMAN: (Interpretation): I do not think we shall be
faced with such a difficulty, because any impediment is both
unreasonable and unjustified and I think that everybody
will thus be satisfied I therefore suggest we leave it as
it is,
The Delegate of France.
M. BARADUC (France) (Interpretation): In that case,
Mr. Chairman, I wonder why we put the two words here: "No
Member shall impose unreasonable or unjustified impediments",
especially as in Paragraph 2 we find: "No Member shall take
unreasonable or unjustifiable action .". This might be
the proper solution.
- 22 -
S S - 23 - E/PC/T/A/PV/38
CHAIRMAN (Interpretation): Then the text would read,
both in French and in English: "N Member shall impose
unreasonable or unjustifiable impediments. " Is everybody
agreed?
(Ag reed).
Are three any further remarks on Paragraph 1?
Baron P. DE GAIFFIER (Belgium) (Interpretation): I
wonder whether, in the French text, the word reesources
five lines from the bottom of Paragraph 1, could be replaced
by "moyens".
CHAIRMAN (Inteppretation): That would not affect the
English text.
Baron DE GAIFFIER (Interpretaion): It is in order
to avoid any confusion between the word "resources" and
"natural resources" in the French and I suggest this substitu-
tion for the English word "facilities."
CHAIRMAN: (Interpretation): I think we can agree to
this amendment, The English text is not affected.
Are there any further remarks on Paragraph 1?
Are there any remarks on Paragraph 2? E/PC/T/A/PV/38
Baron P. de GAIFFIER (Belgium)(interpretation): Mr.
Chairman, I do not remember whether we changed the first line of
paragraph 1 of Article 12.
CHAIRMAN (interpretation): No, we have not changed it.
Are there any further remarks on paragraph 2? Adopted.
We pass on to paragraph 3.
Mr. Angel FAIVOVICH (Chile)(interpretation): The Legal
Drafting. Committee deleted the word jurisdiction" in paragraph 2
and substituted the words "territories" instead of "Jurisdiction"
but I think that the word "territories" can also be deleted because
it is obvious that no State can take any measures outside its own
territory and therefore I suggest the deletion of this word.
CHAIRMAN (interpretation): Are there any remarks on this
amendment?
Mr. Seymour RUBIN (United States): We seem to have the
phrase "within its territories" occurring in a number of places in
the Charter, for example in Article 10 as well as in Article 12
and I wonder whether it would not be better to retain the phrase in
this case as well.
Mr. Angel FAIVOVICH (Chile) (interpretation): I think, Mr.
Chairman, that if in other Articles of the Charter there are
expressions which appear to be unnecessary it would not be
justifiable to maintain them here but on the contrary they should
be deleted,otherwise the readers of the Charter will think that the
authors of the Charter do not know what a State is and that we are
apprentices in matters of law.
Mr. Seymour RUBIN (United States): Mr. Chairman, I have no
strong feeling on this point. The phrase "within its terrtories"
might be specifically addressed to the question of action within a
territory or colony or other legal territory of a Member State and E/PC/T/A/PV/38
ER
the words were inserted in order to take care of that possibility.
Mr. R. J. SHACKLE (United kingdom): I think there is an
additional reason for retaining these words because they point to
the place in which so to speak the interests of the nationals and
othe: Members are located. It is the consequence of the fact
that their nationals are participating in the development, that
they have brought - may be their capital or appliances or maybe
all kinds of things, but they are chiefly located on the
territory of other Members. I think that those words appear
for the same reason in iii, paragraph 2 of Article 12a on page 9
in this print. I think that is the reason - the location of
these assets or whatever they may be.
Mr. Angel FAIVOVICH (Chile)(interpretation): Mr. Chairman,
I do. not insist because this is not a question of substance.
However, I should like to state that the reasons given by the
delegates of the United States and of the United Kingdom have not
convinced me. The Metropolitan territory or the Colonial
territories are perfectly defined and described in the
International Law. However, I will not press my point.
M. P. BARADUC (France)(interpretation): Mr. Chairman, I
apologise but I have also a remark to make regarding the form or
this paragraph, The list of the various interests of nationals
in technical activities is such that it makes the sentence
in the French text practically and the same applies to
the end of the first sentence in paragraph 1. I suggest that
before we conclude the examination of this Chapter, that is before
this evening, that we should in agreement with the French speaking
colleagues prepare a French text which would be and
at the same time as near as possible to the English text. J. - 26 - E/PC/T/A/PV/38
CHAIRMAN (Interpratation): The English text would not be
changed, and( it is only a question of re-writing the French text.
DR. J.E. HOLLOWAY (South Africa): Mr. Chairman, on the word
nationals" it seems to me a question arises, which the
sub-committee may or may not have considered.
What happens if the action by which a complaint is introduced.
affects, let us say, an American national in the Union of South
Africa? Does the American national have to go to his government,
although the whole of his economic activity is situated in the
Union of South Africa? Is not intended to mean people domiciled
in the country of the Member making the. complaint?
CHAIRMAN: Mr. Shaokle.
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, the
position as it appears to me is that if there is a United States
national in the Union of South Africa, then there is nothing to
prevent him going to the appropriate government in South frioa if
he has any matter he wishes to discuss. That is, so to speak, a
purely informal procedure, but from the moment that this becomes
a formal procedure - and all the rights that are set up under this
Charter are rights between governments, and that is formal- that
American national would need to go to the United States government,
and the United States government would then take the matter up
formally with the Union Government . There is nothing to
prevent in informal procedure, but if it becomes a formal case
under the Charter, then it goes to the government of the National.
DR. J.E. HOLLOWAY (South Africa): I can see the possibility
that the complaint by the American citizen is against action taken
by the United States of America which affects his interests in the J.
Union of South Africa. Then, he will have, to go to the Government
against which he is submitting the complaint to bring, the complaint.
MR. S. RUBIN (United States): Mr. Chairman, if I can commentot
on this witho g ,etngri; into en;fo& t ezegal d iiscusoiuns which
enlivedoa. the sub-mmi.iette, it smers to that we haveomethingil
here that affects thd Gistinction bwtveen t e; rdv "nation"l' and
the wor - "Citizen".
,s I conceive ita _t anyarzte, the question of whethea >
person is a national of a particular country very lgrEel wapdscL
upon the decision of that country. Certainly, the Unit edat tes
may take up ehs cause of one of its nationals living abroad, either
in relation to thce ountry in which he is living or in relation to
moxe action taken by a third country.
however, it is sosq metimeias at any rate, the case thaa U
country does undertake to represent persons living within its
be
jurisdiction who may or may not/- or who are not in this particular
case - citizens. In other words, the United Statem giaht complain
against a country which took actiodeCttmeLiatul to the interests
of a person living in the United States, moLici e~ in the United
States, but not a citizen in the United States. In that case it
gtbht make representations under these clauses to ehcouzuntry that
is takgn&, the action.
Therefore, it emars to me that eht word an-tionals" is the
not
appropriate. wdre here, and that id Loec/oause any particular
difficulties in the cases which have been imagined.
If aA .mecidan national were living in the Union of SouthAfrttica
and an action were, taken by a third country, the possibility does
arise of both the Union of SouthA fca c- and the United States
making representation. However, at the present time very few
difficulties of that sort actually do arise, and it seems to me
that by using the wordna "tial-1s" in that sense we get into no
difficulty.
27.A - V
- 28 -
Baron P. de GAIFFIER (Belgium) (Interpretation):
Mr. Holloway has made an interesting remark about the word
"nationals", and according to his remark he considered that
the word referred to what he described as "natural persons";
but paragraph 5 of the same Article states that the term
"nationals" as used in Articles 12 and 12A comprises "natural
and legal persons". Dr. Holloway's remark would be susceptible
of further development if it referred to "legal persons" as
well, and I think that it would be to the advantage of Chapter IV
if it were possible to make this concept clear as regards the
nationality of countries, capital and persons.
If this is not likely to make us embark upon a long
discussion, I suggest that the definition of nationality should
be made with regard to the prevailing interests engaged in
various enterprises, rather than with regard to the law under
which the company has been incorporated, This was the
practice followed by Anglo-Saxon countries during the War, and
we could usefully take advantage of it.
CHAIRMAN: The Delegate of Czechoslovakia.
H.E. Z, AUGENTHAIER (Czechoslovakia): Mr. Chairman, I
had no intention to intervene in this issue - I int ended to
intervene only in paragraph 3. I think the main issue I
wanted to raise has been already raised here, but this is my
point of view, Should the I.T.O. be an organisation for
discussion of general politics for trade and employment, or
should it be an organisation for dealing with the complaints
of individual persons and individual enterprises and so on?
If we allowed the latter course, it would mean that the
Organization would be a kind of court for private interests, and V - 29 - E/PC/T/A/PV/38
I am afraid that instead of having full employment, we would
have full employment only for lawyers!
Mr. Chairman - gentlemen - there are certain matters
which are outside the scope of international law. Those
matters are, for instance, immigration restrictions, the
granting of citizenship and so on, and many of those matters
are of the greatest political importance. As soon as a
matter is regulated by an international treaty, it ceases to
be a matter of domestic jurisdiction. Article 2, paragraph
7 of the Charter of the United Nations says: "Nothing
contained in the present Charter shall authorize the United
Nations to intervene in matters which are essentially within
the domestic jurisdiction of any state, or shall require the
Members to submit such matters to settlement under the present
Charter". Now, what does that man? It means that no
State shall be required to submit such matters to settlement
under the Charter, and that not even recommendations should
be made to the State. In justification of the use of the
word "essentially", it was argued that if a matter is on the
border-line between international concept and domestic
julisdiction, it may be placed outside the authority of the
Organization if one can claim that it is essentially within the
domestic jurisdiction - even if under modern cond itions what
one nation does domestically alcostalways has at least some
external repercussions; and the word "intervene-" means that
the Organisation shall not exercise any authority, --that it
will not even make recommendations of any kind with regard to
any matters of this kind. That is why we think that we
should do away with the idea that the I.T.O. should be a kind
of court for dealing with private interests. It should only
be for discussions among States on matters of Land general
measures taken by those States. G
-. 30 -
CHAIRMAN (Interpretation) I take it, Mr. Augenthaler,
that you simply desire to make a statement, but it is not your
intention to submit an Amendment to the text under discussion?
Mr. AUGENTHALER (Czechoslovakia): I have no intention,
Mr. Chairman, of presenting any mendment to alinee 2. I nave an
Amendment to present to alinea 3, but I thought, as the discussion
ran, that I should state it immediately, as it may lead. us to
some extremely confused situations, for instance, that the United
States could be entitled to intervene in favour of some
Czechoslovak national living in the United States.
CHAIRMAN: The Delegate, of South Africa.
Dr, HOLLOWAY (South Africa): Mr. Chairman, the point I raised
was simply this, whether we are quite right to limit the right of
a Member acting on behalf of another person than its own national,
bearing in mind that inside its territory there are a large
number of people who are not its own nationals.
If we want to, limit the right in that way, then I think
when it comes to a natural person you may have the situation
that a person interested. in getting technical assistance from the
USA., for, let us say, the film industry- that person, being an
American, may find that the U.S. Government has laid on a
restriction which is considerodis inconflict with the Charter;
but in view of the fact that his case cannot be taken up on his
behalf except by the Government of which he is a national, he
will have to go to the U.S. Government; and it can be a case
against the U.S. Government. If you want to limit it that way,
-the word. "nationals" is enough. Or if you want to go a bit
further, say "No, the Government of the country in which he
lives should be able on his behalf to take up his case", then a
very simple Amendment will meet that. You will then say "on
behalf of its nationals or persons domiciled in its terrytory".
And then the definition of "nationals," would also have to
apply to persons; that is to say, they would be natural
persons or legal persons. - 31-
CHAIRMAN: The Delegate of the United Kingdom,
Mr. R. J. SHACKLE (United Kingdom): Mr. Chairman,
all I can say is based upon my own experience of the United
Kingdom treaties. We always base ourselves upon the
nationality of a person or a country and my experience of
other countries is that they do much the same, I think that
so far as there is, so to speak;, a generally recognized right
to intervene on behalf of persons or countries, thatt right
should be exercised. A government may sometimes think it
right to intervene on behalf of a person domiciled in its
territory, but it is, in my opinion, an exceptional matter,
without any right to do so,
It does seem to me this is a place where it might be a
little dangerous to try to extend this field. I have
rather the feeling that at this stage it would be well to
adhere to the well-known lines of commercial treaties, which
base themselves on nationality.
As regards the definition of legal persons, there again
it would be unjustifiable for us to concern ourselves with
the very detailed questions which underlie that definition,
I would be better to take the tests which each country
applies and determine what are its legal persons, We should
leave it, in any case, to the law of each country concerned
rather than attempt to lay down detailed rules here, That
is what I would like to suggest,
Dr. HOLLOWAY (South Africa): I will not press the
point Mr. Chairman.
CHAIRMAN (Interpretation): Are there any further
remarks on Paragraph 2?
S. E/PC/T/A/PV/38
We will pass on to Paragraph 3.
The Delegate of Czechoslovakia.
H. E. Mr. Z. AUGENTHALER (Czechoslovekie): Mr. Chairman,
we made a proposal in London, and again here we made an
amendment in the sense that we wish to state that the
complaints regarding sctions should be only by Members on
their own behalf and on the question of general programmes, not
on behalf for some private interest, because if
we did that, I am afraid we would be creating a kind of
new A. E/PC/T/A/PV/38
I suppose that if somebody invests money in some country be
is submitted to the codes and jurisdiction of this country. He
has his ordinary ways of hei? his claim, and it is not a matter
the
for/International trade Organisation. That is why we propose that
the words "on behalf of any ofits nationals" should be deleted.
Dr. A.B. SPEEKENBRINK (Netherlands): Mr. Chairman, I have
a remark of a more general nature. I have been wondering whether
paragraph 3 is-necessary at all here or whether there are special
reasons why we are including it in this chapter because,as proposed
by the Committee on Chapter VIII we have in Article 86 and further,
regulated the question of consultations between Members, and, the
settling of disputes, and I see that in Article 86 we say that "If
any Member should consider that any benefit accruing to it directly
or indirectly under this Charter is being nullified or impaired, or
that the realisation of ahy objective of the Charter is being
impeded, as a result of.....?, and. so on you get then the normal
consultations proccedure which, as I said, is also adopted here because
in this paragraph we simply say "The Organisation may request Members
concerned to enter into consultation with a view to reaching a
mutually satisfactory settlement and may lend its good offices to
this end". Well that is all included in 86 so I wonder whether we
should not for darificationt's sake - unless there are special
reasons for retaining this paragraph in this Chapter - simply delete
it and leave it to the normal way of cetting disputes and so on,
as provided in Article 86 and further.
,, -
ER- J. - 34 - E/PC/T/A/PV/38
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I.
apologise for continuing again, but Dr. Augenthaler has raised
a very large question, and Dr. Speekenbrink has raised a question
not quite so large.
Regarding the large question raised by Dr. Augenthaler,
it does seem to me that the suggestion is not revolutionary,
because surely it would mean that no treaty could ever contain
Establishment (Clauses. It is quite a common practice to have
Establishment Clauses which define the rights of persons in the
Country and in the territory of the other party. Will, those
treaties are freely entered into, and therefore their stipulations
are accepted by parties; no doubt in a limited sense, as a
modification of sovereignty, but this is the way of every treaty.
I see revolutionary in that at all and there is nothing
revolutionary in paragraphs 2 and 3 of this Article. The only
difficulty is that we are normally living by that sort of
treaty, and it does seem to me that if you have paragraph 2
which includes this, that "no Member will take unreasonable or
unjustifiable action injurious to the rights or interests of
nationals of other Members", then it must follow from that that,
if there is a case where it is considered that a Member has not
fulfilled that obligation, there must be some way of taking the
matter up with him. That is provided in order that this
paragraph should not be a dead letter. Now, if there is a
question of taking the matter up with a Member, it can only be,
as I said before, because all the rights
and f~nn . of that kind are rights as between Governments, and
therefore I see nothing revolutionary, b.i.> . which is not
familiar, in the principle of paragraph 3.
Dr. Speekenubrink has suggested that it is unnecessary to
have paragaph 3, because the latter is already covered by the
general procedure for the settlement of disputes under Article 86. 35
J. E/PC/T/A/PV/38
ell, I would think that that is arguable, but, on the other
and, there is a point of clarification for which I think it is
desirable to keep paragraph 3, that is, Article 86 says:
"If any Member should consider that any benefit accruing
"to it directly or indirectly under this Charter is
"being. nullified or impaired, or that the realisation
"of any objective of the Charter is being impeded my
and Members are governments, and it is obvious that that covers
national governments, unless you say to, and it does seem to .
me that the value of paragraph 3 is that it makes it clear that
it is possible for a Member to take action under this on behalf
of all his nationals. It clears up an obscurity and for that
reason I think that it is desirable to retain paragraph 3.
I- - - V
- 36 -
Dr. A.B. SPEEKENBRINK (Netherlands): Mr. Chairman,
Mr. Shackle spoke especially about "the realisation of any
objective of the Charter is being impeded". Article 86 then
says.: "as a result of - (i) the failure of another Member, to
carry out its obligations under this Charter, or (ii)
the application by another Member of any measure, whether or
not it conflicts with the provisions of this Charter" and so on,
so I think it is a very broad clause.
As I understand the question, it is whether it is right that
the Member should act on behalf of any of its nationals. Well, I
always had the point of view that as.the Charter is an arrangement
between Governments, the Govermment of a country may always act
on behalf of its own nationals They will always be the subject
of- its complaints, I think.
CHAIRMAN : The Delegate of Czochoslovakia.
H.E. Z. AUGENTHALER(Czechoslovakia): Mr. Chairman, I
would just like to give Mr. Shackle an explanation. I am
afraid that I cannot agree with his remark. It is true that
normal commercial treaties contain clauses of establishment;
but those commercial treaties are then ratified by Parliament,
and they become only part of the internal jurisdiction of the
country.
If someone is not satisfied with the application of this
treaty - if it is a private person- he applies to the court of
the country, with the complaint that the country is not applying
the provisions of this treaty. Then if the question should be
one for international arbitration or something of that kind,
there must be a special treaty betwcai the two countries, and as
far as I know nearly all arbitration treaties say that the
arbitration court should decide only on questions of law, but
not on private interests. If there is a private interest
involved, there must be a special convention among the States.
E/PC/T/A/PV/38 CHAIRMAN (Interpretation): Mr. Shackle has asked for
the floor first.
As the time is getting late I shall call upon Mr. Shackle
and the Chinese Delegate. and then we shall adjourn for lunch.
When we meet again in the afternoon, I shell ask Dr. Coombs
to express his opinion on the Czechoslovak and Netherlands
Amendments, and then we shall take a decision.
Mr. SHACKLE (United Kingdom): I would probably agree with
Dr.Augenthaler. The position no doubt varies between different
countries. Some countries make a practice of incorporating
Treaties in their law - it is the -European custom - others do not.
We do not in the United Kingdom, but we nevertheless take
care that our law applies without Treaty obligations, and. in a
case of this kind, under an Establishment Treaty, I entirely
agree that a foreign national has to exert his rights by going
to the Courts of the country concerned, but if, having done that,
he still does not got satisfaction, then his right arises to
appeal to his own Government, which in turn takes up the matter
with the government concerned under the Establishment Treaty.
Well now, as regards the question of an Arbitration
Convention, we shall here have an automatic one; but it does
seem to me that in these complicated legal matters it might be
desirable to refer the question to the Legal Drafting Committee,
rather than, to discuss it in the full Commission. I do not
know whether it might be possible to try, at any rate, before
these Articles . come up in the final Plenary Meetings.
Mr. WUNSZ KING (China): All I want to say is that I share
the views of Mr. Shackle, and I really have nothing to add to
what he has said so fully and so ably. S
I simply want to remind my colleagues that when the original
.Article 35 was drafted it was meant to apply to Chapter V only
and therefore it was thought necessary to have some formula of
similar character in Chapter IV, but at later stages Article
35 was taken out of Chapter V and has now become Article 86,
which is intended to apply to the whole Charter. Such being
the case, it seems to me that the case envisaged in Paragraph
3 of this Article - Article 12 - is fully covered by these
provisions in Article 83, and therefore I wish to support
Mr. Speekenbrink's proposal to delete this paragraph altogether.
CHAIRMAN, (Interpretation): The Meeting is adjourned
until 2.30 a.m.
The Meeting adjourned at 1.5 p.m. |
GATT Library | yn417zc8519 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Thirty-fifth Meeting of Commission "A" held on Monday, 11 August 1947 at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, August 11, 1947 | United Nations. Economic and Social Council | 11/08/1947 | official documents | E/PC/T/A/PV/35 and E/PC/T/A/PV.34-36 | https://exhibits.stanford.edu/gatt/catalog/yn417zc8519 | yn417zc8519_90240179.xml | GATT_155 | 4,609 | 28,326 | UNITED NATIONS N
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/ A/PV/35
11 AUGUST 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
THIRTY-FIFTH MEETING OF COMMISSION "A"
HELD ON MONDAY, 11 AUGUST 1947 at 10.30 A.M. IN THE
PALAIS DES NATIONS, GEEVA.
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).
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.
N.ATIONS UNIES E/PC/T/A/PV/35
CHAIRMAN: (Intepretation): The Meeting is called to
order.
Gentlemen, on our Agenda today we havu the last readings
of Articles 34, 35, and 38 of the Draft Charter. The final
drafting of these Articles was referred by us to a sub-Committee
chaired by Mr. Brown of the United St.a:tes Delegation and the
report of that Committee is contained in Document E/PC/T/W/258
dated July 31. It was then revised by the Legal Drafting
Committee whose report is contained in Document E/PC/T/155 to
which is added a corrigendum dated August 8. First of all,
I shall call upon Mr. Brown to ask if t t:ae - any .nurbner explana-
tions to give in a4U±titjI to the Retort of his Commettee.
Mr. WINTHROP BROWN (United States): Mr. Chairman, I do
not think that I have anything to add to the Reort of our
Committee contained in E/PC/T/l46. However, if anyone has any
questions as to the reasons for any of the changes which the
Committee recomands, I should be very glad to try to answer,
I have also examined the draft of the Legal Drafting
Committee, E/PC/T/155, as corrected, and as far as I am concerned
it is entirely satisfactory and I would imagine that the
Commission would prefer to use that document as the basis for
discussion.
VP
- 2 - E/PC/T/A/PV/35
CHAIRMAN (Interprotetion). We will there fore follow
Document E/PC/T.l55 as corrected by Corri gendum 1. of
A.ugust 8, 1947. We wilI start with Article 54. Are there
any observations on Paragraph 1 (2)?
The Delagate of Balgium.
Mr. Pierre FORTHOMME (Balgium). (Not interpreted).
(Interpretation): The remarks of the Balgiam Delegate
do not apply to the English text.
CHAIRMAN (Interpretation : Are there any further
observations?
Mr. .Winthrop G. BROWN (Uniied States): Mr. Chairman,
I have a very important suggestion; that the comma in the third
line-of the English text should be deleted - I beg your pardon,
it has already been done.
CHAIRMAN (Interpretaion) Are there any other
observations? Is that agreed?
(A: ced)
Are there any observations on sub-paragraph (b)? We
have a Belgo-Lusembourg amendment.
The Delegate of Balgium.
M. FORTHOMME (Belgium) (Interpretation): Mr. Chairnman,
our amendment only aimed at re-drafting the French version of
sub-paragraph-(b) of Article 34, which was very faulty, but the
fact that an English version was cirulated may have created
some confusion . We have nothing to say and nothing to amend in
the English text, which seems to us quite satisfactory. As far
as the French text is concerned, we have submitted our amendment
to the French Delegation, who will probably support it,
S
- 3 - E/PC/T/A/PV/ 35
CHAIRMAN: The Delegate of Franch.
M. LECUYER (France) (Interpretation): The Belgian amendment
is agreeable to the French Delegation,
Mr. S. L. HOIMES (United Kigdom): Mr. Chairman, I think
it was perhaps an accident that this paper, W/268, appeared in
English at all in the circumstances, but thcre are certain
diffcreincas - possibly due to the diff rence in language-
between the alleged translation of the French revision and the
existing text as it appears in the Drafting Committeo' s report
on Article 34, 1 (b),
I wonder whether it would be desirable if the Legal
Drafting Committee were given another opportunity of looking
at the text of Article 34, 1 (b) as now proposed by the French
version. I would not suggest that there are serious difficulties
at all, but I would feel a little happier if the Legal Drafting
Committee were informed of this revision and were asked to look
at it.
CHAIRMAN (Intepretation): (to M. Forthomme): I do not
think there is any essential difference in the two texts, so
far as I can see,
M. FORTH0MME (Belgium): (Not interpreted).
Mr. S. L. HOLMES (United Kingdom): They could, of course,
be asked to look :at it now; I understand they are in session,
CHAIRMAN (Interpretation). (to Mr. Holmes): I have no
intention of senaing thec text to any other sub-committee. I
think if thera is a diverg nce in any text, we should resolve
this problem right away, and here.
The DelegatG of Belgium.
S
- 4 - ER
M. PIERRE FORTHOMME (Belgium) (Interpretation): Mr. Chairman,
I had to make this amendment of the French version because it was
attempted several times to translate the French text following more
or less closely the construction of the English text and the results
were highly unsatisfactory;allthe attemts only produced monstrosities:
therefore I made an analysis of the English text and took ouit the
main ideas and reproduood them in the French text.
The first fact that struck me as being important was that there
was a concession regarding preferences. The send fact:that as a
result of those concessions the importers of the country were
affected. The third fact; the country to which those importers
belonged made a request to the country granting them a concession;
and the fourth idea: the countries to'which. the request was made
took action.
All these ideas do not appear in the same order in the French
version as in the English one. The same ideas appear in both,
and I think we could have here a comparative reading of the two
texts from that angle.
Mr. S.L. HOLMES (United Kingdom): We were not quite clear why
the word "established" appeared in the French text as translated
Into English. That may be just a peculiarity of language, and if
that is all it is, we should not object to it. The present English
text talks about"domestic producers of like or directly competitive
products in the territory of a Member which receives or received
such preference...... Is the word "established" or "etabli"'
In French necessary?
M. PIERRE FORTHOMME (Belgium.) (Interpretat ion): Mr. Chairman,
I had to use that word on account of the .very- long sentence here,
and I thought it was necessary to show that-the following words -
namely., -,"in the territory of a Member. .." and so on applied to E/PC/T/A/PV/35
the word "producers" which is separated from 'in the territory" by
quite a few words.
CHAIRMAN (Interpretation): Are there any other observati ons
on paragraph (b)? It is adopted.
Paragraph 2.
M ANGEL FAIVOVICH (Chile) (Interpretation): In London and
New York our delegation as well, I believe, as that of Canadea and
Cuba, made a reservation on this text because we thought that such
measures should not be taken without consultation .with the Organisa-
tion. In the next text that is now before us we see that these
provisional measures harve been reduced to the minimum,. and in these
conditions we are glad to withdraw all reservations and to accept the
next text.
CHAIRMAN (Interpretation): Are there any other observations?
Paragraph 2 is then adopted,
Paragraph 3, sub-paragraih (a). No observations? Adopted.
Sub-raragraph (b). No observations? It is therefore
adop ted.
Mr. 'INTHROP BROWN (United States): Mr. Chairman, I have
one general observation to make in respect to this whole paragraph.
By its terms this paragraph makes no distiction between the members
of the Organisation who are parties to the General Agrement on
Tariffs and Trade, and the Members who are not, and it is quite
possible that for some periods of timeMembers may be Members of the
Organisation, but may not have had time or opportunity to participate
In the-negotiations under Article 24 and to become parties to the
General agreement. It would seem to as that if a Member should have
to take action under article 34 by midifying or withdrawing a tariff
- 6 - E/PC/T/A /PV/35
concession negotiated under Article 24, it should not be obligatory
to consult with Members of the Organisation who were not parties to
the Trade .Agreement,and Also it seems to us that in such a case a
Member who was not a party to the Trade Agreement who had, so to
speak, paid nothing for the concession, should not have any rights
of compensatory action under article 34. We would therefore suggest
for the consideration of the Committee that it be Lade clear in this
Article by a clause at the end that nothing in the Article would
require a Member who acts with respect tc a tariff concession or
preference concession negotiated underArticle 24 to have to obtain
the agreement of Members who are not parties to the Genciral Agreemnt,
and that Members who are not parties to the General Agreemant should
not have the right of compensatory action. in these circumstances.
I am very-sorry that this thought did not come to us until last
night, am I have not been able to circulate any text which would
accomplish that result, but I have such a text here and I could. read
it . I have about a dozen copies if the idea lends itself to the
Committee.
- 7 -
ER J.
-8-
Mr. W. BROWN (United States): Mr. Chairman, would the
Committee oare to have me read the suggested Draft which we have
proposed?
We would suggest that a new paragraph 4 be added to read as
follows:- nothingng in this Article shall be construed (a) to
require any Mremberin connection with the withdrawal or modificaton
by-such Member of any concession negotiate( under ,article 24,to
consult with or obtain the agreement of Members other than those
Members which are parties to"(I am going to change the text) "the
General Agreement on Tariffs -and Trade, or (b) to authorize any
such other members not partins to such Agreement to withdraw or
suspend. obligation under this Charter by reason of the withdrawal
or modifioction of such concession'.
CHAIRMAN (Interpretation): I woulc suggest that we postpone
temporarily the discussion of this texut until we oan distribute
a Frencoh translation. When we get the translation we will continue
the discussion of the suggsted new Article.
M. P. FORTHOMME (Belgium) (Interpretation): I support the
suggestion, Mr. Chairman.
CHIARMAN (Interpretation): Therefore, we pass on to
Article 35.
(L-. P. FORTHOMME (Belgium) mada a remark which does not
apply to the English texst, and which was not translated).
M. LECUYER (France) (Interpretation): I support the
drafting amendment as proposed by my Belgian colleague.
E/PU/ T/A/PV/35 CHAIMAN (Interpretation): I suppose you. alI agree with
these slight modif ications of the French text;
We now come to article 35. I suppose that Mr. Brown will have
something to say in this reapect.
MR. W. BROWN (United States): Mr. Chairman, the important
change in this connection is to remove paragraph 2 which appeared.
in the New York Draft and make it applicable to the whole Charter
and put it -in Chapter VIII. I think that general plan received the
tentative approval of the Commission when these Articles were first
discussed. It was the unanimous recommendation of our sub-
comittee, and so that paragraph was revised and referred to the
sub-committee on Chapte. VIII, which also agreed with the change
in position.
The only other change of substance is the. omission of the
last clause in the New York Draft text which would require
specificlly the furnishing of certain information, and it was felt
that the obligation to afford adequate opportunity for consultation
would. sufficiently meet the case without giving rise to certain
difficulties which the inclusion of tho New York phrase caused.
certain delegations.
CHAIRMAN (Interpretation): Are there any other observations
on article 35?
MR. C.L. HEEITT (Australia): Mr. Chairman, it has bee
suggested to me that in the Technical Sub-Comrmiittee the other day
the words " or charges"' were deleted from the relevant Article.
- a -
E/PC/T/A/PV/35 J.
- 10 -
CHAIRMAN (Interpretation): Therefore, the rapresentative of
Australia suggests that we should sappress the words "or charges"
in Article 35?
MR. C.L. HEWITT (Australia If that is in accordance with
the wording of the Technical Sub-Committe. I do not know.
MR. E. WYNDHAM WHITE (Executive Secretary): That is true.
MR. C. L. HEWITT (Australia): Then in that case I would
suggest that it be deleted.
E/PC/T/A/PV/35 V
- 11 -
CHAIRIMN: (Interpretation): This modification being in
accordance with what has been decided in the Sub-Committee on
Technical Articles, I believe we can accept the suggestion to
suppress these two words "or charges" in the English text.
Are there any other observations? We accept
Article 35.
We pass on to Article 38. Has Mr. Brown any observations
or remarks to make on this Article?
Mr. Winthrop BROWN (United States): Mr. Chairman, paragraph
1 was re-drafted. to make it clear that the obligations and rights
under the Charter should apply as between different Members as
well as between each separate Customs territory, and also as an
improvement in language.
The important change is the addition of paragraph 3(a)(b) and
(C), which make it clear that a Member may enter into an arrangement
leading towards a Customs Union without violating the Charter.
It was recognized that it was not always possible to effect
a Customs Union all at once, and that it would be desirable to
recognize that the transition steps leading towards the formation
of a Customs Union were: a perfectly legitimate and desirable form
of action, Therefore, paragraph 3 was put in to this Article.
I have one other suggestion to make, and that is that
paragraph 4 should be deleted because of the fact that I-understand
that the Committee on Chapter IV has proposed an Article 13(C)
which covers the same subject matter, and therehas always been
some doubt in the minds of Delegations as to where Article 38(4)
really belonged in the Charter.
The Sub-Committee on Chapter IV having recommended that the
subject matter be taken care of there, and that the new Article
be inserted in Chapter IV for that purpose, I would suggest that V - 12 - E/PC/T/A/PV/35
Article 38, paragraph 4, be deleted here. I may say that in
making that last sugestion I speak only for my Delegation, and
not for the Committee. The Committee took no position on that
point.
CHAIRMAN (Interpretation): We will examine the Article
paragraph by paragraph, and we will start with paragraph 1. Are
there any observations?
M. Angel FAIVOVICH (Chile) (Interpretation): It is not an
observation I want to make, but a declaration which I would like
to see registered in the minutes.
We have in Chile a province called IMagallanes, which is in
a special position geographically and economically. It is very
far away from the rest of the country. It has very different
economic conditions, and for these reasons we have given to this
province the right to certain franchises in its imports. It
is not a different customs territory at all: it is a part of
the country in this respect, but it benefits from certain
franchises on imports. I would like to establish clearly that
this paragraph 1 of Article 38, examined in the light of
paragraph 5, does not at all mean that this province of Magallanes
constitutes a special customs territory. It is a part of the
Chilean customs territory, but it benefits from certain franch is os
regarding imports due to its special geographical and economic
cond itions.
CHAIRMAN (interpretation) This declaration will be takean
into consideration. G -E/PC/T/A/PV/35
CHAIRMAN (Interpretation): Any other remarks on paragraph 1?
Adopted.
Paragraph 2.
Mr. FORTHMME (Belgium): (Interpretation): The remark of
the Belgian Delegate does not . concern the English text.
Mr. FAIVOVICH (Chile) (Interpretation): This new paragraph (b)
includesthe idea which we have ourselves submitted of a
temporary arrangement, or initial period, for the formation of a
Customs Union. It was the same idea, or a similar idea, to that
suggested by the United States Delegate on the Sub-Committee, and
from the fusion of these two. ideas came the new text, which gives
us satisfaction. Wei are satisfied that now this temporarily period
is legitimate, and that the text premits such period to be
provided for.
CHAIRMAN: The Delelate of Syria.
Mr. JABBARA (Syria) (Interpretation): Mr. Chairman, this
paragraph 2 is a very important paragraph for us, and it
provides a certain number of dispositions with which we agree;
but we see a certain number of difficulties as far as the
interpretation of the text is concerned. and, for instance, first
of all, in sub-paragraph (a), it speaks of advantages accorded
by any Member to adjacent countries in order to facilitate
frontierd traffic. Does that include customs duties, or simply
facilitating formalities? Then further cn, in sub-paragraph (b),
it is said *th- formation of the Customs Union or the adoption of
an interim Agreement necessary for the attainment of a Customs
Union". This is authorised, but it is perhaps not very precise
where, further on, it says that such Union or Agreement "shall not
on the whole be higher or more stringent than the average level
of the duties and regulations." This seems to most be not very
clear and net very feasible, and I would like to have these points
made clear, thet we can avoid any difficulties in the future. S
- 14-
CHAIRMAN: I will ask Mr. Brown to advise us on this
subject.
Mr. Winthrop G. Brown (United States): Mr. Chairman, to
taka the second point first: I think the proviso in (b), to
the offset that the duties and other regulations imposed in
a cusToms union shall not be, on the whole, more stringent than
the average levels prevailing in the constituent territories, was
simply to make sure that when you form a customs union it is not
used as an occasion to raise the barriers around the whole new
area to a level higher than the generel average of the level which
prevailed in the territories of the two Members. Of course, you
can mapka them as much lower as anyone wants to.
It is annecessary precaution and I should think it would
certainly not be unreasonable or limit any legitiaete action for
the formation of a customs union.
On the first point, as to whether (a) covers duties or not, I
must admit that I am a not sufficient of a technician to give an
official answer to that question, It is my understanding that
this clause applies to the frontier traffic as it has been inter-
nationally interpreted to mean the flow of trade baek and forth
across the border - I think it is within 15 miles on either side.
It is a narrowly limited arae of trade, so it is not a broad
exception. Whether or not it applies to duties as well as to
other formalities, I am not clear I should think it probably
could . --
CHIRMAN: The Delegate of the United Kingdom.
Mr. StL. HOLMES (United Kingdom): Mr. Chairmen, perhaps
it might be useful if, in relation to the point made by the
Syrian Delagate, I referred to the Report of the First Session
of ths Preparatory Committee, the working of this particular E/PC/T/A/PV/35
page 15 & 16
missing RH. ER - 17 - E/PC/T/A/PV/35
made available, and when we could consider them later. We now have
an instance of such a case. We have not before us the draft of
article 13(c) at present, and we have had no opportunity of consider-
ing it fully. Therefore we cannot say anything on it now.
CHAIRMAN (Interpretation): I would suggest that we now
examine paragraph 4 on its own merits. Later on when we have Article
13(c), we can, see if we are satisfied with paragraph 4 as it is or
if we want to keep the/texts.
'Mr.S.L. HOLMES (United Kingdom): Kr. Chairman, I fully
appreciate the point made by the Belgian representative. At the
same time I have myself had the advantage of seeing the proposed
text of article 13(c) and I might perhaps just say that I feel the
suggestion made by the United States representative is a very
feasible one. That may not be entirely relevant or in order in
view of your ruling, but it would be, I think, in order, to make
this point:that the provision for new preferential arrangements
which we have in front of us here in this paper T.155, that is to say
the framework of article 38, has always seemedto us slightly mis-
placed, and that for that reason alone there is a case for. dealing
with it in Article 13(c). Now that it is appearing in the same terms
in an ther more appropriate place in the Charter, we should feel. that
what the United States representative has proposed has a merit on
those grounds alone. J.
- 18 -
M. A. FAIVOVICH (Chile) (Interpretation) Mr . Chairman, I
want to agree with what you have just said about examining this
Article on its own value'. I believe that when we have examined it
we can always, later on, if we are confronted with the suggested
text for Article 13, see if we need to introduce some modification.
My opinion is re-inforced by the text of the Report of the
Sub-Committee on Chapter IV itself. In this Report the
Sub-Committee indicates that it cannot decide on Preferential
Agreements dealing with other problems thaa those of Article 13,
antd that would mean that if these Preferential Agreements deal with
points inuluded in Article 38, which we are now. discussing, it
could not itself take a decision. Therefore, we must take a
decision on everything that deals with Article 38, and therefore I
would second the suggestion of our Chairman to examine it on its
own merits here.
As this Repors has not yet been approved and not yet
distributed to all the Delegates, I will read the exact text of this
Report which deals with this point. The text is as follows:-
"The Sub-Committee considers that it has no right to decide
if it is necessary to forest the conclusion of new Preferential
Agreements for other aims, and in consequence to decide if
Article 13 (c) makes Artilel 36, paragraph 4, superflous".
CHAIRMAN: Monsieur Brown.
MR. W. BROWN (United States): Mr. Chairman, I think it is
very difficult for us to consider this question without having the
text of Article 13(c) before us - certain Members do have it and
other Members do not.
The Delegate for Chile is quite correct in saying that the
text of Airtiole 13(c) refers to the possibility that spacial
E/PC/T/A,/PV/35 J.
-. 19 -
preferential arrangements might be neccessary to assiet it the
development prograrammes of a Member country, and it sets up
procedures by which certain preferential agreements might be
considered. That leaves open the question of whether or not a
specific Article dealing with possible now preferential systems
would be needed. I think our answer to that question would be
that, for the most part, the most likely eases,in which such new
arrangements were not covered by the Customs Provisions or the
provisions of Article 14, woule be related to programmes of
economic development. If they are not, of course, it would be
an unusual case which, I think, would be covered by paragraph 3 of
Article 66 of the New York Draft, which provides for special
procedures for waiving obligations of the Members undertaken in the
Charter It is for that reason that we feel that Article 38,
paragraph 4 is not needed here. First, it will be covered in
Article l3(c) for the main eases in which it will be likely to be
involved, and second, the residue of cases could be covered by
Aticle 66, paragraph
CHAIRMAN (Interpretation) Are there any other remarks on
this subj ect?
M. P. FORTHOMME (Belgium) (Interpretation): Mr. Chairman, I
have listened, to the remarks just made by Mr. Brown, . and I think
that the procedure suggested by you is the one to adopt so that we
will not have to decide right now wheher paragraph 4 should. be
deleted or not. - 20 -
CHAIRMAN (Interpretation): I believe it is difficuIt
to take a decision on this point without having the exact text
of Article 13(C) and of Article 66. I feel we could suspend
our discussion - postpone it until we are through with
Chapter IV and Article 66, and then we could resume it with
the exact text before us.
M. Angel FAIVOVICH (Chile) (Interpretation) :
Mr. Chairman, I would personally have preferred to follow your
own suggestion, as seconded by the representative of Belgium;
but if it is agreeable to the representative of the United
States to postpone the discussion, I will gladly agree to do
so.
CHAIRMAN (Interpretation): We now pass on to
-paragraph 5. On this paragraph, I see that the Legal
Drafting Committee has suggested a new text. I would ask
Mr. Brown if he agrees with this text.
Mr. Winthrop BROWN (United States): Mr. Chairman, our
Committee has not yet had a chance to consider, as a Committee,
the proposal of the Legal Drafting Committee. Therefore, I
can only speak for my own Delegation, and my Delegation's view
is that the suggestion of the Legal Drafting Committee is an
improvement on the text.
CHAIRMAN (Interpretation): Any remarks on paragraph
5 as amended by the note of the Legal Drafting Committee?
M. Pierro FORTHOMME (Belgium):(Interpretation): The
Belgian Delegation supports the draft presented by the Legal
Drafting Committee in both versions, English and French.
E/PC/T/A/PV/65
V V
CHAIRMAN (Interpretation): No remarks? The sub paragraph
is, therefore, accepted.
We come back to the now paragraph 4 to Article 34 - the
suggestion made by the representative of the United States. You
have received the text in the two languages, and I believe that
everyone has had time to read it. Are there any observations
or remarks?
M. Pierre FORTHOMME (Belgium) (Interpretation):
Mr. Chairman, I support the, new text presented by the United
States Delegation, and I accept as a whole the English text
presented. However, I would like to raise a small point here.
Is it correct to say in English "to withdrawal obligation",
because if this is accurate there is a small difficulty as far
as the French text is concerned.
CHAIRMAN (Interpretation): May I ask an English-speaking
Delegate to answer that question?
Mr. Winthrop BROWN (United States): I think it would
probably be more correct to say "to suspend obligations",
because the word "withdraw" might best be left out, perhaps;
or it could also be met by saying 'withdraw from".
(M. LECUYER (France))(Interpreter): The remark of the
French Delegate has no bearing on tlhe EngIish text.
CHAIRMAN (Interpretation): M. Forthomme has a better
French text than was originally submitted.
M. Pierre FORTHOMME (Belgium) read the French text
M. LECUYER (Interpretation): I entirely support the new
version presented by my Belegian colleague.
(Exchange) of remarks in French between Delegates of Chil:
and Belgium, not interpreted).
- 21 -
E/PC/T/A/PV/35 G - 22- E/PC/T/A/PV/35
CHAIRMAN (Interpretation): Do you all agree?
Mr. FORTHOMME (Belgium) (Interpretation): This applies
only to the French text.
CHAIRMAN (Interpretation): Now we are in agreement an both
the French and English texts.
We are now through with our Agenda for to-day. Are there
any other remarks?
The Meeting is ended.
The Meeting rose at 12.25 p.m. |
GATT Library | sn437by9550 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Thirty-first Meeting of Commission A held on Monday, 21 July 1947, at 10. 30 p .m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, July 21, 1947 | United Nations. Economic and Social Council | 21/07/1947 | official documents | E/PC/T/A/PV/31 and E/PC/T/A/PV.29-31 | https://exhibits.stanford.edu/gatt/catalog/sn437by9550 | sn437by9550_90240164.xml | GATT_155 | 8,568 | 52,040 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/A/PV/31
21 July 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERNCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
THIRTY-FIRST MEETING OF COMMISSION A
HELD ON MONDAY, 21 JULY 1947, AT 10. 30 P .M. IN THE
PALAIS DES NATIONS, GENEVA.
Mr. ERIC COLBAN (CHAIRMAN)
(NORWAY)
Delegates wishing to make corrections in their speeches
should address their communications to the Documents
Clearance Office, Room 220 (Tel: 2247)
Dlegates 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 MoN 2 RESTRICTED
E/PC/T/A/PV/31
CHAIRMAN: The meeting is opened
We have to-day to consider two Articles, Article 18, Tariff
Valuation for oustoms purposes, and certain, proposals relating to
Article 37. I would suggest that le start with Article 18.
If there is no objection, we start with Article 18. You will
find on page 15 of Document T/103 that this Article has been worked
out by an ad hoe Sub-Committee consisting of a number of delegates,
with Dr. Holloway in the chair. I have been informed that Dr.
Holloway had planned to be here to-day, but he has been unavoid ably
detained in London. Nevertheless, even though he cannot give us
his personal assistance, we can doubtless consider the matter to-day.
We will start with paragraph 1 of Article 18. You will see
that there is no comment or amendment suggested by the sub-Committee
and that the draft replaces, practically without any drafting changes,
the New Youk text.
Mr. C.E, MORTON (Australia): Are we considering document
T/103 or M/41-47 which the Secretari-t has issued?
CHAIRMAN: I am starting with document T/103, and when we
come to 18: 2 I will take up document T/W/247. May I take it that
we are all in agreement with the Sub-Committee's proposal with re-
gard te paragraph 1?
We pass on to paragraph 2. There you have an explanatory
note on page 15 of document T/103. You have read the text of that
explanatory note and I very much doubt whether it is worth while
letting that explanatory note go forward to the World Conference,
but I would like to hear the views of the delegates. MoN 3 RESTRICTED
E/PC/T/A/PV/31
Mr. S. KORTEWEG (Netherlands): I think it would be useful
to maintain this explanatory note in order to show that a specified
limited period has been considered. Certain questions were raised
by the various delegations in this Preparatory Committee and I think
it might be useful for the Conference to know that.
CHAIRMAN: If the Commission is in agreement with the view
expreaeed by the delegate of the Netherlands we could maintain the
explanatory note and merely alter the first sentence to read:
"The Preparatory Commission examined ..... instead of "the
sub-Committee decided to report that it had considered ......""
Is that agreed? G
4
Mr. ROUX (France) (Interpretation): It seems to me,
Mr. Chairman, that the Preparatory Commission should at the
present stage provide for a definite undertaking with regard
te the date of the entry into force of the new provisions
ooncerning the tariff regulation and imposition on value..
We think that the text which is going to be inserted.
in the Charter should be more definite on that point, and may
very well provide for the entry into force of these previsions
within three or six months after the ratification of the Charter.
This is indeed one of the essential Articles of the
Charter, and it is important that the countries which negotiate
now the new tariff agreements should have an idea about the
date of the entry into foroe of these provisions.
We quite realise that it would be difficult to apply these
provisions immediately to the tariff agreements under negotiation.
That is why we only propose that these provisions should be
included in the Draft Charter; and it would, indeed, be strange,
if such an important question was to be left open in the Charter,
and if it were not provided for the entry into force of these
provisions within a short time. I quite agree that it is not
going to be a very easy task to pass the necessary legislation.
Nevertheless, taking into account the time which will elapse
before the Charter itself is ratified and comes into force, and
adding to that a margin of three or six months, I think we should
arrive at quite a reasonable period of time, and therefore I
suggest that this question should be reconsidered and a more
definite proposal included in the text of the Draft Charter.
-- CHAIRMAN: You have heard the suggestion of the Delegate 5 E/PC/T/A/PV/31
of France. I would like some Member of the Sub-Committee finally
to express his view.
The Delegate of Belgium.
BARON PIERRE DE GAIFFIER (Belgium) (Interpretation): The
Belgian Delegation supports the French proposal.
Mr. KORTEWEG (Netherlands): We also support the French
proposal.
CHAIRMAN: Do other delegates feel the same as the Delegates
of France, Belgium and. Netherlands.
Mr. LEDDY (United. States): What is the specific proposal?
in
CHAIRMAN: To replace/the text, as far as I understand, xixk
the words "at the earliest possible practicable date", by a
definite term of say three or six months after the coming into
force of the Charter.
Mr. LEDDY (United. States): Mr. Chairman, I had. thought
that this question was rather fully discussed. in the Sub- Committee
and that the Sub-Committee was unanimous in its view that a fixed
date would. not be desirable.
I think that three or six months would. probably be too short
a time for some countries and too long for others. I would be
inclined to leave the prevision for the inclusion of "the earliest
practicable
possible/ date" in the text - saying that while the Committee felt
that it may not be practi cable for all Members of the Orgnisation
to give affect to these principles by a specific date, nevertheless
it is anticipated that the majority of countries would be able to
bring their legislation into accrdance with this at the time of
accepting the Charter - that would be our own form of procedure -
in other words, changes in our own legislation when the Charter
was up for consideration, and not at a later stage. I do nit see much difference between three or six months
and simply saying that you give effect to it at the time of
bringing the Charter of forward, and. I rather sgspect that when
we get into the larger Conference we will find that the working
out of tariff valuation provisions to conform with these
principles will cause same difficulty, and therefore a flexible
period of transition should be provided.
I think, so far as we ourselves are concerned, we have n^
objection to a particular date, but I think we would almost prefer
to say that it should be done at the time when the Charter was
in force.
CHAIRMAN: You have heard the suggestion by the United
States Delegate, who maintaine the text of paragraph 2 as it
stands, while amending the explanatory note by inserting some
words, more or less, to the effect, if I have understeed it
rightly - to maintain the paragraph as it stands in the expectation
that most Members will be able to give effect to the principles
of tariff regulation at the same time as the Charter comes into
cperation; and in such cases where it is impossible, the
Organisation may draw the attention - and so on. E/PC /T/A/PV/31
Mr. J.M. LEDDY (United States): It could be mentioned in
the note that the intention of the Members of the Preparatory
Committee is to give effect to this rule at the stipulated time.
CHAIRMAN: You have heard the suggestion. It seems to me
to be very logical, and it ought to give satisfaction to those
who would like to have a fixed date, if it is said in the
explanatory note that we expect the different Governments to
place themselves in a position conforming to the principles of
tariff valuation when the charter comes into force. That
should be a reasonable solution, and there is the second proposal
by the United States Delegate that Commission A might add that
as far as the Members represented on this Commission are
concerned, they intend to make good this expectation of adapting
their rules when the Charter comes into force.
I should like to hear the opinion of Delegates on the
first, that is, the main proposal of the United States.
M. Louis ROUX (France) (Interpretation); I am very grateful
to the United States representative for his suggestion. I
think the proposed solution is excellent, and it is a material
improvement upon the previous text.
It is a good thing that the principle should be stated
that upon the entry into force of the Charter, all the
provisions of the Charter, including those concerning the
definition of value, will come into force; but in these
circumstances one question only remains, and that is, why we
maintain in the text of the Article the words "at the earliest
practicable/ If these words were not included in the text of
the Article, it would be clear that the provisions of Article 18,
exactly like all the other provisions of the Charter, will
V 7 8
V E/PC/T/A/PV/31
come into force simultane ously with the entry into force of the
Charter itself, and this would be still clearer in the light of
the explanations included in the explanatory note.
CHAIRMAN: We must think of the other Delegations who will
take part in the World Conference .
Mr. J.G. CHERRY (South Africa): Mr. Chairman, I would
just like to confirm the statement of the Delegate of the United
States that this matter was pretty fully discussed in the
sub-Committee. It was then decided to add this commentary which
now appears on page 15.
The South African Delegation is affected to the extent that
probably South African customs legislation will have to be
amended as the result of this Article. We have no intention of
eveding that amendment, and we rather objected; to using a
specified period of three months or six months on the grounds
of administrative practicability - that it might be found
awkward. We have now the alternative "when the Charter comos
into operation". I still feel that that is rather an unknown
quantity, and I am , ,o ndoring if there is very much difference
between that statement and the orignal suggested specific
period. We do not wish to embarrass the Commission at this
stage by establishing a reservation on this point. We should
prefer the note or the commentary to remain as it is on page 15,
but if we find ourselves in a minority here we shall not press it.
CHAIRMAN: I w-r.-k this clears the ground for a reasonable
solution. I understand that there is no objection to the first
(the main) amendment proposed by the United States Delegate.
I think it would be true to say that it is expected that V 9 E/PC/T/A/PV/31
most countries will be in a position to adapt their national
rules to these principles at the same time as the Charter
cones into force; but as to the second suggestion of the
United States Delegate that we should express a unanimous view
as Members of this Commission that our Governments commit
themselves to give effect--in view of what the South African
Delegate has just said, I think we should not press that point. J. 10 E/PC/T/A/PV/31
CHAIRMAN: Is there any objection to the procedure I have
just suggested? As this is not the case, I take it that that is
agreed.
We pass on now to the more difficult part of Article 18......
MR. G.B. URGUHART (Canada): I would not anticipate that,
Mr. Chairman.
CHAIRMAN: ....although in principle I am very optimistic.
You will find it on page 16 and the Comments on page 17. Let us
take the Comments as they stand.
The first paragraph: "The Sub-Committee considered that it
would be in conformity with Article 18 to presume that 'actual
value' may be represented by the invoice price, plus any non-included
charges for legitimate costs which are proper elements of 'actual
value' and plus any abnormal discount or other reduction from the
ordinary competitive price".
The question is whether we maintain or not this explanatory
note. If we do maintain it, it will then be "Commission A
considered that.....", and so on. It has been, I takea it,
unanimously agreed by the sub-committee that the Note was desirable
and, unless any Delegate wishes to express a divergent opinion, I
take it that we pass the Note for insertion.
The Delegate of Chile.
MR. F. GARCIA OLDINI (Chile) (Interpretation): I should like
to raise a qestion, Mr. Chairman, which is perhaps more related to
the next sub-paragrph, but I prefer to raise it now in order to
avoid any possible misunderstanding.
There may be two methods in determining the ad valorum value.
The first kethod is that it is determined in each case on the
basis of data provided in the text of this Article, but it is a J. 11 E/PC/ T/A/PV/31
praotiee adopted in meny countries that, when a definition is made
on this basis, it is maintained for a certain period. Now,
conditions may change daring that period, and a moment may come
when the valuation thus applied will no longer correspond exactly
to the conditions prevailing at the given moment.
I have the impression that such case is provided for in the
text before us, but I am not quite certain of that and I should
like to have a confirmation.
CHAIRMAN: The Delegate of Australia.
MR. C.E. MORTON (Australia): The practice of establishing
value for particular products which are expected to extend over a
period of time was thoronghly convassed by the sub-committee, and
it was universally agreed that such a practice was in contravention
of Article 18W(a)(i), which provides that values shall not be based
on arbitrary values, that each individual importation should be
dealt with on its merits on the basis of the price value ruling at
the time that importation was made. 12
ER E/PC/T/A/PV/31
Mr. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
I see do direct relation between the remark made just now, and the
question raised by the Delegate of Australia. I actually never
said that I envisaged valuations which would not be based on the
real value. The only question which I pointed out was that the
correct interpretation should - be given to the expression which
you would find at the beginning of sub-paragraph 2, where we read
that the "actual value should be the pri cc at which, at a time and
place detemined ....." Now what do those words "at a time and
place determined" mean? Valuation will be made on the basis of the
realvalue, wo are agreed on that, but tho only questi on is whether
this valuation should be made on each occasion, for cach consignment
of goods or who ther, on the other hand, it could be made at a
certain time on the basis of the considerations laid down here,
and then be maintained for a certain period.
It seems to me that, if we expect the Member Countrics to make
a new valuation upon each consignment of goods, this would be an
administratively impossible proposition.
CEAIRMAN: Does any Delegate want to expriss a view on this?
Woll, if nobody wants to, I will try to answer it, although I
am not an export on these particularly questions. The words "at a
time and place determinod" should, in my opinion, be read together
with the words which follow - "by the legislation of the country
of importation .. ..." These following words limit the field of
the possible interpretation of the previces exprecsion and define
in which way they must be interprated; that means at a time and
place determined by the legislation of the country. E/PC /T/A/PV/31ER
Mr. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
what you said is perfectly in conformity with my interpretation.
The position will be that any particular legislation may lay ..
down, at a certain moment, those valuations, provided thay are made
in acoordance with the provision of this Article, and then they will
be normally maintained.
M. LOUIS ROUX (France) (Interpretation): It seems to me, Mr.
Chairman, that the explanation given by you is quite in conformity
with the idea which guided the authors of this text. What was
envisaged in the Sub-Committee was the fact that there may be, in
the different legislation of the Member States, various criteria
for e, str the time and place, but, essentiallIy, the criterion,
wlichever it is, should be applied in all cases, and it should be
clearly laid down in the relevant legislation, The law should lay
down the date - it may be the date of the commercial transaction,-
the date of tho shipping of tho goods, or tho date or their
arrival - whichever is chosen, it s shouId be the same in all cases,
and the same principle, should be applied to the place, be it within
the exporting country, at the port of embarkation, at the port of
arrival or at the customs station in the importing country. What
is important is that a rule should be formulated, end that it should
be the same rule which will be applied in all casses.
Mr. G.B. URQHART ( Canada ) : i t ,.Mr. Chairman, ',;et I
being, determined
agree with your explanation of the time and place/by legislation of
the importing country, but as I understand the question put by the
Delegate of Chile, it is this, that having once established a
value for duty of certain goods from a specified country in
accordance with the criteria laid down in 2(a), that valuo be applied
for a period to all importations of such goods Now if that is the
question, I should say that it is not permissible under the Act.
Mr. J. M. LEDDY (United States): Mr. Chairman our points of
view is expressed by the Canadian Delegate.
ER
13 - 14 - E/PC/T/A/PV/31
CHAIRMAN (Interpretation): I am quite awars of the
possibility that the Chilean Delegate had such a situation in
mind. In view of the remarks made by the Delegates of
Canada and the United States, I should like to ask the Delegate
of Chile to be good enough to clarify the position of his
Delegation: whether it is his intention that the law should
give a value determination and then apply it for a certain
period, or should the law only lay down the methods whereby
the value will be determined? In other words, whether the law
is to lay dowm the actual valuations and figures for a certain
period, which would be wrong from the point of view of the
text before us, or whether, on the other hand, the law would
only lay down the principle and the method for establishing
the value, In the letter case, that would be within the
provisions of this Article.
The Delegate of Chile will understand that I address
this question to him only because the point was raised by
other Delegates here. (Interjaction by Mr. OLDINI: Yes,
I understand) .
The Delegate of Chile.
Mr.F. Garcia OLDINI (Chile) (Interpretation): Mr.
Chairman, my question is as follows: The laws will lay down
the procedure whereby the value of the goods must be
established in accordance with the provisions included in this
Article of the Charter, and, on the basis of this law , and
taking into account the time and place determined by the law
and other provisions of this Article, the customs value of the
goods will be established . My question is this: as to the
value established in the way just mentioned by me, and which
will be applied to all goods of certain estegories, will it
be proper to apply it during a certain period?
S S 15 E/PC/T/A/PV/31
CHAIRMAN (Interpretation): May I ask the Delegate of Chile
whether it would be passible for a Chilean importer of goods to
raise that" question; that is to say, in practice, to contest at
a certain moment the impositions applied to his goods and to
say that they wore right and well-founded, let us say, a month
ago but that they do not apply any more et a given date, and may
a Chilean importer, in those conditions, request that the value
determination should be reconsidered?
Mr. OLDINI (Chile) (Interpretation): It seems to me that
thare are two possibilities, In the first case the lew could lay
down that the valu; determinations will be revised, let us say,
every six months, or, alternatively, the law may say that the
value ieterminations will be revised if and when approciable
changes in the adual values have occurred.
I think that the importer will have no right to raise the
question in the first case unless six months have capsed, and in
the second case unless there have been appreciable changes, but
under the two provisions he will have the right to raise the question
when the conditions provided for have baen fulfilled.
CHAIRMAN: The Delegate of the United Kingdom.
Mr, G. IMMS (United Kingdom) Mr. Chairman, this Article
deals with the "definitions of valus and procedur s for determining
the value of products subject to customs duties, or other charges
or restrictions based upon or regulated in any manner by value"
What I cannot understand is how the Chilean Delegate reconciles
this practice about which he his just told us with that
provision in Paragraph 1. S 16 E/PC/T/A/PV/31
If the value of goods - bcans or peas, or
anything you like - is fixed at £5 per ton, it does not seem to
me to matter whether that value at the time of its fixation
is the actual value of the goods, because, if that value runs
for six months and the value of beans varies in that six months,
if the value is fixed at £5 per ton and the duty is fixed at,
say, 20 per cent, then for those six months the duty is
£1 per ton, irrespactive of the actual current value of the
beans. That seems to me not to be an ad valorem duty at all,
but a specific duty, E/PC/T/A/PV/31
Mr. F.GARCIA OLDINI (Chile) (Interpretation): This is
precisely the question I have ravised, Mr. Chairman. I think it is
not only in our country but also in several other countries that
there is a system of establishing the customs value which is based
on the actual value and tends to approach the actual value as nearly
as possible. But we have not that administrative machinery which
would be necessary to change the value, perhaps every day, in accord-
ance with the fluctuating prices. Therefore, the possible solu-
tions are to establish the value for a period, or in accordance with
certain conditions. It is the practice in my country that the value
should be established for a certain period and I ask whether this
is in conformity with the provisions of this Article.
BARON PIERRE DE GAIFFIER (Belgium) (Interpretation): It
sce,-s to ;.o, Mr. Chairman, that the system referredto by the delegate
of Chile falls into the category. of arbitrary or fictitious valua-
tions.
CHAIRMAN: I take it that the Commission, having lietened to
the remarks of the delegates who have spoken, feels that the scheme
mentioned by the delegate of Chile is not in conformity with the
actual text of article 18. It is, as tho delegate of the United
Kingdom mentioned, a kind of amphibian system, half ad valorem, half
specific duty. There was no provision in the Charter that would
allow for such a system. I do not think it is possible to work out
i~ny real ad valorem system and such customs items as have been bound
by our intended multilateral tariff agreement can, of course, not be
subject to such a system.
CHAIRMAN (Interpreteation): May I ask the delegate of Chile
whether, after the exchange of views which has taken place, he con-
siders that we can accept the text of this Article of the, Charter as
it stands? I am naturally referring only to paragraph 2, sub-
paragraph (a), sub-paragraph (ii).
MoN 27 MoN 18 E/PC/T/A/PV/31
Mr. GARCIA OLDINI (Chile) (lnterpretation): Mr. Chairman,
our customs tariffs include several categories and certain of them
lay down specific duties. I cannot state definitely how and when
our specialised administration will be in a position to adapt their
practices to these provisions, but I hope you will understand that
in these circumstances I am obliged to formulate a reservation with
regard to this sub-paragraph.
CHAIRMAN (Interpretation): It seems to me that the best
solution would be to insert, it the comments, a sentence to the effect
that the delegate of i reserves for the time being, the position
of his Government. I hope that the delegate of Chile will be able
to accept the expression "for the time being. "
Mr. GARCIA OLDINI (Chile) (Interpretation): Yes.
Mr. J.M. LEDDY (United States): If it is not a question of
principle but only one of time, I hope that the delegate of Chile
of the fact
will take note/that we have decided to maintain that those principles
shall be given effect to at the earliest practicable date. That is
to say, that shile would be one of those countries which might re-
quire several months to adapt its machirery. 19
CHAIRMAN: (Interpretation): The comments already accepted on
page 15 of T/103 deal with the same question, and, in fact, they
will allow the Chilean Government to take the time which will
be necessary to bring the administrative praotices into conformity
with the provisions of Article 18.
CHAIRMAN: We pass on to the next sub-paragraph in page 103.
"The Sub-Committee considered that the wN ds "between independent
buyer and seller" in (ii) might be deleted on the understanding
that the phrase "under fully competitive conditions" covers the
same concept."
The Delegate of the United Kingdom.
Mr. IMMS (United Kingdom): Mr. Chairman, the United Kingdom
Delegation have reviewed the question from their point of view,
whether it is or is not necessary to retain the words "independent
buyer and seller" in this paragraph, and have come to the definite
conclusion that they cannot agree that the words "fully
competitive conditions" do, in fact, entirely cover the same
concept.
In their view, the phrase "fully competitive conditions" is
qualified by the words "between independent buyer and seller".
In the absence of the latter phrase it seems to the United Kingdom
Delegation that "fully competitive conditions" might legitimately
be considered as meaning conditions which are fully competitive
with those under which like merchandise is sold or pttend.
forsale. Such a construction would involve the question of whether
or not prices were fully competitive, and would have very
serious consequences, very much to the disadvantage of the
importing community on the system of valuation at present in
use in the United Kingdom. G/31
On our reading of it, the phrase "under fully comp> titive
conditions" covers the concept of open market price (which is,
of course, in the United Kingdom, the open market price at the
time and place of importation) plus some of the assumptions
included in the United Kingdom law. But on U.K. experience
going back over many years, partial cover of this kind, is not
enough. "Open market" needed qualification and definition to
reach a clear interpretation and aveid a mass ef case law. Hence
it is that in our law, as it now stands, it has been found.
necessary to include certain assumptions to re-inforce the 'open
merket' concept, which is the basis of our system. In the same
way, it is necessary here to qualify the word's "fully competitive
conditions"
Our practice is briefly to divide by automatic declaration
an a statutory form the transactions in which buyer and seller
are fully independent from the so in which they are, in any respect,
not at arm's length. In the former case, the price paid is prima
facie acceptable. In the latter, the price paid is prima facie
unacceptable, and our normal procedure is to work back from
realisations, actual or anticipated, which Crepresent the first
arm's length price in the history of the goods. We do not, of
course, have the domestic value recourse sf prices in the country
of origin. Ones we have satisfied. ouselves as to the precise
status of an importer and. established the basis of valuation of
his goods we have, broadly speeking, dispesed of his problem
once and for all. We do not have to reconsider the valuation
of his imports on any and every change in prices.
We would not work this sestem if the criterion instead, of
whether or not the supplier and imperter were independent was
0
E/PC/T/A/PV/31 whether or not the prices were fully competitive. The former,
as I have explained, is ascertained automatically by declaration,
whereas the latter would require apprsal or something similar
of all importations from associated suppliers, would cause endless
trouble and delay, and would, I must reiterate, be regarded as a
retrograde step by the importing community.
It may be asked, and was, in fact, asked, by s-me Delegates
in the Committee, what precisely are the classes of case in which
the omission of the words "between independent buyer and seller"
is expected t: cause embarrassment to us. On the basis of past
United Kingdom experience (and I feel justified in remarking
that in the paper sent to is by the Netherlands Delegation which,
no doubt, many of you have read, it is stated that the United
Kingdom was working, ad valorem duties in the 14th century), the
omission of those words would be liable to embarrass us in
dealing with proprietary articles such as, e.g. Swiss watches,
toilet preparations, medicines and importations of parts for
assembly, where all the transactions are between associated
houses, but such houses are "fully" - indeed in most cases
"keenly" - '"competitive" one with another. None the less, each
of them individually does not satisfy "le independence test.
For these reasons we cannot agree that "between independent
buyer and sallar" ir. the new text of this paragraph is redundant,
and regard it as of first importance that the se words should be
retained.
This is not a question of reluctance to alter our practice on
a small issue. It is vital to the whole structure of our system
that these words should be retained. V E/PC/T/ /PV/31
CHAIRMAN: You will have noted that the comments on
page 17 of Document T/103 simply state that these words "might
be deleted on the understanding that...". If that understanding
is not a foregone conclusion, and I think it is not, I take it
that the simplest solution would be not to omit these words.
Mr. J.M. LEDDY (United States): In our view, the
governing principle is that the merchandise should be sold or
offered for sale under fully competitive conditions. Now, we
admit and recognize that in certain cases administrations may
require, in order to be satisfied that this principle has been
met, that buyer and seller should be independent; but we do not
think that the independence of the buyer and seller is a
separate test, because, as the Delegate of the United Kingdom
has pointed out, in the case of certain associated houses,
although it is freely recognized that there is competition and
that the prices, therefore, represent the actual value,
nevertheless the mere fact that they are associated in some way
has thrown those values out of consideration.
Now, I think that if we make the independence between
buyer and seller one of the governing principles here, there is
very little left for this provision for valuation - at least,.
very little benefit from our point of view. In the case of
the United States, I think that it can be hela that perhaps
80% of the imports are conducted between buyers and sellers
who are in some way related or associated, notwithstanding
the fact that the trade takes place under fully competitive
conditions;
I wonder whether it could meet the United Kingdom
to add, either in the note, or in the text, a provision that
a country may require that buyer and seller be independent where
V 22 V 23 E/PC/T/A/PV/31
this is necessary to ensure that the conditions are fully
competitive. We could accept that, but we could not, I do not
think, accept independence between buyer and seller as a
separate governing principle.
Mr. G. IMMS (United: Kingdom): Mr. Chairman, oonc erning
the United States Delegate's suggestion as to a way in which
my point might be met, I would like the opportunity of
discussing the matter with the United States Delegate. 24 J.
YR. C.E. MORTON (Australia): I must say that Australia
definitely had a certain feeling that the words "independent buyer
and seller" are in themselves somewhat ambiguous, because the
degree of independence may vary.
I would strongly support the suggestion that has been put
forward by the Delegate of the United States who says, in effect,
that a country, in order to cover its concept of the terL "under
fully competitive conditions", may require that the transaction be
between an independent buyer and seller. If such an intent can be
arrived at, it would be more satisfactory to everybody.
CHAIRMAN: It appears quite impossible to terminate the
labours of the Commission today. I would suggest that the
Delegates of the United States, United Kingdom and Australia try
to work out for our next meeting an agreed formula either
involving a slight amendment to the text of the Charter, or an
amendment in the Explanatory Note, Is that agreed?
Agreed.
We pass on to the last sub-paragraph on page 17 of document
T/103: "Further, the Sub-Committee considered that the proscribed
standard of "fully competitive conditions" would meet the
contention of the South Afracan Delegation that countries should
not be required to consider distributors' prices which involve
special discounts limited to exclusive agents".
I would ask the Delegate of South Africa whether he wants so me
explanatory note of that kind to be maintained.
MR. J.G, CHERRY (South Africa): Mr. Chairman, as I stated
a short while ago, this Article will necessitate certain alterations
in our existing legislation and practice. We asked for the
insertion of this Note in order that those alterations sould not be
E/PC/T/A/PV/31 J . 25
too drastic. We have at the present moment adopted certain
practices, against which there has been practically no objection,
and if we had to abandon those practices our only alternative might
be, in respect of certain commodities and in certain classes of
trade, to have to review our tariff rates.
We should therefore appreciate the retention of this Note.
Whether it is intended to mention the South african Delegation by
name or not, I do not know. I do not wish to press this
particularly in one direction or another, but I do not think it is
usual, when a document goes forward, for specific delegations to be
mentioned.
CHAIRMAN: Well, I had already struck out on my text the
words "of the South African Delegation" because, as the South
African Delegate has said, it is not usual to quote the Delegation
whic bas brought up such a question, but that is on the condition
agree
that the Commission unanimously/to the Note as it than would read.
The Delegate of the United States.
MR. J. M. LEDDY (United States): I wonder if this could not
be met, Mr. Chairman, by re -phrasing it to read "Commission A
considers that the prescribed standard of fully competitive
conditions would permit members to exclude from consideration
distributors' prices which involve special discount limited to
exclus ive agents".
Mr. G.B. URQUHART (Canada): Could we have that again,
Mr. Chairman, please?
MR. J.M. LEDDY (United States): "Commission A considers that
the prescribed standard of fully competitive conditions would permit
Members to exclude. from consideration distributors' prices which 26
J. E/P C/ T/A/PV/31
involve special discounts limited to exclusive agents".
CHAIRMAN: Does that re-draft meet with the the epproval of the
Commission?
Approved.
Then we have a further comment which is contained in
document W/247, that is a suggested note by the Delegation of
Australia. Perhaps the Australian Delegate would like to speak on
this. ER E/P C/T/A/PV/31
Mr. C.E. MORTON (australia): Mr. Chairman, the Australian
Government felt rather strongly that, in going into the details as
we have done in Article 18:2, we have ventured into fairly troubled.
waters. We agree, howevor, that some effort must be made to spell
out the vague formula that was initially put forward in the proposals
of the United States Government, and we are much inclined to the
opinion that the whole subject should be considered carefully by the
ITO, if and when established, but they have come to the conclusion
that it is well that we should have a shot at the problem here.
They feel, howeve r, that, with regard to 18:2(a), the emphesis
seems to be on valuation on the basis of the general price level
rather than on the basis of a particular exporter's prices, and as
valuation on the basis of a particular exporter's prices is the
ground work of the valuation system or a number of countries, they
wish it to be made clear that the present formula does permit a
Member to assess duty uniformily, either (a) on the basis of a
particular exporter's prices of the imported merchandise, or (b) if
he chooses, on the basis of the general price level of like
merchandise according to the Member's established practice. I
take it, Mr. Chairman, that, in conformity with the practice you
have been pursuing this morning, you .will slightly amend the purpose
of this note agreed upon, by saying that "Commission A agreed", or
even "considers" that the formula permits of this suggestion that I
have put forward, just as you have done with regard to the latest
note regarding competitive conditions.
CHAIRMAN: Before giving the floor to the next speaker, I
would like to ask the Delegate of Australia whether the words
according to the member' established practice" refer both to (a)
and (b) of this proposal, or only to (b)?
Mr. C.E, MORTON (Australia): Whichever may happen to be the
country's practice. If a country has been in the habit of ER E/PC/T/A/PV/31
unitormly using the merchant's price as the scle basis, it shall
continue to do so. But if that is objeotionable to any country, I
am quite prepared to have the reference to "Member's established
practice" deleted.
CHAIRMAN: Either delated, or to put those words after the
word "uniformly" so as to make it perfectly cloar.
Mr. C.E. MORTON (Australia): Well, it would make perfectly
clear if you put it after the word "uniformly", but in case it meets
with objection from any other country, I am prepared to see it
deleted.
Mr. S. KORTEWEG (Netherlands): Mr. Chairman, if there is a
wish to avoid unnecessary changes in legislaetion in the different
countries, I would propose that the best way is to have a note like
this one. Nevertheless, we think there is a big difference
between rule (a) and (b), and anyway there is a difference in place
in the distribution process of the merchants Who are selling and
buying the goods. If you are selling in detail, then the prices
are different from cases where you are selling in big quantities,
and therefore I think it would be better to have only the possibility
of (a) and not also of (b).
Mr. J.M. LEDDY (United States): Mr. Crairman, we think that
this note is fully consistent with the text of paragraph 2(a),
because 2(a) says that the value may be based on such merchandise or
like merchandise, and then goes on to talk about the extend to which
the price of such commodities is governed by quantity. So, although
I think this is fully satisfactory to us, we would like to ses the
deletion of the phrase "according to Member's established practice".
That might be misleeding, because some Members have an established
practice for basing value on the general price level of like
merchandise, which I think, perhaps, may not meet the requirements
of the Article. 29
S E/PC/T/A/PV/31
CHAIRMAN: You have heard the different opinions. The
Delegate of the Netherlands has no roal objection to the text.
He would prefer the mission of Point (b), but he would, I
understand, also, be willing to acccpt the text as it stands.
The Delegate of the United States proposes the striking out
of the final words, "according to the Member's established
practice." That has already been agreed to by the Delogate
of Australia, so I bog to submit to the Commission the question
of whether we agree to the Australian explanatory note in the
form resulting from the cmission of that last line. It would
then read: "Commission A considers, " etc. Are there any
objections?
(Agreed )
Before we go further, I should say We have nowdealt with
all the comments on Point (a) of Article 18, subject to the
reservation of the United Kingdom Delegate on the question of
"between independent buyer and seller"
Mr. G. IMMS (United Kingdom): Mr, Chairman, -I have had
a word with Mr. Leddy and Mr. Morten and I think our point will
be met in a manner acceptable to both those Gentlemen if the
words "between independent buyer and seller" were deleted and
a new sentence were inserted at the end of that first sentence
of sub-paragraph (11), roading: "In determining whether the
conditions of sale are fully competitive, a Member May have
regard to the question whether the transection is one between a
buyer and seller who are independent of each other."
CHAIRMAN: You hava heard the suggestion of the United
Kingdom Delegate. Is that agreeable to the United States
Delegate? S 30 E/PC/T/A/PV/31
Mr. C.E.MORTON (Australia): Rather than alter the text
to that extent, I was wondering if the United Kingdom Delegate
would not agree that that formula should be represented by our
explanatory note. I take it that it would have the same
validity for interpretative purposes, and it would not clutter
up the text with a very long paragraph.
CHAIRMAN: If I may give my porsonal opinion it is that
the less we have of explanatory notes the better, because,
evan if we adopt the suggestion of Dr. Holloway, to insert in
the Charter some general clause imputing a strong interpretative
value to the explanatory notes, it is not entirely the same
as the text of the Charter and it might lead to confusion.
On the other hand, I entirely agree that the Charter should
not be over-burdened. I will leave the decision to the United
Kingdom Dalegate.
The Delegate of Canada.
Mr. G.B.URGUHART (Canada): I wonder, Mr. Chairman, if,
instead of altering the text of the paragraph, we could insert it as
a note in the text at the bottom of the paragraph - right in the text
CHAIRMAN: All the explanatory notes will be at the bottom
of the text, where they belong. That was decided in the
Chairman's Committee the other day.
The Delegata of the United Kingdom.
Mr. G. IMMS (United Kingdom.): Mr. Chairman, this article,
I think, is of prime importence, and I think it is wrong to
talk about cluttering up the text whan we put in a provision
which is, in itself, of considerable importance. I can see no
reason why this sentence should not go in the text, particularly
if I compare it with the United States sentence already in the
text. 31
MeN E/PC/T/A/PV/31
CHAIRMAN: I should like to ask the delegate of Australia if
he feels very strongly about this?
Mr. C. MORTON (Australia): I hesitate before accepting a
modification of the text of the Charter. I think there should be
consideration of the question of phraseology and I am glad to note
that there is less hesitation on the fact that the note may be
capable of some slight modification. It was rather hastily put
together, The Phrase "between independent buyer and seller" sounds
all right on the face of it, but when lawyers get to work on it, it
may not sound so good.
Mr.G. IMMS (United Kingdom): I think the answer to Mr
Morton. on that point is that if the note has any validity, the same
objection to the phraseology can be raised if it is put in as a note,
as if it were put in a text . It seems very unlikely that the
Commission will dispose of article .8 to-day, and I therefore suggest
that the phrase be put in tentatively,with the previse that members
can return to the point at the next meeting.
I I I - - 32
the
CHAIRMAN: I was just going to make/same suggestion - that
we insert the provision in the Text, and at the next meeting
we will have an opportunity of deciding. whether it should. be
in the Text or an explanatory Note, and in exactly what words.
I am not quite as optimistic as the, Interpreter, who spoke
about "une prochaine seance"; but now I take it we are unanimous
in accepting point (a) of Article 18, subject to the possiblity
of coming back on the point just discussed.
We pass on to sub-para. (b). On that there is no comment,
and so I take it that we all agrea to the proposal of the Sub-
Committee. You have it at the tope of page 18 of T/103 - sub-
paragraph (b). -
£~ree&? igreed. .
Welo, now we come t- the rather rmportant sub-pazagraph (c).
There you have a new Draft submicoted by the Sub-:mmittee in
a document containing
four sub-paoagraphso and. ysu have cn page 18/certain comments,
which I got tc-day, and- I asked that it should. be distributed,
partioularly with regard to the suggestion by the United States
Delegate, with regard. to sub-paragraph - (iii). I take it that
you have all receiveo it. Let us gO throegh, briefly, th,
comments. The mcjority of the Sub-Committee accepted. (i) and. (ii),
but wished to delete (iii). The question is now whether the new
U.S. re-draft of (pii) may be acoerted; but we will come back to
that. The U.S. Delegate stated that (i)acceand (ii) were, ptable
only if (id.) were retaineC-
The coment eurtner says lhgaCaoaddan DeLe--tiOn aid. not
opposeothe retention cf (iii).
New Zealand wiohed. further t, consider the matter.
there questipns will, we hoPe, disappear after the full
discussion Finally, the- Sub-Committee thought the following
entence should. appear inmaeNote as a cormcnt on (iv): "The
apprecnation".... dow to currencies. We shall take that when we
arrive at sub-paragraph (iv). E/PC/T/A/PV/31
CHAIRMAN: I take it that in order to arrive at the .
unanimous decision., we should start by considering the new
United States amendment on sub-paragraph.(iii).
Mr. C.E. MORTON (Australia): I would like to draw your
attention, Mr. Chairman, before we consider sub-paragraph (c)
to what might be termed an error, perhaps, in document T/103.
If you will turn to the Report of the sub-Committee in document
41/47, you will see that paragraph (iii ) was in asterisks,
indicating that that sub-paragraph had real standing insofar as
it had little or no support in the sub-Committee. In the document
T/103 it appears en clair, which my indicate that it has a
validity equal to that of the other paragraphs in the document.
CHAIRMAN: I entirely agree with the remarks of the
Australian Delegate, but in defence of those who have prepared
document T/103, I would say that it is stated on page 19 that
the majority of the sub-Committee wished to delete (iii), so
that achieves exactly the same result.
V 34
ER. J.M. LEDDY (United States): We were working on the
basis of Document M.41/47, and there is some slight difference
between M.41/ 47 and T/103. I think document Z.41/47 is the aetual
text.
CHAIRMAN: Does the Delegate of the United States wish to
explain his new proposal or not?
MR. J.M. LEDDY (United States): I should say, first,
Mr. Chairman, that we are putting it forward ad referendum and that
our instructions do not permit us to accept fully at the moment.
If it is approved by the Commission, we hope that we will be able to
accept also, but we are without final instructions which will permit
that at the moment. If the text is acceptable to the rest of the
Commission I think we might avoid rather a long discussion,
Perhaps you might wish to ask some of the delegates whether, having
thought it over, they find it satisfactory. If there is some
doubt about it we might go over the background of the discussions
in sub-committee and the reasons why we have supported the existing
text, and what our position is.
CHAIRMAN: The Delegate of Belgium.
E/PC/T/A/PV/31 35
ER E/PC/T/A/PV/31
Baron Pierro de GAIFFIER (Belgium) (Interpretation): Mr.
Chairman, the Belgian Delogation was included in the majority of
the Sub-Committee, which wished to delete sub-paragraph .3. We
considered indeed, that this provision was not satisfactory from
the point of view of principle, because it permitted each country
to define the rates of exchange and each country was at liberty
in these definitions, and such a practice might lead to discriminatory
measures. The new text now proposed by the United States
Delegation shows a considerable progress as compared with the
original proposal. It is now suggested that it is the Organization
which, in agreement with the International Monetary Fund, should
define the exchange rates. Therefore, we think that we can
reconsider our position and, although the new United States proposal
actually provides for the retention of the differential rates, which
is an undesirable thing, at the same time it takes into account
established facts, and we also agree that it rather belongs to the
International Monetary Fund than to the Organization to make such
a determination. Therefore, we would have no objections to the
adoption of the new United States proposal if this is the wish of
the majority of this Commission.
Mr. G.B. URQUHART (Canada): Mr. Chairman, this paper, which
was handed round by the United States this morning, is headed
Article 18, paragraph 2(c). It is not quite clear to me whether
sub-
this is intended to replace the whole of 2(c) or just/paragraph (iii).
CHAIRMAN: Only sub-paragraph (iii).
well, it is rather late, and I think that if the Delogates
got this paper only this morning, they had better think it over and
we, shall met again on wednesday morning at half-pest-ten, and then
I hope that we shall rapidly got through this Article. There
remains a certain addition to Article 37, and the farther consider-
ation, if any delegates so wish, of what Mr. Coombs said at our
last meeting on the points relating to Article 37.
The meeting rose at 1.00 p.m. |
GATT Library | mp911mk8300 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Thirty-First Meeting of Commission "B" held on Sunday, August 17, 1947 at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, August 17, 1947 | United Nations. Economic and Social Council | 17/08/1947 | official documents | E/PC/T/B/PV/31 and E/PC/T/B/PV/30,31 | https://exhibits.stanford.edu/gatt/catalog/mp911mk8300 | mp911mk8300_90250115.xml | GATT_155 | 22,072 | 130,212 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/B/PV/31
17 August 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
THIRTY-FIRST MEETING OF COMMISSION " B "
HELD ON SUNDAY, AUGUST 17, 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 shouId
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.
NATlONS UNlES J. 2 E/PC/T/B/PV/31
CHAIRMAN.: The meeting is called to order.
MR. J.R.C. HELMORE (United Kingdom): Mr. Chairman, before
we begin business today, I wonder if you would allow me to suggest,
as one who did not suffer from it, that the Executive Secretary
should have informed those responsible for the looking and
unlocking of doors in this building that when we work on Sunday
afternoon we expect some facilities to be available to us to get
into cur offices and from our offices to this room.
MR. E. WYNDHAM WHITE (Executive Secretary): Mr. Chairman ,
as one who has suffered from this, I shall be most happy to convey
this opinion to the authorities concerned.
CHAIRMAN: We have still a very heavy programme of work before
us, so we will have to make speed if we intend to get through our
work today. Therefore, I would urge all Members of the Commission
to use the utmost economy of words in putting their arguments.
We will first of all consider the proposal for Voting which we
agreed upon yesterday and for which the Secretariat have prepared
a text for our consideration. The text has been circulated in
English and French and it is now presented to the Commission for
approval. Are there any comments on the proposal so far as it
relates to the insertion in the Charter?.
Members of the Commission will note that.Alternatives A and B
will be set out, and they will be followed by a Note setting forth
the proposal of the Chinese and Canadian Delegations.
Is that agreeable to the Commission?
MR. H. F. ANGUS (Canada): Mr. Chairman, the Chinese Delegation
is at this moment, considering a possible variant of the Note, which J. 3 E/PC/T/B/PV/31 would make it possible for it to appear, if so desired, as an
Integral alternative. It is a matter of some words of drafting and
if we could have a minute or two and then came back to this it
would be a great help.
CHAIRMAN: We will came back to this Note then when the
Canadian and Chinese Delegations are ready to submit an alternative.
In the meantime, we might consider the wording of the
Appendix A, which is given on page 2 of the document.
Are there any comments on this Appendix?
MR. J.R.O. HELMORE (United Kingdom): Mr. Chairman, I will
not press this point, but simply for the purposes of explanation
I wonder if we could include with formulae A and B words equivalent
to those which appear at the top of page 2 of document E/PC/T/W/293.
There are two paragraphs there that explain the initial allocation
of votes based on factors (b), (c) and (d) in one case, and on (a), (b) and (c)
in the other case, which would be calculated on the average of the
last three pre-war calendar years and the full calendar year
preceding the entry into force of the Charter. The succeeeding
calculation would be made at the time of the periodic revision.
CHAIRMAN: I take it that the United Kingdom Delegate is
referring to document E/PC/T/W/298, which is wrongly numbered as
E/PC/T/W/293 on the second page?
MR. J.R.C. HELMORE (United Kingdom): Yes, Mr. Chairman
I apologise for that but I merely read the reference at the top of
the second page.
CHAIRMAN: I take it that if those two paragraphs are
inserted under Formula A, they should also be inserted under
Formula B? E/PC/T/B/PV/31
Mr. J.R.C. HELMORE (United Kingdom): I would be content
to have it that way, Mr. Chairman, or, for shortness, the
Secretariat might put it in after both formulae, saying in each
case "for the purpose of the initial allocation of votes the
factors (b), (c), (d) (or (a), (b), (c) respectively) ..." but
that is purely a matter of drafting which I would be very content
to leave to the Secretariat.
CHAIRMAN: Is the proposal of Mr. Helmore approved by the
Commission?
(Agreed)
Are there any other comments on the Appendix?
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, as the term
"Secretariat" used at the end of the annex might be a little
ambiguous as to whether it refers to the Secretariat of this
Conference or the Secretariat of the United Nations, I wonder
if it would be helpful to add: "More accurate material to be
supplied at the World Conference by the Secretariat of the
Organization after consultation with the Statistical Office of
the United Nations.
Mr. WYNDHAM-WHITE (Executive Secretary): I doubt whether
it is really necessary. The Secretary-General of the United
Nations has agreed to supply the Secretariat for the World
Conference, and I think the consultations which would take place
within the Secretariat of the United Nations are not a matter for
discussion in a document such as this. It would, naturally,
be a matter of course that the Secretariat of the United Nations
would make use of the statistical resources of the United Nations.
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, I do not want
- 4 -
V V - 5 -
to make this matter the subject of a debate, but I would like to
explain the reason for our suggestion.
The figures to be used in this table are of utmost importance,
because if there is an inaccuracy, The changes the weighted voto
from beginning to end. India has presented a paper showing a
difference of opinion regarding the figures presented in the
table, and Cuba would also have to present figures. If we could
make sure that these statistical figures have been forwarded by
the Statistical O ffices of the United Nations, we should all take
it as something that could not be argued against ; but if you
say "the Secretariat" only, there will be doubt as to whether the
Secretariat had enough statistical material for the purpose.
CHAIRMAN: Perhaps such words as these would satisfy the
Delegate of Cuba: "More accurate material will be applied to
the World Conference by the Statistical Services of the United
Nations Secretariat.
Dr. Gustavo GUTIERREZ (Cuba): Perfectly.
CHAIRMAN: Is that agreed?
(Approved).
Mr. O. PARANAGUA (Brazil) : The Secretariat is having an
easy task to ascertain about certain factors like external trade;
but, I wonder, how can we accept the figures for national income?
The figures of the Secretariat are, I think, private figures
for the purpose of paying the quota of the United Nations. They
have other figures for the purpose of UNRRA, for relief.
Mr. WYNDHAM-WHITE (Executive Secretary): I think that
point was covered by the vsa of the words "Statistical Services
of the United Nations". That, after all, is the body to which
E/PC/T/B/PV/31 V -- 6 --
the United Nations have entrusted the task of producing the
most reliable statistics available to the United Nations, and
if reliable statistics are not available, or unequivecable
statistics are not available, I think we can rely on the
Secretariat of the United Nations to say so.
Mr. O. PARANAGUA (Brazil): I have full confidence in the
Secretariat, but sometimes a task may be an impossibility. I
can give you an example: the figures we have for the National
Income of China. To find out the figures, you must go to the
Review of the University of Chicago: it was only calculated in
1933 - 1935. There is no special service. They are private
calculations. . There are about half-a-dozen countries having
national figures. All the others mean guesswork. I do not
know what the Secretariat will put as a source.
Dr. J.E. HOLLOWAY (South Africa): On a point of order,
are the merits of these matters under discussion?
CHAIRMAN: I was just going to remark upon that. We
agreed yesterday, more or less,on all these points. We were
simply to approve this paper prepared by the Secretariat. I
do not think the Delegate of Brazil is making a proposal - he
is just pointing out some of the difficulties. But the
Secretariat of the United Nations, so I am informed by
Mr. Wyndham White, aro prepared to undertake this responsibility
we are putting on them here, and it will be up to them to
decide whether or not they can provide the figures. Therefore,
I do not think there is any purpose in discussing this matter
further here. - 7 - /31
CHAIRMAN: Any other comments on the Appendix.
Is the Appendix approved with the changes suggested?
Agreed.
Are the Canadian and Chinese Delegations now in a position
to submit an alternative to the note?
Mr. ANGUS (Canada): Yes, Mr. Chairman. At yesterday ' s
meeting it was decided, I think, that the Canadian and Chinese
proposal should take the form of a note, because the draft
submitted by my Chinese colleague referred to the World
Conference, and in that sense was unsuitable for inclusion as
a draft Article.
We have agreed on an alternative to the note prepared here
which would be a draft Article. I regret that the pressure of
time has made it impossible for us to have a French translation
available, or indeed a text for circulation, but if the general
idea is approved both these difficulties can be met later in
the afternoon.
The alternative (c) would be the text of alternative (a),
followed by these words:-
Provided that at the instance of any Member any such
decision shall require corroboration by a second vote taken by
a simple majority of the votes cast in accordance with the plan
...... of weighted voting set out in the Annexe --- to this
Charter.
With such a draft any plan of weighted voting - either of
the other two - could be inserted., and the effect would be this:
That if a decision were made by a simple majority on the basis
of each State one vote, and no one challenged the decision, it
would be final. It would be open to anyone to ask that there
should be a second vote with a roll call, in which case a weighted
E/PC/T/B/PV/31
G G E/PC/T/B/PV/31
majority would be required.
Now I am not asking to consider the merits of that at the
moment, but as a method of bringing this suggestion clearly
before the World Conference, we think that this formula might
have some usefulness.
If it is desired, or if the Committee is agreeable to replace
the note by alternative (c) along these lines we shell be glad
to have the documents put in form immediately; if, on the other
hand, it is preferred to keep the note, then we simply leave it
at having brought forward the suggestion.
CHAIRMAN: The proposal of the Canadian and Chinese Delegations
is that in place of the note I have given on the paper before us
there should be set forth alternative (c), which would read the
same as alternative (a) with the addition of the following words:-
"Provided that at the instance of any Member any such
decision shall require corroboration by a second vote taken by
a simply majority of the votes cast in accordance with the plan
of weighted voting set out in Annexe --- to this Charter."
Subject to refinement in drafting by the Legal Drafting
Committee, I would like to know if this proposal would meet
with the approval of the Commission.
Mr. COLBAN (Norway): Mr. Chairman, I beg to support
the Canadian and Chinese proposal.
CHAIRMAN: The Delegate of Australia. E/PC/T/B/PV/31
CHAIRMAN: The Delegate of Australia.
Dr. H. C. COOMBS (Australia): Mr. Chairman, I am sorry
to differ from what has been suggested, but as I understand
the intention of putting in alternatives it was that the
alternative put in should, so to speak, be representative of
varying approaches to this problem. In its original form,
the Canadian-Chinese suggestion - quite apart from whether
it had sufficient support in the Commission to be adopted -
was quite clearly a separate alternative in the sense that
it did indicate a third type of approach; that is, that you
could have weighted voting for certain specified questions.
In that sense, I was willing to support the proposal that an
alternative of that kind should be included.
But the proposal which the Canadian Delegate has just
outlined - if I understand it correctly - appears to me to be
so close in principle to the system of weighted voting that
it is not, in essence, a third alternative at all. If I
understand his proposal correctly, it would mean that one
country could obtain a weighted vote on any question if it
was dissatisfied with the result of a vote on the basis
of one country -one vote.
It seems to me it is natural to assume that in all cases
where a country on the lsoing side of a vote on the one
country - one vote principle believed that the result would
have been different on a weigthed voting principle, it would
obviously ask for a weighted vote on that question, and
therefore all questions would be decided by weighted voting
unless they were decided in the same way by a system of
one country - one vote.
- 9 -
S E/PC/T/B/PV/31
Therefore, Mr. Chairman, whilst I am not expressing any
judgment on the merit ts of these proposals, it does seem to
me that we are not including a different approach to this
question by putting in an alternative in the form which the
Canadian Delegate has just outlined. On the other hand, I
do believe there would be some merit in putting in the
alternative in the form in which it was originally suggested;
that is, there will be specified questions on which it
could be understood beforehand that a weighted vote was
desirable.
I do not support that proposal myself, but I believe it
is a possible alternative for which good arguments could be
advanced, and I would suggest that we do include an alternative
of that kind. One objection against including it, which was
raised yesterday, was that you would have to specify the
Articles. I do not believe that is necessary at this stage.
If what we include is the third alternative, it would
have, the effect that a system of weighted voting would
ordinarily be used and there would be votes on the system of
one country - one vote except for decisions as specified, and
that the specifications of the decisions could be done at the
World Conference and not here. We would then be putting in
actually a third alternative and not a variation in wording
of one which is already there.
CHAIRMAN: In order that we should get through our
heavy programme today, I cannot permit the re-opening of a
debate on the merits of any of these proposals for voting. We
agreed yesterday on the substance of the proposals before us.
We simply introduced the question of voting today to consider
in what manner the various alternatives should be set forth.
S
- 10 - E/PC/T/B/PV/31
Members will recall that the Chinese Delegate had proposed
a draft of the Canadian-Chinese proposal for insertion under
alternative (c), but that we could not accept that draft because
it referred to the World Conference.
The Canadian and Chinese Delegations have now submitted
their proposal in the form of a draft. I think Dr. Coombs
is possibly misled by what is set forth by the Secretariat in
this Note, which may not convey the idea which was the basis
of the Canadian-Chinese proposal. This is set forth at some
length in Document E/PC/T/143, AWQendum 2. If Dr. Coombs
will consult that document he will see that it does not
differ in essence from the draft which is now submitted by
the Canadian and Chinese Delegations. The question really
before us is not the merits of the Canadian-Chinese proposal,
but whether it should be submitted in the form now suggested
by the Canadian and Chinese Delegations under alternative (c),
or whether it should be in the form of a Note.
The Delegate of Australia.
Dr. COOMBS (Australia): I understand the United Kingdom
Delegate has a suggestion to make.
- 11 -
S E/PC/T/B/PV/31
Mr. J.R.C. HELMORE (United Kingdom): Mr. Chairman, it is
painful for me to suggest that your last speech did not represent
the facts quite as closely as your speeches usually do. If we look
into the Chinese and Canadian paper, in paragraph 2, the suggestion
was that in certain designated oases the system should be combined,
and in paragraph 3(b) we see that it says "What issues should be
designated as requiring a combined majority?" and I would agree
with Dr. Coombs that there is an essential difference between, say,
one State, one vote, and weighted voting on any issue; and one
State,one vote, and weighted voting on certain ctitical issues. I
have written out hurriedly a rather simple amendment to the text
that has just been submitted by the Canadian and Chinese delegations
which I believe would give effect to the decision that the Committee
came to yesterday, which was to present the Canadian-
Chinese proposal in our report as alternative C., and with your
permission I will read it. It is this. Instead of saying as in
the text appended: "Any such decision shall require collaboration
which allows weighted voting to be asked for on any issue", we
should say: "Any decision reached by the Organisation on the matters
provided for in Articles ..of this Charter shall require..."
We should obviously have to invlude a note "'what those issues
should be is a matter for determination by the World Conference."
I do believe., Mr. Chairman, that that does represent correctly
the decision that we reached yesterday.
CHAIRMAN: I want to thank Mr. Helmore for having called my
attention to the inconsistency of what I said, and what we agreed
to yesterday. I apologise to Dr. Coombs for having misinterpreted
that point, but it is only because I wanted to save the time of the
Commission . I think that the proposal made by Mr. Helmore does
conform to the Chinese-Canadian delegations' proposal I would
like to know if it would meet with the approval of those delegations.
- 12 - ER -- 13 -- E/PC/T/B/PV/31
Mr. H.F. ANGUS (Canada): Mr. Chairman, we should even
prefer it to the draft we submitted as being in closer conformity
with the original proposal. I think that perhaps while speaking
I should remove one misapprehension that Dr. Coombs seemed to have.
This does not substitute weighted voting for simple voting on
those points. Any decision would require both types of majority.
CHAIRMAN: If this is approved by the Commisson then it
will be inserted in the Charter as alternative C.
Before we leave the question of voting we have to decide on
a consequential question. In the report of the Committee on Vot-
ing covering Article 69 which was voting in tie Conference, Article
73-Voting in the Executive Board, and Article 78 - Voting in the
Tariff Committee, we have decided the question which relates to
Article 69, but it will be necessary for Commission B to decide
whether the alternatives which are inserted in Article 69 could
also be inserted in Article 78; that is, Voting in the Tariff Com-
mittee, or if they are not to be inserted what the text of Article
78 will be.
With regard to Article 73 it will be noted that the Report of
the Committee recommends the text of Article 69 of the Drafting Com-
mittee's Report. Perhaps it might be better to leave this until
we come to Articles 73 and 78. I would simply like to draw the
attention of the Commission to make it clear that we have not yet
finally disposed of all questions pertaining to voting. - 11 - E/PC/T/B/PV/31
We now come to Article 72: Composition of the Executive
Board. In addition to the Report of the ad hoc Sub-Committee
which was presented to us yesterday, we have a re-draft of
Article 72 furnished by the Legal Drafting Committee and given
in paper E/PC/T/159.Addendum 1. We also have a paper circulated
by the Delegation of India, which is E/PC/T/173.
We shall therefore take as our working paper for the purposes
of this discussion the Report of the Legal Drafting Committee, and
I think we had better proceed with this Article paragraph by
paragraph, commencing with paragraph 1.
The first speaker on my list is the Delegate of India.
Dr. GUSTAVO GUTIERREZ (Cuba): I wish to raise a question
of order, Mr. Chairman. There is the proposal made by the
Norwegian Delegate which has been circulated, which I suppose
is official - -
Mr. Erik COLBAN (Norway): Yes.
Dr. GUSTAVO GUTIERREZ (Cuba): - - and if it is official,
I think, according to parliamentary usage, it should be
considered first, because if it is approved there is no need to
go into the discussion of the proposed Article 72.
CHAIRMAN: I thank the Cuban Delegate for calling my attention
to the Norwegian Delegate ' s proposal which has just been circulated
this morning. The Norwegian Delegation have proposed an
alternative text and this can be considered in connection with
the proposal of the Sub-Committee. It is, as the Cuban Delegate
states, an amendment to the proposal of the Sub-Committee and
therefore he is quite in order in stating that it should be
considered at the same time as the Sub-Committee ' s Report and
disposed of first before we deal with the Report of the Sub-Committee. P -- 15 -- B .. E' /PC/T/1/PV/31
According, to our Rules of Procedure, Rule 27 reads: -
When an amendment revises, adds to or deletes from
a proposal, the amendment shall be ut to the vote first,
and if it is adopted the ar -ded proposal shall then be
put to the vote"
So if we considered this question and came to a vote we should have
to put to the vote first the proposal of the Norwegian Delegate;
ot I do not think we should limit the discussion simply to the
proposal of the Norwegian Delegate. We should discuss the Report
at the same time. But we -1noe able to pass paragraph 1 of
the text as given by the Legal Drafting Committee until we have
disposed of the Norwegian amendment
H.E. Mr. WNSZ KING (China): Mr. Chairman, on a point of
order: if I recollect correctly; the Delegate of Norway submitted
this same proposal a"t" one of he meetings of Commission ;iand
this proposal, together with quite a large number of other proposals,
was referred to the Sub-Committee for examination, and, after
careful examination of all these proposes, the Sub-Committee
unanimously recomended a new Article which is the present text of
Article 72 Therefore,if there Isany question of amendment at all,
this new Article 72 is really an amendment to the original Norwegian
proposal And, besides, the Norwegian proposal represents the
view of only one Delegation, while Article 72, according to the
present text, repriesents the view of the Sub-Commttee, the
unanimous view of the Sub-Committee, which was set up by this
Commission to study this question.
CHAIRMAN: I think what we should do is first of all to have
a general discussion on the Report of the Sub-Committee and
their proposal as set forth 'in the Legal Drafting Committee s
text. We can c,onsider, along with that Report any amendments P - 16 - E/PC/T/B/PV/31
such as that submitted by the Norwegian Delegate, and it is
possible that we may have other amendments in the course of
our discussion, and the question of procedure will only arise
when we come to vote on the various proposals.
I will read the Norwegian proposal, which has just now
been circulated in the English text. The Secretariat are
preparing the French text, which will not be available for
some little time but will be circulated as soon as possible.
The text reads as f ollows: -
''The Executive Board shall consist of the
representatives of not more than fifteen of the Members
of the Organisation, elected by the Conference by the
affirmative vote of two-thirds of those present and
voting. Seven of the Members may be immediately
re-elected on the expiration of the term for which
they have been elected." E/PC/T/B/PV/31 17 --
CHAIRMAN: Before this question was raised, the Delegate of
India had asked for the floor and then the Delegate of Norway. I
propose to call on them in that order.
The Delegate of India.
Sir R. PILLAI (India): Mr. Chairman, I venture to submit,
in all modesty, a proposal in connection with the composition of
the Executive Board, and that proposal is that India, that is, the
Dominion of India should be given a permanent seat on the Board.
I start from the position - a position which, I think, is
incontrovertible - that had there been no partition of the country
no one would have found any difficulty about the inclusion of India
amongst the countries to be allotted permanent seats on the Board.
I say this because even if we leave out population - a factor which
must tell heavily in favour of China and Inaia - and take into
accourt only national income and foreign trade, we shall find that
India, as constituted before the 15th August, stood seventh among
the countries of the greatest economic importance.
Now, how has the position been affected by the partition?
The Dominion of India still covers a vast expense of territory,
being more than three-quarters of the size of the old unitary India;
it is rich in natural resources, especially in coal and iron: and
within its frontiers is concentrated practically the entire
industrial potential of Greater India. It is against this 1 ;-
background thatono the ecmic imporrtance o ithoe of India.Domnini
s to be assessed. But first lept us a~ly,p 'or urasisticalely stC
pposes, the criteria hitherto adopted for the determoinoati n.f
the economic importancec of a ountry, namely, national income and
foreign trade. I do not owish t inflictono the Cmmission more than
J.
17 - the essential statistical details and for fuller information would
invite my fellow Delegates to refer to our Note which has been
circulated by the Secretariat to all delegations. Taking national
income first, the position, you will find, is that the national
income of what was formerly British India and Indian States was
estimated at twelve billion dollars. We believe that this is
too low an estimate, but accepting this for the moment, distributing
this between India and Pakistan on a population basis, we arrive
at a figure of about ten billion dollars for India, yielding
20 points on this count, against 24, the figure originally
assigned to the whole of India. Turning now to foreign trade, on
a rough computation, partition is found to involve for the
Dominion of India a reduction in the value of trade from 1,370
million dollars to 1,180 million dollars, which means a drop in
points from 27 to 23. Against this, however, must be set the
fact that the trade between India and Pakistan, hitherto treated
as internal trade, now becomes foreign trade for both States. The
exact volume of this trade is not readily ascertainable, but
taking into account the major items only such as cereals, cotton
and raw jute moving from Pakistan to India, and coal, cotton
textiles, sugar and a wide variety of consumer goods moving in the
opposite direction, the addition to India 's foreign trade on this
account cannot be put, even on a conservative estimate, at less
than 300 million dollars representing 6 points. The net increase
in points on account of foreign trade is thus from 27 to 29 and the
final position resulting from partition is that the Dominion of
India can claim a total of at least 49 points against the 51
previously allotted to India.
The figures mentioned represent the result of rouch calculations,
and I do not claim that they are sacres not. But I do maintain
J. - 18 -
E/PC/T/B/PV/31 J.
- 19 - E/PC/T/B/PV/31
that the broad conclusion emerges from this analysis that in terms
of accepted criteria the Dominion if India cannot be much lower
in order of commercial importance than was continental India in the
past. This is not a statistical paradox, but an economic fact.
We must remember, too, that partition, far from enfoebling India
economically has restored conditions favourable to rapid economic
development and has set both India and Pakistan on the road to
economic progress. The Dominion of India is the second largest
country in Asia., and its determination to make its full contribution
in terms of work, sacrifice and service in all fields of human
endeavour must surely ensure for it a high place amongst the nations
of the world.
It is on these grounds, Mr. Chairman, and more especially
because India is demonstrably among the first seven countries of
major economic importance that I put forward this claim.
Recognition of the claim by the Conference would produce a profound
impression in my country, and would be regarded not merely as an
expression of international good-will, at this, the most mement--us
epoch in our history, but as a reminder that India will now be
expected, more than ever before, to direct its labours to fruit ful
international channels.
At the same time, Mr. Chairman, we are in full accord with the
Committee on Voting and Membership that the countries named in
paragraph 1(a) of the text recommended by it should be given
permanent seats on the board. Our proposal is merely that the
Dominion of India should also be given a permanent seat, and while
expressing no particular preference for the draft Article 72
proposed by the Committee we suggest that effect might be given
to our proposal by increasing the total membership from 17 to 18
and the number of permanent seats from 7 to 8. V - 20 -
E/PC/T/B/PV/31
CHAIRMAN: The Delegate of Norway.
Mr. Erik COLBAN (Norway): Mr. Chairman, ljwpbhpteal is
explain the words "The Norwegian Delegate disapproves of the
proposed text of Article 72". The Sub-Committee itself does
not seem to feel on very strong ground, since it states that
"the Conference of the Organization, when it is established, will
no doubt proceed to an examination of the text of Article 72
with a view to deciding whether it should be modified in the light
of the membership of the Organization", and it is said finally,
as part of the draft text; "The provisions of this Article
shall be subject to review by the Conference every three years."
Would it not be wiser to adopt a formula that would leave it
to the Organization to achieve the research the Sub-Committee
has in view, without committing them to the text of the
Sub-Committee? My suggestion would enable the Conference to
achieve in full all the results that the Sub-Committee has in
view. There would even be room for India; but I have also
some observations to make on the concrete contents of Article 72.
It is based upon the idea that the Members of the Executive
Board shall not be elected by all the Members of the Conference,
but by groups. Is that wise? Is it wise to establish an
Executive Board, each Member of which does not feel that he
fully represents the Conference - that he and the country he
represents enjoys in full the confidence of the Conference as a
Member of the Executive Board?
I think that all the Members of the Executive Board
should be elected by the full Conference, and each of them
should feel that by this election he has got a mandate from all
the Members of the Organization; and in order to make that
mandate still more of an honour and still more to imply the
duties resting on the Members of the Executive Board, I would V - 21 - E/PC/T/B/PV/31
like the election to take place by a two-thirds majority vote.
In the proposal of the Sub-Committee, they have done my
country the honour of putting us in a group. I have no objection
to collaborating with the countries mentioned in that group;
but I most strongly object to being put in one group without
having an opportunity of adjusting my position in accordance
with the circumstances of the day. - 22 - E/PC/T/B/PV/31
It may be that one day l find that the commercial
interests of one of the countries in the group you have put me
in are in direct conflict with the commercial interests of my
country. It may be that I may find that by giving my vote to
quite another Member of the Organisation than one of this group
my commercial interests would be safeguarded. So that is why,
briefly speaking, I must maintain that I disapprove of this text.
It is true, as the Chairrman of the Sub-Committee said, that my
proposal is nothing new. No. I made the same proposal on the
18th July in Commission B; but the Sub-Committee does not seems
to have noticed it - they put it in a bulk with all the other
Amendments, but it has disappeared; there is no mention of it;
and I think the ideas in my suggestion are, after all, of some
interest, and I wanted to hear arguments against my suggestion
and I have not got any.
The introduction to my proposal also says I submit the
following alternative text, because as we are in the presence of
a unanimous Sub-Committee Report and very important Members of our
Commissions were Members of the Sub-Committee, I am under no
illusion with regard to having my view approved by a quasi-unanimous
decision of Commission B.
That is why I confine myself to submitting my idea as an
alternative text to go to the World Conference to be considered
on a footing of equality with any other proposal, including the
proposal of the Sub-Committee in the form it may have after the
discussion here.
I would add that as I said yesterday, with regard to the
question of voting, I would consider it almost futile to reopen
here a full debate on the pros and cons of all the aspects of the
question of the composition of the Executive Board. I think it
would be wiser to reopen the question in the wider gathering of
Governmental Representatives we shall have in Havana.
CHAIRMAN: The Delegate of Australia. E/PC/T/B/PV/31
- 22bis -
CHAIRMAN: The Delegate of Australia.
Dr. COOMBS (Australia): Mr. Chairman, I do not wish to
re-open the question of permanent seats on the Board. The
views of the Australian Delegation are well knownon that question:
we do not consider such permanent seats necessary to protect
the interests of the major Powers. But it is clear from the
Report of the Sub-committee that a substantial majority of the
Sub-committee, at any rate, would be prepared to accept such
an arrangement.
I am in entire agreement with Mr. Colban's views on that
point, that it is desirable that any Member of the Board should
feel that he is there as the result of the of the
entire Conference and that he should feel responsible to the
entire Conference in that way. But since there does seem to
be, in the minds of the Great Powers, a sense of insecurity, I
presume we must defer to their needs in this way, as another
demonstration of the fact that it is really unnecessary for
them to take special measures to see that due deference is
paid to their wishes.
I wish to confine my attention primarily to the question
of the method of filling the remaining seats on the proposed
Board, but before doing so I wish to draw attention to one of
the questions regarding the selection of the permanent Members
of the Board, which is relevant to the point raised by the
Delegate for India.
I am in entire agreement with the Delegate for India,
that on any reasonable assessment of economic importance the
new Dominion of India would, with practical certainty, be
entitled to a permanent seat if it is to be assessed on the
basis of economic importance. But, whilst the Committee
recommended that that should be the basis, I note that there
S - 23 - E/PC/T/B/PV/31
is no provision, so far as I can see, in the Articles themselves
for the selection of those countries on the basis of economic
importance, What is provided is that certain countries should
have permanent seats on the Board. That does seem to us to
be a weakness, in that there is no oreteria laid down for a
review of that matter from time to time by the Conference, and,
if it is not to be reviewed, then I suggest it is likely to lead
to a representation which no longer corresponds to true
economic importance.
The Committee has, however, recommended that the
remainder of the seats, apart from the permanent seats,should be
filled by a system of elections from groups of countries, I
find myself completely unable to determine what are the elements
which led to the grouping of these countries as a justification
for selecting this principle for election. The countries are
roughly grouped, in certain cases, in geographical areas
where that looked a convenient way of doing it, such as in
South and Central America, in the Middle East countries and in
Northern Europe - Scandinavia. But it is clearly not possible
to proceed on a basis of geographical contiguity when you come
to find a place for Australia and New Zealand. Consequently we,
along with certain other countries who are equally difficult to
place in congenial geographical company, are bundled into a heap
and it is left for them to sort themselves out upon some quite
undefined basis.
The results of this are rather odd. First of all, for those
countries who have been grouped together on a geographical basis,
I see little cause for comfort as far as they are concerned.
As the Delegate for Norway has pointed out, geographical con-
tiguity is no guarantee of similarity of interests and it may
well be that a country may find itself in a group whether it is
not among people with a common outlook or a common set of
S . - 24 - -
problems, but perhaps with conflicting social and political
philosophies and conflicting economic interests. I do not know
whether that is so in the cases which have been suggested, but
it clearly could be so.
Furthermore, those factors are relevant to selection of
representatives. If we are going to be represented on the
Board by anybody other then ourselves, we are very interested to
know the political and economic philosophies of the country
which is going to represent us, and we are very interested to
know along what lines their economic interests run, particularly
on questions which are of importance to us. What we are
anxious to do is to ensure that the Board has within it people
with an understanding and a comprehension of problems of the
kind which we think are important and which may be particularly
difficult for us. We do not see any reason to assume that our
geographical neighbours - even if we had any in this sense would
be able to represent our point of view in that case.
We might be much better content to be represented on the
Board by the representatives of Norway and Sweden than we would
be by countries very much closer or related to us, perhaps, in,
other ways. So, Mr. Chairman, we feel that this is an
irrational basis of grouping, even if election by groups were a
desirable method.
led
Furthermore, we feel it has/the Committee into obvious
inequities. Once you have countries in a group, they must be.- 65
rouped as countries, and countrieesn arcpt all-of tsamehe z Ssie
or the sameeconomic significance;on uancseqtly we find tharere e
peculiarities of representation, if you judge from what is
apparently thdere unlayping rinciple in the Committee's Report;
that is, that representation should, in some sense, be related to
/PC/T/B/PV/31 S - 25 - E/PC/T/B/PV/31
economic importance.
I am putting this forward, not in any criticism of the
representation of the particular countries, but merely as an
illustration of the difficulty of working out a reasonable
system of representation once you set out on this system of
groups.
There are five seats allocated to the American Republics,
the Arabian States and the Scandinavian States; there are five
seats to be given to all other Members. If we have a rought shot
at assessing the economic importance or those two groups, in
accordance with the formula set out in one of these Annexures
we discussed ad nauseum yesterday, we find there are 32 countries
in the first group, which has five seats. Out of those 32
countries, four appear in the first 20 of the most important
countries. On the other hand, there are 28 countries in the
other group - the "also rans." Out of the 20 most important
countries in the world, assessed in accordence with this
formula, they account for eight.
I am not suggesting that this is in any sense a deliberate
pieces of unfair representation, but it is a necessary consequence
of a system of election by groups of countries which are
different in size and in economic importance and is, I think,
a serious criticism of this method of approach.
There are other problems because we were not able to
group countries conveniently on a geographiosl basis. T..ose
which could not so readily be grouped were left to group
themselves as they could form a group, but they have to find -
I think the figure is 4 - three States to form a group before
they can have a representative.
Suppose that our own country were seeking such a group:
we might, for instancee, say the new Dominions of India and
Pakistan are suitable comrades in such an enterprise, but they, S - 26 - E/PC/T/B/PV/31
by themselves, would not necessarily be able to put a representative
in. We would still have to go and find somebody else and it
might not be easy to find one which was as similar in its outlook
as the two Dominions I have referred to. We would then have
to look for a fourth one, and Suppose we found Italy, or a
country of that order? Here would be four countries which rank
high in the order of economic importance and they would have,
so far as we can see, one representative; at any rate, if there
are any with more than one, there is nothing in the Report or
in the Articles to indicate how the number which we get is to
be determined. - 27 -
ER E/PC/T/B/PV/31
In other words, Mr. Chairman, we should
wish this principle to be recognised that the practices to be taken
into account in selecting countries which would form a desirable
board are many and complex and change from time to time. They
are the sort of things which countries would take into account in
deciding for whom to cast votes in open elections. Since we are
apparently committed to recognising a certain number of permanent
seats we would wish the remainder of the seats to be filled in a
war which would permit us to cast our votes taking into account all
the factors, not geography alone, and therefore we wish to put for-
ward also as an alternative proposal a compromise which recognises
the apparent nebulosity of permanent seats, and we would
propose that there should be 8 permanent seats allotted to the
8 most important economic countries as they are Assessed period-
ically.
Secondly, that the remainder of the seats should be filled by
straight elections, and that they should of course rotate, and vote
for the other proposals put forward. Those are the two fundamental
proposals which we propose: that there should be 8 permanent seats
allocated from time to time in accordance with their economic
importance at that time; and, secondly, that all other seats on the
Board should be filled by open elections. P 28 . - ..O - E/PC/T/B/PV/31
CHAIRMAN: The Delegate of Czechoslovakia.
H.E Z.AUGENTHALER :(MCzechoslovakia)!t. ' Chairman, I wont
be very long, because th e most of what Iwanted to say has already
been said. Instead of crosswords I have been studying a little what
comes out with this weighted voting, just to find out on which basis
the seats on the wExecutive Board; ere distributed because I
suppose that this Commission tried to allocate the seats in
accordance with the economic importance of the dif.ferent countries
Now, I find that the 7 States which would have the permanent
seats have 22'7 per cent. of the total votes, and they have 7 seats,
What you call the Ar.ab States have 76 per cent and they have
seat. The'Scandinavian countries have 7.2 per cent. and have
seat,The Latin-American coun.tries have 25'5per cent. and
have 3 seats. And the rest of the world, thep rest of Euroe,
Australia, South Africa, all together - and India too, which have
3,2per cent,, hould have 5 seats, So it means that in the
first group of the permanent seats i1lt would be seat for 3 persons;
for the Arabian countries it would be 1 seat for 7.6 persons;
for the Scandinavian group it would be 1 seat for 7.2 persons;
for Latin-America it would be 1.5 seat for 3 persons; and for
the rest of the world, 1 seat for 6.6 persons.
If it were done in proportion it should be: in the first
group, instead of 7 seatsi, only 4; n the Arab countries it
should be more than 1 seat; in the Scandinavian countries it
should be more than 1 seat; in tehe Latin-Amrican countries it
should be more than 4 seats; and in the rest of the world it
should be 6 seats,
Now you see that probably the wallocation as not done
according to the economic importance of the different groups; and
I have taken for my calculations the tables submitted by Great P - 29 - E/PC/T/B/PV/31
Britain - not because I like them so very much, but because
they were the only ones where there were figures for all countries
whereas in the others there were some empty spaces; and I
could not work with empty spaces.
Now I was wondering also about something else. For
instance, if the Latin-American countries would be represented,
let us say, as a group on the Executive Board only by three
representatives, should they have only 3 votes, or should they
have the votes of the whole group of Latin-American countries?
Because in that case they would have more votes than the first
group of 7 permanencies.
On the other hand, if we are further forming groups, so
that there might perhaps be a Balkan Group one day, I am
wondering what would happen if, for instance, at some future
time Yugoslavia might be represented on the Executive Board by
Greece, or to the contrary!
Now I have seen from these rather sad meditations that,
first, India, which in my mind, and I think we all recognise,
should be counted among the great countries, has no
representation at all and was put with the others among, I
should say, "the common people ": that the Latin-American
countries are not represented as they should be according to
their economic importance, neither the rest of the world,
I thought, also, that we are allocating seats and we do
not know up to now who would be the Members and who not.
That is why I support the proposal of the Norwegian
Delegation; because I think there is no doubt, whether it is
in the Charter or whether it is not in the Charter, that the
great powers will always have seats on the Executive Board and
I think the Norwegian proposal takes care of that. As to the
rest, I agree entirely with Mr. Colban. J.
- 30 - E/PC/T/B/PV/31
MR. J.R.C. HELMORE (United Kingdom): Mr. Chairman, before
the translation begins, I wonder if you would allow me to ask a
question?
The Czechoslovak Delegate has given us some calculations which
I think he says were taken from the United Kingdom paper. I
could not quite follow them, but I would like to ask him whether
he included the basis vote of a hundred, because if not they are
entirely meaningless.
H.E. DE. Z. AUGENTHALER (Czechoslovakia): I have taken the
last column: "Votes as Percentage of Total Listed".
MR. J.R.C. HELMORE (United Kingdom): But I should explain
that we include a basic vote of a hundred per State; which is far
greater then factors comprising economic importance.
H.E. DR. Z. AUGENTHALER (Czechoslovakia): "Votes as
Percentage of Total Listed" is a percentage of votes from the
hundred .
MR. L.R. EDMINSTER (United States): Mr. Chairman, I wish
first to refer to the request of the Indian Delegation. Assuming
that there are to be a substantial number of permanent seats on
the Executive Board, the considerations advanced by the Indian
Delegation in favour of the assignment to India of a permanent seat
on the Executive Board, are, in my opinion, pursuasive. I therefore
wish, on behalf of the United States, to express my support of
their request.
That leads me next to the proposal put forward by the Delegate
of Norway. I wish to say first, with reference to their proposal,
that the United States Delegation has from the first been inclined J. -- 31 -- E/PC/T/B/PV/31 to be sympathetic towards the formulae contained in that proposal.
We expressed, I think, some support of it in London last Fall; we
were in favour of it when the sub-committee first took up the
discussion on this matter at this Conference. However, in the
Course of that discussion, if my memory series me rightly - this,
perhaps, is a matter on which the Chairman of the sub-committee
could speak with more authority - the chief objection that was
made to that proposal in the sub-committee was that, after all, a
Member might not be re-elected and, as was rather implied, he
might be, and that therefore there would be an impass if there
were no provision for putting someone in his place and you would
have a reduction in membership. If I am wrong in my recollection
of that, I certainly would wish the record to be corrected.
Therefore, as the matter was discussed in the sub-committee,
the United States Delegation finally arrived at the conclusion that
it would cast its support for the proposal which is now contained
in the Report of the sub-committee.
Now, that is as far as I am really authorised to go in
commenting on that, but I should like on my personal responsibility,
without having discussed the matter with the Head of our Delegation,
to say a few words next with reference to the matter of the way in
which provision is made for the election of other Members of the
Board. It is my personal feeling that the .
points that have been made in critisem of that proposal, firstly by
the Delegate for Norway and at more length by the Delegate from
Australia, have a great deal of substance. I, personally, am not at
all certain, notwithstanding that I am a Member of the sub-committee
which submitted this Report, that it might not be better to abolish
the grouping and to leave the election of the Members of the Board,
those that are not provided for on the permanent seats, shall I say,
to a "free for all" and to let everyone take his chance. V - 32 - E/PC/T/B/PV/31
It would be fine if they could all win; but there are not
enough please, and perhaps we would just have to pray that the
devil would not take t .e hindmost:
CHAIRMAN: The Delegate of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, it seems, at
the actual stage of this discussion, that we are not going to
enter into the substance of the whole problem, but only to
consider the proposal submitted to us by the Sub-Committee and
the amendments that have been filed during this Session.
It seems that we may have in the text of the draft that is
submitted to the World Conference as Alternative A the proposal
suggested by the Sub-Committee. Then we should have some
alternatives - I would prefer one alternative and not more than
one, if those Delegations that are not in agreement with the
suggestion made by the Sub-Committee could arrive at a single text
that should be presented.
We have seen with satisfaction that the geographical factor
has been borne in mind in the text submitted by the special
Sub-Committee, but it is my duty to state that the Cuban
Delegation cannot accept the naming in the legal text of the
nations that must comprise the Executive Board of I.T.O.,
because, in our opinion, it violates the principle of equality
of nations.
We have said at a former opportunity, and we repeat it now,
"that we feel that a certain number of the most important nations
should
of the world, from the economic point of view,/be elected and
re-elected to have a permanent seat on the Executive Board; but
we consider that they should be elected by all the Member
nations of I.T.O. - that is to say, they must have their seats E/PC/T/B/PV/31
by the will and consent of all the other nations.
This problem was the subject of very lengthy discussion
when the Charter of the United Nations was under consideration,
and in the Charter we have two systems. Once is the procedure
followed in Article 23 - Composition of the Security Council.
Names are stated in the Charter: that is not a very popular
system. Nevertheless, there was some reason for it - the
maintenance of international peace and security, as well as
equitable geographical distribution.
We think, however, that in Article 61, setting up the
Economic and Social Council, we have a very good pattern to
follow. I am going to read the text of the Charter, because it
might be the solution of the problem:
"The Economic and Social Council shall consist if eighteen
Members of this United Nations elected by the General Assembly.
Subject to the provisions of paragraph 3, six members of
the Economic and Social Council shall be elected each year for
a term of three years. A retiring member shall be eligible
for immediate re-election.
At the first election, eighteen members of the Economic
and Social Council cil shall be chosen. The term of office of six
members so chosen shall expire at the end of one year, and of
six other members at the end of two years, in accordance with
arrangements made by the General Assembly" .
That means that we could have the six most important nations
elected for three years, and then another six nations elected
for two years, and the rest, of the third part of the group for
one year. There is no doubt that by their importance, their
interests, their political ties and relations with the other
nations, the most important nations of the world will always be
elected and re-elected, inasmuch as they continue to be important
from the economic and political point of view. That is why we
favour inserting in the proposed Charter an alternative covering
a system different from the one submitted, which we cannot accept.
V
- 33 - - 34 - E/PC/T/B/PV/31
Mr. COLBAN (Norway): Mr. Chairman, on a point of order.
I wonder whether we cannot confine ourself to the presentation
of alternative drafts without continuing a discussion on the
merits of this question.
We know before-hand that we shall come to a decision approved
by a considerable majority of the Members of the Commission, and
is it worth while then to continue the discussion?
CHAIRMAN: I think the point of order taken by the Norwegian
Delegate is quite a valid one, but I have on my list three
speakers and I think they desire to speak on the general question,
and I would therefore suggest they should confine their remarks
to comments on the various proposals, and indicate what their
purpose would be - either the various proposals now before the
Commission, or any other proposals which they may favour.
I would like to know what other Members of the Commission
wish to speak, so that we can then arrange to close the Debate
after they have spoken.
The Delegate of the United Kingdom.
Mr. HELMORE (United Kingdom): I take it your intention is
quickly to come to a decision on what text should go in both on
the Drafting Committee's text and on the Australian text which
has just been circulated; but if it is your wish I would sooner
reserve my remarks until the Commission has come to a decision
on the main issue.
CHAIRMAN: Yes, I would ask that any drafting points be
deferred until we decide on what basis we come to.
The speakers on the list now are Belgium, Netherlands, Brazil,
China, South Africa. Any other Delegations wish to speak on
this subject? - 35 -
E/PC/T/B/PV/31
Mr. WUNSZ KING (China): Yes.
Dr. HOLLOWAY (South Africa): Only if the merits are going
to be further discussed. If not I am quite prepared to keep
quiet.
Mr. WUNSZ KING (China): I wish to speak only one sentence
in my capacity as Chairman; and then one or two sentences in
my capacity as the Delegate of China.
CHAIRMAN: I therefore propose that after the Delegates
of the Netherlands and the other countries have spoken we close
the debate on this, and discuss how we ought to proceed
further.
The Delegate of Belgium. S - 36 - E/PC/T/B/PV/31
Baron P. DE GAIFFIER (Belgium) (Interpretation) Mr.
Chairman, as you have asked us to be brief, I shall be very
brief now, but first of all I would like to state that I have
listened with great care and taken into good consideration
the remarks made by Mr. Colban. We have always found it to
our advantage to follow the advice he gave us, which has always
been extremely good and sound advice, and I think the criticisms
he made on article 72 - and in particular on Paragraph (c) -
were extremely sound ones.
In spite of the merits and charms which are linked with the
principle of regional ties, it is quite useless, I think to
underline this principle in a document like the Charter, because
there may be many congenial links other than geographical ones.
If we were only to take one example we could take the example
of the British Commonwealth of Nations, where the links are not
geographical ones.
Nevertheless, I would like to say that the document which
was put forward by the Sub-committee presents real advantages.
I was not a member of the Sub-committee and for that reason I
will leave it to a member of the Sub--commnittee to defend this
text. In spite of that, I would like to propose that Article
72 should be sent to the Havana Conference as the first text
to be inserted in tha draft, and that we should send a second
text to the World Conference, the text put forward by Mr. Colban
or the text as it was amended by Dr. Coombs. But I would press
that we should not send more than two texts to the World Conference.
CHAIRMAN: The Delegate of the Netherlands.
Mr. A. B. SPEEKENBRINK (Netherlands) : Mr . Chairman, when
I asked for the floor it was to support the argument of Mr.
Colban and also his proposed that the draft should be put S - 37 - E/PC/T/B/PV/31
before the World Conference as a definite proposal-
I agree with other speakers with regard to their criticisms,
for instance, with regard to the election by groups of countries.
The election ought to be by the Conference and by nobody else.
I also underline the importance of the system of voting.
It makes it very difficult to decide here, before you have
decided how you will vote, how you will deal with it at the
World Conference on the specified draft as put forward here.
I also agree that it is very difficult to come to a definite
conclusion here when you do not know the ethict membership of the
ITO .
I could go on with a few other points but I will not take
up the time of Members by doing so. I am therefore quite
agreeable to have several alternative texts brought before the
world Conference. If you bring them into discussion, I might
say a few words on them, but not now.
I only want to say one thing: Whatever we decide here,
this is a very important thing which we are discussing. We
are sitting here receiving drafts at the last moment and not
as
having the possibility of contacting our Governments, so,/I asked
before, what is the value of agreeing here on certain points?
I must make a very special reservation here that whatever
I can agree to as to the texts to be sent to the World Conference
- even if I should express here my preference for one of these
texts - is only conditional, because I have no time and no
opportunity of asking the opinion of my Government at this late
stage of our Conference.
CHAIRMAN: The Delegate of BraziI. S
Mr. O. PARANAGUE (Brazil): I feel obliged to say a few
words about the Executive Board, because I am responsible for
the skeleton of this plan, with the collaboration of the
United Kingdom Delegate in the Sub-committee.
When I put forward this general plan it was not an
innovation; it was the precedent of the Fund, because in
the Fund you have five appointed Directors and you have
election by groups. The Delegates who oppose here the
election by groups were elected to the Fund by groups. For
example: the Netherlands was elected with the Union of South
Africa; Belgium was elected with Iceland and Luxembourg;
Czechoslovakia was elected with Poland and Yugoslovia, and
Canada was elected with Norway.
We have this precedent, which is working perfectly well -
we have never had any trouble on the Board of Directors with
this grouping - and I do not see why countries which accepted a
system which is working so well should reject the same system
here. That is the reason why I put forward this general plan.
It is not mine: it is the plan of the American Treasury. I
only adapted it for the ITO, and the percentage of voting is
also taken from the American Treasury. That is the merit of
this plan.
- 38 - E/PC/T/B/PV/31 - 39 - E/PC/T/B/PV/31
About the other plan. I perfectly agree that the Havana Confer-
ence ought to have all information about the other alternatives -
Mr.Colban's alternative, and Mr. Coomb's alternative - but I think
that we ought to send all the three alternatives to Havana.
I have also another consideration. We did not have a roll
call for Mr. Colban's alternative: we simply decided to send the
three alternatives to Havana. I do not know why we should have
a roll call for the two alternatives about the Executive Board.
I propose that we should reduce this discussion and send the three
alternatives to Havana.
M. ANGEL FAIVOVICH (Chile) (Interpretation): Mr. Chairman
I shall be extremely brief. The form which is to be given to the
Executive Board if we follow the advice of the sub-Committee, is an
arbitrary one, and the reasons against the groupings which were pro-
posed by the sub-Committee, were given here by the representatives
of various delegations, and I entirely agree with the reasons.
Therefore, we have to reject in the name of our delegation the
Report of the sub-Committee, and we would like to second the pro-
posal and the arguments put forward by the delegate of Norway because
this proposal seems, in our opinion, to be the best one because it
is in accordance with the legal and political principles of the
United Nations.
H.E. Mr. WUNSZ KING (China): Mr. Chairman, first of all I
would like to apologise if I should speak more then one or two
sentences.
Speaking as the delegate of China I would strongly support the
request made by the Indian delegate for a permanent seat on the
Executive Board, while at the same time I would not make any com-
ments on his quantitative considerations because; as I pointed out
yesterday, the selection of the 7 permanent Members was not based
on such considerations.
ER - 40 -
E/PC /T/B/PV/31
Speaking as the Chairman of the Sub-Committee, I feel grateful
to Mr. Colban, and to you, Mr. Chairman, for having made the ruling
that all remarks should be confined to the proposals and the alterna-
tive proposals because that ruling seems to have relieved ne of the
thankless job of giving explanations to all remarks and all the
severe criticisms. However, it seems to me that I cannot let some
of the remarks pass unanswered. One of them is this: that Mr.
Colban/seems to have some worry about the mysterious disappearance
of his formula in the sub-Committee, but I can assure him that that
was not the ease. The formula was very much in our minds when
the question was taken up. Of course, there were many other
formulae and if Mr. Colban's formula has somehow mysteriously dis-
appeared, they might have shared the same fate,which was not the
case. P - 41- E/PC/T/B/PV/31
Mr. Colban 's formula had its beauty because it was very
simple and, as I had the occasion of pointing out to him, it
seems to me that its weakness also lies in its simplicity, because
if some such simple formulae were to be adopted, then it would have
the distinct disadvantage of leaving the door wide open for
lobbying, which is certainly not very desirable.
Then the formula again seems to me a little bit too rigid,
because, unlike the formula which was submitted by the Sub-Committee
it does not provide for periodic review, to take one instance only.
Mr. Colban also questions the wisdom of leaving this mode of
election to the geographical groups. I think there is much in tha
point, but, on the other hand, don ' t you think it would be still
more democratic that the election should be left to the various
groups and not be sponsored by the Conference as such.
As to the question of confidence, I do not think there is
any point of confidence or lack of confidence, because, if the
formula were adopted by the Conference, then the Conference
would be well aware of the situation and in agreeing to the
formula certainly the Conference would have already given its
implied confidence to the various groups themselves.
Now, as to the point that there was no rearrangement of
groups, I can assure Mr. Colban that that point has been taken
care of in the Sub-Committee ' s formula.
Having said so much - or, rather, so little - I would say
that the point mentioned by the United States delegate was
perfectly in order so far as my memory goes, Of course my memory
is just as good or just as bad as yours.
Now the Cuban Delegate seems to be strongly opposed to the
naming of the seven or eight permanent Members in the formula,
but we can very easily recall that there have been many
international precedents in this connection. The other day, P -- 43 -- E/PC /T/B/PV/31
Ambassador Colban reminded us of his own experience during
his long years of service in international organizations, and
in this I entirely agreed with him, for I somehow have, the same
experience. I distinctly recall that in 1920, when the question
of the election of the four non-permanent Members of the Council
was taken up, there was a good deal of discussion, as a result
of which quite a large nubber of criteria were set forth to
guide the election.
Now, the whole idea which undelies the Norwegian and
Australian proposals seems to me that it should be left to the
Conference itself to have a free election. Well, I do not
argue on this particular point, but I would like to remind my
colleagues that if any criteria were to be set up on the basis
of the chief economic importance and on the basis of the
technical distribution of States on considerations of geography,
and so on and so forth, this really does not constitute any
restriction on this liberty of choice in election it would
rather represent an enlightened and judicious exercise of that
right .
Having said so much, I would like to call your attention,
Mr. Chairman, to this points that if it is the general l feeling
of this Commission that, instead of taking a decision on this
particular question of the composition of the Executive Board,
we should follow the example. happy or unhappy, which was set
yesterday, and simply decide to forward two or three alternative
drafts to the Havana Conference, while I have no serious
objection to that procedure, I would like to say that, if that
procedure were to be followed, then it would mean that, in so
far as the Sub-Committee on Voting and the Composition of the
Executive Board is concerned, we have not done anything. And
that would certainly bring discredit to the Sub-Committee, P
- 43 -
especially to its Chairman, and I am very much afraid that
would diminish my own chance of getting elected as Chairman
again :
Therefore, for that reason if for no other, I am personally
in favour of taking a decision on this question of the composition
of the Executive Board, and, if the Rules of Procedure are any
guide, I suppose that these proposals would be put to the vote
in the reverse order of seniority, which would mean that the
Australian proposal would be voted upon first, and, if it is
defeated, then we will come to the Sub-Committee ' s formula, and
then - well, you enjoy the distinction of seniority, Mr. Colban -
to Mr. Colban ' s formula.
I submit to the Chairman my views and, of course, in
questions of procedure, I am entirely in his hands. - 44 - J. E/PC/T/B/PV/31
CHAIRMAN: The Delegate for South Africa.
DR. J.E. HOLLOWAY (South Africa): Mr. Chairman, I wish to
support the proposal of Dr. Colban. I shall try to be brief about
it.
During the weary months which this Conference has moved along
at snall's pace, I have had a feeling of ever growing disillusionment.
I should have thought that a body coming together here, a
constituent assembly, to draft constituents for the world body,
would have been able to hold itself down to fundamental principles
much more than we have been doing. The principle has been
swamped by opportunism again and again, frequently because we
cannot help ourselves, but in this very important matter on which
we have given hostages to fortune there is, except in the proposal
of Dr. Colban, as has been pointed out by various speakers, not
even an attempt to consider whether there is not an over-riding
Principle dealing with these matters, which we can only disregard
at our peril. Yet, such a principle is, and it stands clear as
a beacon, based on the fact that this body of Executive Directors
is a body of trustees. We are all puttings things of the greatest
importance to our countries in their hands and we vest a lot of
power in them. They can be called to order as far as they are
nationals of a particular country by their country, but they cannot
be called to order by the great majority of states outside. The
only way in which the states outside can look after their interests
is in the Conferenee, but all the decisions which are taken in
between are taken by the Executive Directors in their function as
trustees.
Now, the suggestion from the sub-committee is that you should E/PC/T/B/PV/31
immediately out away from your obligation of trusteeship by making
them responsible not to the people whose interests they are to
safe-guard, but to certain groups.
I think, Mr. Chairman, in the ordinary course of things the
important countries will be represented. It will just happen
naturally that the big powers, the countries with big commercial
interests, on the very account of those big commercial interests,
will be represented. I think that representation will probably
go on unbroken, but I only have that view because I think these
countries will put on to the Board men who can be trusted to carry
out that duty of trusteeship properly. I see nothing sacrosanct
in any big country having a right to membership of this Board of
trustees. Every Member of that Board of trustees has a trust
towards every Member of the Organization - towards every Member.
not towards one particular country - and if it should so happen that
a great power abuses that position of trust, what should happen?
What should happen is what should happen in all cases - when there
is an abuse of trust, the people who have put that trust in him
should have the right to throw him out, and unless you keep that
power vested in the hands of the constituents of this body of
trustees, what you are telling us small countries is this:-
"Come into this Organization at your peril".
Thank you, Mr. Chairman.
J.
- 45 - V - 46 - E/PC/T/B/PV/31
CHAIRMAN: I shall now endeavour to sum up; for the
assistance of the Commission, the discussion which has taken
place on the Report of the Sub-Committee regarding the
composition of the Executive Board.
First of all, I would like to mention one point about which
there has been general agreement in the Commission, and that is
that if there is to be a permanent seat, a permanent seat should
be allotted to India. I am afraid that there has not been the
same degree of general agreement on the other points.
We have three proposals before us: The proposal of the
Sub-Committee, the proposal of the Norwegian Delegation, and
the proposal of the Australian Delegation.
We also have a proposal that, instead of coming to a
decision now, we should forward to the World Conference three
alternative proposals. That proposal would also have to be
put to the Commission, and it would seem to be the proposal
on which a decision should be reached first, because if we are
to submit three proposals to the World Conference, there is not
very much need to discuss which of the three proposals the
Commission prefers.
I would like to point out that the position respecting the
composition of the Executive Board is rather different from
that pertaining to the question of voting. When we considered
the question of voting some weeks ago, the United States
Delegation made the proposal that we should not decide this
question, but that the Sub-Committee should submit various
alternatives. It seemed to be the general sense of the
Commission on the question of voting that these various
alternatives should go forward to the World Conference,
following the precedent which was followed in the case of
relations with non-Members. V --- 47 --- E/PC/T/B/PV/31
Now, in the case of the composition of the ExecUtive Board,
it has always been the understanding that we would endeavour to
agree on one definite proposal. I think it would create a very
unfortunate effect on public opinion outside the Conference if we
were not able to agree on this matter. On the other hand, if
we cannot obtain very general agreement on any one of the
proposals before us, it may be that the Commission will have to
decide that the only alternative is to forward the various
proposals to the World Conference. I would think, however,
that the fewer proposals we forward to the World Conference
the better the impression that will be created.
Now let us examine in essence the three proposals before us.
Two of the proposals (and I will refer to the Australian proposal
as "the Australian proposal" even though it represents a
compromise between the two schools of thought) - the Sub-Committee's
proposal and the Australian proposal, contain a provision for
permanent representation directly provided for in the Article.
The Norwegian proposal provides for no permanent representation.
The essential difference between the Australian proposal
and the proposal of the Sub-Committee is that the Australian
proposal contains no provision for what I would describe as
geographical representation, so that I think the way might be
clear if we might first of all obtain the sense of the
Commission on this question as to whether or not the Commission
desires to include in the proposal the principle of geographical
representation. - 48 - E/PC/T/B/PV/31
Dr. COOMBS (Australia): On a point of order, Mr. Chairman,
could I make a suggestion. It seems to me, if we are going to
consider this question, the critical choice is between the
proposal of Mr. Colban and one of the Committee's proposals
labelled the Australian proposal; so that actually our
proposal is not an alternative but a suggested Amendment to the
Committee's proposal, if the basic principle is adopted.
I am making this point because if it comes to a choice
between the proposal labelled the Australian proposal and
Mr. Colban's, we would not want our proposal considered unless
the principle of permanent seats is agreed to, and it does occur
to me, therefore, that formally the correct way to deal with this
is to regard our proposal as a forecast Amendment to the
Committee's proposal, and to deal with the Committee's proposal
as the furthest away from the original text, and if that is
carried, to take our Amendment; if it is not carried, to deal
with Mr. Colban's proposal which is closer to the original text
In that way I would be permitted to vote against the Committee's
proposal. If that is carried, I could then submit my Amendment
to that. If it is not carried my vote would then be recorded
in favour of Mr. Colban's proposal.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. HELMORE (United Kingdom): Another point of order,
Mr. Chairman, which is that I think you have said there was a
proposition before the Committee, and if not, I make it formally,
that we should put in three alternative texts, and I believe
that is the furthest away from all the proposals we have had.
I suggest that whether you agree completely with that point
of order or not, you might perhaps take the sense of the Commission
E/PC/T/B/PV/31
G G --- 49 ---
on that proposal first, in spite of your condemnation of it,
because it would save a great deal of time on other proposals.
CHAIRMAN: The Delegate of China.
Mr. WUNSZ KING (China): The Chinese Delegation wishes to
support the suggestion made by the United Kingdom Delegation.
CHAIRMAN: The Delegate of Brazil....
Mr. PARANAGUA (Brazil): On a point of order, Mr. Chairman,
about this vote, I must ask if we are changing completely
the procedure since London.
In London alternatives were inserted in our Report and
in Lake Success the same; and. here I see that we are taking
the majority of the Sub-Committee on an Article drafted and
re-drafted even by the Drafting Committee, and we want to make
that disappear.
We do not have the same preoccupation now on the
formation of the Havana Conference that we had about voting.
About voting it was quite clear the majority agreed with
one oountry one vote. It was a concession, on my part, not to
insist on a vote. Now, from what I see here, it is the
deliberate purpose to make this Article 72 - drafted by
the Sub-Committee and re-drafted by the Drafting Committee -
disappear from our Report; and I will be obliged to put a
reservation about that as a declaration on the subject.
E/PC/T/B/PV/31 S
- 50 -
Mr. O. PARANAGUE (Brazil): I should like to make another
remark. It was precisely Mr. Colban who asked that we should
give up the idea of taking a vote in this Commission.
CHAIRMAN: Before we deal with any other points of order,
I would like to deal with those which have already been presented.
I will first deal with the point of order raised by the
Delegate of Brazil. I wish to assure him that there was no
intention on the part of the Chair to displace the proposal
of the Sub-committee. It was just because, as Mr. Colban,said,
it is desirable to avoid a vote, that I was e exploring the
situation to see if there was not a basis on which we could
reach general agreement without the necessity of coming to a vote.
The point raised by Mr. Helmore is perfectly valid.
The first qustion to be decided is whether or not we should
forward, to the World Conference the various alternative texts.
With regard to the point of order raised by Dr. Coombs on
the question of voting on the three proposals before us; it
if is necessary to put this to the vote the procedure would be
somewhat as follows: the proposal of the Australian Delegation
certainly can be regarded as an amendment to the proposal of
the Sub-committee and therefore it should be put first - at
least, it should be put before the proposal of the Sub-committee,
although it is rather unusual to put an amendment before the
main motion
It is difficult for me to decide in what order Mr. Colban's
proposal should come, but I think we can leave that over until
we have decided the main question. S
- 51 -
Before we do that, I should like to explore the possibility
of coming to some agreement. However, if it is the desire of
the Commission, I shall have to put to the vote the question of
whether we shall furnish to the World Conference the alternative
texts.
The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, the
French Delegation has abstained from taking part in the dis-
cussion until this moment because we thought the suggestion put
forward by Mr. Colban was the simplest one; that is, to send
the proposed draft which he put before the Commission to the
World Conference.
We agree with what Mr. Colban said; that is, that the
substance of these proposals should not be discussed hero. I
think it would be very wise if we followed Mr. Colban's
advice now.
The French Delegation in the Sub-committee adhered
to the text proposed by the Sub-committee because this text
gained the approval of the Sub-committee, and the French
Delegation has up to now maintained its adhesion to this
text, but I do not think that for this text a sufficient
majority can be obtained to send it to the Havana Conference
Therefore I think that no clear majority could emerge from
our debate at this late stage.
It is certainly very regrettable that one text cannot
be sent to Havana. Nevertheless, we have to face the facts
and I think the only thing we can do now is to follow Mr,
Colban's advice and send the alternative texts to Havana.
CHAIRMAN: Is the Commission agreed on the proposal of the
E/PC/T/B/PV/31 E/PC/T/B/PV/ 31
United Kingdom Delegate, supported by the Delegate of France;
that is, that we send the three texts. - the text of the Sub-
committee, the text proposed by Mr. Colban and seconded by M.
Royer, and the text proposed by Dr. Coombs - to Havana?
M. Royer (France) (Irterpretation): I supported, not the
text of Mr. Colban's proposal but his proposal to refer it to
Havana.
Mr. A. B.SBEEKENBRINK (Netherlands): Speaking on a point
of order, Mr. Chairman;;I cannot quite reconcile the propostion to
havr the text of the Sub-committee as a proposal with what you
remarked some time ago about a consensus of opinion on the
inclusion of India's permanent representation.
CHAIRMAN: After we have come to a decision on sending
these three texts to Havana, we will then have to approve the
form of the three texts. That will give an opportunity for any
Amendment, including the amendment which the Netherlands Delegate
has suggested.
S - 53 -
E/PC/T/B/PV/31
Dr. H.C. COOMBS (Australia): Mr. Chairman, I am embarrassed
about this question because the decision we must make about
sending three alternatives to Havana depends on the balance of
opinion, and the only justification for sending one alternative
text is the absence of unanimity or the absence of a clear majority
opinion, and if it is your view from the debate that there is in-
sufficient agreement to send on a single text of the reservations,
then I would be content for it to go on; but I do believe that
there is insufficient agreement to be able to decide on this question.
CHAIRMAN: We think we shall have to take a vote on that
question to see whether or not the Commission is in favour of sub-
mitting three alternative texts to the world Conference; and there-
fore, as Mr. Helmore proposed, we shall take a vote on that question.
Dr. H.C. COOMBS (Australia): I am sorry to be difficult
about this, but quite frankly I would not know how to vote on this
point. If there is a serious division of opinion on this question,
then I am - :-t-->: of sending the alternative texts, but if there
is no serious division of opinion I do not know the answer.
GHAIRMAN: I have been endeavouring to avoid taking a vote
on this question, because I did hope that there would be a possi-
bility of finding a solution; but Mr Helmore has made a proposal
that we should decide the question of sending the three alternative
texts.
Mr. J.R.C. HELMORE (United Kingdom) Mr. Chairman, if it
would assist you in the conduct of your debate, I am prepared to
withdraw my proposal on an understanding which I suggest should be
as follows. You are very anxious to avoid taking a vote on this
question, and I think we are all anxious to avoid taking a vote at E/PC/T/B/PV/31
this time on substantial issues which we know have got to be decided
by the World Conference. After all, we are only a Preparatory
Committee .
Dr. Coombs, on the other hand, does not know how to vote because
he does not know quite what Members think, and I believe you could
very quickly ascertain what Members think without taking a vote
if you were to go round the room and ask each delegate a question on
what his views were on two points that you would put to us, namely,
permanent membership, and geographical representation, but I thin k
you would only be able to bear doing that if the Commission as a
whole assured you that they would answer 'Yes' or 'No.'
CHAIRMAN: I fully agree with the suggestion that has been
put forward by Mr. Helmore. It would facilitate very much obtain-
ing the sense of the Commission on the question before us if we could
find out who is in favour of permanent representation, andwho/not is in
favour of permanent representation; who is in favour of geographical
representation, and who is not. That world not be committing any
delegation to any definite proposal. It would simply be a method of
finding out the sense of the Commission and it would then/an able us
when the various Members of the Commission see what is the feeling of
the majority of the Commission, to know better how to proceed
accordingly.
M. O. PARANAGUA (Brazil): Mr. Chairman, if we use the vote to
find the opinion of the Commission, as it is proposed, and all the
three alternatives are not sent to Havana, how would the World
Conference be informen about an alternative including different
provisions And then in the Report I believe the rights of the majority
if there is a minority, would be respected. That means the majority
favoured so and so, but there is a minority which thinks that it is
possible for such and such a plan. If there is any reference to
this minority how can the Conference in Havana know what the views of
this minority are?
- 54 - P - 55- E/PC/T/B/PV/31
CHAIRMAN: The procedure I have just proposed, which is
that suggested by Mr. Helmore, is not a definitive vote to decide
any question for this Commission. It is simply to help the Commission
to make up its mind by indicating how each Delegation feels on
these two basic questions: - permanent representation versus
no permanent representation, and geographical representation
versus no geographical representation By answering these
questions, the members of the Commission will then provide the
Commission with an indication of how the Commission feels on
these two particular questions, and this will assist us materially
in coming to a decision on what steps to take. We are not
proposing a formal vote in any way binding the Commission to any
definite proposal.
The Delegate of China.
H.E. Mr. WUNSZ KING (China): Mr. Chairman, when I supported
Mr. Helmore's proposal to ascertain the feeling of the Commission
as to whether or not the three alternative texts should be forwarded
to the World Conference, I thought that would very much simplify
our procedure and tasks; that was why I supported him as the
Delegate of China.
Now it is suggested to ask us by rotation the two basic
questions; the first is whether we are in favour of permanent
representation and the second is whether we are in favour of
geographical representation. Well, I certainly understand the
first point, but I do not quite understand the second point. What
do we mean by geographical representation? Does it refer to the
very broad principle of geographical distribution of States, or
rather the system of geographical grouping as contained in the
Sub-Committee' s text?
CHAIRMAN: In reply to the point of order raised by the
Delegate of China, I would say that the term. "geographical - 56 - E/PC/T/B/PV/31
representation" for this purpose means the principle embodied
in the proposal of the Sub-Committee regarding geographical
grouping.
The Delegate of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, this is not
a point of order. It is just simply to say this: - the Chair
has suggested a very wise system of solving this problem, as we
are establishing a precedent in relation to the voting system,
that is to say, we have here the Report of the Sub-Committee;
there is an alternative proposition; there is the Norwegian
proposition; then afterwards there is something else which
might be an alternative to the text of the Sub-Committee or an
amendment, or anything else. But we have here two things
primarily and rightly, according to our Rules- the Report of
the Sub-Committee and the alternative text submitted by the
Norwegian Delegation, and we are called to give our thought and
our vote to those two things.
I could not accept in this Commission, at this stage, to
vote or say a word about the principle of permanent seats or the
principle of geographical representation, because, at the time
that subject should be discussed, I would ask for a full debate
with all the implications of it. I would start by saying that
we should not take sone of the things, because they are
prohibited under the Charter of the United Nations, and that would
be illegal from the beginning. So, in order to avoid this
problem, I suggest this: that we are a Preparatory Committee,
drafting a text to be submitted to a World Conference, and the
only thing we have to do is to offer the Report of the Committee
and any other alternative text that the Commission might consider
proper. And I move a formal proposition in that sense. P - 57 -E/PC/T/B/PV/31
CHAIRMAN: The Delegate of Cuba has made a formal motion.
That has the floor that we should vote on the proposal of
the Sub-Committee and on the proposal of Dr. Colban. I would
point out
Dr. Gustavo GUTIERREZ (Cuba): I think I did not express
myself sufficiently clearly. My proposal was exactly what
the Chair had said before - to ask the Commission, if we
decide to send to the Havana Conference both the text of the
Sub-Committee and the alternatives presented.
CHAIRMAN: The Delegate of Norway.
Mr. Erik COLBAN (Norway): Mr. Chairman, in order to
facilitate the attitude of the Commission I would interpret the
proposal of the Cuban Delegate to mean that, by sending these
two texts, we do not define our attitude to either one. We
simply send them on as working papers.
Dr. H. C. COOMBS (Australia): As there are certain
difficulties about expressing an opinion as to whether these
things should go on to Havana as alternatives, I have to report
that I have conducted some private research in this matter and
I am satisfied that there is sufficiently serious division of
opinion on this question to warrant their being sent forward as
ready
alternatives, and I am/to express my view in that way without
any further question.
CHAIRMAN: It is a little difficult for the Chair to know
exactly what the motion of the Cuban Delegate is. Is it just
that we send alternative texts to Havana? And, after we have
decided that question, if the vote is in the affirmative, shall -58- E/PC/T/B/PV/31
we decide which texts?
Dr. Gustavo GUTIERREZ (Cuba): No - to make an extension
to the Report of the Sub-Committee consisting of the text
submitted by Mr. Colban and the text submitted by Dr. Coombs.
Then afterwards we can decide if there is any alteration
necessary to be made in the texts. - 59 -
CHAIRMAN: The Delegate of Cuba, seconded by the Delegate of
Norway, has moved that the three texts, that proposed by the
sub-committee, that proposed by the Australian Delegation and that
of the Norwegian Delegation, should be sent on to the World
Conference in Havana.
Will all those in favour please raise their hands?
Those against?
The motion is carried.
We will now consider the alternative texts, first taking up
the proposal of the sub-committee based on the Report of the Legal
Drafting Committee given in document E/PC/T/159.
H.E. MR.. WUNSZ KING (China): On a point of order, Mr. Chairman,
do I understand that these texts are to be sent to the WorId
Conference as (1) the text of the sub-committee as amended by the
Legal Drafting Committee, and (2) Dr. Colban's text, and
(3) Dr. Coombs' text? Well, such being the case, I am wondering
whether it is really necessary to discuss them at this stage.
CHAIRMAN: The Delegate of Cuba.
DR. G. GUTIERREZ (Cuba.): Mr. Chairman, I think that the
Commission should decide on the texts one by one because, with
regard to the text submitted by the Legal Drafting Committee, it is
not a final text and so the Commission has to decide if it accepts
the text submitted by the sub-committee, because there are
alterations and deletions here, and we are not going to send that
to Havana, we are going to send a complete text to Havana. It
might be, with this text presented by the sub-committee, that our
French colleagues will find some inconsistencies between the English
and the French, as usual and then we will have to make an amendment.
E/PC/T/B/PV/31 - 60 -
E/PC/T/B/PV/31
That is the kind of alteration to be considered.
Then, in relation to Dr. Colban's proposal, I would ask him
if he would agree to add small provisions taken from this text to
complete his ideas.
In relation to Dr. Coombs' text, I do not dare to make any
proposal.
CHAIRMAN: I think that we have to consider the texts, and I
hope we can do it very rapidly without the Members of the Commission
raising to many points.
As regards the point raised by the Delegate of China, we have
to consider in what form this is to be put into the Charter. I
would suggest that perhaps we follow the form that we have adopted
in the case of Relations with Non-Members and Voting, that is,
label the sub-committee's proposal Alternative A, the Australian
proposal Alternative B, and the Norwegian proposal Alternative C,
without giving any credit to the delegations concerned.
DR. G. GUTIERREZ (Cuba): Mr. Chairman, the Cuban Delegation
does not share the opinion of the Chair in relation to the order,
because we think that Alternative A should be the text of the
Report, of course, but Alternative B in our opinion must be the
Norwegian proposal because it is the most different from the text,
and then the Australian proposal, which is the compromise, should be
Alternative C.
CHAIRMAN: Is that proposal of the Cuban Delegate agreed?
Agreed.
MR. A. FAIVOVICH (Chile) (Interpretation): Mr. Chairman, I
would like to know whether the substance of each of these proposals is - 31 - E/PC/T/B/PV/31
going to be discussed or whether only the form of these proposals
is to be discussed? I think that, following our agreement, the
provisions of substance should not be discussed and that we should
confine ourselves to discussing the form of these provisions,
because in any case this schedule is going to be referred to the
Havana Conference.
CHAIRMAN: We shall only discuss the form.
MR. O.PARANAGUA (Brazil): Mr. Chairman, we are sending
Dr. Colban's Alternative without any intervention by the Legal
Drafting Committee. We are also sending Dr. Coombs' AIternative
without any intervention. Why should we send the sub-committee's
proposal with reference to this document? It would put it on a
different basis.
H.E. MR. WUNSZ KING (China): I entirely share Mr. Paranagua's
views.
CHAIRMAN: The Delegate of the Netherlands.
DR. A.B. SPEEKENBRINK (Netherlands): Mr. Chairman, I would
only like to know how we will list these three proposals. If they
are listed as proposals A, B and C, they still come under the
responsibility of this Commission; if they are listed asa proposal
from-five delegations, a proposal from another delegation, and a
proposal from another delegation, then there is no need to discuss
the substance matter of these. If they are only listed A, B and
C, that means that we have studied them and we think all three of
them are good proposals which should be put in the Draft Charter.
Dr. J.E. HOLLOWAY (South Africa): Mr. Chairman, I suggest
that we do not even discuss the form. Let the people who are
responsible for them put them in the form they want to. They will
go to a sub-committee at Havanea and when they come out of that sub-
committee their progeritors will not recognise the form,
so why waste time, which is valuable, on discussing the form. - 62 -
E/PC/T/B/TV/31
CHAIRMAN: In that case, it will be necessary for us to
adopt the proposal of Dr. Speekenbrink and put forward these
proposals as coming from certain Delegations; in which case I
would like to know how we should describe the proposal of the
Sub-Committee.
Mr. Erik COLBAN (Norway): I think the question is quite
simple. We have decided to send the Report of the Sub-Committee
to Havana. Well, that will go as a Report of the Sub-Committe
not considered by the Preparatory Committee. We have decided
to send a proposal of the Norwegian Delegation. I am perfectly
willing for it to be sent on as the proposal of the Norwegian
Delegation, or of one Delegate; but in view of the support it
has received here, it might probably be all right to say "A
certain Delegate proposed the following text", and then finaIly,
the Australian amendment would go forward in the corresponding
way, "One Delegate suggested the following text". No further
discussion could be needed here.
CHAIRMAN: I think the way in which we could reach agreement
on this question would be to use the following formula, simply
to state that the Preparatory Committee decided to refer to the
World Conference at Havana three alternative texts regarding
the composition of the Executive Board, each of which had the
support of several Delegations.
Mr. O. PARANAGUA (Brazil): Mr. Chairman, I am against
this discrimination because how can we send a text from a
Sub-Committee "not considered by the Preparatory Committee and
imply that the other two were considered? The text of the
Sub-Committee is more than the text of one Delegation: it is
the text of a Sub-Committee composed of many countries, and - 63 - E/PC/T/B/PV/31
some important countries, like the United States, the United
Kingdom and France - it is at a higher level.
Dr. J.E. HOLLOWAY (Souith Africa): Mr. Chairman, we can
easily get over that difficulty by putting them all to the vote
and recording the votes.
Mr. J.R.C. HELMORE (United Kingdom): Mr. Chairman, I think
I am entitled to say something about this. Before we began this
discussion, you may remember - it was a very long time ago now -
that I asked you whether it was your wish that people who had
drafted amendments should put them forward in the debate, or
should leave them until we had taken a decision on what we were
going to send forward, and we said that they should be put forward
afterwards, and that was accepted tacitly by the Preparatory
Committee.
Now, the disposition at the moment in the Committee (which is
no doubt looking at the clock and thinking of dinner) is to try
to get rid of the job, and I would earnestly appeal to the
Preparatory Committee to treat the World Conference fairly and
to send it texts that are as finished as possible.
The Legal Drafting Committee (I know, because one of the
members of my Delegation was on it) has used its best endeavours
and spent a lot of time in trying to get the Sub-Committee' s
Report into the most perfect form. We set up that Committee,
at an earlier stage when we were not so tired, especially to do
that, and I expect the members of the Legal Drafting Committee
are even more tired than the members of this Commission.
It seems to me that we should be departing from our
were to
responsibilities if we/send forward texts that we knew were not
in the best form they could. be, or texts which, as Dr. Gutierrez
has just told us, are in the present form of Dr. Coombs' text,
V - 64 -
which is not quite complete.
I have the same feeling about the Australian text. If we
are going to send these proposals forward on an equality, as
we have decided, then each of them should be brought to the
best state we can, and to the same state, and that requires
that each of them should be looked at by the Legal Drafting
Committee.
I do not think the Commission as a whole is ready to
consider them now; but I suggest (I do this with some
diffidence, because it means more work for the Legal Drafting
Committee) that we should very gingerly ask that Committee
whether it would be prepared to sit tomorrow and to listen to
any Delegations which have amendments to put forward to these
texts, submitting them in writing beforehand, and I believe
that without too much work they could bring before the
Executive Session or some special meeting arranged on Tuesday
a version of these in the A, B, C form, complete. which would
take us very little time to deal with.
Alternatively, if that does not appeal to the Commission,
I would seriously ask that a few amendments, designed to
bring these into proper form, should be considered, and
particularly an amendment of the text of the Sub-Committee or
the text put forward by the Legal Drafting Committee of
Alternative A, which incorporates the general desire of this
Committee; but if there is to be a list of names of States
who should be permanent Members of the Executive Board, the
name of Indian should be included.
E/PC/T/B/PV/31
V G
- 65 -
CHAIRMAN: I wish to appeal to the Members of the Commission
to try to get on. We have an awful lot ahead of us, and we
should not waste too much time on these questions.
With regard to Mr. Halmore's proposal, it is not possible
to have an Executive Session on Tuesday, because the final Report
must be ready by tomorrow night if the Secretariat are to get out
a text to enable the Executive Session to take place on
Thursday.
As regards the other part of Mr. Helmore's suggestions,
I submit there are precedents for us submitting the various
headings (a) (b) and (c). We have done it in the case of
relations with new Members and in the case of voting. That does
not mean any Member is committed, to any one text, but simply that
we want to go to Havana with the best form the Preparatory
Committee finds possible.
If we adopt any other procedure, other countries might not
wish to be associated with these proposals, and the only way is
to name them(a),(b) and (c). So the Commission is perfectly
agreeable that the Sub-Committee' s proposals should be
Proposal (a)- Mr. Colban's proposal, (b)- and the
Australian one is a compromise proposal, (c).
I therefore propose we pass here that procedure, and proceed
now to deal with the texts of these three proposals, then refer
these to the Drafting Committee, so that they can get them in
shape for submission to the Preparatory Committee in Executive
Session when it meets on Thursday.
Will all those Members of the Commission who approve of
that procedure please raise their hands? Carried.
We will now consider the text of the Sub-Committee as
prepared by the Legal Drafting Committee - Paragraph 1.
E/PC/T/B/PV/31 G E/PC/T/B/PV/31
-66-
Mr. ANGUS (Canada): Mr. Chairman, if your suggestion
that there was unanimity about the admission of India is approved,
it may have to be a consequential Amendment here. I suggest
we take that up later.
CHAIRMAN: Is Canada proposing that India should be
included among the countries named in sub-paragraph (a)?
Is that proposal of the Canadian Delegation approved?
Agreed.
The Delegate of Cuba.
Mr. GUTIERREZ (Cuba): Mr. Chairman, I have a certain doubt
that I want to put before the Commission. Before doing so I would
express very clearly that I do not make any objection to any one
of the nations that are mentioned. On the contrary, the
Cuban Delegation would be very happy to allow them to be
appointed to permanent seats on the Executive Board.
I suppose that the Members of the Executive Board should
be Members of the Organization, and if we take the Articles that
deal with Membership, we shall find there that the Customs Union
have a different Membership of the Nations.
I am quite happy with Benelux being a Member, but we are
drafting the Charter of a World Organization, and I have just
read in the paper that units are being formed in the Balkans, and
perhaps some other places of the world are in preparation, and
I do not know if legally, not being Members of the Organisation,
they can be elected on to the Executive Board.
So I raise that doubt from the juridical point of view,
and would like to understand and know the answer of the Committee.
CHAIRMAN: The Cuban Delegate will note that the Sub-Committee
referred to this question on page 3 of their Report, and they
said that owing to the limited time available to the Committee to
study the subject of the Executive Board, certain problems have
been left unresolved, in particular the power of the Customs Union
to appoint a Member of the Board.
I think that the point he has raised could be covered by a
note which would be put in the Report. S
- 67 -
CHAIRMAN: The Delegate of the United Kingdom,
Mr. HELMORE (United Kingdom): Are you taking this by
sub-paragraphs or by whole paragraphs, Mr. Chairman?
CHAIRMAN: By sub-paragraphs.
Are there any other proposals regarding the opening
paragraph and sub-paragraph (a)?
Is sub-paragraph (a), with the inclusion of India and
a Note covering the question of a Customs Union, approved?
(Agreed)
Sub-paragraph (b)
Mr. HELMORE (United Kingdom): Mr. Chairman, there is a
point of drafting. The Legal Drafting Committee have deleted,
in the following sub-paragraph, the titles of the groups -
"Arab States" and "Scandinavian States" - and have left the
matter at a list of countries. I want to suggest that,
similarly, the title of the group in sub-paragraph (b) -
"American Republics" or "American States" - should be deleted
and that instead we should have a list of the countries in
the group.
This is not merely an amendment designed to ensure
complete conformity; it is to remove possible ambiguities,
because one of these days Newfoundland may be a State and I
am not sure whether it is the intention that Newfoundland should
be in this group or not. I suspect that on Dr. Coombs's
principles - wanting the same people with the same interests
in a group - it might be inappropriate.
I might also point out that there are two British Colonies
on the South and Central American mainland which one of these
days might be States and which might not wish to be in the same
group
E/PC/T/B/PV/31 S E/PC/T/B/PV/31
Mr. O. PARANAGUA (Brazil): I think this way of complicating
matters is very interestring, because everybody knows that are
the Latin American Republics. If we are going to have such
care and precision when we speak about a country being composed
of such-and-such provinces,I might mention that you can also
have a secession.
Why not have a. general denomination? Why have a long
list? I cannot see any reason for it.
When we speak about the United States here, we might
put a note - "or some other territory which may join the
United States" - for example, as in the case of Hawaii. If
there is to be a 49th State then we must put in a provision,
because otherwise it is not included in the expression "the
United States." I think there is no need to put that.
CHAIRMAN: The Delegate of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, although
I do not know what kind of rabbit Mr. Helmore is bringing out
of his hat, I really would prefer that we follow his advice and
state the nations by their names, because we do not like Cuba
to be called anything other than The Republic of Cuba. And
here he is talking about "American States"; they prefer to be
called "American Republics."
CHAIRMAN: I would suggest that perhaps Mr. Helmore might
leave this question to be decided at the World Conference.
Mr. HELMORE (United Kingdom): I cannot quite see why I
should do that, Mr. Chairman.
CHAIRMAN: I think we must put the suggestion to the
vote, because we cannot spend time on questions like this.
The United Kingdom Delegate has proposed that the Latin - 69 -
American States should be specified by name, which I take it
would mean that in sub-paragraph (b) they would be suppressed
and they would come under sub-paragraph ( c).
Mr. HELMORE (United Kingdom): No, it is much simpler
than that, Mr. Chairman. I am sorry if I did not make it clear.
Instead of - I am referring to the Legal Drafting Committee's
text - saying "the American States", we should say "the following
group of States" and then we should have a list, in conformity
with the lists in sub-paragraph (c) (i) and (ii).
Mr. PARANAGUA (Brazil): Mr. Chairman, may I quote an
Article of an international agency? In the Bretton Woods
Convention of the International Monetary Fund, it says in
Article 12, Section III(b): "Two shall be elected by the
not
American Republics/entitled to appoint Directors."
I think that is quite sufficient.
E/PC/T/B/PV/31
S ER E/PC/T/B/PV/31
CHAIRMAN: Will all those Members of the Commission who are
in favour of the proposal made by Mr. Helmore please raise their
hands.
Dr. GUSTAVO GUTIERREZ (Cuba): But I cannot vote, Mr. Chair-
man, on American states when it is American Republics. Therefore
I must abstain.
If we should follow the suggestion made by the Brazilian
delegate that when making the nomination they should be named the
American Republics, there would be a confusion if you say "The
American States."
CHAIRMAN: When we were dealing with Mr. Helmore's proposal
I was taking the Legal drafting Committee's report.
Mr. J.R.C. HELMORE (United Kingdom): May I withdraw my pro-
if we have to talk about the American Republics,
posal, Mr. Chairman, / In my proposal I was taking the wording
of the Legal -Drafting Committee's Report, and the delegate of Brazil
seems to me to be reading all the time the words that were deleted,
when he spoke about the American Republics.
CHAIRMAN: The Drafting Committee deleted the words "Republics
not entitled to appoint Members of the Board" and substituted it by
the words "States not entitled to a seat on the Board under sub-
paragraph (a)." I take it that we could reach an agreement it
we changed the wording to "Elected by the American Republics not
entitled to a seat on the Board under sub-paragraph (a)." I think
that will meet the case.
Mr. H. F. ANGUS (Canada): There would be a consequential
amendment to the French text, I understand.
M. ROYER (France) (Interpretation): Canada, of course, cannot
be counted as a Republic. ER - 71- E/PC/T/B/PV/31
CHAIRMAN: Is that agreed?
Sub-paragraph (c).
Mr.H.F. ANGUS (Canada): Mr. Chairman, I would suggest that
if it meets with the general approval one might add the words after
"groups of States" "if Members desire to be represented as a group."
I do not think the sub-Committee intended to form compulsory groups
and it would meet Mr. Colban's point.
CHAIRMAN: Does everyone agree with this proposal. Approved.
Sub-paragraph (d) Approved.
Paragraph 2. Approved.
" 3. Approved.
"4 Approved.
" 5 Approved.
" 6 Approved.
" 7 Approved.
" 8 Approved.
" 9 Approved.
Mr. H F. ANGUS (Canada): While going so fast we left out a
consequential point under paragraph 1(c), that if a group of States
should elect to disband, one more Member will be added to the pool
which they join.
H.E. Mr. WUNSZ-KING (China): I would like to raise a very
small point on page 3, line 4. The word "certain" is substituted
by "minimum". I am not quite sure whether "certain" may also mean
"minimum," because I should like to keep the word "certain."
M. ROYER (France) (Interpretation): Mr. Chairman, I would
second this proposal because in French when you say that a State
represents a minimum proportion of trade, this minimum amounts to
nothing. -72-
ER E/PC/T/B/PV/31
Dr. GUSTAVO GUTIERREZ (Cuba): I support this also
CHAIRMAN: Then it is approved. I did not quite understand
the proposal of Canada
Mr. H. F. ANGUS (Canada): My proposal was this, Mr. Chairman,
that if a group under paragraph 1(c) were chosen by its members not
to be represented it would then fall under 1(d), and my suggestion
was that there should be a provision that 1(d) should then elect
not 5 members but 6.
Dr. H.C. COOMBS (Australia): I presume it would be possible
for the American Republics to decide not to elect their members
collectively, and therefore it would be necessary to amend (d) so
as to make the number of members to be elected variable according
to which of the groups are elected.
CHAIRMAN: I think that point is covered by paragraph 2 which
provides that the Conference shall make regulations; on ghd
reallocation of seats.
As I understand it, the sub-Committee's report was put before
this Commission and the Commission would then make changes but
all questions of substance have been covered.
M. O. PARANAGNA (Brazil): This question of the amendment of
the Canadian delegate is a question of substance. P
E/PC/T/B/PV/31
CHAIRMAN: The Delegate of Canada.
Mr. H. F. ANGUS (Canada): Mr. Chairman, we have made
two changes of substance. one in including India, and the
other in allowing a group to disband. My understanding is
that both changes were made quite unanimously, as a result of
the general discussion here, and I cannot think that there can
be any principle violated by such action.
CHAIRMAN: I understand the Canadian Delegate has withdrawn
the last suggestion he made,
Mr. H. F. ANGUS (Canada): Which one?
CHAIRMAN: I don't know. The amendment - -
Mr. H. F. ANGUS (Canada): No, I said we made two changes
of substance representing unanimous opinion, They are not
contentious changes of substance. One is the inclusion of
India, the second, allowing a group to disband. The third
seemed entirely consequential on the second, merely a matter
of drafting it, saying that if a group does disband there is
one more Member given to the people under (d) whom that group
joins.
CHAIRMAN: I see. That is covered by paragraph 2.
Mr. H. F. ANGUS (Canada): Mr. Chairman, paragraph 2
would give the Conference authority to make that change, and
it is perhaps immaterial whether it is done in that way or done
automatically, because one can hardly imagine them refusing it,
CHAIRMAN: It would be done at the World Conference or
perhaps at a subsequent Conference. Does the Commission
agree with that explanation?
-73 - -74-
H.E. Mr. WUNSZ KING (China) :How does this sub-paragraph (d).
read now?
CHAIRMAN: There is no change in (d).
We will now take up the Australian redraft which will have
to be submitted to the Legal Drafting Committee for final review.
(Australia):
Dr. H.C.COOMBS:/ But may I draw attention to an omission,
Mr. Chairman?
CHAIRMAN: There is a change in sub-paragrah (d); following
the proposition of the Delegate of China, the word "certain" before
"minimum" has been reinserted.
Dr. H. C. COOMBS (Australia): In point 3 of this suggested
re-draft we would wish to incorporate, after the word "by" in the
first line the words "two-thirds vote of", so that the proposition
would then read: -
"Nine other Members shall be elected to the Board by
two-thirds vote of the Conference."
Furthermore, Mr. Chairman, point 6 we feel is unnecessary and
might be deleted.
CHAIRMAN: The Australian Delegate proposes to modify his
proposal by adding the words in paragraph 3, after the word "by" -
"two-thirds vote of", and to delete paragraph 6.
Mr. O. PARANAGUA (Brazil): Mr. Chairman, I am opposed to
this procedure. We ran over this alternative: we approved the
alternative, and now we are beginning to do away with the
alternative. That means in the end we are doing nothing. We do
not know what we are doing. With all this improvisation we do
not know what we are approving.
E/PC/T/B/PV/31
p P -75 - E/PC/T/B/PV/31
CHAIRMAN: I think we decided to refer the three
alternative texts to the World Conference on the basis of the
Sub-Committee's proposal, the Australian proposal, and the
Norwegian proposal. We are now considering these three
proposals in the form in which we will submit them to the
World Conference. Has the Brazilian Delegation any objection?
Mr. O. PARANAGUA (Brazil): What are we discussing now?
CHAIRMAN: The Australian proposal.
Mr. O. PARANAGUA (Brazil): All right. Thank you.
CHAIRMAN: Does the Commission agree to insert the words
proposed by the Australian Delegate?
H.E. Mr. WUNSZ KING (China): What are the words?
CHAIRMAN: To add in paragraph 3, after the word "by",
the words "two-thirds vote of", making the phrase read "by
two-thirds vote of the Conference." It is also proposed
to delete paragraph 6.
Dr. A. B. SPEEKENBRINK (Netherlands): May I ask the
Chairman to propose the text paragraph by paragraph?
CHAIRMAN: First of all, are those changes submitted by
the Australian Delegation approved?
Approved.
Paragraph 1.
Mr. J.. R. C. HELMORE (United Kingdom): Mr. Chairman, I
have an amendment to paragraph 1 which leads up to an additional
paragraph which I wish to suggest for the purpose of completing
this. I do not know whether you wish me to refer to that p - 76 - E/PC/T/B/PV/31
additional paragraph now, or simply to reserve the right to
put in something in paragraph 1 when we come to it.
CHAIRMAN: Will you make your proposal now?
Mr. J. R. C. HELMORE (United Kingdom): Yes, Mr. Chairman,
It is to add a new paragraph 6 which would provide as follows:
(a) During the time that any State mentioned
in paragraph 2 of this Article is not a Member of the
Organization, the size of the Board shall be reduced
accordingly.
(b) During any time that the number of Members
of the Organization is less than 28, the numbers
6, 2, and 2 shall be substituted for the numbers
9, 3, and 3 respectively in paragraph 5 (b).
If I might just explain that very briefly: obviously if
you name certain States by reference in paragraph 2 , referring
forward to paragraph 5, you have to provide for the case n
that one or more of them is not a Member. Similarly, if you
provide for a definite size of the Executive Board and all the
rest, it would be wrong in my view to leave that size the same
whatever was the size of the Organization.
I therefore suggest that if there were less than 21 Members
not entitled to permanent named seats on the first election,
there should only be 6 other Members, of which 2 should be
elected for 1 year, 2 for 2 years, and 2 for 3 years, in
conformity with the Australian proposal. - 77 -
MR. O. PARANAGUA (Brazil): Mr. Chairman, I think it is
absolutely impossible to go on with a discussion like this. I
would ask that this amendment be circulated to the Commission
because we are voting and discussing here without really knowing
what the discussion is about. Even the Interpreter cannot make
an interpretation of it, and I suppose that Mr. Helmore himself
would be unable to discuss the amendment without notes. I would
like to have it in writing.
CHAIRMAN: The Delegate of Chile
MR.A.FAIVOVICH (Chile) (interpretation): Mr. Chairman,
what I have to say here is not very pleasant, but I think that we
cannot go on with the discussion in the way in which it is
proceeding because we do not know what is the trend of this
discussion and which part we are following.
Mr. Chairman, just now you stated how the discussion was to
proceed and you made a proposal, to which the Commission agreed.
Therefore, following the proposal to send these texts to Havana,
we discussed neither the substance of the text of the proposal by
the sub-committee nor/of the Australian Delegation. The result
of not discussing the substance of these proposals was that two
substantive amendments to the proposal of the sub-committee were
discussed and voted upon, and if amendments are put to the
Australian proposal now, I am afraid that the Australian Delegation
will not recognised in the end the text which it proposed, because
an amendment has been brought forward here and other amendments to
that proposal might also be brought forward.
We agreed, Mr. Chairman, to send to Havana,three drafts, and
all these matters here are outside the scope of these drafts and
E/PC/T/B/PV/31
J. J.
E/C/T/B/PV/31
-76-
are outside the scope of our discussion.
CHAIRMAN: I have been very lenient up to now in accepting
amendments from the floor without giving delegates an opportunity
to have them in their hands for a sufficient time to study them
thoroughly.
As regards the two texts which we have before us, submitted
by the Australian and Norwegian Delegations, I do not think that they
have the same status as the proposal of the sub-committee.
Therefore, we were in order in making changes of substance in the
Report of the sub-committee, but we would not be in order in
making any changes or insertions or additions to the proposals of
the Australian and Norwegian Delegates.
We have acted the changes proposed.by the Australian Delegate,
and he had a perfect right to submit an amendment to his own
proposal.
I therefore feel that I must rule Mr. Helmore's proposal out
of order.
MR. J.R.C. HELMORE (United Kingdom): Mr. Chairman, would you
allow me to make a suggestion to you on that point of order, and
reply to the speeches of the Chilean and Brazilian Delegates.
I would like to assure them that there is nothing I am less
anxious to do than to confuse the Commission or confuse them or
rush texts through. It will be within the notice of the Commission
that I myself suggested that the Australian and Norwegian texts
should go to the Legal Drafting Committee so that they could be put
in a proper form. It is also within the memory of the Commission
that the Cuban Delegate, who is also a distinguished Member of the
Legal Drafting Committee, said that he wanted to make an addition to
the Norwegian text to complete it, and no objection was taken. V
- 79 -
I submit, Mr. Chairman, that the proposal I have just
outlined - and I only outlined it in order to save time - is
merely to complete the Australian proposal. I really cannot
believe that the Preparatory Committee wants to send forward
an incomplete text for study by the World Conference.
I might give the simplest example of how the Australian
text is incomplete, and I feel sure that Dr. Coombs Would
agree with me. It is that the Preparatory Committee would look
very silly in sending forward a text which names certain States
which shall be elected, when we do not know that they are going
to be Members of the Organization. That was the point of my
first sub-paragraph, to provide for that contingency. I do
not think it is an amendment of substance. It is entirely in
conformity with one of the provisions in the text which we have
already approved on another basis. But if the Committee feels
that it would be wrong to consider these additions, and if you
rule accordingly, Mr. Chairman, then, of course, we accept that
ruling, but we shall have something to say about it at another
stage.
CHAIRMAN: I think the Australian proposal can go forward
in the form in which we would approve it now, and that the
United Kingdom Delegation will have ample opportunity at Havana
to make any additions to this proposal if the Australian proposal
is found to be an acceptable basis for deciding this question
in Havana.
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, I wish to
ask a question before saying what I wish to say. When are we
going to meet? Are we going to adjourn now and meet again
after dinner, or meet tomorrow?
E/PC/T/B/PV/31 - 80 -
V
CHAIRMAN: It was my intention that we should adjourn
as soon as we finish this question of the composition of the
Executive Board, and that we would then discuss whether we should
meet tomorrow or on some other occasion.
Dr. Gustavo GUTIERREZ (Cuba): I think that the Commission
is rather tired, and we are discussing now under the pressure of
nerve strain, and I do not consider that is a proper psychological
condition for discussion. I agree in part with Mr. Helmore and
part with my Chilean colleague. I think we could have the
substance of the Proposition made by the Australian Delegate,
or by the Norwegian Delegate, but that we could add here in the
Commission anything we consider proper to make that paper more
presentable to the rest of the nations of the world. Our work
is very responsible, and I am very much afraid that being tired
we may be hasty and finish this as soon as possible and afterward
when we look at the text in our homes or our offices, we would
regret very much that, for a question of thirty minutes or so,
we have produced a paper that is not right.
I would propose, Mr. Chairman, that we adjourn and continue
our work tomorrow morning. Otherwise, I would have to present
two additions to the Norwegian proposition now.
CHAIRMAN: I interpret the Cuban proposal as consisting of
two parts: first it is in the form challenging the ruling of
the Chairman, and the second part of his proposal is that we
adjourn now.
I would put to the Commission the first part of the Cuban
proposal about the ruling of the Chairman. Will it be in order
for the Australian Delegate to submit a revision of his proposal,
embodying, after consultation with the United Kingdom Delegate. V - 81 - E/PC/T/B/PV/31
the suggestions of the United Kingdom Delegate, or if he does not
desire to do so,/the United Kingdom Delegate to present that
amendment, and that will be considered by the Commission at its
next meeting, the same to apply to the Cuban amendment to the
Norwegian proposal?
Dr. Gustavo GUTIERREZ (Cuba): I wish to conclude my
proposition in this form, that Mr. Helmore and myself got in
touch with the Secratariat in order to insert in the propositions
made the necessary additions, with the approval of their authors,
and have the paper circulated and taken as the first matter to
be dealt with tomorrow morning, when we meet again. E/PC/T/B/PV/31
- 82 -
CHAIRMAN: I will take up the date of the next meeting
later; but is the proposal of the Cuban Delegate agreed?
Dr. HOLLOWAY (South Africa): In the form of a challenge
of the ruling of the Chair.
CHAIRMAN: The date of our next meeting. I will not put
a motion of adjournment, because I take it that is almost
unanimous. Commission"A"meets to-morrow. If we are to conclude
our work in time in order to permit Plenary Sessions, it will
be necessary for us to meet to-morrow simultaneously with
Commission "A".
Mr. SPEEKENBRINK (Netherlands): I do not think it would
interfere with the work of the Conferencc, Mr. Chairman, if
the dates of the Plenary Meetings were changed.
I will not oppose the Meetings of "A" and "B" to-morrow, but
if I have no chance, or the Debate goes on late and I have not
been able to do so before, I must assert my right to speak
against certain points in the Plenary Session.
The Brazilian Delegate agreed.
Sir RAGHAVAN PILLAI (India): Before we adjourn, Mr. Chairman,
I should. like, on behalf of the Indian Delegation, to express
our sincere thanks to the Commission for its most generous
response to our request for a permanent seat.
CHAIRMAN: The Commission will meet to-morrow at 10.30,
or if that is not possible, at whatever time is fixed.
The Meeting is adjourned.
The Meeting adjourned at 9.05 p.m.
G |
GATT Library | nd679my7794 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Thirty-fourth Meeting of Commission A held on Friday, 8 August 1947, at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, August 8, 1947 | United Nations. Economic and Social Council | 08/08/1947 | official documents | E/PC/T/A/PV/34 and E/PC/T/A/PV.31-34 | https://exhibits.stanford.edu/gatt/catalog/nd679my7794 | nd679my7794_90240174.xml | GATT_155 | 15,929 | 95,704 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/A/PV/34
8 August 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
THIRTY-FOURTH MEETING OF COMMISSION A
HELD ON FRIDAY, 8 AUGUST 1947, at 2.30 P.M. IN THE
PALAS 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,
are reminded that the texts of interpretations, which
do not Pretend to be authentic translations, are reproduced for
general guidance only; corrirgenda to the texts of interpretations
cannot, therefore, be accepted.
NATIONS UNlES E/PC/T/A/PV/34
CHAIRMAN: The Meeting is open.
We have on our Agenda the Technical Articles 16-23 and
87. You have the text of the Articles as previously agreed to
in Document T/142 and this morning I recived Document T./154
containing the Legal Drafting Committee's Report. Now, that
paper has not been in our hands very long but I have gone through
it and I do not think it would meet with any serious difficulty
if, when examining the paper T/142, we take into account such
remarks as the Legal Drafting Committee submits. I would like to
know if there is any Delegate who objects to this procedure?
We really are obliged to do our utmost to get through.
The Deleate of the United States.
Mr. J.M. LEDDY (United States): Mr. Chairman, I believe
Document T/154 was distributed yesterday and I think we have all
had an opportunity to go over it, and I believed it would Expedite
matters if we could just proceed on Document T/154 instead of
having to compare two papers.
CHAIRMAN: The Delegate of France.
M. ROUX (France) (Interpretation): I also think, Mr.
Chairman, that, as Document T/154 was circulated yesterday afternoon,
it should be taken as a basis for our discussions. I have already
had occasion to examine it, and I think that I shall have a few
remarks to make concerning the French version as the text comes
up for discussion because there are some slight difficulties with
regard to the French version.
CHAIRMAN: The Delegate of Belgium.
P.
3 V
M. Pierre FORTHOMME (Belgium ) (Interpretation): Mr.
Chairman, when we accepted the schedule of our work here, we
said that we wanted to have at our disposal all the texts
covering the Charter before deciding on any one Article. At
present, a number of texts pertaining to important Articles
have not been distributed to us.
As far as Articles 16 - 23 and 37, 34, 35 and 38 are
concerned, I believe we can discuss and consider them here
without the necessity for having all the texts. However, any
approval we may give here may be subject to comments or
reservations we shall make later, when we have all the documents
at our disposal.
CHAIRMAN: I understand that there is general agreement
that we should base our discussion on Document T/154, the Report
of the Legal Drafting Committee. A few minutes ago we received
an addition to that paper from the Legal Drafting Committee.
I have glanced through it, as well as I have been able to here,
and I see that it does not seem to have any material importance.
It is a question of commas and brackets and underlining, etc.;
but we shall keep an eye on it when we go through the different
paragraphs.
We begin with Article 16, paragraph 1, and I would like to
draw the attention of the Delegates to the fact that the Legal
Drafting Committee has transferred the last sentence of our
text to a new sub-paragraph 7 reading as follows: "The provisions
of this article shall not apply to the operation of aircraft
in transit, but shall apply to air transit of goods (including
baggage)". It is not an alteration of the text or of
substance - it is simply a drafting amendment.
3 E/PC /TA/PV/34
We have a footnote, saying that "the Delegate of Chile declared
that he maintained, for the time being, the view that Article 16
should be confined to goods only, in which case the words "and also
vessels and other means of transport" should be deleted". I
would like to ask the Delegate of Chile . other he maintains that
declaration.
I see now that the Delegate of Chile is not present, so I
cannot see any other way of solving the problem (unless he should
turn up later) than to maintain the note, but, in accordance with
our general practice, not to mention the name of the countr, but
simply to say "one Delegate".
The Delegate of Belgium.
Baron Pierre de GAIFFIER (Belgium) (Interpretation):
Mr. Chairman, I should like to make a remark concerning the
transfer of the provisions which are now at the end of paragraph 1
to another paragraph (7). I wonder to what extent this transfer
can be logical?
Paragraph 1 of Article 16 deals with good, transportation, etc.
to which "in transit" applies. Now we extend transit facilities
also to aeroplanes. Therefore, it seems to me that the logical
place would be paragraph 1 of Article 16, and I would like to know
whether the legal Drafting Committee has serious arguments in
favour of their suggestion.
CHAIRMAN: Is there any member of the Legal Drafting Committee
present who would be willing to reply to this question?
M. ROUX (France) (Interpretation): Mr. Chairman, I think
there would be no objection to following the Legal Drafting
Committee on this point, since the result is exactly the same
V
4 V 5 E/PC/T/A/PV/34
wherever these provisions are placed. However, wa ev-l,kI ould 2iLe to
point out that in the French text of paragraph 7 the word
"alinea" should be replacedle"y "Articl&.
CHAIsr: Is thss SatiSfactohe to eba.e-oflatlli v Be1sIg?
BaronGA. Fe ;_IFTIER (Belgium): n will lot press the point,
Mr. Chairman.
NHAIRMLI: May I then take it that we accept paragraph 1 of
Article 16 in the text Lf tle lega1 Drafting Committee?
It ie approved.
I me tioned. one nparagraph 1. There is another one:
"The Preparatory Committee considered that the wording of this
paragraph is intended to cover transit from one point to another
in a given country across the territory of another country".
I have compared these notes in the Legal Drafting Committee's
Report with the original text we had adopted, aud I foand the
corresponding paragoaph, sc unless there is any contrary opinion
we should maintain it.
x .RGUHA U2QJELRT (Canada): Mr : nhairmaz, I suggest that
the text of paragrapq 1 is auite explicit, and that the note 2
is fairly gratuI itous. Would suggest it be deleted. 6
CHAIRMAN: The Delegate of Australia.
Mr. MORTON (Australia): I would support that suggestion,
Mr. Chairman.
CHAIRMAN: Does any Delegate wish this Note to be maintained?
I personally agree with what has been said by the Delegate of
France.
The Delegate of Czechoslovakia.
Mr. MINOVSKY (Interpretation) (Czechoslovakia): I would
point out that this Note, No. II, was inserted on the suggestion
of the Chilean Delegate, and considering that he is not
present...
Mr. LEDDY (United States): Mr. Chairman, I understand that
it will be your intention to return to the first Note when the
Chilean Delegate returns; so perhaps we can consider the second
note tentatively, and if he wishes to raise any objection at
that time, he may.
CHAIRMAN: I take this to be agreed?
Then we pass on to paragraph 2 of Article 16. You will
see that in the Text the Legal Drafting Committee has practically
approved the text agreed on previously. Is that approved?
The Delegate of France.
Mr. ROUX (France) (Interpretation): The French Delegation
raises a point which does not apply to the English version.
CHAIRMAN: Has any other Delegate any objection to
accepting the views of the French Delegate, with regard to the
drafting of the French text?
G
E/PC/T/A/PV/34 G 7 E/PC/T/A/PV/34
The Delegate of Belgium.
BARON P. DE GAIFFIER (Belgium) (Interpretation): The remark
made by us affects only the French text.
CHAIRMAN: May I take it we all agree to maintain the
previous text of the French translation of paragraph 2?
Agreed .
Paragraph 3. There I see in the white paper the Legal
Drafting Committee has said that they want us to strike out the
"s" in the fourth line of paragraph 3, the "s" in the word
"customs". That is the kind of alteration they want us to make,
so you see it is not very important.
We leave it to the Legal drafting Committee to see to it
that the text is final, in the proper form.
The Delegate of Australia.
Mr. MORTON (Australia): I suggest we leave the text as it
stands - the reference to "customs" is now more common.
CHAIRMAN: May I take it that we approve the English and
French texts of paragraph 3? Approved.
Paragraph 4. The French and English texts, are they both
approved? Approved.
Paragraph 5. Approved.
There we have a footnote on page 5. "with regard to Transport
charges, the Preparatory Committee understood that the principle
of paragraph 5 refers to like products being transported on the
same route under like conditions."
You will remember we had some exchange of views as to how to
translate this into French, the two likes, because in the French 8
text, when we discussed it, we had two different terms for "like",
we had "similaires" and we had analogues". We asked the Legal
Drafting committee to look into it, and they told us that it is
quite right in French to translate two likes first by "similaires"
and then by "analogues", and I think we bow to the wisdom of the
Legal Draftig, Committee.
The Delegate of France.
Mr. ROUX (France) (Interpratation): Mr. Chairman, I must
point out that the question was raised by my colleague from Chile.
CHAIRMAN: I also remember that he raised the question
because he wanted to have some explanation. I consider that he
should be satisfied now with the explanation supplied by the
legal Drafting Committee.
I would like to mention that the Legal Drafting Committee is
slightly mistaken when they take it we have asked for this
because we did not consider the French and English texts as
having the same value and force; of course that was never our
intention. So we can leave out this Note by the Legal
Drafting Committee.
We pass on to paragraph 6 of Article 16. E/>~~~~~~~~~/PC/T/A/PV/34
Y' will see t at the text is practically the same as.-e
h d adopted previously, but on Puge 7 of± Document T/154 the
Ltgal Dratting Committee says: "If is suggested that since the
process of accepting the Charter will not include signature,
the expression 'hn the day of the signature of this Charter',
wherever it appears in ehe C;arter, be replaced by a fixed data."
7e had in the N.- Y~rk text a term "the final act of the
Conference, " e'-t do,s not appear in the sub-committce's
text so far as I can see, but I cannot doubt that there must
be a fital act, Theie must be some document ;hen the Con-
ference6 com6s to an and and that final act will have a date,
so would It not ba right to insert it? That is only a
suggestion.
The D1Logaa of the UTited States%
Mr. X.M.L7DDY (United Statts): I do not think the
quhstion has been raised hare that tha C:arter will not be
signed. I think it may trll bG that we may wish to have
a signature and th_ mere fact that th-re is a provision for
the procedure docs not leavr that signature out of it.
W'ilst we should cref~r to have a fixed date for other reasons,
I think possibly the best thing to do is to leave it alone for
the moeent, unlss at a lat;; stass -f the mseting it is possible
for e sub-cdmitteeato examine all the places in the cherter
whare reference is made to the dat- of the signature of the
Chart;r and su.-est a fixsd d But that has some substantive
eifecteand I think that for purposes of thG technical Articles
we should levz tho text as' it stands.
CH4IPEAN: The Delegate of France. 10
S E/PC/T/A/PV/34
M. ROUX (France) (Interpretation): Mr. Chairman, I support
the views just expressed by the Delegate of the United States,
This is a general matter which applies to the Charter as a
whole and I think we should use here, for legal reasons, the
phrase at present in force.
CHAIRMAN: I take it, in the light of what we have just
heard, the present text will also cover the different alter-
natives, including the one I had in mind, and that there will
be signed a final act, to which the Charter will be annexed.
If there are no further remarks I take it we can pass
Paragraph 6 in its present form.
Mr. C.E.MORTON (Australia): Mr, Chairman, I note that the
Legal Drafting Committee proposes to dispense with the phrase
"expédition direct" appearing in the English text. At least,
that is the significance of the square brackets which have been
placed there. You will recollect that there was quite a
considerable amount of discussion in the sub-committee on that
same point, and we agreed to maintainn the phrase. I would
like to know if any reason has since been advanced for removing
it.
CHAIRMAN: The Delegate of France.
Mr. ROUX (France) (Interpretation): Mr. Chairman, it was
at the request of the French Delegation that after the London
Conference the words "direct consignment" were added between
parentheses after the words "expedition directe" because of
the difficulty of translating these, words into French and of
having an accurate French equivalent. But now that we have
found one, I agree with the Legal Drafting Committee when it
thinks that these words which were in parentheses are no
longer necessary; that is the reason why they appear between
square brackets. I also think they should be deleted. E/PC/T/A/PV/34
CHAIRMAN: It was reasonable to keep the words in the
English text as long as the two texts were separate, but
now they are side by side in the same document I think we
may accept the sugestion of the Legal Drafting Committee.
Then there cannot be any further misunderstanding.
Are there any further remarks?
Paragraph 6 is therefore approved. ER. 12 E/PC/T/A/PV/34
Mr. J.A. MUNOZ (Chile): Mr. Chairman, first of all I wish
to apologise for being so late, but my chairman has become suddenly
ill and he is in his hotel, and there are certain reservations to be
made in certain paragraphs by us. I would ask for indulgence if you
could wait for a few minutes until I get instructions.
CHAIRMAN: Very well. We now pass on to paragraph 7, the new
paragraph which we have already dealt with and where we have approved
a slight amendment of the French text replacing the word "alinea" by
"article". I take it that paragraph 7 is unanimously appreved. We
pass on to Article 17. A propos, there was a footnote on paragraph
6 of Article 16, You will find it at the bottom of page 7:
"The Preparatory Committee was in favour of the retention
of this paragraph as adopted by the Drafting Committee, subject
to a reservation recorded by the French Delegate when Article
14 was discussed."
I wonder whether it is necessary to maintain that footnote?
M. ROUX (France) (Interpretation): Mr. Chairman, I must ask
you to retain this note till a decision is taken on Article 14.
CHAIRMAN: We then pass on to Article 17, paragraph 1. You have
the text before you, and you will see that it is practically the same
as we have passed before, but there are some notes on page 10. "The
delegate for Cuba maintained for the time being his criticion of the way
of approach to the problem of dumping by Article 17 which confines it-
self to restricting the rights of Members affected by dumping, whilst
not condemning those practising it; he would prefer to introduce the
Article by an express statement of condemnation." As the delegate
for Cuba is not here at the moment, we shall maintain this note
provisionally until he comes. It was the second note that was adopted
by Commission A previously; that the Preparatory Committee understood
that the obligations set forth in Art c i 17ew T1dula, an she tasc: ce of all other obligations under Chapter V be subject to the provisions
of Article 34."
Mr. J.M. LEDDY (United States): I believe that note is
intended to apply not to the while of Article, but it is partinent
only to paragraph 6. As quantitative restrictions are also
mentioned, I think that it should be moved as a comment to paragraph
6 and amended accordingly to paragraph B of Article 17.
Mr. E.L. RODRIGUES (Brazil): Mr. Chairman, I agree with
the representative of the United States that the note should be
moved to refer to paragrap~h 6, but I am o ' theopvinoOn that it
shuvld not be deleted because we need this note and it was a
oopDromise with the subCcommittee.
ABON P. de A`IFFIER (Belgium) (Intep-retation): (The
Belgian rperesentative refers to a drf1tnigp2oint which only aplLies
to the French text of Note II).
HAIIRALN: I take it that we all agree with the suggestion off
the United States delegate that we transfer Note II top.aragraph
6. That is agreed. W e have another note onp_aragrp-h 1. Yut -
will find it at the bottom ofpwage 10, and as ovu. koiw already, it
was adopte -unnrm-ously previously, and if thee - is oc objection
we shallpsassiIt.
Mr. JM3.LEiDDY (United States): A.re going on to the
text, or are we just taking p. the note first?
HAiIRAN<: I shall take itpiage by page.
Mr. J.M. LEDDY (United States); I have a very smallp1oint
on page 8. 14
Small (a) in the indented paragraph beginning "the oomparable
price" should go before the words "is less than" so that it
would read:
".....exportod from one country to Another (a) is less
than the comparable price....."
CHAIRMAN: I did not quite oatch that.
MR. J.M. LEDDY (United States): The small letter (a) in the
first indented paragraph which reads "the comparble price. ...."
should be moved up so as to appear before the words "is less
than.. .", so that it would read:
" ..the product exported from one country to another
(a) is lesa than the comparable price ......"
CHAIRMAN: I see. I think that that drafting amendment
is approved.
MR. C.E. MORTON (Australia): It is departing from the
original text as in T/142. I am just trying to think whether it
is a Justifiable departure.
MR. ROUX (France) (Interpretation): In the French text the
small (a) should come before the words "la différence".
CHAIRMAN: Is there agreement on this drafting amedment:
Agreed..
Any further remarks on the text of paragraph 1 of article 17?
The French or the English?
MR. C. E. 1MORTON (Australia): Mr. Chairman, when you deal
with the note at the bottom of page 11 regarding "duty or charge"
or "duty and charge" I am assuming you will ascertain then that 15 E/PC/T/A/PV/34
certain Alterations to paragraph 1 may be necessary.
CHAIRMAN: I understand that .
We pass on trao pagraph 2, pags 11. h Tere you will see
tht tLehe Ial D)afgtineCommeeitatohee nalot idereaour previous
tt ut have1raawn our attention' t the; fct thagh:e have u se:
"duty or charge" and only "duty" indiscriminately, and they want
us to use the same expression 11 through. I do not know what
would, be the wisest way out of it. You will see at the top of
page 12 that the United States representative on the Legal
Drafting Committee declared that it was the same to him, but we
should either say only "duty" or we should say "duty or charge "
use the same expression all through this Article. I believe
speaking for myself, that as we have started paragraph 1 by
"anti-dumping duty or charge" it would perhaps be logical to use
the same expression all through the Article.
CHAIRMAN: The Delegate of France.
M. ROUX (France) (Interpretation): I readily support this
proposal, especially as the text of Article 17, notwithstanding
the views of the Drafting Committee, is perfectly clear and
could lead to no confusion in the reader's mind. People are
apt to use rather indiscriminately the words "charges" or duties",
therefore, I think both should be used here.
CHAIRMAN: The Delegate of Australia.
MR. C. E. MORTON (Australia): The holding of Article 17
is "Anti-dumping and Countervailing Duties". It is true that
reference is made from time to time in the Article to "duty or
charge". Any amount imposed at the time of iimportation to cover what is supposed to be dumping is a charrge, certainly, but it is
invariably known in all1 countries as an "antidumping duty" or
"countervailing duty". I think we could well dispense with the
use of the word "charge" and just use the words "antidumping duty"
or "countervailing duty" throughout the text.
Does any other De ¢..t share the views of the
Australian Delegate? The Delegate of the United States.
Mr. J.M. LEDDY (United States): I think that would be much
the simplest way of handling it, Mr, Chairman, and the position
would be fully safeguarded by paragraph 6 which would provide that
no measures other than anti-dumping or or countervailing duties would
be applied - delete the words "or charges" whenever they appear.
That would be perfectly consistent.
CHAIRMAN: Does any other Delegate wish to express an
opinion on this? I am no expert but I have a slight feeling
that it is safer to say "duties and/or charges" than simply
"duties". They talk about "antidumping duty". But in a
Charter of this kind I do not think it does any harm to make it
very explicit that even if the charges is not exactly the same type
as the customs duty, it is covered. But I do not insist. It
is for the Commission to decide.
The Delegate of Belgium.
Baron P. de GAIFFIER (Belgium) (Interpretation): Mr. Chairman,
I wish to support the views you have just expressed.
CHAIRMAN : Does anybody feel that there is anything wrong
in maintaining "duties and charges" ?
The Delegate of the United States.
Mr. J.M. LEDDY (United States): I have a little difficulty
with it, after looking at the French text, because it seems to me
P. P 17 E/PC/T/A/PV/64
the French text rather talks about an "antidumping duty" and a
"countervailing duty" but it does not refer to "antidumping
duties or charges" or "countervailing duties or charges" and the
only thing that would make the two texts completely consistent,
I think, would be to stick to the one name in the English text,
namely "dutiess". After all, it is the Customs Officers who
collect these things. V E/PC/T/A/PV/34
CHAIRMAN: The Delegate of Australia.
Mr. C.E. MORTON (Australia): Mr. Chairman, the point is
that the amount you collect on dumping or subsidization is an
anti-dumping duty or an anti-dumping charge, a countervailing duty
or a countervailing charge. There is no occasion to refer to
it as "an anti-dumping duty or charge" or "a countervailing duty
or charge" -- it's one or the other. There is no need to say both.
CHAIRMAN: I would only mention that is the New York text
says "anti-dumping duty or charge", but I have no objection to
striking out "or charge" if that is the general feeling of the
Commission. Are there any strong ob sections to the proposal of the
Australian and United States Delegations?
Then I take it that the Commission is in agreement with the
simplification: that we should simply say "duty".
Mr. G.B. URQUHART (Canada): Mr. Chairman, before you
pass the text of paragraph 2, I note that the Drafting Committee
has made a change in the thirteenth line which they apparently
regretted and want to change back. They changed the words
"a particular product" to "any special product". Now they want
to change it back again.
CHAIRMAN: Is there any objection to that drafting amendment?
That is, "special subsidy to the transportation of a particular
product". It makes the text somewhat more attractive, because
we do not repeat the word "special".
Mr. G.B. URQUHART (Canada.): The original intention was
"a particular product" and the Drafting Committee have changed
it to "any special Product" without noting the change - now
they want to change it back again. V E/PC/T/A/PV/34
CHAIRMAN: Yes, in the last paper they propose to change it
back. It is simply a clerical error in Document T/154.
We pass on to the footnote on paragraph 2, on Page 12. We
have already approved that unanimously, and unless anyone wishes
to raise a question, I take it that we still approve it.
(Approved).
(Interpretation)
M. ROUX (France) raised a drafting point which does not apply
to the English version.
CHAIRMAN: We pass on to page 13, paragraph 3 of Article 17.
Agreed? Agreed.
Paragraph 4? Agreed.
Paragraph 5. There is a footnote: "The Delegations of
Belgium, Czechoslovakia, France, Luxembourg and the Netherlands
expressed the fear that abuses might be committed: under cover of
the provisions of paragraph 5 regarding the threat of injury,
of which a State might take advantage on the pretext that it
intended to establish some new domestic industry in the more
or less distant future. The Committee considered that, if
such abuses were committed, the general provisions of the Charter
would be adequate to deal with them".
I wonder whether these Delegations are interested in the
maintenance of this note. May I call upon the Delegate of
France? G 20 E/PC/T/A/PV/84
Mr. ROUX (France) (Interpretation): Mr. Chairman, of
course the interest of this comment may be questioned, but a
moment age we adopted as a principle a remark which, at the
suggestion of the United States Delegate, was transferred to
paragraph 6, namely, the Note II on page 10, saying that "It
was the understanding of the Pereparatory Committee that the
obligations set forth in Article 17 would, as in the case of all
other obligations under Chapter V, be subject to the provisions
of Article 34."
Now I submit that there is a relationship between these
two comments, and it may be said., in a general way - I am stating
what may be a questionable fact - that the provisions of
Article 17 are always subject to the provisions of Articles 34
and 35. I think that is, maybe, an adequate answer.
CHAIRMAN: I would like to hear the observations of any
other Delegations to this footnote. Is there any one of them who
wants to maintain that Note?
The Delegate of Belgium.
BARON DE GAIFFIER (Belgium) (Interpretation): Mr. Chairman,
this Note was proposed by the Committee. I do not intend to
reopen the discussion on the general interest of this Note,
but our Delegation considers that it is relevant to our purpose
and would like to maintain it.
CHAIRMAN: Than I take it the right thing is to maintain
the Note with the introduction, "Five Delegations expressed
the ferr", and so. on; but apart from that I take it we all
agree to the text submitted by the Legal Drafting Committee
on paragraph 5?
BARCON DE GAIFFIER (Belgium) (Interpretation): This deals 21
with a Drafting point.
CHAIRMAN: The Secretary draws my attention to the fact
that the Luxemburg Delegation itself...
Mr. MORTON (Australia): I wonder whether it is the correct
answer, to amend reference to paragraph 3 of Article 30. It
appears to me to be the fourth line of paragraph 5 of Article 17. ..
CHAIRMAN: Well, we have not as yet passed Article 30, as
far as I remember, in Commission B. The Legal Drafting C.ommittee
will have to modify its attitude on Article 30. Any further
remarks on paragraph 5?
Mr. MORTON (Australia): The Legal Drafting Committee
might not like to have our very important inclusion in Article 17
nullified by reference to the wrong Chapter.
CHAIRMAN: Paragraph 6 of Article 17. You will remember
that it is on this paragraph that the reference to Article 34
will new figure in an explanatory Note.
No observations?
A note by the Legal Drafting Commiittee. "It is suggested
that the phrase "in respect of any product of any other Member
country" be inserted after the word "Member" if this interpret-
ation was intended by the Committee".
I cannot speak on behalf of the Committee, but I think
it was the intention of the Committee, so, if you agree, we
add those words in the text of paragraph 6.
Mr. MUNOZ (Chile): It seems quite obvious, Mr. Chairman,
that is right.
CHAIRMAN: Agreed. A/PC/T/A/PV/34
Mr. LEDDY (United States): The words "or charges", I take
it, must now be deleted?
CHAIRMAN: Yes, they have been deleted, all through the
Article.
A foot-note to paragraph 5, on page 15, has already been
regulated.
Mr. LEDDY (United States): In fact, the Note is deleted?
CHAIRMAN: Well, it is in our Minutes of the day, as a
reminder to the Legal Drafting Committee that...
Mr. LEDDY (United States): Sorry, I thought you meant the
Note In paragraph 5.
CHAIRMAN: - No, the reference to paragraph 3 of Article 30.
Then, we have on page 16, a Note to paragraph 6. "The
Preparatory Committee was not unanimous on the addition of this
paragraph. Its inclusion was supported by twelve delegations
and opposed by four" .
I wonder whether any of the Delagates who opposed this
drafting would. be willing to modify their attitude. As far as
the previous discussion was concerned their attitude was so
definite, that I think it is simply a waste of time to reopen the
discussion.
22
G S
The Delegates in question were China, India, Cuba and
Chile. Remembering the discussion which took place, I do
not tnink any of them is prepared as yet to alter his point
of view.
Mr. J.A.MUNOZ (Chile): I am sorry, Mr. Chairman, but
I have to maintain our reservation.
CHAIRMAN: Then I take it that we maintain that note to
Paragraph 6 unaltered.
We pass on to Article 18, Paragraph 1. Delegates will
see that there has been practically no alteration by the
Legal Drafting Committee. Is that approved?
The Delegate of France.
M. ROUX (France) (Interpretation): This remark refers only
to the French text.
CHAIRMAN: Is Paragraph 1 approved?
(Agreed )
Is Paragraph 2 approved?
The Delegate of Canada.
Mr. G. B. URGUHART (Canada): Nj, Mr. Chairman, The
Legal Drafting Committee have suggested the deletion of the
word "and" in the sixth line, between 4 and 5. I would
suggest the deletion of "and 6" instead, because "6" is
not a principle of valuation; itiis a procedure for the
application of those principles. I advanced the same argu-
ment in the Sub-committee and in Commission A and it was
adopted.
CHAIRMAN: Are there any other speakers? E/PC/T/A/PV/34
M. ROUT (France) (Interpretation): I would like to make
the same remark as I made before regarding Lines 13 and 14 of
the Franch text of Paragraph 2, in which there are clerical
errors.
CHAIRMAN: What exactly is the purpose of the Canadian
Delegate's remark?
Mr. G. B. URGUHART (Canada): To delete the word "and"
and the figure "6" in brackets, because "6" is not a paragraph
dealing with the principle of valuation; it is a procedure
for the application of those principles.
CHAIRMAN: The Delegate of Australia.
Mr. C. E. MORTON (Australia): We support the amendment
suggested by the Delegate of Canada.
CHAIRMAN: To delete "and 6"; that is, to read: "3, 4
and 5 of this Article"?
Mr. G.B . URGUHART (Canada): Yes.
CHAIRMAN: Is that agreed?
(Agreed)
We pass on to Paragraph 3, Page 18, Are there any
observations in the drafting of Paragraph 3 by the Legal
Draft ing Committee?
Mr. J. A. MUNOZ (Chile): Mr. Chairman, I must again
apologise, for having to speak out of turn. There is, however,
a saying in Spanish: "Más vale llegar en tiompo que ser
convidado," which means that one has to got up very early in
the morning. But my reservation is for what now is sub-
paragraph (b) of Paragraph 3, and. sub-paragraph (c). I do not
24 S E/PC/T/A/PV/34
think that we have any particular objection to it, but we
have not recived instructions and therefore I have to maintain
a sort of overalll reservation.
CHAIRMAN: We have on Page 21 of Document T/154, in
Note V: "The Delegate of Chile reserved his position for the
time being." I hope that when the Preparatory Committee paasses
all these texts in a formal manner, the Delegate of Chile will
be able to withdraw, that reservation.
Mr. J. A. MUNOZ (Chile ): I hope so, Mr. Chairman.
CHAIRMAN: The Delegate of the United States.
Mr. J.M. LEDDY (United States): As regards Paragraph 3(a),
Line 7, we suggest that the phrase "like merchandise" should
read "like froreign marchndise", in order to avoid the construction
that we are talking about "like domestic merchandise, "
CHAIRMAN: Are there any observations on that suggestion?
(Several Delegates requested clarification and the Chairman
asked the Delegate for the United States to repeat his proposal.).
Mr. LEDDy (United States ): We would just like to insert the
word "foreign" between the words "like" and "marchandise" in
lines 7 and 8, so that it would road: "of like foreign mer-
ehandise, "
CHAIRMAN: Is it necessary to add: "should not be based
on the value of merchandise of national origin"?
Mr. LEDDY (United States): If it causes difficulty we
will net press the print, but we think it would make it
clearer, ER E/FC/T/A/PV/34
CHAIRMAN: Is it necessary to add these words?
Mr. J.M. LEDDY (United States): If there is any difficulty
about this we will not press it, but we think that this small
amendment would make the text clearer.
CHAIRMAN: The delegate of the United States does not
insist, and as the text seems to me to be perfectly clear and
consistent, I take it that we shall maintain the text. It is
agreed.
Mr. S.L. HOLMES (United Kingdom): I will have a remark
to make, Mr. Chairman, on note II which I think is part of the
paragraph. Can I make the remark immediately?
I should like to call attention if I may to Paper W.262 which
is being circulated in the Committee. It relates to the fact that
as in r T. :- - ?-'e d i'-- - !gation found it
necessary to reserve their position as regard the deletion of
certain words from this passage "between independent buyer and
seller" but which did appear after the words "in the ordinary
course of trade." We should like if we can to get a clear
text without reservations as far as possible, and we should like
to withdraw our reservation provided that the note would be in a
form which would perhaps be agreeble to other delegations. The
suggestion is that the text of the note instead of appearing as it
does should be replaced by the text given in our paper 7.262.
CHAIRMAN: You will see that on page 20 in Note II the
explanatory note was tentatively approved at our last meeting
and to which the delegates of India and the United Kingdom reserved
their position. The new draft of this explanatory note now sub-
mitted by the United Kingdom delegate seems to me to express
practically the same idea as the note we then agreed to that between
26
_ , ,_ , _ . ER 27 E/PC/T/A/PV/34
independent buyer and seller" which read in conjunction with "under
fully competitive conditions", should be meant to cover the same con-
text, but I leave it to the Commission to decide whether the wording
now submitted by the United Kingdom delegate is entirely satisfactory.
To my mind it covers exactly the idea that the Chairman of the Sub-
Committee of Article 18 explained with some force in our last meeting .
Mr. C.E. MORTON (Australia : Ir. Chairman, I would agree to
replacing Note II on page 20, by the1 e Stein Document ;. 2Cc.
Mr. RANGANATHAN (India): I just wish to say that if the revised
note is accepted we shall also be in a position to withdraw our
reservation.
Mr. J.G. CHERRY (South Africa): Mr. Chairman, I am in a position
to state that the Chairman of the Sub-Committee dea ing with Article
18 accepts this draft proposed by the United Kingdom delegition.
CHAIRMAN: May I take it that we are all in agreement?
(Agreed)
Dr. S . KORTE"EG (Netherlands): Mr. Chairman, I should like to
at something about 3(b) of the text of the Article itself. It is the
question that was raised in a former meeting. I mean the end of the first
sentence of that point 3(b). It begins with " Atual value". At the
end of the sentence in which the definition of "actual value " is given,
we find the words sunder fully competitive conditions." New the ques-
is whether it is necessary or desirable to add the words "Comparable"
between the words "competitive" and "conditions." The reason for that
would be that we must take account of the place which buyer and seller
occupies in the distribution process . Now, I think it is covered in
this case by the words that follow some lines further on where it men-
tions the place which buyer and seller occupy in the distribution process.
Even if this question is covered, I think it would be desirable to add
the words"and comparable" between "competitive" and "condition " to make
the question quite clear. J.
28
E/r. /T/A/PV/34
CHAIRMAN: Does any other delegate wish to express an opinion
on this suggestion?
Mr. C.E. MORTON (Australia): I should like to express
whole-hearted opposition to it.
MR. S.L. HOLSS (United Kingdom): I agree.
CHAIRMAN: I am in the hands of the Commission, of coourse,
but I might perhaps point out that the term "comparable" is
sufficiently vague to open the door for all kinds of disputes, and
so for that reason I think it is not wise to insert it. I
understand and fully appreciate the idea behind the Netherlands
suggestion, but in our Draft Charter we should try to have as
Much plain speaking as possible and therefore I would suggest that
we should maintain the text which we have previously agreed on.
DR. S. KORTENEG (Netherlands): Yes, Mr. Chairman, I see
there is that danger and therefore it would be better not to
insist, I think.
CHAIRMAN: Thank you.
There is still one point on paragraph 3(b). You will find it
on the bottom of page 19, the Note by the Legal Drafting Committee,
and it is also explained further in the white paper: "It is not
clear whether the expression 'in the ordinary course of trade'
qualifies the word 'sale' or 'time and place'". If the former,
it should be placed after the word "sale".
MR. G.B. URQUHARD (Canada): I suggest, Mr. Chairman, that
we maintain the text as it stands.
CHAIRMAN: The Delegate of the United States. 29
J. E/PC/T/A/PV/34
MR. J.M. LEDDY (United States): Mr. Chairman, I think the
intent is surely that it must come after the word "sale":- "sale
or offered for sale in the ordinry course of trade".
CHAIRMAN: The Delegate for Australia..
MR. C.E. MORTON (Australia): Mr. Chairman, I would support
the American Delegation's suggestion that the words be deleted
from the place in which they appear and re-inserted to read:
"offered for sale in the ordinary course of trade and under rully
competitive conditions".
CHAIRMAN: The Delegate for the United Kingdom.
MR. S.L. HOLMES (United Kingdom): Mr. Chairman, does not
the expression in question qualify the word "price" in the second
line?
CHAIRMAN: The Delegate for Austraiia.
MR. C.E. MORTON (Australia): Mr. Charman, the expression
originally "in the ordinary course of trade between independent
buyer and seller" as such had a meaning on its own, and the place
in which it was inserted was not of great moment. When the words
between independent buyer and seller" are taken away and the
phrase is placed after the word "sale", it has a definite value.
CHAIRMAN: Are there any further remarks?
The Delegate of India.
MR. S. RANGANATHAN (India): I think the expression,
Mr. Chairman, "in the ordinary course of trade" really qualifies
all three items - price, time and place and the sale. It is very J. 30
difficult to find one place where they can all qualify equally.
I think the position that has been found for this in the original
Draft is as good as any other,
CHAIRMAN: The Delegate of the United States.
MR.J.M. LEDDY (United States): I think it must be made
clear that what we are talking about is the price of merchandise
when it is sold or offered for sale in the ordinary course of
trade, and trade means to exchange, sell or offer for sale, and
therefore I think it is much better if you put it after the word
"sale". If you leave it where it is, these may be some
confusion as to whether it is designed to refer solely to the
time and place determined by the legislation of the country of
importation.
CHAIRMAN: Well, the opinion seems to be sufficiently
divided to require me to give an opinion, and my opinion is
exactly the one expressed by the Delegate of India. I think that
we have here a number of words to determine the price: "Actual
value should be the price at which, at a time and place..... and
in the ordinary course of trade, such or like merchandise is sold
or offered for sale under fully competitige conditions". I do
not think it matters a bit whether you put "in the ordinary course
of trade" after the word 'sale" or whether you leave it where it
stands, but it would not alter the sense of the paragraph if you
put it after the word "sale". 31
V E/PC/T/A/PV/34
CHAIRMAN: The Delegate of France.
M. ROUX (France ) (Interpretation): .............................. Mr. Chairman, this text
has been studied at great length. The present drafting seems to
me to be well-balanced, and I would be in favour of its retention.
M. J.A. MUNOZ (Chile): I am in agreemnt with what you have
Just said., Mr. Chairman, and with what the Delegate of France has
Just said. I think the text should be left as it is.
CHAIRMAN: Well, I think personally that the text is perfectly
clear as it stands. I think it is sufficiently clear to enable
one to decide, and whether the words "in the ordinary course of
trade" remain where they are or are put after "sale' does not
matter a bit, and I have the impression that the general feeling
in the Commission is that we should abide by the text before us.
Is there any objection to maintaining the text? Then we
keep the text as it is presented to us.
We pass on to paragraph 3(c). There is no objection to
the text, either the French or the English, but we have some
notes. The first note is on Page 20: "The Preparatory Committee
considered that it would be in conformity with Article 18 to
presume that "actual value" may be represented by the invoice
price, plus any non-included charges for legitimate costs which.
are proper elements of "actual value" and plus any abnormal
'discount or other reduction from the ordinary competitive price".
We have agreed unatimously to that before, and unless there
is any objection, I take it that we all agree.
Note II we have already dealt with. On Page 21 there is
Note III: "The Preparatory Committee considered that the
prescribed standard of "fully competitive conditions" would
_ . I __ . V 32 E/PC/T/A/PV/34
permit Members to exclude from consideration distributors'
prices which involve special discount limited to exclusive agents".
That was also unanimously approved before, and I take it that we
maintain it.
Dr. S. KORTEWEG (Netherlands): I should like to make a
comment on Note III, which says "speciall discount". It would
be better to speak in both cases of "abnormal discount". I
think it is not a question of special" discount.
Mr. J.G. CHERRY (South Africa): Mr. Chairman, Note III
was introduced in order to meet representations made by the
South African Delegate, and the alteration of "special" to
"abnormal" would not, to the best of my recollection, reflect
the sense of the discussion that took place in the sub-Committee
on that occasion. The whole idea was that distributors were
not under fully competitive conditions, and in this connection,
special discounts to distributors were involvad. It was not
that they were abnormal. There were special discounts to
distributors, and we should prefer the word "special" to be
retained.
CHAIRMAN: In the light of the statement by the South
African Delegate, does the Netherlands Delegate insist on his
proposition?
Dr. S. KORTEWEG (Netherlands): I should like to ask,
is it the intention of South Africa to exclude any discount even
if norrmal. If he should say "special discount" in this case
is a normal thing, why should. you exclude something that is
normal in the ordinary course of trade? 33
E/PC/T/A/PV/34
Mr. J.G. CHERRY (South Africa): Mr. Chairman, the idea was
to exclude from consideration not so much normal discounts as
distributors' prices which involve a special discount limited
to exclusive agents. We have got to take those last six words
as one explanatory fact. The distributors' prices involving
special discounts limited to exclusive agents we do not wish to
be considered. G E/PC/T/A/PV/34
CHAIRMAN: Does anybody else view this matter in the same
light as the Netherlands Delegate?
This not being the case I would ask the Netherlands.
Delegate kindly to with draw his Amendment.
Mr. KORTEWEG (Netherlands): I don't insist.
CHAIRMAN: Note IV on page 21. That was also unanimously
agreed to. You have the text before you.
The Delegete of Canada.
Mr. URQUHART (Canada): There seems to be a ty1 'gaphical
error in that fourth line. The word "duty" after 'assess"
has been omitted.
Another point is that the deleted letters (a) and (b) -
that is, placed in aquare brackets - I think they had better be
left in.
Mr. JOHNSEN (New Zealand.): I think the letter (a) at the
beginning should be before the (i) in brackets, in the third
line.
Mr. MORTON (Australia): We that was put in at the
instigation of the Australian Delegation, I feel very much like
a commercial traveller comming home from a long voyage and trying
to recognize any of the younger children. "The Preparatory
Committee considered that the wording of" - what? - "would
permit. . ", eto.
CHAIRMAN: There are two errors in this. In the third
line there should be (a) and (b), and in the fourth line, the word
duty. The French text is exact. I take it that you have no
objection to this explanatory Note? Agreed.
Mr. MORTON (Australia): The Note reads: The Preparatory
committee considered that the wording of (a) and (b) would permit 35
. G E/PC/T/A/PV/34
a Member to asses duty uniformly either (a) on the basis of
a particular cxperter's prices of the imported merchandise, or
(b) on the basis of the general price level of like merchandise.
But why, Mr. Chairman?
Mr. LEDDY (United States): If (a) follows (a) in the
first sentence, and (b) follows (b) in the second sentence -
either/or - that might meet the Australian Delegation's point.
CHAIRMAN: I say either/or - that is quite sufficient.
Does that satisfy the Australian Delegate?
Mr. MORTON (Australia): Mr. Chairman, I would like to see
that all my children have blue eyes. Accordingly I would like
(a) turned to ( i) ard (b) to (ii).
CHAIRMAN: Well, that disposes of Note IV.
We pass on to the following page, 22.
No observations? Agreed.
Then the Legal Drafting Committee says it has suggested
that the text of paragraph 4 be transferred from this place
to become the last sentence of paragraph 3(a).
We have already approved paragraph 3(s), and the question
is Simply whether we now should agree with the Legal drafting
Committee to transfer the whole of pararaph 4 to paragraph 3(a),
I have read the two jointly, and cannot see any
objection to it. On the other hand., I do not think it is very
important.
The Delegate of Canada.
Mr. URQUHART (Canada): It may be, Mr. Chairman, that
the paragraph is out of place. I do not know; but I do not 36
G E/PC/T/A/PV/34
like the idea of adding it to a paragraph (a). If they want to
ohange it to some place else, they might change 4 and 5 - make
the present paragraph 4 paragraph 5.
CHAIRMAN: As the Legal Draftng Committee has not made
the transfer as it has done in other cases, but simply put a
suggestion to us, it seems that the Legal Drafting Committee does
not feel very strongly about it. I think that unless any Delegate
takes up the idea af the Legal Drafting Committee, we can maintain
the text as it stands. Is that agreed?
Agreed.
Paragraph 5. (a) No objections? Agreed.
(b) Agreed.
(c) Agreed.
(d) The English text is agreed. The
French text, there the Legal Drafting Committee draws our
attention to the fact that they have modified the original
French text by replacing the word. "autorisant"T by "obligeant".
That was in conformity with what we all decided on a previous
occasion .
So I take it we also approve the new French text. S 37 E/PC/T/A/PV/24
That disposes of the Note by the Legal Drafting Committee
at the top of Page 25.
Mr. J. M. LEDDY (United States): Mr. Chairman, I would
like to ask that the commas be deleted from sub-paragraph (d).
I believe it is a typographical error; it was not so in the
original draft.
CHAIRMAN: It reads: "The Preparatory Committee decided
that the following should appear in its Report as a comment on
(d): The alteration of a currency which is recognized by
a change in its established par value shell not be considered
a change in the method of converting currencies."' That must
be re-drafted. I propose to say something like this: "The
Preparatory Committee considered that the alteration of a
currency which is recognized" and so on, and leave out the
quotation marks.
The Delegate of China.
H. E. Mr. WUNSZ KING (China): Mr. Chairman, as regards
this paragraph, the Technical Expert of the Chinese Delegation
had a conversation with the Technical Expert of the United
States Delegatian and, for the sake of further clarification,
we would suggest that the wording should be altered to read as
follows: ". . the alteration of a rate of exchange" - in
substitution of the word "currency" - "which is recognized by
a change in the established par value of a currency or in
accordance with the changes in the market value of a currency
shall not be considered a change in the method of converting
currencies. With your permission, I will ask the Secretariat
to be kind enough to distribute these copies.
(Copies of the Chinese Delegation's proposal were passed round). E/PC/T/A/PV/24
CHAIRMAN : You have heard the Chinese proposal. The
first part of it is to alter the expression "a currency" to
"a rate of exchange" and it is, of course, logical to say that
you do not altar a currency but you alter its value - the
rate of exchange. I do not know whet Delegates feel about
that.
I would also add that the French text presented by the
Legal Drafting Committee - "le changement de la valcur
d'une monnaie" - comes nearer to the Chinese proposal than
the English text.
Mr. J. M. LEDDY (United States): Mr. Chairman, I think
this is probably an illogical proposal. I do not believe we
ever intended the provisions relating to the alteration of a
method of converting currencies to prevent taking into account
changes in the rate of exchange. For example, if a Member is
using, let us say, a particular type of rate of exchange -
supposing there are two rates of exchange and a Member is using
Type B instead of Type A - what we meant by the change in the
method is that he may not change from Type B to Type A, but if
Type B should vary from day to day, of course that change would
not be considered a change in the method, just as a change in
the par value of the currency would not be a changein the method;
you are always using the par value. So I think this is an
Illogical proposal.
CHARMAN: The Delegate of Australia.
Mr. C. E. MORTON (Australia): Mr. Chairmen, the
original note dealing with this matter read: "The depreciation
of a currency which is recognized by a change . . " . It was
correct English. They changed it to read: "the alteration
of a currency which is recognized.. . " I felt it did need
some change, but for the sake of pe.ce and quiatness I let it go,
38
S S 39 E/PC/T/A/PV/24
That portion of the Chinese amendment which does alter it to
that extent - "there alteration of a rate of exchange which is
recognized by a change in the established par value of a
currency . . " - is all right, From there on we read:
"or in accordance with the changes in the market value of a
currency. . .". I think perhaps anything of that kind is
too casual. That introduces all sorts of free market rates.
The purpose of this Article was to say that values for
duty should be first re-converted on the basis of par value of
a currency. It became necessary to take notice of certain
multiple currency practices, but not to introduce free market
rates. That would certainly introduce questions of free
market value.
I for one, Mr. Chairman, would have strong objection
to any alteration of the wording of the Note as it now
appears, after long consideration and much deliberation on
the matter. E/PC/T/A/PV/34
Mr. J.A. MUNOZ (Chile): Mr. Chairman, I would like a
little clarification. Perhaps the delegate of the United States
will help me out on this . Does he mean that we are to recognise
different rates of exchange such as, for example, is now done in
Spain? You have the ordinary rate of exchange and the tourist rate
of exchange. Does that mean that you can recognise that as
legitimate? I do not quite follow the argument.
Mr. J.M. LEEDDY (United States): In order to answer the
delegate of Chile's question it is necessary to review the text that
provides first that Members shall use rates of exchange based upon
the par value of the currency for purposes of tariff regulation.
This is a general rule but there are two exceptions. One is that
you may use rates of exchange which are based upon the/vaIue of the
currency, and commercial transactions in cases where there is no par
value and there are certain cases of that kind. The second excep-
tion is that countries which use rates of exchange which are not based
upon the par value but are based upon, say, an average of multiply
rates of exchange, may continue to do so until the Organisation would
provide rules to cover that case. Now, we have never understood why
the reason for variations in any one of those three permissible
rates of exchange in accordance with the variations in the market or
the par value, or variations in the market where no par value has been
established, would constitute an alteration in the method. We never
considered that the original note was necessary and we did not feel
that the Chinese amendment was necessary at all, but in view of the
statement by the delegate of Australia, we should rather have the
note accurate, and include the amendment proposed by the Chinese delegaa
tion. Otherwise there will be some question in our mind as to whether
the Commission intends to say that variations in rates of exchange other
than those inflicted by the change in the par value are an alterati on
in the method that has been referred to.
- 40 -
ER ER -41- E/PC/T/A/PV/34
Mr. WUNSZ KING (China): Mr. Chairman, as regards the ob-
jection raised by the Australian delegate, I have nothing to add to
what the United Statee delegate has said. I am not a technical man
and therefore I would like to leave all technical arguments either to
the technical experts of my own delegation or to the technical experts
of some other delegation, but I would like to add a word of general
explanation.
You will doubtless notice that paragraph (d) on page 24 of Docu-
ment 154 seems to the Chinese delegation to have given rise to some
doubts as to the actual value of the stipulations which are contained
in 5 (a) and (b) on pages 22 and 23. I presume that it was for the
purpose of removing some of these doubts that a footnote which is
now the second paragraph on page 25 was inserted, but I submit that
while the original wording seems to have the effect of removing one
doubt as to the value of stimulations in 5 (a), it has not had the
effect of removing a lingering doubt as to the value of stipulations
in 5 (b) , and it is for this purpose that the Chinese amendment is
introduced in order to cover these two aspects so as to remove what
I call the lingering doubt on the second as ect, and I do hope that
the other delegations will have no serious objections to our two
amendments P.
CHAIRMAN: The Delegate on Australia.
Mr. C.E. MORTON (Australia): Mr. Chairman, the Delegate
of the United States has not carried the story far enough
forward in the resume of what led up to this Note. It is
provided for in this Article that countries shall convert
foreignn currency at a rate of exchange which is based on the
par value of the currencies involved. In the case of two
countries, Members of this Conference, they convert foreign
currency at the rate of exchange applicable not to their own
currency but to that of sterling. The paragraph as it is so
Worded would authorise those two countries, by this wording, to
take measures which would cause an increase in the amount of
duty payable. Certainly by paragraph (iv) says that no country
should alter its method of converting currencies in such a
manner as to increase generally the amount of duty payable.
This Note applies solely to paragraph (iv) and it is simply said
that, when a country's currency depreciates, as the curency of
Australia and New Zealand is likely to do at any time, that
should not be regarded as a change in method of converting
currednoies. Sooner than have that Note played tt r& j -. . with by
references such as a appearing in the Chines, Delegation' s
amendment, I am prepared to withdraw it altogether.
CHAIRMAN: The Delegate of Franace.
M. ROUX (France) (Interpretation): Mr. Chairman, I see
no necessity for changing the text that has been submitted to
us by the Legal Drafting Committee. As has been said before,
this is a technical matter, and I am afraid that if at this late
stage of our work we adopt an amandment rather hastily we may thus
be led to take an unfortunate decision.
As far as I am concerned, I cannot ad ;-t the second part,
at least, of the Chinese amendment, and as far the first part -L -43- 3~ A E/PC/T/L/PV/34
ic coecorned I baliev it is coeereed by thi Frnch version, at
any ratex of the tGet of thf ingal Dmarteeg Com'ittou. If
ehe whole t-xt ofethe Chinesu amendment were to be adopted hure
I would eave to rescrv, provieionally thG position of the French
De61 ation.
CHAIRVLN: famosrseec I in iubjcw to ahose tho want to
speak: but ae eave thr;shcd off chese dittioult technical
aspbAts of the ^rticlex so maeny ties tht I hope you will
content yourselvesgwite seyinouwhithcr y,t abide by the text of
the Lagel Draftieng Committe ardwhethea zei to wh^t xtent you
may be paepered to .cc;pt the proposal ef the ehinrse DulGgation.
shefDeeegat-.oi Bollium
rearen AiFFrrc d&eGCIIER (Bulgiume (Interprotation):
Er, Chairman, in conformity with your propoeal, nhe Bolgiaz
Dolagation fully supperts the tvedxt preseLegalby the T.:
Drafting Committee.
CI{UR Delegatee of Brazil.
Mr. E.L . RODRIGUES (Brazih): Mr. Cbaireman, e fccpt th1
first earteof eh6 afrndmont oi China and hot the second part,
becauseaI feel thgeneral the g. meanin, of the "established
par vaeue" coverEddbota the ecl ree par valuc of a country and
the real rar value, the countriee Nuich arcfPlmbers ot the
nalcrn tis. l oonetary F-und and the countrare which 3or not
Members can enjoy all these : aidities.- n it well not necd the
second paea which rs-ds "odaiceaccor. ncX with the chaeges in ths
market value of a cerrene " bceausllther; wiil ec no causc for
such changes. E/PC/T/A/PV/34
Mr. J.P.D. JOHNSEN (New Zealand): Mr. Chairman, I would like
to confirm the position as outlined by the Delegate of Australia.
The paragraph to which this note refers -paragraph (iv),re--numbered
(d)- relates solely to the method of converting currencies.
I find difficulty in seeing how the provisions suggested by
the. Chinese Delegate fit in with that context, and I would support
retaining the note as it came from the legal Drafting Committee.
I might add that I think the change in the wording suggested
in the first part of the proposal made by the Chinese Delegate is
acceptable.
CHIRMAN: Well, I have the impression that the great majority
of the Delegates feel that we should abide by the text submitted by
the legal Drafting Committee, and the more I read it, the more I
feel that the first part of the Chinese proposal is really already
covered by the text of the draft: "The alteration of a curency
which is recognized by a change in its established par value".
As to the second part of the Chinese proposal, I find
considerable opposition, and I would allow myself t, say to the
Chinese Delegate that the discussion that has taken place should;
give him considerable satisfaction as to the interpretation of
the different clauses of this Article. I wonder whether, if
this discussion goes into our minutes, he would then, in the light
of the explanation which has been given, be prepare to abide by
the text of the Legal Drafting Committee.
Mr. J.M. LEDDY (United States): As I said at the beginning,
we should have preferred that this note should not appear in the
text at all, sinse we have never agreed that variations in rates
of exchange oonstituted an alteration in the method of converting
the currency. I think that there has been a lack of understanding
V
-44- -45-
possibly based on a lack of knowledge of the Chinese proposal.
As I understand the situation, there is no par value for
the Chinese currency. There are two rates of exchange. One
is an official rate and the other a market rate, but the official
rate is much more favourable to importens than the market rate, that
is to say, importers pay at the market rate for their goods, but
the valuation of their products is based upon the official rate,
so that the duty is lower.
Now, as the market rate goes up, adjustments are made in the
official rate to keep it in line, but always below, and that is
the reason why the Chinese Delegation, as I understand it, has
proposed this addition: to make it clear that allowing an
increase in the .official rate - to keep in line with changes
in the market rate - would not be considered an alteration in
the method. We do not think it would be. We would prefer
either to have the note amended - to make it accurate, or delete
it entirely, but we are willing to abide by whatever the Commission
decides.
Baron Pierre de GAIFFIER (Belgium) (Interpretation):
Mr. Chairman, I would understand the objection of the United
States Delegate if the Charter did not cover such circumstances,
of Article 18
but we have paragraph 2(b)/of the Charter which precisely deals
with that kind of position, and therefore I do not understand
his statement.
CHIRMAN: The Delegate of China.
H.E. Mr. Wunsz KING (China): Mr. Chairman, with your
permission I would like to ask the technical expert of the
Chinese Delegation to give a further explanation.
V - 46 -
Mr. C.H. CHEN (China): Mr. Chairman, this note is added by
the Chinese Delegation simply in order to avoid misunderstanding.
We know that it is provided in paragraph 2(b) that where no
such par value has been established, the conversion value shall
reflect effectively the current value of such currency in
commercial transactions.
The conversion rate, at present, in China is changing from
time to time because of the currency inflation. We have to adjust
it from time to time, so we generally express in terms of American
currency. For instance, at present the official conversion rate
is 12,000 to 100 dollars, but this rate can compare with the
so-called market value, as we state in our amendment, which is
equivalent to the current value in this text.
V E/PC/T/A/PV/ 34
This at present is ab ut 50,000. That is about 1 to 4.
Now, if we do have such an understanding, then we can
change our official conversion rate. That is why we want to make
this addition. But if all the Members here think they understand
it in this text - if what we have in mind. as a new amendment is
considered as superflu ous - then we expect this explanation to
be placed. on the official record of this Conference, because
there may be a dispute later on. We have to adjust our
conversion rate from time to time, even though we do not do it
as frequently as we should.
For a country such as China, where the financial and
monetary situation is unfortunately not such as it should. be, we
attach the greatest importance to the wording, of the Amendement which
the Chinese Delegation has proposed; but in order to reach a compro
-mise, in view of the strong opposition from some of the
Delegations, which I do not understand very well, I would.
suggest that in the Report itself some such formula might appear
on the lines of saying that it is understood that nothing in
this paragraph or Article is to be construed. as to prevent any
Member States from readjusting their rates of exchange as
conditions might require. If this formula. is agreeable to the
Commission, then the Chinese Delegation might consider the
possibility of withdrawing its Amendment.
CHAIRMAN: Any further remarks?
Well, we have different proposals, one from the United.
States representative that one alternative solution will be to
omit any reference t- this question, and confine ourselves to
the discussion we have had here. The other is the proposal Just
made by the Chinese Delegate, that the Commission should
47 -48-
express the view that nothing in this article prevents a
Government from - I hesitate to formulate the exact wording Of
their proposel - nothing in this Article should prevent a
Government from re-adapting its currency value in accordance
with the conditions... What was, exactly, the wording you
suggested.?
Mr. WUNSZ-KING (China): "Would not prevent the Member
States from readjusting the rate if exchange of their currency
from time to time as canditions might... "
CHAIRMAN: But these proposals are rather tentative; we have
not had any opportunity of studying them fully, and. I am always
a little bit afraid to adapt proposals made on the spur of the
moment without consideration by all the Delegations. So I myself
feel rather inclined to come back to the proposal of the Legal
Drafting Committee and record the discussion in full in the
Minutes of this Meeting of Commission A, and that would, to my
mind, give the Chinese Delegation all the satisfaction they want.
They would then be free to pursue the matter further at a later
moment.
He was afraid of creating misunderstandings, and I think
that the discussion in this case should do away with any fear
on that score. E/PC/T/A/PV/34
CHAIRMAN: The Delegate of China.
H. E. Mr. WUNSZ KING (China): Mr. Chairman, I am sorry
to say I am distressed to hear that the spirit of compromise
which has inspired the formulation of this wording has not
been reciprocated by an equal spirit of compromise on the part
of my colleagues. On the other hand, I am very grateful to
you for having suggested that in the Minutes a full account
should be recorded concerning the Chinese amendment and the
result of the discussions and the opposition, etc. But with
your permission I would like to suggest something more; that
the Commissin might see its way to agree to the inclusion in
the report of a passage saying that the Chinese Delegation has
proposed an amendment, quoting the exact words, and that the
Delegation has reserved its position thereon.
CHIRMAN: I thank the Chinese Delegate for his remark:
and, as far as I can see, the best solution would then be that
we maintain in our text the Explanatory Note as previously
agreed to and reproduced by the Legal Drafting Committee,
and that we add, in the official text: "0ne Delegate would
have preferred the following text" and than insert the
Chinese proposal.
H. E. Mr. WUNSZ KING (China): And add: "and the
Delegate has reserved his position in this regard."
Mr. J. M. LEDDY (United States): Mr. Chairman, I wonder
If it would be simpler if the Chinese Delegation reserved. its
position without putting the alternative draft in, because, as
I say, we do not object to the interpretation the Chinese
Delegation is getting at. We do not wish to support a text
which leads to doubts in some Members' minds as to its exact
meaning.
- 49 -
S - 50-
CHIRMAN: May I ask the DeIegate of China whether that
would be satisfactory to him: that we maintain the previous
Note and that we simply add that one Delegats (The Delegate of
China) reservd his position on this matter; then we put in
full in our Vcrbatim Record of this meeting the result of the
discussion, including the Chinese proposal?
H.E. Mr. WUNSZ KING (China): Mr. Chairman, I would have
no objection to maintaining the original text so long as the
Chinese text as it is also appears in the Report.
CHAIRMAN: That was just what the United States Delegate
naid: that he and other Delegates have no objection to the
idea of the Chinse amendment and that is why it would be
misleading to put in that amendment in the name only of one
Delegation. It would be easier to say that the Chinese
Delegation - or one Delegation - reserved its position, and
leave the matter open for further Discussion
Mr. J. M. LEDDY (United States): Mr. Chairman, would
it not be agreeable that we should all leave it to the Organi-
zation and its powers of interpretation to determine the
method of conversion of currencies and not have a Note at all?
S ER E/PC/T/A/PV/34
CHARMAN: We have heard the last two questions which
were made some time ago by the United States delegate but we
would omit any reference to this question in our texts and confine
ourselves to having one whole discussion in the Minutes. Would
that be agreeable?
H. E. Mr. WUNSZ KING (China): I am very sorry to speak
again, Mr. Chairman. Well, I have another compromise to suggest.
I will not insist even upon the wording of my amendment if we
could omit altogether from the Article itself paragraph (d) with
its footnote.
CHAIRMAN: Does any delegate wish to support that last
proposal? That does not seem to be the case.
H. E. Mr. WUNSZ KING (China): Then, in that case, I am
sorry to have to insist upon the inclusion of this Chinese text
in the report saying that the Chinese delegation has maintained
or reserved its position.
CHAIRMAN: Well, I must try to find what the Commission
has agreed to;
Mr. J. M. LEDDY (United States): Mr. Chairman, just one
point. I would like to call the attention of the Chinese dele-
gation to the fact that paragraph. (d) states that nothing in
this paragraph shall be construed to require any member, but it
does not say that any member shall be prevented. Therefore there
should be nodifficulty in connection with the Charter. There may
be a difficulty in connection with the Trade Agreement because
we have in the Trade Agreement a reservation that no Member
shall alter the method of converting currency so as to increase
the par value of concessions. I might suggest that we go along
without any note until the time at which the Trade Agreement is
drawn up. ER -52- E/PC/T/A/PV/34
CHAIRMAN: Does tha.t remark of the United States delegate
alter the view of the Chinese delegate?
H.E. Mr. WUNZ KING (China): Well, I am very grateful to
the United States delegate for his remark and for his support.
Nevertheless, I feel sure that there should be no great difficulty
in the inclusion of the Chinese amendment in the Report.
CRAIRMAN: Well, I take it that the general opinion of the
Committee will be that we maintain the note we had agreed to already
weeks ago, and that one Delegate would prefer the following weeding
of this note and insert the text of the Chinese delegate. When he
prefers another wording, that means he reserves his position to the
text that we have previously agreed to, and if he likes we can say
that one delegate reserves his position and would prefer the following
text.
H.E. Mr. WUNZ KING (China): Yes, this is excellent.
CHAIRMAN: Well, I t ake it that in the circumstances we must
adopt this solution and pass on to paragraph 6 of the Article. Are.
the English and French texts of paragraph 6 agreed?
(Agreed)
Article 19, paragraph 1 - no objection?
(Agreed)
You will see that paragraph 2 is former paragraph 3. Any
objections?
(Agreed)
Mr. J.M. LEDDY (United States): Only a small point, Mr.
Chairman. In the last sentence "The Organisation is authorised to
request" we should like changed to "The Organisation may request." CHAIRMAN: We have already made that alteration,
Paragraph 3, former paragraph 2, any objections? (Agreed.)
Paragraph 4
Mr. C.E. MORTON (Australia): I would prefer that the word
"enforoe" in the second line of paragraph 4 be replaced by the
word "impose ' and also that the word "penalty" in brackets remains
is
and/not replaced by the word "fine".
Mr. G.B. URQUHART (Canada): I would support that, Mr. Chairman.
CHAIRMAN: Can the French text remain as it is?
Mr. ROUX (France) (Interpretation): Mr. Chairman, obviously
the second sentence deals with fines and not with penalties such as an
imprisonment term or anything like that.
CHAIRMAN: Does the remark of the French delegate modify
the view of the Australian delegate?
Mr. C.E. MORTCN (Australia): although hanging, drawing
and quartering may not be covered by the word "penalty", neverthe-
less, the seizure of goods is a penalty, not a fine.
E/PC/T/A/PV//34 V -5- E/PO/T/A/PV/34
CHIRMAN: You have heard the suggestion of the Australian
Delegate to slightly modify paragraph 4. It does not alter the
French text; I think it clarifies the position, and unless there
is any objection I take it that we agree.
Mr. J.M, IEDDY (United States): The French text will be
brought into conformity, because it clearly refers only to money
fines as it stands.
CHAIRMAN (Interpretation): I believe that the French text
must be re-drafted.
M. ROUX (France) (Interpretation): Mr. Chairman, I
believe that the French term would properly be "penalités
pecuniaires" - that is; pecuniary penalties, which include
fines and confiscation, because the seizure of goods, just
referred to by my Australian colleague, is in fact confiscation,
and since any kind of penalty like imprisonment is excluded
from this context, I think "penalités peouniaires" would be
the appropriate term.
CHIRMAN: In that case, the French text will be altered
accordingly. Is that agreed? (Agreed).
We pass on to page 29, Paragraph 3. You will remember we
had a discussion with the re representative of the International
Monetary Fund, and as a result of that discussion we adopted
this text, which I take it we maintain.
The Delegate of Canada.
Mr. G.B. URQUHART Canada): Mr. Chairman, should that not
be paragraph 2, due to the re-numbering?
Mr. J.M. LEDDY (United States): - I really think it arose
under paragraph 5, in connection with the reference to fees on E/PC/T/A./PV/34
imports and exchange control in paragraph 5. Perhaps it would
be better to put it after paragraph 5.
Mr. G.B. URQUHART (Canada): That would also -involve a
change in the sixth line from the bottom.
CHAIRMAN: Yes. I will ask the Secretariat to kindly see
to that. We pass on to paragraph 5. There are practically no
drafting amendments by the Pegal Drafting Committee. I take it
that it is approved? (Agreed).
Article 20 - Marks of Origin, paragraph 1.
Baron P. de GAIFFIER (Belgium) (Interpretation):
Mr. Chairman, concerning Article 20, the Belgian Delegation believes
that there still remains here a confusion as to the text of the
Charter which we were hoping would be eliminated in the course
Of our preparatory work. I am referring now to the discrimination
and the difference which should be made between marks of origin
and statements of origin, because we feel that marks of origin
are a hindrance to international trade, whereas statements of
origin may be a hindrance to fraud and irregular procedures. I
would like the desire for a distinction to be made between those
two concepts to be mentioned here.
CHAIRMAN: Do you want this to go on record, or to be put
in the text itself?
Baron P. de GAIFFIER (Belgium) (Interpretation): Mr.
Chairman, could we not have a footnote, as ther.- are so many
footnotes already, saying that it is assirable, as far as
possible, that marks of origin and statements of origin should
be dealt with separately in the Charter? -56-
CHAIRMAN: It is rather late to take up this new point,
as I do not think we can get the Commission as such to express
such a view. I think we should confine ourselves to saying
in a footnote that one Delegate expressed the view that - and
so on
Mr. MUNOZ (Chile): I must wanted to ask the Belgian
Delegate what he means by "statement of origin". Does he mean
certif icate?
HARON DE GAIFFIER (Belgium) (Interpretation)- No, not
certificate of origin; but certain names of origins, perhaps.
I do not know exactly how you would translate that into French.
But it Is certain that words like, for instence, regional marks.
Mr. MUNOZ (Chile): Oh, I see.
Mr. TEDDY (United. States): Belgium proposes a separate
Article for paragraph 7?
CHAIRMAN: I am sorry, but I do not think we shall be able
to finish our work entirely to-day, so I would suggest that the
Delegate far Belgium should submit a written Draft before we
continue the discussion.
CHIRMAN (Intertrpretation): And then we shall see whether
we are able to answer the proposal in the text, or whether it
might be place i in the comments.
We pass on to Article 20, paragraph. 1.
I ask if there is any comment? approved..
Paragraph 2? Approved.
Paragraph 3.
The Delegate of Canada.
E/PC/T/A/PV/34 E/PC/T/A/PV/34
Mr. URQUHART (Canada): Mr. Chairman, on paragraph 3, the
Legal drafting Committee has suggested that the word "imposed"
be change, to "affixed". I would suggest that it be changed to
applieded.
Mr. LEDDY (United States): I think paragraph 6 has the
desired effect.
Mr; URQUHART (Canada).: Paragraph 6 might be wrong.
Mr. LEDDY (United States): No, I think it means the fixing
of the marking.
Mr. URQUHART (Canada): Well, marks can be fixed by other
means than by "affixing". (Laughter.) They may be done by
dyeing.
Mr. LEDDY (United States): We do not care what word is
used.
CHAIRMAN: Further on, in the French text, there is a
qcery by the legal Drafting Committee. They say that the
French text imposes an obligation. The English text does not
impose such obligation. The difference should not be resolved
by drafting. Well, I remember that we decided that the English
text should be worded "Members should permit", and in order to
bring the French text into line with that, we might say;
"Chaque fois que cela sera possible du point de vue
administratif, les Etats Members permettront l'apposition, au
moment le l'importation, des marques d'irigine."
Mr. ROUX (France) (Interpretation): Mr. Chairman, I think
the remark of the Legal -rafting Committee was aimed at
substituting the word,3, permettront, in the French version,
and I have n, objections to that.
-57- E/PC/T/A/PV/34
CHAIRMAN: I take it we all agree to the text of paragraph 3
as it now stands.
Mr. HOLMES (United Kingdom): With that elteration in the
French text.
CHAIRMAN: Paragraph 4. No remarks: Agreed.
Paragraph 5. No observations?
Mr. JOHNSEN (New Zealand.): Mr. Chairman, I have a
suggestion to make there. The Legal Drafting Committee have
recommended. a change from the words''agree to"in the first line.
It seems to me that the words "agroo to "or "undertake to" are
preferable in the text to the words shown. To undertake to
do something is better then a direction in that case, and I
think also that in the fifth line it would. have been preferable
to have retained the original text, that is, the reference as to
marks of origin, instead of just"marking requirements"- as they
my be marking requirements other than marking requirements
in respect of marks of origin.
CHIRMAN: Is there any objection to the remarks just made
by the Delegate of New Zealand? S
-59-
E/PC/T/A/PV/34
CHAlRMAN: This not being the case, we will revert
to the former re ding: "The Members agree to.
unnecessary requirments as to marks of origin" end we will
adopt the whole of Paragraph 5.
There is a footnote on Paragraph 5. That has already been
discussed and agreed unanimously. Are there any objections?
Paragraph 6. Are there any objections?
(Agreed)
Paragraph 7. Are there any objections? -
The Delegate of Chile.
Mr. J. A. MUNOZ (Chile): I am once again unhappy at
having to reserve our position on this paragraph, on account of
lack of instructiorns if from my Government. are waiting tor
them end I hope tha.t before the meeting closes, or before the final
meeting, we shall be able to withdraw our reservation.
Mr. CHAIRMAN: May I at the same time ask the Delegate of
Chile whether he is now in a position to withdraw the raservation
on Article 16, Paragraph 1, that should strike out "and
also vessels and other means of transport." You will find
it on Page 2 of Decument T/154.
Mr. MUNOZ (Chile): Yes, Mr. Chairman.
CHARMAN: Thank you very much.
With regard to the second Note: "The Preparatory Committee
considered that the wording of this paragraph is intended
to cover transit from one point to another in a given country
across the territory of another country." I think you were
instrumental in bringing in that Note, but I take it that you
consider it entirely superfluous.
Mr. J. A. MUNOZ: Yes, that is so. S
CHAIRMAN: May I ask whether the Delegates are prepared
to continue for some time. I am afraid we shall not be able
to finish, but it is a question of whether the re will arise
any serious probloms. For my part, I am quite prepared to
continue.
The Delegate of Chile .
Mr. J. A. MUNOZ (Chile): I Agree with you, Mr. Chairman,
but perhaps we might have 15 minutes' recess.
Mr. C. E. MORTON (Australia): M. Chairman, may I remark
that we have already miss, our afternc.-n tea, and I suggest
a postponoment.
CHAIRMAN: We cannot postpone the meeting until later on
this evening; that is impossible, but we might meet tommorrow
morning,
Mr. E. L. RODRIGUES (Brazil): Mr. Chairman, I suggest
we continue our work until 7.30 without any recess.
CHAIRMAN: Let us say that we will continue for another
half an hour,
With regard to Article 21, Paragraph 1; is there any
objection? You will see that the text is practically unaltered
by the Legal Drafting Committee. Is that agreed?
Paragraph 2, Page 37. Is that approved?
Mr. J. M.LEDDY (United States): In the fourth line,
there is the phrase "import duty or other charge.," This
relates solely to import questions. S - E/PC/T/A/PV/34
CHAIRMAN: It that/agreed to, a slight adjustment of the
French text will be necessary. Is that agreed?
Are thers any objections on Paragraph 3 (a)?
(Agreed)
There is a footnots by the Legal Drafting Committee, but
in their Whitte Paper they say the Note has become unnecessary
because of the change made by the French Delegation in the French
taxt. May I take it that we all agree on Paragraph 3(a)?
Mr. J.P.D.JOHNSEN (New Zealand): I have just one small
observation, Mr. Chairman, regarding the eighth line from the
bottom of that paragraph. There is a full stop an a small
"p" for "provided". I think it is customary, in a case like
this, to use a semi-colon,
CHAIRMAN: Before "provided"?
Mr. JOHNSEN: Yes.
CHAIRMAN: I think we accept that,
Are there any objections on sub-paragraph (b)?
The Delegate of Belgium. ER E/PC/T/A/PV/34
BARON P. de GAIFFIER (Belgium) (Interpretation): The Belgian
delegation believe that there is a strong contradiction between sub-
paragraph (a) and (b) now that they appear in two columns because
sub-paragraph (a) deals with certain procedures and in sab-paragraph
(b) it is said that the paragraph shall not require the substitution
of procedures in force, and therefore there seems to be an incon-
sistency, and the Belgian delegation wonders if it is the intention
of the sub-Committee to go as far as that. Perhaps sub-paragraph (b)
may need to be redrafted.
CHAIRMAN: Are there any suggestions.
BARON P. de GAIFFIER (Belgium) (Interpretation); We would
prefer the deletion of sub-paragraph (b). However, if that is
impossible, we suggest that the Organisation should allow a period
of time for the concerned countries to readjust themselves to the
requirements of sub-paragraph (a).
M. ROUX (France) (Interpretation): Mr. Chairman, as we
all know, this sub-paragraph was added to provide fur a certain
transition and to enable the retention of some legislation which
so far has not given rise to any difficulties. However, as my
Belgian colleague has pointed out, there- arises a drafting point
here if we compare sub-paragraph (a) and (b). This is simply a
drafting difficulty which would be settled, I believe. maybe by
altering sub-paragraph (b) by a reference to the intervention or
the authorisation of the Organisation. It might be remature to
attempt to settle this to-day and if we meet again at the beginning
of next week we might perhaps submit another draft which would meet
the objections that have been made. However, the substance of sub-
paragrah (b) would have to be retained. ER
Mr. J. M. LEDDY (United States): I know that a discrepancy
between the English and French texts in sub-paragraph (b) may cause
eme difficulty. The sub-paragraph (b) laid down the requirements
that the procedures concerned must provide for an objective review
of administrative action. Now the French text simply says it must
prepide or a review of the action. The whole point of having the
Organisation look at the procedures under (b) is to see whether or not
they- provide for an objective review.
BARON PIERRE DE GAIFFIER (Belgium) (Interpretation): Mr.
Chaitraian, I refer to the last sentence of this sub-paragraph. We
agree that"Members employing such procedure shall, upon tle request
of the Organisation., furnish the Organisation with full information
thereon In order that the Organisation may determine whether such
procedures conform to the requirements of this sub-Paragraph."
Now, Mr. Chairman, I submit that these sentences leave us entirely
In the dark as to What the Organisationlas to do if these procedures
do not conform to the requirements of the sub-paragraph.
CHAIRMAN: In the light of this I think we had better pass
over (b) and take it at our next and last meeting. Meanwhile I
venture to suggest that the delegates will have expressed their views
in a private talk and see whether they can attempt to redraft the
sub-paragraph.
Mr. J.P.D. JOHNSEN (Now Zealand): Mr Chairman, our delega-
tion is particularly interested in this particular provision which
was put in at our suggestion, and we would certainly like to be
informed of any consultation that here might be on this point.
CHAIRMAN: I would suggest that the delegates of France,
Belgium and New Zealand should form an unofficial sub-Coamittee to
talk the matter over. We pass on to Article 22. E/PC/T/A/PV/34
BARON P. de (GAIFFIER (Belgium) (Interpretation): Mr. Chairman,
before we go any further I wonder whether you will allow me to come
back to our decision which was taken by the Committee a few moments
ago regarding paragraph 5 in Article 20 which concerns marks of
origin. It was decided by the. Committee to eliminate the Draft
which was presented by the Legal and Drafting Committee and to revert
to the original text. However, before this decision beoone sfinal
the Belgian delegation would like to insist upon the conservation of
the modification brought by the Legal and Drafting committee. As
you know, the Belgian delegation was always in favour of the
suppression of all unnecessary marking requirements. We consider
that this only leads to the spoiling of the goods, and therefore
should be eliminated since it creates unnecessary obstacles in the
same way, and the original trade marks might create obstacles for
goods of national origin. That is why we consider that the
modification which was introduced by the Legal and Drafting Committee
was a very happy one, and we would like to insist upon its retention.
I believe that the French text does not entirely correspond
to the English text and we could modify it. (and then the Belgian
delegates suggests a proper modification of the French text ).
ER
-64 - -65- E/PC/T/A/PV/34
Mr. J.M. LEDDY (United States) We would prefer the Legal
Drafting Committee's text as it was recommended complete.
CHAIRMAN: Does the Committee, after this exchange of views,
accept the Legal Drafting Committee's text?
Mr. .J.P.D. JOHNSEN (New Zealand): Mr. Chairman, this
Article, as far as I can see, deals entirely with marks of origin.
It seems to me that in order to keep within the context, the
original draft should stand. In other words, it should refer
to unnecessary requirements as, to marks of origin. I do not
see that there is any necessity to alter the context of this Article,
namely, to provide for other mark requirements. I would suggest
that the original draft be retained.
CHAIRMAN: Any further remarks?
Baron P. de GAIFFIER (Belgium) (Interpretation):
Mr. Chairman, to meet the remark of the Telegate of New Zealand,
I would like to observe that the spirit of Article 20 tends to
eliminate all unnecessary obstacles, and the trade marking
requirements are one of these obstacles. Therefore, Mr. Chairman,
we submit that our proposal is entirely within the spirit of
Article 20.
CHAIRMAN: May I take it that the Commission now agrees to
the text proposed by the Legal Drafting Committee?
(Interpretation) This remark concerns the English text. The
French text ought to be re-drafted in order to be quite correct.
That is agreed?
Mr. C.E. MORTON (Australia): Mr. Chairman, I think it is
getting late and we are getting a little hasty in our decisions. -66- E/PC/T/A/PV/34
CHAIRMAN: We go back to Page 39, Article 22, paragraph 1.
You will find that is in practioally the same form as we adopted
previously. Is that agreed? (Agreed).
Paragraph 2. Agreed? (Agreed).
Paragraph 3. Agreed? (Agreed ).
Paragraph 4. Any observations?(Agreed).
Paragraph 5. Any observations? (Agreed)
Paragraph 6. Agreed?
Mr. J.M. LEDDY (United States): Mr. Chairman, I am sorry!
I suggest that the word "may" in the seventh line should be brought
down to the thirteenth lint, because you want the Organization to
collaborate with the other international organizations with respect
to everything provided for in the paragraph, so that it should
read: "The Organization, in collaboration with the Economic and
Social Council of the United Nations and with my other
organization doomed appropriate, may engage in studies with a
view to ... ." The same change should be made in paragraph 7.
CHAIRMAN: I think we all agree to that drafting amendment.
Paragraph 6 is approved? (Approved).
Paragraph 7, with the amendment just submitted by the
Delegate of the United States. Approved? (Approved).
Article 23, Boycotts. I take it the text is approved?
We have a note that two Delegates reserved their position on this
Article. I think they reserved their position for the time being,
but I am not sure of that.
Mr. J. M. LEDDY (United States): Mr. Chairman, we would be
happy to see the Particle deleted.
CHAIRMAN: Any support for the suggestion of the United States:
Mr. S.L. HOIMES (United Kingdom): Mr. Chairman, I should
V V -67- E/PC/T/A/PV/34
rather like time to consider that interesting but wholesale
suggestion on the part of my United States oolleague. Perhaps
the matter might be left for the moment on the basis of the
suggestion as made. -68- E/PC/T/A/PV/34
Mr. RANGANATHAN (India): If tho idea is that the whele
Article should be deleted, I support it.
CHAIRMAN: Well we cannot decide this here to-day, but
we can pass over Article 23 and take a decision at our next
meeting, at the same time as we consider the question we have
reserved now; and then we have only Article 37 left, and
I think it is too late now to start on that.
I have an announcement to make.
Commission A will meet at 10.30 on Monday morning next
for the discussion of Articles 34, 35 and 38. This will be
instead of the Tariff Committee. Monday morning at 10.30.
As for our Committee, I cannot decide when it can meet
again. I must submit that to the Secreteriat.
Mr. VAN DER POST (South Africa): Mr. Chairman, Dr. Holloway,
who has been called away to London, has asked me to make a
statement about the Notes that might result in some discussion.
Could I be given the cpportunity, if you please. The special
Note, for example, on Article 18. He has asked me to make a
special statement in order to draw the attention of the Commission
to it.
CHAIRMAN: That terminates our work to-night.
The Meeting rose at 6.55 p.m.
G |
GATT Library | qp168bn4148 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Thirty-Ninth Meeting of Commission "A" held on Thursday, 14 August 1947 at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, August 14, 1947 | United Nations. Economic and Social Council | 14/08/1947 | official documents | E/PC/T/A/PV/39 and E/PC/T/A/PV.38-39 | https://exhibits.stanford.edu/gatt/catalog/qp168bn4148 | qp168bn4148_90240194.xml | GATT_155 | 21,253 | 129,280 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/A/PV/39
14 August 1947
SECOND SESSION OF THE PREPARATORY COMMIITTEE OF THE
UNITED NATIONS C ONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
THIRTY-NINTH MEETING OF COlMMSSION "A"?
HELD ON THURSDAY, 14 AUGUST 1947 AT 2.30 P.M.
IN THE
PALAIS DES NATIONS,
M. Max SUETENS
GENEVA.
(Chairman)
(Belgium)
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 textes of interpretations
cannot, therefore, be accepted.
.
NATIONS UNIES P.
CHAIRMAN (Interpretation): The Meeting is called to
order.
Genteleman, we will resume the discussion where we
later it this morning. if you remember, we were faced with
two amendments, one presented by the Czechoslovakian Delegation.
and another amendment presented by the Netherlands Delegation.
The first amendment tended to delete in paragraph 3 of article
12 some words. The seoond amendment, of the Netherlands
Delegation, tended to delete this paragraph 3 entirely. I
shall now ask Dr. Coombs who presided over the sub-Committee
which dealt with the examination of this Article to give us
his opinion on the matter,
Dr. H.C. COOMBS (Australia): Mr. Chairman, these
particular amendments, of course, were not discussed by the
sub-Commiittee, and I do not think I can pretend to speak for
the sub-Committee on them, but perhaps I should comment on the
proposals that have been made.
It seems to me, in relation to the proposal put forward
by the Czechoslovakian Delegation, that it is reasonable to
expect that --. Member would take the complaint so to speak in
its own right, not merely acting as a sort of Post Office for-
private individuals. But I think it is equally reasonable
to allow that a complaint by a Member made in its own right
could .originate. from an action which affected one of its nationals
Individually in the-first instance; but I think the Member, before
making a complaint in respect of that action, has an obligation
to examine the circumstances of the case to satisfy itself that
the action has, in fact, adversely affeted its interests and to
make the complaint on that ground, that is, although it would
obviously be perfectly reasonable, it seems to me, to quote the E/PC/T/A/PV/39
individual case in illustration of the complaint. So that
as regards the operation of this, it would appear to me that
the substance of the clause would not be affected if we
deleted the references to nationals and in particular, I think,
delete the phrase present to the Organization", which does
carry an implication that the Member does not necessarily accept
-any responsibility for the complaint itself. I think the
clause would be adequate for its intention if it read:-
"Any affected Member may complain to the Organization that
action by another Member is inconsistent with its obligations
under this Article".
The only disadvantage about doing that is that this article
has been substantially in. this form or some time and the
reason for the deletion of the might not be understood. I
suggest, therefore, that if that is done a note might be
included in the Report to read something to the effect that:
"It was agreed that complaints under this paragraph should be
alleged by Members only in their own right although a
complaint by a Member could properly concern action
affection one of its nationals . The Member should,
however, be expected to examine the circumstance. of the
case and satisfy itself before complaining that its
interests were adversely affected"
Some such wording as that would explain the reason for the deletion
of the parts referred to.
Referring now for a moment to the suggestion by the Delegate
for the Netherlands, I agree fully that nothing is given in this
paragraph which is not adequately provided by Article 35. There
is a right of complaint for which machinery exists there; and
therefore there would d be no harm in deleting the whole clause,
although, for the same reasons, it might be worth while; adding
a note to the eiffect that this paragraph in the Preceding Draft
text was dropped because it was considered unnecessary in th light
of the Provisions of Article 35.
3 - 4.- E/PC/T/A/PV/39
CHAIRMAN (Interpretation): Mr. Webb.
Mr. L..C.. WEBB (New Zealand): Mr. Chairman, we are in favour
of the change which I think Dr. Ooombs has suggested, that is I
think we should replace the words in paragraph 3 "may present to
the Organisation a complaint" by "may complain to the Organisation."
The effect of that change would be to throw upon the Member present-
ing the complaint the responsibility of assuring itself that it is
not tirial and that there is at least a reasonable assumption that
the facts are correct.
As to D. Speekenbrink,s proposal that (3) should. be deleted
altogether, I think he has made in some sense a good case but I
would be against the deletion of the paragraph because I think that
if you do that,logically you must go to Article 26 and also to
Article 40 dealing with Restrictive Business practices, and make
there a similar orange because there are similar provisions in those
Articles. I do not think that/should be done because it seems to
me that there is sonic justification for assuming that slightly
different complaint procedures may be justified under different parts
of -the Charter. M. A. FAIVOVICH (Chile) (Interpretation): Mr. Chairman, I
would just liketo say a few words on Articles 12 and 12A because
I think that there is a close link between these two articles.
We agreed to sending these articles to the Coimmittee because we
thought that these Articles established, an equitable balance
between the rights of investors and of the countries where the
investment were made, and we understood quite rightly, that the
investor should have certain guarantees for the investment. We
agreed, on the other hand, that an equal treatment should be granted
to domestic capital and to foreign capital being invested in the
country.
Furthermore, we admitted and we agreed to the fact that if
capital were expropriated from a country the investor should
receive an equitable an, just indemnity, and we thought that a
regime could not be perpetuated which, in fact, exposed the
investor to any form of arbitrary expulsion, but we could not
accept that, under the guise of all the facts that we have just
mentioned, this Article should come to mean that a State could
intervene politically in the countries where such investments are
made, and it seems to us that this paragraph .3 gives too much
relief to the particular situation of the investor as apposed to
the situation of the country where the investment is made. In
fact, this article gives a special statute to the investor, and
therefore there is no more of that equality between ths investor
and the country where the investment is made, of which I have just
spoken,
For this reason, I agree that the words "on behalf of any of
its nationals should be deleted. We do not think that a country
should be asked to intervene -and represent any particular interest
here and in that way act on behalf of its national, but we think
that the Czechoslovak amendment does not go far enough and we
would ask to see the words "acting on its own behalf or on behalf
of any its nationals" deleted.
E/PC/T/A/PV/39
J. E/PC/T/A/PV/39
Furthermore, as we suggested on a previous occasion, we
would like to see the word "complaint" replaced by the word
"claim", and at the end of the same paragraph the word "mutually"
should be deleted.
I would like to mention another aspect of this Article.
This Article provides for claims in cases where a party, acting
on its own behalf or on behalf of its nationals, thinks that
it can make a complaint. But the substance of the paragraph
ought to mean that a State could only complain when the
provisions of the Charter have been violated.
In fact, the Charter is a document which will be signed by
Member States and which will be an official document between
the Member States. In cases where investors think that they
have the right to complain, they should go through normal
diplomatic channels and ask for the diplomatic help and assistance
of their own Government. They should not act through the
provisions of the Charter, because, as I have just stated,
this paragraph ought only to provide for violation of the
provisions of the Charter.
To summarize what I have said, I would say that in regard
to paragraph 3 of Article 12, and the similar changes to be
made in Article 12A, we would adopt the Czechoslovak amendment;
but would ask to see the scope of the amendment extended to the
deletion of the words "acting on its own behalf or on behalf
of any of its nationals". We would also ask that the word
"complaint" should be replaced by the word "claim", and at the
end of the paragraph, that the word "'mutually" should be
deleted.
CHAIRMAN: The Delegate of Cube..
V V
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, when we
started the discussion on Chapter IV, the Cuban Delegation
presented an amendment asking for the complete deletion of this
paragraph, so naturally I have to support the Delegate of the
Netherlands; but it was discovered during the discussion that
practically every one of the Chapters of the Charter has a
provision of that sort, called, more or less, administrative
consultation with respect to complaints". When we asked for
the deletion, it was entirely on technical grounds, because
we saw systems of complaint and consultation in every Chapter,
and we were repeating some of the elements of the procedure,
but they were not the same all through the Charter.
We suggested then that there should be a general procedure
of complaint and consultation that that procedure should be
moved to Chapter VIII, and be applied to all the Chapters of
the Charter. That was agreed in general, but it was found
difficult to convene the various meetings of the sub-committees.
We have discussed this matter in the Legal Drafting
Committee, and we have come to the conclusion that it is absolutely
necessary to delete in every Chapter the special procedure
established, and instead to make a general procedure in
Chapter VIII. However, at this stage in the work of the
Preparatory Committee it would be almost impossible to do it,.
because we would have to check very carefully the special
procedure for consultation given in every Chapter. Therefore
I think the best solution would be to - insert a, note concerning
this paragraph, station that the World Conference should study
the convenience of taking away the special procedures for
consultation, to yield the ground to the general procedure for
consultation envisaged in Chapter VIII - I compose in
E/PC/T/A/PV/6c?
- 7 - V - 8 - E/T/A/PV/39
Articles 87, 88 and 89. But as it is here that we have to deal
with it, I only want to call the attention of this Commission
that we are facing this situation: According to the rights of
international law, there is a right of interposition, by means
of which a Government interposes its good offices or acts on
behalf of one of its nationals in relations with other Governments.
That does not happen every day, and there. is a large amount of
jurisprudence and preference in regard to this matter. But that
action stops when the other Government does not give the problem
consideration. Then, if the Governments are not both bound by
a treaty, or some sort of agreement, the matter finishes.
Now, if we wish this text,as it is actually drafted, to
mean that any of the Members of this Organization may act not
only on their on behalf but on behalf of my of their nationals
--that is to say, that any of the Governments here represented
could come to the Organization with a complaint acting on
behalf of Messrs. Such-and-Such--I think that we would -be going
farther than international law permits.
For that reason, we second the amendment proposed by the
Czechoslovak Delegate and supported by the Chilean Delegate,
To conclude, I want only to state that the Cuban Delegation has
reserved its position in relation to this Article, and in
relation to Article 12A., pending, the approval of an amendment
presented that was transferred to A'rticle 89. G - 9 - E/PC/T/A/PV/~39
CHAIRMAN: Mr. Rubin.
Mr. SEYMOUR RUBIN (United States): Mr. Chairman; it seems
to us there will be some confusion arising out of the words "act-
ing on its own behalf or on behalf of any of its nationals".
As I see it, at any rate, it does not appear to the
Delegation of the United States that there is anything unusual
or anything extraordinary under this terms of the Charter in the
words "on behalf of any of its nationals", and, I am somewhat
puzzled by the comments which have been made arising out of that
particular phrase.
Now it does seem to us that if we passed. "trade among
States" to clean trade which its largely carried on by private
organisations in those various States, if complaints do arise
under any provisions of the Charter they are going to start off
originally with the complaint of a national of one country,
engaged. in the trade of a particular commodity, that the Charter
is vialated. He will then present his case to his Government
and. argue that the Government of the United. States, or one of
the other members of the Organisation, has done viclence to its
obligations.unler the Charter; and if his Government is
satisfied. that it is a reasonable grounds for complaint, and. is
satisfied that it wishes to the that complaint to the
Organisation, it will do so.
It will then present the complaint as its own, but will
certainly present the complaint which arose ,in the first
instance, because an individual a national of that particular
Member State was injurea. in a way which is thought to be
contrary to the terms of the charter.
Now it seems to me that we have nothing other than the
situation in paragraph 3 of Article 12, It may be that a measure
which a Government takes is injurious, to an investment of a
particular national, or it may be that a measure which a G
Member Government takes is injurious to the trade which such
national is carrying on, and in either caase the affected Member
acting in its own capacity, but certainly having the interests of-
its nationals in mind, and having their rights in mind, arising,
from the terms of the Charter, will present the point.
So it does seem to me that there is an element of ambiguity
in the discussion so far which is somewhat difficult for me to
understand. Under these circumstances, however, it would appear
that there may be no clarity in maintaining this paragraph as it
now stands. On the one hand, I would. personally not like to see
the phrase acting on its own behalf or on behelf of any of its
nationals" deleted from this particular provision of the Charter
on the basis of the discussion which has taken place up to now.
It does seen to me, certainly, that no Government will be
violating the sovereignty of any other Government if it listen
to the complaint of one of its own nationals, ant thereafter
takes the complaint to the Organisation, and in this sonse there
seems to me no reason for the deletion of the phrase "of any
of its nationals".
However, I think that despite the occurrence. of paragraphs
similar to this in other portions of the Charter, it might be
as well, with a view to facilitating our work and perhaps
eliminating further discussion of this somewhat metaphysical
point, if paragraph 3 were entirely deleted, and if we then
went entirely on the basis of what is found in Article 86 and. the
Articles which follow that.
If that were done, I would like to see inserted. in the
Record, a Note similar to the Note which was presented tentatively
by Dr. Coombs a few moments ago. I would like to see some
clarification in the record. that a Member is certainly not
- 10 - E/PC/T/A/PV/39 C-
precluded. from listening to the complaints of one of its
nationals that an obligation by another Member under the Charter
has been violated, and then presenting a complaint on that ground
to the Organisation. If that Were done, Mr. Chairman, it does
seem to me we would probably not lose 'a treat deal by eliminating
paragraph 3.
I agree with Mr. Webb entirely that I personally do not see
any strong reasons for deleting it. Provisions of this sort do
occur in other portions of the Charter, and. deletion of the
paragraph hare may load. to reexamination of other solutions, to
see whether or not the provisions of those other Chapters should
or should not be retained; but in view of all the discussion,
I put forward the suggestion that perhaps the .simple t action
f:or this Commission to take would be the deletion of paragraph 3
and the action to the Record. of an explanatory note along the
lines I have suggested.
- 11 - - - s It -
CHAIRMAN: The Delegate of Brazil.
Mr. J. TORRES (Brazil): Mr. Chairman, having been the
on who pressed in the Sub-committee that this paragraph be
retained, I think it is my duty to say a few words on the
subject,
In the minds of many people, Chapter IV is pretty much
whet Dr. Gutierrez said, in a happy expression, "a catalogue
of good intentions", and I was concerned with the fact that
by deleting this paragraph we might be weakening further the
text of a Chapter which does not have much force. I did not
demand that it be retained, because of the fact that it may
giveninvrestors a special privilege or even put them in, a
special position.
My understanding is that this paragraph would provide for
action that would work both ways. It would also give the
countries who need certain facilities some measure of complaint
vis-à-vis the othcr countries who may unreasonably withhold
these facilities from them.
In Article 12 A we have already provided against the
interference of capital in political affairs or in the interml
situation of Member countries. But, seeing that this matter
is now causing so much difficulty, and understanding, too, that
sufficient provision has been adequately supplied in the Articles
of Chapter VIII, I am prepared to forgo the psychological.
advantage that there may be in retaining this paragraph of Article
12, and therefore I would have no objection to its simple
elimination.
S 13
CHARPLAN (Interpretation) Gentlemen, he last delegate who
has just spoken stated unequivocably that he accepts the deletion
of the whole of paragraph 3 with, of course, the inclusion of a para-
graph stating the reason for the deletion on the lines given by Dr.
Coombs, and the formula given by Mr. 'ubin, the delegate for the
United States. A I to consider, gentlemen, that you all agree
to delete paragraph 3?
H.E. Z. AUGENTHALER (Czechoslcvakia): I agree with the dele-
tion of paragraph 3, I agree also with the addition of the note of
the United States delegate, on condition that the note is completed
by the following words, or approximately" that there is no iE: for
complaint if the legislation of the Member concerned offers to the
of the
nationals/complaining countries,legal ways to receive justice."
CHAIRMAN (Interpretation): Mr. Augenthaler, I would like to
give you my personal opinion, I rather fear to include the sentence
you propose here because this would, it seems to me, extinguish all
possibility of diplomatic action because there is no case which we
could not find in which the laws of a country would enable the parties
to find a solution.
M. B.BARADUO (France) (Interpretation): I quite agree with what
seems to be the majority view, to delete paragraph 3, but I wonder
what the amendment which was suggested. by Mr. Robin and the addition
suggested by Mr. Aegenthaler would add to the case here. In fact,
we are not all the origin of international law. where are current.
practices and customary practices followed in such cases, and in our
Foreign Affairs Ministry in Paris we have very often the case; of one
of our nationals who comes to us and complains because another Govern-
ment, in his opinion has taken steps which --'use him undue pre judice. ER
The first thing we say to one of our nationals in such cases is to
refer the national to the Tribunes of the country involved and ask
him to settle, if he can, his case in the country where such action
has taken place. It is only if the case is complicated in some
way that we resort to diplomatic action, but if a national thinks
that any other country has violated the obligation of the Charter,
then it will be, of course, for him to inform his Government of his
opinion, but he will have to try first to obtain reparation from
the Government taxing such action, and if he does not obtain such
reparation, it will be the duty of the protecting Government to con-
sider the interests of its national and to envisage then only the
possibility of referring the case to the Organisation. I think
that Dr. Coombs summed up the case quite clearly, and it would be
even dangerous for us to set up here rules of international law which
would in fact only complicate the matter of settling disputes between
nationals and other Governments.
Therefore, if we agree to suppress paragraph 3 here, I think that
we ought in that case to refer only to the possibility of the
procedures provided for in other Articles of the Charrter, but it would
certainly be dangerous to lay down rules for settling disputes in
international law,
Mr. SEYIMu-m RUBlN (UNIted States): Mr. Chairman, I made a
suggestion that a note be added here only ; it seemed to me that
-the discussions have indicated that perhaps there is some special
infirmity in the minds of some members of the Commission which touches
on the Articles of the Charter. In my view there is no such
special infirmity . If there is a violation to the right and obliga-
tions set down in the Articles of the Charter, a complaint can be
presented to the Organisation. Now, under those Articles, like under
most other Articles of the Charter, the way in which a complaint
14 ER. 15 E/PC/T/A/PV/39
would ordinarily come to the attention of the Government which
presents the complaint is because some national of that Government
has been injured - it may not be his investment which has been in-
jured at all, it may be that he has been subjected to some sort of
internal tax which affects his export to another country, and he
makes the complaint on that ground; or he may be attempting to
secure technology in the United States and he may find that in the
United States there is some unreasonable impediment, so that he can
complain under the provisions of this Chapter,
It is with a view only to removing the possible inference
arising out of the discussion -, as I said, a special infirmity
does attach to these particular investigations-that I make a suggestion
of an explanatory note.
concerning
Secondly ,the comment of Dr. *-nX7tthaler ; I venture to suggest
that under the law of the United States it would effectively remove
any possible complaint against the United btates that it had violated
the Charter on any ground whatsoever, because when this Charter does
come into effect it will come into effect in the United States as a
Treaty or other international agreement ratified by our Congress.
It will, under the Constitution of the United States, become part of
the Supreme Law of the land, and automatically there will be recourse
to the United States in cases rising out of the violation of what
would be then a Supreme Law of the land. The Law of the land, I
would suggest to Dr. Augenthaler would therefore remove any possi-
bility of any.complaint whatsoever on any question of the Charter
presented to the Organisation, and I doubt very much whether that
far-reaching conclusion is actually intended J.
- 16 -
Thirdly, I would like to present two sentences which perhaps
can make more clear in general language exactly what I would like
to see attached as a Note, and perhaps if we considered a
particular draft or some wording in these rather large issues of
the difficulty as to
international law,/exactly what we mean by the phrase "on behalf of
its nationals" would disappear. The Wording I would suggest is
as follows:- Paragraph 3 of article 22 was deleted on the
grounds that this subject was already covered by the provisions of
Article 86. In this connection it was agreed that the deletion of
paragraph 3 would, carry no implication that a Member could not,
as under other parts of the Charter, present a complaint to the
Organization arising out of a violation of articles 12 or 12; and.
affecting the interests of a national of such Member".
CHAIRMAN: Mr. Augenthaler.
H.E. DR. Z. AUGENTHALER (Czechoslovakia); Mr. Chairman, I
am very puzzled that we are discussing matters which, to My mind,
are entirely clear. The Charter is a public and official document
and private interests are of an entirely different character. I
would make it clear, for instance, in the following way:- If
my Government were to publish a rule contradicting some provisions
of the Charter, I suppose that any Member may come and say "you
have tone something contrary to the Charter and I would like to
discuss the matter with you", but there is something entirely
different if some authority wrongly appliest some provision of the
Czechoslovak laws in contradiction, for instance, to the Charter
which becomes a law of the country.
I will give you an example which will possibly make it very
clear. Let us suppose that there is a case of confiscation of
E/PC/T/A/PV/39 - 17 -E/PC/T/A/PV/39
property in Czechoslovakia. Now, the confiscation is decided
by a court, and when we admit this procedure, a foreign country
may come and, on behalf of Its national, lodge a claim by
diplomatic means, but I would reply "I can do nothing in this
case because the courts are independent and your national has to
lodge appeal against a decision, and so long as he does doet go the
normal way I am unable to discuss the matter with you". I think
that that is the normal way of international relations, that is,
that so long as normal legal ways are not exhausted there is no
cause for complaint.
it
I hope that in the light of this explanation/is now clear
what we have in our minds. - I8 -
CHAIRMAN: The Delegate of Cuba.
Dr. Gustavo GUTIERRTEZ (Cuba): Mr. Chairma.n, the situation
it so clear, from the international point of view, that I cannot
understand why we are discussing the matter for hours.
If we do not wish to create a now right, then the deletion
of paragraph 3 has no importance at all, because the matter is
covered absolutely from the beginning to the end of Article 86.
But what really makes everyone go deeper into the matter is
that if it is understood that in every case where a national of
a foreign country considers that the Government of the country
where he is established or where he is having his activity has
done something inconsistent with the Charter, that particular
person will have the right to go to his Government and present
a claim, that would make this Organization the biggest court of
the world. We would receives millions of complaints.
I do not expect - and nobody can. expect - to create that
right. On. the contrary, if that situation arises, that
national must take steps according to international law, and
we are not modifying here the general principle of international
law. He must go to the courts of that nation, and exhaust all
the legal procedure. When the court has given the last
decision, then if he can present his case on the ground of
denial of justice, i t is the time (and only then) that the
foreign government can interpose on his behalf.
If it is in relation to matters that have nothing to do
with the Charter, the Governments must take action according to
the principles of international law. But if the matter is one
of the provisions of this Charter, or covered by one of the
provisions of this Charter, then there is a special procedure,
and the Government, instead of trying to go to arbitration,
V V
- 19 -
or following, any of the different procedures, will come to the
Organization, to use the method which has been established.
Therefore, I do not see why we should continue the discussion.
CHAIRMAN: (Interpretation): Gentlemen, I would just like
to make an observation. It is four o' clock, and I would
like to remind you that we are still dealing with paragraph 3
of article 12 and that we are supposed to finish today the
discussion on Chapter IV.
I certainly do enjoy your company to the utmost, and I
like to listen to the discussion here, and I would not mind.
seeing; the sunrise in the gardens of the Ariana; but, nevertheless,
I would like to avoid that emergency measure. When Dr. Coombs
handed me this document it was with a certain pride and a certain
relief. Now I understand very well his sense of relief,
because with the text he handed me over his worries!
I think that the discussion now taking place and the
arguments which have bean presented, are only a repetition of
previous discussions. Therefore, I think that we could nor-
pmt an end to this debate. There is a simple proposition before
us - to delete paragraph 3 altogether. Does everyone agree
to the deletion of paragraph 3?
(Agreed)
Mr. Soymour RUBIN (United States): Mr. Chairman, I am
agreed to the simple proposition of deletion paragraph 3; but
there is another simple problem before the Commission, which is,
the insertion of a note, which, to my mind, is not at all
inconsistent with anything that Dr. Augenthaler or Dr. Gutierrez
have recently said: a note which merely makes it perfectly clear
that, as I previously put it, Articles 12 and 12, carry no special
or hidden intereferences within their mysterious depths. Xi E/PC/T/A/PV/39
CHAIRMAN: I propose that we to on with the discussion,
and shall ask Mr. Rubin to prerare a Draft which we will
examine later in the day.
Are there any comments on paragraph 4?
Does nobody ask for the floor on paragrraph 4? Adopted.
Paragraph 5. I think the Belgian Delegate had one comment to
make on paragraph 5.
BARON DE GAIFFIER (Belgium) (Interpretation): Mr. Chairman,
this morning in course of the discussion the Australian and
Chinese Delegates paid. compliments to the '.egal Drafting Committee
for the work they had done in improving the text of Charter IV.
I think we could also add our congratulations to this Legal
Drafting Comittee on the work it. has done on this paragraph 5.
The question I raised was an important one and a substantive one,
but as it is already late I am ready to accept that this question
should'. be dealt with by the Organization when the Organization
takes un the question of establishing and setting up an
Investment Code.
CHAIRMAN: (Interpretation): Gentlemen, I -do not think that
I will be accused of being partial if I say that this is a good
intervention.
Any further comments on paragraph 5?
BARON DE GAIFFIER (Belgium) (Interpretation): (This remark
only concerned the French text.)
- CHAIRMAN (Interpretation): Gentlemen, we now pass on to
Article 12 A. This Article must be read in liaison with the
Report which was presented-by the Sub-Committee. - You will see that
at the bottom of page 5 of that Report, Document T/162, there is a
footnote which reads as follows: "One or more of the Delegates
-iz - E/PC/T/A/PV/39
in the Sub-Committee believed. it essential that the substance of
this note, with which the Sub-Committee agrees, be included in the
official explanation of the text".
The discussion is now open on articlo 1214,: and. as we have
cone previously, we shall start with the examination of paragraph I
of this article. Does anyone wish to speak on this paragraph?
The Delegate of Norwey.
Mr. MELADER (Norway): Mr. Chairman, I would just make some
general comments on Article 12 A..
We have not had time to study this important article very
carefully so far. There are certain points on which we are in
doubt, and we have not really been able to make up our minds on the
Article, ant. consequently we have come to the conclusion that we
would defer our decision as to whether or not we can accept this
Article for the time being.
CHAIRMAN (Interpretation): We will take into account the
Reservation which was just made by the Norwegian Delegate, and hope
he will be able to withdraw it in the future.
The Delegate of Czechoslcvakia.
Mr. AUGENTHALER (Czechoslovakia): Mr. Chairman, I have two
remarks to make. The first remark is on the ninth line from,the
bottom: "of other 1Members and security for existing and future
investments." I think there should be added. - but it is
rather a question for lawyers to decide - "legal security'. If
there are Revolutions in the country - well, I do not know
what use the Charter could be, or if the complainant may then
ask the ITO to intervene.
And. then the other Amendment would be that I would propose
the deletion of the last phrase, from "Accordingly" to "future
investments", because I cannot think that we agree to offer
G
- 21 - G _- - 2. E/PC/T/A/PV/39
the widest opportunities for investments.
CHAIRMAN: The Delegate of Brazil.
Mr. TORRES (Brazil): Regarding the first suggestion that
we had, the word "legel" before "security", the Brazilian
Delegation would. be in agreement; but we cannot agree to the
of paragraph 1
deletion of the last sentence/of article. 12 A because we think
it would to a great deal of damage to the offort we are here
undertaking to provide for an atmosphere of confidence in order
that capital movements may again come about in the world. S
CHAIRMAN (Interpretation). It Is a fact, Mr. Augenthaler,
that this sentence shows fairly accurately the, atmosphere in
which this Article was drafted. and I think you .will have no
objection,, in principle, to maintaining that sentence, and that
you only proposed this deletion because you thought the sentence
was not particularly useful. Therefore I hope you will not
object to intaining this sentence.
The Delegate of Czechoslovakia.
H. E. Mr. Z. AUGENTHALER (Czchoslovakia): Mr. Chairman
I would like to state that Czechoslovakia does not admit
foreign investments in its country. That is why I cannot
state here that I a gree to give the widest opportunities for
Investment.
CHAIRMAN ( Interpretatioin ): This is, I think, the
precise case in which a Government, when signing the Charter,
can make a formal reservation.
The Delegate of Chile.
Mr. F. Garia. OLDINI (Chile) (Interpretation): Mr.
Chairman, I wonder if this case is not covered by the present
sentence, saying: "They recognize that such development would
be facilitated if Members were to afford, for international
Investments acceptable, to them * I think the word
"acceptable covers the case.
CHAIRMAN (Interpretation): I suppose that, nevertheless,
you have no objection to the maintaining of that sentence?
Mr. OLDINI (Chile): (Not interpreted).
CHAIRMAN: The Delegate of the United States.
Mr. Seymour RUBIN (United States): Mr. Chairman, I would
E/PC/T/A/PV/39 S - 24.-
like to associate myself with the statements made by the
Chilean Delegate and the Brazilian Delegate just a moment
ago. We did work this paragraph over rather carefully,
and, indeed, the whole of Paragraph 12 was worked over rather
carefully at somo length, in the Sub-committee, and I think
that the insertion of the phrase "for international investments--
acceptable to them" is designed to like care of such a situation
as Mr. .Augenthaler has just mentioned. I would therefore very
strongly prefer to leave the paragraph essentially as it is
With respect to the insertion of the word "legal" before
"security", I would have no strong objection to it, but it does
seam to me that you create a certain amount of ambiguity by the
insertion of the word "legal" and that, even without its insertion
no Member would be so unreasonable as to demand security whilst
a country was in a state of revolution. This was drafted, I
think, in reasonable. terms with a view to reasonable application.
CHAIMAN : The Delegate of the United Kingdom.
Mr. SHACKLE (United Kingdom): Mr. Chairman, I agree with
the speakers who considered we should maintain the last sentence.
It contains the qualifying phrase: "consistent with the limita-
tions recognized as necessary in this article" That brings in
all the preceding safeguards - the words 'withaappropriate safe-
guards" at the beginning of the paragraph; "intereference in the
internal affairs or national policies of Members," and, finally,
the qualification "acceptable to them." So, the provision is
covered about as fully as it possibly could be and I suggest
it should be maintained,
with regard to the insertion of the word "legal" before
"security, " I think it would be a pity to make that addition.
It suggests s very narrowly legalistic interpretation of security
and I am sure the intention was that It should be wider, 25
ER E/PC/T/A/PV/39
M. ROYER (France ) (Interpretation): Mr.Chairman, I have no
objection to the substance of this text, butI think that the draft-
ing of this sentence is a little too strong. think that , we abuse
the superlatives, and I think that in fact -;. weaken the effects in
the text, and as Mr. Wilcox said one day, "the lady ;,y ic)4 -
too much," and I think these objections ought to be reserved. to the
weaker- sex. Therefore, I propose that the sentence should be modi-
fied. in this way: "Accordingly they agree to provide, consistent
with limitatiors recognised as necessary in these Articles, all.
-v.t and the Necessary guarantees of security for existing
and future Investments."
CHAIRMAN (Interpretation) Has every one heard correctly Mr.
Royr's amendment? Does; the Commiossion agree to accept that amend-
ment?
Mr. SEYMOUR RUBIN (United States) : Mr. Chairman, I am dis-
posed to accept the change in the text which is in accord with the
general intention. However, it does not seem to the that there is
a very great improvement in the words just proposed by the French
delegate. It seems to me also that there is involved. in these
words the supresion of the Words: the widest oppertunities for
investment" and perhaps there is undue emphasis on the words: "all
facilities and the necessary guarantees ot security." Now what we
laboured over and studied lenthily in the sub-Committee was the phrase
which would indicate the sort of thing at which we were aiming, and.
I think that this sentence is pretty much the same, as it stands at the
present time. It does express a point of view which found a-recent
in the Sub-Committee.
As Mr. Shackle pointed out it is hedged around with a number r a.
unneccesary limitations. I would hesitate - unless a very strong
reason appears - to substitute other words and make a. .change in the E/PC/T/A/PV/39
wording of the Article which has in other parts been laboured over
and very thoroughly discussed by the sub-Committee.
CHAIRMAN (Interpretation): Mr. Royer, I think that you know
the French saying that the better is always the enemy of the good,
and therefore I am afraid that if we try to improve this text we
shall be drawn into very long discussions and get nowhere.
M. ROYER (France) (1nterpretation): Mr. Chairman, I will
therefore not press my point, but I thought that the text w':\iPa'.
I have iust proposed might be able to gather the adhesion certain
of my colleagues who had objections to the text which is now before
me.
CHAIRMAN(Interpretation) Tjerefore, gentleman, we now would
like to make a decision on paragraph 1 of Article 12 I hope
thatYMr. Augenthaler has been convinced by the observations and the
remarks which have been made, and therefore, that he has no objection'
to maintaining the last sentence of this paragraph, and as I stated
Just now, the, CzXob ;..akian delegation will be able to make a
formal Reservation on that paragraph at the time of the signature of
the Charter. Therefore, there remains only the amendment tending
to insert the word "legal" before the word "security" in this para-
graph. There are certain difficulties here because certain delega-
tions agreed to this insertion and other delegations said that this
would narrow too much the scope of the meaning of security as it is
here.
In the face of these explanations, I would ask Mr.Augenthaler
if he presses his point of view for the inclusion of this word
H.E. Z. AUGEN THALER (Czechoslovakis): , Mr. Chairman, I do not
insist on the word "legal", but to simplify the matter, I think I
should say that I make reservation on the whole of article 12a.
CHAIRMA (Interpretation): This is aIready mentioned in the
Report of the Sub-Commiittee. Does anyone else wish to speak on
paragraph 1?
26
ER 27
J. E/PC/T/A/PV/39
we now pass on to paragraph 2. We have two sub-paragraphs
(a) and (b), and sub-paragraph (a) is itself divided into four
sub-sub-paragraphs, (i), (ii), (iii) and (iv). Does anyone wish
to speak on paragraph 2, sub-paragraph (a).
BARON. P. de GAIFFIEA (Belgium) (Interpretation): Mr. Chairman,
the comment I wish to make refers to sub-sub-paragraph (iv) of
sub-paragraph (a). The Report of the sub-committee reads as
follows:- "The Sub-Committee believes that the word 'just ' in
paragraphs 2 (a) (iv) and 2 (b) covers all aspects of the payment.
of consideration or compensation, including adequacy and time of
payment, . etc.".
We asked and pressed our point that the word "prior" should
be introduced before the word "just" - "for the payment of just
consideration" - because, referring to consideration, in Belgian law
the word "prior" is always introduced before the word "just" as the
idea of "just compensation" does not include the idea of "prior
compensation".
We would not press our point and ask for the insertion of that
word if the Report stated that this is the meaning of the text,
that the meaning is that prior compensation should not itself be
paid but that the amount of the compensation to be paid should be
fixed in a prior manner.
Our observation referred to both the Note and the text,
because we have asked that the word prior" be inserted in the text
of the paragraph itself, but if the case is covered by the Note
then we should not press for the insertion If the word "prior" in
the text of sub-paragraph (iv) itself. 28 !
CHAIRMAN (Interpretation): Are there any observations on
Baron Gaiffier's suggestion?
The Delegate for Chile.
Mr.. F. GARUCIA OLDINI (Chile) (Interpretation): I think that
this note; should be drafted Accurately, because otherwise one might
interpret the word "prior" as meaning prior to the payment and not
prior to the fixing of the amount.
CHAIRMAN: Monsieur Royer.
M . ROYER (France) (Interpretation): This question. Mr. Chairman,
was debated within the. sub-committee, but I think that the insertion
of the word "prior" would" lead to may difficulties in the practical
application. In fact the practices vary in the different
countries and the quetion on prior payment or prior fixing of the
amount for the transfer of ownership might lead, in certain cases
and in certain countries, to insuperable difficulties -which we
cannot foresee; yet. In certain countries, at least, there would
be no difficulties if the law of the countries provided for prior
payment or prior fixing, of the amount of the consideration before
the transfer or ownership, but in other countries, where the tran:fs're
of ownership would take place before the fixing of prier payment,
these countries would have to modify their own laws so as to using
them into harmony with the provisions of the Charter, and this
would create insuperable difficulties because they would have to
modify their laws for just one still point in the Charter.
Therefore, I think we could leave the word " just" here and
leave it to the courts of each country to give a correct and legal
interpretation of this word. 29
CHAIRMAN (Interpretation): Gentlemen, I think that we could
leave the text as it now stands and make a note in the record of
the declaration just made by Baron Gaiffier.
BARON P. de GAIFFIER (Belgium) (Interpretation): Thank you,
Mr. Chairman, but I hope that a substantial part of the Report
will go into the records of this meeting and will be taken up again
in the Report of this Commission.
CHAIRMAN: The Delegate for Australia.
MR. B. W. HARTNELL (Australia): Mr. Chairman, I just want to
ask whether it is your intention that the Note will incorporate the
views of the Delegate of Belgium in respect of the word "prior" or
not?
In fact, if it is the intention of the Committee to insert the
words "just consideration" to cover the ideas put forward by the
Delegate of Belgium, it would be impracticable for the Australian
Delegation, I think, to accept that interpretation because, as far
as I know, it would be constitutionally impossible. If, on the
other hand, it is merely a question of expressing what is the
point of view of the Belgian Delegate, that would suit us.
CHIARMAN (Interpretation): It will only take due account of
the remarks just made by the Belgian Delegate.
Are there any other observations on sub-paragraph (a)?
E/PC/T/A/PV/39 E/PC/T/A/PV/39
M. ROYER (France) ,(Interpretation): - Mr. Chairman, this is
Just a remark on the first part of paragraph 2. I would like
to ask the Secretariat, when the final text of Article 29 is
.drawn up, to put the terminology of this paragraph 2 into line
with the terminology of Article 29; and to modify the words
"special exchange agreement" so as to read, as in Article 29,
"special agreement on exchange". (The second remark applies
only to the French text).
The Chairman made a remark in regard to sub-paragraph (c.)
which concerned the French text only.
CHAIRMAN: (Interpretation): Are there any other comments on
sub-paragraph (a)?
We can now turn to sub-paragraph (b).
H.E. Mr. Wunts KING (China): I am wondering whether the
word"reasonable" in sub-paragraph (iii) on page 9 is really
necessary, seeing that the measures to be taken in this connection
will always be reasonable.
CHAIRMAN: (Interpretation): Is anyone opposed to the
deletion of the word 'reasonable" in sub-paragraph (iii) of.
sub-paragraph (a),page 9?
Mr. Seymour RUBIN (United States): Mr. Chairman, the word:
was inserted there, I think, .ith a view to indicating that
there should be some flexibility in the measures provided to
ensure participation in the expansion of industry; and also
cause you might have, on the one hand, measures which were
completely reasonable and, as a possible alternative, measures
which were perhaps aimed at the same objective, but whose
technique might, in operation, result in unwarranted and
30 V 31.
unnecessary injury. As a result, would prefer to maintain
the word 'reasonable" in paragraph (iii).
H.E. Mr. Wunsz KING (China): In view of the explanation
given by the United States Delegate, I do not press my point;
but, at the same time, I would. like to suggest the addition of
the word. "reasonable" to sub-paragraph (iv) on page 10, so
that it will also read "reasonable measures takento ensure the
transfer of ownership", etc.
CHAIRMAN (Interpretation): Does anyone wish to introduce
the words "reasonable and justified'"?
M. ROYER (France) (Interpretation): Mr. Chairman, I will
not press for the inclusion of the word "justified" We had
in this respect a long discussion within the Legal Drafting
Committee. The French law establishes as a principle that all
individuals and States are sound in mind and body; but it
seems to me that the text of many of the provisions of the
Charter lays down as a basic principle that all the States are
unreasonable I think that it would be in the interests of a
proper drafting to delete as often as possible any reference to
the word ''reasonable", because otherwise we would be implying
that, in many cases, the States act in an unreasonable way.
Dr. A.B SPEEKENBRINK (Netherlands): I support the
suggestion, Mr. Chairman.
.-E. Mr. Wunsz KING (China): Do I take it that the word
reasonable" will be inserted in this sub-paragraph (iv)?
CHAIRMAN (Interpretation): Mr. Royer is not very been
on the insertion of this word.
V 32
H.E. Mr. Wunsz KING (China):, Well, to cut a lone story
short, in view of tho lateness of the hour: if it is reasonable
to keep the word reasonable; " in this sub-paragraph (iii), it
does seem to me rather unreasonable not to use the word
"reasonable"'. in sub-paragraph (iv).
M. ROYER (France) (Interpretation): I have no further
objection.
CHAIRMAN (Interpretation): Therefore we will include the
word "reasonable" in sub-paragraph (Iv). Are there any further
comments?
we now turn to sub-paragraph (b).
v E/PC/T/A/PV/39
Mr. AUGENTHALLER (Czechoslovakia): Mr. Chairman, I would
like to make a statement that in the opinion of the Czechoslovak
Delegation the provisions of this article e cannot be interpreted
in such a sense as to nullify or impair any measures taken by
Members in accordance with international arrangements such as
decisions of the International Conference on German Reparations
in Paris, the Articles of the present and. future Peace Treaties
of ex-enemy countries, or measures taken unilaterally an" aiming
at the confiscation of property of ex-enemy nationals or
collaboraters, or as punishment or part punishment for criminal
offences.
Equally the Provisions of this Article should not apply in
such cases as requisitions in cases of emergency, for instance, war
it being understood that foreign nationals should receive
treatment no less favourable than the Member's own nationals.
Then the second point is that according to our legislation
we consider the nationality of a person according to the place
where he is incorporated" . That means that if there is a
Corporation constitute according to German law in Germany,
then it is in our view "German", even if there are some other
interests in it.
CHAIRMAN: The Delegate of the United States.
Mr. RUBIN (United States): Mr. Chairman, if I understood
correctly the statement which was made in his first point by the
Delegate of Czechoslovakia, my Delegation would certainly have
no objection to that interpretation being incorporated. in the
Record, an. perhaps added somewhere in the Committee's Report
in an appropriate place. The point was discussed. in the Sub-
Committee and during those discussions I did express the view
that the phrase "just compensation" exclude. compensation to
33 34
enemy nationals whose property was taken over under the power
of laws such as those which, I take it, the United Nations
have already had. put into application - the Trading with the
Enemy Act, in the case of theUnited States.
Nor would "Just compensation" be payable in the other
circumstances indicatet in Mr. Augenthaler's statement.
I would, however, like to have the opportunity of examining
his statement when it is available, and. would like to make the
Reserve necessary for such examination.
With respect to the second point, it seems to me that we are
in no way prejudioing in this Article the determination of what
is a national of another Member.
In other words, we are not here saying that a Corporation
incorporated in one country or another country is a national of
the country in which it is incorporated, or a national of the
country whose reel nationals only control, perhaps, the entire
ownership of such Corporation.
That question 'was referred to, as I understand- it, earlier
to-day by Baron de Gaiffier, and we at that time agreed to pass
over the question.
G S E/PC/T/A/PV/39
M. ROYER (France) (Interpretation): Mr. Chairman, I would
think, neverthless, it would. b: useful that such a Note as
suggested by the Czechoslovak Delegate, and to which the United
States Delegate agreed, should be mentioned in the Note to
the Report of the Commission on Article 12A- In. fact, *part
of the question was settled in the Note which was established
by the Sub-committee set the request - if I rermember rightly -
of the Cuban Delegate,
As regards the seizure, sequestration and confiscation
made by a State, it seems to me that there. is a certain ambiguity
in the english text, In fact, the French text says quite clearly
that the law in force at the time of the sanctions, to be taken
by the State should be applied, but the English texts seems to
say that the law. must be pre-existing, that is to say, pre-existing,
for example, at the time of signature of the Charter. If one
could put these two texts in harmony, that is to say, the English
and the French, and have the English text to follow the French
text, I think that the cases of criminal offences could
easily be covered and most.
As to the second question of reparations, then I think
these questions are covered by the Peac., Treaties and other
treaties, and there the case could easily be dealt with by
inserting in.the text that the measures ought to be in Conformity
with the treaties which have been duly registered with the
Secretariat of the United Nations. I think this is in
accordance with Article 102 of the Charter:
CHAIRMAN: The Delegate of Cuba.
Mr. R. L. FRESQUET (Cuba): Mr. Chairman, I going to
refer to the Note which is mentioned in the Report of the Sub-
committee, on Page 5 of Document T/162, because the Cuban 36
S . E/PC/T/APV/39
Delegation's acceptance of this paragraph 2(b) is dependent upon
the inclusion of such a Note in the Report of the Committee, and
from the Report of the Legal Drafting Committee it does not
appear that the Note was included.
I may add, in answer to certain points raised by the Delegate
of France, that it is our understanding that the term "pre-existing
law" refers to the moment the act is performed. 0f course, I
have no objection to straining a point and adding in the Note
the words "in force" after the phrase "because of a violation of
pre-existing law," just to make it more clear,
(After the interpretation into French):
Mr. Chairman, I meant to say, "because of a violation of the
law in force," because otherwise it has no sense.
CHAIRMAN (Interpretation): Mr. Fresquct, if I understand
you rightly, you are asking for an amendment of the draft of
the Explanatory Note on Paragraph 2 which appears on Page 5 of
the Report of the Sub-Committee, Document E/PC/T/l82,
Mr. FRESQUET (Cuba): Mr. Chairman, I am asking for two
things: the inclusion of the Note in the Report of the Sub-
committee, because in the Report of the Legal Drafting Committee
the Note does not appear. That is our main question, but, in
response to the point raised by the Delegate of France, we are
in agreement on changing the wording of the Note in order to
read: "because of a violation of a law in force", instead of as
it is now: "because of a violation of pre-existing law,"
CHAIRMAN (Interpretation): Are there any objections to
the proposal just made by the Cuban Delegate?
(Agred). S . E/PC/T/ :/PV/39
Mr. ROYER(France) (Interprettion): Is there any objection
to adding to the Cuban Note in the sense I have just asked:
that is to say, the addition would refer to the Peace Treaties
or to a decision of the International Commission on Reperations;
in other words, a decision derived from or taken in accordance
with an International covenant?
CHAIRMAN (Interpretation): Gentlemen, I think the best
thing to do now is to adjourn for a quarter of an hour, so that
we can gain strength for our further efforts, in consideration of
Articles 13 and 13A In the meantime, during our break, I
will ask M. Roer and Mr. Fresqust to draft their proposals.
I will also ask Mr. b-enthaler to submit his draft to Mr. Rubin.
The Meeting is adjourned for a quartar of an hour.
(The Meeting and adjourned at 5.20 p.m.) P E/PC /T / A/P V /39
The Meeting resumed at 5.45 p.m.
CHAIRMAN (Interpretation): The Meeting is called to
order . May I ask M. Foyer what is the result of his talks
with the Cuban Delegate and the Osechoslovskian Delegate.
M. ROYER (France) - not intepreted.
CHAIRMAN (Interpretation) The two texts will be circulated
in French and English.
Has Mr. Rubin taken cognisance of the text of M. Augenthaler?
Mr. Seymour RUBIN (United States): I am sorry I was just
a little late in coming to the Moeting. Mr. Augenthaler said
that if the modification - which I presume we are just discussing
was made, that would take care of the suggestion he had made.
As I understand it, the text which has been prepared will take
care of the text suggested by Mr. Augenthaler.
CHAIRMAN Interpretation): I think it would be better
to defer the discussion until the texts are circulated.
We now have to turn to paragraph 3, this last paragraph
of Aticle 12A. Has anyone any comment to make on this
paragraph? No comment?
Adopted,
Mr. L.C. WEBB (New Zealand): Mr. Chairman, my remark
was not concerned with this particular sub-paragraph, I
merely wish to say that, as I am not aware of the views of my
Government on the text of Article l2A I enter a formal reservation.
P. 39
Dr. COOMBS (Australia): It will be necessary for the
Australian Delegation to make a reservation on this text.
CAIRMAN: (Interpretation): Due account will be taken
of the reservations made by the Australian and New Zealand.
Delegates.
The Note drafted by the United States Delegate has just
been circulated. It refers to the deletion of paragraph 3 of
Article 12. Any comment on this Note?
Mr. AUGENTHALER (Czechoslovakia): Mr. Chairman, I am sorry,
but I cannot agree with this Note. It raises the same problem
we were discussing here, and as we stated already that it is
in accordance with international jurisdiction, any interpretation
of questions of international law and so forth concerning the
private and individual interest of a Member should be brought
before the ITO.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. SHACKLE (United Kingdom): Ifeel that in order to
avoid confusion, which I am sure we all would wish to avoid in
this discussion, it is very necessary to bear in mind this
question is in two entirely separate arts.
The first concerns the case where a new law is authorized
which might be held to be in conflict with some of these
provisions quite irrespective of any case that might arise under
it, and any law which might be introduced which would conflict
with these provisions. Then clearly there is a right for a
Member Government to go to the other Member Government which
introduced the law and make representations that it is in
confliot with the Charter, and it may be that the case of the
Organisation is a case under the Charter. There surely can be
no doubt at all of the right of one Governnment to do that in 40
respect of another Member Government. But there is then the
seconcl quite different type of case, which is the case where
there is a law already in existence. Nobody can claim to
it, but it may be administered in such a way as to
lead to a complaint by some national that it has not received
justice or fair treatment. In that second case, clearly, it
has to go through all its legal recourses, exhaust all its legal
rights, before a case can arise at all. It is conceivable, I
suppose, that a national might go through all his legal remedies
andi still not have got satisfaction, and in that case a case
might arise that this is an unreasonable an( unjustifiable action
under paragraph 2 of the Article. That is a possibility.
But that is quite a separate matter from the first case. It is
a case where there be that be a new law which is not in itself
inconsistent with the Charter, but where it is administered in
such a manner as not to constitute just treatment; and it is
only in that case, after the legal rights have been exhausted,
that the question will arise of that national's Governent
taking the case up under the Charter.
It seems to us, if one takes those two entirely separate
aspects of the --- `Ts'ictlyr, it clarifies the discussion
considerably, and I should think' `. make it perfectly
possible to accept this Note suggested by Mr. Rubin.
CHAIRMAN: Gentlemen, I think that the difficulty here
arises out of the fact that the objections presented by
Mr. Augenthaler were related to a case which is, in fact;
introduced again by the last words of the U.S. Draft, and those
are the words "affecting the interests of a national of such
Member" .
I wonder if we could not find a text of compromise by
altering the last words of this Note, and just say "present
a complaint to the Organization if the Articles 12 and 12A were
to be violated." Final Stop.
CHAIRMAN: The Delegate of France. S 41 E/PC/T/A/PV/39
M. ROYER (France ) (Interpretation): Mr. Chairman, I was
about to make another suggestion on the lines of the remarks
just made by Mr. Shackle. T -.- t would be to suppress ths second
sentence and replace it by the following sentence: "On the
other hand, the omission of this paragraph should not be
construed as to prejudice the rights of Member States to
afford protection to their own nationals in accordance with
the principle of International Law."
As Mr. Shackle pointed out just now - and I agree with him
on this point - we are just acting as if there were no
International Law, but, in fact, International Law is in
existence and therefore we should not just take out of
International Law certain of its provisions and apply them to
a particular case, that is to say, the protection of foreign
nationals, because the treatment ought to be the same whether
a foreign national has five dollars in his pocket or only
two dollars. There is no reason why we should mention here
special provisions for them
CHAIRMAN: The Delegate of China,
H. E. Mr. WUNSZ KING (China): When I asked for your
permission to speak just a moment ago, I was thinking of suggesting
almost the same thing as was suggested by M. Roye.r. I would suggest
as a sort of compromise, that we accept the Note proposed by the
United States Delegate, with the addition, after the words "in
this connection", of the following words: "without prejudice to
the usual practice and procedure under the General Principles
of International Law." S 42 E/PC/T/A/PV39
CHAIRMAN (Interpretation): Mr. Augenthaler, you are now
faced with three sugesstions; I hope that one of them will be
satisfactory to you.
H.E. Mr. Z. AUGENTHALER (Czgchoslovakia): Mr. Chairman,
I am satisfied with two of them, that of Mr, Royer and that of
Mr. Wunsz King.
CHAIRMAN (Interpretation): Which suggestion do you
prefer, Mr. Rubin?
Mr. RUBIN (United States): I prefer the suggestion last
made by the Delegate of China, Mr. Chairman.
CHAIRMAN (Interpretation): We will therefore accept the
suggestion If the Chinese Delegate. After eliminating all
these suggestions, we have finally reached a solution.
We will turn now to Article 13, Does anyone wish to speak
on Paragraph 1?
The Delegate of Brazil.
Mr. J. RORRES (Brazil): Mr. Chairman, I would just like
to support the statement made by Dr. Coomòs when he presented the
Report, and to move that the words "including agriculture" be not
included in the text of the Article but instead be subject to
a Note similar to that of the Sub-committee.
CHAIRMAN: The Delegate of China.
H.E.Mr. ;UNSZ KING (China): When I offered congratulations
to the Legal Drafting Committee this morning for having intro-
duced so many impprovements to the texts, I certainly had in mind
this particular improvement. I am particularly fond of and
attached to these two words and, if the objections from certain 43
Delegations are not very serious, I do hope that these two words
will be kept in the text.
CHAIRMAN (Interpretation): One speaker proposed the
deletion of these words: another speaker suggested that the
words should be maintained.
The Delegate of France.
M. ROYER (France) (Intepretation): Mr. Chairman, the
English word "industry" can cover both the case of agriculture
and industrial manufacturing activities, but in French the
word industries" cannot have that meaning and therefore I
would prefer that at least the word "agricole" be maintained in
the French text, especially as we are going to have complaints
from the representatives of the agricultural branches
CHAIRMAN: The Delegate of the Netherlands.
Mr. A. B. SPEEKENBRINK (Netherlands): Mr. Chairman, I would
like to support the arguments of Mr. 1unsz King and Mr. Royer. I
think the Legel Drafting Committee have done a good job here.
CHAIRMAN: The Delegate of Cuba.
Dr. Gustavo GUITEEREZ (Cuba): Mr. Chairman, the Cuban Dele -
gation would very gladly support the maintenance of the text that
has been offered by the Legal Drafting Committee, both in English
and in French, because in Spanish, as in French, when you talk
about "industry", agriculture is not included.
CHAIRMAN (Interpretation): I will therefore ask the
Brazilian Delegate not to press his point.
Mr. TORRES (Brazil): Mr. Chairman) since the London Conference
the emphasis has definitely been on industry and we in Brazil do not
quite understand agriculture as industr. I doubt, of course, that
the inclusion of the word "agriculture" is very pertinent, but, since
you ask me not to insist, I merely say that we may have to come back
to this point at the Plenary Scssion: I have to consult my Delegation. 44
E/PC/T/A/PV/39
CHAIRMAN: (Interpretation): Any other comments on para-
graph 1?
Dr. H.C. CCiMSS (Australia): Mr. Chairman, I feel that if
changes have to be made it would be gramatioally preferable to say:
"including agricultural industries ."
CHAIRMAN: We could also say "particular industries including
agriculture."
Dr. H.C COOMBS (Australia): The reason I have suggested
there is that this Article deals with governmental assistance to
economic development and mentions a form of assistance to agricultural
industries. I do not know how that will be translated into French,
but as I understand it, agriculture is not, in the English sense, an
industry but a group of industries, and some form of governmental
assistance might be given to, say, the wheat growing industry or the
fruit growing industry, or some such sort of agricultural industry;
but I think it was not ordinarily very popularly given to agriculture
as a whole. The corresponding thingwould be to imagine a govern-
mental assistance being given to manufacturing, which is clearly not
the sort of thing that was contemplated., and I think that the problem
does not arise in the French text. I think a misunderstanding would
arise unless you indicate in soma way, and you edit those
words to make it quite clear that you do contemplate that it covers
former of activity, agricultural as well as industrial. But if you
say "including agriculture" it would appear to me to say that Members
recognise a special governmental assistance may be repquired to pro-
mote the establishment for reconstruction of agricultural as a who
which is clearly not the thing intended. 45
J. E/PC/'i /A/PV/39
DR. H.C. COOMES (Australia): Mr. Chairman, I was wondering
whether we might learn from the French once again and say
particular branches of production, industrial or agricultural".
H.E.DR. WUNSZ KING (China): I should prefer to keep the
words "including agriculture" because, if some such words as have
been suggested by Dr. Coombs are to be used, then perhaps we will
have to change the texts in all other paragraphs where the words
"industry" or "industries" appear, while, if we use the words
"including agriculture" in this connection, it is quite
understood that whenever the words industry" or "industries"
appear in other texts they do not exclude agriculture.
CHIRMAN: Of course, there is no question here of amending
the French text. This only applies to the English text.
The latest suggestion which has just been made to me is to
add the words "including agricultural industries". Does
Mr. Wunsz King agree to that text?
H.E. DR. WUNSZ KING (China): I would prefer to keep these
two words "including agriculture".
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I do not
think that we should require to make the change very may times.
As far as I can see, the only exceptions we need to make are in
Article 13, paragraph 4 (c) on page 19, the last line but one - that
is the first point, and the second point is on page 22, Article 13A,
paragraph 1, the sixth line. If we make the corresponding change
as Dr. Coombs suggested, then I think that covers the case. 46
J. E/PC/ T/A/PV/39
DR. J.E. HOLLOWAY (South Africa): Mr. Chairmarn, alI these
suggestions mean exactly the same thing, and I suggest that at this
late hour we should not waste time on literarlystyle.
CHAIRMAIN (Interpretation): I propose the suggestion made
by Dr. Coombs - "including agricultural industries". I suppose
that the Commission will agree?
H.E. DR. WUNSZ KING (China): What is the actual position
now, Mr. Chairman?
CHAIRMAN (Interpretation): We do not use the words
"including agriculture". It is almost the same, but we will use
the words "including agricultural industries".
H.E. DR. WUNSZ KING ( China): Well, I do not mean to
introduce a reservation on this relatively small point, but I
would like to have the opportunity of examining the words further
with my technical experts. 47
Dr. H.C. COOMBS ( Australia): Could I refer back to the
note on Article 12A? The representative of the International
Monetary Fund has raised an objection to the last sentence on
Page 5 of that note. The precise words that are objecten to
are those that follow the word "Charter" in the third from last
line: "but subject to any other international obligations of
that Member which are not in consistent with its obligations
under the Charter".
The representative of the International Monetary Fund has
drawn my attention to the fact that the inclusion of those words
would appear to give any obligations entered into internationally
in relation to transfers greater authority than the obligations
of the Member concerned under the articles of Agreement of the
Internatioral Monotary Fund, and I feel that there is something
in his objection.
My recollection of the discussion in the Committee is to
the effect that this clause was included at the request of the
United States Delegate in order to ensure that a country which
had, in a treaty between itself and another Member, undertaken
to accept certain obligations in respect of transfer where an
industry had been nationlised, would not be able to use the
text of the Charter (if the obligations in the Charter were less
than those entered into in the agreement) to evade the
obligations entered into in the agreement.
I feel that the point that it was intended to cover would
be met, while meeting tho point raised by the representative of
the Monetary Fund, if we deleted the words from "but subject
down to the end of the sentence and inserted a now sentence to
the effect that this should not prevent a country talking
action to give effect to any prior obligations in respect of
such transfers as it may have accetpted in an international
agreement, provided that such action is consistent with its
obligations under the Articles of Agreement of the Monetary
Fund.
V G
CHAIRMAN: (Interpretion): I think that it would be
necessary that this test should be typed out.
CHAIRMAN: The Delegate of China.
Mr. WUYSZ KING (China): May I be permitted to come back
to this small point about the words"including agriculture",
because I am very anxious to dispose of my very small
reservation since I dislike too many reservrations to the text.
I would suggest the words "particuIar industries or
particular branches of agriculture". I wonder if this working
would be acceptable to my colleagues? I should think that
this wording corresponds with the French text very well.
CHAIRMAN (Interpretation): Is everyone ready to accept
this suggestion?
Adopted.
E/PC/T/A,/PV/39 49
S E/PC/T/A/PV/59
CHAIRMAN: I. everyone ready to except this suggestion?
(Agreed)
H.E. Mr. Wunsz KING (China): If this is accepted I am sure
that some other text will have to be modified accordingly.
Mr. SHACKLE (United Kingdom): I have already indicated
the references.
CHAIRMAN: We pass on to Paragraph 2 (a).
The Delegate of France
M. ROYER (France) (Interpretation): Mr. Chairman, before
starting the discussion on Paragraph 2, I would like to state that
the French Delegation interprets Article 13 as it interprets
Article 10, that is to say, that this Article has a general scope
and that it must be construed as permitting help both to nawly-
founded and established industries and to industries which have to
be reconstructed for different reasons, one of those reasons being
for war damage, and that the needs of both cases are taken care of
by this Article. I would like this declaration to be registered
in our records and I hope that the registration of such a decla-
ration in our records could mean the agreement of the Commissio
to this interpretation.
CHAIRMAN (Interpretation): Are there any objections to the
French proposal?
I hope that now we can turn to Paragraph 2 (a), Does anyone
wish to speak on this sub-paragraph? Are there any objections?
(Agreed).
Sub-paragraph (b): are there any objections?
(Agreed).
Sub-paragraph (c): are there any objections?
Does everyone agree to(sub-paragraph (e)?
(Agreed)
Therefore the whole of Paragraph 2 is approved. ER 50 E/PC/T/A/PV/39
CHAIRMAN (Interpretation): Paragraph 3. Are there any
objections?
Sub-paragraph (a.) Agreed.
I would only like to point out in sub-paragraph (a) that there
is a note made by the Legal Drafting Committee that this Committee
was unable to agree upon the meaning of the ,English phrase "sub-
stantial agreement. "
Dr. H.C. COOMBS (Australia) What does "substantial agreement"
really mean?
BARON P. de GAIFFIER (Belgium) (Interpretation): In New York
there was a long meeting of the Drafting Committee to try and find a
translation of the words "substantial agreement", and in the end the
French interpretation was "accord général" which could be translated
back into English "general agreement ."
M. ROYER (France) (Interpretation): I remember very well
that we were faced with the same Problemn in New York that the words
"substantial agreement" may be interpreted in two different ways in
French; one translation for it is that out of seven of eight people
who are gathered, five or six agree to a text. That is one way to
interpret "substantial agreement." 'The other way is when two
persons agree on 15 out of 18 points which are discussed. This is
another way of interpreting "substantial agreement." The French
way of saying "substantial agreement" would be that parties have
reached an agreement.
Dr. GUSTVO GUTIERREZ (Cuba): I would like to know from the
delegates of Great Britain or the United States what is their inter-
pretation for substantiall agreement." 51
E/PC/T/A/PV/39
CHAIRMAN (Interpretation) : I wanted to raise the same
question precisely.
Mr. R. J. SHACKLE (United Kingdom): It is with the utmost
trepidation that I shall try to explain those words. It seems to
me that those words would mean that all of the Members must agree
on something; therefore it is not a question of the number of people
who agree, but I think that what it means is that they agree to the
essentiaIs of fhe text; possibly without, aggreing on minor points
of detail.
CHAIRMAN (Interpretation): I think that therefore we could
have a French translation of the words.
Gentlemen, I invite you to ponder over this question so that
before the end of the discussion we may find a solution to this pro-
blem. I would like to know if anyone else wishes to speak on para-
graph 3, sub-paragraph (a).
No-one wishes to speak on this sub-paragraph? No comments?
No observations? 52
J. E/PC/T/A/PV/39
Therefore we pass on to sub-paragraph (b). Is everyone
agreed?
Agreed.
Sub-paragraph (c).
DR. H.C. COOMBS ( Australia): I am sorry, Mr. Chairman, but
I am not quite sure which point you are on now . Are you still on
the translation point?
CHAIRMAN (Interpretation). We have just approved
sub-paragraph (a) and sub-paragraph (b) of paragraph 3. I was
Just asking if there were any questions on sub-paragraph (c) and if
the Committee were roady to agree on sub-paragrph (c).
DR. G. GUTIERREZ (Cuba): Mr. Chairman, the point is to firm
the appropriate text in English and French for the words "Upon
substantial agreement being reached".
BARON P. de GAIFFIER (Belgium) (Interpretation): Mr. Chairman,
I think that the solution suggested by the Legal Drafting Committee,
that is, to suppress in the French text the word "substantial" is
the best one, because we find that word in various sub-paragraphs
and it would be better to stick to the solution presented by the
Legal Drafting Committee.
DR. H.C. COOMES (Australia): Mr. Chairman, this question of
*substantial agreement" does seem to me to be answered in part by
the words that are proposed to be cut out of the French text. As
I understand "substantial agreement", it mens sufficient agreement
to justify a decision by the Organization. It can only be a
question of judgement, and I think that has been recognised all the
time. I am not sure how that translation would read in French, but 53
J. E/PC/T/APV/39
I think it would express the essence of what Mr. Shackle has said
and also, if I may say so the essenoe of what Monsieur Royer said -
sufficient agreement to justify a. decision by the Organization.
(The Chairman made a remark which was not interpreted)
M. ROYER (France) (Interpreted): Mr. Chairman, I am afraid
I would not be able to define standards under which we could
reach an agreement.
DR. J.E HOLLOWAY (South Africa): Mr. Chairman, you yourself
and Monsieur Forthomme both know Flemish and French. May I
suggest that you try to translate the words "in hoofdzaak". If
you can translate these two words into French, you have got the
exact meaning of "substantial agreement". V 54
CHAIRMAN (Interpretation): If we just put in the French
text the word "suffisant", that would give the meaning. That
would mean that we do not need to reach complete agreement, but
the agreement must cover the essential points and be sufficient
to justify a decision of the Organization.
M. Angel FAIVOVICH (Chile) not interprated in English.
CHAIRMAN (Interpretation): We are only discussing here
sub-paragraph (c), and I do not ant to make a ruling on the
translation of "substantial agreement", for there are other parts
of the Charter where the words appear. We are only discussing
this sub-paragraph (c), and here I think the words "substantial
agreement" can be translated into French by "accord suffisant".
We therefore accept this translation in this particular case.
M. Angel FAIVOVICH (Chile) (Interpretation): Therefore,
should we have to give in the preceding cases a different trans-
lation of these words?
M. ROYER (France) (Interpretation): I agree, Mr. Chairman,
with what the Chilean Delegate has just said. As the word
"agreement" is used in the three cases with the same meaning, I
think we should use the same words. I do not want to look for a
Russian or Chinese translation, but I think that in French the
word "suffisant" is the best translation we have found up till now.
CHAIRMAN (Interpretation): Gentlemen, we shall adopt here
the words "accord suffisant" in the French text.
Paragraph 3 is therefore adopted.
We now turn to paragraph 4, sub-paragraph (a). Any comments?
Nobody has any comments to make? Adopted.
Sub-paragraph (b).
H.E. Mr. Wunsz KING (China): After the words "industry
concerned", I should like to add the words "or the branch of
agriculture concerned". 55
Mr. WUNSZ KING (China) : It is the seventh line from the
bottom.
CHAIRMAN (Interpretation): The Amendment refers only to
the English text. Does everyone agree? Adopted.
Mr.HARRY HAWKINS (United States): Mr. Chairman, the
Report of the Sub-Committee on the Draft submitted included a
report on paragraph (b), because at the end of paragraph 4,
which the Legal Drafting Committee deleted, I think the
intention of the Sub-,committee was that that qualification,
"having regard to the provisions of sub-Paragraph 2 (e)", should
appear in paragraph (b), in order to make sure that the sub-
paragraph (b) does not override and supersede completely the
provisions of paragraph 2 ( e).
I should therefore suggest that that clause be moved
down to paragraph (b), so that it would. read this way:
"if, having regard to the Provisions of sub-paragraph 2 (c),
it is established", and so on.
Mr. SHACKLE (United Kingdom): Mr. Chairman, I feel certain
that that accurately reflects the intention of the Sub-Committee
and I suggest that for that reason we make the change.
CHAIEMAN: Does everyone agree?
Therefore, the .Amendment suggested by Mr. Hawkins will be
included here.
Any other comments on sub.-paragraph (b)?
E/PC/T/A/PV/39 S - 56 E/PC/T/A/PV/39
H. E. Mr. Z.AUGENHALER (Czechoslovakia): Mr. Chairman,
reading here "any other practicable and reasonable measure
permitted under this Charter," I was wondering if the Charter
does permit of impracticable or unreasonable measures?
Mr. SHACKLE (United Kingdom): Mr. Chairman, I think the
Charter permits of series of unreasonable and impracticable measure
measures.
M. ROYER (France) (Interpretation): The statement just
made by Mr. Shackle is somewhat puzzling,because therefore this
would not be allowed under the provisions of Article 13 but
would be allowed under other provisions of the Charter, and I
wonder who would make a ruling or a decision between these two
sets of conflicting provisions.
Dr. H. C. COOMBS (Australia): Mr. Chairman, the provisions
are not conflicting. The Charter leaves Members free in a
number of respects and in those areas where the Members are free
they can take action of any kind whether it is reasonable or
unreasonable, The obvious example is in the field of tariffs,
where no restriction is made on Members at all. They are per-
mitted to impose tariffs of many hundred per cent if there so
wish.
That is proposed here is that Members should on occasion
be permitted to use methods which are precluded under the Charter
and it is suggested that they should be permitted to use those
methods in place only of the more reasonable measures which they
could use under the freedoms which they have in the Charter.
CHAIRMAN (Interpretation): Therefore I think it would
be better to maintain this expression "practicable and reasonable". E/PC/T/ A/PV/39
Are there any other comments on sub-paragraph (b)?
Baron P. DE GAIFFIER (Belgium) (Interpretation): The
letter (b) is omitted in the French text.
CHAIRMAN (Interpretation): Are there any comments on
sub-paragraph (c)?
H. E. Mr. WUNSZ KING (CHINA): Here again - and I am sorry
to say I am very agriculture-minded - I would like to add, after
the words "the industry", "or industries concerned" in the
english text, or, in the French text, "or branches of agriculture
concerned."
CHAIRMAN (Interpretation): The amendment will be made in
the English text; we all agreed upon it previously.
Are there any other comments on sub-paragraph (c)?
(Agreed)
Paragraph 5(a): are there any comments?
(Agreed).
S
57 ER.
58
E/PC/T/A/PV/39
CHAIRMAN (Interpretation): Sub-paragraph (b)
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I have a
very small purely verbal point to make. It is about the use of the
word "similarly" in the fourth line. That is a word which has been
introduced by the Legal Drafting Committee, and I think it is clear
was
that their intention was to imply that the condition /laid down in
(a), that is to say: "The Organisation shall, at the earliest oppor-
tunity, but automatically within 15 days after receipt of the state-
ment.... advise the applicant", and so on. The word "similarly"
is meant to bring in the same qualification,"at the earliest oppor-
tunity"actually within 15 days. I feel that that is too much of a
load on the word "similarly", and I would like to substitute this:
"in the manner provided for in sub-paragraph (a)."
CHAIRMAN (Interpretation): Does everyone agree with this amend-
ment ?
Dr. COOMBS (Australia): It would be better to use the words
"in the manner provided for."
Mr R.J. SHACKLE(United Kingdom): I would agree to that.
CHAIRMAN (Interpretation): Does everyone agree? Are there no
further comments on sub-paragraph (b)?
Therefore the whole of article 13 is adopted.
.Article 13 A - Transitional Measures. Paragraph 1.
Mr. WUNSZ KING (China) : Mr. Chairman, the same point comes
up here again. I would prefer the words: "particular industri es or
particular branches of agriculture."
CHAIRMAN(Interpretation): Does everyone adopt this amendment?
Do you all agree on paragraph 1?
Paragraph 2. ER
Mr.HARRY HAWKlNS (United States): Mr.Chairman, paragraph 1
iiprovides that notification shall be given by a Member before a
signature. I think that the sub-Committee will agree that the
notification of restrictions that would have been maintained should
be given before others, so that the extension of those lists could
be considered by other Members and could apply to similar obligations.
Now, if that is correct and concrete, it would require this change.
In (ii)(b), I would change the words "Member has notified the
other signatories of the Agreement or of the Charter, prior to such
signature", to read "prior to their signature."
M. ROYER (France) (Interpretation) Mr. Chairman, we are
faced here with a legal difficulty because the way to become a Member
of the Organisation is not by signing the Charter, but the new means
provided for adhering to the Organisation is that Members should
is
deposit an instrument of acceptance, which the new word for "'instru-
ment of adhesion" to the Charter, and therefore it may happen that a
State will never sign the Charter and yet become a Member of the
Organisation, and if a Member were not to sign the Charter , then I
wonder how this provision could be applied.
Now as to the exact moment when this notification should. take
place, there is another difficulty if we say here that this notifica-
tion should be made to the other Members before they sign the Charter,
because this will be a practical difficulty. Take an example: if
in two years time a Member decides to join the Organisation, how will
he then be able to notify, let us say 17 other countries, of the
measures which he intends to take if these other States have already
signed the Charter? This is a practical difficulty, and I do not
see exactly how we could solve it.
59 60
ER E/PC/T/A/PV/39
CHAIRMAN: (Interpretation): Have you got a proposition to
make in that case?
M. ROYER (Interpretation): Mr. Chairman, I think that
we ought to take the same time limit which will be the time when the
State becomes a Member of the Organisation, and that is to say a
time when this Member deposits his instrument of acceptation or
ratification with the United Nations because, as I have stated, there
- for
may never be a signature, and the time will have to be decided/when
the State becomes a Member of the Organisation. 61
J. E/PC/T/A/PV/39
BARON P. de GAIFFIER (Belgium) (Interpretation): If it is
only a question of date, could we not modify the text so as to
read "at the time when the Member deposits instrument of
acceptance".
MR. R.J. SHACKLE (United Kingdom): I venture to think that
the right time to take is the time before the authentic text is
established and, in the case of the general Agreement , that would
be the time of signature. If it is not accepted, it should be
before the date on which the authentic final text is established.
The reason for that is that it is necessary, when the final text is
established, for every participant in the conference to know what
is envolved in this provision, and therefore that should be the
limit of time. If you defer it to the time of acceptance, other
things may happen which the other participants of the conference
would have no means of knowing and they may have bought a pig in a
poke. The way to get over it, I suggest, is to say in the
fifth line "or if not a signatory of that Agreement 'when prior to
the establishment of the authentic text of the Charter". That, I
think, is the way to cover it in the first part.
Then, in (b) I think one would say "such Member has notified
the other signatories of the Agreemant or of the Charter prior to
their signature or to the establishment of the final text of the
Charter" .
I am afraid it is very complicated, but I hope I have made the
idea clear.
BARON P. de GAIFFIER (Belgium) (Interpreted): Mr Chairman,
I would like to state that the Belgian Delegation is not entirely
satisfied with the draft of article 13A; I would not like to waste J.
the time of the Commission now and therefore, with your permission,
I would like to know if we can get in touch with the Secratariat
tomorrow and suggest a few drafting modifications here which only
refer to the form of the draft itself?
DR. H. C. COOMBS (Australia): There seem to me to be certain
further practical difficulties about the suggestion, even as the
United Kingdom has mentioned it.
If, at the time the Charter comes into force, a country has no
intention of joining the Organization, it obviously would not
advise other Members of the measures which it was operating which
were in conflict with each other and which it wished to continue,
but if, some years later, it saw the light, it would be precluded
under this measure from making, applications. It would seem to me
to be reasonable that, in such cases, the Organization could ask
for information when the-application was made for membership to
decide beforehand what should be done about it, whether they would
be permitted to continue those measures or whether they would have
to amend them before going granted membership. I am not quite
sure what the precise wording should be to meet that point, but that
is a further complication on top of what the United Kingdom
Delegate has suggested.
Mr. R.J. SHACKLE (United Kingdom): I am inciined to suggest,
Mr. Chairman, that all we can feasibly hope to cover in this
article is the case of' the original signature of the original
adherents. I feel that as regards later adherents, it will have
to be a question, as it were, of their negotiating with the
Organization the terms on which they come in. One cannot foresee
particular cases and so I do not think we need to mention them.
Then, it would be possible to arrange with each new adherent what
would be suitable terms.
CHAIRMAN (Interpretation): Gentlemen, as far as the date where
transitory Members become effective is concerned, we have two
proposals, one by Mr. Shackle and the other one by Monsieur Royer.
E/PC/T/A/PV/39 V.
M. ROYER (France) (Interpretation): Mr. Chairman,
Mr,. Shackle 's proposal and my proposal differ because they are
not considered in the same light. I think that Mr . Shackle
shows less Christian indulgence to the recanting sinners and
that he wants to reserve the advantages of the club for the
original members of it, and feels that the flock who have found
their way again into the fold of the Organization should not
be granted the same advantages.
I will not press my point here, however. The only thing
is that I doubt if the Organization will have the right of
negotiation with future Members, because I do not know of any
provisions of the Charter which enable the Organization to waive
certain obligations in favour of joining Members in certain cases.
Mr. R.J. SHACKLE (United Kingdom): I hesitate to express
a very off-hand opinion, but it does seem to me that as far as
the question of arranging conditions for the entry of later
comers is concerned, that is probably provided for under
paragraph 2 of Article 65, as now suggested in the Report of the
Committee on Chapters I, II and VIII.
If you look at paragraph 2 of Article 65 - Membership, it
reads like this: "Any other State whose membership has been
approved by the Conference shall become a Member of the
Organization". Well, the power to approve implies the power to
disapprove: the power to disapprove implies the power to approve
on conditions. I think that is logical.
Mr. L.C. WEBB (New Zealand): Mr. Chairman, I would strongly
oppose the idea that there should be different conditions on entry
as regards this Airticle for States which may Join the Charter V 64 E/PC/T/A/PV/39
after the original Members. I do not think it is a satisfactory
proposal at all. I think the rights under Article 13A should
be the same for both classes.
Mr. R.J. SHACKLE(United Kingdom): I do not want to
prolong the debate unnecessarily, but I would observe that there
is an essential difference of circumstance as between the
original adherents and later adherents.
In the case of the original adherents, what they are doing
is known at the time when the General Agreement or the Charter,
as it may be, is drawn up. Each of the negotiating countries
knows what the other is doing. But that is impossible in the
case of later adherents, and it seems to me that that is the
objection to making the date of adherence the determining moment
at which you have to notify the other Members.
It seems to me, for that reason, that that difference of
circumstance does justify having some arrangement before the
Organization can make reasonable conditions with later adherents
on this question of transitional measures. There are essentially
different circumstances which need to be treated by different
methods. I do not regard it at all as a case of discrimination.
Dr. H.C. COOMBS (Australia): I do not knew whether it
is desirable to continue this discussion, Mr. Chairman, but there
does seem to me to be some difference between the two cases.
As I understand the purpose of this clause, it was to
provide prospectiveMembers with the protection that they could
stay out if they thought this provision was going to be unduly
abused by the other prospective Members, and therefore, before
they decided to come in they were entitled to know what measures
other countries were going to maintain under this. Once they 65
have, however, become Members and it is a question of new
Members, the position is rather different. The protection
they have then is not staying out of the Organization but
keeping other people out. The requirement does seem to me
to be that they should be advised of what measures a country
wishes to maintain at the time of making its application. But
if it is decided to admit the applicant Member when they know,
it seems reasonable that, as the Delegate of New Zealand has
suggested, the incoming Member should be given the same conditions.
If that suggestion is considered worth while, it could be
implemented by limiting the provisions of the present Article
to Members who have become Members on or before the date on
which the Charter comes into force, and have an additional one
which enables a Member who joins after that date to get similar
provisions provided that all Members are advised what he wants
to maintain before or at the time his application for membership
is received.
Mr. R.J. SHACKLE (United Kingdom): For my part, I should
think that was satisfactory, Mr. Chairman.
CHAIRMAN (Interpretation): Does everyone agree to the
proposal that was made by Dr.Coombs?
Everyone agrees. 66
CHAIRMAN: (Interpretation): Gentlemen, a further small
effort to make.
. Paragraph 3.
Mr. AUGENTHALER (Czeohoslovakia) (Interpretation):
Mr. Chairman, this remark refers to the French text, and under
(iii) there is no French word corresponding to the English
word "provided", and therefore the provisions here are not
introduced as they are in the English text by a word, and
therefore the French text ought to be amended to read as the
English text does.
CHAIRMAN: (Interpretation): Due notice will be given to
your remarks.
Any other remarks? 13A is therefore adopted.
Mr. TORRES (Brazil): Mr. Chairman, just a minor point.
I think it wculd improve the arrangement of this Article if
we could make 3, 2, and 2, 3. It would. be the more logical order.
Mr. DEUTSCH (Canada): Mr. Chairman,have passed. over
para. 2 at the bottom of page 23? I get confused here with these
various numbers.
CHAIRMAN (Interpretation) :You are quite right, Sir,
paragraph 2 has not been examined. Any comment to make on
paragraph 2?
Mr. DEUTSCH (Canada): Mr. Chairman, on the top of Page 24,
the second line, there are some words in brackets "including
negotiations affecting preferential margins". A similar
statement is contained in paragraph 3 (a) on page 13, but
the middle of the paragraph, the same statement is presented,
G G 67 E/PC/T/A./RV/39
but there are no words in brackets. This difference between
the two texts might give rise to some misunderstanding. In one
case we have inserted the words in brackets, and in the other
we have not. If it is agreeable to the Committee I would
suggest that we drop the words in brackets, provided it is
understood that in both cases the obligation referred to - in
the case of paragraph 2 on page 23, the word "obligation" in
the fourth line - that "obligation" refers to both obligations
respecting the binding of tariffs and obligations respecting
the binding of preferential margins.
If it is understood. that that obligation refers to both
situations, then we can drop the word in the brackets, and
remove the possible confusion.
Mr. SHACKLE(United Kingdom): Mr. Chairman, I would like
to support the suggestion of the Canadian Delegate concerning
the words in brackets. It seems to me quite clear that the
words must necessarily include preferential margins.
CHAIRMAN (Interpretation): Therefore, it seems that these
two sections of words could be deleted without any trouble.
Therefore, Gentlemen, we have to examine Article 15B.
Mr. TORRES (Brazil): Mr. Chairman, is it agreed that we
invert the order of these two paragraphs?
CHAIRMAN: Yes .
Mr. WEBB (New Zealand): Mr. Chairman, page 2 of the
Committee's Report refers to certain reservations on certain
aspects of this Article. I assume that those reservations
will be carried forward? CHAIRMAN: The Delegate of China.
Mr. WUNSZ KING (China): I am pleased that this point
was raised. As a matter of fact, the Chinese Delegation did
make a reservation to Articles 13 and. 13A.. For this purpose,
with your permission, I would like to react a short statement.
The Chinese Delegation appreciates the painstaking efforts
made by a number of` Delegations to reach a satisfactory solution
for this Article. Unfortunately these efforts have not succeeded
in producing a formula which will lead to a unanimous acceptance.
We still believe that the miracle of prior approval
should not form the basis of this Article, The- reasons are
obvious enough. In the first place, we have not been convinced
how this principle is to be applied with sufficient elasticity,
if applied at all, to cases where measures are to be taken in
order to meet balance of payments difficulties and other similar
cases. Whereas in cases where a county desires to resort to
protective measures for the purpose of economic development,
this same principle is held to be secrosanct, and must be
applied in a far more rigid manner.
Secondly, the implementation of this principle will, we
are afraid, have the affect of defeatIng the very purpose of
fostering economic development.
While maintaining its Reservation which was referred to in
Document T/162, on page 2, the Chinese Delegation is nevertheless
prepared, in the interests of unanimity and solidarity, to
recommend Articles 13 and 13A. as they are at present worded to
the Chinese Government for its futher consideration, without,
however, committing the Government to those Articles without
claiming their re-examination at the World Conference.
E/PC/ T/A/PV/39 S
CHAIRMAN: The Delegate of India.
Mr. B. N. ADAKAR ( India): - Mr. Chairman, the Indian
Delegation has also maintained its reservation to Article 13
and the whole subject dealing with quantitative restrictions
for protective purposes, but they would like to inform the
Commission that they have also reported Article 13 as now
revised to their Government and, if the Commission will permit
them, will make a further statement on the subject within a
few days, as soon as they receive orders from their Government.
CHAIRMAN: The Delegate of the Lebanon.
Mr. A. NASSIF (Lebanon) (Interpretation): Mr. Chairman,
I have been entrusted by the Lebanese Delegation to make a
formal statement here. The Lebanese Delegation is happy to
see that some evolution has taken place in Geneva as regards
the texts which were formally proposed and adopted in London
and New York. Nevertheless, taking into consideration the
Agreement which binds Lebanon to the States of the Arab
League, and which foresees the economic development of these
countries after common agreement, the Lebanese Delegation
maintains the reservation it has made and asks to postpone
its decision on this Article until all the States of the Arab
League are gathered at Havana.
CHAIRMAN: The Delegate of New Zealand.
Mr. L. C. WEBB (New ZeaIand): Mr. Chairman, I only wish
to state that the New Zealand Delegation is in the same position
as the Indian Delegation. We have submitted the revised text
of this Article to our Government and have no instructions.
69 E/PC/T/A./PV/39
CHAIRMAN: (Interpretation): The Delegate of Chile.
Mr. Angel FAIVOVICH (Chile) (Interpretation): Mr.
Chairman, the position of the Chilean Delegation in regard to
Articles 13 and 13(e)will depend upon the fate of the amendment
Introduced to Article 25 and on the fate of Article 25 itself.
CHAIRMAN: The Delegate of Czechoslovakia.
H.E. Mr. Z. AUGENTHALER (Czechoslovak): Mr. Chairman,
as to Article 13(b) I would like only to state that the matter
is of such imporance that, in my view, it would be advisable
that the Organization should take, in such cases, the prior
opinion of the Economic and Social Council.
May I ask Mr. Augenthaler why, and in what
circumstances, the Organization should ask the opinion of the
Economic and Social Council?
H.E. Mr Z. AUGENTHALER (Czechoslovakia ): Mr. Chairman,
the Economic and Social Council may be consulted if there is a
question of forming new preferential arrangements or new
preferential blocs. That is why I think it would be advisable
to have the opinion of the Economic and Social Council.
CHAIRMAN (Interpretation): Gentlemen, due notice will
be taken of the reservations which have just been made here.
there any further comments on Article 13 (.b) ?
The Delegate, of Chile.
70
S Mr. ANGEL FAIVOVICH (Chile): (Interpretation): Mr. Chairman,
since the opening of the debate in this Conference, the Chilean
delegation has made known its position as regards preferential
agreement to foster economic development, and the Chilean delega-
tion states that in cases of such new preferential arrangements it
could not agree to the principle of prior approve all. Therefore we
had to maintain a reservation which we had made on previous
occasions. I would like to add a few words on the question of
a quorum which is necessary to the procedure for the approval of
the Organisation. In spite of the fact that the sub-Committee did
not make a final decision on this question, nevertheless the quorum
of two-thirds of the members present and voting which is suggested
seems to me to be quite exaggerated and would constitute a threat
to requesting Members. The result would be that all possibility
of action which is given to the Members in the provisions of this
Article would vanish, and therefore if this quorum as suggested
here is maintained, the Chilean delegation would have to reserve
its position on the whole of Article 13B.
CHAIRMAN (Interpretation); Gentlemen, the Chilean delegate
has raised an important question, the question of the necessary
quorum in order to have an affirmative vote of the Conference. In
fact, the sub-Committee did not propose any formula: we only find
in the text in brackets "by an affirmative vote of two-thirds of
Members voting", and this is an important issue, that the Commission
should decide on.
M. J. TORRES (Brazil): Mr. Chairman, the position of the
Brazilian delegation regarding the question of the new preferential
arrangements has been, during the time in which this Conference has
met, clear and unequiv idal. If we have collaborated in the sub-
Committee to reach some agreement regarding this matter, it was only
71
ER E/PC/T/A/PV/39
because we wished to have a candid attitude, but I am afraid we
only
would/continue in this attitude if the two-thirds vote is adopted.
If, however, this form of voting should be substituted by one of
equal majority, we would not recommend this to the consideration of
our Government, and we would have to reserve our position.
Dr. A.B. SPEEKENBRINK (Netherlands): Mr. Chairman, I think
that we are here faced with a considerable difficulty. How can
we know whether we could have a quorum of two-thirds or threefourths
or even have a simple majority, if we do not know what the votes
are worth? I have seen from the report that the Committee on Chapter
VIII has not settled the question of voting, so we do not know whether
we will have weighted voting or another type of voting. If we do
not know that I- do not see how we can decide on the question of
whether we should have a simple majority or a ,two-thirds majority. 73
M. Angel FAIV VICH (CHIle) (Interpretation): Mr. Chairman,
the question which has been raised here is a very difficult
question of substance for the reasons which were just given by
the Netherlands Delegate, and I think we ought to leave the
solution of this problem to the World Conference. Actually,
any decision taken here by 17 Members may not reflect accurately
the point of view of 70 States which will probably take part in
the World Conference.
Chapter VIII will be sent for examination to the World
Conference and there the World Conference will be able to make a
decision also on this problem and choose just criteria and make
a decision which will correspond to the large majority of the
States participating in this World Conference.
CHAIRMAN (Interpretation): Gentlemen, it is already very
late. I would like to ask the question: do you want to pursue
the Meeting now or adjourn and resume our Meeting in an hour's
time ?
Mr . QUNSZ KING (China) : Mr. President, as Chairman of the
sub-Committee on Voting I would like to suggest that the question
of voting in connection with this paragraph be postponed until
the report on Voting is taken up by Commission B one of these days
and a decision, if there is any decision at all, is reached on this
very difficult and important matter.
CHAIRMAN (Interpretation): Gentlernen, we are faced now with
a formal proposal by the Chinese Delegate to adjourn the discussion
on paragraph 1 of Article 13B on this question of voting, and,
therefore, this means that we should not take up this discussion
now but leave the solution of the problem to a further and later
examination. If you agree to this proposal this would mean that
the whole question of tackling l3B would be adjourned to later
date. p.
Mr. J. TORRElS (Brazil ): Mr. Chairman, I just want to add
that when I spoke a while ago I was, of course, speaking on the
assumption of the "One country, one vote" basis. I think in
that regard the position of the Brazilian Delegation is also clear
and unequivoal. I think that this Conference should indicate
to the Third Conference what is its opinion on the matter.
But I have no objection to deciding this later on during this
Session.
Dr. G. GUTIERREE (CUba): Mr. Chairman, taking into
consideration the stage of our work, we do not feel it convenient
to postpone the discussion on any of the matters that are common
to the consideration of the Commission, but it is preferable to
settle them and especially when we know that the question of voting
is going to be subject to many discussions. And, after all, we
are only preparing a draft for another Conference, and as we have
taken this matter from the beginning I think that the suggestion
made in the trainning by the Delegate of Chile is very wise: we
should leave the two texts with the words as they are in brackets
and show that there are two possibilities and leave the decision
to the World Conference. I make the suggestion in that sence,
that we leave the text like it is and subject it to the decision
of the World Conference.
Mr. Harry HAWKINS (United States): Mr. Chairman, the only
difficulty with the suggestion that I see is that we have to decide
fairly soon what does into the General Agreement on Tariffs and
Trade. I take it that if the proposal of the Chilean Delegate
is adopted, the first paragraph of Article 13B would not be
included in the General Agreement,
Mr. R. J. SHACKLE (United Kingdom):
74
I would like to support 75
that suggesttion. It seems to me that in the meantime the
matter can be dealt with by correspondence with Article 38,
paragraph 4, and also correspondance with the provision regarding
general dispensing power which would ultimately reside in the
Organization. I suggest that is the best way to leave the
matter.
Dr. H.C. COOMBS (Australia): Mr. Chairman, it does not:
seem to me to be necessary for us to take into account here
whether or not this Clause goes into the General Agreement.
This is not the only clause or Article of the Agreement about
which there is not unanimity and it is far from decided as yet
what will, in fact, go into the Genaral Agreement, or whether
it will take the form of the draft we now have presented to us,
and, therefore, it does not seem to me we need worry about
whether this does or does not so into the General agreement . If
it seems wiser to defer the decision because of the nature of
the problem to the World Conference, then I think it should be
so postponed without worrying about the effect of that decision
on the General Agreement . 76
J. E/PC/ T/A/PV/39
CHAIRMAN (Interpretation): Gentlemen, we are faced with the
proposal made by the Chinese Delegate to leave the solution of
this problems to the world Conference. This suggestion was
seconded by a certain number of Delegations. What is the
Commission's opinion on this question? Is any one opposed
DR. A.B. SPEEKENBRINK (Netherlands): No, provided that we
have no solution of the voting questionhhere in Geneva.
CHAIRMAN (Interpretation): Of course, it is understood that
if we see any possibility before we break up in Geneva of solving
this problem, we shall do so, but otherwise we shall leave the
question open until the World Conference.
M. J. TORRES (Brazil): Mr. Chairman, I am for deciding this
question here and now. If it is left as it is, I will have to
enter a reservation pending, a decision on the voting question.
CHAIRMAN:: Monsieur Royer.
M.ROYER (France ) (Interpretation): Mr. Chairman, the French
Delegation has no objection to leaving this question for a
solution by the World Conference, but for a solution which will be
taken by the wiorld Conference at the same time as the solution on
the question of voting, as a whole.
I want to refer here to observations made by the United States
Delegate and supported by the United Kingdom Delegate. These
observations referred to the implication of the deletion of
Article 13 B in regard to the general Agreement on Tariffs and
Trade.
There are two solutions in this respect. The first one Is
that provisions should be included in the General Agreement on 77
Tariffs and Trade which would be of a different character than the
provisions which might be adopted it Havana.The other solution
is the complete deletion of Article 13(B) from the General
Agreement on Tariffs and Trade, and I would like to ask the
countries which are interest, in this Article 13(B) what solution
they would propose to this problem ?
The sub-committee made a proposal, and I wolud not like to
refer to this proposal now, but I would like to offer a possible
solution which would be similar to the one which was adopted in the
case of paragraph 4 of Article 28, that is, to leave the conditions
on the voting problem and the conditions on procedure to the
Organization, as is provided for in Article 71. I wonder whether
the Members which are interested in Article 13(B) would adhere to
this solution? Otherwise, if we leave the solution of this
problem to the World Conference, we might be faced with a dead-lock
as regards the General Agreement on Tariffs and Trade at that time.
CHAIRMAN : The Delegate of Cuba.
DR.. G. GUTIERKEZ (Cuba): Mr. Chairman, when the Cuban
Delegation seconded the motion made by the Chilean Delegation, they
did not wish to make any reference to the General Agreement on
Tariffs and Trade, because we have very peculiar views on the matter
and we prefer to leave this matter to the World Conference in order
to give enough time to all the deIegations to make a decision,
because we know that it is a matter of importance.
However, now that it has been mentioned as a question to be
considered as a provision of the General Agreement, I must say that
the Cuban Delegation feels that they are beginning to think that it
is impossible to sign an Agreement with certain provisional texts
that are going to be modified two months afterwards, texts that J.
are going to be taken to Parliament, open to discussions and to
debates of administration and operation, only to be modified a
few days afterwards, and at the next meeting of the Tariff
Committee we are going to present a motion formally that not one
single Article of the Charter be inserted in tne Trade Agreement,
but that the Trade Agreement be only and, exclusively a Trade
Agreement and that it should wait for the last text of the Charter
to be signed. That is the technical position. Trying to sign
an Agreement on a text that has not been agreed upon is no
agreement at all. However, we do not want to stress this question
here now, but we will stress it in full force in the Tariff
Comnittee, and that is why I think that there is no importance for
us in the question whether the Article should be or should not be
incorporated in the Trade Agreement. E/PC/T/A/PV/39
CHAIRMAN (Interpretation): Gentlemen, the situation is,
therefore, as follows: A certain number of Delegations suggested
that the question should be referred to the World Conference for
a solution. Other Delegates stated in reply that this delay
might create certain difficulties with regard to the conclusion of
the General agreement on Tariffs and Trade, which is in the
process of being negotiated. Two Delegates indicated the
inconveniences of such a delay, and two other Delegates indicated
that these inconveniences should not be taken into consideration
and influence our decision here.
It seems to me that as the discussion is now exhausted and
the position is somewhat confused, the best course is to take a
vote on the question. Therefore, we shall now take a vote on
the Chilean proposal, which is to refer the examination of
Article 13(B) to the World Conference at Havana. Will all those
Delegates who are in favour of referring this question to the
World Conference please raise their hands?
(Nine hands were raised)
Who are the Delegates who wish to vote against that
proposal?
(The Delegate of Brazil raised his hand).
The proposal made by the Chilean Delegate is carried.
Gentlemen, before we adjourn, a still have to consider two
notes.
M. J. TORRES (Brazil): Mr. Chairman, may I ask that the
reservation of Brazil, pending the decision of the vote, be noted?
CHAIRMAN (Interpretation): The reservation made by the
Brazilian Delegate will be taken into consideration.
Gentlemen, you all now have before you the provision to be
79
V V
added to paragraph 2 of the comment on article 12A., This reads as
follows:
"It has also been recognized that the provisions of paragraph
2 (a) (iv) and 2 (b) are not applicable when the measures of
transfer of ownership have been affected pursuant to the terms of
a treaty of peace or in conformity with other international
agreements related to the conclusion of the war".
I suppose that everyone agrees to this text?
(Adopted) .
There is still another text to read: We now have before us
the revised text of the Explanatory Note on Transferability which
was submitted to us by Dr. Coombs. It reads as follows:-
"Page 5, paragraph 3, lines 11 - 13:
Delete the words ". . . but subject to any other internatonal
obligations of that Member which are not inconsistent with its
obligations under the Charter."
Substitute the following:
"This should not prevent a country taking action to give
effect to any greater obligations in respect of such transfers
as it may have accepted in an international agreement provided
that such action is consistent with its obligations under the
Articles of Agreement of the International Monetary Fund."
Mr. Seymour RUBIN (United States): I would suggest the
substitution of the word "shall" for the word "should" in that
sentence.
M. ROYER (France) (Interpretation): Mr. Chairmen , it seems
to me that although I thought I knew the English language, I was
80
E/PC/T/A/PV/39 81
mistaken, because the word "Charter" seems in every instance to
be translated by the words "International Monetary Fund". I
thought that the obligations ought to be consistent with the
obligations under the provisions of the Charter, but it seems
to me that the word "Charter" has been translated as "obligations
under the Articles of Agreement of the International Monetary
Fund".
Do we assume that the obligations under the Articles of
Agreement of the International Monetary Fund have a more general
character than the obligations under the Charter?
We proposed a draft in this matter, and we were asked to
drop this draft; but nevertheless it appears to me that when
we started the discussion in the beginning we decided to set up
an internationally code which was to be considered as a Charter
on trade and employment. I wonder if the text which we have
been asked to elaborate does not seem to be too mediocre, and the
guiding text - "the Bible" - is always the Articles of Agreement
of the International Monetary Fund.
If that is so, I do not see why we have wasted time setting
up provisions on investment. It would have been easier, perhaps,
to have written something into the Articles of Agreement of
the International Monetary Fund. Or do we think that the
Charter that is our text is only a minor text, and that the
Articles of Agreement of the International Monetary Fund should
be considered as "the book of reference"? Mr. Chairman, I would,
therefore, ask that the text which the French Delegation proposed
here should be adopted. 82
CHAIRMAN (Interpretation): Mr. Royer, I think there
is nothing very alarming in this text here, and in a sort of
know I
way it represents only a "good neighbour" attitude towards a
specialised Agency which is more ancient than our own forthcoming
Agency, and if we read the text here, we see that this should
not preveiw a country from taking action to give effect to any
obligation in respect of such transfer as it may have accepted
in an international agreement, provided that such action is
for consistent with an obligation under the Articles of Agreement
of the International Montetry Fund.
There is, as I have stated, nothing very alarming in this
,_».provision, but to satisfy you we might add also"if consistent
with its obligations under the Charter .
Mr. RUBIN (United States): Mr. Chairman, I am in perfect
agreement with the substance of the suggestion you have just
made, but I wonder whether you would not take care of the problem
in a much more simple way.
As I understand it, the difficulty found by the
Representatives of the Fund is that there might be some
international obligations on a Member not inconsistent with the
obligations under the Charter, but which might, however, be
inconsistent with the obligations undertaken by a country
which is a Member, and also a signatory, of the International
Monetary Fund.
Now it seems to me that perheps we might take care of that
entire problem by adding one word to the text which we already
have before us in Document T/162. As we merely say "but
subject to any other international obligations of that Member
which are not inconsistent with its obligations under the
Charter," let us add the word "existing" after the word "other"
and before "international". It seems to me if we do that we
w ill take care automatically of the possibility that a Member 83
may have had obligations inconsistent with the Fund prior to
its signature of the Fund Agreement. If it did, and if it
had signed and put into effect the Fund Agreement, then those
obligations would never have existed. So by adding " existing"
after "other", it seems to me we can eliminate this entire
Amendment, and eliminate another, perhaps unnecessary, reference
to the Fund.
CHAIRMAN: Agreed?
Mr. ROYER (France): Agreed.
Dr. COOMBS (Australia): Agreed.
Mr. BASCH (International Bank): I was present at the
Meeting of the Sub-Committee, and I know how difficult it was
to reach an agreement on this particular Explanatory Note.
It was considered important by some Members of the Committee
and when Mr. Royar said this Note should mean something to the
ITO, nobody thought of that, it was nobody's idea.
The simple idea was, that Members of the Sub-Committee should
ask the Fund and the Bank, what will be the position in the case
of paying compensation - what are the provisions in the Fund
Agreement? This referred. to the transfer of payments, and we
tried to summarise in the Note what the situation really is.
Therefore, when we found in this Note that in c (ii) the last
sentence reads: "but subject to any other obligations of that
Member which are not inconsistent with its obligations under
the Charter", the Representative of the Fund asked, what are
financial obligations not inconsistent with obligations under
the Charter? Because that whole sentence and text of this Note
deals only with the provisions as interpreted and/or stated
in accordance with the agreement of the International Monetary
Fund.
E/PC/T/A/PV/39
G 84
This was the reason why it was suggested it would be more
logical to make the whole article read consistently, and to
amend it as was suggested now by Dr. Coombs, so that there
should be no misunderstanding that there might be some other
Agreement which would provide for payments -but only if they
are not inconsistent with Members' obligations under the
articles of the Fund.
It is a discussion which took many hours in the Sub-
Committee, and which finally satisfied the Members of the Sub-
Committee; and therefore I would like on behalf of my colleagues
of the Fund to suggest, if possible, acceptance of the form as
proposed by Dr. Coombs. S E/PC/T/A/PV/39
CHAIRMAN: The Delegate of the United Kingdom,
Mr. SHACKLE (United Kingdom): Mr. Chairman, I venture to
think that the representative of the International Monetary Fund
and the International Bank can be fully satisfied with the amend-
ments Mr. Rubin has proposed, because clearly the Articles of
Agreement of the International Monetary Fund and the Statute of the
International Bank are existing international obligations. I hope
no one will discover they are in conflict with anything in the
Charter. I think this covers everything which concerns the
Bank and the Fund.
CHAIRMAN: The Delegate of Australia.
Mr. B. V.HARTNELL(Australia): Mr. Chairman, I have indicated
that I am in accord with the proposals of Mr. Rubin and I continue
to be in accord with them, but, in view of the observations of the
representative speaking on behalf of the Fund, and in view of the
fact that there does not seem to be any perticular virtue in the
words which stand already in the Report which is the subject of
our discussion, I wonder whether we could not satisfy everybody
concerned by adopting the proposal which vou yourself made, Mr.
Chairman, which was to delete these words now standing in the
Report, to incorporate the words proposed by Dr. Coombs, and to add
to those words, after the word "obligations" in the last line but one,
the words "under the Charter and," Then I think M. Royer would be
satisfied; I think the Bank would be satisfied; and I think it
would not detract from the general purpose of the Report .
CHAIRMAN: (Interpretation): Gentlemen, Mr. Rubin marked his
agreement of this suggestion, M.Royer agreed to this modification
of the text, and the Australian Delegate adheres to it now. There-
fore, as it is very late, I would suggest that everyone should adhere
to this text. Is that agreed?
(Agreed).
The Meeting is adjourned.
The Meeting rose at 8.45 pm. |
GATT Library | nr753vy1083 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Thirty-second Meeting of Commission A held on Wednesday, 23 July 1947, at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, July 23, 1947 | United Nations. Economic and Social Council | 23/07/1947 | official documents | E/PC/T/A/PV/32 and E/PC/T/A/PV.31-34 | https://exhibits.stanford.edu/gatt/catalog/nr753vy1083 | nr753vy1083_90240167.xml | GATT_155 | 10,131 | 61,402 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
CONSEIL
RESTRICTED
E/PC/T/A/PV/32
23 July l947
ECONOMIQUE
ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.,
VERBATIM REPORT
THIRTY-SECOND MEETING OF COMMISSION A
HELD ON WEDNESDAY, 23 JULY 1947, at 10.30 A.M. IN THE
PALAIS DES NATIONS, GENEVA
Mr. ERIC COLBAN (CHAIRMAN) (NORWAY)
Delegates wishing to make corrections in their speeches
should address their communications to the Documents
Clearence 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/A/PV/ 32
CHAIRMAN: The Meeting is called to order.
At our last meeting we were discussing Article 18; (2)(o)
and we agreed, I think, that the decisive point in that sub-
paragraph was Point(iii-on which the opinions in the Sub-committee
were considerably divided.
At the end of our last meeting the United States Delegate
made a compromise. proposal which has now been distributed as
Document W.251, and we agreed that between our last meeting
and today the Delegates would examin that suggestion and soc
whether it would enable Delegates to agree to the whole text
of sub-paragraph (c). I do not need to ask the United States
Delegate to explain his proposal, because you have had it in
your hands for some days, but I would like to know whether any
Delegate has any remarks to make or any objection to present
on that proposal.
Th_ Delegate of Australia.
Mr. C . E. MORTON (Australia): It appears to the Delegation
of Australia, Mr. Chairman, that multiple currency practices
have little to recommend them in any way. However, they are
something with which the International Monetary Fund found itself
burdened at its inception end consequently a certain toleration
for a certain period has to be extended. We are entirely
opposed to them, but we are faced with the position that they
exist and, in the meantime, a country may regard itself at
liberty to take advantage of their operation within the limits
proposed by the International Monetary Fund.
We see great dangers, both in regard to country's exports
and to a country's imports from multiple currency practices and,
as regards our experts to them, we think that the paragraph of the,
new draft, which says thit for the pur;3oses of importation e par
ratc should bs used, or no higherrate, protects us fully.
S
- 2 - S
As regards imports into our own country, we feel that
multiple currency practices may, in certain circumstances,
constitute an export subsidy. This position has been brought
to the notice of the Sub-committee, ho have agreed,by the
issue of a Note on Article 17, Paragraph 2, thst a country
may deal with multiple currency practices by means of
countervailing duties in such circumstances.
There is, however, another element of which we are mis-
trustful. In certain circumstances, multiple currency
practices amount to a partial depreciation of a country's
currency. In such cases we did not think we should partially
deal with the deletarious effects of multiple currency
practices by means of insisting that the value for duty should
be converted at the par rate. We think we should deal
with it entirely as a piece of dumping, or as a dumping
measure. Therefore we propose that the Note to Paragraph 2
of Article 17 be amended in the manner in which I have
circulated a paper this morning, which indicates that, in
addition to the subsidy element, the dumping element which
occurs when ths multiple currency practice amounts to a
partial depreciation of currency may be taken care of by
action under Paragraph 1 of Articls 17.
We have previously expressed our objection to multiple
currency practices, but we do not think that an Article on
valuation is the place at which we should attempt to protect
ourselves. Thearefore we propose the addition of Note on
anti-dumping measures and duties which will enable us to
take protective action in that regard.
CHAIRMAN: You have heard the observations of the Australian
Delegate. He does not object to the amendment presented by the
United States Delegate, but if that amendment is agreed to he
suggests a re-draft of the Explanatory Note to Article 17, Paragraph
2. I would first ask -whether any other Delegate has any objection
to the United States amendment as presented in Document W.201.
- 3 - 4
ER E/PC/T/A/PV/32
M. L. ROUX (France) (Interpretation): Mr. Chairman, I should
like to ask two questions. In the first place, what is the
difference between the american proposal now before us , and the
previous text of paragraph 2(c)(iii), which was not accepted by the
Commission? It seems to me that those proposals lave the
Member States free to determine any rate, and including an
arbitrary rate of exchange.
My second question is directed to the representative of the
International Monetary Fund, who, on s occasions, was good
enough to give us good advice. I should like to have his opinion
on the American proposal.
CHAIRMAN: Then perhaps, it would be best to try to get a
reply to the second point brought up by the French Delegate. Is
the representative of the International Monetary Fund prepared to
give his opinion on the United States amendment?
Mr. Ernest STURC (International Monetary Fund): For reasons,
Mr. Chairman, which we have explained at length in tne Sub-Committee
on this Article,we viewed,with grave concern, the American proposal
on 2(c) (iii), as it was previously proposed. At present the
amendment is considerably closer to our position on this question.
Nevertheless, if the American Delegation itself did not commit
itself yet to it fully, we would reserve our position. As a merit
of it, I would say that the question of a single rate additional to
the par value rate is still a possibility within this amendment, but,
in the long run, it will be eliminated by the procedure as outlined
in the Amrican proposal, and, therefore, it is much closer to
what we desire, namely, that a single uniform and par value system
should be established, throughout the world.
CAIRMAN (Interpretation): Is the representative of France
satisfied by the explanation which has been given by the 5
ER E/PC/T/A /PV/32
representative of the International Monetary Fund?
M. L. ROUX (France) (Interpretation): I am satisfied to some
extent, Mr. Chairman, only because this is rather a technical
problem. What will happen in fact is that, when the Charter is
adopted, and this was also recognised by the representative of the
Monetary Fund, the general rule which will be applied with regard to
countries applying duties calculated on the basis of the ad valorem
price will be, in its essence, what was laid down in the original
United States proposal, which was not accepted by the Commission.
It is only later when an agreement will be coneluned between the
Organization and the Monetary Fund, that it will be possible to
abandon these arbitrary practices.
CHAIRMAN: Does any other Delegate wish to oppose the United
Stat es amendment?
Mr. J .P.D. JOHNSEN (New Zealand ): Mr. Chairman, I do not wish
to raise any opposition to the proposal, but I would just like to
make one small observation, and that is in connection with the word
"agreement" in the first line . The intention of the paragraph is
in
that the Organization shall formulate the rules and, obviously,/the
formulating of such rules, they would consult with the Internatonal
Monetary Fund. I do not think there is any suggestion that there
would be any disagreement between the two on the Matter, but I
think the real intention is that there should be consultation,and
the responsibility rests with the Organition to formulate the
rules. I should think, therefore, that, in order to presente
relalions perhaps it might be agreed between the Organization
and the Monetary Fund, to use the word "consultation" in place of
the word "agreement". MR.JOHN LEDDY (United States): Mr. Chairman, may I just
explain. I think that we proposed the words "in agreement with"
of
for two reasons: because/the rather strong views of the
representatives of the Monetary Fund in this connection, who were
concerned with the question of par values, and secondly, because
we think that in practice it will probably be the Monetary Fund
that has the staff and knowledge to deal with this complicated
question of 'what is the right exchange rate in relation to the
value of a country's currency.
Therefore, we thought that perhaps the line we should take
should be a bit stronger and actually envisage that the
Organization and the Fund would agree upno this, rather thin that
there should be merely consultation.
I should like to ask the representative of the Fund whether
they have any views on the matter?
CHAIRMAN: The Representative of the International Monetary
Fund.
MR. E. STURO (International Monetary Fund): Mr. Chairman,
our view is that the expression "in agreement with" in this
connection would be more suitable than "in consultation with", even
though we agree fully that consultation Might lead to the same
results as the expression "in agreement with". Nevertheless,
because this question is of a most delicate technical nature, and
because the InternationaI Monetary Fund is so vitally interested
from a much broador point of view, namely from the point of view of
keeping, the par value system in perfect order, we think that the
stronger expression might be more useful in this regard in that it
would indicate to the international Trade Organization that this is
a question on which an agreement is most vital and necessary. 7
J. E/PC/T/A/PV/32
I would only like to add, Mr. Chairman, that I gather from the
discussion of the sub-committee on the balance-of-payments articles
that, regarding the problem of the special exchange arrangements with
Members which are not Members of the International Monetary Fund,
the expression "in agreement with"is contemplated. Therefore,
the expression here will not be the only one which will be used in
such a connection.
CHAIRMAN: The Delegate of Belgium.
Baron P. de CAIFFIER (Belgium) (Interpretation): Mr. Chairman,
at our last meeting, we accepted conditionally the United States
proposal. We consider that the action against multiple currency
practices is more in the realm of the International Monetary Fund
then of the Trade Organization. That is why we insist on the
retention of the word "agreement".
CHAIRMAN: Does this explanation give satisfaction to the
Delegate of New Zealand?
MR. J.P.D. JOHNSEN(New Zaaland): I am thankful for the
explanation, Mr. Chairman, but from my own point of view I think
that the Organization should be responsible for its own action,and,
as I said before, I do not think there is any doubt that they must
be guided by the recommendations of the Fund in this matter,
because they must rely on the Fund for advice. Nevertheless, I
think the words "in consultation with" would have the proper
relationship. In view of the fact that it is suggested that the
words "in agreement with" are being used elsewhere - I cannot
confirm or deny that, because I am not familiar with what has been
going on in all sections of the Charter - it would not be
inconsistent if these words were retained here, but if that were not 8
the case, then I think there right be an inconsistency.
CHAIRMAN: I agree with thae Delegate of New Zealand that the
words "in consultation with" would have the same result. On the
other hand, I am not quite certain that the use of the words "in
agreement with" takes away from the Organization the right and duty
to formulate the rules. It simply means that the Organization
must make sure that in formulating such rules it is eating in
conformity with the views of the International Monetary Fund, and
as it is a question of technical monetary policy, I think that the
Organization could act wrongly if it tried, to establishe rules
which were not agreed to by the International Monetary Fund.
Therefore, I think we could quite well keep the word "agreement",
even if it seems a little strong.
May I take it that we now all agree to the United States
amendment? 9
V E/PC/T/A/PV/3 2
Mr. G. IMMS (United Kingdom): I would like to raise two
points. One of than is purely a drafting point and the other
is perhaps one of more substance.
In the third line of the American draft we see "governing
the conversion of foreign currencies". Presumably the
Organization and the International Monetary Fund know no"foreign"
currencies - currencies are not, in a sense,"foreign" to them,
and perhaps that point might be met by the addition of the words
"by Members" after the word conversion" -that is, "... the
conversion by Members of foreign currencies".
The other point is that this sentence provides for general
rules regarding foreign currencies in respect of which multiple
rates of exchange are maintained. I wonder if it would not be
desirable to amplify the sentence by providing that the Organization
and the Fund might make rules regarding the conversion of an
individual currency. The application of a general rule to a
particular case might present some difficulty. On the form of
words you might simply state "shall" or "may, at the request of a
Member, substantially interested in the trade affected, formulate
rules for the conversion of an individual currency".
CHAIRMAN: Would not the first point of the United Kingdom
Delegate be met if you simply strike out the word "foreign?"
Mr. J.M. LEDDY (United States): Mr. Chairman, I think that
may lead to some difficulty. This deals solely with the conversion
rate of exchange of the foreign currency. We do not want to
imply that these rules are to be applied by the importing Member
in respect of its own currency.
CHAIRMAN: Could we solve the first difficulty by saying
"governing the conversion by Members of foreign currencies"? Is
that agreeable to the United States Delegate? V E~ ~~~1 :£/PC /T/A/PV/32
Mr. 1.M. EDDY (United States): Yes.
CHAIRMAN: Then thbasecond point is, to add after the
full stop i,n the first sentence "and mayat the request of a
Member substantially interested in the trade affected, formulate
rules for the convers"on of an individual currency'.
Mr. J.M. IEDDY (United States): I think the idea was that
these provisions should permit the formulation of rules for the
currency. I think that mieht be handled more easily by
re-caeting the first sentence to read "shall formulate rules
governing conversions of any foreign currency in respect of
which multiple rates of exchange are maintained consistently with
the Articles of Agreament of th" International Monetary Fund!.
Any Member may apply such rules in respect of any such currency
for th" purposes of paragraph 2(a).?
Now, it seems to me thai ahat could permit the Organlz.tion,
in egreement with the Fund, cithcr to set out general rules
covering all multiple rate currencies or particular rules
governing eacheof suah currencies in the evrnt th.t pa-ticular
rules were necessary.
CHAIRMA1: Does that give satisfaction to the United
Kingdom?
Mr. G. IlIS (United Kingdom): It does.
CHAIRMLN: That is a very good solution. May I take it
that we now agree to the United States amendment, with the
slight addition of the wor" "any", inserted between "of! and
"for eign"? v 11 E/PC/T/A/PV/32
Mr. C.E. MORTON (Australia): Including "the conversion by
Members".
CHAIRMAN: Does the Delegate of the United States want
the words "by Members"?
Mr. J.M. LEDDY (United States): Yes.
CHAIRMAN: May I take it to be agreed?
(Agreed) 32 E/PC /T/A/PV/32
CHAIRMAN: We must now go, back to the explanatory note on page
9 of the document T/103 concerning multiple currency rates: "It is
the understanding of the Sub-Committee that multiple currency rates,"
(official practises by a State)"may in certain circumstances con-
stitute a subsidy to export which could be met by countervailing
duties under paragraph 2 of this article." You will remember that
that was the text.
The Australian delegation wants this to be amplified by adding
the words "or may constitute a form of dumping by means of a partial
depreciation of a country's currency which could be t by action
under paragraph 1 of this Article. By 'multiple currency practices'
is meant practices by Governments or sanctioned by Goverments."
You have heard the Australian proposal. I do not know whether
anyone wishes to have and further explanation, but I would like to
know/if there is any opposition to this suggestion.
Mr. J.M. LEDDY (United States): I take it that this is not
a limitation to the definition of dumping; but simply an explanation.
CHAIRMAN: You all have a copy of the Australian amendment,
and I will give you a minute to read it so that we can all be sure
of understanding the proposal.
I take it that tho silence means that the Commission accepts this
redraft of the explanatory note on page 9.
We will now go back to pages 16 and 17 of document T/103. You
will remember that we had considerable discussion about the words
"between independent buyer and seller". The United Kingdom delegation
expressed considerable doubt as to whether these words should remain
in the text and, in connection with that, whether the third note on
page 17 should be maintained. I would ask the United Kingdom dele-
gate to tell us whether he is now able to express a definite view. 13
I should add, before the United Kingdom delegate speaks, that
we considered the possibility of inserting at the end of that sen-
tence the words "In determining whether the conditions of sale are
fully competative a Member may have regard to the question whether
the transa,.2on is one between buyer and seller who are independent of
each other."
Mr. G.IMMS (United Kingdom): We have given further study to
the compromise suggestion of Monday, which you Mr. Chairman, have
just read, and I am afraid that our conclusion is that we cannot
accept it. We have considered also whether, and on what basis, any
other form of compromise would be acceptable to the United Kindom, but
our conclusion is that we must stand by the text of the paragraph as
it was sent to us by the Sub-Committee. As I attempted to explain
on Monday, we do not agree to the suggestion made in the note.
Mr. J.M. LEDDY (United States) In the Sub-Committee there
was rather an understanding that the phrase "under fully competative
"between
conditions" did contain the same concept as, independent buyer and
seller. " However, in the light of the statement of the United
Kingdom delegate, I think it was quite clear that the United Kingdom
would not interpret this phrase "fully competitive" as covering the
concept of "independent buyer and celler." This is an extremely
technical question and we are concerned about it from two points of
view. First, whether it will mean that we in the United States,
shall have to exclude a very large number of transactions which proper-
ly should be taken into account because they are effected under fully
competitive conditions. Secondly, whether other countries will do
that.
I think we really should have time to think about it and I suggest
we might ask the Sub-Committee to meet again on this one point and see
whether a solution cannot be found. I think it is too complicated
to express to the full Commission without some background. 14
E/PC/T/A/PV/32
BARON PIERRE DE GAIFFIER (Belgium) (Interprretation):
Mr. Chairman, I will not comment on the value of the term
"independent", or its suppression. My point of view in this
respect is somewhat analagous to our United kingdom colleague,
but I did not want to complicate matters by a lengthy discussion
on this point.
I think we can solve the problem rather easily by considering
that we have an alternative in frent of us. Either we keep the
words in the Charter, "independent buyer and seller" -"under
fully competitave conditions"- or we suppress the word
independent",and add a ccmment of the kind which is under
review in our Report, replacing the words "Sub-Committee" by
"Commission". I think the result would be practically the same.
CHAIRMAN: I am afraid it would not be very helpful to refer
it back to the large Sub-Committee that dealt with this before;
and I do not see any better solution than to maintain - I am
speaking personally, it is for the Commission to decide - the text
we have on page 16 of Document 103, including- the words "between
independent buyer and seller", and to have an explanatory Note
saying that certain Delegations considered - and so on.
The Delegate -of the United States.
Mr. LEDDY (United States): Mr. Chairman, I think that our
efforts should be in all cases to get an agreement among the
Members of the Preparatory Committee on the text of the Charter,
and if there is hope of agreement being reached, that we
should pursue it. I think if we keep the phrase in, and comment
cn it, that will indicate that there is a division of opinion
which should be forwarded to the World Conference - unless there 15
E/PC/T/A/PV/32
will be some later opportunity at this Conference of settling
the problem; and I think particularly, owing to the general
agreement on Tariffs and Credit, that we should do all that is
necessary for us to reach an agreement on the subject.
We would not object to sending this along as the Report of
Commission "A", with the phrase in brackets as a comment,
provided that there will be an opportunity in the full
Preparatory Committee to take up this question again.
Meanwhile the Sub-Committee can meet and consider it.
CHAIRMAN: The Delegate of South Africa.
Dr. HOLLOWAY (South Africa): Mr. Chairman, I only wish
to apologise for not being present here as Chairman of the
Sub-Committee when this matter came up on previous occasions.
Certain Matters of some importance to my country made it
essential for me t o be in London.
I would like to suggest that we grasp the nettle now. Putting
it off to either the Preparatory Committee or the World
Conference takes us further away from the point where we were
as close as we are likely to come.
As Chairman of the Sub-Committee I would be against
ending it back to the Sub-Committee, because we would just go
round in all the same circles as previously in the Sub-Committeeo,
and ultimately, more or less, I think a, violence to the
discussion, because it would add nothing to the subject.
I would like to bring you back, however, to the point where
we were then, which was fairly closeot- each other - as close
as we could ever get, probably. We had got to this point, that
we were all agreed on what we meant by the term "under fully competitive conditions". It could be held to includes "between
independent buyer and seller". That the Committee was agreed on.
But still I think I have not made my point quite clear.
We were agreed., as we said in the Note - the Sub-Committee
considered (that is our interpretation) that the words "between
independent buyer and seller" might be deleted, on the understanding
(which we all agreed with) that the phrase "under fully
competitive conditions" covers the same concept.
Now it does not matter whether Webster's Dictionary, or
the Oxford Dictionary, or any kind of reasoning in those same
circles we went round before, came to any other conclusion in
the minds of any of the Members of the Sub-Committee - I think
the Members of this Commission will be in agreement that we
want to interpret the two terms in the same concept. So to that
extent we were so close together that we were agreed. The only
point not in agreement was how to put that down.
The United Kingdom wanted to put it in the text. The United.
States said, if you do so in the form in which we have it in the
Text here, it involves certain difficulties, which it is rather
essential that we should avoid. New, of course, we were only
considering the particular form of the text; but nobody else at
that stage could conceive another form of Text in which that
agreement which we had arrived at could be worded, for the Text
itself. 17
S
E/PC/T/A/PV/32
So then we fell back, like the Sub-committee and other Committees
have done, on just another instrument that we had in our hands,
a bit of latitude which was given to us by the fact that we
could explain in a commentary what we meant. That does give
us a bit more latitude. It was then agreed that we would
explain in the commentary that it was our understanding that these
words were covered by the concept of the conditions.
Again we were fairly closo together, but a little bit
further away than we were at the previous point, because if we
had then left the words out of the text altogether and, making
use of this latitude that we had in tho use of footnotes, put it
into a footnote, anybody interpreting It afterwards must say that
we understood it that way, and therefore were in honour bound
to interpret it that way.
We cannot get away from it.At that meeting, however, the
majority of the Delegates wished to keep the words in the text
and transfer the problemof whether they are in the text, or
whether they introduce a difficulty for one of the countries to
this Commission. The question for this Commission to decide,
therefore, is whether it is going to leave those words in the
text or express the same meaning by using the further latitude
which we have in a footnote by taking the words out of the text,
but warning everybody by the footnote about the substantial
agreement we had got, namely, that "under fully competitive
conditions" does cover the same concept.
Very well; if this Commission does not settle that matter,
then the same question will come before the Preparatory
Committee one stage further. If the Preparatory Committee does
not settle it, and passes the same buck on to the World Conference,
the atmosphere in which we had got as close as we could to
one another will disappear entirely. S 18 PC~~~A~~~~:/PC/T/;,/PV/32
I woeuld sug.o vtc strongely eto the rsprvsentative of the.
omnitad windoz th,te aWe ale agre no ara in honDur bound to
considerethat it cme rs tee saaz conc pt,elne nobody aisc can
comz and say aaterwarde th!t it doce not. Tharefors the
riaht way in which we canheeal weth tbw matt-r now is to
settle it once and for all by taking out those words. I know
some Dclegates do not like the ing a ef takin& th,m out.
If we gro nit goinc to try and move aelittle asidG, so that
our ulbow does not stick intf the ribs ot eomebody elsz, we
will be FrguAng here in -usIustgge48. a suq :st thet this is
a mattee ca which wc ORn very well make a compromise. The
meaaing is expliined by a nota which has rpreuch inteu::.tative
value as the text itself.
I ER 19 E/PC/T/A/PV/32
CHAIRMAN: You have heard the suggestion of the Delegate of
South Africa, and I understand that the explanatory note would then
be more or less as follows. "It was suggested in the Commission to
insert the words "between independent buyer and seller", but the
Commission considers that the words "under fully competitive
conditions" cover the same concept. And, therefore, the words
"between independent buyer end seller" will be deleted from the
Article."
Mr. C.E. MORTON (Australia): Mr. Chairman, we are of the
opinion that the words"between independent buyer and seller" in
the text, are ambiguous, and to that extent should be removed. We
are, however, convinced that the words "under fully compitative
conditions" must be in some way linked with the expression "between
independent buyer and seller", as we all agreed they were. To
that extent the explanatory note to the text would be very
satisfactory. The difficulty arises owing to the fact that it is
not the wish of the United Kingdom to link the two phrases, but we
regard the words "between independent buyer and seller" as a
strengthening point of the fully competitive conditions. I think
we should aim at arriving at a note which will amplify "under fully
competitive -conditions" by the concept of "between independent
buyer and seller", rather than say that one includes the other.
Mr. G.B. URQUHART (Canada): Mr. Chairman, I am fully in
agreement with everything that Dr. Holloway has said, and in my
view, this is the place to settle the issue. As for the phrase
between independent buyer and seller", I do not think it makes any
difference whether it is included in the text or not. In my view
the term "under fully competitive conditions" includes that, and
it would, be within the prerogative of any Member to determine
whether the conditions are fully competitive, and to consider the
fact whether the transaction was between independent buyer and ER E/PC /T/A/PV/32
seller. I think that follows automatically, and I think it would
meet the situation if an explanatory note along the lines that you
have suggested, appeared in the comment.
Mr. G. IMMS (United Kingdom): Mr. Chairman, I made that
excessively long speech yesterday explaining why we did not regard
these two concepts as being exactly parallel, but I do not want to
repeat that speach. As far as Dr. Holleway's suggestions are
concerned they were not covered by saying that it was suggested in
tho Commission to insert the words "between independent buyer and
seller". These words are in the text, and you cannot insert them,
for they are there already. Already it was suggested in the Sub-
Committee by certain Members that the words right be deleted.
This is a very different footing, and I think we had better keep
on the right side.
Mr. C.E. MORTON (Australia): To keep the records straight,
these words were inserted in the Report of the Sub-Committee, under
an asterisk.
Mr. G. IMMS (United Kingdom): I believe the official record
is T/103, and there is no asterisk. .
Mr. C.E. MORTON (Australian): And M41/47.
Mr. G.IMMS (United Kingdom): I do not think - .--is an
official document.
CHAIRMAN: Yes but I would also like to say that it was
suggested in the Commission to insert the words so and so, in
article so and so, whether that means to delete from the previous
text or not. I think this is a linguistic problem. We are not
under an obligation to take the Sub-Committee's proposal without
considering it on an independent footing, but I do not want to
insist. We must try to find another term as the term which we
have used is not clear. 21
CHAIRMAN: The Delegate of South Africa.
DR. J.E. HOLLOWAY (South Africa): Mr. Chairman, the Note
following from my remarks would be something like this: "The
Commission deleted the words 'between independent buyer and seller'
from the Report of the sub-committee on the understanding that the
phrase "under fully competitive conditions' covers the same concept".
You can make it even stronger by saying "under the unanimous
understanding" That would get over the difficulties mentioned.
CHAIRMAN: Does that suit the Delegate for the United Kingdom?
MR. G. IMMS (United Kingdom): No, Sir, It would not be
unanimous - I would like to make a reservation on that.
MR. C.E. MORTON (Australia): Mr. Chairman, instead of saying
that it fully covers, we could say something like should be read
in conjunction with the concept of independent buyer and seller".
MR. J.M. LEDDY (United States): Mr. Chairman, I wonder
whether, as a Note on the lines of that indicated by Dr. Holloway
would seem to be acceptable to the majority, for the time being the
United Kingdom could not reserve its position on this, and in the
meanwhile we could have some further consideration of it. In other
words, let the text go forward for the moment leaving "between
independent buyer and seller", putting in the note,and allowing a
reservation to go forward, but in the meanwhile it is understood
that we should try to get together and see what could be done to
make it unanimous.
CHAIRMAN: You heard the last proposal of the South African
Delegate. Is there any objection, with the exception of the
United Kingdom Delegate? 22 E/PC/T/A/PV/32
The Delegate for India.
FR. R.S. MANI (India): The position of the Indian Delegation,
Mr. Chairman, is the same as that of the United Kingdom.
We would have been prepared to accept the compromise suggestion
which was thrown out by the United Kingdom Delegate on the last
occasion to insert an additional sentence in the text itself, but we
cannot agree to the proposit ion now put forward by the South African
Delegate, and the Indian Delegation would also like to reserve its
position, if that is acceptable.
CHAIRMAN: I will ask the Secretary kindly to read the proposal
as it now stands.
MR. F. .HAIGHT (Secretary): "The Commission deleted the
words between independent buyer and seller' from the Report of the
sub-committee on the understanding that the phrase 'under fully
competitive conditions' should be read in conjunction with the concept
of independent buyer and seller". I put in the words of the
Australian Delegate.
DR. J.E. HOLLOWAY (South Africa): No, you have got My words
before you: "on the understanding that the phrase 'under fully
competitive conditions' covers the same concept". That is all that
I suggested. The SAustralian Delegate suggested changing the words
"covers the same concept". Further, to meet the views of the United
Kingdom Delegate, we can say "should be held to cover the same
concept", making it perfectly plain that we accept that. Then it
is merely a question of form, because in substance we are now agreed.
MR.F.A. HAIGHT (Secretary): "The Commission deleted the words
between independent buyer and seller from the Report of the sub-
committee on the understanding that the phrase 'under fully
competitive conditions' should be held to cover the same concept. -23-
/ T A/PV/3 E~~~~~~~~~~~~~~/PC/'i2/42V/T12
The United Ki"gdou and Indian Delegates reserve their positions.
CRIL1: Is this agreed?
^greed.
In ths light of certain rerarks on the possibility of
re-onsidExecg the raeter in the Preparatory Committee in C30outive
Session, I gouls like to mGntioa for the information of Deleratee
that, very mmohsto my astonishment, in a meeting of the ChairlenS'
ColiMtee tho opinion was expressed by the Chaiman, 11r.Suetens,
on the advice of the xeouxive Secietary, that Commission A and B
are the P:Oparatcry Committee in Exooutive Session, and that they
had not anticipated any further roetinis of the Preparatory
CoAmittee 1a Executive Session when Co missions . and B h.d terminated
their work. I thea said "But that cuts off the possibility for
Delegates whd have made reservations provis:)nally of with6rawing
these reservetiens). I (id not ,et any answer because w wure in
a hurry, but I would like the Dela, tcs to ke6p this provision in
mind, ana with their respective Delt;ations press for _Gnew, even
if it is an enmmrete informal, meeting of the Preparatory Cornittoe,
where Ahey could sgudy the reports of Commissions and B and -ive
all of us who have made provisional reservations an opportunity of
droppEng thea. 24
V E/PC/T/A/P V/3 2
CHAIRMAN: We now, go back to Article 18, and I am very sorry
we have made such slow progress. We have agreed to the re-draft
of point (iii) of sub-paragraph (c) of Article 18, and, as I said
at the beginning of this meeting, that implies that we also accept
the rest of the text submitted by the Sub-Committee on sub-paragraph
(c) .
We have still to consider sub-paragraph (iv) of (c):
"Nothing in sub-paragraph (c) shall be construed to require
any Member to alter the method of converting currencies for
Customs purposes", etc. I must say that I do not quite understand
the meaning of that, and I wonder whether the word "require" may
be a clerical error for "permit".
M. L. ROUX (France) (Interpretation): There is a divergency
between the two texts, but the English text, as it now appears in
the draft, does not convey a very clear meaning. It says, in fact,
not
that any country can/go further than the undertaking provided for
in this paragraph. This goes without saying, and there should be
no special provision to that effect, but what the French text says
is that in no case could any Member argue that from the provisions
of this paragraph it could aggravate the position as it now exists,
or as it would exist under the provisions of the paragraph, and
therefore apply higher duties. Therefore there is not much to
be said in favour of the English text as it now appears.
Mr.J.M. LEDDY (United States): Sub-paragraph (c) lays down
the rule that the par value _.. : erL in converting currencies.
The application of that rule to the internal system, of some
countries today would result automatically in an increase of duty.
Therefore, paragraph (iv) was added to say that nothing in 25
E/P V i C/T/A/P'1/32
sub-paxazraph (c) erall be construed to require any Memb<r to
incr.ase its duties by usin. the par ralue,
We Considered whether The sub-para~ra h should read
"Nothing in sub-paragr&ol (¢) shi 1 be construed to permit or
authorise ani Merbor to increase its duties", but we felt that
since threre was no general binding, against taiff increases in
the Charter, it would be inappropriate to insert a rule which
im-1. i ghat thhre pas a general tariff bindinG. Tais Daragraph
(iv) should bewhcad in c;njunctior with a provision '&ich it has
bean p>¢posed 'G Ilitjo in the General Agreement on Tariffs and
rade. That provision would say that.no Member shall alter its
method c' convertung curr-ncies so as to impair the valae of any
tariff concession graetee, sc that in the General Trade Agroemsnt
"e do aet themeule that ycu "shall not! alter your rnthod in
that way, and herarag mehcly)say that ,nothing in sub-pnxarrapk (cj
shall "reouiref ycu to do so, so that the two are consistent.
C~I~i IA: ,cll, the explanation ae have heard means that
gt is the Fzench text whihe has a wront, expression, and that tls
werd gequire" iy the 1njlish text is tho ri,ht exprssion. It
represents what was intended, ald thc French text will have to
be broteht into conoTrmity with the English >txt. But it
remains to be settled whether the Commission agrees to this
sub-para-raah, which was, as.far as ' can see, unsnimously
approved by '.h S- i _. 26
Mr. C.E. MORTON (Australia): If it is a question of
retaining or deleting this paragraph, Mr. Chairman, I would say that
I am Whole-heartedly in favour of its deletion.
M. LOUIS ROUX (France) (Interpretation): I am also in
favour of the deletion of this text. As far as I can understand,
the reasons for which it could have been maintained were that sub-
paragraph iii) of paragraph (c) contained mandatory rules, whereas
no such rules art included. That sub-paragraph. simply states
"Any Member may establish for any foreign currency . ". As
there are no mandatory rules, no obligation exists and therefore no
exception must be mentioned.
Mr. J.M. LEDDY (United States): There must be a misunder-
standing. It is not sub-paragraph (iii) but sub-paragraph (i)
which lays down the rule that par values must be used in converting
currencies, your own currency and foreign currency, In the case of
some countries the present system is to use a rate of exchange which
is not par value. This is more favourable to the importers than
the par value and if the use of the par value is required, as it is
under sub-paragraph (i), the effect will be to increase duties, in
some cases substantially, perhaps as much as 25 per cent. We need
a sub-paragraph (iv) to say that sub-paragraph .) , or anything else,
shall not be deemed to require an alteration in the method of convert-
ing currencies which will have that effect.
CHAIRMAN: You have beard the explanation given by the United
States representative, and I repeat that this text was unanimously
adopted by the Sub-Committee, and I cannot see that it can do any
harm, even if certain delegates do find it superfluous. In the cir-
cumstances I wonder whether we cannot pass it as unanimously agreed.
, , . - ,_ - ,. 27
M E/PC/T/A/PV/32
M. E.L. RODRIGUES (Brazil): In spite of being in full agree-
ment with the United States representative on principle, especially
because I took into consideration the note on page 19 "Tae appre-
ciation of a currency which is recognised by a change in its estab-
lished par value shall not be considered a change in the method of
converting currencies", I am not quite sure what will be the position
of the countries which up to now have not declared the par value to
the Monetary Fund, or which aro not members of the Monetary Fund up
to the present.
CHAIRMAN: It was my intention, when we had agreed on sub-
paragraph (iv), to come to this explanatory note.
M. E.L. RODRIGUES (Brazil): I do not mean the explanatory
note. My doubts are about the appreciation of a currency. I think
the explanatory note is very good and explains everything, but if it
lets us assume that a country which is not a member of the Monetary
Fund and has an established currency, has to declare the par value,
then, I ask, what will be the position of this country in regard to
paragraph (iv).
Mr. J.M. LEDDY (United statas): I think the point raised by
the delegate of Brazil could perhaps be dealt with by deleting the
word "appreciation" and substituting "operation".
CHAIRMAN: Does that satisfy the Brazilian delegate?
M. E.L RODIGUES (Brezil): Yes.
CHAIRMAN: I think, after this discussion, we can agree to accept
sub-paragraph (iv) in the English version, the French text being
corrected accordingly, and also the explanatory note on page 59 of
document T/103, with the alteration just suggested by the United
States delegate. 28
G E/PC/T/A/PV/32
CHAIRMAN: Is it agreed?
Agreed.
We pass on to paragraph 3 of Article 18. There is no
Amendment - no explanatory Note - or any reserve, on the Text
submitted by the Sub-Committee.
Mayv I take it that we agree to that text?
Agreed.
The Delegate of New Zealand.
Mr. JOHNSEN (New Zealand): Mr. Chairman, the Notes relating
to Article 18(2)(c) - will they include sub-paragraph (iii) of
18 (2) (0)?
CHAIRMAN:I think I said at the Draft meeting that we omit
all these Notes, with the exception of the last one,which we
have just adopted.
The Delegate of the United States.
Mr. LEDDY (United States) One small point on paragraph
3. I think some words were omitted at the end of that sentence.
I think it should read: "the value for customs purposes of the
product concerned".
CHAIRMAN: Well, I think we all agree to that clarification
of the text: "the value for customs purposes of the product
concerned".
Then we pass on to Article 37. There the last thing we
discussed, when we were on that article, was the proposed new
paragraph. You find it in Dc¢. '/25..
The Delegate of New Zealand.
Mr.JTOHNSEN (New Zealand): If I may refer to that paragraph 3,
while I have a oct of respect for the suggestions of the United
States Delegate, I think on reading that paragraph that it is one G 29 E/PC/T/A./PV/32
of general application, and I think the words that were
suggested really do not improve it.
I think you have get to leave it in the light of the first
two lines: "The bases and methods for determine the value of
products subject to duties, or other charges or restrictions
based upon or regulated in any manner by value should be stable
and should be given sufficient publicity to eneble traders to
estimate, with a reasonable degree of certainty, the value for
customs purposes. "
I think it is a general principle, really; it does hot
refer to particular products.
CHAIRMAN: You have heard the observations of the New
Zealand Delegate on paragraph 3 of Article 18, and we suggested
that the addition of the "product concerned", as suggested by
the United States Delegation, was not necessary, and the U.S.
Delegate agreed; so we keep the Text as submitted by the Sub-
Committee.
We now must consider Document W/245. The proposed new
paragraph was referred to us by the Sub-Committee on Articles
14, 15 and 24, and we have their exchange of viewson that
proposal some few days ago; and the last speaker at the time
was the Delegate of Norway, who also is a member of the Sub-
Committes on Article l5. I do not know whether he has anything
to add to what ho said at that time. 30
S . E/PC/T/A/PV/ 32
Mr. J.MELANDER (Norway): Mr. Chairman, the transfer of
Articls 25, Paragraph 2 (a) to Article 37 has been agreed in
principle and, as we all know, the main purpose is to make the
exceptions which were included in Article 25, Paragraph 2(a),
which were only exceptions from the use of quantitative.
restrictions, exceptions from all the measures referred to in
Chapter V. That means that they Will also be exceptions
from, for examples, internal taxes and internal reglations so
far as they are used as protective measures.
In regard to "Article 25, Paragraph 2(a), the last line,
we proposed, when Article 25 was debated in the Commission, that
the reference to 1 July 1949 should be cltered to 1 March 1952.
We proposed that as an amendment to Article 25, paragraph
2(a); in other words, as an amendment referring to the exceptions
from the use of quantitative restrictions, and the reason why
we made that proposal was that the Monetory Fund Agreement, in
Article XIV, Section IV, rafers to a similar transitional period.
Section IV of Article XIV of the Monetary Fund Agreement says
that "Not later than three years after the date on which the
Fund begins operations end in each year thereasfter, the Fund
shall report on the restrictions still in force under Section
2 of this Article," and - that is the main point - "Five years
after the date on which the Fund bogins operations, and in each
year thereafter, any member still retaining any restrictions
inconsistent with Article VIII, Sections II, III or IV, shall
consult the Fund as to their further retention."
In other words, the Monetary Fund Agreement lays down that
five years after the Fund has begun operations the quantitative
restrictions relating to exchange control shall, in principle,
be brought to an end. The Fund began operations on ). March
this year. Consequently that will mean that the restrictions S 31 E/PC/T/A/PV/32
applied in accordance with the Monetary Fund Agreement will
come to an end at 1 March 1952.
The quantitative restrictions which we have in mind here,
in accordance with Article 25, refer to a transitional period.
It is a question of maintaining quantitative restrictions in
order to provide for the equitable distribution of goods in
short supply, to maintain price control of a Member country
undergoing shortages subsequent to the war, and to provide
for the orderly liquidation of surplus stocks and for the
liquidation of uneconomic factories and industries developed
by any Member during the war.
It seems to us it is quite obvious that this transitional
period will not have passed on 1 July 1949. It is likely - I
think we all agree - that if we agree on this Charter in the
course of the coming winter it will probably come into force
not earlier than, for example, 1 January 1949, and it is
reasonable to expect - I think that is obvious to everybody -
that these measures which are in question here will be
necessary for a considerably longer period than 1 July 1949.
Anyway, the reason why we proposed the amendment was to bring
this proviso in Article 25 into line with similar provisions
in the relevant Article of the Monetary Fund; consequently
we proposed the same date, namely, 1 March 1952. 32
ER E/PC/T/A/PV/32
Now, after we had made that proposal, the Commission has
agreed that the provisions relating to internal taxes and internal
regulations, as laid down in Article 15, shall also be subject to
the same exceptions as those included in Article 25 (2)(a), and it
is for that purpose that this provision has been transferred to 37.
The sane arguments apply there. It is quite obvious that, in
order to be able to liquidate these factories, and to provide for
this price control and so on, it will be necessary to apply internal
taxes and internal regulations in the same transitional period,
Consequently, we feel that the same arguments would lead to
confusion, unless the 1st July 1949 be substituted, and be
altered to 1st March l952.
Now, I ,would mention that that would,perhaps,make it easier
for many delegations to accept Article 15 and perhaps to take a more
lenient view on Article 13 than has been the case before. I
mention this as an extra argument. It is not a necessary argument
to use, from the point of view of the Norwegian Delegation, I
mention it merely as a point which is going to meet those delegations
who are in favour of extending Article 13,and who are against the
prior approval rule. That is a consideration which I think ought
to be taken into account here .
That is our amendment, Mr. Chairman. Otherwise have no
amendment to the proposed new Article of paragraph 2. 33
CHAIRMAN: The Delegate of the United States.
MR. J.M. LEDDY ( United States); Mr. Chairman, I think we
would agree with the Delegate of Norway that the date 1st July, 1949
is a bit early and should be moved up. On the other hand, we have
some doubts as to the wisdom of moving it up as far as the
1st March, 1952 by analogy with the transitional period of the
Internationl Monetary Fund. There are important distinctions
between the transitional period in the Fund and the one that is
provided here.
Firstly, the transitional period in the Fund is designed to
provide Members with a period during which they can make their
currencies convertible. That is an adjustment which, I think,
involves economy as a whole. In the Charter we are dealing with
particular measures necessary to handle particular after-effects
of the war, which do not necessarily involve an adjustment of the
whole economy. V 34 E/PC/T/A/PV/32
Secondly, in the Monetary Fund transitional period there is
a means by which the Fund may approach Members - I think at the
and of three years, and in each year thor af ter, and see whether
they cannot become convertible at an earlier date; and there
is also the power in the Fund which does not exist in the I.T.O.
of withholding access to the Fund's resources in the event
that a Membzr who can become convertible does not become
convertible when he is able to, even though that may be pricr
to the expiration of, the five-year period,
Finally, there is a provision here which I think we ought
not to overlook, thereby the Organization may continue this
transitional period for further periods, idcckwb we are really
discussing is not when particular measures should be cut off, but
when they should come under the scrutiny, of the I.T.O.
Now, I think that it is right that 1st July 1949 is too
early to expect the I.T.O. to be in a position to give serious
attention or to give thorough consideration to the extension
of these measures. I would suggest that we take some date in
between 1st July 1949 and Ist March 1952 as being reasonable -
say, 1st January 1951, which would move it up an additional
year and a half. 35
E/PC /T/A/PV/32
Mr R.J. SHACKLE (United Kingdom): On this subject I think
very much on the sane lines as the Norwegian delegate, that 1st
July 1949 would obviously be too early a date to expect that the
positionsof short supply and grice disequilibria would have corrected
themselves, At the same time, we do feel, for the reasons which
the United States delegate has expounded, that it would be excessive
to move the date as far as 1st March 1952. We have therefore come
to the conclusion that the right course is to try to select some
middle date.
CHAIRMAN: Is the date of 1st Juanary 1951 satisfactory to the
Norwegian delegate in the light of the proposed text, that the date
can be extended in respect of application for such further periods
as the Organisation may specify?
Mr. J. MELANDER (Norway): I am afraid that the answer would be
no. The arguments put forward by the delegate of the United
States, namely, that the exchange control regulations provided for
under the Monetary Fund Agreement are into duced or maintained in
order to make it possible to introduce currency convertibility, and
that those regulations involve the adjustment of the currency re-
strictions, these same arguments apply just as much to restrictions
concerning general taxes and to other measures which we have in mind.
In fact, the only way in which this suggestion of the Agreement as a
whole can be effected is through the measures which are now in general
use - exchange control regulations, quantitative restrictions, and
other protective measures. I would go so far as to say that these
measures are all of a parallel character; they are in fact being
applied on a parallel basis to-day by practically all countries.
I would oven say that if we can use them on a parallel basiz, it will
be possible to get back to that normal status which we all hope for
at an earlier date. The other point, namely, that the Fund Agreement refers to
the possibility of denying access to the funds of the Monetary
Fund ,well,that is a point, but we have under the Charter the
adjustment of obligations in Article 35, which is just the
same things and the possibility of bringing these restrictions
down at an earlier stage, which is provided for in the Fund
Agreement, we also have in the Text here - in which it is said
they shall be removed as soon as possible, as soon, in fact, as
the conditions giving rise to them have ceased, and the ITO
will supervise them: so they are parallel.
Consequently, I think the only logic would be to have the
same date, 1st March 1952. On the other hand, I am not
insistent, and am willing to reach a compromise, and I think,
in that case, we ought to have it extended to as long as 1st July, 1981.
That I think would be the only logic to me, as it is quite
evident it will be necessary to continue these measures for a
longer period than we have in mind now. It does not matter very
much as to the particular date; but I would prefer to have the
logical conclusion, namely, 1st March 1952. But if it is the
feelini- of the Commission that we shall compromise on a certain
date, I will throw out the 1st July 1951. S 37 E/PC/T/A/PV/32
Mr. J.M.LEDDY (United States): There are three points
dealt with in Paragraph 2: one is products in short supply;
the second is price control; the third is the orderly
liquidation of surpluses of any particular products or
uneconomic industries.
I think it is certainly conceivable, in the case of some of
the products which are now in short supply,that they will no
longer be in short supply in 1950. On the other hand, some may
continue to be in short supply. The same thing will be true in
regard to the liquidation of temporary surpluses of stocks or
of industries. It should be possible to liquidate surplus
stocks in two or three years. The same applies to industries.
On the other hand, I would venture to say, with regard to
balance-of-paymants problems, some countries clearly are going
to be in balance-of-payments difficulties until 1952, or even
after that.
What we are talking about hero really is not the point
at which a restriction has to bu removed; it is the point at
which we should ask the ITO whether or not it should be removed. If
it is necessary, if the products are clearly likely to be in
short supply, then presumably the Organization will extend the
period but I think we should not unduly lengthen the period,
because we are dealing with particular products and particular
situations and we cannot say now that those conditions will
continue for several years in all cases.
CHAIRMAN: It is already late, but I will call upon
the Brazilian Delegate.
Mr. E.L.RODRIQUES (Brazil): Mr. Chairman, in spite of
preferring the date given by the Delegate for Norway, I would S 3S E/PC/T/A/PV/32
accept the United States date as a compromise, but I should
like to state that during the Sub-committee meetings I tried
to explain that, in a transitional period, we sometimes need
to take measures against the exporting of some goods - I
would mention textiles. Because of this, I would like to have
it on the record. I mention this because I believe, in the
light of what I have heard in the Sub-committee, that the
export prohibition for combating inflation could be covered. 39
ER E/PC/T/A/PC/32
CHAIRMAN: In this case, it will be necessary to have a
meeting to discuss the question relating to article 37. We would
continue tomorrow afternoon at 2.30, if that is agreeable to the
Commission.
Mr. R.J. SHACKLE (United Kingdom): I think there are a few
points still to be settled on Article 18, and I wonder if it would
not be better to settle the date of the next session for some time
later than tomorrow.
CHAIRMAN: But we have already discussed, gone through, and
generally agreed to article 18. There was one question brought
up by the United Kingdom representative, which was whether we should
retain or omit the words "between independent buyer and seller".
That was discussed at great length at the previous session,and also
today, and finally we arrived at the compromise solution, namely
to strike out these words from, the text submitted by the Sub-
Committee, inserting an explanatory note saying that we
consider the meaning of this term implied in the tern "commercial
considerations". But the United Kingdom Delegate and the Indian
Delegate recorded their reserve on that question for the time
being, and we hope that later on they might be able to withdraw
their, reservations.
If there is another problem on Article 18, then of course, we
would postpone the meeting. 40
MR.R. J. SHJACKLE (United kingdom) Well, Mr. Chairman,
regarding article 18, we hope that it might be possible to
Withdraw the reservation, but that can, of course, be done in a
later Commission, so that I do not want to hold up the meeting on
this point now.
CHAIRMAN: It is, of course, understand that a Delegation,
having made a reservation, if it is able either to suggest a new
solution or a compromise in order to withdraw that reservation, is
always free, through the Secratary, to suggest an amrgency
meeting where we can come together and settle it. Whether we
would be able to g0 over the whole question once more in the
Preparatory Committee is, as I explained, before Mr. Shackle came
in this morning,a point on which the Chairman,s Committee has
taken a decision that seems to block that Possibility, but we hope
that we will be able to come together once more besides the
meeting tomorrow afternoon.
Tomorrow we will continue the discussion on the questions before
us, and then we will take up the new Draft submitted by the
Australian Delegate on Article 37, and finally, I promised the
Australian Delegate an opportunity of elaborating further, or of
coming back to, the points made the other day by Dr. Coombs, and
when that is done we have finished. with the technical Articles and
article 37.
The meeting is adjourned.
The meeting rose at 1.20 p.m. |
GATT Library | dn469mc9578 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report Thirty-Second Meeting of Commission "B" Held on Tuesday, August 19, 1947, at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, August 19, 1947 | United Nations. Economic and Social Council | 19/08/1947 | official documents | E/PC/T/B/PV/32 and E/PC/T/B/PV/31-33 | https://exhibits.stanford.edu/gatt/catalog/dn469mc9578 | dn469mc9578_90250122.xml | GATT_155 | 11,042 | 68,342 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
RESTRITCED
CONSEIL E/PC/T/B/PV/32
ECONOMIQUE 19 August 1947
ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EXPLOYMENT.
VERBATIM REPORT
THIRTY-SECOND MEETING OF COMMISSION "B"
HELD ON TUESDAY, AUGUST 19, 1947, AT 10.30 A.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) .
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 interpretation cannot,
therefore, be accepted. E/PC/T/B/PV/32
CHAIRMAN: The Meeting is called to order.
We shall begin our discussion on Charter VIII, and first of
all we shall endeavour to terminate Article 72 - Composition of the
Executive Board. I call the attention of the Members of the
Commission to Document W.303, - the three alternative texts of
Article 72. You will notice that in the opening paragraph it is
stated that "Commission B has not yet adopted the texts of Alterna-
tives of B. and C. " So our first task will be to consider the texts
of Alternatives B. and C. to be quite sure of presenting to the
World Conference the text in the form in which we feel it should be
presented.
The texts of alternatives B. and C. incorporate the amendments
that were suggested by the Cuban delegation to alternative B., and
by the United Kingdom delegation to Alternative C.
We will first consider Alternative B, paragraph 1.
Mr. J.R.C. HELMORE (United Kingdom): Mr. Chairman, I do
not wish to put forward any amendments at all on this if the Com-
mission feels that it would be better not to have amendments. I
merely wish to point out the apparent inconsistency which Members
may like to consider: that is that in alternative B, line 3 of
paragraph 1 we say: "by the affirmative vote of two-thirds of
those present and voting", whereas in the lest line of paragraph 2
we say: "by a two-thirds majority of the votes east." I do not
believe there is any significant difference in the results because,
after all, if somebody does not went to cast a vote he can go out
of the room and he is not present. I merely suggest that it would
be better to adopt one formula or another.
Mr. ERIK COLBAN (Norway): Mr. Chairman, I made my proposal in
order to submit my idea on the question of principle. I did not
intend to elaborate a full text, and I do not think it strengthens,
2
ER ER
but rather weakens, my proposal to add paragraphs 2 and 3. I
have no real objection to the ideas contained in these paragraphs,
but I feel that my proposal would carry more weight if it were in
my original form.
Dr. CUSTAVO GUTIERREZ (Cuba) : Mr. Chairman, if we present
the AIternative B with only paragraph 1, all the delegates present at
the World Conference will ask themselves for what extension of time
the Executive Board is elected, and what are the possibilities
an increasing relation of combination in /elections.
The first observation especially would be, in my opinion, of a very
technical nature because to say that the Executive Board should con-
sist of a certain number, and not to say for what extension of time
the Executive Board is elected, is really something unique in this
matter. Nevertheless, as nothing has been added to the principle,
but just a question of basic importance has been introduced by para-
graphs 2 and 3, if this is going to be a matter of long discussion,
I shall not take any interest in the discussion.
Mr. ERIK COLBAN (Norway): Mr. Chairman, I also would like to
avoid any further discussion, so as I feel that the Cuban delegate
attaches considerable importance to these additions, I shall not
object.
Mr. H.F. ANGUS (Canada): Mr. Chairman, might I call attention
to a very minor point. Alternative B says that "the Executive Board
shall consist of representatives of the Members." The other
alternative says that it "shall consist of Members." Is that an
intentional difference?
Mr. ERIK COLBAN (Norway): Yes, Mr. Chairman I ,think that it
is a more logical way of putting it that the Executive Board has 15
3 E/PC/T/B/PV/32
Members but each one of these Members is the representative of a
Member of the Organisation.
CHAIRMAN: Are there any further comments?
DR. GUSTAVO GUTIERREZ ( Cuba): Mr. Chairman, I think that
the suggestion made by the United Kingdom delegate is acceptable
to us; that is to say, to have the same wording in both paragraphs
1 and 2. That is to say "by the affirmative vote of two -thirds
of those present and voting."
CHAIRMAN : Is that agreed? Can we now adopt the text of
paragraph 1. Adopted.
Paragraph 2 will have the change suggested by the United King-
dom delegate.
4 5
E/PC/T/B/PV/32
It will now read:- "The number of Members on the Executive
Board may, upon a recommendation of the Board, be increased by the
Conference by a two-thirds majority of the Member present and
voting". Is that agreed?
Agreed.
Paragraph 3.
The Delegate for Brazil.
MR. O. PARANAGUA (Brazil): Mr. Chairman, I read here "The
Members elected to the Executive Board shall normally be elected
for terms of three years". What are we to understand by the
word "normally" ?
CHAIRMAN: It seems to be the same wording as paragraph 3
of Alternative A.
Is paragraph 3 approved?
Approved.
We now pass to Alternative C.
Paragraph 1. Any comments?
Paragraph 1 is adopted.
Paragraph 2?
Approved.
Paragraph 3?
Approved.
Paragraph 4?
DR. E. COLBAN (Norway): Mr. Chairman, I Just want to ask
the Delegate for Australia whether the last sentence of paragraph 4
is correctly given here:- "A retiring Member shall be eligible
for immediate re-election". That refers to "Nine other Members" 6
J. E/PC/T/B/PV/32
and, as it stands here, it would not guarantee any reasonable
protection. I just want to ask whether he has purposely put in
"shall be eligible for immediate re-election"?
DR. H.C. COOMBS (Australia): It was quite deliberate,
Mr. Chairman. It was my view that the countries, in voting at each
election, would take into account such need for rotation of places
on the Executive Board as they considered desirable.
CHAIRMAN: Does that satisfy the Norwegian Delegate?
DR. E. COLBAN (Norway): Certainly, Mr. Chairman.
CHAIRMAN: Is paragraph 4 approved? . -
Approved.
Paragraph 5?
The Delegate of Belgium.
Baron P. de GAIFFIER (Belgium) (Interpretation): Mr. Chairman,
Ipwould oust like o u a question totthe Australian Delegate.
In(sub-paragra5h 5a5 of paragraph b, I see that the formula which
appears agetph, ae sub-parCuracusgording the 6~stnms Union of
BeLgium, Luxembourg and the Netherlands, is different from the
formula which appears in Alternative A. The formula in
Jumc _ative A is Lore flexible, and we have said many times that
ee ouxxi to _., fle. ble provisions in the Charter. Therefore,
tt sAms to aA:AhaA alternative k presents certain advantages,.
expecially iJ we consider the observation made the other day by
ate.Clban Thler-e.
CIU-JOJ.: Thc Delegate of Australia. 7
J. E/PC/T/B/PV/32
Dr. H.C. COOMBS (Australia): I take it that the Delegate
for Belgium is referring to the way in which the Customs Union
between Belgium, Luxembourg and the Netherlands has been dealt with,
without offering the alternative that, if they do not wish to be
represented as a Customs Union, they would be represented in turn,
that is, either the representative of Belgium or the representative
of the Netherlands. I would not object to the inclusion of the
words "should these States desire to be represented as a unit"
but, in my opinion, if they do not so wish to be represented, then
the number of permanent seats should be correspondingly reduced
and the two countries concerned should take their place with the
rest, the number of places to be filled by election being
correspondingly increased.
Baron P. de GAIFFIER (Belgium) (Interpretation): Mr. Chairman,
I thank the Australian Delegate for the explanation he has just
given. I wanted to know whether this text was drafted purposely
in the way it is now, and I am satisfied.
DR. A.B. SPEEKENBRINK (Netherlands): May I ask, Mr. Chairman,
whether these words suggested by Dr. Coombs will now be included?
CHAIRMAN: Does the Delegate of the Netherlands propose that,
after the word "Netherlands", the words "should these States desire
to be represented as a unit" should be added?
DR. A.B. SPEEKENBRINK (Netherlands): Yes, Mr. Chairman.
CHAIRMAN: Is that agreed?
The Delegate for Cuba. 8
J. E/PC/T/B/PV/32
Dr. G. GUTIERREZ (Cuba): Mr. Chairman, I think that a Note
should be inserted at the foot of the page saying that the previous
Note extends to this matter of the Customs Union.
CHAIRMAN: We will be dealing with the text of the Notes
given on page 1 later. I take it that the Cuban Delegate would
like to have that Note repeated here, or rather, it will not be
repeated, it will be incorporated by reference. Is that agreed?
Approved. V
Mr. J.R.C. HELMORE (United Kingdom): Mr. Chairman, I take
it that what we have just approved is the insertion of the words?
CHAIRMAN: Yes, the insertion of the words and the reference
to the note. Any other comments on paragraph 5? Is paragraph 5
approved with the changes we have made?
(Approved)
Paragraph 6 Sub-paragraph (a). Any comments?
Mr. H.F. ANGUS (Canada): Mr. Chairman, unless the matter is
covered by the note inserted, this paragraph would have this
operation: that unless a Customs Union could be a Member, the
Customs Union could not achieve membership under paragraph 5(a)
and the number of seats would be reduced accordingly. If the
Customs Union is a Member, it is presumably a Member for all
purposes, and the States lose their identity to that extent.
Mr. J.R.C. HELMORE (United Kingdom): Mr. Chairman, might
I attempt to analyse, for the benefit of the Delegate of Canada,
the possible alternatives which might arise under the wording .We
have Just adopted for paragraph 5(a), and their effect on
paragraph 6 (a) ?
There are three possibilities in theory: One is that one
of the States (Belgium, Luxembourg and the Netherlands) would not
be a Member of the Organization. In that case, the size of the
Board would be reduced accordingly. The second possibility is
that the Customs Union of Belgium, Luxembourg and the Netherlands,
all Members of the Organiation, would not desire to be represented,
in which case there would be no change in the size of the Board,
since all the States mentioned in paragraph 5(a) would be
Members and therefore the proviso in paragraph 6(a) would not
operate. The third alternative is the one which I think the
9 E/PC/T/B/PV/32
Delegate of Australia has contemplated in his text, that is, that
the Customs Union would desire to be represented as a unit, in
which case no question would arise.
I take it that the theoretical proposition that Belgium could
be a Member and the Netherlands not, is not really a very likely
proposition, since I can see great difficulties in a Customs Union
of which one party was a Member of the Organization and the other
party not. I suggest to the Delegate of Canada that we can leave
it as it stands.
CHAIRMAN: Is the Delegate of Canada satisfied with the
explanation?
Mr. H.F. ANGUS (Canada): I do not wish to pursue the
discussion. It seems to me it is the Iegal Drafting Committee
who will eventually have to decide that.
CHAIRMAN: Is sub-paragraph (a) approved?
Dr. Gustave GUTIERREZ (Cuba): I suggest that we have the
text as it is, to be considered by the World Conference, because
I think the Legal Drafting Committee is exhausted!
CHAIRMAN: I take it that the Commission is agreed on
sub-paragraph (a). Sub-paragraph(b). No comments? The
text is approved.
Paragraph 7? Approved .
We now take up the two notes that appear on Page 1 of
document W/308. The first note was approved and is in the Report
of the Committee. The second note reads: "The Preparatory
Committee was not able to examine fully the conception of giving
membership in the Board to customs unions. This matter may
need to be considered more thoroughly by the World Conference".
V V E/PC/T/B/PV/32
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, I think that
the word "may" in the last sentence of the note should be
re[;aced by another word - I should suggest "must" or some other
appropriate English word.
CHAIRMAN: I suggest the phrase "This matter should be
considered more thoroughly by the World Conference " would meet
the point.
Is that acceptable to everybody in the Commission?
(France )
M. ROYER/( Interpretation): Mr. Chairman, I want to go back
to footnote 1. I do not think that we can insert this fo onot e,
as it stands here, under Alternative 6, especially after the
explanations which were given to us by Dr. Coombs. Dr. Coombs
said that if the three countries composing the Benelux Customs
Union did not wish to be represented as a unit, not only would
Luxembourg fall under the common law, but the other two countries.
Therefore I think that to insert such a note we would have to
modify the draft.
CHAIRMAN: I think that we only agreed to insert a
cross-reference under Alternative C to the second of the two
notes here. Is the second note approved with the change we
have made?
(Approved)
We have now completed our work on Article 72.
Article 73 -this was formerly Article 69 - Voting.
Paragraph 1- 12
E/PC/T/B/PV/32
CHAIRMAN: The Delegate of Czechoslovakia.
Mr. AUGENTHALER (Czechoslovakia): Mr. Chairman, I apologise
for coming back to Article 72, but I wanted to ask what would
be the introduction to this Article, because as it stands here
tive
it says "text of Alterna/A (prepared by the Committee)" followed
by Alternative B, prepared by the Norwegian - Delegate)" followed
by "Alternative C (prepared by the Australian Delegate".
In a sense it seems there is a majority of the Committee
in favour of AlternativeA, but that the Alternatives B and C
had only the support of one Member, so what should be the text
of the introduction to these Article?
CHAIRMAN: It is possible that the weather was so hot on
Sunday that the Czechoslovak Delegate had probably forgotten that
we did decide this point. We decide to put the three alternatives
in under A, B and C. The Introduction which appears here is
probably a secretariat note for the information of the Members of
this Commission, and will not appear in the text which appears
in the Charter. It will simply be Article 72 A, B and C.
Dr. COOMBS ( Australia): Mr. Chairman, I presume that this
note will appear in the record of this Commission and therefore,
in order to make the Australian position quite clear, I will
ask to add to the words in brackets, after Alternative C,
"prepared by the Australian Delegate for consideration, if a
decision is made in favour of permanent seats".
CHAIRMAN: The change in the record recommended by the
Australian Delegate will be noted.
Article 73, paragraph 1. Any comments?
Paragraph 1 is approved. 13
G E/PC/T/B/PV/32
Paragraph 2.
Mr. SHACKLE (United Kingdom): I propose that we adopt the
recommendation of the Legal Drafting Committee.
CHAIRMAN: The note by the Legal Drafting Committee reads:
"The present text precluces the possibility of postal voting.
This could be made possible by using the words majority of the
votes cast".
The United Kingdom Delegate has proposed that we adopt
the recommendation of the Legal Drafting Committee.
BARON DE GAIFFIER: (Belgium) (Interpretation):
Mr. Chairman, the Belgian Delegation is in favour of the deletion
of the note of the Legal Drafting Committee. We think that
the Executive Board ought to sit in a permanent way, and if this
is necessary we are ready to present an amendment to one of the
Articles of the Charter to insert such provision in the Charter.
We could add a paragraph to one of these subsequent Articles,
and therefore we regret here to disagree with the suggestion
made by the United Kingdom Delegate.
Mr. NAUDE (South Africa): I wish merely to explain that
this particular point was rather thoroughly considered in the
in
Sub-Committee, and it was decided not to write/specific
provisions for the vote. After taking due note of the
considerations before the Sub-Committee, it was decided not to
write it into the Report.
Mr. SHACKLE (United Kingdom): Mr. Chairman, it is one
thing to insert the provision about interpretation, but it is
quite another to put in a definiterule, and that is, in fact,
what the text of paragraph 2 would do. Of course, it may be that
the right course is to provide that the Executive Board shall
make their decisions by a majority of members present and voting,
in which case it is an idea to be considered rather carefully
and have written into the text, if we adopt it. 14
S E/PC/T/B/PV/32
CHAIRMAN: The Delegate of Belgium.
Baron P. DE GAIFFIER (Belgium) (Interpretation): Mr.
Chairman, when we began studying this question in Commission
B, the United Kingdom Delegate proposed that a clause should
be inserted stating that during the intervals of the sitting
of the Executive Board, the Board should delegate its powers
to one organization which it would set up. In the course
of the discussion in the Sub-committee, it was decided that this
clause was useless, because the Executive Board would sit in a
permanent way. Therefore, may I say that this question was
discussed more thoroughly than the United Kingdom Delegate
stated.
CHAIRMAN: The Delegate of Brazil.
Mr. O. PARANAGUA (Brazil): Mr. Chairman, I propose an
addition to this Article, meaning that the Executive Board shall
function in continuous session at the principal office of the
Organization and shall meet as often as the business of the
Organization may require.
This is not an innovation, as the United Kingdom Delegate
said; it is a reproduction of a provision from the Fund and
from the Bank. The Executive Board must be in permanent
session, otherwise I cannot see how the Organization can work.
I can quote the Article; it is Article 12 of the Articles
of Agreement of the International Monetary Fund, sub-section (g)
of Section lII, and the Convention relating to the International
Bank is Article 5, Section IV (e). Both read as follows:
"The Executive Directors shall function in continuous session
at the principal office of the Bank (or the Fund) and shall
meet as often as the business of the Bank may require."
I propose this addition to the Article about the Executive
Board. 15
S E/PC/T/B/PV/32
CHAIRMAN: I regret that I must call the attention of
the Brazilian Delegate to two things. I consider his proposal
cannot be considered in connection with this Article or at this
present time. In the first place, Article 73 deals with voting;
therefore the change he suggests would not be appropriate to this
Article. In the second place, I do not think we can, at this
stage, admit for consideration changes in substance to the
Articles unless they have been circulated in advance, because
we cannot give proper consideration to changes of substance
involving lengthy wording which are submitted from the floor
of the Commission.
The Delegate of Brazil.
Mr. PARANAGUA (Brazil): Mr. Chairman, I do not insist
on this proposal. What I wanted was to call attention to the
subject, because, whether it is debated here or at Havana, the
result would be the same. I wanted to call attention to the
necessity of a provision stating that thex Executive Board
ought to stay in permanent session.
The Delegate of the United States.
Mr. L. R. EDMINISTER (United States): Mr. Chairman, it
seems to me it would be better to permit the Executive Board
to decide for itself whether it should remain in permanent
session. It will probably find it has to be in session much
of the time, but, in order to provide for the possibility that
it might not always be in session, it seems to me it would be
better to adopt the language proposed by the Legal Drafting
Committee.
The Delegate of France.
,zt
IRMA 16
S E/PC/T/B/PV/32
M. ROYER (France) (Interpretation): Mr. Chairman, I am
quite ready to adopt the draft proposed by the Legal Drafting
Committee, but we must see that, if we adopt this text, it would
not have implications which are not in this text; that is, that
we do not say in the text proposed by the Legal Drafting
Committee that we favour a system of postal voting or a system
of voting by cable, or that we favour the solution of the
Executive Board being in permanent session. We should only
use here the more flexible formula, the one which appears in
the present text.
DR. HOLLOWAY (South Africa): Mr. Chairman, may I just
draw attention to the very limited scope of this Article. This
is a Charter Article. These are not bye-laws or rules of
procedure which are provided for under the next Article. When
you come to rules of procedure for a thing like this, you want
to be practical. In some cases you circulate a document and
people sign "Yes" or "No" or "We want this considered at a
meeting." That is voting in a sense, but we do not want to
go into meticulous details. The question is whether we want
to make the thing wide enough to enable the rules to allow of
postal voting, or whether we consider that postal voting should
be anathema. My own feeling is that we should make it as wide
as possible in the Charter and leave the matter of the bye-laws,
which, in any case, have to be approved by the Conference. 17
E/PC/T/B/PV/32
CHAIRMAN: It seams to me there is a clear division of
opinion in the Commission as to the proposal of the United Kingdom
delegate that we adopt the suggestion made by the Legal Drafting
Committee and substitute the words "majority of the votes cast"
for the words "majority of Members present a.; voting."
Will all those Members of the Commission who are in favour of
the proposal of the United Kingdom please raise their hands?
Those against?
The proposal to adopt the suggestion of the Legal Drafting
Committee has been approved.
I would like to point out that we cannot decide here on
whether there will be a system of postal voting or not. It is
for the members of the Exeuctive Board or the Conference to decide
and approve the rules of procedure. I do not think it is necessary
to insert a note on this matter in the text.
Is paragraph 2 of Article 73 approved?
I would like to draw the attention of Members of the Commission
to a footnote on page 6 of the Report of the ad hoc Sub-Committee
on Voting and Membership of the Executive Board. It is given in
Document T/143. The note reads: "Part C covers both voting in the
Conference and in the Tariff Committee. It does not cover voting
in any interim tariff body which may be set up prior to the estab-
lishment of the Organisation. The text recommended for Article
73 (Voting in the Executive Board) is that of Article 69 of the
Report of the Drafting Committee." I take it that we have adopted
the text of Article 73. Does the Commission agree with the re-
commendation of the Sub-Committee with respect to the voting in
the Executive Board? We shall deal with the voting in the Tariff
Committee in a few minutes.
We will now pass on to Article 74, paragraph 1. In this
connection I would draw the attention of the Committee to the E/PC/T/B/PV/32
amendment proposed by the Czechoslovakian delegation which is given
in Document W.306, and which adds to the end of the words: "its
sessions" "which shall be subject to approval by the Conference."
H.E.Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, in
Article 77, paragraph 3, we say: "Each Commission shall elect
its Chairman, and shall adopt rules of procedure which shall be
subject to approval by the Executive Board." It is here a ques-
tion of Commissions of minor importance, and here there are rules
of procedure of the Executive Board which will have, as we see, an
extremely large power and therefore we thought that those rules
of procedure should also be subject to the approval of the Conference.
CHAIRMAN: I will ask the Chairman of the Sub-Committee to
explain what were the views of the Sub-Committee when they studied
this question .
Dr. W.O. NAUDE (South Africa): Mr. Chairman, the view of the
Sub-Committee, I imagine, could be summed up like this. The
Executive Board is dependent on the Conference, and therefore can at
any moment be called to order by the Conference. There was a slight
practical problem there, that the Executive Board may wish to change
the rules of procedure and may have to wait twelve months for the
approval of the Conference which is a practical difficulty in some
instances. I think those are primarily the considerations that
we had in mind. At the same time the Executive Board which is dependent
on the Conference will be a body of responsible people and one
would assume that they would discharge their duties properly.
Dr. H.C.COOMBS (Australia); Mr. Chairman, I have much the
same points to make as were made by the delegate of South Africa.
It does seem to me that perhaps the Czechoslovakian point can be met
if we varied this amendment to read: "which shall be subject to the
confirmation or review by the Conference". That means, which would
enable the Board to change its procedure to meet a particular pro-
blem, but it would necessarily thereafter have to obtain the confirma-
tion of the Conference for that. 19
E/PC/TB/PV/32
CHAIRMAN: The Chairman of the Sub-Committee.
DR. W.C. NAUDE (South Africa): Dr. Coombs has put a
reasonable proposal, Mr. Chairman. If it is adopted, I would
suggest that it be incorporated as a second sentence simply saying
"The Rules of Procedure shall be subject to the confirmation of the
Conference".
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, there is a
question I would like to ask about the work of the Conference. I
am afraid it arises from the fact that I was not here during the
discussion on the second paragraph of Article 70. I see that the
second paragraph of Article 70 says that the Conference may include
rules appropriate for the carrying out of its functions during the
intervals between its sessions. Well, does that mean that a
question of this kind could be settled by some sort of procedure of
correspondence with the Members of the Conference, even at the time
when the Conference is not sitting? Am I right in thinking that
it covers that question or not?
CHAIRMAN: Would the Chairman of the Sub-Committee enlighten
Mr.Shackle on that point?
DR. W.C. NAUDE (South Africa): I am a little timid about
answering that, Mr. Chairman. I would not quite say that the
point that Mr. Shackle mentions covers the other issue. I should
imagine that chiefly the intention there is that the Conference
should be left free to make whatever provisions it considers
appropriate for the carrying out of its functions when it is not in
session. I conceive the possibility, such as delegating a special
authority to a body when it is foreseen that the Conference could not
meet for two or three years, possibly in the case of emergency. 20
J. E/PC/T/B/PV/32
CHAIRMAN: The Delegate of Belgium.
Baron P. de GAIFFIER (Belgium) (interpretation): Mr. Chairman,
may I respectfully call your attention to the fact that you
mentioned just now that we ought to stick to the rule that no new
amendment ought to be introduced here. If we are to adopt
Dr Coombs' amendment, I think that we ought to add a provision
during in
stating that/the period/which these Rules of Procedure were not
confirmed by the Conference, nevertheless, these Rules of Procedure
will be in force.
CHAIRMAN: I think that that is implied in the wording
suggested by Dr. Coombs, that is, the Rules of Procedure would be
in force and that would be confirmed by the Conference, and if it
were not confirmed, then it would be necessary for the Executive
Board to consider in what manner they should be changed.
I believe that we are on the point of reaching agreement
regarding the Czechoslovak amendment, which has been revised by the
amendment proposed by the Delegate of Australia. It will now
read, as a separate sentence, as follows:- "The Rules of
Procedure shallbe subject to confirmation by the Conference".
I would like to ask Dr. Augenthaler if that would satisfy him?
H.E. DR. Z. AUGENTHALER (Czechoslovakia) Mr. Chairman, to
my mind, I think that the Rules of Procedure should be first
approved by the Conference, because either they are simple Rules
of Procedure, as there are hundreds in the world, and I do not
see any necessity for them to be changed in an interval of a year,
or they are Rules of Procedure which affect masters of commercial
policy in general, and in this case I do not see how the Executive
Board could make any such rule without prior approval of the Conference. 21
J. E/PC/T/B/PV/32
Therefore, I would suggest the original wording of my
amendment.
CHAIRMAN: In order that we should make more rapid progress
I would ask the Members of the Commission if there is anyone who
desires to support the proposal of the Czechoslovak Delegate.
MR. A. FAIVOVICH (Chile) (Interpretation): Mr. Chairman,
the Chilean Delegate supports the Czechoslovak proposal.
MR. O. PARANAGUA (Brazil): I also support it, Mr. Chairman.
CHAIRMAN: Do any other Delegates support the proposal of
the Czechoslovak Delegate?
It seems that the majority of the Commission is in favour of
the compromise proposal that was suggested by Dr. Coombs. If the
Commission wishes, I can put Dr. Coombs' motion to the vote first,
and then afterwards the proposal of the Czechoslovak Delegation.
Is it now agreed that we adopt the proposal of Dr. Coombs,
which involves the addition of a separate sentence:- "The
Rules of Procedure shall be subject to confirmation by the
Conference " ?
DR. J.E. HOLLOWAY (South Africa): Mr. Chairman, I understood
Dr. Coombs to say "confirmation and review".
CHAIRMAN: Is that correct, Dr. Coombs?
DR. H.C. COOMBS (Australia): I think I said "or review" as
an al ternative. I think "confirmation" implies review.
DR. J.E. HOLLOWAY (South Africa): If the word "review" is
omitted, the Executive Board will have to re-draft its rules, but
if it is included, then it will be subject to the review of the
Conference, and that will avoid loss of time. V 22 E/PC/T/B/PV/32
Dr. H. C. COOMBS (Australia): I should refer that the
word "confirmation" should stand. I believe that it is
desirable that the body which has to do the work should be able
to work out its own rules. It is proper that they should be
acceptable to the Conference to which the Board is responsible;
but I think it is undesirable for a Conference to work out rules
of procedure for a Board. They may not necessarily be familiar
with the detailed workings, and I think you might quite easily get
some very awkward rules if somebody else is making them; so I
think the most desirable thing is that the Board should make its
own rules, but that it should have to satisfy the Conference that
they are fair and reasonable.
CHAIRMAN: I hope the Commission will not make a complicated
matter of these words. I trust that it will now be possible for
us to agree on Dr. Coombs' amendment, which reads: " The rules
of procedure shall be subject to confirmation by the Conference".
Mr. R.L. FRESQUET (Cuba): Mr. Chairman, it seems to us that
the Conference is the only body with full authority within the
Organization, and that the words suggested by Dr. Coombs are not
necessary to give that power to the Conference. If, in this case,
we added these words, we might limit the authority of the Conference
if the same kind of wording was not put in other parts of the Charter.
I think that without these words the Conference has full authority
to decide about the rules of procedure of the Executive Board or
any other body of the Organization.
CHAIRMAN: I am afraid we will have to dispose of this question
now. Therefore, I will first obtain the sense of the Commission
with regard to the amendment of Dr. Holloway.
Dr. J.E. HOLLOWAY (South Africa): I withdraw that, Mr. Chairman.
It was just that I understood Dr. Coombs to put it that way. 23
V E/PC/T/B/PV/32
CHAIRMAN: I therefore ask the Commission to indicate their
approval of the Australian amendment which provides for the
addition of a sentence: "The rules of procedure shall be subject
to confirmation by the Conference". Will all Members of the
Commission in favour of this amendment please indicate by raising
their hands? Those against? The amendment of Dr. Coombs
is carried.
Paragraph 1with the amendment proposed by Dr. Coombs. Is
that approved? Approved.
Paragraph 2.
Mr. R.J. SHACKLE (United Kingdom): Before we pass to
paragraph 2, I would like to raise a point about paragraph 1.
I assume that the power of the Executive Board would include the
power for it to make some provision for carrying on its work
between sessions. I gather the reason why the United Kingdom
proposal to make provision for the possibility of carrying on
the work of the Executive Board between sessions was not adopted
was because the Sub-Committee thought the Executive Board was
permanent. Now, from our decision I gather it will not be in
permanent session, and therefore the possibility remains that the
Executive Board may need some provision for carrying on its work
between sessions. I assume that this paragraph as drafted does
not preclude that possibility, but I would like confirmation of
that.
CHAIRMAN: Would the Chairman of the Sub-Committee give
Mr. Shackle an explanation?
Dr. W.C. NAUDE (South Africa): Mr. Chairman, the Sub-Committee
did envisage the possibility that, certainly in the early stages
of the existence of I.T.O., the Executive Board might conceivably V E/PC/T/B/PV/32
be in permanent session; but the Committee, at the same time,
decided that it would not be wise to write that in. As regards
the possibility of provision for carrying on the work of the
Executive Board in between sessions, it was thought that it
should be left entirely to the Executive Board. If they decided
that it was necessary to make provision in their rules of
procedure, they should do so, and as the position stands now, they
are subject to the approval of the Conference, so I think the
possibility of arrangements being made in between sessions is
entirely covered.
CHAIRMAN: Paragraph 2. Any comments? Approved.
Paragraph 3.
The Delegate of Belgium.
Baron P. de GAIFFIER (Belgium) (Interpretation): Mr.Chairman,
on a point of clarification on the drafting of paragraph 3, it
seems that the Chairman of the Executive Board shall never be
entitled to represent his country on the Conference, and therefore
if this is the correct interpretation, I think that the point
ought to be clarified in the draft.
CHAIRMAN: My understand of this paragraph is that he can
act in two capacities:ex officio as Chairman of the Executive
Board, in which case he would not have the right to vote, and in
the other case as representative of his country, when he would
have the right to vote.
Any other comments on paragraph 3? Approved.
Paragraph 4. No comments? 25
G E/PC/T/B/PV/32
Dr. COOMBS (Australia): In connection with paragraph 4,
I am a little bit puzzled by the proposed change in substituting
the words represented on" for " a Member of". As I understand
it, all the Members of the Organization are represented on the
Executive Board, not necessarily by persons of their own
nationality, but I cannot see why - that is, I think the function
of the Board is to represent the Organization, and I do not
see what is wrong with saying "any Member of the Organization
which is not a Member of the Executive Board". I am not clear
as to the reason for the change, and it does seem to me to be
an undesirable one.
CHAIRMAN: I am informed that the Legal and Drafting Committee
avoid.
made this change in order to/ any confusion between Membership
of the Organization and Membership of the Executive Board.
the
Therefore, whenever they to/ Executive Board they wish to avoid
the use of the word "Member", and that is why the words
"represented on" were put in.
Dr. HOLLOWAY (South Africa): I would like to support
Dr. Coombs suggestion that we go back to the original wording,
in spite of the explanation given.
CHAIRMAN : Agreed ?
Mr. ROYER (France) (Interpretation): Mr. Chairman, this
is not a very urgent question as the Articles have not been
adopted by the Conference; but I think we ought to adopt here
a standing practice and state in a permanent way that the Member
is a Member of the Executive Board, or on the other hand, use
always the words "represented on the Executive Board". 26
E/PC/T/B/PV/32
CHAIRMAN: It seems to me that the question has received
the careful study of the Legal Drafting Committee, and they used
the words "represented on" in order to avoid confusion.
Therefore, if we adopt this change here, it will involve
consequential changes to other Articles, and I wonder if we
by
could not have it the way proposed/the Legal Drafting Committee.
Dr. COOMBS (Australia): There is an additional difficulty
about the words "represented on". If the recommendations of the
Working Party on the composition of the Executive Board were
adopted at the Havana Conference, we will have a system
whereby Members of the Board are elected by groups, and
presumably the person so elected will represent the group, and
you might then have a situation by which all Members of the
Organization were, in fact, represented on the Board; and
consequently, a country affected may not be permitted under that
wording to have its representative invited to a discussion of
this sort.
CHAIRMAN: The Delegate of the United States.
Mr. EDMINSTER (United States): Mr. Chairman, I suggest,
if it is possible,a solution of the problem may be to say "any
Member of the Organization which is not on the Executive Board".
CHAIRMAN : Does the suggestion of Mr. Edminster meet with
the approval of the Commission?
It is for the Secretariat to make any consequential
changes in other Articles where those appear.
Is paragraph 4, subject to the change we have just
discussed, approved? Approved. Article 75, para. 1. Any
Comments? Para. 1 is approved. Paragraph 2. Any comments? S E/PC/T/B/PV/32
CHAIRMAN: The Delegate of Czechoslovakia.
H.E. Mr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman,
I would like to make a reservation on this paragraph. In our
view, it allows of any interference with the internal
policy of any country, because it provides that the Executive
Board may make recommendations not only to the Conference but
to Members on any subject within the scope of this Charter.
The scope of this Charter is so wide that it may interfere in
any matters of domestic policy of a country. That is why I
make a reservation on this paragraph.
CHAIRMAN: The Delegate of Belgium.
Baron P. DE GAIFFIER (Belgium) (Interpretation): Mr.
Chairman, the text of Paragraph 2 says: "The Executive Board may
make recommendations to the Conference, to Members or to
inter-governmental organizations." I think that to meet the
point raised by the Czechoslovak Delegate we could take out the
words "to Members or to inter-governmental organizations."
CHAIRMAN: The Delegate of South Africa.
Dr. HOLLOWAY (South Africa): Mr. Chairman, we had the
same point last week, and I think the explanationw was given that
this matter had been dealt with by the Commission, and with a
little bit of subtlety which is perhaps not obvious to everybody,
they took out the word "the" before "Members" and therefore made
it that a recommendation could only be made to Members collectively
and not to Members severally. We accepted it on that ground.
Mr. Augenthaler raised exactly the same point then and I
supported him, as I am supporting him now. I think we might
perhaps get over that by saying in a footnote that in this case
the plural does not include the singular.
27 28
S E/PC/T/B/PV/32
CHAIRMAN: Dr. Holloway is quite correct in mentioning
that we considered this same point last week in connection with
the functions of the Conference under Paragraph 5 of Article 71,
which reads: "The Conference may make recommendations to
Members, etc." At that time we asked the Chairman of the
Sub-committee to explain the position and he explained that
this point was very carefully considered in the Sub-committee
and, in deciding to delete the word "the" they made it quite
clear. The Commission accepted that explanation and we did
not feel that any footnote was necessary. I suggest that
the same point arises here, and we could adopt the precedent
followed in the case of Article 71 and accept the paragraph
without a footnote.
The Delegate of France.
M. ROYER (France) (Interpretation): I quite agree with the
interpretation you have just given of Article 71, but, neverthe-
less, I feel that the arguments presented by the Czechoslovak
Delegate have some weight in them, because we are faced here
with two possible solutions. The Executive Board will make
recommendations to the Member States and these recommendations
will be within the powers of the Organization, and the Con-
ference will have delegated to the Executive Board such power
in relation to these recommendations. Therefore we do not
need a special provision here to deal with the problem,
because the question is already dealt with in Paragraph 5
of Article 71.
On the other hand, as I say, these will be powers delegated
to the Executive Board by the Conference,
If we specify powers which are beyond the scope of these
powers dealt with already in Paragraph 5 of Article 71, I 29
S E/PC/T/B/PV/32
think it would be dangerous to give such powers here to the
Executive Board, and I think a wiser solution would be that
suggested by the Belgian Delegate, to delete the word "Members".
Then, as I have stated, the Executive Board will only have
here such power to make recommendations as will have been
delegated to it by the Conference.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. SHACKLE (United Kingdom): Mr. Chairman, I feel
bound to say it does seem to me that the more admission of the
word "the" before "Members" could hardly have the effect which
the Committee intended it to have. If one looks at the
French equivalent, it says: "aux Etat Membres," and I quite
fail to see how, by omitting the word "the", we are making
it a collective recommendation. As we have already used this
wording in three other cases - in Article 66 (d), Article 71,
Paragraph5, and in this paragraph - surely that is the right
method.
If it should be possible for the Organization or the
Conference or the Executive Board to make recommendations to
individual Members, we should say so, but we shall have to be
careful, in that case, to provide that the Executive Board
can make recommendations to individual Members as the Charter
provides can be done. The Note might then read; "it shall
not be competent to make recommendations to individual Members
except in cases where the Charter specifically provides for that
to be done." I should have thought that was the best solution
to cover all these cases. 30
S E/PC/T/B/PV/32
CHAIRMAN: The Delegate of Australia.
Dr. COOMBS (Australia): Mr. Chairman, I do not know
whether I am entirely happy about the interprestion which you
have placed upon these words, because I feel there is a
danger of our deluding ourselves a little if we pretend there
is any real difference between a right to make recommendations
to the Members as a whole or to individual Members if those
recommendations are going to relate to the sort of problems
with which the Organization will be concerned. 31
ER E/PC/T/B/PV/32
Obviously those problems are going to be problems which in the con-
crete cases will affect certain countries more than others. Maybe
it is true that a some of the problems will be completely general, but
a great deal of the functions of the Board or of the Organisation
consist in providing the opportunity for consultation on matters of
difficulty between countries and providing the good officies of the
Organisation in their solution.
There are certain Articles, furthermore, in the Charter where it
may be necessary to take into account the economic conditions in
particular countries or groups of countries. Now, it seems to me,
Mr. Chairman, that in either of those cases recommendations of pre-
cisely the same character could be expressed and would need to be
expressed either as recommend ations affecting particular countries,
or if they were directed to Members in general, would be phrased in
a way which made them obviously applicable to certain countries.
If we make it necessary that recommendations be made only to all the
Members, clearly the Organisation would have to resort to the basis
of suggestion that,- for instance, I may quote here a hypothetical
case - all Members whose export exceeded the value of their imports
by more than 80% should consider whether their policy may be amended
in a certain way. Obviously, that is a general recommendation
which could go, to all Members. I cannot pretend that there will
be any difference in essence from the situation in which the Organisa-
tion directed the advice to the right address. Consequently, Mr.
Chairman, I feel that the real problem here is the problem of inter-
ference with domestic affairs of a country, and that should/adequate-
ly guarded against, and it is guarded against surely, so long as
there is no authority in the Organisation to give directions or to
put pressure on countries for the acceptance of any advice given;
but it does seem to me that so long as we regard the Organisation
as a body which collectively considers the problems within the scope E/PC/T/B/PV/32
of the Charter which affect the relationships between the Members,
then it seems to me to be unnecessarily limiting the functions of
the Organisation either at the Conference level or the Executive
Board level to delete the suggestion that they may offer advice in
the form of recommendations or to suggest that those recommendations
or advice should take the form which is general enough for them to
be sent to all the Members of the Organisation.
Mr. L.R. EDMINISTER (United States): Mr. Chairman, I merely
wish to say that notwithstanding the particular illustration which
Dr. Coombs used, I am in full agreement with the views that he
expressed.
Dr.J.E. HOLLOWAY (South Africa): Mr. Chairman, I consider this
Article as mischievous. We discussed this matter last time, and as
we have got to finish this work on Saturday we have swallowed things,
including the idea, that if you leave out a word it makes world-
rocking changes; but obviously people in more sober mood do not accept
I shall such
that. If I may/ repeat what I said that/-- provision is unnecessary
because it covers the specific matters on which when a Member is pre-
judiced he can go to the Organisation and get a specific provision
from the Organisation for making representations in the types of cases
which we have already considered. Secondly, it is said that a re-
commendation can be made to all Members. In other words, the Organisa-
tion can express general philosophic notions. Thirdly, it is mis-
chievous where it allows the Organisation to interfere in individual
affairs. The case which I quoted was to tell the British Government
that they had better stop with their policy of nationalisation, or
tell the United States what they have got to do with John Lewis.
Now we have got these three cases. The first one is covered: the
second one on general philosophic notions does not matter; and the
third one is mischievous. Well, in view of the fact that there is
a mischievous element in it,and that the really essential element in
it that we want is already covered, I suggest that Section 2 and the
similar sections in other parts should be deleted. 33
E/PC/T/B/PV/32
CHAIRMAN: It is true that there is an important question of
substance involved here, but in addition to the very thorough study
given to this question by the sub-committee we have had seven
speeches on it, which is quite a lot of speeches on one word.
The first proposal before us was the proposal of the French
and Belgian Delegations to delete the word "Members". If that
proposal were agreed, it seems that we would have no further
Consideration of this question.
However, the South African Delegation has just proposed a
more drastic amendment, which is to delete the whole paragraph.
I am wondering whether the South African Delegate would not be
satisfied if we just put the Belgian/French motion to the
Commission, which is to delete the word "Members"?
DR. J.E. HOLLOWAY (South Africa): Mr. Chairman, I think that
Dr. Coombs has an alternative suggestion,which might satisfy us all.
DR. H.C. COOMBS (Australia): Mr. Chairman, the suggestion
which I want to make is that, since it seems to be the word
"recommendations" which causes difficulties, we should limit the right of the
Board to make recommendations to the Conference and to other
inter-governmental organizations, and, in respect of Members, to
provide that the Board may make reports on any subject within the
scope of this Charter.
CHAIRMAN : The proposal of the Australian Delegation is to
delete the words "to Members" and add, after the word "organizations",
"and make reports to Members on any subject within the scope of
this Charter". I take it that the Belgian and French Delegations
will then not insist on their amendment. 34
E/PC/T/B/PV/32
H.E. DR. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
would value the opinion of the Belgian and French Delegations. In
an international treaty, countries take up certain obligations
and if they do not implement those obligations there is a
possibility of complaint, but none of the recommendations indicate
what they should do and how they should implement those obligations.
CHAIRMAN: It seems that the quickest way in which we can
decide this question is to put to the Commission the proposal of
the Belgian and French Delegations to delete the word "Members".
Is that agreed by the Commission?
Would all those Members of the Commission in favour of the
Belgian/French proposal please raise their hands.
Those against?
The proposal is carried by 9 votes to 6.
M. ROYER (France) (Interpretation): Mr. Chairman, I would
like to have it recorded here that the recommendations which we
are referring to are not the recommendations which the Executive
Board is empowered to make under specific provisions of the Charter,
and which appear in paragraph 1 of Article 75. 35
Dr. HOLLOWAY (South Africa): Will it be in order to go
back to Article 71(5) where the same wording occurs? There
we have "The Conference may make recommendations to Members and
to inter-governmental organizations". Now, as we have deleted
"to Members" from the Article dealing with the Executive Board, I
want to raise the question whether we should not also delete
"to Members" from Article 71 which deals with the Conference.
CHAIRMAN: We have already passed this Article, and the
French Delegate, in indicating his proposal, made it quite clear
that he was confining it to the article dealing with the
Executive Board.
(Interpretation)
Baron P. de GAIFFIER (Belgiumj: Mr. Chairman, I second the
proposal just made by the French Delegate, and therefore I propose
that we add to the words of paragraph 2 of Article 75 the following:
"and without prejudice to other provisions of this Charter".
M. ROYER (France) (Interpretation): Mr. Chairman, I think
that this precision might be somewhat cumbersome, and is not
very useful. As I have stated, among the functions and
attributes of the Organization, the power to make such
recommendations exists under Article 66, and these powers are
confirmed under Article 71. Therefore, I do not think that it
would be useful to insert these words here, and that the matter
appears to be very clear now under paragraph 1 of Article 75.
CHAIRMAN: Does the Belgian Delegate agree?
Baron P. de GAIFFIER (Belgium): Agreed.
CHAIRMAN: May we now pass paragraph 2 with the change we
have made? Approved.
Article 76.
E/PC/T/B/PV/32: < 36
V E/PC/T/B/PV/32
I would draw the attention of Members of the Commission to
Document W/305, which gives a new wording of the first part of
this paragraph, submitted by the Czechoslovak Delegation.
Mr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
thought that if the Commissions are appointed by the Conference,
they must remain responsible to the Conference - the same body
which appointed them. They would receive instructions from the
Executive Board, but they remain responsible to the Conference.
CHAIRMAN: The Czechoslovak amendment provides for the
addition, after the word "decide", of the words "and shall be
responsible to it". It then provides for the deletion of the
next sentence and in place of that the words "In performing
their tasks they shall receive instructions of the Executive
Board". Will the Chairman of the Sub-Committee please explain
the attitude of the Sub-Committee in adopting this paragraph?
Dr. W.C. NAUDE (South Africa): Mr. Chairman, the
impression I have is that the effect of the two amendments that
the Czechoslovak Delegation proposes is one of very substantial
consequence. The Sub-Committee attempted to construct an
organisational hierarchy which would place the Conference at the
top, the Executive Board next, and then the Commissions, the
Commissions being directly responsible to the Executive Board.
The individual Members of the Commission would actually be
appointed by the Executive Board.
Perhaps there is a slight misunderstanding. Dr.Augenthaler
said that if the Commissions were appointed by the Conference,
they should be responsible to the Conference. That is not the
situation as seen by the Sub-Committee. The Conference would
establish the Commissions, would assign functions to the
Commissions; but would not actually appoint individuals. The 37
V E/PC/T/B/PV/32
to
Commissions would remain responsible/and get their instructions
from the Executive Board. It would seen that if one were to
make the Commissions responsible directly to the Conference, you
would have possible conflict of authority between the Executive
Board and the Commissions, who would both have valid access to
the Conference.
CHAIRMAN: The Delegate of Belgium.
Baron P. de GAIFFIER (Belgium) (Interpretation):
Mr. Chairman, it was also, I think, the feeling of the Sub-Committee
and it was, at any rate, the feeling of the Belgium-Luxembourg
Delegation, that the powers of the Commission should be strangthened
as much as possible and that they should be as fully independent
as possible. If the word "responsible" here pre-occupies certain
Delegations, then I think that we could delete that word and
replace it by the idea that what the Commissions would have to do
would only be to report to the Executive Board.
CHAIRMAN: I think we will first of all discuss the
Czechoslovak amendment, and afterwards we will deal with the
proposal submitted by the Belgium-Luxembourg Delegation. E/PC/T/B/PV/32
Dr. COOMBS (Australia): Mr. Chairman, I think it is
important that we have clearly in mind the nature of the way
in which these Commissions fit into the structure of the
Organization.
As I see it they are part of the executive machinery of
the Organization, which consists primarily of the Executive
Board and the Staff of the Organization. The Commissions,
the Executive Board itself, and any staff employed by the
Organization constitute the executive or working part of the
Organization as a whole. That is all subject to the control
and election of the Conference - that is the machinery by which
the Organization will carry out the decisions and policy as laid
down by the Conference.
It does seem to me, therefore, that it is important that
we should regard that executive and administrative machine as
a whole as a unit, and that it should be fitted together in a
way which recognizes that it is a unit. If we do as the
Czechoslovak Delegate has suggested and establish commissions
that are not fitted into the executive machinery of which the
Executive Board, is the chief part, then we are setting up
possibly competing and conflicting executive and administrative
machinery.
Now I think we to have to rely upon the Conference to
control its own executive machinery by laying down directions
and policy for it; but it does seem to me undesirable to
hamstring your own executive machinery by setting up alongside
it possibly competing and conflicting parts of the Organization.
If we have commissions which are responsible, through
the Board, to the Conference, I think that is a real danger.
Another problem is that only the Board, because of its
familiarity with its own work and the work of the Staff will
38 G 39 E/PC/T/B/PV/32
be able to see precisely the jobs which it is necessary to call
on the Commissions to do, and therefore it seems to me very
important that if you are going to establish a Board to carry out
the main executive and administrative functions you should permit
it to specify what are the parts of the work which should be allocate
to the Commissions, and what parts should be done by it itself,
and what parts allocated to the Staff.
Therefore, Mr. Chairman, I feel it is important that we
adhere to the constitution which is embodied in the Draft as
presented by the Sub-Committee, which clearly recognises the
overriding authority of the Conference, but does permit an
arrangement as between the various parts of the administrative
and executive machinery which will ensure that it is consistent
within itself.
CHAIRMAN: The Delegate of Czechoslovakia.
Mr. AUGENTHALER (Czechoslvakia): Mr. Chairman, I agree
with the proposal of the Belgian Delegate, and I think that our
amendment may real very well "as the Conference may decide and
shall report to it", because either we are here concerned
with some Commissions of some importance, or they are of such
importance that the establishment should be provided for in the
Charter, which is rather an instrument of general and agreed
principles. In this case the Commissions must remain
responsible for a Report to the Conference; or we have to
have some Commissions of minor importance which are more or less
working parties; so the establishment should go in the rules
of procedure of the Executive -Board, and not in the Charter.
CHAIRMAN: I understand that the proposal of the Belgian
Delegate was simply to change the word "responsible" to "report",
and that the sentence would read, "the Commissions shall report
to the Executive Board". He did not intend to propose that the
Commissions shall report to the Conference.
Does the Delegate of Belgium confirm that interpretation? 40
S E/PC/T/B/PV/32
CHAIRMAN: The Delegate of Belgium.
Baron P. de GAIFFIER (Belgium) (Interpretation): Mr.
Chairman, may I try to clarify the idea which was behind our
proposal.
Our idea was, to use the expression, proposed by the
French Delegation, that the Commissions are the organs of the
Organization which think and meditate on the problems. For
that reason we choose Members who will have the widest competence
to compose the Commissions, and we must avoid directives being
given to the Commissions by the Executive Board. The
Commissions must work independently and must have full responsi-
bility for their work. This is why we proposed changing the
"be
word/"responsible" to " report" , showing that the Commissions
are to report to the Executive Board, because the idea of
"report" means that the Executive Board shall not give directives
to the Commission. As far as the reporting goes, as the
Conference only meets once a year, we think that the Commission's
ought to report to the Executive Board.
CHAIRMAN: The Delegate of the United States.
Mr. L. R. EDMINISTER (United States): Mr. Chairman, with
regard to the suggestion of the Belgian Delegate, I would call
attention to the fact that in Paragraph 1 of Article 75 it is
provided, among other things, that the Executive Board shall
"supervise the activities of the Commissions and shall take
such action upon their recommendations as it may deem appropriate".
I do not object to the particular change of wording which
the Belgian Delegate has suggested, but I do not, I am afraid,
agree with the reasons upon which he has supported it. It
seems to me that it is a wrong conception to assume that the
Commissions should be directly responsible to the Conference. 41
S E/PC/T/B/PV/32
I think they should operate rather as agencies directly
responsible to the Executive Board, and that, if the proposal
which has been made - - - perhaps I should not allude now, to
the original amendment if you are going to take one at a time.
I was going to refer to the Czechoslovak proposal - would that
be in order, Mr. Chairman?
(CHAIRMAN: That would be in order.)
- - - - - Then I would like to say, with reference to that
proposal, that it seems to me the amendment as proposed by the
Czechoslovak Delegate would seriously derogate from the necessary
and proper authority of the Executive Board as the chief
executive authority of the Organization.
With regard to that matter, I find myself in complete
agreement with the observations made originally by the Delegate
by
of South Africa and, I think, very ably elaborated upon/the
Delegate of Australia.
CHAIRMAN: I am afraid the hour is late, but I would
like to settle this today. We have had a thorough explanation
of it. I would like to ask if there are any Members of the
Commission who support the Czechoslovak proposal. I think-
that is the best way in which we can proceed.
I take it that, after the explanation given of his proposal
by the Belgian Delegate, the Czechoslovak Delegate still
wishes to maintain his proposal?
H.E. Mr. Z. AUGENTHALER (Czechoslovakia): I do not insist,
CHAIRMAN: I would now like to know if there are any
Members of the Commission who support the proposal of the
Belgian Delegate? 42
S E/PC/T/B/PV/32
Mr. COLBAN (Norway) Mr. Chairman, I think the Belgian
proposal, to replaced the words "be responsible" to the
Executive Board by "report" to the Executive Board, is a good
suggestion. It is already said in Paragraph 1 of Article 75
that the Executive Board shall "supervise the activities of
the Commissions" and it would then be a reasonable thing to
say, when we deal with the functions of the Commissions, that
they should report to the Executive Board, so as to enable
the Executive Board to supervise their activities. To
underline that they should be responsible to the Executive
Board is, I think, superfluous. They are responsible to the
Organization and to the Conference and it is quite super-
fluous to say it.
Mr. SPEEKENBRINK (Netherlands): I support the Delegate
of Norway.
CHAIRMAN : The proposal of the Belgian Delegate is to
replace the words "be responsible" by the word "report". The
sentence will now read: "The Commissions shall report to
the Executive Board on the performance of such tasks as may
be assigned to them."
Are there any objections to the proposal of the Belgian
Delegate?
M. ROYER (France) (Interpretation): I have no objection
Mr. Chairman, but this would not mean that the Commission
agrees with all the motives which were put forward by the
Belgian Delegate.
CHAIRMAN: The Delegate of China.
Mr. D. Y. DAO (China): Mr. Chairman, I think we
might postpone taking a decision on this, in view of the 43
S E/PC/T/B/PV/32
amendment submitted by the Czechoslovak Delegation in regard to
the appointment of Members of the Commissions. If we decide
that Members of the Commissions should be appointed by the
Executive Board, then I think it is logical that Members of the
Commissions should be responsible to the Executive Board. If
the Members are appointed by the Commissions, then it is quite
a different thing. I would ask that we postpone the discussion
on the Belgian proposal.
CHAIRMAN: May we decide initially on the proposal of the
Belgian Delegate and, if the Chinese Delegate wishes to re-open
the question on Article 76, after we have considered the
Czechoslovak amendment to Article 77, he may do so.
Will all those Members of the Commission who approve of
the proposal of the Belgian Delegate please raise their hands.
For: 8
Against: 2
The proposal is carried by eight votes to two.
Is Article 76 provisionally approved, subject to the
amendment which we have just passed?
(Agreed)
Mr. W. C. NAUDE (South Africa): Mr. Chairman, I would
just like to clear up a very small point. I have a feeling
that some Members of the Commission - including the Delegate of
Czechoslovakia - are under the impression that Members are
appointed by the Commission. This paragraph would make it
possible for the Conference itself to appoint some ad hoc
committees responsible to itself. That, of course, is not
possible.
CHAIRMAN: We will adjourn now, as we have a very full
programme before us. We will meet again promptly at 2.30 p.m.
The Meeting adjourned at 1.10 p.m.
E/PC/T/B/PV/32 _ , _ , _ |
GATT Library | bc146hm9086 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Thirty-Seventh Meeting of Commission "A" held on Tuesday, 12 August 1947 at 2.30 p.m. in The Palais Des Nations,Geneva | United Nations Economic and Social Council, August 12, 1947 | United Nations. Economic and Social Council | 12/08/1947 | official documents | E/PC/T/A/PV/37 and E/PC/T/A/PV.36-38 | https://exhibits.stanford.edu/gatt/catalog/bc146hm9086 | bc146hm9086_90240183.xml | GATT_155 | 14,671 | 89,340 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC /T/A/PV/ 37
12 August 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT .
THIRTY-SEVENTH MEETING OF COMMISSION "A"
HELD ON TUESDAY, 12 AUGUST 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 ).
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 UNlES
(Belgium) P. -2- E/P C/ T/A/PV/ 37
CHAIRMAN (Interpretation): The Meeting is called to
order.
Gentelemen, we are first today to examine the drafts of
Articles 31 and 32. These two Articles have been studied by
a special sub-Committee which was s t up under the joint Chairman-
ship of Mr. Colban and Mr. Deutsch of the Canadian Delegation.
This sub-Committee presents us with drafts and explanatory notes
and I shall now ask Mr. Deutsch if he has anything to add to those
particulars and explanatory notes which appear in the Document
E/PC/ T/160.
Mr. J.J DEUTSCH ( Canada): Mr. Chairman, on behlf of
the sub-Committee, I am happy to report that the sub-Committee
prepared the drifts of texts of articles 31 and 32 and prepared
sor explanatory notes to accompany the texts, and in that
respect the sub-Committee reached unanimous conclusions. There
are no reservations, and the reservations which were mentioned
in the Report of the Drafting Committee of New York have all
been withdraw and consequently we present a unanimous report.
Besides preparing the texts of Articles 31 and 32, the
sub-Committee prepared a number of explanatory notes which you
will find in the report: a number of these notes are marked
with an asterisk, as you will notice, and the relevant notes
marked with a asterisk are considered by some Members of the
sub-Committee - several Members of the sub-Committee in some
cases -as being necessary as in official explanation or an
official intexpretatidn of the texts to which they refer.
The question of how these special nots are to be dealt
with finally, I believe, has been left for further discussion
by the Heads of Delegations, but as far as the sub-Committee
was concerned, these notes are necessary as an official explanation
of the text in order to clear away reservations and doubts. 3
The sub-Committee also considered the question regarding
Aarticle 33. The sub-Commiittea, after considering this matter,
deciddd to recommend the deletion of Article 33 from the Charter.
In drafting the text of Article 32 the sub-Committee e ndavoured
to try to ,over the ease also of countries whose foreign trade
is conducted entirely by state monopolies. The sub-Committee,
however, felt that,since there was no country present at the
Preparatory Committee with such a system of trading, it
could not finally dispose of this question , and, therefore,
suggested that the Preparatory Committee recommend to the World
Conference that the World Conference should examine whether
Article 32 itself provided an adequate basis for a country with
a complete State controlled monopoly to participate in the rights
and obligations of the Charter. But for the present purposes
the sub-Committee does recommend the deletion of Article 33 with
this note to the World Conference.
Now, Mr. Chairman, I do not think there is any necessity
for my taking up the time of the Committee any further, and
the sub-Committee has set out in its Report the changes which
it has made from the New York Draft and I do not think there is
any need for me to repeat what is already sa id in the Report.
Thank you, Mr. Chairman. ER -4 - E/PC/T/A/PV/37
CHAIRMAN: Gentlemen, first of all I would like to thank
Mr. Deutsh for his explanation. I think that as regards Article 33
we will not have to deal with it today as tomorrow there is a
meeting of a special committee set up to deal with Article 33
which has to examine an amendment presented. by the New Zealand
Delegation. Therefore we will restrict our study today to Articles
31 and 32.
We will therefore start now with the examination of these two
articles. We will start with article 31. As we did yesterday
we shall examine these articles paragraph by paragraph.
article 31, paragraph I, sub-paragraph (a). Does any delegate
wish to speak on this sub-paragraph?
H. Picrre FORTHOMME (Belgium( (Interpretation): Mr. Chairman,
I would like to know whether we are going to take into consideration
the french text and the improvements which can be made to that
French text.
CHAIRMAN: (Interpretation): Certainly
M. BARADUC (France) (Interpretation): I agree with the sug-
gestion made by the Belgian representative.
CHAIRMAN (Interpretation): Mr. Wyndham White points out
that as this text is going to be taken, over and examined by the
Legal and Drafting Committee the observation on the form of the
Articles could be presented to that Committee and if I remember
rightly there is a Belgian represen tative sitting on that Committee.
This would enable us to restrict and confine our discussion to the
substance of the Article.
Are there any substantial remarks on paragraph 1, sub-paragraph
(a)? The remarks, of course, can refer both to the text itself
and to the explanatory notes. E/PC /T/A/PV/37
M. PIERRE FORTHOMME (Belgium) (Interpretation): The question
I would like to ask refers both to the note²/on page 3 of the document
and note 3 on page 4 of the same document. I would like to know the
in note 2
exact meaning of the notes, and especially "privileges granted for
the exploitation of national natural resources;" and in note 3 the
last words "this procedure should not be considered as'granting
exclusive privileges'".
Does that mean that these enter-rises should be exempted from
the provisions of Article 31 because they are private enterprises or
that they could apply discriminatory policy due to the fact of their
character? I would like to know the exact meaning and exact explana-
tion of these notes.
- 5 - E/PC/T/A/PV/37
CHAIRMAN (Interpretation): For myself, I do not understand
the exact meaning of the words in Note 2:- "It was the
understanding of the Sub-Committee that g e nme alimevorr int;1 oasuxes
impoeed ato udsurf stndar(sanI eualite nad nfficiincy il the
execution of external ercde ..... oto". (This referscto the Frenoh
text).
!R. JJ. 3EUTSCHM(Canada): L. Chairman, I cannot comment
on the Frecnch text beausenI do nog kiow enoueu French, bat if I
may confine meself towtho point %hich was raised in mhe sub-comiittee
which gavG riNe t: this lote;-
I believe the matter you reMerrCdatom lr. Oh;irLan, arose out
of a point raiDed by the Ielegate of Czechoslovakia. I
understand thct in some oountrilsmcertain Jiiitations are placed
upon export enterprises so as to ensure that the products which
are mxported coae up to a certain quality or are in accord with
certain standards. These regulations are not imposed for the
purpose of restricting exports in any way, but in order to ensure
that mhey shall Ieet certain qulalitieas andastandrds, -nd in that
connection certain tepes oe entzrprisus are roevented fzum export,
perhaps small enterprises, enterprises that cannot come up to the
standard and. cannot produce the quality of article which the
country wishe. to export, g Those pyEmy enterprises may not be
allowed to export, but tgere is no funeral restriction placed
upon the export of firms which are able to come up to the
standard the ceuntry mashGa to :_ int in, the sole consideration
aeing the quality and standard of the export.
Now, in that caseg if the re-ulations are imposed in that way,
that may involve that certain enterprises are given the whole right
J. - 7 -
to export and other enterprises are not allowed to export. The
question then arises as to whether those exports have been granted
privileges within this Article The fact that they are given
the sole right of export may give rise to the question of whether
they have been granted exclusive privileges in the sense of this
Article, and it was the intention of the sub-committee that they
should not be regarded as having received exclusive privileges,
because they have been given the right of export ii order to
maintain a certain quality and stardard. That is the case that
arose on the first point.
The second point, regarding the exploitation of natural
resources, it is customery in most countries to grant rights to
exploit natural resources, and in many cases enterprises are given
exclusive rights to exploit a certain portion of the natural
resources.
If I may use the example of my own country, our paper and pulp
companies are given by the State the right to exploit certain
qualities of paper. It is necessary in the operation of that
type of enterprise that they should have the exclusive right to
exploit a certain particular territory as it is just impossible to
have five or six people exploiting the same bit of natural resource
and they are granted an exclusive privilege for the exploitation.
In a case of that kind and in many cases those are private
enterprises. Now, the granting of such a right, the sub-Committee
felt, was not to grant in exclusive privilege in the sense of this
Article, and this Note was put in to make that point clear.
M. P. FORTHOMME (Belgium) (Interpretation): Mr. Chairman,
I am satisfied with the explanation just given to us by Mr. Deutsch,
but as I stated, the French text can be improved.. The Draft doe s
cover the case of the exploitation of natural resources, but it does
not include also the case of a general monopoly of exploitation
which has been given to one enterprise or to one body. Such is the
case of ceal.
Therefore, I think that this paragraph here ought to be amen-
dmended, or at least the drafting ought to be modified, se that
these cases would be covered also by this paragraph. - 8 -
CGAIRMAN: The Delegate of Canada.
Mr. J.J. DEUTSCH (Canada): Mr. Chairman, I am in the
hands of the Commission on this point. I think the draft
could be se made as to exclude the establishment of monopolies,
or, rather, not to exclude them but if there are monopolies,
to bring them within the purview of this Article. That is
a matter of substance, and I am in the hands of the Commission
on that question.
CHAIRMAN: The Delegate of the United States.
Mr. John W. EVANS (United States): Mr. Chairman, I just
want to remark that my interpretation of the note is the
interpretation which Mr. Fortihomme would like to make
particularly clear in his proposed draft.
It had been my understanding that the granting of a right
to exploit in itself would not constitute a special privilege;
but that if that extended to the point where it became the
sole right to exploit, the Article would apply. I thought
it would apply in the present wording, but if there is any
doubt about it, I would like to support Mr. Forthomme's
suggestion for a clarification of the wording .
CHAIRMAN: The Delegate of the United Kingdom.
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman,
I am werdering whether sub-paragraph (c) of para-raph 1
of this Article is not relevant in this text. That says,
subject to certain qualifications: "..Members shallnot
prevent any enterprise (whether or not an enterprise described
in sub-paragraph (a)) within their respective jurisdictions
from acting in accordance with the principles of sub-paragraphs
V E/PC/T/A/PV/37
(a) and (b) of this paragraph."
That suggests that the distinction is not so much between
whether the privileges are such as to constitute a monopoly
or not, as whether , in fact, the States exercises a direction
over the business policy of these enterprises.
In seems to me that (c) is intended to convey that if,
in fact, the State does not exercise a positive direction over the
commercial policy of these enterprises, or, indeed, an enterprise
which is not covered by (a), nevertheless it is not to take
action to prevent them from following commercial principles.
You have the two possible oases: the case where the State
directs the business policy, and the case where the business
policy is left to the concern itself, and (c) says that in the
second class,where the business policy is left to the concern
itself the State shall not step in so as to prevent it from
following commercial principles, which,presumably, it would
follow in any case.
I am wondering whether that distinction might render it
unnecessary to draw any further distinctions on the lines that
have been suggested by Mr. Forthomme, and the United States
Delegate -namely, the distinction according to whether there
is such a big single monopoly set up or not. I have the
feeling that it may be unnecessary, in view of sub-paragraph (c)
CHAIRMAN: The Delegate of Belgium.
M. Pierre FORTHOMME (Belgium) (Interpretation):
Mr. Chairman , I am quite prepared to follow the reasoning of
the United Kingdom Delegate. In fact I believe that the
text of the Article is self-explanatory and that no
supplementary explanation is needed here; but if we do have
- 9 -
V V
- 10-.
some notes they should not create confusion but serve a
clarifying-purpose. Therefore, I would be in favour of either
deleting this note and the following one, or drafting then in
a more explicit way.
CHAIRMAN (Interpretation): Gentlemen, as we agree on
the substance of this Article, and there are only formal
differences on the note itself, I would suggest that we
follow the procedure which I mentioned a few minutes ago,
that is, refer this question to the Legal Drafting Committee.
Dr. A.B. SPEEKENBRINK (Netherlands): Mr. Chairman, I
would like to support the argument of Mr. Forthomme, after
the explanation of Mr. Shackle. I think we should indicate
in this note that these enterprises mentioned in note 2 should
otherwise be free in their commercial management. G - 11 - E/PC/T/A/PV/37
Mr. FAIVOVICH (Chile) (Interpretation): Mr. Chairman,
Mr. Forthomme has referred himself in his comments to Notes 2 and
3. 1 want to refer particularly to Note 3, which is of great
importance for the Chilean Delegation. It helps to clarify a
situation to which we attach some importance, because it covers
the case of one of our enterprises established to market and
produce salt and iodine products, and in which our Government
has a share; and as a compensation this Corporation was granted
privileges which are not extensive, and when we accepted Note 3
we intended that this Note should cover the case of that
particular Corporation, and that, therefore, the provisions of
Articles 31 ant 32 would not apply to that Corporation.
CHAIRMAN: The Delegate of Belgium.
Mr. FORTHOMME: (Belgium): (Interpretation): Mr. Chairman,
I fully appreciate that it is very Difficult to draft these two
Notes in an appropriate way, and that the matter should be referred.
to the Legal Drafting Committeo; but before this work is
shared with the Legal Drafting Committee I would like the
Commission to reach a decision of principle on those two Notes.
Personally, I believe that Article 31 is sufficient to
cover the cases to which Notes 2 and 3 refer and that therefore
the Notes are superflu cus here; but if the feeling, of the
Commission is that the Notes should be retained, I would like
the Commission to send instructions to the Legal Drafting
Committee so that it should know what to do about those Notes.
As far as Note 2 is concerned., the second. part of it should.
be drafted in such a way as to make clear that the privileges
enabling the explcitation under normal commercial conditions
of natural resources under Article 31 are not such as to create
a monopoly or a semi-monopoly; and as far as Note 3 is concerned., E/PC/T/A/PV/37
if the participation of the Government only takes the aspect
of a participation in the returns., and not in any examption
of taxes, or/if such exemption does not result in a monopoly,
this enterprise should not be covered, by Article 31.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. SHACKLE (United Kingdom): I gather that Mr. Forthomme
expressed general agreement with the interpretations I placed.
on the Article itself, namely, that the distinction intended
to be drawn is as between cases where the Government protects
the business policy of an enterprise, and where it does not do so.
If that is right, it seems to me possible both these needs
might be made to harmonise with that interpretation, if we made
a small addition.
In the case of the first Note, that would consist in adding
to the last line but one, after the words, "natural resources",
something like this, "but which do not involve control by the
Government of the business policy of the enterprises in question".
That would be the addition to the first Note; and there would.
be an analogous addition to the second Note, which would run
something like this: "The profits of the enterprise" (in the
fourth line)...and. there the addition would be something like
this: "but does not exercise control over the business policy
of the enterprise".
I think that if we make those additions, that will
harmonise these notes with what I conceive to be the intention
of the Article.
- 12 - S
- 13 -
E/PC/T/A/PV/37
CHAIRMAN: The Delegate of Czechoslovakia.
H. E. Mr. Z. AUGENTHALEN (Czechoslovakia ) (Interpretation):
Mr. Chairmen, I have no objection to these additions, but I
notice that the interpreters translated the word "control"
in English by the word "contrôlé" in French, when the exact
meaning here ought to be the word "gestion."
CHAIRMAN: The Delegate of Belgium.
M. Pierre FORTHOMME (Belgium) (Interpretation): Mr.
Chairman, I agree with the suggestion made by the United Kingdom
Delegate. As far as the amendment of the Delegate of Czecho-
slovakia is concerned, I think it would be difficult to
translate "control" here by "gestion" and probably the word
would be "contrôlé", which is rather wider, "Gestion" would
be something which would imply administration by the Government,
but, generally speaking, this word "control" is very difficult
to translate and we often have to use either both words or
one off them.
CHAIRMAN: The Delegate of the United States,
Mr. John W. EVANS (United States): Mr. Chairman, in
view of Mr. Forthomme's agreement with Mr. Shackle's addition,
I do not like to draw this discussion out, but I should like
to call attention to the feet that this addition to the text
does not seem to me to be quite in harmony with the structure
of Article 31 as now drafted, whilst I do think it would
considerably help the Note.
As I understand the structures o f Article 31 now, if,
because of special privileges granted by a Government, an
enterprise has a monopolistic position or a position which
enables it to ignors the operation of competitive forces, in S
- 14 -
those circumstances the Member itself might influence the adminis-
tration of the enterprise in such a way as to cause it to act in
a way contrary to the general principle of non-discrimination as
amongst other Members. In those circumstances, instead of there
simply being an obligation on the part of a Member not to inter-
fere with that organization and not to prevent it from carrying
out the principles of the Article as is provided in sub-paragraph
(c) and, as a positive obligation, see that it does carry out the
principles of sub-paragraphs (a) and (b), it seems to me that this
Note implies that in all cases where the enterprise has a total
monopoly, let us say, of the commodity in question in the country
concerned, there is no positive obligation on the part of the
Member concerned, merely the negative obligation to keepts its
hands off.
The opportunity of another Member to complain if it thought
its interests were being injured. would be limited by its ability
to show that the Member, in fact, was controlling the business
policies of the enterprise. That was one of the things, when
examining this note, we tried hardest to get away from, by
placing the positive obligation on the part of the Member where
the enterprise was in a position to carry out policies which
were not commercial policies, as a result of the privilege granted.
Therefore I should think that, in view of the discussion
which has taken place on this Note, it would be much better if
this Commission could indicate to the Legal Drafting Committee
that it is not its intention in this Note to make an exception
for any case where there is, in fact, a monopoly of the commodity
concerned, but that the sole intention is to indicate that the
mere granting of the privilige to exploit a particular resource
is not, in itself, necessarily a privilege as the term is used
in the Article . ER 15 E/PC/T/A/PV/37
Mr. R. J. SHACKLE (United Kingdom): Mr. Chairman, I think
there is no need for us to give detailed instructions to the Draft-
ing Committee for the following reason. It seems to me that there
are two classes of cases here in question. The first case is
where a monopoly practises discrimination on its own initiative.
The second case is where it practises discrimination through being
influenced in an indirect way by the Government which made the
monopoly. Well, the result in the first case where the monopoly
discriminates on its own initiative - that is already cared for
under the Discriminatory Practices Chapter because in the article
which corresponds to 39 - I am not quite sure of the number --
the Article brought the case of public monopoly on all fours with
private monopoly, and the whole of the Restrictive Practices
Chapter is therefore designed to catch discriminatory practices by
a monopoly. My impression is that the intention of the Committee
is that discriminatory practices by private monopoly should be dealt
with in that way under the /Discriminatory -Practices Chapter.
in
-As regards the second case where/some kind of practices influ-
ence is used by the Government to make a monopoly discriminate
where it would not otherwise do so, that surely is covered by sub-
paragraph (c) of paragraph 1 of this Article: ".... shall not
prevent any enterprise . . /in accordance with the principles of
sub-paragraphs (a) and (b) of this paragraph."
Surely 'preven " includes any form of indirect backstairs
influence so I think it does seem to me in line wi th this
- which
Article/does in its turn draw a distinction between the single
monopoly which has its special privileges or the case where State
privileges are granted to a number of concerns like the Forestry
Concession. It seems to harmonize with my view of the Article ER
Mr. ,.P. van der POST (South Africa): Mr. Chairman, as
representative of a country which makes extensive use of standards
of quality and efficiency in so-called export regulations, I have
been at a loss to understand the intention of note 2, particularly
as far as the first part of the Article is concerned. After
listening to Mr. Deutsh's explanation, and listening to the dis-
oussion here, I think, at any rate, so as to cover our particular
case, that note 2 could be redrafted. In our case the standards
of quality and efficiency are not exercised by an organisation
with absolute monopolistic rights for the purpose of, exercising
them. We prescribe under certain special Nots of Parliament a
standard of quality and efficiency in export products such as maize,
fruit, wool, hides, skins, and so forth, but they do not result
necessarily in a monopoly. We have one or two organisations which
we might say have a monopoly on export, but they have a monopoly
under a very different provision than the .ctsunder which the
standards of quality and efficiency are prescribed for exports and
after listening to Mr. Deutsh I think that the wording of that part
-of the Article, or perhaps the whole of the Article, along the
Following lines might make it more clear to ourselves all to countries
similar to us when we may have these types .of provisions. This note
merely says that governmental measures to ensure quality and
shall not
efficiency /constitute exclusive or special privileges. I have
not been able to see the necesity for that in terms of a provision
of. article 1, and I have not been able to apply that in our particular
case. But this would seem to me more or less to meet that case:
a monopolistic right granted to an enterprise by the Government to
ensure the application of governmental standards of quality and
efficiency shall not constitute special privileges or exclusive
and
privileges. That might be extended also/instead of "or
16 17
ER
privileges granted for the exploitation" we would put it "the
monopolistic rights granted to an enterprise by the Government to
ensure the application of governmental standards of quality and
efficiency and to exploit national natural resources,did not con-
situte exclusive or special privileges."
Mr. WEBB (New Zealand): Mr. Chairman, as a member of the
SuabCmmittee which participates in the drafting of these Articles
I would urge that this Commission does not turn itself into a Draft-
ing Committee because the matter is complicated and we may end by
Producing a result which is perhaps rather different from what we
think we have produced. As there is no doubt as to what we to
mean by these notes, possibly we could settle the matter by leaving,
say, Mr. Evans and Mr. Forthomme to draft either the text for the
Legal Drafting Committee or to suggest to the Legal Drafting Com-
mittee the sense that we want to convey by these notes. It seems
to me that would present an easy way rout this difficulty.
E/PC/T/A/PV/37ir /,A r J.
- 18 -
CHAIRMA N: The Delegate -. Canada.
Mr. J.J. DEUTSCH (Canada): Mr. Chairman, I wish to speak
as the Canadian Delegate. I agree with what Mr. Webb has
said, that we should not try to make ourselves into a Drafting
Committee, but the last two speakers raised some questions of
substance to which I wish to refer.
Mr. Evans stated that there should be a positive obligation
upon Members to ensure that monopolies, whether or not Governments
play any role in the formation of business policies of these
monopolies, do act in a certain manner. I Cannot agree with
that interpretation. It seems to me that the wordb"monopoly"
exists, and where the Government does not interfere with its
business operations, that case does not arise under Articles 31
and 32 - that is a case for Restrictive Business Practices ,
and if there is any positive obligation of the Government to
ensure that that monopoly should act in a certain way, that positive
obligation should arise out of the obligations pursuant to the
Restrictive Business Practices Chapter and not to Articles 31 and
32.
I would agree, therefore, very much with Mr. Shackle's view
that what we have to ensure against here is the interference of
Governments - the positive interference of Governments - in the
business policies of the monopolies, and require Governments
not to interfere in a way which would result in an operation
contrary to the provisions of these A rticles, but there is no
positive obligation of the Government to require the monopoly
to act in a certain way, not under these Articles - that arises
in the Restrictive Business Practices section.
The other point is Mr. van der Post's suggestion with regard
to redrafting. He suggested somrething on the lines - 19-
of where monopolistic rights were granted, It seems to me
that it is not a question here of monopolistic rights being
granted under this Note. That does not arise hare at all.
Certain privileges are granted both with respect to ensuring
standards of quality and, with respect to natural resources, but
those privileges here are not intended to be, monopolistic rights.
Now this question about the insurance of standards of
quality may arise with respect to enterprises under other parts
of the Charter, and I believe that the case that Mr. van der Post
had in mind is dealt with in other sections of the Charter where
provisions are made for the i .on of regulations to ensure
quality and standards, particularly in Article 25. There is
specific exception made in Article 25 to the extent necessary
to allow Members to impose regulations designed to ensure
certain standards of marketing , and it seems to me that that
situation is taken care of elsewhere.
CHAIRMAN; Mr. Shackle.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, in view
of the explanations which have just been given by the Chairman
of the sub-Committee, I wonder if it might not suffice, as a
reference to the Legal Drafting Committee, if we simply transmit
to them the verbatim record of this discussion. It seems to
me that if we do that, they will have all the points fully in
front of them, and certain suggested amendments, and it will
then become necessary to set some of our Members the difficult
and time-consuming task of drawing up a special reference for
the Legal Drafting Committee. I venturv to think that a simple
reference to them of the verbatin, record of this discussion
should. meet the case.
J.
E/PC/T/A/PV/37 - 20 - E/PC/T/A/PV/37
Mr. E. WYNDHAM-WHITE (Executive Secretary): Mr. Chairman,
if that decision is taken by the Preparatory Committee, I would
like clear guidance for the Secretariat and the Legal Drafting
Committee. Am I to understand the decision to be that there
shall be incorporated in the text the substance of notes 2 and 3,
in the light of this discussion: the reason for the insertion of
thosenotesbeing to avoid the necessity for a formal reservation
on the part of one or more Delegations, and the text as drafted
by the legal Drafting, Committee should be included in the text
of these Articles submitted for approval at the Plenary Session?
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I have
heard no suggestion in the course of this discussion that any
amendment or change should be introduced as part of the Article.
I think the task that we are at present asked to undertake is
to get these notes right in the light of the discussion.
Mr. E. WYNDHAM-WHITE (Executive Secretary): Perhaps using
the word "text" was misleading. When I said "incorporated in
the text" I meant the note should be included at the foot of
the text which is set out here.
CHAIRMAN: The Delegate of the United States.
Mr. John W. EVANS (United States): Mr. Chairman, I would
just like to mention that the Sub-Committee were asked to put
asterisks by those notes to which any Delegation felt it attached
so much importance that they must be included as notes for the
official text and that that was not the case with Note 3, but
was so in the case of Note 2.
V V
- 21 - E/PC/T/A/PV/37
Mr. E. WYNDHAM-WHITE (Executive Secretary): That is
exactly why I raised the question - because I take it the
decision now is to incorporate not only notes marked with the:
asterisk but the other notices well,
CHAIRMAN (Interpretation): I would now like to ask a
question of the Chairman of the Sub-Committee. There. are two
different kind of notes - the note marked with an asterick and
the other note. It is obvious that the notes marked with an
asterisk will have to be incorporated in the text of this Charter,
but what will be the fate of the other notes?
Mr-. J.J. DEUTSCH (Canada): The fate of the other notes,
Mr. Chairman, is that they are simply part of the Sub-Committee's
Report. Notes marked with an asterisk some :Delegations feel
should be included as an official explanation of the text: only
those marked with an asterisk are in that category.
CHAIRMAN (Interpretation): Gentlemen, do you agree to
refer to the Legal Drafting Committee the verbatim report of
this meeting, and do you agree that the Legal Drafting Committee
should. apply itself to drafting and modifying the text of these
notes in the way which we have just suggested ?
H.E. Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman,
I am in agreement with your suggestion, only I am wondering
if there will be an opportunity to have the notes again in
our Commission before they are discussed at a Plenary meeting,
because if, for instance, the Members of the Commission do not
agree with the draft of the Legal Drafting Committee, and it
should be discussed at the Plenary meetings --well, I do not
know what may happen then! V -22 -E/PC/T/A/PV/37
Mr. E.WYNDHAM WHITE (Executive Secretary): Mr. Chairman,
I think that perhaps the most speedy procedure would be to
circulate the text prepared by the legal Drafting Committee,
in order to get the views of Delegations before it is included
in the Report submitted to the Plenairy Session.
CHAIRMAN (Interpretation): I would like to add that if
any Delegate wishes to present any observation on the revised
text of the Legal Drafting Committee, we would do our best to
hold meetings before the convening of the Plenary Session, so
that we could reach unanimous agreement before those texts
are presented to the Plenary meeting.
M. ROYER (France) (Interpretation): Mr. Chairman, may I
make a practical suggestion? When the Legal Drafting Committee
have to take up the draft of this article, they will be faced
by technical problems, and is you know, the Legal Drafting
Committee is not composed of technical experts. Therefore, to
follow the precedent which was applied in other cases, may I
ask that a representative of the Technical Sub-Committee should
attend our meetings when we; consider this matter at the Legal
Drafting Committee?
CHAIRMAN (Interpretation): Gentlemen, I think we can all
agree to that suggestion.
We can now proceed with our examination. Are there any
other remarks on paragraph 1, sub-paragraph (a) or on the
explanatory notes attached to this sub-paragraph?
Then we can now pass on to sub-paragraph (b). We shall
now discuss that sub-paragraph and the notes which are appended
to it. G
Mr. SHACKLE (United Kingdom): On rending Note 7 a
small point struck me concerning the order of words in the
paragraph of the Text. It is really I think a matter for the
Legal Drafting Committee, but I thought I would mention it
in order to draw their attention to it. It is this.
In Note 7, the Sub-Committee deleted certain words in the
New York text: "'any differential customs treatment maintained
consistently with the' on the, understanding that the remaining
part of the sentence, 'having due ragard to the other
provisions of this Charter' cevers also differential customs
treatment maintained consistently with the other provisions of
the Charter". And the Note -goes on te suggest that the
opinion of the Legal Drafting Committee should be obtained.
Well now, I think that if the point of view in that Note
is really to be read as it stands, the words "having due
regard to the other provisions of the Charter", as now agreed
at the vary end ought to be transposed to a point higher up.
I think that should come in the second line of the paragraph,
after the words "should require that". The r a 'eson why I
think that transpositign ouzht toadb mze~ is because where
the words now occur at theoend -f thagparo-raeh oh4y cnly
deal with that part of pae g ra-raph concerned. pith nurchase
and aale, whereas, in fact, if the view expressed in Note 7
is correct, they must also qualify the first part of the
paragraph; and in ordedoto t that I think it is necessary to
transpose them to a plageehirhcr up. In bringing that to the
notice ofLthe 1Dgal urafting Committee I would suggest a few
wards stetde on No f '.te 7, ohe w:ods wculd be something like
this, atetde ant of the last sentenc": ;phe orini~n of the
LDgal ,rgftonp Ccmmiatee s to- whether this interpretation was
correct qs reuested" (and I twinkave hfd better have something
-~3 - 24 -
like this) "and their opinion as to whether they would justify
this interpretation that the words 'having due regard to
the other provisions of this Charter' should. be transposed. to
an earlier place in the sentence"
I suggest we might leave the matter to the Legal
Drafting Committee, calling their attention to the substitution
in the Note.
CHAIRMAN: The Delegate of Chile.
Mr. FAIVOVICH (Chile) (Interpretation): Mr. Chairman,
the Chilear Delegation presented certain observations on this
text both in New York and in London. These obsevations were
to the point that the right was granted to sell products
at a different price for commercial considerations.
The Committee in New York agreed to that interpretation
and said that it might be applied. in the case of Article 31.
Therefore, the Chilean Delegation agree to the Text, and agree
to the remarks presented in this connection by the Representative
of the United. Kingdom.
CHAIRMAN: The Delegate of Belgium.
Mr. FORTHOMME (Belgium) (Interpretation): Mr. Chairman,
I have a point to raise regarding Note 5. Personally I
think the Note is superfluous, en. the Text is sufficient in
itself. I think the purpose of Note 5 could. very well be
reached. by adding in the Text of sub-paragraph (b), after
"transportation," the words "financing" and "financement" in
French.
CHAIRMAN: May I have Mr. Deutsch's views on this point. - 25 - E/PC/T/A/PV/ 37
Mr. DEUTSCH (Canada): This point, Mr. Chairman, was
raised. by the Delegate of China, and, the Note was drafted
in order to allow him to move a Reservation.
Now it is purely a question of whether the Delegate of
China would be satisfied. with the suggestion made by
Mr. Forthomme. The adding of the word "financing" in the
Text might raise some other questions of substance.
I remember the commission wished to consider that point,
but the Note itself was drafted for the benefit of the
Delegate of China. S
- 26 -
CHAIRMAN: The Delegate of China.
H.E.Mr. WUNSZ KING (China): The Chinese Delegation would
like to have this Note maintained, because we attached the greatest
importance to it.
CHAIRMAN: (Interpretation): Are there any other observations
on sub-paragraph (b)?
The Delegate pro France.
M. ROYER (France) (Interpretation): Mr. Chairman, I would
like to ask the Legal Drafting Committee to study rather closely
the French text, which is not a very happy one at the present time.
CHAIRMAN (Interpretation): As M. Royer is a member of that
Committee, it will be very easy for him to make the study.
Mr. R. T. SHACKLS (United Kingdom): Mr. Chairman, there
is just one small observation I have to makes before we leave
that paragraph. As regards the transpositions which I suggested,
I think it is probably unnecessary for me to suggest any addition
to the Note which I proposed. I think it would be sufficient
If we just called the attention of the Legal Drafting Committee
to the Minutes for the record of what I said.
CHAIRMAN (Intepretation): We now come to sub-paragraph (c),
The Delegats of Belgium.
M. FORTHOMME (Belgium) (Interpretation: I believe that
Note 8 is necessary, and that the words which appear in it -
"Subject to the provisions of the Charter" - are necessary.
(Interpretation)
CHAIRMAN:/ In that case this Note will be referred to the
Legal Drafting Committee with the following indication: "that S -27 - E/PC/T/A/PV/37
One Delegate (namely, the Belgian Delegate) thought that the
words 'subject to the provisions of the Charter' should be
included.".
Mr. HAFKLE7 (United Kingdom): Mr. Cairm.en, may we
leaose say: "TwoDe lgastes.* "
.E.. Mr. Z.A;UEN?HAZEPR (Czechoslovakia): Three, pleaea
HAIRMANW (Interpertat ion): Wew shall therefore state that
s certain nmne-r of Delegates thought these words necessar.3
eonow pass on to Paraga~ph .,
M. OaRTOMMES (eBlgium): (Not interprete)d.
HAIRMAaN (n terpeGaition): o)u are righ., W F still aeve
toexam-ieoae certain numbero f Notes which refer to the whole
of Paragraph 1. A.re there any observations on these Noeos?
., FRTHOMME? (eBlgium) Inhterpretation): Mr. Chairman,
we fullyaigesG with the inetrre;a-tion given inNIote 9, but we
woud1 lies an asterisk to beadded to it ad- the Note to have
ths same efe ct as all otezr Notes with an asterisk.
HAIRMANg: Te- Delegatet of Canada.
Mr. .1JT. DUITSCH (aendaa.): I do not think the sub-
committea woude have minded putting an ase-risk beside this
Noe., eD felt that teo exxtwams. cecar. The position of a
Mareatige oacrd als covered, but oO make it more explicit I
thinkw-e coudA add an asterisk.
HAIRMA'N: Teae : is another Noeo with an asterisk: that
is otea 1., .- 28 -
Mr.Angel FA;.IVOVHCO C;hals) (Interpretaoibn): This is ehz
N-te to which IerefoedcA justonzw when I spek oA ;rtle1c 31,
subapagoaraph (b), dnc. steabd that thisoNett shodlV be maiat:enAd,
AHRMANIR: ehDele_ateAt ofe Blgium,
M. FOROM.OME (Belgium) nt:.ererctit on):As fa_£r asoNeta
10 is conceeds , Ielzevevn that thp Drese d fraftgnE is dangerous,
baceesa it opens thdoblor to certain inrp DratLtions dn, it
vmdle be eateblhsaing diefer nces of pcecZs on w rrong basis,
I would prefer eh& following text: he:c ercparatory Committee
agreed ah?t eho wording ofaPrgrap:rh 1 (b) oA _rticle 31 does
nopr,aeclude the customary variations op -rec sebwe-;en ena
meekct dnt anoeh r market."
S ~~~~~~M. .ha , ,Aan .
`ZNGL F.'IVOICHp (Chile) (Interlretation): Mr. Chairman,
thc text of Note 10 oorresponds to the text which appears on page
27 of the English draft of the New York report, and in note 10 the
Sub-Committee refers itself to the text adopted in New York. There-
fore it woulc. not be possible for us to accept a modification on the
lines suggested by the Belgian delegate. Nevertheless, if the
Legal Drafting Committee were to give the interpretaton of this
njw text which has Just been suggested, we might be able to look at
this natter once again.
Mr. PIERRE FORTH0IIp (Belgium) (Inter.retaton): Mr. Chairman,
may I request that this draft should be reconsidered because although
it came from New York it was drafted by the Dranting Committee, end
therefore it is not final. Of course, one cannot require that the
sane pricls be applied on ael marketsp but I think the Iresent text
opens the door to wrong interpretation and. misuse and I therefore
ask that it be reconsidered and redrafted.
M. ROYER (France): (Interpretation): Mr. Chairman, I would
have no objection to seeing this text revised by the Legal
Drafting Committee, but on this side of the table we find the text
perfectly clear as it stands now, and the Pjoposal which was Just
made by Mr. Forthomme introduces a subjective element and therefore
if the Commiss ion was able to agree to the text as it stands. now
it would seem better to us
Mr. R.J. SILCKME (United Kingdom): Mdo think that as Ir.
Royer says the note is definitely clearer as it stands now, and it
does seem to ce thatrt"e word "austomaiy cntroduces a subje tive
conception.
E/PC/T/_-tV/37
29
ER ER 30 E/PC/T/A/PV/37
CHAIRMAN (Interpretation): Maybe Mr. Forthome would be able
to tell us what inconveniences he sees in the formula as it stands
now.
Mr. PIERRE FORTHOMME (Belgium): (Interpretation): Mr.
Chairman, we have seen in recent times how conditions were estab-
lished as regardst e supply and demand problems so as to create in
that
artificial conditions differences in markets, so/when the aim was to
boost prices in certain markets discrimination was established
between markets. In fact, I think that the text which we have now
before us permits such measures to be taken and our text would avoid
the misuse which was enabled. under the present note, and although it
permits differences in prices it forbids the exploitation of the
customer, and certain privileged situations to be established to the
detriment of the consumer.
Mr. R.J. SHACKLE (United Kingdom): Is not there a case which
falls under Chapter VI on Treatment of Commerdal Practices?
CHAIRMAN: (Interpretation): Mr. Forth omme, I think that
the practicesto which you refer are not covered here, because if we
look at the Proviso we read that"provided that such different t
prices are charged. for commercial reasons, to meet conditions of
supply and demand in export markets," and therefore this Proviso
would prevent any form of aggression to take place.
M. ANGEL- FAIVOVICH (Chile) (Interpretation): Just now I
accepted that this text be referred to the Legal Drafting Com-
mittee for clarification,
but after listening to the explanation given by Mr. Forthomme I must
confess that there was a slight confusion, and therefore the text of
Article 10 seems to me to be perfectly clear and I would ask Mr.
Forthomme not to press his point and not to submit his proposal. M. Pierre FORTHOMME (BeIgium) (Interpretation): Mr. Chairman,
I am sorry but I have to press my point.
(Interpretation)
CHAIRMAN: / As I think that there is a majority of
Delegations which wish to maintain this Note, it will always
be possible for the Belgium Delegate to present a reservation.
M.Pierre FORTHOMME (Belgium) (Interpretat ion): Therefore,
I am compelled to reserve our position.
CHAIRMAN (Interpretation): Paragraph 2.
Mr. L.C. WEBB (New Zealand): Mr. Chairman, with regard
to Paragraph 2, the New Zealand Delegation would ask that an
asterisk be attiched to Note 11 which, I think it would be
agreed, is somewhat essential for clarifica-tion of the;text.
D. ioore i FORHOMME (Belgium) (Inecrriea'tion): Mr. Chaimlan,
I wuald like to as kfor a la rificailon of the meaning of Note. 11.
rf. .L.CWEBB (eow eoaa nd): MYr. Chairman, during the
discussion on this eoxt we ecre concerned with, for instance,
thecoaeG of Goevrneant imports which wreo used for purposes
whcoh did not result in the asle of goods in tea ordinary
commercial eanea. For insance-, a Government mig~htpuarchase
,oods which easuleod in the sup-ly of some soca-l service to
te_ community adc in some seneo the servicemLgAht be "sol"Y,
that is, there would. be achdare; for it, but it was not considrecd
that such pacotceGs shoud. come wihain this particular Artcole.
Itwvas also, I think, intended to cover the case of, say, a
Goevrneont importing hydro-electric mcQhiecry. There was soeO
discussion, for instance, on the question ofmachiinery used for
the purpose of supplying electric power. J.
M. Pierre FORTHOMME (Belgium): Well, I am very glad of
the explanation because, as I understand it, what was aimed at
was that imports by Governments for the production of services
for the community should not fall under the application of
Paragraph 1 of article 31. That is what is meant. In
the case of your hydro-electric machinery imported by a Government
for the production of electricity, your intention is that it should
not be covered by Article 31, Paragraph 1.
Dr. J. E. HOLLOWAY ( South Africa): I do not know that
the point is made very clear by the Note, Mr. Chairman.
The service which our Government renders is to make use of
certain insecticides to kill tsetse-flies, which destroy a large
number of animals, but the same insecticides also kill house-flies,
and other people also make insecticides for killing, house-flies.
Now, the Govrnment evidently is not bound by Section 1 in intro-
ducing the material to make,let us say, D.D.T for killing tsetse-
flies, but is subject to that for making the same D.D;T. for
killing house-flies.
I think that the Note re requires something a little more definite,
CHAIRMAN: The Delegate of the United States.
Mr. J. W. EV.NS (United States): Mr. Chairman, I think
that this discussion has perhaps unduly complicated the intent of
the entire Paragraph 2. It should be recalled that in the New
York Draft there was a total exception to the terms of Article 31
with respect to Government purchases of commodities for its own
use. That raised the question in New York and in the sub-Committee
hare as to whether a Government might, by importing goods and pro-
cessing or manufacturing the goods themselves and then reselling
in commercial markets, in effect, frustrate the purposes of the
exceptions which should be limited to the normal uses of the
Government itself, and the phrase which gives rise to the Note
E/ P C/ T/A/PV/ 37 has to do only with further clarifications of the exceptions, out
the basic exception has been there all along, that is, the excep -
tion by the government fur its own use.
Unless we finally reconsider the basic question as to whether
governments are, when importing anything to be used in the gov-
ernmentl establishment, to be subject to the provisions of
aAticle 31, I think that probably this debate is unnecessary. Now,
there never was any real logic in excluding goods imported for
governmental use, excpt for the fact that most governments wished
to retain the privilege that they have always had. Under the cir-
cumstances, it seems to me that the Note itself is quite clear
and that it does not alter the intent of the Article as drafted,
or as previously drafted, and I should like to support Mr. Webb's
request that it be given status in the final report.
E/PC/T/A/PV/37 ?d7 V E/PC/T/A/PV /37
Mr. R.J. SHACNLE (United Kingdom): Mr. Chairman, I agree
with what the United States representative has just said. It
seems to me that it is perfectly clear. In fact, I should have
thought the position was clear even withcut the note, because
surely everyone knows that service is not goods, and gods are
not service; but I see no objection whatever to putting an
asterisk to it.
CHAIRMAN: The Delegate of Belgium.
M. Pierre FORTHOMME (Belgium): Mr. Chairman, I would just
like to say that when I asked Mr. Webb what this note meant, it
was not at all a rhetorical question, meaning I had an idea as to
what it meant - on the contrary, I honostly did not know what it
meant. Maybe the Delegation are all suffering from brain fag as
the result of too much Charter, but we read this thing over and over
again and we just could not understand it.
Now, I do entirely agree with the principle as expressed by
Mr. Webb, and I am quite willing to see this note have ,an asterisk;
but I do submit that though the people who were in the Sub-Committee
and argued the whole thing over find this very concise terminology
perfectly illuminating, there are people who have not taken part
in the discussions who spent a good deal of a morning trying to
understand what it meant, and perhaps, as I say, by brain fag,
could not understand. Therefore, I think that if the Delegate
of New Zealand attaches importance to this note, we might take a
look at it with a view to perhaps expanding it a little and making
it clearer, because in compiling this paragraph 2 we have a
succession of notes which remind me of that famous deal between
Mr. Knott and Mr. Shott, which was very difficult to understand
and which was explained in the local newspaper!
34 V 35 E/PC/T/A/PV/3 7
CHAIRMAN (Interpretation): I think, gentlemen, that we
can now terminate the discussion on paragraph 2 and on Article 31
as a whole.
H.E. Mr. WUNSZ KING (Chine): The Chinese Delegation has
no more notes to offer, but I am reminded by the technical
Delegate, of tho Chinese Delegation who attended the meetings of
the sub-Committee and took part in the discussions there, that
he had made one or two observations in regard to this paragraph
of Article 31, and I would like now to repeat and re-affirm what
he had said in the Sub-Committee meetings so that the observations
will appear in the records of this Commission;
You will certainly notice that in this paragraph there are
the words "for use in the production of goods for sale", and
thee words, If I understand correctly, also appear in one of the
relevant paragraphs of Article 15 to which the Chinese Delegation
has strongly objected and has since maintained its objection;
but so far as this paragraph is concerned, we seem, to note some
sort of difference between the two texts.
In the case of Article 15, we find that it is a question
of national treatment and here in the case of a system of state-
trading such as is envisaged in this Article, there is no
question of national treatment. Therefore, I am happy to say
that while we maintain the objection to this expression in the
case of Article 15, we do not have any objection to using these
words in this connection.
CHAIRMAN: The Delegate of New Zealand.
Mr. L C. WEBB (New Zealand): Mr. Chairman, with regard to
Article 31, 1 have not succeded as yet in clearing the text
with my Government. It is a long distance to New Zealand, and
the telegraphic traffic at the moment is rather heavy., so I
am afraid I must just formally reserve myself until my Govern-
ment clears the text, and the same remark will also applyto
Article 32. 36
Mr. EVANS (United States): Mr. Chairman, I should like
to add one word. to that point made by the Delegate of China.
I am glad he mentioned the point, because I think it would. be
desirable to register the fact that the Sub-Committee
considered. the possibility of making the word/in paragraph 2
correspond with the wording in Article 15, and decided, as the
Delegate of China has said, that it should net necessarily
correspond, because the nature of the subject matter was
different, and. I think that the Legal Drafting Committee should
have that fact before them when they consider the point.
CHAIRMAN (Interpretation): Article 32, paragraph 1.
Does any Delegate wish to speak on Article 32, para. 1?
No observations? We therefore pass on to paragraph 2.
Are there any comments on paragraph 2?
Therefore we pass on to paragraph 3.
The Delegate of the Netherlands.
Mr. BOGAARDT (Netherlands): Mr. Chairman, I think I can
agree to this paragraph subject to the maintenance of Note 14.
CHAIRMAN: Paragraph 4.
The Delegate of the United Kingdom.
Mr. SHACKLE: (United. Kingdom): I have a small amendment to
suggest to the last line of paragraph 4. The Amendment is to
replace the words "the countries parties to the negotiatin." by
the words "the Member countries substantially interested.". The
reason why I suggest that chance is this: That it is, I think, an
underlying hypothesis of the Tariff negotiations that they will
result in bindings of a multilateral character - not merely
bindings in favour of particular countries w i rth particular G 37 E/PC/T/A/PV/37
concessions in the negotiations, but also in favour of the
other Members. It follows therefore that, if that is the
hypothesis, it would not be right for concessions to
follow afterwords as a result of re-negotiation merely between
the original two Members who negotiated that particular binding.
It would be necessary to bring in the Members
substantially interested., and there is a direct precedent for
that in article 13 - I am referring to the New York Text, but
in this particular the New York Text, I think, is the same as
the Report by the Sub-Committee on Charter IV.
If you lock at Article 13 2 (b) on page 8 of the New York
Report, you will see, in the middle of the paragraph, the
words "the Organization shell sponsor and assist in
negotiations between the applicant Member and the other Member
or Members which would be substantially affected., with view
to obtaining substantial agreement". The reason for the
insertion of those words is, I think, precisely the reason I
have put forward just now; and for that reason it seems to me
it should be "the Member countries affected", instead of "the
countries parties to the negotiation".
CHAIRMAN: The Delegate of Czechoslovakia.
Mr. AUGENTHALER (Czechoslavakia): Mr. Chairman, we are
in favour of the Text as it stands here. We are not in favour
of any change, because we think that if some country was
interested in some commodity, it could. state and declare it
during the present discussions.
CHAIRMAN: The Delegate of the United Kingdom. S E/PC/T/.L/PV/57
CHAIRMAN: The Delegate of the United K ingdom.
Mr. SHACKLE. (United Kingdom): Mr. Chairman, my attention
has been called to the fact that at the end of Paragraph 2
of the Article we have the words: "Any Member entering into
negotiations under sub-paragraph (b) of this paragraph shall
afford to other interested Members an opportunity for consultation
in respect of the proposed arrangements." That, of course,
contains exactly the idea which I am seeking to introduce by my
amendment here. That being so, I do not quite understand the
motive for the Czechoslovek Delegate's suggestion.
CHAIRMAN: The Delegate of Czechoslovakia.
H. A. Mr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman,
if it is the interpretation I have given here of this Article,
I would like, with the Delegate of New Zealand, to make reserva-
tions for the whole of Articles 31 and 32
Mr. J. J. DEUTSCH. (Canada): Mr. Chairman, speaking as the
Canadian Delegate, I wish to speak in favour of maintaining
the present text,
CHAIRMAN: The Delegate of the Netherlands.
Mr. C. H. BOGAARDT (Netherlands): I wish to support
the point of view of the Delegate of Canada.
Mr. SHACKLE (United Kingdom): Mr. Chairman, I would only
say that it seems to me that if we leave this text as it stands
it alters the basis underlying the conception of the tariff
negotiations. If I understand it correctly, it is a definite
understanding that these tariff reductions we are negotiating
are going to be multilaterally bound. If that expression means
anything at all, it means those multilaterally-bound rates 39
cannot be treated separately; the other people who are substan-
tially interested have got to be brought in. It may be that
the Commission does not want to adhere to the conception of
multilateral binding. If it does not, we should hear about it.
CHAIRMAN: The Delegate of the United States.
Mr. John W. EVANS (United States): Mr. Chairman, I
confess I do not quite understand the interpretation which
Mr. Shackle, I think, is placing on this wording, or at
least his understanding of what would happen in practice. A s
I understood this working, although it refers to where a maximum
duty has been negotiated, in actual practice the provisions
which would be made for allowing for adjustment in the case of
wide fluctuations would actually be made in the negotiations
themselves, and sub-paragraph (b) of Paragraph 2 provides that
other Members having an interest in the commodity should be
given an opportunity to consult with respect to their proposed
arrangaments. So that it seems to me the other interested
Members will be adequately represented in the application of
this flexibility and there is nothing what really departs
from the principles which have been f ollowed in the tariff
negotiations.
CHAIRMAN: The Delgate of the United Kingdom.
Mr. SHACKLE (United Kingdom): With reference to what
the United States Delegate has just said, I would like to call
attention to the fact that the last four lines of Paragraph 2
do not cover this case; they refer to sub-paragraph (b) of this
paragraph, The case of negotiating a tariff is covered under
sub-paragraph (a) of Paragraph 2, so we shall not have had the
Other interested Members given their opportunity -of consultation
in respect of the tariff negotiations, which would be under
E/PC/T/A/PV/37
S 40
sub-paragraph (a) and not sub-paragraph (b).
It would be possible to deal with my point in a different
way; that is, by deleting the words "sub-paragraph (b) of"
in the last four lines of Paragraph 2, so that the last lines
of Paragraph 2 would read: "Any Membcr entering into negotiations
under this paragraph shellefford to other interested Members an
opportunity for consultation in respect of the proposed arrange-
ments." If that were done, everything would be straight. So
long as you keep the words "sub-paragraph (b) of" in that
passage, my point arises as regards tariff negotiations, because
the other interested Members will not have been brought in,
and you will not have reached agreement on what is a reasonable
adjustment to allow for a variation in world prices. So that
you either make my original change ,which is to read in the
last line of Paragraph 4: "the Member countries substantially
effected, " or else you alter the last lines of Paragraph 2 so
as to read: "Any Member entering into negotiations under thls
paragraph shall afford to other interested Members an
opportunity for consultation" and so on. I do think that in
either case we have; got to give the other Members their
opportunity.
I should prefer my original amendment for this reason;
that it does preserve more closely the parallel with the
ordinary tariff negotiations. I think it is desirable to
preserve that analogy in the cases of these negotiations, then
the other equally substantial interests get the benefit. I
think my original amendment. is better; that is to say, to
amend the last line of Paragraph 4 rather than to amend the end.
of Paragraph 2.
S ER. 41 E/PC/T/A/PV/37
CHAIRMAN: (Interpretation): May I have Mr. Deutsch 's
opinion on the alternative proposal which was just put forward by
Mr. Shackle.
Mr. J.J. DEUTSCH(Canada): Mr. Chairman, this proposal was
not specifically discussed in the Sub-Committee. I do think,
however, that Mr. Shackle's proposal constitutes a change in sub-
stance from what has been agreed to in the Sub-Committee; the reason
being ./I think Mr. Evans mentioned. that at the time of the
maximum
negotiation of the import duties as it is now called ,the method for
effecting an adjustment to allow for price fluctuation will be deter-
mined in those initial negotiations. Now, if a member has negotiated
the maximum import duties with those adjustments, then, presimably,
the matter is settledor if there is no other question arising in the
future-if the manner in which the adjustments to be made is specified
in the negotiations initially, then the thing proceeds automatically.
There is no need in that case to consult other members when the
adjustments are made. If this adjustment has not been spelled out,
--the method of this adjustment at the time of the negotiation,-then
it means perhaps that such an adjustment cold notbespelled out at the
time and the Member will naturally take into account when he enters
'into the negotiation that he may have to,if he wants to, make use of
this proviso and will have to get the agreement of five or six of
the parties. - The tendency will be for the Member not
to bring his action because he knows that when the time comes he has
to get the agreement of five or six Members, and that will be
difficult. In that case the tendency will be not to bind himself.
It seems to me that will lead to less binding. Looking at it purely
from the standpoint of personal interest in the export side of this
does
question, I think it is advisable, even as/does the Canadian delegate, not
to adopt Mr. Shackle's proposal because I think it will lead in fact
in the end to a smaller reduction in international trade barriers 42
than if we would not have it at all. It is always difficult to
adopt items in which a domestic price stablisation schedule is
involved, and the more impediment you put in the way the less bind-
ings yor are likely to get, and therefore I do not want to suppor t
Mr. Shackle's amendment because I think it will lead to a smaller
reduction in tariff values. I do suggest it is a matter of sub-
stance which was not discussed in the Sub-Committee.
Mr. R.J. SHACKLE (United Kingdom): As the Committee does not
seem to agree with this amendment, I will not tress it further. At
the same time I notice no disagreement in the Commission with the
view that the method of adjustment should be agreed in the original
negotiations . If we do agree on that proposition, then I would be
satisfied if that goes clearly into the record. It should become
known that the point is that the method of adjustment should be
agreed in the original negotiation. When we are agreed. on that we
might have a note saying so.
(Interpretation):
CHAIRMAN: I suppose that the Commission will agree on the
last suggestion made by Mr. Shackle.
Mr. R.J. SHACKLE (United Kingdom): Thank you, Mr. Chairman.
CHAIRMAN (Interpretation): Paragraph 5. No comments?
Paragraph 6. No comments?
Paragraph 7. No comments?
Gentlemen, we shall interrupt our work for five minutes, and, in
five minutes we shall resume our work on Article 36. V
CHAIRMAN (Interpretation): Gentlemen, in spite of what
I said at the opening of this meeting, we shall take up the
discussion on Article 33, which is to be suppressed. I was
misinformed, and therefore we shall new examine Note 19. I
think that all Delegates have taken cognizance of this Note,
and that therefore they do not require any explanation on the
Note.
The Delegate of New Zealand.
Mr. G.D.L. WHITE (New Zealand): Mr. Chairman, we would be
quite happy with the text of Note 19 as it stands at the moment,
on the understanding that that is completely without prejudice
to the New Zealand amendment to Article 33.
Note 19 refers to the position of a country having a
complete monopoly of its external trade, and we are quite happy
that that subject be dealt with in the way suggested in Note 19.
But I just wish to male it clear to other Members of the Commission
that the deletion of Article 33 in no way affected our position
as regards our amendment to Article 33, because that matter is,
as you said at the beginning of the meeting, still to be further
discussed by the Sub-Committee dealing with that matter tomorrow.
CHAIRMAN (Interpretation); I think that I can reassure
the New Zealanda Delegate that the adoption of Note 19 will,
of course, be without prejudice to the amendment presented by
the New Zealand Delegation.
Does anyone wish to speak on Note 19? Then Note 19 is
adopted. We now turn to Article 36, which appears in
Document E/PC/T/157. The Sub-Committee which dealt with
Article 36 was presided over by M. Braduc, and I now give the
floor to M. Baraduc .
E/FCT/T/A./PV/37 Mr. BARADUC (France) (Interpretation): Mr. Chairman,
I do not think it will be vary useful for me to give here a
long explanation on the work done by the Sub-Committee on
Article 36, as the Text of it is well-known now by all the
Delegates here.
The composition of the Sub-Committee included
Representatives of Brazil, Czechoslovakia, France, the
Netherlands, the United Kingdom and the United States of America.
Furthermore, the Representatives of the following countries,
Canada, China and New Zealand attended, our meetings and. gave us
the most precious help in our work.
There is also the Representative of the International
Monetary Fund who attended our meetings and collaborated. with us.
In a Meetng of the Preparatory Committee, this Committee
decided. to set up a Special Committee on Article 36 and left it
to that Commttee discuss and examine freely (as freely as
it wanted.) Article 36 and make the recommendations which this
Sub-Committee would find useful to make and. in the form in
which it chose to make them.
In leaving the greatest possible freedom to the Sub-
Committee, I do not suppose that the Committee hoped. that this
Sub-Committee would arrive at a solution of the delicate problem
which was referred to it; and we did not reach agreement on
one Text in our Sub-Committee, nor, must I confess, did we seem
from the start to be able to reach agreement on one Text. So
we are not submitting to this Commission one text, but three
alternative Drafts, which bear no authors! names, and if I may
use this comparison, they are as three illegitimate children
which we are bringing, and. depositing. before the Sub-Committee,
44 E/PC/T/A/PV/37 45
three illegitimate children with unknown fathers, and I do not
hope here that anyone will recognise these three illegitimate
children as their own legitimate child.
The Committee abstained. from discussing the merits of
the three alternatives which we are now submitting to the
Commission, and I think that the Commission will follow the
same wise procedure as we followed ourselves. In considering
those three alternatives, we considered them in relation to
other Articles of the Charter,aRnd also other Conventions, or
other Agreements or Treaties. It appeared essential to the
Sub-Committee to recommend to the Commission not to choose any
of these three Texts, nor to pass a judgment on tho merits of
these three alternative Texts, but to forward these three
alternatives to the World Conference.
If , in the World Conference, no unanimous agreement can be
reached on any of these threat alternati ves, then the World
Conference may have to approach such Body of the United Nationsne
as it may think fit, to hava sn opinion oo cno £f these three
Draftso cr on thd -raft which gizht bedd2opdee by thm iojarito cf
the Delag?oicns inaHpvana, to know whether this Draft was
inconsistent with the obligations undertaken by thM members of
United Nations der.r the Charteo sf eha United. Nations. This
is the whole ofhe1r worw ihich we havaceohieved. Now IowcdlI lekQ
tc go intoommTd ietailo co cur work.
.s I said, we examined these three Texts in laVction to other
provisiono cf the Charter, and we axrmider them in particular in
the light oA Lrticles 14 and 24, as gezdr-s preferentiaArIxrange-
ments, dnn we also examenad the possible effect ofhe1vse three
Drarfts on the detuctioo cf Tariffs, on Subvenoicns, d _4 ao o On
Commodity Agreements, andamEy I say ahoa et theer-es of osOne
of the Delegatew ra %lse amnrined thesc three Texts as being one
possible element ga-irding a Non-Member. atetV in relationote its
export ta e Member ateta. S 46 E/PC/T/A/ PV/ 37
We also examined Article 36 in relation to other Conventions,
Agreements and Treaties, and the Delegations sitting on the Sub-
committee thought it highly desirable that no obstacle should
be put in the :path of agreements beteen Member States and non-
Member States, so long as those agreements wore no t inconsistent
with provisions of the Charter, or som Provisions underlying the
forthcoming Organization
As regards political adreements, the sub-committee was
embarrassed and found some difficulty in determining the category
in which such agreements should be placed and providing for such
exceptions here. I think that the work of our sub-committee
will enable the discussion here on article 36, and also the
discussion which will take place at the World Conference, to be
facilitated, and each alternative will bring elements into this
discussion. I do not think - end this is at least the point
of view of the French Delegation - that we can go beyond that
stage.
Of course, as Chairman of tha Sub-committee, I am ready
to answer any questions which I might be asked.
CHAIRMAN (Interpretation): I thank Mr. Baraduc for his
explanation. May I just add a f ew words.
The three texts which you have now before you present three
different points of view, which may be the only possible points
of view on this question. As M. Baraduc stated, we are not here
to choose between these texts and if we agree to the draft of these
texts we shall forward these texts to the Plenary Meeting. Never-
the less, I would like to draw your attention to Paragraph 9
of the Report of the Sub-committee, which reads as follows: "In
versions 'B' and 'C' of the draft Article a paragraph has been
included to cover the special cases of the Peace Trenties and
the Specialized, or similar, Agencies, if the Legal Drafting 47
Committee considers that those cases would not be clearly excepted
in the absence of such an explicit exception. A similar provision
would seem to be unnecessary in version 'A' to accomplish the
same purpose."
The Legal Drafting Committee has not had the material time
to make kown what its opinion is on this question, but we are
happy to know that Mr. Fawcett is here amongst us this afternoon
and therefore I will give the floor to him as soon as I have finishlt
n zished these meaar.s,
If we age to z) forward, e .;exts:s o thebe Pleny 'Tee1.tgnc,
wLth amdnLments whicm giihtebz obgu,ht to them, theseex_2ts will
be insertea .s Article 36 in abrckets, with a footnetadsided,
whicw -ill be Paga-panh 5 of theepoitrt of ehu Sub-committee.
~serzgdr saragr--aphs 6 an 7 dn, eth following pagezraphs
of this Report, thew .ill be incluldea snd be taken up ag :en.ral
*lcumentation of the Praeprotrry mormittee, which willebc sent
ta theemM(bers aetdnjgni thWo.hdl- Coefercnce.
I will wog cive the flros to Mr.e ewvctt.
MrJ. E. S. FA CECrTT (Uniteld Kgn dom): r.;t Chairman, the
g&Gal Dzaftgn- mormittee dit not put ia -ny formal report about
this, because they thgurht it would save time if ehty sent one
of their mbnrers algnn to explain their ei.ws
The conclusion they ae-ched on versio" iB" was that the
Wds'S in Paragphm. 6, dowas s fer as "UniteNaYstions" were
in
not necessary, on the ground that/thea tss resort, if a Meebcr
werGersquer<d to terminate angaeraemenw -ith a noM-Neebrr under
Paragraphs 2 to 4 of the article, it had a choice either of
withdrawing orDm the ITO or of writhdwa-ing from the other
organization; therefore it could not be said to ebu required
by thiA 4rticleots withdraw from one or the other, ehcrefore,
to'hgnz in thiA &rtielj codl_eb_ intereret-a -s requiring it to
withdrew from ehk other organizati.n, Thuw ve thgu-ht those
S S 48 E/PC/T/A/PV/37
words were not necessary.
As regards the Peace Treaties, we also thought that the
provision was not necessary a s regards the existing Peace
Treaties, since Paragraph 1 of Article 36 relates to future
advantages; Members shall not seek advantages as from the
entry into force of the Charter, and therefore that would not
apply to Peace Treaties which would presumebly be already
in force; and that, as regards Paragraph 2, the Peace Treaties
are not commercial agreements. As regards future Peace
Treaties with Germany or Japan, the position may not be so
clear, Therefore, for the sake of caution, it might be better
to put in the second part of Paragraph 6 of version "B" covering
Peace Treaties
As regards version "C", the same reasoning would apply
to the Peace Treaties.
As regards the first part of the paragraph relating to
withdrawal from other inter-governmental organizations, we felt
that Paragraph 5 of version "C" was drafted in very wide terms
indeed; any international obligation must be terminated if it
would prevent a Member from giving full effect to the provisions
of the Charter. That is so wide in scope and, although it is
difficult to see how exactly obligations under the Convention
of another Specialized ..-_noy would, in fact, conflict, it is
possible that that might happen. Therefore we thought, on
version "C", the whole of Paragraph 6 should go in. But we
would venture to suggest that the difficulty might be overcome,
or the need of Paragraph 6 as regards Specialized Agencies might
be avoided, if Paragraph 5 were drafted rather more precisely,
perhaps limiting the types of obligations which must be
terminated to commercial obligations. 49
CHAIRMAN (Interpretation): Does anyone wish to speak on the
whole of this question ?
Mr. JOHN W. EVANS (United States): Mr. Chairman, I think it
would probably not be desirable to attempt to continue any more dis-
cuss ion than can be helped on the drafting of any one of these
alternatives, I should like to suggest that the Commission accept
the suggestions of the Legal Drafting Committee with respect to
part of paragra h 6, version a, and all of paragraph 6, version C.
M. T MONTEIRO DE BARROS (Brazil) (Interpretation): Mr. Chai r-
man, as a member of the Legal Drafting Committee, I would like
to support the remarks made by Mr. Fawcett and I adhere to everything
he stated. Now as the representative of the Brazilian delegation
I would like to adhere to the statement made by the United States
representative.
CHAIRMAN (Interpretation): Gentleman, do you agree with the
proposal which was just made by the United States delegate and which
was seconded by the Brazilian delegate?
Therefore, the three alternatives will be submitted to the plenary
Commission in the way that I have previously mentioned.
Mr. R.J. SHACKLE (United Kingdom): I would prefer/it Mr. Chairman,
if we had now an opportunity to discuss the different paragraphs of
the Report which accompany the three alternatives, and I will have
a few remarks to make on them.
Well, Mr. Chairman, there is only one point that I have to raise,
and I would apologise for raising it because we were on this sub-
Committee and this was an after-thought, a piece of esprit d'escalier..
It relates to the last sentence of paragraph 5,
reads: "The Sub-Commi ttee suggest s that the World Conference may
wish to seek expert opinion as to whether, under these circumstances,
E/PC/T/A/PV/37
ER ER 50 E/PC/T/A/PV/37
any of the drafts would be in conflict with the obligations of
Members of the United Nations." Well, now, it seems to us on
second thoughts that if it was a question of having expert opinion
there is really only one way in which that expert opinion could be
obtained, and that would be by seeking an advisory opinion from the
International Court of Justice. But it does seem to us that that
would be extremely elaborate and a very cumbersome procedure. In
the first place this Preparatory Committee has not, as s - under-
stand it, got a status to ask an advisory opinion of the Court.
The only body that can do that is the Economic and Social Council
on our behalf, and even if the Economic and Social Council did
have the matter up with the International Court, there would be
the question of preparing a reference and formulating the question
on which we want the Court's opinion. All that would be an
elaborate process, and, moreover, the time factor might not fit.
It might well be that the E omic conr_. and Socac Coulnoil will not have
enough time to formulate this reference to the International Court
and when the opinion of the International Court is obtained there
might not beenough time to present it to the World Conference. It
seems to us that we are being given a steam roller to crack a nut.
in
We mould like to suggest that this is rather a matter wchch eadt
country Member of the United Nations which goes to the Conference
a solution
should think out/in advance for itself. I would presume that
and Members
countries signatories of the Charter/of the Nnited Iwotlons mu-d
give some thought to the obligations dnvolve' in that, and it seems
to us that in this particular matter countries migultcons." their
experts on these questions, and we would not suggeht to tee World
Con ferencethat they do anything like referring the matter to the
international Court of Justice, so what it comes to is that I should
like to suggest that we refer the last sentence of paragraph 5 to read
like this: "The Sub-Committee suggests that countries, Members of
the United Nations proposing to attend the World Conference, should
give consideration to these questions." That takes the place of
"the World Conference may wish to seek expert opinion...." and so on.
That is the suggestion I wanted to make. J. 51 E/PC/T/A/PV/37
CHAIRMAN (Interpretation): Gentlemen, I would like to have
Mr. Baraduo's opinion on this question.
M. P. BARADUC (France) (Interpretation): Mr. Chairman, I am
sorry to say that I cannot agree with Mr. Shackle's point of
view. In fact, tht sentence which appears here reflects the dis-
cussion which took place in the Sub-Committee, and if this sentence
were to be suppressed there might be serious objections on the
part of certain dclegations,and even the attitude of certain
governments, towards the World Conference might change,
Well, Mr. Chairman, what is the question? Article 36 might
have serious repercussions on the political plane. Therefore,
certain governments coming to the World Conference Light be
troubled if the text of Article 36 were to be finally udopted after
a majority decision, but if these governments know that the text
to bc adopted by the majority is, nevertheless, likely-tolbe
referrec to a body of the United Nations as, for exampla, the
Economic and Social Council, or any other body of the United Nations,
then these governments will know that the reservations which they
may have made as Members having voted in the minority on that
point at the World Conference will be taken into consideration by
these examining. bodies, and in the end they will be able, there-
fore, to adhere to an evertual/solution, and this is the purpose
which is served bv the sentence which we have included here. The
sentence, as I have stated, reproduces and reflects the dis-
cussions which took place in the Sub-Comittee, and I would be
very happy if other Members could let us know what they think of
this text.
CHAIRMAN (Interpretation): Gentlemen, who wishes now to
speak on Mr. Shackle's anendment? 52 E/PC/T/A/PV/37
DR. A.B. SPEEKNBRINK (Netherlands): Mr. Chairman, I would
like to support Mr. Baraduc's remarks entirely, and I do that
with recent experience in my mind. Therefore, I am also
entirely in favour of the possibility of having the advice
of the International Court of Justice. Thank you.
CHAIRMAN (Interpretation): Who wishes to speak on this
matter?
Mr. R. J. SHACKLE (United Kingdom): Mr. Chairman, I have
just one thing to say, that is, that if it is really the
intention to obtain thoroughly expert opinion, then I think
it must be the International Court of Justice. I do not think
that the Economic and Social Council has the necessary juridical
standing to give an expert opinion, and I think we must reconcile
the
ourselves to the fact that it will be necessary to seek/advisory
opinion of the International Court of Justice. If that is to
be done, the procedure and timing for making that reference
will have to be thought out very carefully, and that will no
doubt be done.
I do not necessarily object, if that is the wish of the
Commission, but I would point out that it will require some
careful thought as to how it will be done.
CHAIRMAN: Mr. Evans.
Mr. John W. EVANS (United States): Mr. Chairman, our
feeling is that the Wiorld Conference is a body capable of
arriving at its own decisions, and for that reason it probably
is not necessary to suggest any procedure to the World Conference. J. 53 E/PC/T/A/PV/37
Under the circumstances, and for that reason, the suggested
wording of Mr. Shackle would have been perfectly satisfactory
to us.
On the other hand, it is a subject which is delicate, and
rather strong, feelings are held. For that rea:son, we fee1
that the somewhat neutral reading of this paragraph as drafted
in the Report is probably the most sattisfactory that can be
arrived at, and I suggest that it be retained. V 54
CHAIRMAN (Interpretation): Gentlemen, I suppose,
therefore, under the present circumstances, everyone agrees
to maintain the text as it now stands?
Dr. A.B. SPEEKENBRINIK (Netherlands): Mr. Chairman, I
have one more question to 'ask, and that is this: I have seen
in all these three drafts that a Member can, of course, decide
not to accept the decision of the Organization with regard to
relations with non-Members. However, I find everywhere that
in that case the Member may withdraw from the Organization, and
I understand from that that when it comes to the Organization
not approving the action of a certain Member, the only
possibility open to the Organization is as laid down in
Article 35(2) - withdrawing and withholding concessions in
respect of the non-willing Member of the Organization.
I think it is a very important point, and I wonder whether
it .would not be a good things for us to point that out to the
World Conference - that it is the Member who can decide, and
the Organization can only apply certain measures provided for
under Article 35(2) I do not know whether there is a special
reason why that has been left out of the Report.
CHAIRMAN: The Delegate of France.
M. BARADUC (France) (Interpretation): Mr. Chairman, as
Chairman of the Sub-Committee, I would have no objection to
such a reference in the Report as has been suggested by
Mr. Speekenbrink. We could state that as regards the powers
of the Organization, these are established under Article 35.
CHAIRMAN: The Dclegate of the United Kingdom.
Kr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I think
54
E/PC/T/A/PV/37 55
that possibly this difficulty may be assisted by an amendment
of paragraph 5 of Version "B". Paragraph 5 of Version "B"
has two alternatives: "...a Member either shall inform the
Organization of its acceptance of the decision,...... or, if it
is unwilling to accept the decision of the Organization, may
give notice in writing....of its withdrawal".
Now, we feel on consideration that the "may" in the second
alternative is illogical. There ought to be two clear
alternatives. Either the Member shall accept or it shal l
withdraw. There should not be any doubt as to what happens if
it does not accept the decision of the Organization. If we
substitute the word "shall" for the word "may" in the second
alternative, then it will be accepted in advance by the countries
that adhere to this Charted , and in this situation they will
withdraw, so that I think thequestion of whether sanctions and
withdrawal of concessions should be applied to them should, in
all probability, not arise, because there is a prior acceptance
of the obligation to withdraw in those circumstances. It
seems to us that the changing of "may" to "shall" would result
in a clearer and more logical provision, and for that reason I
suggest that the change be made.
CHAIRMA.N (Interpretation): I shall ask M. Baraduc 's
opinion once again.
M. BARADUC (France) (Interpretation): Mr. Chairman, I
wonder whether, if we discussed this question, it would not
be breaking the rule which is a self-imposed one - that is,
that the authors of the three texts here should remain unknown,
and whether if we started discussing one of these alternatives,.
the author of one of the alternatives would then recognize
his child.
V E/PC/T/A/PV/37
Dr. A.B. SPEEKENBRINK (Netherlands): That was the reason :
I only asked to mention the Sub-Committee Report.
CHAIRMAN (Interpretation): I think that it is, in fact,
extremely difficult to amend the text itself of the draft here;
but I believe that, nevertheless, we may be able to give
satisfaction to Mr. Speekenbrink in the way which he himself
suggested, and to which I suppose the Commission will agree.
Are there any other observations?
The meeting is adjourned.
(The meeting rose at 6.40 p.m.)
V
56 |
GATT Library | mp085kc1176 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Thirty-Sixth Meeting of Commiission "A" held on Tuesday, August 12 1947, at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, August 12, 1947 | United Nations. Economic and Social Council | 12/08/1947 | official documents | E/PC/T/A/PV/36 and E/PC/T/A/PV.34-36 | https://exhibits.stanford.edu/gatt/catalog/mp085kc1176 | mp085kc1176_90240181.xml | GATT_155 | 8,974 | 53,560 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/A/PV/36
12 August 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
THIRTY-SIXTH MEETING OF COMMIISSION "A"
HELD ON TUESDAY, AUGUST 12 1947, at 10.30 A..M. IN
THE-PALAIS DES NATIONS, GENEVA.
H. E. Mr. Erik COLBAM (Chairman) (Norway)
Delerates 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 intarpretations, which
do not pretend to be authentic translations, are reproduced for
general guidance only; corrigenda to the texts of interpretations
cannot, therefore, be accepted. -2-
CHAIRMAN : The Meating is called to order.
You may remember that there were certain - ir4 and ends
left over from our last Meeting, but I would suggest that
we should proceed now to the discussions of Article 7 and
clear that out of the way first, and then afterwards we will
take the different outstanding, questions. There is the
Chinese propos: 1 an Article 18: 2 (c) and the suggestion of
the Belgian Delegation on Article 21: 3 (b) and I have also
been informed that the Dalegate of South Africa has a statement
to make. I wonder Whether he wants to make his statement
now or after the discussion?
The Delegata of South Africa.
Dr. J. E. HOLLOWAY (South -Africa): Mr. Chairman, I am
a little bit conrcerned, both as leader of my Delegation and
in a personal capacity, about what has happened to a method
that we used in the sub-Committee on Technical. Articles in
getting over some of our difficulties. I refer to the
insertion of certain notes to make it plain what was intendes.
You will remember - all those who dealt with these matters -
that we got up against some difficulties which seemed to be
insoluble a til we gave ourselves the latitude of putting certain
things in footnotes and not putting them into the text, and in
that way we got over some - I suppose - eight or ten problems.
However, those notes are on a very special level, because
when we are all either dead or enjoying our pensions or doing
other things, other people will have to interpret there Articles
and if these Articles are thrown into the general record of the
Conference they will be like a few straws in the. Augean stables
of the International Conference and it will take a lot of searching
to find them.
P. P . - 3.- E/PC/T/A/Pv/36
Now, as I have said, as leader of the Delegation, I feel
strongIy about the matter because there are certain things on which
we withdrew reservations on the assumption, which I think we all
shared, that those notes would go into a special position. I
feel more of a personal responsibility too - and I put it to the
Delegations concerned - because both as Chairmen of the sub-Committee
and in the Committee on the Technicl Articles I was instrumental
in persuading certain people to accept a certain text which they
did not like on the assumption that they would have a footnote
with which they could accept the text.
Therefore, I came to the conclusion that it would be necessary
to have a definits reference in the Charter to these footnotes
and. to give them status. For that reason I sent forward an
amendment to Commission B, which referred it to the, sub-Committee,
to makte a reference to notes which have been put into the Charter
by the Preparatory Committee. That meant, of course, that each
note had to be votted and it had to be an ExpIanatory Note which
made it clearar what was meant and what was agreed on by the
Conference and I suggested that in the Explanatory Chapter there
should be a reference to a Schedule which should contain these
notes. Commission B has turned that down, Sir, has recommendad
against it, and has said "Well, if it has got to be done, in any
case it has got to be done by the World Conferences". I fail
to see the force of that argument because, after all, if' the
footnotes can only be finally drafted by the world Conference
surely then the whole of the text of the Charter can only be finally
drafted by the World Conference and then we might as well recognise
that we have had o e ioscu snocs diSe si ne,and -waccoming bz:ok,
anad thaen allwo ecn dr-t 1rc again . _4_
G E/PC/T/T..C/PV/536
New the reason why I raise it here instead of in the
Preparatory Comnit ee is partly to save time and partly
because Commission B, or the Sub-Committee of Commission B,
said they had not been instructed on the matter by Commission A.
My feeling at the moment is this, that as far as the
South Afrioan Delegation is concerned the matter - after all,
if these footnotes have no standing, all that I do is to note
reservations when we come to exceptions. As far as my
oclleagess whom I ha-ve perhaps led astray by suggesting that
we were safe to take this part are concerned, I wish to give
them fair warning now that unless we do get these footnotes
added in the special position which we all envisage fo r them,
then they have beon led astray and therefore they will also
have to put in reservations.
I think the generaI effect of not dealing with these
footnotes in the way in which we all intended. to will be that
we will probably have some fifteen or twenty reservations from
different countries .which would have been avoided if the
footnotes had gone into the Annexure, and incidentally, the
Text as it does forward will be much less clear than it would
be with the footnotes. Thank you.
CHARMAN: Well, the position seems to me to be the
we have decided in the Committee of Heads of Delegations,
and I think it was repeated in the Executive Session, that
all the documentation of the Preparatory Committee should be
kept apart from the Text of the draft Charter, but that formal
reservations and explanatory notes replacing, formal
reservations - or making it possible not to make formal
reservations - should. be included at the bottom of the Text of E/TC/T/TAC/PV/36
the Article to which such explanatory notes refer. In this way
the explanatory notes have, not entirely but to a very great
extent, the effect Dr. Holloway wants to give them. They will
not be mixel up with an enormous amount of peper resulting from
other Conferences in London, New York and here. They will be
given a place of honour at the bottom of the page of the Draft
Charter, sida by side with the formal reservations, and I think
that that gives considerable satisfaction. Whether it would be
necessary or desirable in addition to that to insert a clause in
the Charter finally sa.ying that these explanatory notes should
be considered as tentative notes to the Text to which they refer -
whether it is desirable or necessary, I do not think we need to
decide to--day. We have, by deciding to gave them this place of
honour, already drawn the attention of the Havana Conference to
the importance we attach th these explanatory notes; and I do
not think that we, at the present stage of our negotiations here
at Geneva, should worry too much about it. E/PC/T/A/PV/36
CHAIRMN: I wonder whether my explanations have given
some satisfaction to the Delogate of South Africa?
Dr. J. E. HOLLOMAY (South Africa): Mr. Chairman, I am
very well aware of what happened at that meeting - I was
present. I have also seen the Note of the General Secretary.
The question is, however, not what the status of these Notes
will be for the Havana Meeting, The question, as I said, is
what their status will be when people who know not Joseph and
all his works have to interpret this thing. I know the
interpretation the lawyers will give to it. The lawayers will
assume that we were a set of all-wise people who said actually
everything it was necessary to say in the text. We have not
said everything it was necessary to say in the text, partly
because we are not wise enough and partly because we could not
agree, but we could agree when we had those Notes. Therefore
those Notes must have a status in regard to the Charter and that
status can be given very simply by taking up those Notes in
an annexure, as Explanatory Notes which must be used as
interpretative material, and reforrinng to them in the text
of the Charter. Then when we are dead they will still be
there; whereas, if we. leave them out, in ten years' time
people will be utterly lost about tham.
CHAIRMAN: I feel it is rather for the Havana Conference
to decide whether some of these Explanatory Notes should be
incorporated in the final text of the Charter and whether some
others, not to be incorporated, should be loft out altogether
or, finally, whether some of them should be treated in a special
way as interpretative material to the Charter, It is very
to say,
difficult/before we see how the World Conference will deal
with these reservations, what status We are called upon to give
certain of them, So my own suggestion would U. unless the
- 6 -
S - 7..-
Commission feels otherwise, that we must let the matter remain
there until the Havana Conference.
The Dilegate of Australia.
Mr. C. E. MORTON (Australia): Mr. Chairman, the Australian
Delegation is equally concerned with the South African Delegation
about the status of the Notes on the technical :Articles. We
it
would like/to be understood that the Notes, or the majority of the
Notes on the technical Articles, are not like the Notes which
appear to be scattered throughout the Charter like tho leaves in
Vallo abrosa; they are the matters on which it was possible to
have some agreement on the actual wording of the draft. I take
it the draft text is going forward to Havana as an agreed draft
text. If those Notes accompany the draft, with the same status
as the draft itself, it should be no insuperable obstacle to give
those Notes equel validity with the text whilst we are here. The
Hevan Conference will deal with both the text end the Notes however
they see fit, but it must be clear at the World Conference that the
text is only an agreed text as long as it is accompanied by
certain of these interpretative Notes.
I would draw your Attention to Page 11 of T/142 or Paragraph
2 of T/154. Tht text. in the absence of these Notes, is no good
to 50 per cant of the Delegations here: with the Notes they are
all agreed on it.
CHAIRMAN: I do not think there is any dissent amongst us
as to the importanes and value of all these Explanatory Notes.
It is obvious, as I said, that the Notes are inserted so as to
avoid reservations and if the Notes are not respected then there
will be reservations. Whether or not it is necessary in the
Charter to introduce a formal declaration to that affect, I
have an open mind, but on the substance we are all in agreement.
These Notes are Explanatory Notes rendared necessary in order to
avoid dissent .
S Mr. E. WYNDHAM WAITE (Executive Secretary): Mr. Chairman, I
wonder if I could make a suggestion which might enable us to get off
this point. As I understand it, the Delegate for Australia has
repeated in somewhat different words, exactly wheat the decision of
the Preparatory Committee is on the subject of these notes, and if
it. would make the Delegate of Australia and the Delegate of South
Africa happier on this point, we could arrange to insert, in the
Introduction to the Report of the Second Session, a statement on the
position which the Preparatory Communittee has taken on this point,
in
interpreted in the sense/which the Delegate of Australia has
interpreted it.
Baron P. de GAIFFIER (Belgium): (Interpretation): Mr.
Chairman, the Belgian Delegation agrees with your interpretation.
I believe we could all agree in saying that the notes attached to
the text of the Charter should be treated by the Havana Conf'erence
on the same footing as the test of the Charter itself. Having
settled that, we could then leave to the Havana Conference the
decision for further continuation of this text.
CHAIRMAN: I would agree with what the Executive Secretary has
said, that we should, in the Report of the Geneva Meeting, insert a
statement to the effect that explanatory notes are being inserted in
order to avoid reservations or dissenting opinions, and that they
should be treated by the Conference in the same manner as the text
of the Draft Charter. But I would also like to point out that this
Is the way in which we have treated the footnotes from the London
Meeting and the footnotes in the New York Draft. Every time we go
through an Article from the text of the New York Draft, we look at
the footnotes and we discuss them in full. . There is no difference
of opinion on that score, so I really think we are all in perfect ER .;: . - 9 - E/PC/T/A./PV/36
agreement as to the importance and advisability of these explanatory
notes, and if we can, as suggested by the executive Secretary, draw
the particular attention of the Conference to our conception of the
importance of the notes, it would be sufficient.
Mr. S.L. HOLMES (United Kingdom): Mr. Chairman, I would not
necessarily dissent from anything that you have suggested, or
anything that has been suggested by the Executive Secretary, but I
take it that this is hardly the body which could take a
general decision which will apply to the Report on the whole of
the work here - not merely on those parts with which this Commission
has been charged. I think, therefore, that I can assume that any
decision on the lines of what has been suggested will be endorsed,
or will be put up for endorsement, either by an Executive Session
of the Preparatory Committee or by its Delegations. Subject to
that, I hope that we may leave the question at the point at which
it now is so far as Commission B is concerned.
I would, however, like to dissent from one of the suggestions
which, as I understand it, the representative of South Africa made.
That was that we should all be dead within ten years. That is not
my own personal intention.
Dr. J.E. HOLLOWAY (South Africa) : Mr. Chairman, the whole
difference is whether there should be a reference in the text of the
Charter to the notes, or not. I maintain that I am in honour
bound to my colleagues to fight for that, because I persuaded them,
in the Sub-Committee and later on, to accept certain notes. Now,
the matter does not affect only the Charter - it also affects the
General Agreement in which we have some of the same Articles over
and over again, so we cannot put over the matter to Havana.
As far as the method suggested by the Executive Secretary is ER,
- 10 -
concerned., concerning Havana, it will give us another opportunity
of dealing with the matter, and I presume the Report will come up
for approval in Executive Session. Therefore, I am prepared to
leave it at that, having warned my collaagues to whom I have
commitments in the matter, of the position . I intend to be in
Havana, and my government intends to be represented in Havana, but
I must take into account that by November I may quite possibly be
in a much less pleasant and much warmer spot no doubt. Some of
you also may be in a much more -pleasant and much cooler spot than
even Havana, but the matter has now been fully ventilated here, and
I must fight for the reference, in the text of the Charter itself, to
these notes. - 11 -
CHAIRMAN: The Delegate of the United States.
MR. J.M., LEDDY (United States): Mr. Chairman, I would like
to support the suggestions of the Delegate of the United Kingdom
that this matter be referred to the Heads of Delegations meeting,
I should like to say in regard to Dr. Holloway' s last point
that so far as we were concerned, we agreed to the Notes on the
understanding that they would be a part of the
material for interpreting the Charter. They would not be a
legal part of the text of the Charter - if the Committee had
intended that, the Committee would have put them into the text,
and I think that, without prejudice to any different decision
which may be taken in the Heads of Delegation emeening aafter, eter
furtheg thou.ht im theeiaattar, the proposml to iake the notes
a lagal pvrt of xhe tezt really changes the cholecoharaoteh of tle
notes, and we should have toame-ex.uime ther very carefully as
4o thegr leneuago if ehe pwcrc puteiex tho xt.
AHI..thN: You eard ha "i tee Del.gato of Aoutc hfrioa,
aftar having msde cla deaooration,. say that he would let the
matter rest there for touay, bat thg Dele-ate of the United.
Kingdom and the Delogateeuf thi, United States suggest that since
the questioneeas bb-n brought up it ought to be thrashed out in the
meeting of the heads ogaDelee,tions. I do not think that
ancbody oan object to that course being takenM ;ay I take that
to be agreed?
greed.
I said in the opening ef th, mgetin6 that I would staet thu
discssion today with article 37. You have it on paceo41 uf
moculenP E/?C/T/154 .
1
C/T kA PT/3V/;6 J.
- 12 -
MR. G.B. URQUHARRT (Canada): Mr. Chairman, there are two
apparent discrepancies in the Summary record and Verbatim Report
of the last meeting of Commission A, if this is the correct time,
to bring this up.
The first has to do with paragraph 4 of Article 18. The
Summary Record says that it was decided to adopt the suggestion
of the legal Drafting Committee to transfer this paragraph so as
to become the last sentence of paragraph 3(a). That, as I recall
It, was not the dacision of the Commission.
Mr. C.E. KORTON (Australia): My recollection of the matter
Mr. Chairman, is the same as that of the Canadian Delegate.
There was some talk of the transfer of paragraph 4 to paragraph 5
and vice versa, but we definitely agreed that the text of
article 18, paragraph 3 should not be furtther burdened by the
addition of paragraphs 4 and. 5.
CHAIRMAN: The Secretary informs me that there is a
clerical error there on page 2 of document E/PC/T/A/SK/34 - they
have omitted the word "not".
MR. G.B. URQUHART (Canada). The other point, Mr. Chairman ,
is on page 4 of the Summary Record. It says that in the English
text or Article 20 the only change, made was to retain the words
"agreed to" in the first sentance of paragraph 5. There was some
discussion regardiing fixing the marks of origin, end I think some
word was adopted there other than "fixed".
CHAIRMAN: The Secretary informs me that the word "fixed."
was proposed in the Corringendum to the Report of the Legal
Drafting Committee, and we based our discussion on that Corrigendum.
I am sorry for this misunderstanding.
E/PC/T/A/PV/36 E/PC/T/A/PV/36
H.E. Mr. WUNSZ-KING (China): Mr. Chairman, I wish to be
enlightened as to whether we have taken any decision on
Article 23, because I understand that there was one Delegation
which proposed the deletion of Article 23 and that proposal was
supported by another Delegation.
CHAIRMAN: My intention was to start with Article 37, and
afterwards to come back to all the points we passed over last
time.
On page 45 of Document T/154 you will find three general
observations on Article 37. The first one is a reservation by
the Delegate of India, who "maintained his suggestion that a
Member should be allowed temporarily to discriminate against the
trade of another Member when this is the only effective measure
open to it to retaliate against discrimination practiced by that
Member in matters outside the purview of the Organization,
pending a settlement of the issue throgh the United Nations".
I would ask the Delegate of India whether he still maintains
that suggestion.
Mr. S. RANGANATHAN (India): Yes, I should like that note
to continue.
CHAIRMAN: Then it will be retained in the form "One
Delegate maintained." and so on.
The second note you will remember from the previous Meeting
The Delegate of the Netherlands proposed an addition: "Necessary
to protect the rights of the grower who improves plants of
commercial use by selection or other scientific method".
He said in explanation that he simply wanted to mention the
matter hero. He did not expect it to be discussed, but he
would reserve the right to take it up at the Conference in Havana.
We pass on to the examination of the introduction to Article
37. There is no amendment, and you will see. that the Legal Draf--
ting Committee has, pratically speaking, passed our text unaltered.
_ 13_
V - 14 -
Mr. ROYER (France) (Interpretation): Mr. Chairman, we are
compolled to-day to submit some modifications to paragraph II (a)
of Article 37. I apologise if we:do that :at the last minute.
This is due to a number of circumstances, especially to. the fact
that when Article 28 came to be examined a new suggestion was
put forward. after the Plenary Meeting, and the French Delegation
would accept the new Text of Article 28 with a few Amendments
to correct this new' Text.
Unfortunately the French Amendments stirred. some emotion
in the Meeting, and we found.. after studying the question, that
the best solution would be to- modify somewhat the Text of
Article 37. This is why we submit to you a new Text for this
paragraph (a) of II of Article 37. The Sub-Committee on articles
26, 27 and. 29, have recognised already that our procedure is
well founded, end. I even believe that its Chairman intends to
Make a dec1aration in this respect.
The Text we submit to you is as follows upon II (.): the
words "necessary to ens .re to a consuming country an equitable
share of any product essential and. in short supply to it".
The main difference between this formula and the former Text is
that the forme Text only referred to distributing agreements
going through international organizations like the IFC; and. this
is, to our mind, too restrictive.
We must be able to let the States distribute equitably
this kind of goods, even if it does not through such
international agencies, and we have to maintain this position
because our, economic policy at present would be put in danger
if we had to modify it. This is a very important point for the
French Government, and. such a change seems to us indispensable,
if France is to be in a position to accept bot'h a Charter and
the General Agreement on Tariffs. G - 15 - E/TC/T/A/PV/36
Therefore I would request the Committee to take our
suggestion into consideration and to accept it.
CHAIRMAN (Interpretation): I propose to: deal with the
French Amendment when we doal with paragraph (II) of Article 37.
'We pass on to 1 (a) of the Article, "necessary to protect
public morals'. .Any observations?
Mr. MELANDER (Norway): The Norwegian Delegation considers
it necessary to maintain a reservatoin which we have on 1 (a)
and (b), which is recorded an page 45 at the bottom of Doc. T/154.
CHA.IRMAN: Any furthe remarks on (a) and (b)?
Aproved.
(c). .(d.) Approved.
You will see that there is on page 48 a note on sub-paras.
(c) and. (d). "It was noted by the Commission that these sub-
paragraphs my, require further consideration after decisions are
reached. on Articles 25-29".
I wonder whether it is necessary to maintain that statement
now. If nobody wants it maintained, I think we can leave it out.
The Delegate of France.
Mr. ROUX (France) (Interpratation); I would draw attention
to a change in the French text introduced by the Legel Drafting
Committee, who put the words "les pratiques dolosives" instead
of "les tromperies sur la nature"l; but this is going too far,
and. we think the previous Text was a batter one than the present
French text.
BARON DE GAIFFIER (Belgium) (Interpretation): I entirely
agree with the French Delegate. CHAIRMAN: I think in the light of these declarations we
revort to the previ-us Text.
Then cn -age 48 we Nove a seconparagte on sub- :-rvraph (b).
"Toe Cdcmcdsi-n c-nsilere. that ohe reforence tt Seoticn E of
Chapter V will rafquire readop fter the R. Rtion of the final
cexon". that Seotin".
I wzn.ar whethea it is necess-ry to maintain it.
If ncb.!y insists, I think we oan strike it :ut.
We pasp cn ongthe toj of paze 4p, sub-paragraeh (e)
"relaodu:ts2 thepprcotclt of Zrison 1abour".
agreee.
SubprAra-r. (f)? on~ oApprovedvns? _& ir~vex.
(g). trclatinF ta the oonservytion cf exhaustible
natural sesourcms suresch nadusare are miae effective in
cnmjuncti n vith resdomctions ond0.teotic proauctisn or
consumption."
Thereoy-m have a 4)cArent d/261. i. ro-Lraft by the
Delsgaraoi.n loiticn You haefothe text bizwouldou. I tzull like
eo knowDwheta-r any Veleolte hao ano -bjecto-o t: the prcpOsal
al thc. !ugtre.ean Deleiata. S
CHAIRMAN: The Delegate of the United States,
Mr. J. M. LEDDY (United States): Mr. Chairman, we have
no objection to what must be the intent of this proposal, but
we should like to call attention to Document E/PC/T/139, which is
the Report on Chapters I, II and VIII. Page 26 contains a
provision which permits a Member to take any action which the
Member may consider to be necessary to protect its essential
security interests "Relating to the traffic in arms, ammunition
and implements of war" - and this is the important phrase which
I will now read - "and to such traffic in other goods and
materials as is carried on for the purpose of supplying a military
establishment."
We had always considered that that exception would permit
a country to restrict exports not only of exhaustible natural
rcs urces but of other things, such'as, for example, scrap iron,
to the extent that it felt that the export transactions were
carried on for the purpose of supplying a military establishment
abroad, whether or not they were directly or indirectly consigned
to a military establishment as such, and I wonder whether this
exception does not render the Australian proposal unnecessary. In
other respects, I think that the Australian proposal may be a
little too broad, beacuse it is very difficult to say what may be
necessary to a Member's long-term plans for security. I think
that perhaps you could restrict almost anything in the world on
that ground and I wonder whether the exception already in the
Charter does not meet their point.
CHAIRMAN: I wonder whether the Delegate of Australia can
reply to the statement of the United States Delegate on this point,
Dr, H. C. COOMBS(Australia): Mr. Chairman, the sympathy
which the United States Delegate has expressed for our point of
- 17 - S E/PC~~~A/~~~~/?C/T/4-PV/36
view is mutual, pbecauaeewe apreci ta the difficulties of this
proposal, thatdabgergof . ein& eomWehate widi. c ar concerned,
howeher, as tc t ade uacy of thcj clause to which the United
States Delegate has refereed, from tveipoint of le'w which we have
in mind. The precine wording ir the present aft ofethe-.Articla
te ehich he rofors reads: "Relating to the traffic in arms,
ammunptioe and imolamcnts of war and to such traffic in other
goods anri materials as is carried on for thc purpose of
sup*lying a militame es"ablish=nnt.t
w icoenot knowpa-cisely ;.et a military establishment is,
but I doubt whether it would cover a factory which was engaged
only or pertly in tho production of materiaos wof war, -r-hether
iet would covr the factory or plant which produced th,e materials
semi-f.ricated, from which materiales of wa- wce themselves
produced
To refer to the caee that w* have quoted in our Note. It
was found necessary in th so emmeorzoei=nzdiatoly preeeding tha
outb-cak of tae lest wvr to prohibit the exportation of iron
ore from Australia,wbecause re had reason to beliive that It was
being, or would be, used for military purpases.by J-pan, I
do not doubt thao thae iren orb would have been used, first of
all at any rate, in ordinary smelting works in Japan, and I
doubt whether you could describe such smelting works as a
military establishment. e Consequently I fzel some doubt as to
whether the article referred to covers the aoe wof czs_ -e have
in oinde Hewev.r, e -ould bs grateful to hoaw tof vievs ci
ether D~lagates on the matter, as we are aware of the difficulties
of this proposal.
CEHIRKINe The D legate of the ares.d St
M.LE. . M. I2DDY (United States): I should explain, Mr.
Chairman, that we also have restricted exports if scrap Iron
- 18 -
S S - 19 - E/PC/T/A/PV/36
for the same purpose as the Australians have restricted iron
ore and it was always our interpretation of this clause that
if a Member exporting commodities is satisfied that the purpose
of the transaction was to supply a military establishment,
immediately or ultimately, this language would cover it. It
would not do violence to our understanding of it to add the
words "directly or indirectly for the purpose of supplying a
military establishment." I think that would meet this
difficulty.
CHAIRMAN: The Delegate of Canada.
Mr. J. J. DEUTSCH (Canada): Mr. Chairman, we are also
worried about the rather general character of the exception
proposed by Australia. The words "Long-term plans" are
extremely wide end we feel that they may allow the taking of
action which is contrary to the general intent of the Charter
under these broad terms. Long-term plans may include almost
anything and I would prefer to meet the point in the manner
proposed by the United States Delegate. - 20 - E/PC/T/A/PV/36
Mr. J. MELAIDER (Norway): Mr. Chairman, there is one point of
detaiI which comes out of the Australian amendment. It is said, in
the first sentence of the Australian amendment,"Relating to the
conservation,by export prohibitions" The words "by export
prohibitions" are not included in the original text, and they would,
of course,include a limitation by limiting these exceptional
measures only to export prohibitions. Of course, those methods
"export probibitions", would be the most likely ones to be used, but
there are also other measures, and as the text stands drafted by
the Legal Drafting Committee, it is more general and we would prefer
the more general statement so that the words "by export prohibitions"
should be deleted, whatever else is done with the amendment proposed
by the Australian Delegation.
Baron P. de G-IFFIER(Belgium) (Interpretation): Mr. Chairman,
the Belgian Delegation shares the preoccupation expressed by the
representatives of the United States and Canada. Our attitude in
this is the same. We also see a danger in the Australian amendment
in that it establishes a general prohibition, when the preoccupation
.expressed by the representative of Australia is to make prohibition
for certain countries at certain times. There is the danger of war,
and I believe that Article 91 already answers the desire expressed
by the Australian Delegate. It speaks of measures to be applied in
case of war or of international tension, and therefore I believe
that it is sufficient to cover the point raised by the Australian
representative.
Mr. S.L. HOLMES (United Kingdom): Mr. Chairman, the point
that has been raised by the Australian Delegation is obviously one
of importance, and I think it has been recognised here that solving
this problem will present difficulties if there are objections on - 21 - E/PC/T/A/PV/36
the grounds that the wording is a little toc wide. Possibly a form
of words may be found in some other references before the end of the
meeting, which would enable us perhaps to get on to something else.
CHAIRMAN: Are there any other delegates wishing to speak on
this matter? Well, I suggest that we pass over this joint for the
time being, and if, as may be the case, we shall have to have
another meeting on these Articles, we can then hope that, in the
meantime, the delegates will get together and find a reasonable
solution.
to
We pass on/the next sub-paragraph (h): "undertaken in pursuance
of obligations under inter-governmental commodity agreements
concluded in accordance with the provisions of Chapter VII". Are
there any observations? Then that is agreed.
On page 48 you will see that the Delegate of India has made a
suggestion on the sub-paragraph (g). He maintained Provisionally
his suggestion that the words following upon "natural resources"
should be deleted. It would read: "relating to the conservation
of exhaustible natural resources". Does the Delegate of India
maintain that suggestion, or would he prefer to wait until he will
see the result of the discussion on the Australian amendment?
Mr. S. RANGANATHAN(India): I would prefer to wait until the
Australian amendment is disposed of. J.
E/PC/ T/A/PV/ 36
MR.L.C. WEBB (New Zealand): Mr. Chairman, the New Zealand
Delegation has put forward in document E/PC/T/W.269 a proposal
to add a sub-paragraph to paragraph 1 of Article 57. If it
would suit your convenience, I would like to say a few words about
that.
The purpose of this amendment relates to the work of a
sub-committee which was set up to consider the New Zealand amendment
to Article 33 relating to the use of trade controls generally,
and in the course of that committee meeting the question was raised
about New Zealand's use of export control. Unforturnately,
that sub-committee on Artcle 33 has not completed its work, but
we have consider it desirable to put forward this amendment in
view of the fact that Article 37 was coming up for consideration
before the sub-committee on Article 35 concluded its labours.
The purpose of this amendment is to provide for the case of
countries like New Zealand which maintain as a matter of permanent
policy price stabilization schemes covering, generally, the whole
range of their economy. Any country which, like New Zealand,
stabilizes its general price levels is faced with the problem that
the world price for certain commodities, particularly raw materials
which it exports, will be substantially higher than the stabilized
domestic price for the like commodity. The best way of
explaining that is, I think, to give a practical example. In
New Zealand the price of leather to domestic users such as, for
instance, the footwear industry is sold at price very much below
the world level. Now, in the circumstances it becomes necessary
to ensure, by means of export controls, that the local requirements
of leather are satisfied - otherwise, if that is not done, there
would be no leather for the local market or, alternatively, it J.
would be necessary to let the local price of leather rise to the
world level. We do not assume that it would be contemplated that
the effect of the Charter would be to compel the ab ndoment of the
price stabilization schemes, and therefore we have brought forward
this amendment. It is true that it has been suggested that the
same result can be achieved by the method of export taxes, but we,
and I think other countries who have tried that method, have found
it unstisfactory and, iner ,impracticable, because the world
price of primer commodities is subject to such wide variations that
the rate of tax has to be varied too frequently.
Furthermore, it has to be borne in mind that, as I say, these
measure part of domestic stabilization schemes, and the term
domestic etabilization scheme" is included in our amendment.
That, it seems to us, precludes the use of an export control of this
sort for a purely protective purpose.
We would ,therefore ,commend this amendment to the sympathetic
consideration of this Commissiona I imagine that the sub-paragraph
which we have suggested could be added to paragraph 1 of article 37
as a further sub-paragraph.
-85- .._
E/2CA T//3PV "6 V
- 24 -
CHAIRMAN: The Delegate of the United States.
Mr. J.M. LEDDY (United States): Mr. Chairman, I do not
want to delay the proceedings of the Commission, but I would like
to have a bit more time to study the substance and the form of
this amendment, because it is of some considerable importance.
If it were possible, therefore, we should like to take it up at a
later meeting.
CHAIRMAN: As I have already said, I have the impression that
we shall not get through with our work today. I do not think there
can be any objection to the postponement asked for by the United
States Delegate.
We pass on to paragraph II(a) of the Report of the Legal
Drafting Committee, where we have the amendment submitted by the
French Delegation. You have heard the explanation in support
of that amendment by the Delegate of France. I would call on
other Delegates to express their views.
Mr. J.M. LEDDY (United States): Mr. Chairman, we have given
-some thought to this proposal by the Delegate of France since the
time it was first mentioned in connection with the balance-of-payments
Articles. It appeared from the discussion in the Sub-Committee on
the balance-of-payments Articles that this was not a problem which
'was confined to countries in balance-of-payments difficulties,
but applied generally to the acquisition and distribution of
commodities in short supply during the transition period.
We have re-examined the provisions of part two, paragraph (a)
of Article 37 to see whether it did not, in fact, provide for
Agreements between two or more countries as well as the more
general multilateral arrangements relating to products in short
supply, and we feel that probably it does require some re-casting V - 25- E/PC/T/A/PV/36
to take into account bilateral agreements. I think, as it
stands, it would permit unilateral export restrictions, which
could be justified as resulting in an equitable distribution
of commodities in short supply, and also would cover such
multilateral arrangements as the International Emergency Food
Council.
We should like to suggest a re-wording which would provide
certain safeguards to Members in the case of all three types of
arrangements -that is to say, unilateral export restrictions;
bilateral agreements regarding products in short supply, and
the more general arrangements. The wording we would suggest
would be this:
"essential to the allocation of products in short supply,
provided that any such measures shall be considered with an
equitable international distribution of such products among
the several consuming Member countries and with multilateral
arrangements directed to this end" .
That would clearly permit, we think, of bilateral agreements
and the mutual provision of products in short supply, but would
make them subject to complaint in the event that they head the
effect of depriving other Member countries which also need
these products and are unable to get them by reason of the
arrangements concerned. I believe that it is more or less in
accordance with the proposal put. forward by the French Delegation
but has a little more elaborate provisions in the way of safeguards.
CHAIRMAN (Interpretation): Does the French Delagate wish
to answer the Delegate of the United States on this point?
M. ROYER (France) (Interpretation) Unless someone else
wants to speak on this subject, I would be glad to answer the
Delegate of the United States. V - 26- E/PC/T/A/PV/36
Mr. S. L. HOLMES (United Kingdom): Mr. Chairman, it occurred
to us that while there may be some point in the remarks made by
the United States Delegate and in the latter part, particularly.
of the alternative which he has suggested, the needs of the
situation could, perhaps, be met by a fusion of the two drafts:
that: would be, to take the language suggested by the French
Delegation with perhaps come minor alteration (to bring the English
version more into line with English) and to add on to it the
sort of proviso, or some reference to the sort of considerations,
raised by the United States Delegate in the latter Part of his
formula.
BARON DE GAIFFIER (Belgium) ( Interpretation) : Mr. Chairman
I would like to make a general remark regarding the prodecure
in our work. These technical Articles were studied at the very
beginning in the Preparatory Committee and now at our latest
and last meetings we are confronted with a flood of new
Amendments which all are reservations to paragraphs of our
Charter. I see in this a danger of lesing Article 37 from
sight, and we could really come a negative Article, which
would have a rather bad effect on the whole of the Charter -
it would make a negative Charter out of this Text.
I wonder if it would not be preferable for us to study
these Amendments altogether instead piecemeal, and then see
their repercussions on the essence of Article 37. - 27 - E/PC/T/A/PV/36
CHAIRMAN: The Delegate of Brazil.
Mr. E. L. RODRIGUES (Brazil): Mr. Chairman, I am in full
agreement with the whole of the statement just made by the
Delegate for Belgium.
CHAIRMAN: I have also the feeling that it will be
necessary to include this amendment with the two previous ones
to be discussed at our next meeting, but I wonder whether the
Delegate of France now has anything to add to what he said,
or whether we can leave the matter for today.
M. ROYER(France (Interpretation): Mr. Chairman, the
French Delegation does not at all object to discussing its
amendment together with the other two amendments on article 37
which were submitted by the representatives of the United
Kingdom and the United States of America, but I wanted to
indicate that if we have submitted this text so late it is due
to a number of extenuating circumstances. This disposition
was, in fact, not originally in connection with Article 37.
It came from the old article 25 and it was also bound to
Article 28. It was only yesterday that article 28 was
examined and that we were able to see what were the repercussions
on Article 37 of this Article elG 28here>- eforGwe ,,ere not
in a position materially to submit a precise text ear,ier.
Tbis teing saidhaI 5-ve no objection to examining our
proposal later on.A "t the samee imrn we will examine those
of the United States ane th_ United Kingdom Delegations.
"s far as the first suggestion - that oe thc enitsd States
Delegation - is eoneorncd,iit js too early today toegivc a
fioel .pinoon -n it. I think a question of principle is
ieplicd. We have to find out if the. text is sufficiently S - - E/PC/T/A/PV/36
flexible to permit the maintenance of the system which we
consider necessary for our country.
As far as the other proposael is concerned - the one of
the United Kingdom -we could, I believe, accept it. In
any case, it would be a good thing to let the three interested
countries get together and arrive at a common text which
would be satisfactory to all.
This being said, I have no objection to the postpone-
ment of the discussion. - 29 -
CHAIRMAN: We pass on then to paragraph II(a) of article 37,
and the delegates who have taken ,art in the discussion will try to
arrive at some mutual understanding before our next meeting.
II (b): "essential to the control of prices by a Member country
undergoing shortages subsequent to the war".
Mr. J. MELANDER (Norway): Mr. Chairman, II(b) deals with
the price control in the transitional period, but it is obvious, to
the Norwegian Delegation at any rate, that it will be necessary in
future to provide for permanent price stabilisation arrangement in
the countries if they are going to be able to fulfil the objects of
this Charter, and generally to be able to conduct their foreign;
economic policy in the way for which this Charter is meant to provide.
It is quite clear, we feel, that the present provision does
not cover this. It may be that the future work of this preparatory
Committee, especially the work relating to article 15,probably also
to the subsidiary Articles, may show that one can arrive at
provisions here which will meet these objectives. Of course, this
is also the same general object which is underlying the New Zealand
proposal, which we have just discussed a quarter-of-an-hour ago.
We feel that these problems have not really been considered fully
enough at this Conference. I do not propose to take them up now.
I will just refer the delegates to the fact that this paint has
been considered on a limited basis by the Sub-Committee dealing with
state trading and monopolies.
In Article 32, paragraph 4, for example, it is provided for the
Possibility of an import monopoly arranging its price differentials
between import prices and domestic prices, on the assumption that, if
a product 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 variations in world prices, - 30 - E/PC/T/A/PV/36
subject where a maximum duty ......" and so on. That shows that,
in relation to state trading monopoly,that factor has been taken
into account. We feel that it would be necessary to have the same
provisions when it is a question of private trade. It is perhaps
possible to make a statement in II(b) , and alter it so that it would
say that it is essential to the control of prices, and we would cut
out the reference to "shortages subsequent to the war", and that
would make the provisions more general. It may also be that we
would need this transitional rule as it stands, but it is necessary
to have a general rule relating to price stabilization schemes, just
as was suggested by the New Zealand Delegate.
I do not want to take the Commission's time to discuss this
here, because obviously it is impossible to reach a result until we
see the results of the Sub-Committee dealing with Article 15.
Consequently, the Norwegian Delegation will have to reserve its
in regard.
right/to II (b) as it stands now. J. -31 - E/PC/T/A/PV/36
.
HAIRMAN: .Are there any further remarks?
Sub-paragraph (b) is adopted, with the reservation of the
Norwegian Delegate.
Sub-paragraph (c). Are there any remarks?
Adopted.
I would like to ask you to go back to page 10 of document
E/PC/T/154 where we had a remark by the Delegate for Cuba. He
was not present when we dealt with it last time and we had to
pass over it, but I have got a note from him saying that he agrees
to his reservation being given the following form:- "One
delegation would have preferred to introduce the Article by an
express statement of condemnation of dumping". You will see that
it is much milder in form than the previous one.
Before passing on to considering a new proposal concerning
Article 18, paragraph 2(c) interesting the Chinese Delegation, I
will ask the Executive Secretary to make a statement. E/PC/T/A/PV/36
Mr. WYNDHAM-WHITE (Executive Secretary): Mr. Chairman, I
will not take more time than I need, but I did want to take this
opportunity to make a communication to all the Delegations in
the Preparatory Committee, and, through the representatives
here, to the Heads of Delegations, about certain modifications
in the programme of meetings. I will confirm this in writing,
but I think it would be as well to give this advance notice.
It has been decided to cancel the meetings which were
arranged for tomorrow to consider Chapter IV and to substitute
therefor a meeting of the Sub-Committee on Articles 14, 15 and
24. The meeting of Commission A on Chapter IV will be on
Thursday morning and afternoon. On Friday morning and
afternoon, Commission A will meet to consider Reports on
Articles 25, 27, 26, 28, and 29. On Saturday morning and
afternoon,Commission B will be considering Reports on
Chapters I, II and VIII and the Sub-Committee on Voting.
On Monday, 18th August, Commission A will met to consider
the Report of the Sub-Committee on Articles 14, 15 and 25 -
morning and afternoon. The final Plenary Sessions will then
be postponed until Thursday, 21st August and Friday 22nd August.
I would like to add one remark, Mr. Chairman, and that is
that I feel that this is the last proposal that I can make to
the Preparatory Committee, and that if the feeling of
Delegations is that the discussions of the Preparatory Committee
cannot be fitted into this time-table, then I must ask the
Delegations who take that view to request the Chairman of
the Preparatory Committee to convene a meeting of the Heads
of Delegations, for the Heads of Delegations themselves to
decide what programme their think is practicable. Then, in
the light of that suggestion, I would take up with the
- 32 -
V V - 33 - E/PC/T/A/PV/36
Technical Services of the Secretariat of the United Nations
the question of the possibility of providing services within
the programne requested by the Heads of Delegations. No
programme which I have suggested has, I am sorry to say,
corresponded in any way to the requirements of the situation,
whioh is probably due to my bad guessing! At any rate, my
programmes have little or no effect on the course of discussions.
so I think that probably the best thing to do is to ask the
Preparatory Committee itself to examine any questions...( sentence
not completed). G
- 34 - E/PC/T/A/PV/36
CHAIRMAN: well, the declaration of the Executive Secretory
renders it still more important that we must now try to terminate
our work on the Technical Articles at our next Session.
We have taken, to my mind, to, much time. We have discussed
this Article in London, New York and here, over and over again,
and we met new Amendments at the last minute. I do not criticise
the Delegations who submit these Amendments, because everything is
interdepedent in the Charter, but we must face the difficulty
and we must get through in time, because if we cannot end up
acccrding to the programme set by the Executive Secretary we shall
not have time enough between the Preparatory Committee and the
Havana Conference to get our Governments into line with what we
recommend.
We have still the following problems before us.
We have the three Amendments to Article 37. That is one point.
We have the question of boycott. It was suggested by two Delegates
that that Article 25 might be omitted. That is the second
question. I have met a new suggestion from the Chinese Delegaten
*ith egards to the xp lanatory o:te onA-rticec 18 2 (c), or as it
new reads, Article 8S paragraph 5. That is the thidtpo:int.
Finally, we have theqauestion boWught up by theBteliganDzelgate
at our last meeting on Marks of Origin - Article 21 3 (b). This
is material enuogh for a fourth meeting, but I would warn you that
there won't be any possibility for more than one meeting. S .-35- E/PC/T/A/PV/36
Mr.E. WYNDHAM WHITE .ueIT (Ex eutive Sccretary): I must say,
if you agree, Mr. Chairman, thad I woel-. lik- it to be agreed
in the Session es ate th: deta of teenext mcctiAg. "s far
asee canes6c, ehore arc likely to bo clashes with several
other meetines, Th;reeis g meotine of the Sub-committee
on articles 14, 15 and 24, CommAssion '.' on Chapter IV,
Commission 'A' on Articles 25, 26, 27, 28 and 29, Commission
'B' on Chapters I, II ana VIII, ?nd Commission 'A' on
Articles 14, 15 and 24.
I weuldelike th. viaw of the Commission as to which
of those clashes they woeld be bsst able to support.
very evening at tine o'clock is also.vacant
Mr. . M. LEDDY (United States.: h Mr,aCtairm n, I suggest
we da mert st niIhsug eT -uRgcst we, shoule not mcet before
w morrotr night, however, in orderoto all-w of consultation
on some of these points.
CHAIRMAN:elehe D.3egate o. China,
H. WUNMr.K'TNSZ 1ING (China.: Mr, Chairman, I feel that
my proposal might be disposed of im five tinutes.
CHAIPIIo: I w-ged suga¢st thet we meet at 10.30 on
Friday morning, August 15. That is ehe sams time as
commission 'A' will deal with Articles 25, 26, 27, 28 and 29,
bue the e.legatss, so far as I have been able to see, are
generally different for the work on these Articles and the
work on the technical A.ticles,
ehe eelcgata o.sIndia, S
Mr. S. RANGANATHAN (Inc.. . The only objection I see
to that proposal, Mr. Chairman, is that there will be two
incarnations of Commission 'A' functioning at the same time.
I do not mind.
CHAIRMAN: That does not matter.
May I take it that it is agreed we meet on Friday morning,
August 15, at 10.30, and that Delegates will arrange with
other members of their Delegations that there will be no clash
between our work and the work on Articles 25 to 29.
Are there any objections?
(Agreed).
That cannot be altered.
The Meeting is adjourned.
(The Meeting rose at 1.5 p.m.) |
GATT Library | tz363kn2088 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Thirty-third Meeting of Commission A held on Thursday, 24 July 1947, at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, July 24, 1947 | United Nations. Economic and Social Council | 24/07/1947 | official documents | E/PC/T/A/PV/33 and E/PC/T/A/PV.31-34 | https://exhibits.stanford.edu/gatt/catalog/tz363kn2088 | tz363kn2088_90240170.xml | GATT_155 | 8,031 | 47,786 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/A/PV/33
24 July 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
THIRTY-THIRD MEETING OF COMMISSION A
HELD ON THURSDAY, 24 JULY 1947, at 2.30 P.M. IN THE
PALAIS DES NATIONS, GENEVA.
Mr. Eric COLBAN
(Chairman)
(Norway)
Delegates wishing to make corrections in their speeches
address their communications to the Documents Clearance
Room 220 (Tel: 2247).
should
Off ice,
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 inter-
pretations cannot, therefore, be accepted.
NATIONS UNIES E/PC/T/A/PV/33
CHAIRMAN: The meeting is called to order.
We were discussing yesterday the question of the new
paragraph 2 of Article 37, and we had some exchange of views
with regard to a point in the proposed text, namely, whether the
words "July 1st 1949" should be replaced by a later date.
The United States Delegate proposed 1st January 1951. The
Norwegian representative proposed 1st March 1952. After having
heard the suggestion of the United States Delegate, supported
by the United Kingdom Delegate, the Norwegian Delegate proposod
as a solution the intermediate date of 1st July 1951.
Does any Delegate wish to pursue this discussion?
The Delegate of Norway.
Mr. J. MELANDER (Norway): Mr. Chairman, the Norwegian
Delegation has considered this problem, and we have come to the
conclusion that in order to reach unanimous agreement on this
subject, we would agree to 1st January 1951 as suggested by the
United States.
CHAIRMAN: May I take it that we are all in agreement with
adopting that date - 1st January 1951?
Any objection? It is agreed.
We have not, however, considered as yet the rest of the
proposed text of paragraph 2 of Article 37. I read it carefully,
and it is really a transcript of the former Article 25(2)(a) and
I do not think there is any reason for us to try to improve the
draft presented by the Secretariat; but I would like to know
whether any Delegates have any re-drafting proposal to make.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I have
one point I would like to raise. I observe that this has been
carried as a new paragraph 2, and in consequence does not
V V
fall within the preambular sentence that comes at the beginning
of Article 37 as at present drafted, namely, the words "Subject
to the requirement that such measures are not applied in a manner
which would constitute a means of arbitrary or unjustifiable
discrimination between countries where the same conditions
prevail, or a disguised restriction on international trade"
Well, I do not see that there is any point in removing this
new paragraph from the scope, so to speak, of these qualifying
introductory words, and I would like to suggest that this should
be incorporated in t be general list of exceptions, so that it
will fall within the effectiveness of the preamble. I do not
think there can be any qualm or objection to those words
applying to this new except ion. On the contrary, I think it is
desirable that they should apply. They merely rule out
"arbitrary or Unjustifiable discrimintion and disguised
restriction on international trade," and I presume nothing which
is intended at the present time under this new "a", "b" and "c"
would fall within those concemnations in any circumstances, so
I see no reason why they should not just form a part of the
Article as now drafted. M
CHAIRMAN: There seems to be a feeling that these new items
under Article 37 are of a different character from the other items
of that Article. Even if, in order to meet the wishes of the United
Kingdom representative, the exceptions are included, we shall still
need a new sub-paragraph to contain thE new clauses.
Mr. J. MELADER (Norway): I was just going to make the same
proposal.
CHAIRMAN: May I ask whether delegates are in agreemmt with
the suggestion to allow the introduction to article 37 to cover also
the points of the new clauses?
Mr. C.E. MORTON (Australia):I would propose that the clauses
simply be added, unless there are some very extensive word changes.
Mr. J.M. LEDDY (United States): I think this question could be
handled by making sub-paragraphs (a) etc. the final paragraphs of
Article 57, and then have a second paragraph: ``Measures instituted
or maintained , which are inconsistent.... '' etc.
CHAIRMAN: Without separating it into two paragraph?
Mr. J.M. LEDDY (United States): I do not know whether it would
be necessary to have two paragraphs; it. might be that the final form
would be in one paragraph.
CHAIRMAN: I wonder what other delegates feel about that.
It would simply mean adding, after the list, three more items taken
from the Secretariat draft.
1 would add that I myself do not feel very happy about that
solution because we must remember that these three new items have
an explanatory text attached to tham: ``Measures instituted......''
and that explanation covers only these three now items. I therefore
4 5
E/PC/T/A/PV/33
still feel. that a more elegant solution would be to divide the Article
into two paragraphs under the same heading.
Mr. P. . SHACKLE (United Kingdom): That could be achieved by
making two parts of .the list, part 1 beginning with (a) ``necessary to
protect public morals" and the second part of the list beginning
"(a). Essentieal distribution. "
CHAIRMAN: I did not quite catch that.
Mr. R.J. SHACKLE (United Kingdom): My proposal was that the
list which now is just one single list would become a list in two
parts Part I beginning ``(a) Necessary to protect public morals;
and the second part of the list beginning "(a) Essential distribu-
tion." We. could then wind up that paragraph with the measures
mentioned in Part 2 of the list G 6 E/1 C/T/A/PV/35
CHAIRMAN: That is exactly what I myself had in view,
and the Members ef the Sub-Committee on Article 15, at any
rate those who are present, will agree to that so lution
As there are no objections I take it that we agree to that
arrangement.
And then, in arder have them in formal order, I must ask
explicitly whether there is any further objection on the text
prreparod by the Secretariat of this paragrarh (2) of Article 37.
The Delegate of France.
Mr. ROUX (Frence) (Interpretation): Mr. Chairman, I have a
correction to propose to sub-paragraph (b) of this new Text.
We read now tha Document submitted by the Secretariat - (b),
"essential to the maintenance of the legislation on price control,"etc.
We had a discussion on this question in the Sub-Comittee and we
suggested that it was not necessary to keep in the words "maintenance
of the legislation", and we pointed out the fact that they were
not included in the English Text and it was deoided. to adcpt more
simple wording, say, ``essentiall to the price control established
in the particular countries.
The Text now before us should now be correct, in accordance
with the decision of the Sub-Committee. Thank you, Mr. Chairman.
Mr. BAYER (Czecheslovakia): Should we take it that the
Text of paragraph (2) should be the same as it is in the working
paper 245 - that means that the General Preamble to Article 37
would. not refer at all to this Text?
CHAIRMAN: I cam inform the Delegate of Czechoslevakia
that at the beginning of our motion we disicussed. this question
and. agreed that the consolidation of Article 37 should apply to
this new process as well, and that the previous sub-paragraphs of 7
Article 37 will be started. by a number 1, and these three sub-
paragraphs, number 2.
We now pass on to the next number on my Agenda. That is
a communication from the Sub-Committee on Articles 25 and 27.
That communication is incorporates. in the proposel. by the
Czechoslevak Delegation contained in Document W/252, Revision 1.
It is a question of transferring sub-paragraph (f) of
Article:2 to Article 37. That sub-paragraph (f) is in the
New York Text: "Import and export prohibitions or restrictions
on private trade for the purpose of establishig a new, or
maintaining an existing monopoly of trade for a state-trading
enterprise operated. under Articles 31, 32 or 33.''
These prohibitions should be excepted from the Article on
Quentitative Restrictions.
Now the Sub-Committee on article 25 proposes that that
stipulation be transferred to article 37, and. the Delegate of
Czechoslovekia has been kind enlagh to present a Draft for the new
sub-paragraph, (g) .
You have already had a discussion en Document,232, Revision 1.
Is there any objecton to the draft contained in that Document?
The Delegate of the United States.
Mr. LEDDY (United. States): The Delegation of Czechoslovakia
has proposed two papers, one 252 and. the other 282, Revision I.
In 252, the exception reads as follows: "Necessary to secure
compliance with laws or regulations which are not inconsistent
with the provisions of Chapter V".
In 252, Revision I, the phrase is: "Necessary to. secure
compliance with such laws or regulations as those relating to the
enforcement of state trading monopolies oprated. under Articles 31,
32 and. 33'' (etcetera) "and. others which are not inconsistent
with the provisions of Chapter V". S 8 E/PC/T/A/PV/33
I think that the implication of the draft I last read is that
anything relating to the enforcement of State-trading monopolies
or customs regulations, the protection of patents, etc. - even
though those regulations are inconsistent with the provisions
of Chapter V - would be permitted and I think that construction
is not possible under the draft put forward by Czechoslovakia
in W. 252. So we would prefer the first draft put forward by
the Czechoslovak Delegation. We think it is more accurate
and pracisc.
CHAIRMAN: The Delegate of Czechoslovakia
Mr. B.T.BAYER (Czechoslovkia): Mr. Chairman, since it
was decided in the Sub-committee on Articles 25 and 27 to
transfer this sub-paragraph to Article 37, and since the Sub-
committee decided not to draft the text, we looked at the
corresponding sub-paragraph of Article 37; that is, sub-paragraph
(g), and, as the Delegates have observed, we have used exactly
the same text as is contained in sub-paragraph (g).
The difference to which Mr. Loddy is referring, between
Documents W.252 and W.252, Revision 1., is that W.252, Revision 1.
also refers to Article 33, wheroas in the former document to
somehow omitted tha reference to Article 33. We wanted to use
practically the same words as in Article 25, Paragraph 2. -(f)
by transferring them to Article 37 and we did not enlarge the
substance, since the reference to Article 33 was made in Article
25, Paragraph 2 (f) as well.
Tha second difference between .252 and W.252, Revision 1.
is the somewhat changed order of the wirds; W. 252 begins
with: "which are not inconsistent with the provisions of Chaptar V, Y
These words are used at the end of the suggested sub-paragraph (g)
in W.252, Revision 1. S
CHAIRMAN: The Delegete of the United Kingdom.
Mr. R. J. SHACKLE (Unitod Kingdom): Mr. Chairmen, as a
matter of language and drafting, I, too, would dofinitely
prefer the original version of W.252 to the revised form.
The revised form, it seems to me, has several difficulties
in it. "I would like. to draw attention in particular to the
words "and others" in the list lines, but two. It is not
at all clear.whether ``others" refers to laws, monopolies, or
regulations, whereas that would not arise under the original
draft.
As regards the difference in the wording introducing
Article 33, not in the original draft, I would like to
suggest that could be easily dealt with by referring, not to
particular Articles, but to Section E of this Chapter, which
is the State-trading section. At present we do not know
whether there will be a separate Article or not. If we
refer to Section E of this Chapter, we shall have covered. that
point by the whole of the contents of the State-trading
section, whatever they may be. I would like to suggest,
therefor, that we adopt the text of W. 252 with that amendment,
31 and 32
namely, to delete the words in the fifth line. referring to. Articles/
and write in 'Section E of this Chapter 'instead. 10
CHAIRMAN: Is this proposal satisfactory to the Czechoslovakian
Delegate? It will then incorporate Article 33, if in fact there is
an Article 33..
Mr. B. BAYER (Czechoslovakia): I am sorry that we produced
two drafts. We would have saved some time in the discussion if we
had not omitted the reference to Article 33. That was the season
why we put the Revision I. I can agree with the suggestion made by
Mr. Shackle to substitute the reference to Articles 31, 32 and 33 by
a reference to the particular section, end with regard to te text,
had
I would like to say that we have/no intontion or changing the
substance. I would still think that we have not achieved any change
of substance by chaning the order of the words as they are in
Revisiin I. I may specially point out that, if you look at the old
sub-paragraph (g), you will find the words "such as" - literally
"such as". That means that the enumeration of the examples there,
which we preserve in our draft, are only demonstrative. If to use,
at the end of our draft, Revision I.and others which are not
inconsistent we only say what is said in the old (g), that there are
some other measures or provisions which are consistent in the Charter,
without being explicitly mentioned in (g) that they are being covered
by Article 37.
CHAIRMAN: I am glad that the Czechoslovakian Delegate accepts
the re-draft of the United Kingdom, to replace ``Articles 31, 32 and 33"1
with Sect ion E of that Chapter''.As to the rest of the problem of
drafting, as the Czachoslovakian Delegate said that no alteration
of substance was intended, and the reason why the second draft was sub-
mitted simply was to get article 33 mentioned, I take it that he has
no objection to standing by his first original draft. I quite agree"
that his second draft can be read in such a way that there shell not
be any misunderstandings, but on the other hand, it is nevertheless a
open question whether people who have not followed the development E/PC/T/A/PV/33
may misunderstand this, so I think it is better to stand by the
first draft.
Mr. C.E. MORTON (Australia): .Mr. Chairman, the original text
37(g) referred to measures necessary to secure compliance with laws
or regulations such as those relating to customs enforcement. Eahh
of the texts of W/252, original and revised, now refers only to
customs regulations. I should suggest that we strike out the
words "customs regulations" appearing in the sixth line of the
original text (W/252), and add the words in the fourth line "customs
enforcement" after "those relating to"', making it read: "those
relating to customs enforcement, enforcement of state tre ding
monopolies etc." In this way we shall revert to the original text
of Article 37(g).
ER 12
CHAIRMAN : The text will, after the Australian proposal,
read "Necessary to secure compliance with laws or regulations
which are not inconsistent with, the provisions of Chapter V, such
as, those relating to customs erforcement, enforcement of state
trading monopolies operated under Section E of that Chapter, the
protection of patents, trade marks and copyrights, and the
prevention of deceptive practices". May I take it that Delegates
agree to this text?
The Delegative of New Zealand.)
MR. J.P.L. D. JOHNSEN (New Zealand.): Mr. Chairman, I just want
to call attention to one point in. connection with the use or the
words "State Trading monopolies" in relations to Section E.
As you know, New Zealand has an amendment in connection with
Article 33 which relates to a system of complete state control of
external trade not covered by the term "state monopoly". We hope,
of course, that that amendment might be accepted. We would
sugeest that, in order to cover any procedures that might be
approved within this particular Section, the word. "procedures''
might be used. in substitution for the words state trading. monopolies".
I do no; think the words "state trading monopolies'' are necessary in
the context.
CHAIRMAN: You have heard the proposal to replace the three
words ``state trading monopolies" with "procedures" to read "the
enforcement of procedures operated. under Section E of that Chapter".
The Delegate for the United. States.
Mr. J.. LEDDY (United States): The first thing that I think
we should remember is that these examples given under sub--paragraph
(g) are, in fact, only examples, that is, if any law or regulation
is consistent with Chapter , then any measure which is necessary
E/PC/ T/A./PV/53
J. 13
J.
for the enforcement of that law is taken care of here.
Now, the sole reason for rentioning state trading monopolies
specifically here was that, in the case of a monopoly, the
enforcement of that monopoly depends upon a prohibition against
private trade, and in order to make it perfectly clear to clear.in
Delegates that that was permitted, state trading monopolies was
inserted as one of the examples. I think that we need not make
any change in sub-paragraph (g) to accomodate anything which might
be done by way of an amendment to Article 33, such as was suggested
by Mr. Johnsen. If the contingency should arise, it is a little
different and if the amendment proposed to ,article 33 should be
adopted and the sub-comittee dealing with the problem considers
that some further amendment is necessary to this Article, then they
can come back to it, but I do not think that we should more or less
anticipate the adoption of an amendment which has not yet been
adopted.
CHAIRMAN: I would like to ask the representative of
New Zealand whether he feels very strongly About his suggestion to
replace "state trading monopolies" by "procedures"?
MR. J.P.D. JOHNSEN (13w Zealand) Mir. Chairman, in the ovent
of our proposal to amend Article 33 being, accepted, the wording, of
this provision would of course, be inconsistent with that situation;
I do not wish to press the matter at this point on th understanding
that, in the event of our amendment being adopted, we have the
right to come back and. suggest the amendment that we have given
here.
CHAIRMAN: The Delegate for Australia.
Mr. C.E. MORTON (Australia): Article 31 refers to state
trading enterprises, but Articles 32 and 33 refer to state trading
monopolies. I think it would meet the point of view of. the Delegate
of New Zealand if, in the draft, we said "enforcement of state
trading , monopolies or enterprises".
E/PC/T/A/PV/35 14 E/PC/T/A/PV/33
CHAIRMAN: I would like to get a unanimous decision on
this. Would it be any help if I suggested leaving out the
word "monopoly" and say "enforcement of State trading operated.
Mr. R. J. SHACKLE (United Kingdom): I think it might be
the best plan if we leave the current wording, at any rate for
the present. There is a particular reason why I suggest that,
namely, that it is only where you, have a monopoly of State trading
that it is necessary to have prohibitions on importation or
exportation in order that they may be enforced. If I understand
the New Zealand amendment rightly, it would cover the case where
you have a substantial control of import trade already in
existence by means of import regulations and controls. Those
would be self-contained, so to speak, being a system of import
control. They operate themselves, and there is no need as far
as I can see to make any further specific provision here for them.
It is only in the case where you have State-trading monopoly that
you need to have this type of provision.
I also venture to doubt whether the omission of the word
``monopoly'' by itself would make any difference, because the
New Zealand system, if I understand it rightly, is not -at any
rate necessarily - one of State trading but one of State control
of trade. For these reasons, I feel that until we know what
comes out of the New Zealand proposed amendment to Article 33
we had better leave this wording as it stands. If and when we
get a decision on Article 33, we (or whatever other body may be
appropriate) might look at this wording and see if it requires
any amendment, but my impression is that in any event it would
not require amendment.
CHAIRMAN: As the Delegate of New Zealand has already E/PC/T/A/PV/33
consented to that procedure I take it that we agree to the text
as it now stands?
The Delegate of Czechoslovakia.
Mr. B.J. BAYER (Czechoslovakia): Mr. Chairman, I wanted to
explain that which drafting our amendments, both of them, we
used the words"state trading monopolies". We did it for the
reason that these words were used in the old place. In order
to show that we do not want to broaden the substance, we used
the same words.
We are, however, aware that these words are not very properly
used, since Article 31 does not oover monopolies - Articles 32
and 33 deal with monopolies, whereas Article 31 covers State-
trading and private enterprises to which a special or exclusive
privilege has been granted. But since these enterprises to
which a special or exclusive privilege has been granted involve
some restrictions on" the part of others and are also on
the same level as the monopolies covered in Articles 32 and 33,
we think it would be an improvement to drop the word
``monopolies" as you suggested, Mr. Chairman.
CHAIRMAN: The Deleate of the United Kingdom.
Mr. R. J. SHACKLE (United Kingdom): Mr. Chairman, I venture
to think that the word 'monopolies" is required in any case.
It is only if and when you have a monopoly that you need it
protected by a restriction on imports. If by any chance you
have a State-trading enterprise which is not a monopoly, it
would no doubt simply go into the market and buy and sell
alongside private traders, and there would bc no occasion to
have any restriction in that Case at all. If any words should
be omitted, it should be the words "State trading', because
if you say "monopolies operated under Section E of this Chapter"
then you have covered every type of thing which is dealt with
in Articles 31 and 32 and Article 33; so if there is to -be any
dropping of words, it should be the words "State trading" and
not "monopolies".
15
V CHAIRMAN: I do not think it wise for us to go on trying to
improve upon a text which has already been apprrored by the interested
delegations.
With regard to the remarks of the representative of Czecho-
slovakia that Article 31 does not deal with monopolies, that is met
by the fact that we have oratted mentioning the Articles. We simply
refer to Section B. I therefore take it that we can now be unani-
mous in passing the text as it stands.
Mr.J.P.D. JOHNSEN (New Zealand) I think there is some
validity in the argument put forward by the delegate of Czechoslovakia.
If you. look at Article 31 it refers to the granting of privileges to
enterprises which import, but Article 32 provides ``If any Member,
other, than a Member subject to the provisions Article 33, estab-
lishes, maintains or authcrises formally or in fact, an effective
monopoly of the importation or exportation of any product' It
need not therefore be a state trading monopoly; it may be a monopoly
authorised by a State to so: a enterprise, and in that sense I think
the suggestion made by the delegate of the United Kindom that the
words ``State trading'' might be omitted would meet the point.
CHAIRMAN: To me it is a matte of indifference whether you keep
the words "State trading '' in or not ``beause the refence to Section
E. Chapter V ls a reference to the clausces dealing with State tradiing,
so tha wording: ``State trading" in the text. is superfluoes.
We have not very much on time to spare on -tis disctazsion and if we
can come to an agreement on the ommission of the words "State trading''
I do not think we should lose anythirg at alI M. 17
Mr. B.J. BAYER (Czechoslovakia): While I entirely agree with
you, Mr. Chairman, in view of the discussion I think it might be
better if we simply said generally "measures necessary to the enforce-
ment of operations under Section E. "
CHAIMAN: I am afraid that that would be a little too general
If you do not mind, I think we could agree on leaving out the words
"State trading", and keep "monopolies", on the understanding that
we can some. back to it after we have seen the fate reserved to
Article 33.
May I take it we are now agreed?
(Agreed)
CHAIRMAN:. We will now pass on. I still have three ques-
tions. The first is to remind you of an intervention of Dr.Coombs
about a week ago in which he touched upon two of the sub-paragraphs
of Article 37. The first one was that relating to fissionable
materials. He said that he quite realised that that was a question
mainly concerned with security and defence but that, after all, it
also has a commercial aspect. He did not make any formal proposal
but only .drew the attention of our Commission to this commercial
aspect of the problem of fissionable materials. Although he did
not make any firm proposel,he mentioned the possibility of submitting
the question to such international body as could be considered
particularly competent to deal with it.
17 18
My own view is that the only such body I know of will be
the Atomic Commission on the Security Council, but that
Commission is exclusively dealing with the problem from the
point ot view of disarmament, and. I do not think that the
Members of that Commission will be in any better situation than
ourselves for appreciating the commercial aspect of trade in
fissionable materials; so I do not know whether we can do
much more then simply note the opinion expressed. by Dr. Coombs
in our Report, and say that we do not see any solution to it.
But before doing that we must ask the Representative of Australia
whether he wishes to add. anything to what Dr. Coombs said.
Mr. MORTON (Australia): Mr. Chairman, the Australian
Delegation wishes to make a provisional reservation against the
inclusion of (c) in article 37.
CHAIRMAN: In the second point raised. by Dr. Coombs,
point (J), "Relating to the conservation of exhaustible natural
resources if such measures are takeni pursuant to international
agreements or are made effective in conjunction with, restrictions
on domestic production or consumption", Dr. Coombs said there
were cases where the rate of domestic consumption is extremely
conservative for technical reasons, apart from the imposition of
any restriction, and. it might be difficult to prevent natural
riches being exhausted, if dealt with always in the light of
restrictions on the domestic production. That question also.
was reserved for further consideration here.
Mr. MORTON (Australia): We have no formal reservation to
make.
CHAIRMAN: Thank you.
Then we pass on to a Document I have received this morning
E/PC/T/A./PV/33 19
from the Netherlands Delegation, and I take it it has been
distributed... .
Dr. SPEEKENBRINK (Netherlands ) (Interpelation): Just before
you start, I would ask for some further clarification on (e).
I see, "In time of war or other emergency in international
relations, relating to the protection of the essential security
interests of a Member". I have, I may say, read that phrase
many times, and. still I cannot get the real meaning of it.
What do we mean "emergency in international relations?
Is that`` immediate", through a war? - or what is the "emergency
in international relations"?
The second point that is troubling me here is, what are the
"essential security interests" of a Member? I find that kind
of exception very difficult to understand, and there are
possibly a very big loophole in the whole Charter.
I might say that in a time of emergency, we, have no Peace
Treaties signed, and I consider that it is essential for me to
bring as much food to the country as possible, so that I must
do everything to develop my agriculture, notwithstanding all
the provisions of this Charter. It might be a little bit far
fetched, but as it stands here it really is worrying me.
I cannot get the meaning of it. S 20 E/PC/T/A/PV/33
CHAIRMAN: The Delegate of the United States.
Mr. J..M.L.EDDY (United States): I suppose I ought to try
to answer that, because I think the. provision goes back to the
original draft put forward by us and has not been changed since,
We gave.a good deal of' thought to to.the question of the
security exception which, we thought should be included in the
Charter. We recognized that there was a. great danger of having
too wide an exception. and we could not put it into the Charter,
simply by saying: "by any Member of measures relating to a
Member's security interests " because, that would permit
anything under the sun. Threfore we thought it well to
draft provisions -which would take care of really essential
security interests end, at the same time, so far as we could,
to limit the exceptions and to adopt that protection for
maintaining industries under every conceivabe circumstance
With regard to sub-paragraph (e), the limitation, I think.
is primarily in the times: first, time of war. I think no
one would question the need of a Member, or the right of a
Member, to take action relating to its security interests and to
determine for itseIf - which I think we cannot deny - what
its security interests are.
As to the second provision, "or other emergency in inter-
national relations,'' we had in mina particularly the situation
which existed before the. list war, before our our own participation
in the last war, which was not until the and of 1941. War had
been going -on for two years in Burope and, as the tiime of our
owr participation approached, we were required, for our own
protection, to takes many measures which to would have been prohibited
by the Charter. Our exports and imports were: under rigid control.
They were under rigid control because of the war then going on. S
I think there must be some letitude here for security
measures. It is really a question of a balance. We have got
to have some exceptions. We cannot make it too tight, because
we cannot prohibit mcasures which "are needod purely for
security reasons. On the other hand, we cannot make it so
broed that, undor the guise of security, countries will put on
measures which really have a commercial purpose.
We have given considerable thought to it and. this is the
best we could produce to preserve that proper balance,
CHAIRMAN: Does that give satisfaction to the Delegate
of the Netherlands?
Dr. A..B. SPEEKENBRINK (Netherlands):Well, Mr. Chairman,
I certainly could not improve the text myself. I only wanted
to print out certain dangers. Otherwise I agree with it.
CHAIRMAN: In defence of the text, we might remember that
it is aparagraph of the Charter of the ITO and when the ITO
is in operation I think the atmosphere inside the ITO will be
the only effficient guarantee against abuses of the kind to which
the Natherlands Delegate has drawn our attention.
We may now pass on to the now proposal of the Netherlinds
Delegation on Article 37. I would mention that it was only
distributed this morning, but, as this is probably our last
meeting, I hope Delegates will be willing to consider it upon
its merits. I will call upon the Netherlands Delegate kindly
to introduce his amendment,
21 ER
Dr. A. B. SPEEKENBRINK (Notherlands): Mr. Chairman, in sub-
paragraph (g) we mention especially the protection of patents, trade
marks and copyrights, and. we think that there is also a good case
in
for the protection of a grewer of certain plants who is specialising/
methods of improving the quality and has had to have, for some time,
protection. I think that is the best explanation I can give to you,
and I should also like to draw your attention to the fact that the
FAO should study this problem.
CHAIRMAN: You have the paper of the Nutherlands Delegation in
your hands. I would like to know whether any dielegate has any
opinion to express on this?
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, it does seem
to me that this new proposal raises rather new and rather wide issues.
It seems to me that, in any case, it would need. expert consideration
- consideration by agricultural experts, possibly also by patent
experts. I am bound to say that, on the fact. of it, it seems to me
that it would be rather dificult to accept unless, and until, the
proposal of the FAO for a patent is accepted. In the absence of
some check of that kind., how could. one be sure that there really
was anything special about a particular breed of plant? It does
seem to me that it would a apply in connection with expert restrictions,
which would be extraemely difficult to keep a check on. On the
other hand, if any proposal in the nature of a patent does
materialise, then the matter would probably be covered under the
existing (g). If it was not fully covered under that, we should
know what the FSO proposal would involve. In the present position
of affairs, it seems to me. difficult to comit ourselves to a
proposal of this kind. I feel sure that we should need some
expert study to exprese any definite opinion about it.
22 ER
Mr. A.B. SPEEKENBRINK (Netherlands): I can quite follow
and
Mrs Shaokle's objections, because it is a difficult subject/that we
it
only introduced today. We did it because we thought that it would not
be right, it we are thinking on these lines, to bring something
new in/the World Conffrence which we have not discussed here. If
that right is opened to us, we are quite prepared to make a further
study, or that the FAO should make a further study, but I would not
like, as I said, to bring unthing now into the World Conference
without proper notice here.
Mr. T. MELANDER (Norway): Mr. Chairman, we do not see any
general objection to that proposal in principle. There may be some
technical aspects which would have to be considered, but, if there
is really a case hero, I think we should not exclude the possibility
of introducing this exception. I think the principle itself seems
to be reasonable, and I think one ought to consider it, but as the
Delegate has already pointed out, this perhaps ought to be
..sidered in the light of some further studies by the FAO. I
think we all ought to accept that.
CHAIRMAN: I understand that the Netherlands Delegate is
perfectly agreeable to having his initiative noted in our report.
Mr. C.E.. MORTON (Australia): Mr. Chairman, I think we ought
to consider that, if a grower of a bulb or a flower is protected,
the grower who improves animals for commercial use by selection or
.other scientific methods, has similar rights. The United Kinvdon,
France, New Zealand and even Australia are very proud of their
blood stock of certain kinds. I think any right given to the
grower of a new bulb or plant would be equally within the provisions
particular
of the breeder of stock, of a / variety. If the two
propositions could be linked together, we might see some virtue in
it.
E/PC/T/A/PV/33 J.
MR.J.M. LEDDY (United States): We might well add. that,
regarding restrictions on exportation, we could, put -it uncer
provisions for patents and so have all three branches of protection
on the same basis.
CHAIRMAN: Well, I consider this discussion is closed,
I would, on. my own behalf, like to mention that this proposal,
of course, must be seen in the light of what our Preparatory
Committee has already dealt with in reward to our mutual daty to
place adequate supplies of capital funds, advanced technology,
trained workers, managerial skill etc., at evorybody's disposal.
I have to state two things still One is just. to state that
in our text of technical Articles we have some few expressions that
are not always utsed. in the same manner. We have, for instance,
"study'' and. ``investigation''. We deoided in one; place to replace
"investigation" by "study" - I take it that we agree to the same
in other places where that occurs. Likewise, we have from the
sub-committee a paper (I think it is on Article 17) where the
sub-committee strikes out "is authorised to" and replaces it by
"may", and at the bottom of the same text the same sub-committee
uses the expression "is authorised. to", bat I take it that the
Legal Drafting Committee will go through all that and we need not
worry about it.
The Delegate for Canada.
MR. G.B URQUHART (Canada): Mr. Chirman, there, is one small
item of unfinished business that appears on page 3 of document T/105,
which States that the Canadin Delegate associates himself with the
"and also vessels and. other
proposal of the Delegate for Chile, that/ means of transport" be
deleted from Article 16. In view of the fact that it does not
appear very likely that we will get any degree of support for that
24 J 25
proposal, and in view of the expressed desire to get unanimous
agreement on as many .articles :as possible, I think that we no
longer wish to be issociatead with that proposal.
CHAIRMAN: Thank you.
The Delegate of France.
M. L. ROUZ (France ) (Interpretation): Just one remark,
Mr. Chairman, in connection with paragraph (g) of Article 37. I
see in the English text, on the basis of the Czechoslovakian
proposal, the expression ``copyrighte is included, while the French
text in this place says "rights of reproduction". I should like
to remind you that the equivalent of the term ``copyrighte'' in French
is ``droits d'auteur et de reproduction'' instead of ``droits de
reproduction". That is a. point to which we have already drawn the
attention of the Commission in document W/44 submitted in May.
CHAIRMAN: Now, I come to my last Question. We have been
asked by the sub-comittee dealing, with Chapter VIII to draft - or
d raft is suggested - a proposal for- an article including, in one
of the last parts of the Charter, the four points of article 57
which we had previously decided, should be transferred to one of
the last Articles. We have the text here of the United States
proposal in document W/256 on page 13. This contains a proposed
Article 94 "General Exceptions'' and there we find in (a), (b),
(c) and (d) the different items of the previous Article 37 - so far,
so good. Their is to my mind no alteration to suggest in the
text of these sub-paragraphs, bit the question arises as to what
shall be the Introduction to these sub-paragraphs in the new Article.
The United States Delegation has submitted on the 4th july the
following text : ``Nothing in this Charter shall be construed to
require any Member to furnish any information the disclosure of
which it considers contrary to its assential. security interests, or
to prevent any Member from. taking many action which it may consider
to be necessary to such interests", and so on.
25 26
Now, we have on several occasions noted that by transferring
these items from Article 37 to the end of the Charter we take them
away from tile sanctions clause_ of Chapter V - we take them away
from particles 31 and 35 - and before we approve this suggestion
for the introduction, we must make our up minds whether we are in
agreement that these clauses should not provide for any
possibility of redress.
The -Delegate of the United States.
Mr. J.M. LEDDY (United States): I would like to say
something about this Article: first, the reference to the
furnishing of information -this weas drawn from the Restrictive
Business Practices Chapter, and under this provision here it will
be possible to eliminate that exception in Chapter VI. Also,
it should be possible to eliminate the specific exceptions in
Chapters VI and VII relating to some of the other types of action
under (a) (b) (c) and (d).
Secondly, you will note that the words in sub.-paragraph (a)
"or their source materials" hare been added in the text here.
I believe it was left this way, that the words should read
"Relating to fissionable materials" and then there was a note in
the Report that that included source materials. We suggest it
might as well be put in the text.
Finally, I think that the place of article in the Charter
has nothing to do with whether or not it comes under Article 35.
article 35 is very broad in its terms, and I think probably
covers any action by any Member under any provision of the
Charter. It is true that an action taken by a Member under
Article 94 could not be challenged in the sense that it could not
be claimed that the Member was violating the Charter; but if
V V
that action, Oven though not in conflict with the terms of
Article 94, should affect another Member, I should. think that
that Member would have the right to seek redress of some kind
under Article 35 as it now stands. In other words, there is no
exception from the application of Article 35 to this or any
other article.
CHAIRMAN: The Delegate of Australia.
Mr. C.E. MORTON (Australia): Mr. Chairman, the fissionable
materials seem. to be bobbing up like King Charles head, rather
to my embarrassment, from time to time. Article 94 is so wide
in its coverage - it says "or to prevent any Member from taking
any action which it may consider to be necessary to such
interests" - that I am very glad to have the assurance of the
United States Delegate that in his opinion, at any rate., a
Member's rights under Article 35 (2) are not in any way impinged
upon. Could we have a paragraph in Article 94 to make it clear,
or somo wording in Article 94 that says that a Member's rights
under particle 35(2) will not be impinged upon? You only want
to give one of these "kerbside" opinions, is that it?
E/PC/T//PV/33 M
CHAIRMAN: We have only been asked by the Sub-Committee deal-
ing with Chapter VIII whether we have any remarks to make on this,
and I do not think we dan do better than say that the drafting of
paragraphs (a), (b) , (c), (d) and (a) is in conformity with what
we have decided. The only thing is that paragraph (a) relat.- o nly
to fissionable materials, and in our explanatory note we stated that
that comprised also materials from which they are derived; but,
for the rest, we have no observation to make on this sub-paragraph
of the new article 94.
As to the beginning of Article 94, I think we could just simply
leave it to the Sub-Committee dealing with Chapter VIII.
Mr. J.M. LEDDY (United States): The Sub-Committee on Chapter
VIII referred this to Commission A after consideration because they
felt it was not within their competence to deal with. They are deal-
ing solely with the question of organisation, whereas, we are dealing
with substance.
CHAIRMAN: In the light of the declaration of the United
States roepresentative conforming the applicability of Article 35,
has any delegate any objection to the text in this proposed new
Article 94?
Mr. C.E. MORTON (Australia): The AustraIian delegation would
have no objection to the text provided a note is inserted in. the
Report of this Commission saying that it. is our. unanimous opinion
that the text of Article 94 does not conflict with the Member
rights under paragraph (2) of Art icle 35,
Mr. J.M. LEDDY (United States): I do not object to that.,
but it raises some questions of interpretation. In my View, Article
35, in its terms, covers eovers, everything in the Charter. It says
that if any Member adopts any "measure, whetherr or not it confliete
28
E/PC/T/A/PV/33 M E /PC/T/A/PV/33
with the terms of this Charter". If we put in a note of this kind
in respect of Article 94 I think it may raise doubts elsewhere in the
Charter. Therefore I would rather not see that kind of not e . I
think we should have a clear and explicit note on Article 35 saying
that no Member shall bring- any complaint in respect of Article 94
in order to get out of Article 34. I would rather have it left
that way because it is perfectly clear from the text that Article
35 does apply to Article 34.
Dr.A.D. SPEEKENBRINK (Netherlands): If there is any doubt left
about the applicability of Articles 35 and 34, should it not be for
the Drafting Committee to solve the problem?
CHAIRMAN: I think that the sinplest thing is for us to say to
the sub-Committee on Chapter VIII that we have considered this pro-
posed text of Particle 94 and as far as we are concerned we have no
objection to it, because we read it in conjunction with paragraph 2
of Article 35. I know that in the Sub-Committee on Chapter VIII
they have redrafted Article 35, and it simply means that we draw
their attention to the fact that they should not read it in such a
way as Dot to make it applicable to the whole of the Charter in the
newer text.
Mr. J.M. LEDDY (United States) I think that the Sub-
Committee on paragraph 2 of Article 35 is a separate sub-Committee
and not the Sub-Committee on Chapter VIII.
There is a separate Sub-Committee on articles 34, 35, and 38.
It is paragraph 2 of Article 35 that I am talking about.
Mr. C.E. MORTON (Australia): There is a good dual of weight
in the statement of the United States delegate and I am therefore
prepared to withdraw our reservation.
29 30
CHAIRMAN: Then I am in agreement with the Sub-Committee
on Chapter VIII, that we have considered and. approved. this
Draft of the new article 94..
Mr. SHACKLE (United Kingdom): Mr. Chairman, a tiny
verbal -point in (a)"Relating to fissionable materials or their
scuroe. material," I understand the Comission said "the
materials from which they are derived'', so perhaps it would. be
better as adopted. by the Commision, which will be "source of
CHAIRMAN: Any further comments?
The Delegate of the United. States.
Mr. LEDDY (United. States): You mentioned. the other day that
there should be an opportunity at some stage for reconsideration of
some of the points on which reservations have been made as
early as possible.
would it be possible for Commission "A" to have some sort
of a special meeting, to take up all those things at some future
time, as I understand we Cannot do that at the Preparatory
Committee - Commission "A'' is supposed to be answerable to the
Preparatory Commission for this purpose; so it it planned to
have another meeting perhaps we could go over a number of points
that are still open.
* CHAIRMAN: Well, it certainly is my view that we must
have another - as late as possible, but not toolate.
The Meeting is adjourned..
The Meeting rose at 5.5 p.m.
G |
GATT Library | rw149mz7275 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Thirty-Third Meeting of Commission "B" Held on Tuesday, August 19 1947 at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, August 19, 1947 | United Nations. Economic and Social Council | 19/08/1947 | official documents | E/PC/T/B/PV/33 and E/PC/T/B/PV/31-33 | https://exhibits.stanford.edu/gatt/catalog/rw149mz7275 | rw149mz7275_90250125.xml | GATT_155 | 17,622 | 108,724 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/B/PV/33
19 August 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
THIRTY-THIRD MEETING OF COMMISSION "B"
HELD ON TUESDAY, AUGUST 19 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).
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
CHAIRMAN: The Meeting is called to order .
We will deal with Article 77: Composition and Procedure. I
call the attention of Members of the Commission to Document W.304
which gives the Czechoslovakian amendment to Article 77. The Czecho-
slovakian amendment reads as follows:-
"The Members of the Commissions, if not appointed directly by
the Conference, shall be chosen by the Executive Board among persons
qualified by training or experience to carry out the functions of the
Commissions."
In other words, the essential part of the Czechoslovakian amend-
ment is the addition of the words: "if not appointed directly by
the Conference."
H.E. Z.AUGENTHALER (Czechoslovakia): Mr. Chairman, actually
our amendment contains two changes which possibly are not visible at
first sight. The first one is that we thought it was better to leave
the possibility to the Conference itself, at the moment when it was
establishing the Commission, of appointig/the Members. I do not
think that it should be a rule; it should only be a possibility
because otherwise the text of the Charter excludes this possibility.
The second amendment is on a minor point which comes forward in
paragraph 2 where we added: "which shall not exceed 7." vve thought
that the number of the Members of the Commission is more a question
of rules of procedure and not of the Charter because if one day it
will be found that we need more than 7 members - possibly 8 or 9, -
it would be necessary to change the whole of the Charter.
CHAIRMAN: The first part of this amendment is related to
paragraph 1. We shall deal with it now and leave the second part of
the amendment till we come to paragraph 2. Are there any Members
of the Commission who support the proposal of the Czechoslovakian
delegate? 3
M. ROYER (France) (Interpretation): I think that it would
be of some importance to allow the Conference to designate certain
Members of the Commissions although I do not think that this should
be the case only for the Permanent Commission, and without accepting
the drafting proposal by the Czechoslovakian delegate , I think that
we might say something like this: "except if the Conference should
take another decision, the composition of the Commission should be
decided by the Council."
Mr. ERIK COLBAN (Norway): Mr. Chairman, I second the proposal
of the French delegate.
H.E. Z.AUGENTHALER (Czechoslovakia): I agree with the proposal
of Mr. Royer.
Mr. L.R.EDMINSTER (United States): On a point of order, I
did not get clearly what the proposal was. Could it be repeated.
CHAIRMAN: The French proposal would read: "Except as other-
wise decided by the Conference, the Commission shall be composed of
persons chosen by the Executive Board and qualified by training or
experience to carry out the functions of the Commission." Are there
any objections to the French proposal?
Mr. L.R.EDMINSTER (United States): Mr. Chairman, I think it
would be unfortunate to accept this amendment even as further amended
by the insertion of the words "except as otherwise decided by the
Conference". It seems to me that the theory of the relationship
of the Commissions to the Executive Board was pretty carefully explored
this morning, and that the remarks of Dr. Coombs in particular were
Very much to the point on that. It seems to me that to adopt this
amendment would be inconsistent with that, and the Commissions should
indeed be responsible to the Executive Board. Therefore I would
view with some concern the adoption of this amendment. 4
E/PC/T/B/PV/33
CHAIRMAN: The Delegate of the United Kingdom.
Miss HARDIE (United Kingdom): Mr. Chairman, I simply want
to say that we would support the views put forward by the United
States Delegate.
CHAIRMAN: There is a division of opinion in the Commission,
and I thank we will have to decide this question by putting the
proposal of the French Delegate, which has been accepted by the
Czechslovak Delegate, to the vote.
DR. E. COLBAN (Norway): Mr. Chairman. I will only under-line
that, to my mind, this is not a question of drafting. The
Executive Board will be composed of a limited number of Members of
the Organization, and although we should have full confidence that
they will choose the Commissions in an impartial and wise way, I
think it is reasonable that the Conference, representing all
Members, should be noted in our text as having the right, should
anything unforeseen happen, to step in and say:- "No, we do not
want that Commission composed as you intend; we will have it
another way".
Therefore, I still very strongly support the French proposal.
CHAIRMAN: The proposal of the Delegate of France is to add
to the first paragraph of Article 77 the words,, at the beginning,
"Except as otherwise decided by the Conference".
DR. H.C. COOMBS (Australia): May I draw the attention of
the British Delegate to the possible interpretation of this
amendment, of which I fear he may not be aware. Without those
words, the Article reads:- "Commissions shall be composed of
persons chosen by the Executive Board and qualified by training or 5
E/PC/T/B/PV/33
experience.....etc.". If you precede that by a clause which says
"Except as otherwise decided by the Conference", it would imply
that the Conference may decide that the persons should not be
qualified by training or experience.
CHAIRMAN: Monsieur Royer.
M. ROYER (France) (Interpretation): Mr. Chairman, I had said,
a moment ago, that I reserved my right to make some drafting changes
to this text, and it was because I had foreseen this difficulty.
Now, I propose that in the French text an alteration should be made,
that is, put a fullstop after the French "Conseil executif" and
begin a new sentence saying "The persons thus chosen will have the
required knowledge or experience to carry out the functions of the
Commissions". I should like to replace the word "formation" in
the French text by the word "knowledge", because if we keep the
word formation", it might imply that we will only accept certain
persons who have studied in particular universities, which, of
course,we do not intend.
MR. R.J. SHACKLE (United Kingdom): I wonder whether this
amendment is at all necessary, Mr. Chairman. After all, under
Article 71, the Conference is the final deciding body on all matters.
We do not need to start spreading out on this Article. We say in
one Article that the Conference shall have the final authority,
and it refers to all Articles, so I would like to suggest that we
do not make this amendment.
CHARMAN: Will all those Members of the Commission who are
in favour of the French proposal please raise their hands.
Those against?
The amendment is carried by 8 votes to 7. 6
J. E/PC/T/B/PV/33
The paragraph will now read:- "Except as otherwise decided
by the Conference, the Commissions shall be composed of persons
chosen by the Executive Board. The persons so chosen shall be
qualified by training or experience to carry out the functions of
the Commissions".
Is that paragraph, as amended, approved?
Carried.
Baron P. de GAIFFIER (Belgium) (Interpretation): Mr. Chairman,
I have another remark to present with regard to, paragraph 1.
There has been an alteration, in the Legal Drafting Committee's
Report, of the first text which was adopted by the sub-committee
after a lengthy debate. It reads in English "not more than seven"
and in the French text "sept", and those words "not more than seven"
were put in paragraph 2, which now roads in English: "The number
of Members which shall not exceed seven,.....etc.", and in French:
"Le nombre des membres de chaque Commission, nombre qui n'excèdera
pas sept", which means that the number of Members, which shall not
exceed seven, shall be determined in accordance with regulations
prescribed by the Conference. I think it would be far better to
leave the previous drafting and say:- "The number of Members of
each Commission..... shall be determined in accordance with
regulations", meaning by that that this number may be under seven. V
CHAIRMAN: The Czechoslovak Delegate has proposed that
the words in paragraph 2 "shall not exceed seven" shall be
deleted, so I would suggest that we should first of all decide
on the Czechoslovak proposal, whereupon we can take up the
proposal of the Belgian Delegate, depending on how we decide
the Czechoslovak proposal.
Do any Members of the Commission support the proposal of
the Czechoslovak Delegate?
Mr. Erik COMBAN (Norway): I do, Mr. Chairman.
M. ROYER (France) (Interpretation): I also wish to support
the Czechoslovak amendment for the following reasons. I believe
that it is useless to enter into too many details in the Charter,
and if we did so, later on we might find ourselves with
insuperable difficulties, because we would have tried to be too
detailed.
Therefore, I do not know why the figure "seven" has been
adopted. Perhaps it has a mystic value. Perhaps we had
decided to compare the Members of the Commission with the Seven
Wonders of the World, the Seven Wise Men or the Seven Dwarfs:
In any case, I think it might be better to draft paragraph 2
without mentioning the figure seven, and the Conference will
later on decide on the exact number of Members. We might say,
however, in the Report that the Commission had thought that it
might be advisable to have seven Members or less.
CHAIRMAN: The Delegate of South Africa.
Dr . W. C. NAUDE (South Africa) Mr. Chairman, the Sub-Committee
did not settle on the figure seven merely by dreaming it up.
The Sub-Committee was well aware of the type of jeckeying
that takes place when it comes to appointing an international
7 E/PC/T/B/PV/33 V 8 E/PC/T/B/PV/33
body of this description. The Sub-Committee was inspired by
the same considerations as in the case of the Executive Board -
to write in a maximum, and then you are more likely to keep to it
for a long time. To come back to a description used this
morning: if the Commission is to be the thinking machine of the
Organization, it is suggested that thinking can perhaps be better
done in a body of seven than in a body that might grow and grow
without end.
CHAIRMAN: The Delegate of Belgium.
Baron P. de GAIFFIER (Belgium) (Interpretation):
Mr. Chairman, I would like to insist on the value of that figure
seven. I think it is essential that we should keep the
membership to the essential minimum, and we have to choose an
odd number, be it seven, nine or eleven. In that case, seven
seems to be the best figure, because we must not forget that
in addition to the seven Members, there will be other Members
coming in an advisory capacity, there will be observers from
various international agencies, etc. and it is in our interests
to keep the Commission as small as possible in membership.
Mr. R. J. SHACKLE (United Kingdom): I would like to
support what has been said by Dr. Naude and other previous
speakers. I do feel that this limited number is very desirable
to, so to speak, safeguard the Organization against itself,
because clearly when it comes to making these appointments,
every country will think it has the finest economist or
the finest expert on law, and the tendency would be to let them
all in and, we should have Commissions of thirty, forty and fifty.
I think it is very essential to keep this limited number. If
this limit of seven were found hampering in any particular case, V E/PC/T/B/PV/33
it could really bo got over by the power of the Commission to
co-opt, persons specially qualified to deal with any particular
subject that happened to be before the Commission.
CHAIRMAN: The DeIegate of South Africa.
Dr. J.E. HOLLOWAY (South Africa): Mr. Chairman, I hope
that the Commission will insist on having a limitation, for two
reasons: My own experience is that if you have a Commission
of this kind, there are one or two people who do the work and
the other people are there to make a nuisuance of themselves and
make it difficult for them to do their work. The more you
have,the more nuisance you have. The second is a purely
material reason. These international organizations are all
working up towards a budgetary crisis. They are already doing
that although they are quite young, and the more cumbersome you
make these things the sooner you have these budgetary crises
on you.
CHAIRMAN: The Delegate of the Netherlands.
Dr. A.B. SPEEKENBRINK (Netherlands): Mr. Chairman, I frankly
do not see any difficulty with regard to both points of view
expressed here. If we keep in the words "not more than seven"
and
in paragraph 1, as amended previously/we then say "Unless
otherwise decided by the Conference, the Commissions shall be
composed of not more than seven persons", both parties can be
satisfied. G E/PC/T/B/PV/33
CHAIRMAN: Is that proposal acceptable to Czechoslovakia?
Mr. AUGENTHALER (Czechoslovakia): One moment, Mr. Chairman.
CHAIRMAN: In the meantime I will ask the Delegate of the
United States to speak.
Mr. EDMINISTER (United States): Mr. Chairman,
paragraph 2 would then read "the number of Members shall be
determined in accordance with regulations Prescribed by the
Conference". It seems to me that we should shift that back to
paragraph 1, and treat it as the whole situation.
May I add that I think it only requires a change in
paragraph 2; but as a matter of fact it is a very undesirable
change to make in paragraph 1, because if you provide that
the number of Members shall not exceed seven, for reasons which
have already been set forth, particularly by the United Kingdom
Delegation, I think you could rest assured the Conference would
very quickpy provide there should be more than seven members.
CHAIRMAN: We shall now take a vote on the proposal of the
Czechoslovak Delegate, which is to delete the words "but shall
not exceed seven" in paragraph 2. Will all those Members of the
Commission who favour the Czechoslovak proposal please raise
their hands.
The motion is lost by 6 votes to 4.
I would now ask the Belgian Delegate whether he wishes to
proceed with his Proposal to revert to the text of the Sub-
Committee in view of the drafting difficulties to which it would
give rise in connection with paragraph 2.
BARON DE GAIFFIER (Belgium) (Interpretation ): My proposal 11
has been presented before paragraph 1 was amended. Therefore
I forego it.
CHAIRMAN: Is paragraph 2 approved?
Paragraph 3.
Any comments? Approved?
The Delegate of France.
Mr. ROYER (France) (Interpretation): The French Delegation
wishes an explanation on paragraph 3. In the other provisions
of this text it was said that the Chairman was elected for one
year. Does the absence of such a provision here mean that the
Chairman will be elected for life?
CHAIRMAN: will the Chairman of the Sub-Committee please
answer this question.
Mr. NAUDE (South Africa): I do not think that Particular
point was considered, but I do think it was in the minds of the
Sub-Committee that the Chairman could serve as long as it was
thought proper for him to serve. I am informed by the Legal
Adviser that there is no particular provision in the Charter
to cover it.
CHAIRMAN: Is paragraph 3 approved? Agreed.
Paragraph 4.
Paragraph 5. Any observations? Adopted.
We now come to Article 78.
In connection with this Article I would remind the Members
of the Commission that yesterday in Commission A there was
adopted a proposal of the Tariff Negotiations Working Party
concerning Article 24. The Tariff Negotiations Working Party 12
G E/PC/T/B/PV/33
proposed changes in Article 78. These will be found in the
Report of the Tariff Negotiations Working Party as given in
paper T/136. The first paragraph of Article 78 would then read
as follows:
"There shall be a Tariff Committee 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 2 of Article 24" .
The United Kingdom Delegation have submitted an Amendment
which is given in Document W/270. The United Kingdom Delegation
proposes the deletion of the words "and arranging for".
We shall first of all consider the text recommended by
the Tariff Negotiations Working Party, and then the
drafting Amendment proposed by the United Kingdom Delegation.
Is the text as proposed by the Tariff Negotiations Working
Party approved? S
Mr. SPEEKENBRINK (Netherlands): Paragraph 1, Mr.
Chairman, or the whole?
CHAIRMAN: Paragraph 1.
I find that the Legal Drafting Committee have worked on
tha text proposed by the Tariff Negotiations Working Party and
not on the text proposed by the Sub-committee. This will be
found on Page 194 of Document E/PC/T/159.
Is the Commission agreeable to the substitution of the
text proposed by the Tariff Negotiations Working Party for the
text proposed by the Sub-committee?
(Agreed).
We will now deal with the proposal of the United Kingdom
Delegate, which is to delete the words "and arrange for."
The Delegate of the United Kingdom.
Mr. SHACKLE (United Kingdom):. Mr. Chairman, the thought
which lay behind this amendment of ours was that the word
"initiate" would cover all that is required. It is unnecessary
to say "and arrange for." If it is thought desirable to keep
the words "and arrange for", I suggest we should insert "and
where necessary arrange for."
CHAIRMAN: The Delegate of the United States.
Mr. LEDDY (United States): We would support the text
proposed by the Tariff Negotiations Working Party as amended
by the Delegate for the United Kingdom, so that it will read:
"There shall be a Tariff Committee which shall, on behalf of
the Organization, initiate the negotiations . . . and make
recommendations . . ."
CHAIRMAN: Are there any objections to the United
Kingdom proposal?
(Agreed). 14
S E/PC/T/B/PV/33
I would point out to Mr. Leddy that the Legal Drafting
Committee have revised the wording so that it now reads as
follows: -
"There shall be a Tariff Committee which shall, on behalf of the
Organization, initiate the negotiations provided for under
Paragraph 1 of Article 24 and make recommendations and deter-
minations pursuant to Paragraph 2 of Article 24."
Mr. LEDDY (United States): It is because of the
inaccuracies of the Legal Drafting Committee's text that we
would prefer the Tariff Negotiations lWorking Party's text.
CHAIRMAN: Is that agreed?
BARON DE GAIFFIER (Belgium) (Interpretation): Should
we not alter the words "in the making of" in the English
text to "make", Mr. Chairman?
Mr. SHACKLE (United Kingdom): We shall go back to the
Tariff Negotiations Working Party's text.
CHAIRMAN: That does not arise if we go back to the
text of the Tariff Negotiations Working Party. Is that agreed?
(Agreed)
M. ROYER (France) (Interpretation): It will be
necessary then to alter the French text, because otherwise
it would be rather meaningless. The French Delegation will
submit a French text later on.
CHAIRMAN: Will M. Royer give the Secretariat his
proposal for the French text.
The paragraph as we have approved it now reads as
follows: "There shall be a Tariff Committee which shall,
on behalf of the Organization, initiate the negotiations S 15 E/PC/T/B/PV/33
provided for under Paragraph 1 of Article 24 and make
recommendations and determinations pursuant to Paragraph 2
of Article 24."
Are there any comments on Paragraph 2?
Mr. SPEEKENBRINK (Netherlands): Mr. Chairman, I think
we decided yesterday not to mention Geneva with regard to
the signing of the General Agreement.
My second question is whether it is wise to put down
here the numbers of the Articles in the General Agreement,
because we do not know exactly how the General Agreement will
be.
CHAIRMAN: It will be noted that the United Kingdom
Delegation have put down an amendment to this paragraph also,
to make it read: "The Tariff Committee shall consist of those
contracting parties to the General Agreement on Tariffs
and Trade which are Members of the Organization."
Mr. SHACKLE (United kingdom): The thought behind this
amendment was that if we say "the Members of the Organization
which apply the General Agreement on Tariffs and Trade," that
leaves a doubt about the time at which they apply it. The
intention surely is that it is only so long as they go on
applying the General Agreement on Tariffs and Trade that they
should continue as Members of the Tariff Committee. It was
in order to make that point quite clear that we suggested our
amendment. It would then make it unnecessary to mention
these numbered Articles to which Mr. Speekenbrink referred.
CHAIRMAN: Are there any objections to the United Kingdom
Proposal?
(Agreed).
Paragraph 2 will now read as follows: "The Tariff Committee
shall consist of those contracting parties to the General
Agreement on Tariffs and Trade which are Members of the S
Organization."
The Delegate of the Netherlands.
Mr. SPEEKENBRINK (Netherlands): Mr. Chairman, I remember
that yesterday we decided not to put in a date, after
"signed at Geneva on", in order to avoid any confusion.
CHAIRMAN: The Delegate of the United States.
Mr. LEDDY (United States): I think that might be taken
care of by inserting, after "General Agreement on Tariffs and
Trade" the following phrase: "referred to in Paragraph 1(c)
of Article 24." That identifies the General agreement on
Tariffs and Trade.
Does this proposal of the United States Delegate meet
with the approval of the Commission?
(Agreed).
E/PC/T/B/PV/33. p 17 E/PC/T/B/PV/33
CHAIRMAN: We now come to paragraph 3, In connection
with this paragraph I would first of all like to read out the
New York text, which read as follows:
"Each member of the Committee shall have one vote."
We then turn to the note of the Ad Hoc Sub-Committee given
on page 6 of document T/143, which reads as follows
"Part C covers both voting in the Conference and in the
Tariff Committee . It does not cover voting in any interim
tariff body which may be set up prior to the establishment of
the Organization. The text recommended for Article 73.
etc.
So we now have to decide what text we should put in place
of paragraph 3 and I should like to ash the opinion of, some
member of the Ad Hoc Sub-Committee on Voting on this question.
Mr. J. M. LEDDY (U.S.A.): We would suggest that the matter
might be handled in this way:
Paragraph 3 would read:
3. (provisions relating to the voting power of
each member of the Committee)"
"4 (provisions relating to majority votes required for
decisions of the Committee)
That would be in the text, in brackets, and there would be a
footnote reading as follows:
"The content of these paragraphs will depend upon the
decisions of the Inte rtionaln. on Trade a d. Employment
with respect to the question of voting in the ganizationDn.
MrO 0. RANAYAGUA (Brazil): Mr. Chairman, it seems to me
we have two quite different things here, but it can be a
misunderstandi.g, The voting of the Permanent Tariff Committee
c n. be decided by the World Conference, but what about the p 18 E/PC/T/B/PV/33
Interim Tariff Committee? Because that would be inserted in
the Convention and we must decide how would be the voting
by the seventeen members of the Interim Committee according
to the Note we have in document T/143.
CHAIRMAN: The question of voting in the Interim Tariff
Committee, whatever it may be called, as a matter for decision
by the Tariff Agreement Committee. That will be incorporated
in the General Agreement on Tariffs and Trade. It is therefore
outside the competence of this Commission.
The United States Delegate has proposed a footnote to
this paragraph - or to both paragraphs?
Mr. J. M. LEDDY (U.S.A.): Yes; it refers to the voting
power of each member and to the other, the majority votes
required for decisions of the Committee. I have in mind
that paragraph 3 Will become: "3" followed by brackets and
in the brackets you will simply put "(provisions relating
to the voting power of each member of the Committee)" and
then under "4" you will put brackets and within the brackets
"(provisions relating to majority votes required for decisions
of the Committee)," and the footnote would say; "The content
of these paragraphs will depend upon the decisions of the
International Conference ...." etc.
MR. R. J. SHACKLE (United Kingdom) indicated agreement.
H. E. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
support the proposal of Mr. Leddy, but I was wondering if we
should not add there "providing that it is not inconsistent
with the provisions of this Chapter".
CHAIRMAN: The footnote proposed by the United states
Delegate to read as follows: -
"The content of these paragraphs will depend upon the
decisions of the International Conference on Trade and Employment
with respect to the question of voting in the Organization." 19
M. ROYER (France) (Interpretation): Mr. Chairman, I have no
objection to the drafting of these paragraphs being postponed until
the World Conference at Havana, but I must say that I do not like
very much the United States drafting of this note because in adopt-
ing this note we seem to consider that there is necessarily a close
connection between the voting at the International Trade Organisation,
which is merely one international organisation, and the rule that
both be applied in international treaties, namely, the General Agree-
ment. Now it is a rule in international law that all parties to
a Treaty or agreement are on equal footing and therefore, whereas I
am prepared to agree to the postponement of this question until
the Havana Conference, I share the doubts expressed by the delegate
of Brazil, and I think that if we do not decide the question of voting,
and if we decided to postpone the question because it is in the com-
petence of the Havana Conference, then in a few days we might not
be able to decide the question of voting for the General Agreement.
And therefore if we do not decide on this major issue we might be in
a position of not being able to sign the Agreement itself. There-
fore, as I am prepared to agree to the postponement of the question
as we cannot agree to it now, I would like that the note proposed by
the delegate of the United States should not be drafted as proposed
because, as I stated, it might be interpreted in the wrong way.
I think it should merely say - and perhaps the delegate of the United
States will agree - that the question of voting will be referred to
the Havana Conference.
Mr. J.M. LEDDY (United states): Mr. Chairman, I am afraid I
do not get the point of the delegate of France's remarks. Any solution
to the problem about postponing the issue to the Havana Conference is
acceptable to us. I think that the question of the voting has got
nothing to do with the General agreement on Tariffs and Trade. We 20
ER E/PC/T/B/PV/33
must reach a decision on that here. We cannot postpone that till
the Worl d Conference, and our proposal was intended to be entirely
neutral as to the question of the Tariff Committee, but anything
that the French delegate wishes to propose as a note acceptable to
him which would keep it neutral, would be acceptable to us.
CHAIRMAN: Can Mr. Royer propose an alternative text for
the note?
M. ROYER (France) (Interpretation): I would merely say in a
Note that the drafting of these two paragraphs has be en left to the
World Conference,and nothing else.
Mr. J.M. LEDDY (United States): This is acceptable to us.
CHAIRMAN: While we are con -;ing the text of the note we
can deal with paragraph 5. It reads: "The Committee shall adopt
its own rules of procedure, including provision for the election
of its officers." Are there any comments?
Dr. SPEEKENBRINK (Netherlands): Mr. Chairman, I wonder whether
there is any special reason for adopting here another procedure with
regard to Article 77 (3) for the Commission? We say here: "The
Committee shall adopt its own rules of procedure, including pro-
vision for the election of its officers", and Article 77 states:
"Each Commission shall elect its Chairman, and shall adopt rules
of procedure which shall be subject to approval by the Executive
Board." Does this indicate a special position of the Tariff
Committee?
Mr. W.C. NANDE (SouthAfrica): Mr. Chairman, in attempting
to answer Mr. Speekenbrink"s question I might say that fortunately
the sub-Committee did not touch this paragraph at all. There was
no amendment on it; it was simply the New York text repeated.
Having said that,I may say, on purely general grounds, that ER 21 E/PC/T/B/PV/33
the Tariff Committee is not at all comparable to the Commission or
the Executive Board. It is something entirely different in structure.
CHAIRMAN: Are there any comments on paragraph 5? Approved.
There is a proposalattached to the footnote covering paragraph
4. The content of this paragraph is referred for a decision by the
United Nations Conference on Trade and Employment.
Mr. O. PARANAGUA (Brazil): Mr. Chairman, I wish it to be re-
corded that the reservation of the Brazilian delegation in connection
of voting power
with paragraph 3 implies a discrimination/amongst the contracting
parties in the International Convention.
CHAIRMAN: I do not understand the reservation of the Brazilian
delegate. There is no text for paragraphs 3 and 4.
Mr. O. PARANAGUA (Brazil): But there might be some misunderstand-
ing. I asked for my reservation to be recorded. She note might
inply that we can accept the discrimination of voting power in rela-
tion to an international conference.
Mr. J.M. LEDDY (United States): I am just wondering whether
the Brazilian delegate has reserved his position with regard to the
three alternative drafts on voting? If not, I cannot quite see the
logical reservation of this point. This has nothing to do with the
International Trade Agreement. It will be discussed separately by
another Committee.
Mr. O. PARANAGUN (Brazil): I think my words are quite clear,
Mr. Chairman paragraph 3 is connected with paragraph 2. That
means, the Committee will deal with the General Agreement on Tariffs
and Trade and anything connected with this Agreement. It is imposs-
ible for us to agree to any discrimination in the voting power result-
ing from this Agreement. 22
What Mr. Leddy spoke about was voting in general, but this is
a particular case. It is a tariff convention, and any question
arising from this tariff convention must be decided with equality
on voting. That is why I am reserving my position.
CHAIRMAN: Does the Brazilian Delegate suggest a text for
his reservation?
MR. O. PARANAGUA (Brazil): Exactly what I have just said.
CHAIRMAN: I think the Executive Secretary would have some
difficulty in drafting that in relation to this paragraph.
MR. O. PARANAGUA (Brazil): If the Secretary wants, I can
give him a drafting of my reservation later.
MR. WYNDHAM WHITE (Executive Secretary): By the end of this
meeting.
MR. O. PARANAGUA (Brazil): If, at the same time, other
Delegates in connection with the Secretariat enter their amendments?
I will do that. I do not accept any limitation of time.
CHAIRMAN: Is the Note proposed to paragraphs 3 and 4
approved?
Agreed.
We now pass to Article 79 - "The Director-General and Staff".
Are there any comments on paragraph 1?
Approved.
Paragraph 2?
DR. J. E. HOLLOWAY (South Africa): Mr. Chairman, I would like
to propose the deletion of the second sentence of this paragraph. E/PC/T/B/PV/33
In dealing with the subject matter of this Conference, we
started out with certain broad principles, and we have spent a good
deal of time and ingenuity in whittling them down in various
directions. That was inevitable under the circumstances. We
found, on examination, that the principles, or the broad way in
which they were originally formulated, did not fit into a world
that had been very much upset by commercial and military war, but
when we got on to the slippery slope of departing from principles
we did what generally happens - we slipped down, and slipped away
from principles, where there was no particular reason why the
essential principle, the essential framework of an Organization like
this should not be maintained. I submit that this is the case
where we have slipped away from that essential principle.
The sentence proposes that the Director-General should be given
power to initiate proposals for the consideration of any organ of
the Organization. Now, the Director-General as to be the Head
of our administration. That position is a division of the
functions between the Director-General and the Organization, which
it is essentially important to maintain if the Organization is to
work smoothly. The Director-General does not come in there in the
same position as a Member. When it comes to initiation of
proposals in an Organization of this nature, there is one
qualification that you must have for the initiation of the proposals,
and that is that the party that initiates it must bear a responsibility
for what happens if that proposal goes through. The Director-
General, as the servant of the Organization, bears no such
responsibility. The policy should be in the hands of Members.
The policy should never be in the hands of officials. Officials
are there to give us, as Members, the advice, the knowledge and
23
J. J.
experience that they have, but all political decisions in the
broadest sense, all decisions dealing with policy, must be reserved
to the Members of the Organization, and the initiation must start
from a responsible Member and not from an official. That
principle is violated here, and distribution of functions as between
Members and the servants of Member is violated in the second
sentence.
There is another reason of a practical order. I do not want
to go any more fully into this matter then is necessary to
establish my point, but there is another reason of a practical order
which makes it unnecessary and undesirable to vest this power in
the Director-General. The Director-General should be there in
position of impartiality towards all Members. Now, I can give you
an example of what might very easily happen when you have a
Director-General who may, on his own, initiate proposals,
responsibility for which should be borne by its Members. It may
be a matter of a very contentious nature which the Director-General
initiates, but once it has been initiated, the Director-General
being within his right to initiate it, and comes on to the floor,
there is a fight in the Organization about it. Supposing it is
an exceedingly contentious issue, the matter having been raised,
naturally Members take their stand on this contentious issue, and
ultimately one may hope that some sort of solution is arrived at O.
that matter, but that solution has, inevitably, placed certain
people in the position of losing, and immediately you get that sort
of situation, the confidence of those Members in the Director-
General is shaken. You have broken down your permanent Organization.
What for? In order to give the Director General this power, the
power which it is not at all necessary that he should have. 25
V E/PD/T/B/PV/33
I cannot find any reason why the authority which should be
vested in Members only should be put into an official. That is
in conflict with the vertebral system of any sort of Organization,
and I think that if we leave this paragraph in we are looking for
trouble - we are introducing an Organization which is not sound
in principle. For that reason, I suggest that the second sentence
of paragraph two should be deleted.
CHAIRMAN: The South African Delegate has proposed the
deletion of the second sentence of paragraph 2. Do any Members
of the Commission support the South African proposal?
Mr. Erik COLBAN (Norway): Mr. Chairman, I entirely agree
with everything said by the South African Delegate. I think that
this clause is inserted because of a somewhat similar clause in
the Charter of the United Nations; but there is not the slightest
reason to transfer that idea to our Charter. I think it ought to
be omitted.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): I do not think a long
speech is necessary, Mr. Chairman. I think, in fact, that whether
we keep this provision here or not, it is obvious that it will be
possible for the Director-General to initiate proposals for the
consideration of any organ of the Organization. However, I agree
that it may be unnecessary to say so there, and therefore, in
order to avoid any misunderstanding in interpreting the clause, I
would accept the point of view expressed by the Delegates of
South Africa and Norway.
CHAIRMAN: The Delegate of Australia.
Mr. A.H. TANGE (Australia): Mr. Chairman, I am not sure that 26
V E/PC/T/B/PV/33
it would follow, if this wording were deleted, that the Director-
General would, in fact, have the power to make proposals to the
organs of the Organization, and we believe that it would be
a mistake to delete explicit expression of this power of the
Director-General.
As we see it, the structure of the Organization has emerged
in the form of having a Conference which is responsible for the
final discussion of the policies of the Organization, and under that
Conference you have an Executive Board, which is responsible for
the executive functions, and/you have a provision for Commissions.
We have re-drafted those sections dealing with Commissions in
a form which leaves them much more elastic, and also leaves it open
to the Conference to decide whether or not Commissions are
necessary in a particular field. It seems possible to retain
that flexibility in the structure so long as you have provision
for the Director-General and his Staff performing some of the
functions of advising the Executive of the Organization, and the
allocation of functions as between the Executive and the
Director-General can be left to the Conference itself. G 27
It seems to us that there is very good reason why the
Director-General on the basis of the studies of his Staff
should be able to make proposals to the Organs in the Organisation.
I do not believe that there is a great deal to be said for the
principle expressed by Dr. Holloway that the initiator of a
proposal must bear responsibility for his proposal, if it goes
through. The body which bears responsibility, if it goes through,
is the body which puts it through, and that is the Organ to
which the Director-General has made a proposal; and after all,
that is somewhat in line with the familiar practice in the
public services administration of most countries, certainly,
with a parliamentary system.
The Director-General is under the supervision of the
Executive Committee under paragraph 1 of this Article. Now the
only thing which might be in doubt is as to whether or not the
Director-General would be likely to make ill-judged proposals
to an Organ which would embarrass it in any way. He could not
embarrass it a great deal, because they have the power of
disposing of any proposals to which they object. If he acted in
such a manner that the mere presentation of a proposal embarrassed
them, really the choice of the Director-General would have been
an unwise one, and they have the power of dealing with the
situation then.
It is an issue, we think, between the limited secretarial
role for the Director-General and Staff, or a more positive,
thinking role on behalf of the Organization; and we believe that
if you remove this power of the Director-General, you orientate
the thinking and advising work to Commissions, and in effect
the Organization will have to carry on that particular form of
structure; and we are not satisfied that this is the best one
and we believe that there is much to be said for leaving this
E/PC/T/B/PV/33 G 28 E/PC/T/B/PV/33
power to the Director-General. It is not a new power, it is one
which interests other Organizations, such as the International
Labour Organization. I have attended meetings of the Governing
Body of that Organization, and their proceedings are conducted
very substantially on the basis of proposals made to them by the
Director-General - questions brought to the notice of the Governing
Body, and. positive suggestions as to how they should be treated.
For those reasons, Mr. Chairman, we are opposed to the
deletion.
CHAIRMAN: The Delegate of Norway.
Mr. COLBAN (Norway): Mr. Chairman, in Article 79, we have
already said that the Director-General shall be the Chief
Administrative Officer. If we maintain the second sentence of
paragraph 2, it means that we will extend his powers outside
what is implied in his position as Chief Administrative Officer,
and I think that is unwise. The Delegate of France said that
whether we keep it or not, the Director-General will certainly
make numerous proposals. I entirely agree; but he will do it
as Administrative Officer.
When I was in the League Secretariat I made hundreds and
hundreds of proposals, but they stood in the name of one or more
Members of the League, never in my own name.
I had at one Session 13 different Sub-Committees - 13 during
one single Session of the Council - having in each one of those
Meetings three Members of the Council. We discussed things,
very difficult and very important things, I said what I thought,
and I had read the documents much more closely than those Members
of the Council. If they did not agree with me, nothing came
about. If they agreed, well then, they made the proposal in their
own name. I have written notes, and hundreds of Reports to the
Council or Assembly of the League of Nations. My name never G 29 E/PC/T/B/PV/33
figured on any of those papers - it was Mr. Chamberlain,
Monsieur Briand, and so on. They read those Reports having
discussed them with me or with my Staff.
That is the way in which an Executive Secretary should make
his proposals, and it is entirely unnecessary to go beyond his
position as Chief Administrative Officer in order to give him
that authority. 30
S E/PC/T/B/PV/33
CHAIRMAN: This question was considered at the first
Session; this sentence was included in the Report of the
Drafting Committee; it was considered by Commission B in the
month of June, and no amendment had been submitted up to that
time to this particular Session. The Sub-committee, I under-
stand, considered the question very extensively, so I think
there is no need now to spend further time debating it.
I would therefore like to put the proposal of the South
African Delegate, which would be to delete the second
sentence of Paragraph 2, to the Commission.
Will those Members of the Commission who are in favour
or the South African proposal please raise their hands.
For: 8
Against: 2
The proposal is carried by eight votes to two.
Are there any further comments on Paragraph 2?
(Agreed).
Are there any comments on Paragraph 3?
The Delegate of the Netherlands.
Mr. SPEEKENBRINK (Netherlands): Mr. Chairman, I have been
wondering whether the measures for checking of accounts are
insufficient. In my opinion, there should be an arrangement
whereby reports on the budget and accounts are submitted, in
the first place, to the Executive Board, which should study
them before sending them to the Conference. It is, moreover,
in accordance with the principle laid down in Paragraph 1 of
this Article that the draft budget and accounts should be
submitted to the Conference, with the necessary explanations
by the Chairman of the Executive Board. In this way the
responsibility would be fairly divided among the Conference,
the Committee and the Director-General. I might add here that 31
S E/PC/T/B/PV/33
by making this proposal I do not preclude in any way the
possibility of the Conference setting up a special budget
committee.
CHAIRMAN: This question was considered very carefully
in the Sub-committee and, as I announced earlier today, it is
not possible for us to accept amendments of substance involving
lengthy changes of wording which have not been circulated in
advance.
I think, however, that the point raised by Mr. Speeken-
brink can be explained by the Chairman of the Sub-committee
which examined this situation so thoroughly. I will now
cell upon him.
Dr. W.C.NAUDE ( South Africa): Mr. Chairman, the Sub-
committee was inspired primarily by this motive: that it was
quite esential to lay the responsibility where it belongs,
namely, with the chief administrative officer of the Organi-
zation, to prepare the budget. In the New York text some
provision is made for consultation with the Executive Board
by the Director-General. The Director-General is, in any
event, under the control of the Executive Board. He would
no doubt, if he is a responsible man, have consultations with
the Executive Board before presenting his budget to
the Conference.
I might just add, as regards a matter such as Mr.
Speekenbrink had in his mind - the possible auditing of
accounts, that such a matter will no doubt be taken care of
in the financial regulations to be approved by the Conference.
CHAIRMAN: Are there any other comments on Paragraph 3?
The Delegate of Norway. 32
S E/PC/T/B/PV/33
Mr. COLBAN (Norway): Mr. Chairman, I wonder whether it
would not be better if, as I suggested, we say: "The Director-
General shall present to the Conference, through the inter-
mediary of the Executive Board, an annual report.....",
because the Executive Board is his superior, the organ which
will be in constant touch. The Executive Board is very
intimately interested in the financial arrangements and they
should be given an opportunity, at any rate, of making some
remarks on the Executive Secretary's Report.
I thoroughly realise the point of the remarks made by
the Chairman of the Sub-committee, but I do not think this
slight drafting amendment would go against them. CHAIRMAN: The Norwegian Delegate proposes to add after
the word "Conference" in the second line the words "through
the Executive Board". I take it that that would cover the
point which has been raised by the Netherlands Delegate; but
it would be going back to the New York text and therefore
reversing the decision of the Sub-Committee. Therefore I should
like to have the views of the Commission on this proposal.
The Delegate of France.
M. ROYER (France) (Interpretation) I wish to support
what Mr. Naude has said previously. In accepting this new
proposal, we might be in some confusion in our text; because
do the words "through the Executive Board" mean that the
Executive Board would act in that case as a sort of letter-
box, or would we thus give a right to the Executive Board to
study the estimates and present some remarks and observations?
Before the war we had some experience in an international
organization which has clearly shown that it is indispensable for
good financial control that clear-cut responsibilities s shall
be established; and in that case I think the Conference which
votes for the budget should be responsible for its execution
and should eventually appoint a Control Commission to assist in
the task, whereas the intervention of the Executive Board, an
organ which has new views or new ideas on the subject, might
create confusion and possible conflict.
Therefore I think we should leave the text as it is.
CHAIRMAN: I have three speakers on my list - the Delegates
of Cuba, Belgium and the United States. It is now time for us
to break off for tea. If those three speakers would forgo their
rights to speak we could take a vote on this question, which was
very thoroughly examined by the Sub-Committee. But if they wish
to speak, we shall have to wait until after tea, P 34 E/PC/T/B/PV/33
Do the Delegates of Cuba, Belgium and the United States
agree?
Baron P. de GAIFFIER: I prefer to have tea.
CHAIRMAN: Does the Delegate of Cuba agree?
Dr. GUSTAVO GUTIERREZ (Cuba): I do not wish to speak.
CHAIRMAN: We will therefore take a vote on the proposal
of the Norwegian Delegates that after the word "Conference" in
the second line of paragraph 3 we insert the words through the
Executive Board."
Those in favour please raise their hands.
Those against.
The proposal is rejected by 8 to 5.
Is paragraph 3 approved?
Approved.
H.E. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, a small
remarks: - I think we have forgotten in this Article entirely that
the Director-General should not be appointed for a life-term, and
there is no provision how he may be changed. So I would suggest,
if agreeable to the Commission, that we take the same provisions
as there are, for instance, in the Monetary Fund. It says there
that the Director-General shall cease to hold his office when the
Conference so decides.
CHAIRMAN: If the Delegate of Czechoslovakia will direct his
attention to Paragraph 1 he will see there, in the third sentence:
"The powers, duties, conditions and term of office of the Director-
General shall conform to regulations approved by the Conference."
I take it that is sufficient? 35
E/PC/T/B/PV/33
H. E. AUGENTHALER (Czechoslovakia): Mr. Chairman, may
we request the representative of the International Monetary
Fund to tell us how it is done by the Monetary Fund, because it
is exactly defined in their Charter.
MR. SAAD (International Monetary Fund): The Director-General
not the Conference,
is appointed by the Executive Board/and he is responsible to the
Board for the managing of the whole business. He is appointed
for five years, but his term of office can at any time be
terminated a majority vote. You could give him a contract for
ten years, and after ten days you could relieve him of it.
CHAIRMAN: In consideration of this question, we might
also consider the Charter of the United Nations. There no term
of office is laid down for the Secretary-General; that is left
to the Rules and Regulations of the Organization.
Does the Delegate of Czechoslovakia feel satisfied with
these explanations?
May we now approve paragraph 3?
Approved.
We will now have a break for tea. We will reassemble at
5.10: we will go on with our work until 7.30: we will resume
again at 9 o'clock and continue until we have finished this task,
(The Meeting adjourned, 4.40 p.m.) 36
ER E/PC/T/B/PV/33
CHAIRMAN: The Meeting is called to order.
We shall deal now with Article 80, paragraph 1. Are there
any comments? Paragraph 1 is agreed.
Paragraph 2. Any comments ? Approved.
Paragraph 3. Approved.
Article 81. I would like to draw the attention of the
Commission to Document W.282. It is an amendment submitted by the
Australian delegation to paragraph 1. The Australian delegation
proposes the deletion of the final sentence of paragraph 1
Article 81 reading as follows:-
"Notwithstanding the provisions of paragraph 1 of Article 92
the Conference may amend the provisions of this Charter to
conform to any such agreement provided such amendments do not
involve new obligations on the part of Members."
There is then a commentary giving the reasons for the
Australian proposal.
Mr. A.H. TANGE (Australia): The most important thing
about this sentence of paragraph 1 of Article 81 is that it permits
the Conference to amend the Constitution by a simple majority in
certain circumstances where, as a general rule, relating to the
amendment of the Constitution, a two-thirds vote of the Members of
the Conference is required. I do not think I need elaborate on the
reasons. We believe that this is an undesirable requirement to
have as a principle a substantial majority in favour of the amend-
ment for the; reasons that we have set out in this paper.
Dr. W.C. NANDE (Bouth Africa): Mr. Chairman, in this case
it is not, so to speak, defence of the text of the sub-Committee
merely to report to the Commission that there were several Members
of the Sub-Committee who were a little doubtful about the inclusion
of that sentence. ER E/PC/T/B/PV/ 33
CHAIRMAN: Are there any objections to the proposal of the
Australian delegation? The proposal of the Australian delegation
is approved.
Paragraph 1 is approved.
Paragraph 8. In this note with regard to paragraph 2 this
Article may be reopened by the delegations of Brazil and France in
the light of the decisions of another Committee regarding Article
22 - Exchange Arrangements. This is the new numbering. Those
delegations reserve the rights to add a new paragraph 3 reading as
follows:
"Nevertheless, the provisions of paragraphs 1 and 2 of this
Article cannot, in point of fact, preclude the right of final
decision of the Organisation, especially with regard to Articles
17, 19 and 20."
Do the delegations of France and Brazil still maintain this
reservation?
Mr. J.G. TORRES (Brazil): Mr. Chairman, the origin of this
amendment proposed by the delegations of France and Brazil resulted
from the fact that we think that the I.T.O. should be the master in
its c house. It was proposed, among other things, in connection
with the Articles relating to the Balance of payment provisions
that the Brazilian, and, I think, the French delegations, agreed
to drop this amendment. However, in the view of our delegation
it is still necessary to have some provision in the form of a
possible paragraph 3 which would read as follows:
"Nevertheless, the provisions of paragraphs 1 and 2 of this
Article cannot, in point of fact, nullify the right of final deci-
sion by the Organisation under the provisions of this Charter." 38
J. E/PC/T/B/PV/33
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, the French
Delegation wishes to support the remark made by the Delegate for
Brazil. We think such a provision would be useful, either in the
text of the Article, or in the footnote.
CHAIRMAN: Are there any objections to the inclusion of the
new paragraph 3?
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, we would
not wish to see this paragraph as part of the Article. It is our
own opinion that the matter is covered by Article 29 - when I say
Article 29, I refer, of course, to the number which has been used
for the Article up to now.
MR. L.R. EDMINSTER (United States): I desire to support
that, Mr. Chairman.
CHAIRMAN: Are there any other comments?
The Delegate for Australia.
MR. A.H. TANGE (Australia): Mr. Chairman, I wonder if you
would mind repeating the revised Note as presented by the Delegate
for Brazil.
CHAIRMAN: The Delegate of Brazil, seconded by the Delegate
for France, proposed the addition of a new paragraph 3, reading as
follows:- "Nevertheless, the provisions of paragraphs 1 and 2 of
this Article cannot, in point of fact, nullify the right of final
decision of the Organization, under the provisions of this Charter".
Will those in favour of this proposal please raise their hands. E/PC/T/B/PV/33
Those against?
The motion is rejected by 6 votes to 3.
Is paragraph 2 approved?
Approved.
Any comments on Paragraph 3?
MR. R.J. SHACKLE (United Kingdom): The Legal Drafting
Committee have put a Note on the next page with regard to
paragraph 3, Mr. Chairman.
CHAIRMAN: The Legal Drafting Committee suggest, in the Note
at the bottom of page 26, that the expressions "within its
competence" and "within the competence" in paragraphs 3 and 4
respectively are not clear and should be replaced by "within the
scope of this Charter".
Is the Commission in accord with the suggestion of the Legal
Drafting Committee?
Approved.
That will be inserted in both paragraphs 3 and 4.
Is paragraph 3 approved?
Approved.
Paragraph 4. I call the attention of the Commission to
another Note by the Legal Drafting Committee, which appears on
page 27 of document E/PC/T/159.
The Legal Drafting Committee suggest that if it is intended
that the approval of the Conference relates to the negotiation of
the agreement or to the agreement as concluded, the wording should
be changed to read "the Director-General may negotiate an appropriate
agreement to be approved by the Conference".
J . 40
J.
E/PC/T/B/PV/33
Perhaps the Chairman of the sub-committee could give us his
views on this suggestion.
DR. W.C. NAUDE (South Africa): I would merely say that,
to me personally, the Legal Drafting Committee's comments seem
to be entirely relevant.
CHAIRMAN: Is the suggestion of the Legal Drafting Committee
approved?
Agreed.
Are there any further comments on paragraph 4?
MR. R.J. SHACKLE (United Kingdom): Is that agreed subject
to that change, because I would have thought that it would probably
be better to leave the matter in the way in which it is in the
present text? After all, the Conference may perfectly well want
to give instructions to the Director-General on agreements which
he may wish to negotiate, and not merely register its approval
when the agreement has been made. I would have thought that, from
that point of view, there is a good deal to be said for leaving the
existing wording. 41
V . E/PC/T/B/PV/33
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): I approve the
suggestion just made by the United, Kingdom delegate - all the
more so, since the French text is slightly diffrent from the
English text, and I would prefer to keep to the original text.
Mr. L.R. EDMINSTER (United States): I agree with the
comment made by the United Kingdom.
CHAIRMAN-: Is the Commission agreed to keep the text proposed
by the Sub-Committee?
(Agreed)
Any other comments on paragraph 4? Paragraph 4 is approved.
Article 82, paragraph 1. Any comments?
(Approved)
Paragraph 2? Approved.
Paragraph 3? Approved.
Article 83. Any comments?
Article 83 is approved.
Article 84, paragraph 1. Any comments?
(Approved)
Paragiaph 2. Any comments?
(Approved)
Paragraph 3. No comments? The paragraph is approved.
Article 85. Any comments? Article 85 is approved.
Article 86 - Consultation between Members. Is the
Introductory paragraph approved?
Dr. J.E. HOLLOWAY (South Africa): I do not know at what
point in this paragraph, which is in a number of little bits,
I should raise the question. Perhaps you would allow me to 42
V E/PC/T/B/PV/33
raise the matter on the paragraph as a whole.
I would like to say, Mr. Chairman, that of all the vague
and woolly punitive provisions that one could make, this seems
to me to hold the prize place. It appears to me that what it
says is this: In this wide world of sin there are certain sins
which we have not yet discovered and which after long examination
we cannot define; but thee being such sins, we will provide some
sort of punishment for them if we find out what they are and if
we find anybody committing them. When it comes to that, we
shall describe them as sins only when the Organization considers
that they are not venial offences, but serious crimes; but we
do not know under what circumstances the Organization might
consider them to be serious. Nonetheless, seeing that there
are such sins, and in spite of the fact that we do not know
what they are, and in spite of the fact that we do not know under
what circumstances we are going to apply any punishment to them,
we shall still provide a sort of vague and general" sword of
Damocles", if such a thing is possible, to hang over the head
of all the people who may possibly commit this sin.
Then we come to what is the only definite thing in the
whole Article: that is, the type of punishment which can be
visited upon these offenders. It seems to me, Mr. Chairman,
that this is something like Pirandello's play, "Six Characters
in Search of an Author", only it is rather the other way round.
Here it is one punishment in search of six sins!
That is the sort of Article which we are asked here to
write into an international agreement. I do not want to go
into the details of the drafting of that Article, Mr. Chairman -
I do not want to waste any time on it. I only want to draw
attention to what the Sub-Committee says about this matter itself, 43
V E/PC/T/B/PV/33
in document T/139, paragraph 5:
"The Committee draws the attention of the Preparatory
Committee to the limited time which has been devoted to the
study of the means of providing for interpretation of the
Charter and for the settlement of differences among Members
and between Members and the Organisation. The subject was
not fully discussed at the First Session of the Preparatory
Committee and was not considered at all by the Drafting
Committee. At the Second Session the timetable laid down did
not permit the Committee sufficient time to make as thorough
a study of all the problems involved as the importance of the
subject deserves. For these reasons the Committee recommends
that this subject should receive early and full re-exmaination
by the World Trade Conference and the drafts contained im this
Report have been prepared on the assumption that this course
will, be followed."
Now, Mr. Chairman, if that draft goes into the Report, I
am prepared to leave it at that, and then I will have no more
to say about this particularly elegant bit of draughtsmanship. G E/PC/T/B/PV/33
CHAIRMAN: I take it the Commission would have no
objection to acting on the suggestion of the South African
Delegate to insert the substance of the fifth paragraph of the
Report of the Sub-Committee which appears on page 3 of Doc.T/139
as a footnote to Article 36.
Mr. SHACKLE (United Kingdom): I may be wrong, but I
understand that paragraph 5 of the Sub-Committee's Report refers
not to this particular part of Article 86 but the whole of the
Section. After all this 86 is not a new provision at all but
is the same thing as Article 35, which has stood in the Draft
Charter from the beginning. I do not agree that that paragraph 5
is referring to this particular part of the Article.
CHAIRMAN: The best course then would be to have this footnote
referred- to the whole of the new Chapter VIII. Is that agreed?
BARON DE GAIFFIER (Belgium): Mr. Chairman, I think it is
only the Section
CHAIRMAN: It is a new Chapter VIII.
Mr. NAUDE (South Africa): Mr. Chairman, I just want to
have it put in the Record that Article 86 and the small portion
of Article 87 were actually drafted in another Committee - in
the Sub-Committee, I think, of Commission A.
CHAIRMAN: If that proposal is agreed, I will read out the
footnote which might be inserted. I do not think it is necessary,
but the wording of the present Paragraph 5 of the Sub-
Committee 's report will also cover the point raised by the,
Chairman of the Sub-Committee. I therefore suggest the note
should read something as follows:- 45
"The(Preparatory) Committee draws attention to the limited.
time which has been devoted to the study of the means of
providing for interpretation of the Charter and for the settlement
of differences among Members and between Members and the
Organization."
And then we go on to say,
"Therefore the Preparatory Committee recommends that this
subject should receive early and full re-examination by the
World Conference, and the Drafts contained in this Report have
been prepared on the assuiptiol that this course will be
followed".
Is that agreed? Approved.
Is the first part of Article 86 approved? Approved.
Sub-paragraph (a)? (b)? Approved.
Is (o) approved.
The Delegate of Australia.
Mr. TANGE (Australia): There was a suggestion made by
the Legal Drafting Committee in paragraph 1 of article 87
which involves a change which we do not think is particularly wise.
In the centre of the paragraph you will see that the word
"concerned" has been changed to "interested".
It seemed to us that "concerned" is the better word.
"Interested" has a subjective flavour and conveys the idea that
these recommendations would be hade to anybody who considered
they were interested in the subject, even if not vitally
concerned. There is an additional argument, I think, in favour
of using the word. "concerned", and that is, that in article 86,
in the last Paragraph following the series of sub-paragraphs,
it will be seen that the Member may make written representations 46
G E/FC/T/B/PV/33
or proposals to the other Member or Members which it considers
to be concerned; and it seemed to us that there is some
advantage in having the same word. in article 87.
CHAIRMAN: Any objections to the Australian proposal
to the use of the word "concerned".
Is paragraph 1 adopted?
Mr. AUGENTHALER (Czechoslovakia): Mr. Chairman, I would
like only to point out that we have consequently deleted the
word "other" where it says "United Nations and any other inter-
governmental organization", on the fourth line from the bottom
of the page.
CHAIRMAN: To be consistent we should also delete the
word "other" here, as suggested. by Mr. Lügenthaler. I presume
that would be agreeable to the Commission.
The Delegate of South Africa.
Mr. NAUDE (South Africa): May I ask whether the French
word. "intéressés" is the same as "concerned" in English?
CHAIRMAN: The Delegate of France. 47
S E/PC/T/B/PV/33
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): I was myself somewhat
concerned by this modification, because in Article 86 the
English word "concerned" has been translated as "à son avis,
sent en cause," and I wondered whether we should do the same
in Article 87, or whether this is a proper translation,
CHAIRMAN: We will make the French text in conformity
with the English text.
M. ROYER (France) (Interpretation): I shall have to
think the matter over. I think that provisionally we may accept
the present wording. I believe that, as the result of the
deletion of the word "autre", proposed by the Delegate of
Czechoslovakia, it might be necessary to say "and." This
remark, of nurse, applies only to the French text.
CHAIRMAN: Are there any other comments-on Paragraph 1?
Paragraph 1 is therefore agreed.
Are there any remarks on Paragraph 27
Mr. SHACKLE (United Kingdom): Mr. Chairman, as is noted
in Paragraph 6 of the Sub-committee's Report, there is a United
Kingdom reservation on this paragraph. I wish to maintain that
reservation. The reason for it is that we have the feeling that
this procedure for arbitration may unduly complicate the whole
scheme for the settlement of disputes in this Article. A
dispute may be referred to the Executive Board, from which there
may be an appeal to the Conference, from which again there may be
an appeal to the World Court.
It is quite possible, that, if you have a number of separate
references to arbitration, the awards will proceed on a different
principle. Instead of' building up a Case Law, as clearly should 48
S E/PC/T/B/PV/33
be done, you may get a mass of conflicting decisions. For
those reasons, we are doubtful about this paragraph. We are
not proposing to move its deletion, but we wish to maintain
our reservation.
CHAIRMAN: Due note will be taken of the reservation
of the United Kingdom Delegation.
Is Paragraph 2 approved?
(Agreed)
Is Paragraph 3 approved?
(Agreed)
Are there any comments on Paragraph 4?
(Agreed)
Article 88, Paragraph 1: I would call tho attention
of Members of the Commission to Document W/307 - andamondmont
suggested by the Delegation of Australia, proposing the
deletion of the words "Executive Board or the" in Paragraph
1 of Article 88.
The Delegate of Australia.
Dr. COOMBS (Australia): I do not think I have anything
to add to the- comment which we have made in the document as
circulated. We believe that a request for an advisory-opinion
is an important act of policy and that consequently we think
a decision to seek such an advisory opinion should be based
upon a decision of the Conference.
CHAIRMAN: The Delegate of Norwey.
Mr. COLBAN (Norway): Mr. Chairman, I wonder whether the
omission of the words "Executive Board or the" may not render
the procedure extremely slow. The Conference will only meet 49
S E/PC/T/B/PV/33
once a year normally and it may be rather urgent to get an
advisory opinion of the Court. When we say "the Executive
Board or the Conference", I think that when the Conference is
in session it will deal with the matter, but it should not
be excluded that the Executive Board should take the
initiative in such a case.
CHAIRMAN: The Delegate of the United States.
Mr. EDMINSTER (United States): Mr. Chairman, I motrly
wish to say that I share the apprehensions expressed by the
Delegate of Norway.
Mr. SPEEKENBRINK (Netherlands): I, too, Mr. Chairman.
CHAIRMAN: The Delegate of South Africa.
Mr. NAUDE (South Africa): Mr. Chairman, this is again
to report that there was a little concern among some Members
in the Sub-committee on that very point. At the same time,
the argument which Mr. Colban has introduced was fully borne
in mind. It was thought that by the rules laid down by the
Conference the situations in which the Executive Board would
be able to go direct to the International Court would be so
clearly defined that the possibility of misuse would be reduced
to a minimum.
CHAIRMAN: The Delegate of the Netherlands.
Mr. SPEEKENBRINK (Netherlands): I can only say that
I share the apprehensions of Mr. Colban E/PC/T/B/PV/33
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): I wish to associate
myself with the arguments which have been advanced by the delegates
who spoke before me. I think the procedure for arbitration before
the Court will in itself be long enough, and that we do not want
to wait for nearly a year in some cases to ask for advice of the V
Court. However, I believe that as a matter of precedence we
should say "The Conference or the Executive Board... "
CHAIRMAN: Do any other Delegates support the proposal of
the Australian Delegation?
I take it therefore that it is the sense of the Commission
not to accept the Australian proposal.
Do we agree with the suggestion of the French Delegation -
that "The Conference" shall come before "the Executive Board"?
That is, that the text shall read: "The Conference or the Executive
Board..."?
MR. R. J. SHACKLE (United Kingdom): Mr. Chairman, I am
rather doubtful about that suggestion. It is certainly true
that in order of seniority and importance, etc., the Conference
comes first, but it does act come first in order of time; in the
majority of cases questions go to the Executive Board first
and the Conference afterwards, But, as it seems to me that
there is no subsequent effect in making this transposition, I
would. suggest that probably on the whole it is not worth making.
CHAIRMAN: Does the Delegate of France insist on his
suggestion?
M. ROYER (France) (Interpretation): I will not insist,
but I would ask for a clarification. Do I understand rightly
that when there is a request to the International Court of
P P E/PC/T/B/PV/33
Justice for an advisory opinion the Executive Board will first
decide and then the Conference? I had understood that if the
Conference were in Session the Conference would decide. If not,
It would be the Executive Board. But I did not envisage the
possibility of a double procedure, one before the Executive Board
and one before the Conference.
CHAIRMAN: It seems to be clear that the sense of the
paragraph is either the Board or the Conference.
M. ROYER (France) (Interpretation): In that case it might
be more logical to mention the Conference first.
CHAIRMAN: Do any other Delegations support the proposal of
the French Delegation to put "The Conference" before "the Executive
Board"?
Mr. Erik COLBAN (Norway): I think it is right, Mr. Chairman.
CHAIRMAN: I think we shall have to take a vote. Will those
in favour of the French Delegation's suggestion please raise their
hands? Those against?
"The Conference" wins.
Any other comments on paragraph 1?
Paragraph 21 in connection with paragraph 2 I call the
attention of the members of the Commission to document E/PC/T/W/257
submitted by the Delegation of Belgium-Luxembourg on the subject
of Settlement of Disputes. I also call attention to document
E/PC/T/W/299 submitted by the Delegation of the United States and
proposing a new draft of paragraph 2 of Article 88.
I would propose that we first take up for disoussion the
proposed re-draft of the United States Delegation, and I would ask
members of the Commission to confine themselves to the proposal of
the United States Delegation until we have disposed of that proposal.
51 P 52 E/PC/T/B/PV/33
Would the Delegate of the United States like to speak to
this proposal?
Mr. L. R. EDMINSTER (U.S.A.) Mr. Chairman, the proposal
submitted by the United States is designed to reconcile divergence
in the Sub-Committee which found expression in the submission of
alternative drafts. Although the exact extent of the difference
between the two texts submitted by the Sub-Committee might be hard
to define In exact terms, it would appear that a large part of the
difficulty arose out of the use of the phrase "legal validity" in the
first of these alternatives. This point was stressed in working
paper M.271/47 submitted by the Belgian Delegation.
With a view to working these questions out, the United States
Delegation prepared the paper now before the Commission, and in
order to save the time of the Commission and not to complicate
matters by merely introducing a third alternative, discussed it with
as many members of the Commission as the shortness of time allowed.
It appears from these informal talks that the text now
proposed is acceptable to both the members of the Sub-Committee who
preferred alternative (b) as well as to most of the members who
preferred alternative (a). It is also acceptable to most of the
Delegations who were not represented on the Sub-Committee but took
an active part in its work.
It is my hope, therefore, that the text proposed will be
acceptable to this Commission.
CHAIRMAN: The Delegate of Australia.
DR. H. C. COOMBS (Australia): Mr. Chairman, we find
ourselves somewhat puzzled by the United States text since we
understand from what the United States Delegate has said that
he considers this a reconciliation of the two points of view
previously embodied in the two alternatives, but to us it appears / P 53 E/PC/T/B/PV/33
in its present form to coincide very closely to the second
alternative.
As we understood it, the essential difference between the
two views previously expressed was the nature of the review which
should be undertaken by the International Court at the request of
the Organization for the advisory opinion. As it was previously
set out in the first alternative, the scope of that review was
limited to the legal validity of a decision of the Organization,
It is true that it may be difficult to say precisely what is
involved in a review of the legal validity, but our understanding
of that was that it would involve merely a review on the part of
the Court of the power or the competence of the Conference to
come to a particular decision; and in that understanding we favoured
that alternative, because it is our view that the Conference
should retain control over the settlement of disputes arising
between Members as to their obligations under the Charter, so
far as the economic content of those disputes are concerned -
and we would not wish to have referred to the Court anything, but
the purely legal aspects of the question. E/PC/T/B/PV/33
We see no reason to assume that a Court will be any better equipped
to settle disputes of this kind than the Organisation itself, and,
indeed, from my point of view it would be much worse equipped.
On the other hand, we support strongly the view that the pure-
ly legal question should be referred to the Court for advisory
opinion, an d that the Conference should be guided by it, but we
believe that the nature of the references to the Court therefore
should be confined to the legal aspects of the Charter.
Of course, it might be argued that the Court, being a legal
Court, would confine itself to legal aspects, but I have had some
experience of lawyers and they very frequently regard legal aspects
of the question as covering the whole question, and we might find
ourselves therefore in a position where we are submitting what are
essentially problems of an economic character from a body which
purports, at any rate, to be equipped to handle such problems, and
is set up for the purpose of handling them, to another body which
is set up for an entirely different purpose, and which has no claims
to adequacy in this field. Furthermore, Mr. Chairman, we are
doubtful whether we have any right to refer anything other than the
legal questions to the Court. If we look at the powers of the
Court itself as set up in the Charter of the United Nations,
Article 65 which relates to advisory opinions, we see that it states
quite specifically that" the Court may give an adviso ry opinion on
any legal question at the request of whatever body may be authorised
by, or in accordance with the Charter of the United Nations,to make
such a reguest". So the Court is by its own Charter limited to
giving advisory opinion to legal questions, and, furthermore, it
is limited to giving such opinion to the bodies which are approved
If we look
by the United Nations. /at the relevant part of the Charterin
Article 96 we find this paragraph; "Other organs of the United
Nations and established agencies of which the I.T.O. would be an
ER
54 E/PO/T/B/PV/33
example, which may,at any rate, be so authorised by the General
Assembly, may also request advisory opinions of the Court on legal
questions arising within the scope of their activity." we would
therefore have to seek the authority of the General Assembly to
seek such advisory opinions, and . /Charter would be
Provisions of the
permitted , ;;,: r Thnc-9 on legal questions. It seems
desirable to us therefore that we should make it quite clear, in
our own Charter, where we provide the procedure for seeking such
advisory opinions, that it is proposed to limit them to the aspects
of the problem which the Court has competence to deal with, and to
make it quite clear that we are not seeking to refer to the court
aspects of the problems in which they have no competence. We would
therefore. prefer, Mr. Chairman, not to aooept the United States
variation, but to adhere to the alternative, or, alternatively, to
so amend the United states redraft to make it clear that the review
to be carried out by the International Court through the advise by
opinion is limited to the legal validity of any action taken by
the Conference.
ER
55 56 E/PC/T/B/PV/33
CHAIRMAN: The Delegate of Belgium.
Baron P. de GAIFFIER (Belgium) (Interpretation): Mr. Chairman,
shown
I wish to pay tribute to the spirit of co-operation and understanding/
by the Delegate of the United States, and I wish to assure my
colleagues on the Commission that the Belgium-Luxembourg Delegations
fully share the views expressed by the Delegate of the United
States in document E/PC/T/W/299 at present before the Commission.
We agree entirely to replace Alternatlves A and B by the new text
proposed in that document by the Delegate of the United States.
I shall refrain from answering the Australian Delegate, since
we have the proposal made by Dr. Holloway of South Africa, who
stated that the best place for the complete discussion of this
Chapter IV would be at Havana at the World Conference.
I would like to say two things, one about the words "legal
validity". This expression does not appear to us satisfactory
for practical reasons because, whether we are in a sub-committee
or whether we are in a Commission, if we discuss the exact meaning
of this term, each Delegation will have a different interpretation.
Therefore, Alternative A creates a second complication - the
difficulty in knowing whether the question pertains to the legal
validity or not.
The second point that I wish to make is about the Statute of
the International Court of Justice, raised by the. Deegate for
Australia. I think the second sentence of the United States
proposal fully answers the question raised by the Delegate for
Australia, since it says:- "an advisory opinion pursuant to the
Statute of the International Court of Justice". I think it is
not for as to try to discuss the question of the competence of the E/PC/T/B/PV/33
Statute of the International Court of Justice.
CHAIRMAN: The Delegate of the United Kingdom.
MR. R.J. SHACKLE (United Kingdom) Mr, Chairman, I would
like to say, that, on the substance of this question, we quite agree
with what Dr. Coombs has said. At the same time we do feel that
there is a great deal to be said for the compromise text which the
United States Delegation has proposed.
We feel it would be deplorable in this case if we were unable
to give a lead at the Havana Conference, and it does seem to us
that, in fact, the United States proposal is satisfactory. In the
first place, it refers to "advisory opinion pursuant to the Statute
of the International Court of Justice.. Well, it is to be
Article 65 of
pointed out that in/the Statute of the International Court of
it
Justice/says:- "The Court may give an advisory opinion on any
legal question.....etc- ". Now, that means that, in fact, the
Court will give advice, as it is said, on any legal question, and
if there be any question as to whether any particular point is legal
or not, the Court will say "We should not have the task of
deciding". I believe that it is implied that the Court will not
go into economic questions.
Then, as regards the question of facts, Article 88, paragraph 3,
statement of
provides that the/facts should be furnished by the Organization
in .consultation with the Members, subject to the proviso that the
Organization shall supply to the Court such further information as
the Court may require.
There is just one remaining point on which we have felt a
certain amount of doubt with regard to the United States text, that
is, the last words:- "The request for review of such resolution or
decision shall be made by the Organization, in appropriate form,
57
J. E/PC /T/B/B/PV/33
upon the instance of any substantially interested Member". We
have always been rather afraid that this procedure might be used
as an engine of obstruction, so to speak, but on the whole we feel
that that is sufficiently safeguarded now, particularly in view of
paragraph 4 of the Article which says: "Pending the delivery of
the opinion of the international Court of Justice, the resolution
or decision of the Conference shall have full force and effect",
subject to a proviso which follows, on which we have made a
reservation, but we think that that sentence should provide a pretty
good safeguard against the use of this machinery. Therefore,
taking it on the whole, we think that the United States proposal
is acceptable.
CHAIRMAN: The Delegate of France.
58
J. E/PC/T/B/PV/33
M. ROYER (France) (Interpretation): Mr. Chairman, I wish
to associate myself with the remark made by the Belgian Delegation.
I am very grateful to the Delegate of the United States for the
effort made to achieve a compromise in the new text.
The French Delegation have a definite objection to Alternative
A. If, therefore, the Commission accepts the United States text,
the French Delegation will be prepared to withdraw Alternative B.
However, if Alternative A were maintained, the French Delegation
would have to ask that Alternative B be also maintained; but we
are prepared is accept the United States proposal as a basis for
discussion..
I do not want to discuss the question now, but I have to let
you know in the name of the French Delegation that we always
considered that the question of the interpretation of treaties did
not come under Article 65 of the Statute of the Court, but rather
under article 36.
This point is extremely important in the view of the French
Delegation. As regards the advisory opinion, we consider that the
United States text should be interpreted in the light not only of
Article 15 of the Statute of the Court, but also in the light of
other Articles in Chapter IV and also of Article 68.
The question submitted to the Court may be of a legal
nature, but should be examined at the same time as some facts, and
these facts are clearly defined in Alternative B and are only
concerned with violation of the undertakings in the Charter.
We agree with the remarks made by the representative of
Belgium that the notion of legal validity is extremely obscure,
and would give rise to very important differences of opinion when
the question of interpretation should arise, since no Delegate
V V
60
E/PC/T/B/PV/33
could agree on/similar interpretation ofthese words. Therefore,
I repeat that if Alternative A is withdrawn, we would be
prepared to accept the United States proposal as a basis for
discussion, reserving our right to have the question fully
studied by our legal advisers and debated at the World Conference.
CHAIRMAN: Are there any other Delegations who are opposed
to the proposal of the United States Delegation besides the
Australian Delegation?
Mr. H. DORN (Cuba): The Cuban Delegation shares the views
expressed by the French Delegate, and joins the French Delegation
in its willingness to adopt the amendment of the United States
as a basis for discussion.
CHAIRMAN: The Delegate of the Netherlands.
Dr. A.B. SPEEKENBRINK (Netherlandsnds Mr. Y. Chairman, I entirely
oppose Alternative A. I 1 prefer Alternative B to a certain extent,
but I am prepared to accept the American proposal as a good
compromise. I woujd Just explain our attitude. Since the
beginning of the London Conference, we have always insisted on
having every facility for going to the entornational Court of
Justice, because, in spite of our good intentions, curtain
political arguments might crop up. We eavo had recent experience
of that. h Ttat is the reason why I again stress that the way
to the International Court of Justice must be as wide as possible.
IRMANUL.: The Delegate of Brazil.
Mr. J.G. TORRES (Brazil): In the Sub-Committee, we preferred
Alternative A, but we should be very happy to adhere to the text
proposed by the United States Delegation, if that should be the
basis for a reconciliation of the two points of view. V 61 E/PC/T/B/PV/33
CHAIRMAN: I interpret the sense of the Commission as
being in favour of the adoption of the text proposed by the
United States Delegation in place of the existing paragraph 2,
and therefore I take it that it will not be necessary for us
to proceed to a vote on this question. I trust that the
Commission will be able to accept the proposal of the United
States Delegation. E/PC/T/B/PV/33
'Dr. COOMBS (Australia): Mr. Chairman, I have received
some comfort from the interpretation placed on the US text by
some of the speakers; but I am afraid that for the time being
I shall have to reserve the position of Australia on this text,
as apparently our Legal Advisers differ.
CHAIRMAN: Is the proposal of the US Delegation approved?
Approved subject to the reservation of the Australian Delegation.
We can now pass on to paragraph 3. Any comments?
Adopted.
Paragraph 4. Any comments? Adopted.
Paragraph 5. Any comments? Adopted.
Article 89. Paragraph 1?
Dr. HOLLOWAY (South Africa): Mr. Chairman, I just want
to draw the Commission' A attention to the fact that in Commission A
the question of certain notes which were accepted by commission A
in order to enable it to get over certain drafting questions
gave rise to a certain amount of discussion; but as that affected
the question of interpretation of the Charter - which matter is
dealt with under this Article - and as the questionc
was complicated by the fact that there are various notes of
entirely different standing, CommissionA- referred. this matter
to the Heads of Delegations.
My only reason for mentioning it here is that the decision
of the Heads of Delagatocns may possibly involve a further
paragraph in articlee 89.
CAIRMAN.:A-ny other comments on paragraph 1?
The Delegate ofA1ustralia.
DrCOOMBS (Australia): I just want to raise one question
G
62 Mr. Chairman. I seem to remember during the discussion in the
various Committees the quistion being raised as to whether it
was quite clear that a general rule embodied in the Charter
was qualified, so to speak, by any exceptions or specific rule
which followed it in the Charter; and in view of the frequency
with which that question arose, I have a recollection that it
was suggested that in the part of the Charter which dealt with
interpretation, there would be included an article or a paragraph
which would state that such general rules were to be taken as
qualified by anything which followed them in the Charter.
I am not sure whether the Legal Drafting Committee has
decided that is not necessary, but I raise the question.
Mr. SHACKLE (United Kingdom): Mr. Chairman, I did consult
our Legal adviser, who has now left Geneva, on this question, and
I gathered there is no general recognition of a rule embodying
that; but a rule which follows must necessarily qualify the
first, and I do not think we can write in any statement in the
Charter. On the other hand, the legal drafting Committee have been
very careful in considering whether one provision qualifies
another and have where necessary inserted single cross-
references in order to abstain from putting in double cross-
references, and I believe, in fact, the question has been taken.
care of in that way.
Dr. COOMBS (Australia): Mr. Chairman, all I can say is
that, speaking as a Member of the Sub-committees, various
Delegations were persuaded to accept the omission of words to
the effect that notwithstanding anything to the effect in
Article so and so, before certain provisions, on the clear
understanding that such general rules were qualified by the
late provisions of the Article. If that is understood then 64
I have no objections, but if the position is as the UK indicates,
then it would appear to me that some provision is necessary.
However, I do not want to waste the time of the Committee
on it. It seems to me purely a legal question, a question of
construction, and I would ask the Legal Drafting Committee to be
asked to consider this question.
CHAIRMAN: I will ask the Legal Adviser to comment on that.
Mr. RENOUFF (Legal Adviser): The Legal Drafting Committee
would consider this particular point, but it was very careful,
as Mr. Shackle pointed out, to take care of the particular
question involved. However, this question did come up from time
to time throughout the Conference, and I did give an opinion at
an early stage that there was a general rule that whereas
a general provision was followed in the Charter by specific
exceptions from that provision, that provision would be qualified
by those specific exceptions.
I also discussed that particular rule with one of the US
Legal Advisers, who has now left Geneva, and I also thought I had
the United Kingdom Legal Adviser's agreement on that particular
point. I did talk to him about it.
However, I hardly think it necessary to put in a specific
provision in the Charter, if my understanding is correct.
Perhaps we can go into it again at Havana, when the Charter
is again considered
G E/PC/T/B/PV/33
CHAIRMAN: Are there any other comments?
Does Mr. Coombs wish to say anything?
Dr. COOMBS (Australia): No, Mr. Chairman.
CHAIRMAN: Is Paragraph 1 approved?
M. ROYER (France) (Interpretation): This remark only
affects the French text.
CHAIRMAN: is Paragraph 1 approved?
Is Paragraph 2 approved?
(Agreed)
Are there any comments on Paragraph 3?
The Delegate of Cuba
Mr. H. D0RN (Cuba) Mr. Chairman, I am authorised by my
Delegation to say that I would be in a position to withdraw the
reservation mentioned on Page 40 of Document T/159 if the
underlined addition to Paragraph 3 remains as it now stands.
CHAIRMAN: I thank the Delegate of Cuba.
Are there any other comments on Paragraph 3?
I would call attention to the Note with an asterisk, at
the foot of Page 40: "The two Members who favoured Alternative
B in Article 88 did not accept this paragraph."
The Delegate of Belgiuk.
BARON DE GAIFFIER (Belgium) (Interpretation): I wish
to explain briefly the reason why we made this reservation.
If, in the section dealing with the settlement of disputes, the
principle of compulsion has been adopted, then any procedure
other than those mentioned in the Charter should not be
acceptable. We are prepared, of course, to abide by the
Charter, but we think we should not exclude amicable arrange-
ments between Members which would enable them to reach a
- 65
S S E/PC/T/B/PV/33
solution to any dispute which may arise. We say in our country
that a bad arrangement between parties is better than a good
lawsuit. As, however, we accepted the South African suggestion
that this Chapter could be reviewed at Havana, we see no reason
for keeping the reservation made there.
I was somewhat surprised, however, to read the underlined
words in this paragraph 3, which are not, in our opinion, in
conformity with the discussion which took place in the Sub-
committee. I do not see the meaning of these words, which seem
to indicate that when there are complaints or difficulties it
will be impossible to apply unilateral sanctions of any kind,
except when they are brought to the Organization.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): With my colleague
for Belgium, the French Delegation will not insist on the reserva-
tion we made, but, as a matter of curiosity, I would like to know
who is the author of the second sentence of Paragraph 3.
Mr. A. RENOUFF (Legal adviser): Mr. Charman, this under-
lined portion was originally a proposal made by the Delegation
of Cuba in the Sub-committee on Chapter IV, after the termination
of the Sub-committee on Chapter VIII. The Sub-committee on
Chapter IV requested certain Members of the Sub-committee on
Chapter VIII to consult with it when drafting these words. After
that, it went to the Logal Drafting Committee.
CHIRMAN: Are -there any other comments?
The Delegate of the Netherlands.
Mr. SPEENEBRINK (Netherlands): Mr.Chairman, I would
like to say that I also have certain serious doubts about the
advisability of Paragraph 3. However, I will make a formal
66
S E/PC/T/B/PV/33
reservation here and leuve matter over.
CHAIRMAN: The Dlegate of France.
M. ROYER (France) (Interpretation): There is a difference
between the French text and the English text at the point where
it says in English: "without prejudice to any other international
agreement." I would like to know which text is authoritative.
Mr. SHACKLE (United Kingdom): I believe this text was
drawn up in english in the first place.
M. ROYER (France): (not interpreted).
Dr. COOMBS (Australia): Mr. Chairman, I should like to ask
where, and in what respect, this text was altered by the
Legal Drafting Committee. I must confess it has an unfamiliar
air.
CHAIRMAN: I think the underlining here represents
a edition to the text as approved by the Sub-committee on
Chapter VIII, but it originated, I believe, in the Sub-committee
on Chapter IV.
Dr. COOMBS (Australia): Yes, Mr. 3:. ."i:ian, but to my
recollection those are not the words agreed in the Sub-committee
on Chapter IV. I am only speaking from memory, but they do
appear to he to have been changed. There may not be any change
of substance, but I find it a little difficult to understand.
G7
S E/PC/T/B/PV/33
CHAIRMAN Would the Delegate of Cuba like to explain?
Mr. H. DORN (Cuba) (Yes: only to say that they are
formal changes which in our opinion do not touch the basic
elements and that were agreed upon between some of the members
of this Working Party in order to make it possible to agree upon
the whole body. I do not think there is any question of
substance involved, and I understood that the Delegate of the
United States also agreed on this point - that it is only a
question of new wording and not a question of substance.
Dr. H. C. COOMBS (Australia): It is all right,
Mr. Chairman. I have found it. It is only a change of form.
CHAIRMAN: The Delegate of China.
Mr. D. Y. DAO (China): I understand that in Article 34,
Emergency Action, a Member may take action prior to consultation
with the Organization in certain circumstances. If this is one
of the procedures envisaged in the CIarter, as said in the
preceding sentence, we are agreeable to the idea that a Member
should not declare war against another Member without
consultation with the Organization!
CHAIRMAN: The Delegate of Belgium.
Baron de GAIFFIER (Belgium) (Interpretation): I think it
would be necessary, Mr. Chairman, to readjust the French text
with the English text. We find in the English text the
word "nor" connecting the two parts of the sentence, whereas
in the French text there is a full stop, Therefore the two
parts of the sentence are disconnected, which might lead to
the interpretation that there could be unilateral sanctions
after a final decision had been made, which is exactly contrary
to our purpose.
68
P P 69 E/PC/T/B/PV/33
CHAIRMAN: Will the French and Belgian Delegations
make their suggestions to the Secretariat?
Is paragraph 3 approved?
Approved.
Paragraph 41 Any comments?
Approved.
Article 91: sub-paragraph (a)
M. ROYER (France) (Interpretation) (Mr. Royer made an
observation which relates only to the French text.)
CHAIRMAN: Sub-paragraph (b).
Dr. HOLLOWAY (South Africa): Mr. Chairman, on a point
of order, is Article 91 before Commission "B"?
CHAIRMAN: Article 91 was approved by Commission "A'".
We have now been requested by Commission "A" to insert in
sub-paragraph (b) (11) the words "directly or indirectly"
after the words "is carried on". That is the purpose of this
Article being before us now. Paragraph (b) (11) would then
read:
relating to the traffic in arms, ammunition and
implements of war and to such traffic in other goods
and materials as is carried on directly or indirectly
for the purpose of supplying a military establishment;
Is that agreed?
Dr. H. C. COOMBS (Australia): I would just like to
make our position clear, Mr. Chairman. This was inserted to
meet a point raised by the Australian Delegation in connection
with Article 37. While it is my personal view that the
problem we posed is substantially met by the inclusion of those E/ PC/T/B/PV/33
words, I am not in a position at this stage to withdraw the
reservation which we made on Article 37 until the question
has been considered by my Government.
CHAIRMAN: I take it that the Commission has no objection
to the insertion of the words directly or indirectly" as
requested by Commission "A".
Article 91 was approved by Commission "A' and we now
pass on to Article 92.
Paragraph 1J if there are no comments, that is approved.
Paragraph 2: any comments? Approved.
Paragraph 3: any comments? Approved.
Article 93: any comments? Approved.
Article 94: paragraph 1: any comments? Approved.
Paragraph 2: Approved.
Paragraph 3: Approved.
P
70 ES. 71 E/PC/T/B/PV/33
,Article 95,
CHIRMAN: Paragraph 1 Approved. Paragraph 2. approved
Paragraph 3.
M. ROYER (France) (Interpretation): I do not see the use
of paragraph 3 because in Artocle 102 of the Charter of the United
Nations it is stated that it is the duty of: the united Nations that
every Treaty should be registered in accordance,.. and so on.
Therefore I do not see why we should authorise the United Nations
to do something which is provided for already.
Mr. RENOUFF (Legal Adviser): Mr. Chairman, under Article
102 it is stated that every International Agreement must beregis-
tered with the Seoretariat, but it is not registered by the United
Nations. It is registered by a party to the Agreement, and
out of the regulations approved by the General Assembly last year,
the United Nations for the first time was given power to register
on behalf of the parties to an Agreement . The purpose of this is
to obviate a necessity for any Member of the party to this Agree-
ment to avoid having to come to the United Nations and register.
It is merely a matter of convenience.
CHAIRMAN: Paragraph 3. Approved.
Article 96. I would like to draw the attention of the
Commission to the footnote which states: "This Article consists
simply of the former paragraphs 4,5 and 6 of article 95. Any
amendment to the text of those paragraphs is indicated by double
underlining.
Are there any comments on paragraph 1?
Dr, H.C. COOMBS (.Australia): I would raise a question of
whether the phrase "territories for which it has international respons
ibility" is sufficiently precise. It should perhaps be something
like "territories within its jurisdiction." But I have no suggestion
to offer.
71
ES . 72
Dr. A.B. SPEEKENBRINK (Netherlands): I prefer the present text,
Mr Chairman.
CHAIRMAN: Is the text of paragraph 1 approved? Agreed.
Paragraph 2.
M. ROYER (France) (Interpretation): Chairman, I wonder
Article 95 in
whether there is a mistake in the second reference to/paragraph 2
of Article 93, "Any separate customs territory referred to in the
proviso." There is a proviso but it does not concern a separate
customs territory. It must be paragraph 1 of Article 96.
CHAIRMAN: I think you are right.
M. ROYER (France) (Interpretation). I think the French text
must be in conformity with this remark.
CHAIRMAN : Is paragraph 2 approved with the changes that have
been made? Agreed.
Paragraph 3.
M. ROYER (France) (Interpretation): I will make a last
attempt, probably in vain, in order to try and suppress the word
"reasonable" in paragraph 3.
H:E.Z. AUGENTHALER (Czechoslovakia): I support the French
proposal , Mr. Chairman.
CHAIRMAN: The Legal Drafting discussed this question at length,
and they think they could not take out the word "reasonable" in
French, and therefore they could not take it out in English. Is it
the proposal of the French delegate to take out the word in English?
E/PC/T/B/PV/33 ER 73 E/PC/T/B/PV/33
M.ROYER (France) (Interpretation): The French term
would be "toutes measures utiles".
CHAIRMAN: Are there any objections to the deletion of
the word "reasonable "?
BARON P. de GAIFFIER (Belgium) (Interpretation): "Toutes
les mesures utiles" seems to be saying rather much. I am afraid
if we delete the word "reasonable" measures. might mean police
measures, and even military measures.
M. ROYER (France) (Interpretation): Mr. Chairman, I said
at the beginning of my speech that my attempt would probably be
in vain, and I think I was not mistaken.
CHAIRMAN: I thank the French delegate.
Is the paragraph approved? Agreed.
Article 97. Are there any comments? Approved. J.
CHAIRMAN: As we have come to the end of our work, it will
not be necessary to meet after dinner.
H.E. DR. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman,
since we have been so worried about the word "reasonable", should
there not be added a new Article, the list Article in the Charter,
saying that all the International Trade Organization should be
reasonable
DR. W.C. NAUDE (South Africa): Mr. Chairman, I do not
apoligise for holding up the discussion for a few minutes.
There is a very serious deletion from the Report of the
Sub-Committee on Chapters I, II and VIII. We agreed one morning,
at a quarter past one, to put in our Report a record of our
appreciation of the work of the Secretary, Mr. Renouff. He, on
his own authority, struck it out of our Report, so I am taking the
opportunity of paying a tribute to him now, as I feel that the
industry and insight shown by him should be recorded in the
records of the International Trade Organization.
Baron P. de GAIFFIER (Belgium) (Interpretation) Mr. Chairman,
I want to join Dr. Naude in his reference to our Secretary and I
would like, having been myself a Member of the Sub-
Committee, to thank him for the way in which he directed our
discussion.
CHAIRMAN: Commission B, having come to the end of its work,
the meeting is closed.
The meeting rose at 7.25 p.m.
E/PC/T/B/PV/53
74 |
GATT Library | sf016wh6770 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twelfth Meeting of Commission A. Held on Thursday, 12 June 1947 AT 2.50 P.M. in the Palais Des Nations. Geneva | United Nations Economic and Social Council, [ca. 1947 - 1994] | United Nations. Economic and Social Council | NaT | official documents | E/PC/T/A/PV/12 and E/PC/T/A/PV.11-13 | https://exhibits.stanford.edu/gatt/catalog/sf016wh6770 | sf016wh6770_90240093.xml | GATT_155 | 12,686 | 77,286 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL RESTRICTED
ECONOMIQUE E/PC/T/A/PV/12
ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
TWELFTH MEETING OF COMMISSION A.
HELD ON THURSDAY, 12 JUNE 1947 AT 2.50 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 2. E/PC/T/A/PV/12
C'HAIRMAN (Interpretation): You remember that yesterday at
Commission A we finished with Article 34 and referred it to the Sub-
Committee with a view to taking into account all the opinions
expressed, in order to submit to us a final draft. I suggest that
the Sub-Committee dealing with Article 34 be the same as the one
dealing with 14, 15 and 24 under the Chairmanship of Dr. Coombs.
I will propose to set up another Sub-Committee to deal with Articles
35, 36 and 38, but as Article 34 is closely connected with the
question in Articles 24, 15 and 24, I think it is better that the
same Committee takes care of the whole matter. Does everyone agree?
We are now discussing Article 35 on Consultation -Nullification
or Impairment. There are several amendments, some of which
completely alter the draft of this text and propose to change the
place of the text in the Charter. The first amendment in that
correction is the Cuban amendment which proposes that this Article
paragraph 1 of
should be deleted, and that a new Article 85A, the text of/which
appears in W/175, page 4, should be added. As for paragraph 2, the
wording will remain the same as the present Article 35, paragraph 2,
with a difference in the first sentence. Then there will be some
alterations and tho addition of a new Article 86A. To this amendment
from the Cuban delegation can be added the amendment of the United
Kingdom delegation, which proposes that paragraph 2 be transferred to
Article 86 and that Article 35 (2) and 86 be combined in a new re-
draft. This can be compared with the French amendment, page 5,
document .W/175, which proposes that paragraph 2 of Article 35 be
deleted and replaced by a new particle in Chapter VIII. We have not
yet received the new draft proposed by the French delegation. The
aim of all these amendments seems to be to avoid the establishment of
a special regime for the complaints arising from Chapter V of the
Charter - a regime which will be very general and applicable to all
the Articles of the Charter. This is a very important Article, and I
will invite the authors of the amendments to defend them. First of
all the delegate for Cuba. S 3 E/PC/T/A/PV/12
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, the Cuban
DeIegation think that the case has been presented so clearly
by the Chair that we only need add a few words by way of
explanation of the purpose of our amendment.
We consider that, inasmuch as there is a proper place
for this document in Chapter VIII, and it is dealt with by
the different functions and procedures to be carried out,
all the matters arising out of the question of interpretation
or by any action of the parties in the application of the
principles or Articles of this document should be brought to
the consideration of the Organization in the same way: that
is to say, to establish a general procedure and not special
procedures for every one of the chapters.
This multiplication of procedures would, in our opinion,
lead to great confusion, whilst the other form, as is known
in all countries - the procedure of the amicable solution of
business differences or disputes - is only one procedure, with
several different clauses. If that procedure could be followed
in the- Charter it would give much clearness to the whole.
situation contemplated.
So far as we can see, those different amendments - the
United Kingdom, the French and the Cuban - more or less have
the same idea. The only difference, it seems, is that in the
Cuban proposal we prefer to take out not only Paragraph 2
but also Paragraph 1, because Paragraph 1 relates. especially
to the cases covered in Chapter I, and if we leave this paragraph
in Chapter V we are doing exactly the thing we want to avoid,
that is to say, a spacial reference in every chapter instead of
having one single reference to the way of acting in the cases
foreseen. S 4 E/PC/T/A/PV/12
These proposals are designed to regroup the remedies
created by tho Charter for settling, either amicably or,
by a legal procedure, questions or disputes arising out of
the wording or the application of the Charter, or which may
develop by actions directed against the purposes of the
Charter or situations having the effect of nullifying or
impairing its objects.
Our amendment is intended, furtherrmore, to avoid a
multiplication of the procedures provided for,
CHAIRMAN (Interpretation): The Delegate of the United
Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Well, Mr. Chairman,
I do not think I really have very much to say. I think that,
as I have already remarked, the object of the propositions of
the Cuban Delegation, the French Delegation and ourselves is
really the same; that is, to bring together in one place and
co-ordinate the procedure for the settlement of disputes
throughout the Charter. Our own proposal has been circulated
as Document W. 161.
I take it that it will not be in order to go very deeply
into the merits of that particular proposition, which presumably
will come up for discussion when Chapter VIII is reached.
As regards the suggestion that the existing Paragraph 1
of Article 35 be also transferred to Chapter VIII, I rather
doubt if that is necessary. In the first place, the various
other chapters of the Charter - that is to say, Chapters
III, IV, VI - VII - do lay down their own procedures for
consultation, and, apart from that, we have in our proposed
analgamated text of Article 35(2) and Article 86 proposed - 5 -
S E/PC/T/A/PV/12
a Paragraph 2 which itself provides for consultation in any
circumstances. Perhaps it'would be in order for me to
read that one paragraph. It is as follows:-
"If any Member considers that another Member has adopted
any treasure, whether or not it constitutes a breach of an
obligation under this Charter, or that any situation has
arisen, which has the effect of nullifying or impairing
any object of this Charter, it may invite the Members concerned
to consult thereon and they shall endeavour to reach a
satisfactory settlement."
That would be the first step in the whole procedure
and I think that would cover the case of consultation and
there would be no harm, to say the least, in leaving the
present Paragraph 1of Article 35 where it is, in the General
Commercial Policy Chapter. E/PC/T/A/PV/12
CHAIRMAN: The delegate of France
M. ROYER (France) (Interpretation): As the delegate for
Cuba has explained, the three amendments, that of the delegation of
Cuba, that of the United Kingdom and that of France, have all the
same aim more or less, that is to say, to transfer paragraph 2 of
Article 35 to a Chapter of the Charter other than Chapter V; because
we want the system to apply not only to Chapter V but to the Charter
as a, whole. And we have proposed to maintain paragraph 1 of
Article 35 in Chapter V, as the United Kingdom delegate has explained,
because we find it is useful to deal with the question of consulta-
tion on a purely administrative basis as provided for in this para-
graph, and we think there is a very great difference of nature between
the consultation provided, for in paragraph 1 and that provided for in
paragraph 2 of Article 35. . That in paragraph 1 is purely adminis-
trative consultation to settle details; whereas paragraph 2 estab-
lishes a system which is much more ambitious and vast and which is the
way In which various Members would fulfil the obligations. There-
fore we think there are two completely different ideas there and they
should be in two different Chapters.
(Continued after Interpretation)
(Interpretation): I wish to add, Mr. Chairman, a few minutes
ago you mentioned that you did not have any new text from the French
delegation in substitution for paragraph 2. I wish to say that in
the meantime we have seen the Australian proposal and, apart from
few minor changes which we might ask for in the drafting of the
proposal, we should be prepared to accept it as it stands.
CHAIRMAN (Interpretation): Since the delegate for France has
mentioned the Australian proposal I think I should give the floor to
the Australian delegation to defend their amendment, which does not
P.
- 6 - ~ .1 Y
tend to change the pleoe of Article 35 but merely to make precise
the procedure in orner t" avond arn' ambiguity or misurderstandirg.
Dr. 11.0-COOM1S (astrslias: Mr. Chairman, as you hive
stated, the Australian amendment is essentially a drafting amend-
ment and is intended to clarify the ArTicle so that it makes cloar
the intontion os we understood it 0f the Ltndon C-mmittee. We
fQfl,.afo instance, that the prnsent phresef"nullifying or impairiig
nerobject of this Chirter" is not--vaey satisfying Englfsh and its
meaning is fairly obscure. I ' not quite sure how you nullify
or impair an object, or.preciselyr how you identify what are the
objects of the Cr?rter. It-h.sspurposes and it has provisions,
but "%bJect 1 is a somewhat vague word in this"context and we feel
.that the Article ccn be improved by referring specifioally to the
benefits which accrue directly or indirectly to the Members as a
reeult of obligations undertakeorby M:mbers either in the Charter w
as a result of it.
I should l"beneo em"hasise that by the word ?fbnefitst we con-
ceive not merelynbenefits eocorded for instance, urder the provisions
if articleco 24, but the benefitshj which other untries derive from e
acceptance of thehartder obligation imposed by the C'Icer: that is
the benefit which we, amongsthether people, would derive from tSB
acceptance of the employment obligation by major industrial countries,
and the benefit which industrial countries would derive from the
improvements in tho standard of living resulting from the operations
of Chaptcr 'IV t' countriesSoith under-developed economies. 3S I
would like to make it quite dlear that we have used benefit in this
context in a very wide sense,
We have also sought to make quite clear the circumstances in
which a reviWe of obligations can be sought. ; have done this by
setting out precisely in the first paragraph under a sub-heading,
In '
V POMfr I rA / E/PC/T/A/PV/12
in sub-paragraphs (i) (ii) and (iii) the precise circumstances:
(i) the application by another Member of any measure,
whether or not it conflicts with the provisions of
this Charter; or
(ii) -the failure of another Member to carry out its obliga-
tions under this Charter; or
(iii) the existence of any other situation
provided that these three groups of circumstances have the effect
of depriving a country of any benefit accorded to it directly or
indirectly under the Charter, or that the promotion by it of any
purpose of the Charter is being impaired. In the latter connec-
tion we have particularly in mind the circumstances whereby action
of those kinds may make it difficult or impossible for a country to
carry out its own obligations under the Charter and thereby prevent
or impair the promotion by it of the purposes of the Charter which
deals with the reduction or elimination of trade barriers of one
sort or another.
P.
- 8 - J.
We then go on to make more precise the machinery routine to be
followed by the country seeking, to have its obligations reviewed
and the procedure which the Organization itself shall follow. Our
purpose here is merely to clarify the obligations of the parties
concerned and to ensure, so far as is practicable in an article of
this kind, that undue delay will not be involved in the handling of
the obligation,
I think that it is not necessary for me, Mr. Chairman, to say
any more on the precise intention and purpose of our draft. I
would like to refer very briefly to the suggestion that this part
of the article might be transferred to another part of the Charter.
On the face of it, that does appear to be an attractive suggestion.
We. agree that there is a profound difference in principle between
the contents of paragraph 1. of article 35. and paragraph 2, but I
must confess, while I do not wish to raise any objections to the
transfer at this stage, that I have just a shade of doubt as to
whether, by putting this into Chapter VIII, we may not be spreading
the effects of it fairly wide.
Speaking for ourselves, we quite clearly have in mind primarily
the implications under Chapter V when we prepared this draft, that
is, we were contemplating circumstances in which countries may
wish to seek to have their obligations under Chapter V reviewed,
and before 1 commit myself finally on the question of whether it
is appropriate to transfer this to Chapter VIII, I would like to
look at it in the light of the obligations imposed in other Chapters.
Whether it is necessary to provide the same sort of escapes for
those, whether countries would, in fact, wish to seek them, are
questions which we have not had time to study adequately, but I
would be quite happy, Mr. Chairman, for the sub-committee to be
asked, when it is considering our amendment, to consider it in the J. E/PC/T/A/PV/12
light also of the possibility of it being transferred to Chapter VIII,
provided that that does not commit me to supporting such a transfer
at this stage.
CHAIRMAN (Interpretation): From this preliminary debate, I
think two conclusions emerge. First of all, that paragraphs 1and
2 apply respectively to entirely different questions and situations.
If we look at the report of the First Session, we see very clearly
that paragraph 2 applies to the Charter as a whole. We See
mentioned in particular in Chapter III, and this makes it clear,
that the Preparatory Commission has prepared a report showing the
procedure recommended for negotiations dealing with tariffs and
preferences and that members should proceed according to article 24
of the Charter. "Under the revision, any action by a Member or
the development of any situation, which impaired or nullified any
object of the Charter (including any object set forth in
Chapter III (Employment)) can be an occasion for the lodging of a
complaint with the Organization". This makes it clear that
paragraph 2 applies to the Charter as a whole. Therefore, there
is some foundation in the idea that the place of. paragraph 2 should
be changed to a more general Chapter of the Charter, but I would
like to have the opinion of other members on that question.
J.
- 10 - - 11 -
CHAIRMAN: The Delegate of the United States.
Mr. EVANS (United States): Mr. Chairman, in the first place
I agree completely with your analysis, and a similar analysis has
led the United States Delegation to the following conclusions.
First, that we would prefer not to see paragraph 1 moved. We
would prefer to see it in its present form and place.
Secondly, that the proposal to move paragraph 2 to Chapter VIII
or some other place in the Charter probably has a good deal to
recommend it, though we would like Mr. Coombs, want to reserve
judgement on that until we had. seen the exact form that the
paragraph might fit.
It had occurred to us that these various proposals,
particularly the very valuable proposal of the Lustralian.
Delegation, should be referred to the Sub-Committee as a basis for
consideration and a re-draft of the paragraph without final
prejudice to the question of whether or not it stays in this
Chapter or is placed somewhere at the end.
In its present wording it refers to situations which
conflict with the purposes of the Charter, and probably any new
wording would be equally applicable, whether here or later in the
Charter, so we believe the Sub-Committee should consider this
paragraph on its merits, and when it is drafted - an adequate
paragraph - refer it for consideration in the re-drafting of
Chapter VIII.
CHAIRMAN: The Delegate of Cuba.
Mr. GUTIERREZ (Cuba): Mr. Chairman, in the light of the
discussion which has just been heard., it is apparent that almost
all the other Delegations are in accordance with the distinction
between paragraph 1 and 2.
We consider that the consultation provided for in Chapter I
is
E/PC/T/A/PV/12
G. G. 12 - E/PC/T/A/PV/12.
is a consultation of an administrative character, and that the
other consultation is a procedural one, or certainly different.
Of course we do not agree with that sense, but we must
always consider that when there is such accordance with all the
other Members, they must be right and we must be wrong.
We were taking this Amendment only, add possibly from a juridical,
or an international constitutional point of view.
We are seeking the different kinds of consultation for every
kind of difference, and it is not good procedure to establish
one procedure for every case; on the contrary, there should, be
one general procedure, and included in that procedure, all the
oases for consultations, either administrative or other kinds.
Of course we are aware that an administrative consultation would
be the first step, and then if that failed. would come the other
procedure.
Nevertheless we do not want to detain the work of the
Commission, and if there is such a bie difference of opinion, we
do not insist, for our part, on the elimination of paragraph 1 of
Chapter V; but we should insist that paragraph 2 be placed in its
proper form in the Draft Charter that relates to it, because even
this same wording of paragraph 2 refers to the cases which can
arise and have the effect of nullifying or impairing any object
of this Charter, or else that would be in conflict with the
terms of this Charter; so it means the Charter as a whole.
That is why I think it is a wise thing to take the matter to the
Sub-Committee and make a more deep study of the matter there.
CHAIRMAN: Mr. Speekenbrink, the Delegate of the Netherlands.
Mr. SPEEKENBRINK (Netherlands): Mr, Chairman, we have
already referred to the London discussions, and I add something. - 13 -
E/PC/T/A/PV/12
When we discussed paragraph 2 Article 35 there in the Sub-Committee
it was noted during the discussions that we extended the scope of
this Article, and it was only for convenience sake that we did not
discuss whether it would be advisable to change the place of
that Article, and put it may be later on in the Charter.
So that as the scope of the Article tends to cover everything
under the Charter we are in favour of the proposal that it should
be transferred to Article 85 or 86, as has been proposed by
several Delegations.
With regard to the first part of this Article, there in the
wording of it we made no such important changes, and we had in
mind there the stipulations of the present Chapter. I stated
yesterday that as a rule I am in favour of fewer and more
comprehensive clauses, so that I am inclined to support my Cuban
colleague, there, that it should be better to have one Article at
the end of the Charter covering the whole procedure, and not a
Chapter on special procedures provided for.
It may be a matter for further study, so I will not insist
here that it should be done, but simply would like to support the
Cuban Delegate. E/PC/T/A/PV/12
CHAIRMAN: The Delegate of Norway.
H.E.M. ERIK COLBAN (Norway): Mr. Chairman, I am not quite
sure of my opinion as to where paragraph 1 and paragraph 2 of
Article 35 should be placed. I feel that there is very much
to be said in favour of transferring paragraph 2, at any rate,
to the last Chapter of the Charter; but I must reserve my final
opinion until. we have discussed it in a sub-Committee. Before
sending it on to the sub-Committee, though, I would like to ask
that the attention of the sub-Committee should be drawn to the
insufficiently speedy procedure provided for in paragraph 2.
It states: "and if necessary after consultation with the
Economic and Social Council of the United Nations and any
appropriate intergovernmental organisations". I feel very
strongly that that is a means of sidetracking the whole issue.
What can the Economic and Social Council advise the I.T.O.,
with the Technical Experts Commission with an Executive Board?
I think that we cannot get any advice from the Economic and
Social Council, and as far as both the Economic and Social Council
and other international intergovernmental organizations are
concerned, I think that Article 81, paragraph 2, entirely covers
the point, providing for close, -zsed contact between I.T.O.
and all these organisations. It is superfluous to emphasise
once more in paragraph 2 of Article 35 that I.T.O. will make
a thorough investigation in certain important cases.
I do not make any formal proposal, but I would like the
ad hoc sub-committee to be kind enough two study this problem:
In the Cuban proposal it is suggested that the word "Chapter"
in the third sentence of this paragraph 2 should be replaced
by the word "Charter". In the Australian proposal the word
"Chapter" is maintained, and without wanting to take any final
stand on the matter, I feel that the Australian proposal is the
preferable one.
V
- 14 - V.
- 15 -
CHAIRMAN: The Delegate of Australia;
Dr. H.C. COOMBS (Australia): Mr. Chairman, I thought it
necessary to comment on the point raised by M. Colban, part-
icularly so as to make it clear why we maintain this reference
to consultation) where necessary, with the Economic and Social
Council, and so on.
We do attach a good deal of importance to the inclusion
of those words for two reasons. First of all, it is clear
from the context of this Article that the circumstances in which
a Member may seek to take action under this Article are fairly
wide and rather varied in character. Indeed, some of them may
well fall outside the field In which the I.T.O. itself has a
prime. responsibility or a claim to greater "experties" (if we
can use that word) than othez Organizations in the international
field.
For instance, speaking for ourselves, we have been concerned
particularly, when considering this Article, with the possibilities
of a general deflationary situation which would make it difficult
for us to maintain our obligations; and in such a situation it
does seem to us important that the I.T.O., before taking action
of the kind contemplated here, should discuss with the agencies
appropriate to a consideration of such a situation, what the
facts actually are, the causes underlying the situation and the
possible lines of remedial action. It is, furthermore, in
relation to the last point that we think it is exceedingly
important to maintain these words.
As I have mentioned before, we do not put the emphasis
We do on this Article because we wish Members to be placed in a
position to take retaliatory action against other Members. What
we are anxious to do is to see the causes of the situation removed,
and we only provide for the modification of obligations accepted E/PC/T/A/PV/12
by Members where other means of correcting the situation are
not found to be practicable, and it is just because the action
called for to correct a situation of that kind may well involve
the activities of a number of inter-governmental organizations
that we think it important that consultations should take place.
We would consider it a very great pity if countries were
released from their obligations under the Charter, either generally
or in relation to particular members, if it were possible by
combined action through the cooperation of the Economic and Social
Council and the other intergovernmental agencies to correct the
basic situation with which the claim was designed to deal.
So both because the- I.T.O. will, we feel, need to go these other
bodies in order to put itself in a position to make an honest
judgment, and because remedial action may well best be taken outside
the field of activity of the I.T.O., we consider it of great
importance that the provision should remain for consultation with
the Economic and Social Council and other appropriate intergovernmental
organisation. We would point out to Mr. Colban that the inclusion
of the words "if necessary" makesit appear that) if the matter is
exclusively one within the competence of the I.T.O. itself, then
the I.T.O. in out called upon to consult with anybody.
V.
- 16 - - 17 -
E/PC/T/A/PV/12~~~~~
Mr. J.J. DEUTSCH (Canada): Mr. maairrin, I simply want to
state very briefly oar views on various proposals that have been
made. Witpecesae p to';aragraph 1, we agree with those delegations
who feel that-phisgiaraEraph deals with an entirely different
matter and that it could remain in ins prepent Wosition. We agree
with that poinv of `iWw. .itp ces)eot to paragraph 2, we agree with
the suggeswion Which has been made th thwe-suould take the Australian
text as a basis for the discussion of that paragraph. We feel that
that represents a clearer statement of what is intended, and the
Sum-Comnittee might well consider that as a basis for their
discussion.
With respect to the suggestions which have been made with
referencc to ooasultztion with the Economic and Social Council and
other intergovernmental agencies, we feel that that reference should
remain in this paragraph for the reasons stated by Dr. Coombs. We
hat
ervisage like him/the difficulties that arise under Chapter III in
this Charter will be dealt with by the procedure under this article,
and Chapter III covers matters which involve very deeply the
activities of other intergovernmental organizations. For that
reason we attach considerable importance to retaining the reference
to consultation with those other agencies.
Finally, with respect to tuhe qentior of placing paragraph 2,
we are favourable to the idea that this should be consolidated with
86 and moved to Chapter VIII at thekbaci of the Charter.
A. B. i..EKeSPEENKBRNK (Ietherlands): Mr. Chairman, I would
like to be allowed to speak very shortly with regard to the remarks
of my Norwegcan 0olleague referring to the Economic and Social Council.
'e Just wanted to extend the scope of this parag,aph; and we felt
clearly that otherwise thmre tight be the danger that the wTO vould
becnme r kind ofaoctopus likely to absorb the work of other
organizations, and just te pr;vant %ny musunderstanding there we
add the words "if necessary"aso ns ao mfke it cleaatthet if no
suangeean r shouldeappcar, the ITO woacd --t of iws ovn adcora. S E/PC/T/A/P/V/12
M.ROYER (France) (Intrerpretation): Mr. Chairman,
. .a .h man
simce you haae opened the debate on the amendients to P.ragraph
2 of Lrticle 35, and you have expressed your intention of
reeerrinw these amendm'Gts to the S&b-cornittuo, I iould like
toumentimi tee points: first of all, the S&b-comnJttco on
.reicub commhoued study the R m)otby thi S a-ooLmittve
ommihupter III. In this R: .it tho SOO-coz.rttee on
ee napAr r-Ierceco - bothat the S b-co'-ai tt on 'rticla 35
should look at the R}port and see to it that the final text
reproduces the well and th& intentions oi the authors of tho
Le:a&sn texh ane covers adequ-tely the provisions of C-aptar
III.
ebno cond observation, as Hr C . ,ihtod cut, is
that the erocedure may involve delays which might bo too long,
and, in the ,ustralian proposal, among the consultants we see
not only the sc ~oc and S-eial Council and other inter-
govrMemGntal organizations but also the State i;:bers. This
s ork textg new, which was not in the N- YK:; t, and,
if we have cganultation with all the iLrbers of the Or,;.ization
before-we can act, I .i. we run the risk of prolonging too
much the procrduru of consultation,
B-fore we go any further, I ihink we should ask the
Lustralian D..i.etion whether they insist on the inclusion
of Sc te Me~bers in P:: rah ) tA- irroposal.
With regard to t he last sentence, and the quest ion of
whether it should aply to Chapter V er to the whole system
te invesbelieveion included in tha Chaxrtr, I ievo it would
b;better prAustraliany to ';ep the text of the i^traxian
proposal or girit it hapthac obligations arisinE under C.-.aer V. S - 19 - E/PC/T/A/PV/12
CHAIRMAN The Delegate for Belgium.
M. Pierre FORTHOMME (Belgium) (Interpretation): What
I wanted to say was covered by the first part of the French
Delegate's statement,
CHAIRMAN: Mr. Shackle.
Mr. R.J.SHACKLE (United Kingdom): I would like to add
a few words, Mr. Chairman. First of all, I would say we are
disposed to agree in general with the Australian Delegate's
suggestions and think that they are improvements. Clearly
that is without. prejudice to the possible transfer of the
second part of article 35 to Chapter VIII.
I also agree that the revised text proposed by the
Australian Delegation would make a very simple basis for the
Sub-committee to work upon.
I would like to make one verbal suggestion in regard to
the underlined words which appear in Line 8 of Document W. 170.
It seems to me that we should do better to make it read: "any
benefit accruing to it directly or indirectly by this Charter.'
I think that "benefit accruing" is better than "benefit
accorded."
As regards changing the word "Chapter" so "Charter", it
does seem to me that really depends on where we put the
passage. If it goes into Chapter VIII, then clearly I think
it will be desirable to change "Chapter" to "Charter".
If, on the other hand, it stays where it is, then it would be
appropriate to keep the word "Chapter".
There is just one general consideration I would like to
put forward on the question of possible transfer. As I see it,
this Article, as it was widened in the discussions in London, E/PC/T/4/PV/12
was really meant to act as a sort of general balancer. It was
meant, I am sure, that a balance could be preserved between
Members' rights and obligations under all the various provisions
of the Charter. If a Member were to find that he was not
getting his rights under one part, it might be restored by
some modification of his obligations under that or another
part. It does seem to me that, if we aim at producing such
a balancing factor for the whole of the Charter, it is probably
appropriate it should be possible to grant disponsations under
any part of the Charter. It is rather a priori sort of argument,
but I would recommend that to the attention of the Sub-committee.
Dr, H.C.COOMBS (Australia): Mr. Chairman, I would like
first to say, in reply to the point raised by the French Delegate,
that we would not regard the retention of the words "consultation
with Members" as vital. We were anxious, for the same reasons
as I explained in relation to consultation with other organi-
zations that whatever recommendations the Organization did
make; or whatever dispensations it granted, should be made first
of all with an eye to the changing, circurmstances which create
the problem, and that it night be possible to do something along
those lines by consultation with Members which would, perhaps,
avoid the type of action referred to later in the Particle,
However, we recognize that it would be open to the Organi-
zation to consult with Members and it would be unnecessary to
refer to it here, so we would not regard its retention as
important in the same way as reference to the Economic and
Social Council and other organizations.
I would say also that I agree completely with the verbal
change suggested by the Delegate of the United Kingdom; that to
substitute the word "accruing" for "accorded" would be an
improvement.
S P.
- 21 -
E/PC/T/A/PV/12
CHAIRMAN (Interpretation): I think we are now ready to
refer this question to a sub-committee.
Dr. J.E. HOLLOWAY (South Africa): Mr. Chairman, I would like
to direct attention to a matter of interpretation which involves an
important question of principle in the Australian amendment. I
agree with Mr. Shackle that the Australian amendment is a better
basis for consideration of this matter by the sub-committee than
paragraph 2 of Article 5 in the New York draft. It introduces
at least one new and important point of substance which the New York
draft does not contain. It makes it perfectly clear that a com-
plaining member must be able to show prejudice before he brings any
complaint forward, whereas the New York article was somewhat like an
Irish fight, the sort of thing in which anybody couId join in on any
of the very vague phrases which occurred in that draft..
of principle
I am not sure, however, - and this is the point/on which I
would like elucidation - I am not sure that the Austrslian amendment
does not go a good deal further than probably the Australian delega-
tion would want it to go. To clarify the issue I should like to
put a series of precise questions, and with Dr. Coombs' spermission
I will use Australia as an example:
If you read the words in paragraph 2 (a), the first batch of
underlined words "... the promotion by it" - that is by a Member -
"of any of the purposes of this Chater is being impeded, as a result
of-( ') the application by another Member of any measure, whether or
not it conflicts with the provisions of this Charter;" does not mean
that a Member who has a market in Australia can complain to Australia
that it maintains too high a level of tariffs and that therefore it
prevents the other Member from increasing the employment which it is
committed to under the Charter. - 22 - E/PC/T/A/PV/12
Secondly, I would question whether this does not involve the
implication that if the Organization considers the circumstances
serious enough, it may relieve that Complaining Member of its obliga-
tions to Australia, and if that is the case, whether it may not happen
that Australia's competitors in the market of the Compleining Member
would get Most Favoured Nation rates, but Australia's exports to that
Complaining Member might have to pay some rate higher than the Most
Favoured Nation rate, which is left entirely indefinite and in the
hands of the Complaining Member.
I think if those questions are dealt with it will show whether
Australia intends to go as far as this Article seems to me to go and
whether other Mombers are prepared to follow it on that long course.
CHAIRMAN (Interpretation): I suppose Mr. Coombs, having been
asked a question, would like to answer himself.
Dr. H.C. COOMBS (Australia):: Well, Mr. Chairman, I am not quite
sure if this is not a situation in which I might not claim the privilege
of a Minister in Parliament and ask f or notice, since it is obvious
that the question is designed to be difficult: But I would like to
answer it very seriously, because I think it does raise quite a difficult
problem.
If we look at the wording of the Article I do not think that in such
a situation as Dr. Holloway describes it could reasonably be said that
the existence of a high tariff in Australia took away from the complain-
ing country any benefit accruing to it directly or indirectly under
the Charter. It might be possible, perhaps, to argue that it did
impede the promotion by that country of some one or more of the purposes
of the Charter, since the purposes are fairly general in character.
The difficulty with a clause of this sort, however, is that it is P. - 23 - E/PC/T/A/PV/12
designed to deal with situations about which it is fairly difficult
to be precise. For instance, the first sub-paragraph
"(i) the application by another Member of a ny measure,
whether or not it conflicts with the provisions of this
Charter"
is, I think, taken over automatically from a standard clause in
the old type of Trade Agreement and was designed, I presume, to
deal primarily with possible attempts to evade obligations accepted
in an exchange of tariff concessions. - 24 -
It may be argued, perhaps: that we have given so much thought
to this and we have covered so many potential situations in the
Charter, that, so far from trying to provide for covering situations
not dealt with therein, we might give a prize to anybody with
sufficient ingenuity to find something that is not covered. But
I think what it comes down to is that we will be prepared to rely
upon the Organization,which is, after all, the representative of
the countries forming the organization, interpreting a clause like
this reasonably, to ensure that complaints are made on matters
which are relevant to the general subject matter for which the
Organization is responsible, and to deal with the purposes the
Organization, and that, if a complaint were made, which, while
verbally it might be brought in under the particular provisions,
the Organization would dismiss it because it judged that the
relationship of the complaint to the subject matter with which the
Organization has properly to dual, was so remote that it could not,
in any case, consider the circumstances sufficiently serious to
justify any action as is provided for in clause (c).
Since, over the last couple of weeks, we had a discussion on
a related matter, in which Dr. Holloway took a very active part,
I have given some thought to the possibility of variations in this
clause which might tend to avoid what I feel he has in mind, that is,
an attempt to use the provisions of this clause to interfere in the
domestic policies of another country when they are not, to any
significant degree, affecting the commercial welfare of the
complaining country, or where they are fundamentally relevant to
the purposes of the Charter.
I find it difficult off-hand. to see precisely what change could
be made with that purpose without detracting from the very real
value of the article as we see it. However, I see some advantage,
E/PC/T/A/PV/12
J. 25 -
J. E/PC/T/A/PV/12
Mr. Chairman, in the sub-committee giving some thought to this
question. I do not think any member desires that, as a result of
this clause, either his or any other country's domestic policies,
insofar as they era not international in their impact and connected
with international trade and commerce in their impact, should become
a subject of question and investigation by the International Trade
Organization, and Possibly released from other obligations.
On the other hand, it would be a very great pity if, because
we could not trust an international organization formed out of our
own membership to interpret this clause intelligently and with
sufficient discretion, We were to deprive ourselves of the
opportunity of having our own obligations reviewed in circumstances
which made it impossible for us to carry them out. If we destroy
that opportunity, then I believe that we will face a very real
danger and the International Trade Orgnization will crumble at the
first serious international economic situation. - 26 -
CHAIRMAN: Mr. Forthomme.
Mr. FORTHOMME (Belgium) (Interpretation): In addition to
the statement made by Dr. Coombs, I would like to remind the
Committee of the fact that the onus of the proof is indirect
relation with the oddity and strangeness of the case envisaged;
and one should ask the Organisation in a case of that kind for
more proof and for the discovery of more facts. Especially
when the damage claimed, by the plaintiff is of a very intricate
nature, and when applying this clause to the cases mentioned., one
should indicate the degree of care and caution to be exercised by
the Organisation in each case; and in that respect I would recommend
the changing of the order of subparagraphe (i) and (ii) in the Australian
draft.
I think that the question of the failure of another Member
to carry out its obligations under this Charter should become (i)
and the present subparagraph (i) should become (ii), and that we should
ask for more facts and guarantees for the application by another
Member of any measure, and so on, and for a maximum of guarantee
in the case of the existence of any other situation.
There is a question of graduation between (i) (ii) and (iii).
CHAIRMAN; The Delegate of Chile.
Mr. GARCIA OLDINI (Chile) (Interpretation) I was surprised to
see that the question which has just been raised had not been
raised before; and in reality I do not think it is proper for
the Delegate of Australia to ask for an explanation by saying that
the clause mentioned. in the Australian text is to be found in all
the general texts of commercial agreements.
In reality we know this is a reproduction of the text
established in New York; but where dealing with a common clause
E/PC/T/A/PV/12 G. - 27 - E/PC/T/A/PV/12
in any bilateral treaty this is of less importance than when
dealing with a Charter which is of a very general and multilateral
application, and which confers very wide powers to an international
organisation - even the power, in that case, to take some action
against the Member or Members to which this clause might apply,
and I think that the meaning of this clause is that if a Member
applies any measure, whether or not in the Charter, there may be
sanctions against him and even eviction (to be polite) from the
Organisation.
I think that in order to avoid this possible inrfringement of
the Organisation in the domestic commercial policy of the Members,
it is not sufficient to ask us to trust the Organisation to
interpret this clause reasonably. I think the very fact that we
are asked to trust the Organisation proves that there exists some
danger, the importance of which may not have been sufficiently
stressed, and I think that when we ask the Sub-Committee to study
this clause we should draw its attention to this question and ask
the Sub-Committee to try and consider a draft motivating that part
of the Article very seriously, and not leaving it in a sentence
referring also to "other situations", because these may include
regulations which are not applicable to that case, and which would
not cover the case.
CHAIRMAN: The Delegate of South Africa.
Mr. HOLLOWAY (South Africa): In spite of what Dr. Coombs
said., I did not ask this question to be difficult, but rather to
focus attention on the choice which is before us in a very difficult
question.
Now Dr. Coombs' answer naturally was given on the spur of the
moment, and he probably did not notice that I was concentrating
attention on that choice; but he immediately said that he did not G. - 28 - E/PC/T/A/PV/12
.'
think that a Member could go to another Member or to the
gO-anisation in the case which I had put forward on the grounds
that any benefit acrdzled to it directly or indirectly has been
nullified or impair d. I ageec , I agree. But I put the question
of the alternative. My whole question is whether that alternative
is in. The alternative is all, and I quote these words: "The
promotion by it of any of the purposes of this Charter is being
imped"d .
Now one of the purposes that thiMelcmber has to promote, and
a purpose very important to every Member, is to increase its
employme.t, V.
-29-
Therefore, it seems to me perfectly clear that if the tariff
of another country puts difficulties into it, this paragraph
enables it to raise the issue. I do not think you can get
away from it. Dr. Coombs says it is very difficult to be
precise in these matters, Well, then, why be so very precise
in this particular way? I am fully in agreement that when
any benefit accorded to a Member directly or indirectly by
this Charter is being nullified or impaired, then these conse-
quences should follow. I am not at all sure that they should
follow in the second case, or, in other words, that we should
make provision for this alternative because of a Member raising
the question.
Now Dr. Coombs has a second defence. We must have a
certain amount of faith in our Organization and I am in full
agreement with him; but remember, please, that under this
Article you have got the dispute, with a month or several
months of discussion between the two Members, before the
Organization gets to hear of it. I am fully with Dr. Coombs
and with, I think, all the Members of this Conference that
where benefits accorded to the Member directly are being
impaired by the action of another Member, then we should provide
for this action. I think if we go beyond that, then a conse-
quence may follow which I will just drop very quietly into the
minds of Members here -- very quietly - 3. doubt here and there
it may fall on fertile soil and that is that you may be faced
with the question that the customs tariff policy which your
Parliament follows is called in question by another Member. I
shall leave it at that. The matter will no doubt receive more
attention.
I do want to pay Dr. Coombs the tribute: that he has
already improved the draft, and I have no doubt that he will
improve it a little more in the sub-Committee.
E/PC/T/A/PV/12 E/PC/T/A/PV/12
CHAIRMAN: The Delegate of Brazil.
Mr. E.Z. RODRIQUES (Brazil): Mr. Chairman, after
listening to several remarks made by the Delegates here, I
arrive at the conclusion that it would be better, perhaps,
in order to avoid hard feelings, to establish that all con-
sultations should be done through the Organization and not
direct from country to country. It is an idea, I suggest,
to be considered by the sub-Committee.
My reason for asking this, is that, as you know, all
matters connected with this Article 35 constitute great
difficulties in different countries and this would greatly
facilitate understanding; and, at the same time, by putting
consultation through the Organisation, all countries can profit
and advise.
CHAIRMAN: The Delegation of the United States.
Mr. John W. EVANS (United States):Mr. Chairman, if I may
revert to the question raised by Dr. Holloway, I want to support
the suggestion that the sub-Committee consider very carefully
the question of whether the purpose of this paragraph may not have
inadvertently bean expanded to much by the Australian text.
I should suggest that among other possible solutions which
the sub-Committee might consider in order to bring, the cosmic
scope of the present Australian wording into more worldly dimensions,
would be the substitution for the word "Purposes" with a capital 'P"
V. - 31 -
Dr. H.C. COOMBS (Australia): - Mr. Chairman, I think that a
number of the suggestions which have been made for the improvement
of the draft that has been submitted should receive the careful
consideration of the Sub-Committee, in Particular in relation to
the point made by Dr. Holloway that we are conscious of the
difficulties which he referred to, particularly in relation to the
use of the phrase "promotion by it of any of the purposes of this
Charter", and we would be glad to consider any variation of that
which would result in its meaning being more precisely limited.
Also, if I can follow Dr. Holloway's agricultural imagery and if
I can drop a seed into his mind, he might be able to help us to
think of a better word that "benefit". One of the reasons why we
felt it necessary to add the second part of that sentence was the
feeling that the word benefit" by association might tend to be
Interpreted in an unduly narrow way, relating particularly to the
exchange of taritf concessions or something of that sort. If it
is clear that "benefit" will be understood in the way in which I
described it when I was explaining this re-draft some minutes ago,
then I think it might be possible to change the latter part of the
sentence in a way which would make it much less objectionable in the
light of the consideration that Dr. Holloway submitted.
M. AUGENTHALER (CzechosIovakia) ( Interpretation) : I only have
a few remarks to present, esepcially with reference to the statement
by the delegate for Brazil. He explained that, in his opinion,itit
~~~~~~~~~~n his 0.,L .0 1
will be better that all questions should be referred to the
ganIzation and. Or deazt with through the C -ani-stion instead of
being dealt with through direct negotiations between members.
ersonally, I believe tha.a the first ciscussion should take Plare
directly between members, which is the normal diplomatic way of
E/PC/T/./2V/l2 E/PC/T/A./PV/12 -32-
dealing with this question, and that only after the discussion
between members has taker place in important cases, the Organization
should deal with this question. On the other hand, I think that the
Sub- Committee should try to find a way to seeing whether it would
not be possible to reach a situation where some of the members could
agree between themselves to eliminate some parts of the Charter.
CHAIRMAN(Interpretation): I think we can consider the
discussion of article 35 as closed, and refer the question to the
Sub-Committee. We shall give to that Sub-Committee, as a general
directive, the task of studying Article 35 on its merits,and later
on decide the place it should have in the Charter. We should also
tell the Sub-Committee to take the Australian proposal as a basis
for discussion, and in addition to take into account all the views
expressed in this debate. - 33--
M. ROYER (France) (Interpretation): Before closing the
discussion on article 35, Mr. Chairman, I would like to remind
you that two Delegations, at least, in New York, made reservations
on the last sentence of the first paragraph of this article.
They were the Czechoslovak Delegation and the French Delegation.
They had envisaged either to specify that part of the sentence,
which is too absolute, or to delete that last pert and to revert
to the London text.
CHAIRMAN (Interpretation): I quite agree.
H.E. Dr. Z. AUGENTHALER (Czechoslovakia): I do not want
to add to what my French colleague has said, but only to state
that all Members should be allowed the same privileges.
CHAIRMAN (Interpretation): We can now pass on to the
next Article.
With regard to article 36, I would remind the Commission
that the text was drafted neither at the First Session in
London nor by the Drafting Committee in New York. We had as a
basis then only the United States draft. Since that time the
United States Delegation have altered their original draft and
the revised text appears in Document W. 165.. There is also
a new text suggested by the Czechoslovak Delegation, which is
contained in Document W. 171. These two Delegations will have
the floor to explain their proposals.
The Delegate of the United States.
Mr. John W. EVANS (United States): Mr. Chairman, since
the original United States draft to article 36 has not been
debated, I suppose I might make quite a long speech about it,
but I will not attempt to do that.
E/PC/T/A/PV/12
S S - 34 - E/PC/T/A/PV/12
I should like to point out, though, before I run through
our revised draft of Article 36, the principal considerations
which prompted us in submitting this quite drastic change from.
our original proposal.
We had in mind - I think more clearly than at the time
the original draft was submitted - the same considerations which
have led the Czechoslovak Delegation to submit a wording of
their own for this Article. We had come to recognise that some
countries may be faced with very serious problems from a rigid
application of the principles laid down in this article if there
were no discretion in the Organization and no such escape for
the Member concerned.
In approaching the re-draft, we have tried very hard to
consider the position of such countries and we believe that we
have, in fact, accomplished an article here which, whilst it
does not lose the essential value in the original proposal,
does take care of these special and difficult problems.
With that introductory remark, I should like to refer
briefly to what we had in mind in each of the new proposed
amendments.
The first one is, I think quite simple and hardly requires
any explanation. It seems quite clear that no Member of the
Organization should be allowed, or should want to, enter into
any negotiations with a non-Member in order to obtain from that
non-Member special privileges at the expense of other Members
which it would not have been entitled to obtain from another
Member. That is the only purpose of Paragraph 1. The earlier
wording, I think, .h ,as been improved by the substitution of the
final phrase, which is underlined. ehr earlier wording was
subject to a possibly too broad interpretation. Itigh.ht have
been understood to require that aemr.ber suspend commercial treaties S -35- E/PC/T/A/PV/12
or other arrangements with non-Members which were not harmful in
any way to a third Member.
Paragraph 2 is, in essence, a means of assuring that if any
non-Membe r wishes to become directly entitled to the benefits
which are extended to Memvers, he should become a Member of the
Organization and be subject to its obligations.
Paragraph 3 also seems to us to be essential, by virtue of
the timing and the schedule under which this International Trade
Organization is coming into being. The nations here represented
are negotiating important concessions with each other. In doing
so, they will have covered a very large part of the total
commodities in world trade. A much larger number of countries
- though not larger in the sense of the total trade they do
are not participating in these initial negotiations and yet many,
if not most, of the Members represented here have Most-Favoured-
Nation treaties with many - and in some cases nearly all - of
the Members not represented here.
The result of that situation is that a good deal of the
inducement to Members not now present - the inducement to join
the Organization and to adopt its obligations as well as to
receive its benefits - may be lost if the Members outside of this
group who are non-Members of the Organization do invoke their
Most-Favoured-Nation privileges. This becomes parallel with
the provisions with regard to tariff negotiations respecting
Members who do not participate in the initial negotiations, and
the purpose of that is to prevent non-Members from receiving
greater benefits than Members are permitted to extend to non-
Members in precisely the same situation. - 36 -
J. E/PC/T/A/PV/ 12
Our new paragraph 4 provides - and here is where we feel that
we have carefully considered the special problems of any country
whose trade may be carried on largely with non-members - that a
Member who feels he cannot conform with the obligations to
paragaraph 2 and paragraph 3 may ask the Organization for an extension
of the time period which, in any event, is allowed to elapse before
this paragraph becomes effective. It also provides that unless
the Organization withholds permission for the extension, it is
automatically granted. No action by the Organization will resolve
in the member obtaining the extension requested. Thirdly, if the
Organization should refuse that extension, it provides that the
member is free, regardless of other provisions in the Charter, to
withdraw from the Organization.
We feel that that should provide the necessary flexibility and
necessary safeguards for any member country. I think that is all
I have to say, Mr. Chairman.
CHAIRMAN: Monsieur Augenthaler.
M. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, Gentlemen,
the matter we are discussing today is one of far reaching importance,
and possibly of vital interest to some countries.
As you all know, the Preparatory Committee at its First
Session in London left Article 36 for consideration at a later
stage and now we are called to take a decision.
The draft we had the honour to present to you is based on the
following considerations:
By adhering to the Charter, the Members have to accept a certain
code of manners in international commercial relations. It is only
just and proper that they should not forget their obligations when
they have to deal with non-members, and that is the reason of J. -37- E/PC/T/A/PV/12
paragraphs 1 - 5 of our draft.
Members or their citizens should not, even if they have the
opportunity take advantage of the situation and seek in non-member
countries special privileges or preferential tariffs. Neither
should they be party to agreements which would be contrary to the
general purposes of the Charter as they are laid down in Chapter I,
as for instance would be an agreement of some countries to oppose
industrial and general economic development of undeveloped countries,
and so on.
It is equally understood that each Member, by virtue of the
most-favoured-nation treatment, is obliged to accord to all
Members concessions granted to any non-member.
On the other hand, it would be unjust to prevent any Member
from concluding normal commercial treaties " from obtaining
tariff concessions in a non-member country merely because this
non-member country has by some chance no commercial treatywith any
Member. In this case, the Member country concerned would be
penalized because a non-member cannot agree with some Members.
as to point 4 of our suggested new text, some explanations may
be necessary, because as it stands it could seem to be too far
reaching which was not intention. If we agree about the matter
itself, I am quite sure that we might find a better wording. What
we intended to say here is, in act, that if in January we f ind
ourselves on the European Continent we cannot go around in bathing
suits even if at this moment in California people are sunbathing
on the beaches. G. - 38 - E/PC/T/A/PV/12.
What I should like to stress is the fact that if the
important interests of some country, having an important part of
its foreign trade with possible non-Member countries, might be
seriously prejudiced by the detailed application of the provisions
of the Charter, some means should be found to help this country to
overcome those difficulties without acting against the principles
of the Charter. A concrete example may make my point clearer.
As you all know, import or export restrictions are used sometimes
not only for reasons of balance of trade difficulties but equally
as a means for bargaining. Now, Members have obligations in this
matter, for instance the Publication of their quotas as long as they
apply them; non-Members have no obligations of this kind. In this
case non-Nembers will be exactly informed about anything that is
going on in the Member country and thus the bargaining possibilities
of the Member would be substantially weakened to its detriment.
This would be an instance, when the Member could abstain from the
publication of quotas and their administration, but confidentially
inform the other Members mainly interested in the trade of the
respective countries on the administration of quotas of goods
where they have a substantial interest.
But this brings us to another point, namely, to the general
problem, and that is, whether Members should be compelled to withhold
from non-members benefits enjoyed by virtue of this Charter and to
come into economic conflicts with the respective non-Members. It
is quite clear that if a country has a normal commercial treaty
based on the most-favoured-nation clause with a non-Member, it
cannot withhold from this country tariff reductions unless it
renounces the commercial treaty with this country. To renounce a
commercial treaty is a very serious step, because such a measure
inevitably leads to counter measures being taken by the other country G. - 39 - E/PC/T/A/PV/12
We in Czechoslovakia once had a situation of this kind in our
trade relations with Hungary, and the result was that trade between
the two countries fell to one tenth and has never since recovered.
Would the Members, if compelling another Member to take such a step.
be ready to compensate the Member for the losses which it might
incur, not to speak of possible political complications?
It is true that the United States amendment provides for an
exemption of the Member with the approval of the Organisation,
but I doubt if my country would agree to submit its international
trade and possibly general international relations to a fortuitous
majority. We fully appreciate the wish of the United states that
the Charter should be universal, and our aims are identical.
But we doubt if this aim can be attained by introducing into the
Charter a form of economic sanctions which ultimately may be more
prejudicial to the Member itself than to the non-Member.
The idea of introducing into a Charter of international trade
penalties or economic sanctions of this kind is unique in world
history. The world once applied economic sanctions. This was in
1935, in the case of the Italian attack on Abyssinia, and we all
know that no great power was as vulnerable as Italy to economic
sanctions. But the sanctions failed; their most important result
was the movement of Italy towards self-sufficiency. I agree that
here it is not the question of applying sanctions to the same degree
as was then envisaged for Italy, but we see in these provisions
possibilities of most serious economic conflicts. That is why we
are of the opinion that anything which might bring a country into
such a position should be deleted from the Charter. We are still
only a Preparatory Committee, and even to-day we cannot say what
will be the content of the Charter, and hence to which parliaments
and to which countries the Charter in its final form will be G. -40- E/PC/T/A/PV/12.
acceptable.
I should particularly like to stress that Czechoslovakia
is unwilling to have economic conflicts with anybody. It makes
no difference whether the country be near or far, great or small.
We do not feel like world champions, and all we want is a quiet
seat in the audience and we do not mind if it is even somewhere
in the Gallery. V - 41 -/A/PV/12
CHAIRMAN: The Delegate of Australia.
Dr. H.C. COOMBS (Australia): Mr. Chairman, there
is no doubt that this is perhaps the most difficult question
with which we have to deal, and the dififculty arises from
the fact that we do not understand, and we cannot in the
nature of the situation understand, the problem which we
are trying to solve. No-one can know at this stage what
countries will be Members of the Organization if it is
established, and what Members will not be, Consequently,
we are attempting to deal with a problem the nature of
which we do not understand, in circumstances where I think
it is practically impossible to reach any satisfactory
However, for the purpose of making some progress on it,
I assume that we have to proceed on the assumption that there
will be non-Members. If, of course, all significant trading
countries of the world are, in fact, Members of the I.T.O.,
then the problem ceases to have any significance; but if
any significant trading countries are outside the Organ-
ization then the question does become one of quite an acute
character.
As far as the Australian Delegation is concerned, we
find ourselves in very strong agreement with the basic
principle underlying the Czechoslovakian Delegation's
remarks, which, as we understand it, were to the effect that
it would be unwise for any rules of the Organization to make
impossible the conduct of ordinary commercial relations
between countries in close economic inter-relation, merely
because one is a Member of the Organization and the other is
not. It does seem to me, therefore, that we must consider
this problem along the lines of trying to make possible
/PVfi2SA km/1 V. -42 - E/PC/T/A/PV/12
friendly commercial relations between Members and non-Members,
while, at the same time, preserving for Members, presumably,
at least some of the benefits which occure as a result of
their membership.
There are two particular problems. One is the status
of existing agreements between countries which do become
Members and between countries which do not become Members
on the other hand. In the absence of knowledge about the
content of those Organizations, I find it very difficult to
reach a conclusion as to whether their continuance would, in
fact, impair the benefits of membership for the other countries
who are Members br4 oe thganr-oCionxji.. On the other hand, I
feel quite satisfied that the continued existence of agreements
in some form should be provided for, since otherwise the
maintenance of normal friendly commercial relations miget ba
prevented. E/PC/T/A/PV/12
Since that is so, it does seem to me necessary that we should
provide for the possibility of new agreements between members and
non-members, by which at least some of the benefits available to
other members are granted to non-members in return for benefits
received. It might be desirable to make such agreements subject
to examination and approval of the organization, but I think it is
an essential minimum that that possibility should be provided for,
I would like to point out the snowball effect of any provisions
which do prevent reasonable commercial relations between members
to
and non-members, since if they are so close/the economic relations
between a member and non-member that the prevention of normal
relationship between them proves to be an overriding consideration
to the member, so that he is obliged to withdraw, then you merely
in
have a situation/which all the countries which are closely related
to that country economically find themselves in difficulty in
retaining membership and we might find very quickly the necessity
of Withdrawal of countries who have close economic relations, not
merely with the original non-members but with one another, and we
might find that the provisions which we introduced for the purpose
of making membership attractive, and so building this organization
into a truly world organization had the exceedingly undesirable
and unintended effect of dividing the world into trading blocks.
I wonder, Mr. Chairman, whether - and I will not put this formally -
I could put the suggestion that we form a Sub-Committee to consider
the matter. That Sub-Committee should give very serious consideration
to whether it is necessary to defer consideration of this problem
until we know something about the real elements in the situation.
At present the Charter does provide for an interim period during which
a foremost treatment is extended to non-members - that was, provided
a time was given during which they could make up their minds. ER
-44 - E/PC/T/A/PV/12
Might we not also regard it as a tine during which this problem
could be studied with some understanding of what the real problem is?
By that time, we would at least know who are the members. We would
not necessarily know whether the non-members would become members,
but at any rate we would be considering the problem with a good deal
more reality to it than we possibly can at the moment. Could we not
provide for that interim period and nothing else, in the Charter,
but give a direction to the organization that it should study the
question of the relationship between members and non-members in the
light of the membership as it had existed after the organization was
then
set up, /the nature of the commitments which existed between members
at that time and non-members, and the economic relationship as it
existed between members and non-members with a view to putting
forward proposals to members at the end of a specified period,
covering desirable relationships on a permanent basis between
members and non-members. - 45-/12
CHAIRMAN:(Interpretation): The Delegate for India.
Mr. B.N.ADARKAR (India): Mr. Chairman, We have followed
with great interest the remarks made by the Delegate of Czecho-
slovakia and the Delegates of the United States and Australia.
we would associate ourselves completely with the general principles
enunciated by the Czechoslovak and Australian Delegates.
It was decided at the London Conference that this very
delicate question should be settled at a later stage and I
would draw your attention, Mr. Chairman, to a passage which
occurs in the procedural memorandum on tariff negotiations on
Page 51 of the Report of the London Conference, which says that
the tariff concessions granted under the agreement should be
provisionally generalized to the trade of other countries
pending the consideration by the International Conference on
Trade and Employment of the question whether benefits granted
under the Charter should be extended to countries which do
not join the International Trade Organization and which,
therefore, do not accept the obligations of Article 24.
It was the intention, underlying this paragraph that the
question of treatment of non-members should be considered at
the International Conference on Trade and Employment. This
was a sound decision, a very wise decision, we feel, and we
think that we should adhere to it. As Dr. Coombs has
rightly pointed out, it will not be possible for us to make
any realistic appraisment of the factors involved until we
know which countries are going to be classed as non-Members
and how important they are in world trade.
C/T/A/PV/12 - I '
Q - 46 - E/PC/T/A/PV/12
As regards the merits of the question, as I said, we
heartily support the remarks made by the Delegates of Czecho-
slovakia and Australia. The Australian Delegate was quite
right when he pointed out the adverse effects where any such
provision is likely to have on the trade relations between
members and non-Members, particularly in situations which a
particular Member my have close economic relations with a
particular group of non-Members. As Dr. Coombs has pointed
out, this particular fact may lead to snowball effects, thereby
diminishing the utility of the Charter that we are going to
institute.
So far as India is concerned, we have Most-Favoured-Nation
agreements with many countries and India will be most unhappy
if she is placed in the position of having to terminate these
agreements and to introduce discrimination in her relations
with countries with which she has been carrying on trading on
a Most-Favoured-Nation basis for ages past.
It is the object of this Charter to eliminate discrimina-
tory treatment wherever it exists. I am afraid this particular
provision will operate to creat discrimination were it does
not exist. It is true that this discrimination is not
inspired by any vindictive spirit. It has the very laudable
objective of bringing non-Members to their senses. Even so,
it implies a threat and it will not make for a proper atmosphere
for the consideration of this Charter, whether at this Coference
or the World Conference, if such provision is included in the
Charter. The International Trade Conference should be an
association of trading Members with mutual interests and
appreciation of the benefits likely to accrue under the Charter
and that should be the binding force behind that association. S E/PC/T/A/PV/12
If such a provision is introduced into the Charter, each
Member may have to consider that, irrespective of any consequences,
good or bad, that may accrue to it by adhering to this Charter
there will be at least one very undesirable consequence, namely,
that its trade with a large number of powerful trading countries
in the world will be subject to discrimination. I do not think
that such a feeling will be conducive to a proper consideration
of the Charter. Therefore we want the World Conference to beo
started in a proper atmosphere, which would not be attained.
by introducing a provision of this sort at this stage into
the Charter.
It is quite true that some provisions dealing with
relations with non-Members may be found to be necessary at a
later stage, but we would be well advised to leave that matter
to be considered at the proper time, when we know how many
countries are going to be classed as non-Members.
We shall be meeting at the World Conference with a large
number of countries hot represented here and we shall be v
offering this Charter to them for their consideration. If i
this offer is backed by an implied threat, it will appear as
if we are presenting them with an accomplished fact. I
therefore suggest that we should defer consideration of this
to a later stage. ' *
T.ere is just one consideratiowothat I !uuld like to add,
Mr. C:airman. Wv Iave, in dealing with the procedure for
tariff negotiations under irticle 24, in Prataph 3, provided
for procedure whereby, if a country, after joining the
Or-anization, fails to conclude a satisfactory tariff agreement -48-
with another Member, the Oranization can decide whether it
has failed to negotiate without sufficient justification, and,
if the Organization comes to the conclusion that a Member has
failed to negotiate without proper justification, the Organization
can authorise the withholding of tariff benefits from that
Member.
Under the present arrangements, tariff benefits to be
exchanged under the Charter are going to be provisionally
extended to all countries of the World. The position is that
under article 14 only Members of the Organization are entitled
to Most-Favoured-Nation treatment. Non-Members are not
entitled to Most-Favoured-Nation treatment. It is therefore
perfectly open to any of the Members of the Organization, if
they so decide, to withhold the benefits of the agreement from
certain non-Memb..ers. ah-t being so, then surely that will
alsocaot as an important deterrent factor against any widespread
feeling on the art of nonember<rs to decide not to join the
Organizati.n4
There is therefore already here a provision which non-
participating countries have to take into account, ma~ely,
insofar as they do not enjoyost- Favouredation- eromtnent
under their existing agreements, meibers may withhold from
those countries the benefits provided under the Charter. I
think we should be satisfied with that provision and, if ceoessary,
we could insert a provision that ehc ga-;nization, although it
expects the countries represented hero to extend the tariff
benefits to a claountries of ehG world, it will not disapprove
of particularemberors withholding those benefits from non-
mbe's at a suitable stage.
E/PC/T/A/PV/12
S E/PC/T/A/PV/12 P.
-49 - // 1f /-
CHAIRMAN (Interpretation): There are still several speakers
on the list and, as it ismquite impossible to hear thea all tonight,
I will givo the floor to the first on my list which is Dr. Colban
of Norway.
DR. E. COL6Jl (Nowway): Ur. Chairman, I entirely share the
opinion. expressed by the iustralian delegate and, support his
suggestions which, by the way, also fall into line perfectly with
ece views expressed by the Czeohoslovlakian and Indian delegates.
CHIAdiiM (Interpret2tion): Therefore, Gentlemen, the meeting
is adjourned until tomorrow at 2.30,when the first speakerswill be
New Zealand and. the United Kingdom.
I am told teat tomorrow afternoon the Exocutive Committee will
discuss document E/PC/T/91, and that will be the first item which
we will discuss tomorrow afternoon.
The meeting is closed.
The meeting rose at 6.05 p.m.
J |
GATT Library | gh951qk2069 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twelfth Meeting of the Tariff Agreement Committee held on Saturday, 6 September 1947 at 10. 30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, September 6, 1947 | United Nations. Economic and Social Council | 06/09/1947 | official documents | E/PC/T/TAC/PV/12 and E/PC/T/TAC/PV/12-14 | https://exhibits.stanford.edu/gatt/catalog/gh951qk2069 | gh951qk2069_90260040.xml | GATT_155 | 9,253 | 56,072 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL RESTRICTED
ECONOMIQUE E/PC/T/TAC/PV/12
6 September 1947
ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
TWELFTH MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON SATURDAY, 6 SEPTEMBER 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 P.
CHAIRMAN: The Meeting is called to order.
At the close of our meetings yesterday we had reached Article
XXIII, Joint Action by the Contracting Parties, and we had agreed
to defer consideration of this Article until there was an
opportunity for the United States Delegation to circulate their
proposed draft text of paragraphs 4, 5 and 6 of this Article. The
United States proposals have been circulated in paper E/PC/T/W/322
which reached delegations this morning . We will deal with those
proposals when we come to the relevant paragraphs.
As there are a great number of amendments on this Article, I
think the only practical way in which to proceed is to take up the
Article paragraph by paragraph and therefore I propose to commence
with paragraph 1.
Mr. Brown.
Mr. Winthrop BROWN (United States): Mr. Chairman, I would
like to make one general suggestion about this Article which I hope
might facilitate the discussion.
Yesterday the Delegation of Czechoslovakia and some other
Delegations expressed a little difficulty in the fact that this
Article, and the references to the "Committee" all the way through
the document, gave an implication of a rather more formal
organisation being set up by this Agreement than was intended. I
think we are all agreed that what we have in mind here is simply
to provide a mechanism whereby the contracting parties may act
jointly in matters which are of joint concern and since there are
17 or 18 of us we have to have some kind of rules of procedure to
ensure that that joint action is taken in an orderly fashion. On
the other hand we see the inferences that might be read into this
formal word "Committee" as it appears throughout the document and
I wonder if it would not more accurately reflect our intention if,
instead of calling ourselves, when we meet to act jointly, a
2 E/PC/T/TAC/PV/12 3 E/PC/T/TAC/PV/12
"Committee", we simply call ourselves what we are, namely "the
Contracting Parties" and, in order to make clear the difference
between the Contracting Parties acting jointly and the other
references to contracting parties during the course of the
document, we simply capitalise the two words wherever they refer to
joint action. I think that that would take away this connotation
of formal organization and would be a sufficient distinction so
that the document would be clear.
If that suggestion did meet with the approval of the Committee
we could change paragraph 1, for example, to read something like
this:
''The contracting parties shall meet from time to time for
the purpose of giving effect to those provisions of this
Agreement ..." and so forth.
In other words leave out "as a Committee" and the formal action
of appointing representatives, and then we might add a sentence
somewhat to this effect:
"For convenience of reference, the contracting parties meeting
for such purpose have been referred to elsewhere in this
instrument as 'the Contracting Parties'" (with capital letters).
That would require some consequential chances in the paper
W/322 which we proposed, but I rather feel that that would be a
somewhat more accurate description of our purpose and would meet
the drafting needs of distinguishing between joint action and
separate action.
P. E/PC/T/TAC/PV/12
CHAIRMAN: Are there any comments on the proposal just made
by the United States Delegate?
H.E. Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
would like to support this suggestion of the United States.
CHAIRMAN: The suggestion of the United States Delegation has
been supported by the Delegate of Czechoslovakia. Are there any
other comments or any objections to this suggestion?
Mr. R.J. SHACKLE (United Kingdom): There may be some
question of drafting, Mr. Chairman, I think. I presume the
United States representative will suggest a text in due course.
CHAIRMAN: I think it will result in a number of drafting
problems, but I think the main principles of the United States
proposal are clear. It is that there should be no mention of the
Committee in any place in the Agreement, and where "Committee"
occurs, the words "Contracting Parties" should appear. That
does give rise to a lot of drafting problems, but we can deal
with those in due course, if the United States Delegation will
submit its proposal in writing. At the moment we are just
considering the principle of the proposal. Are there any other
comments?
The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, there
will be a certain number of questions of drafting, as Mr. Shackle
pointed out; but there is the question of voting here, because
if we put simply "the Contracting Parties", it will mean that a
unanimous decision has been taken by the Contracting Parties in
the matter which they were discussing. I think that to keep the
V
4 V 5 E/PC/T/TAC/PV/12
United States Delegation's formula, one ought to put "The
Contracting Parties acting under the terms of Article XXIII",
just to show the difference between the question of voting and
the other questions.
Mr. Winthrop BROWN (United States): Mr. Chairman, I think
that point could be covered in the drafting.
CHAIRMAN: I take it from the silence of the other Members
of the Committee that the Committee approves of the United States
suggestion and it simply remains to work out the details of
drafting.
Subject to the drafting changes to be proposed by the United
States Delegation, are there any comments on paragraph 1 of this
Article?
Paragraph 2? Paragraph 3?
That brings us to paragraph 4, which is the first of the
paragraphs covered by the United States document W/322. Are
there any comments on this paragraph?
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, as
regards this proposal that each Contracting Party shall have one
Vote in the Committee, we are prepared to agree to that for this
purpose for the time being, without prejudice to our attitude
on the question of voting at the Havana Conference. But we
should wish it to be clearly understood that we should want this
question as to whether there is to be weighted voting or whether
there is not in the Conference to be settled before we go beyond
the provisional application of the General Agreement.
Mr. Winthrop BROWN (United States): Mr. Chairman, I think
our position would be the same. E/PC/T/TAC/PV/12
M. Hassan JABBAR (Syria ) ( Interpretation ): Mr. Chairman,
we have not document W/322 before us.
CHAIRMAN: Are there any other comments?
Paragraph 5. We had, when the original text was presented,
an amendment of the United Kingdom Delegation suggesting the
insertion of the words "Except where otherwise provided for in
this Agreement, the decision of the Committee shall be taken by
a simple majority of the votes cast". I take it that that
amendment has been taken care of?
Mr. R.J. SHACKLE (United Kingdom): Yes, I think the
present wording follows logically from paragraph 4, does it not.?
I think that if we said "a simple majority of the votes cast"
it would mean the same thing as "Contracting Parties present
and voting".
CHIRMAN: Are there any other comments?
Paragraph 6.
Mr. Winthrop BROWN (United States): The Committee will
note that certain words which appear in the Charter have been
placed in square brackets, simply to bring them to the attention
of the Committee. We do not really feel that they belong here,
but we thought we would have them in the text.
M. ROYER (France) (Interpretation): Mr. Chairman, I think
that it would be interesting to maintain the provisions which
are in brackets here, because the functions of the Committee
now are wider than the functions which were allotted to the
Tariff Committee in the Charter, and, in fact, in the Charter
the powers that were given to the Tariff Committee are powers
6
V V E/PC/T/TAC/PV/12
which, in the Organization, would be allotted to other organs
of the Organization. Therefore, it seems to me that these
provisions should be inserted.
CHAIRMAN: Are there any other comments on the words in
square brackets?
Mr . B N. ADARKAR ( India): Mr. Chairman, the Indian
Delegation also would support the retention of the words in
square brackets, because these words have the advantage of
leaving open the questions on which there has been no decision
in the course of this Conference. I have particularly in mind
the question of regional proferences.
CHAIRMAN: Are there any other views with regard to the
retention of these words in square brackets?
The United States Delegation has raised the question as to
whether or not the words in square brackets should be included
in the Agreement . Two Delegations have spoken in favour. I
take it that the Commit tee has no objection to the retention of
these words?
Are there any other comments on paragraph 6? 8
J. E/PC/T/TAC/PV/12
Paragraph 7. You will find on page 5 of document E/PC/T/W/312
a number of comments with regard to paragraph 7. The Czechoslovak,
Norwegian, United Kingdom and Australian Delegations have certain
suggestions to offer with regard to the wording of this paragraph.
I would like to know if these Delegations wish to press these
suggestions?
DR. H.C.. COOMBS (Australia): Yes, Mr. Chairman,
CHAIRMAN: The Delegate of Norway.
Mr. J. MELANDER (Norway): Mr. Chairman, we feel that it is
difficult to discuss paragraph 7 of Article XXIII until we have
finished Article XXVII. I therefore propose that we leave
paragraph 7 until we nave settled article XXVII.
CHAIRMAN: I take it the Committee will have no objection to
the suggestion of the Norwegian Delegate to come back to this
paragraph after we have dealt with article XXVII.
That is agreed.
No doubt Members of the Committee will have noticed an error in the
text given on page 55 of document E/PC/T/W/189. Thereference there
in the fourth line to Article XVII should, of course, read
"Article XXVII".
Paragraph 8. On page 6 of document E/PC/T/W/312 the Australian
Delegation suggest the addition of the following paragraph: "The
Committee may take such action as it deems necessary for the
performance of its functions and may enter into such arrangements
with the Secretary-General of the United Nations as may be necessary
for this purpose". E/PC/T/TAC/PV/12
In view of the suggestion just made by the United States
Delegation with regard to this paragraph, no doubt the Australian
Delegation will wish this to be held over until we come to the
revised text of the Article as suggested by the United States
Delegate.
DR. H.C. COOMBS (Australia): To what does the suggestion refer,
Mr. Chairman?
CHAIRMAN: Mr. Brown's suggestion for the re-drafting of this
Article is that whenever the word "Committee" appears, the words
contractingng Parties" should be substituted.
DR. H.C. COOMBS (Australia): I do not see that it is really
necessary to defer consideration of this point. If it is decided
to refer to the Contracting Parties acting jointly as Contracting
Parties (with a capital "'C"and "P") then presumably we could
substitute that phrase for the word "Committee". However, I do
not mind if you wish to defer it.
MR. W. BROWN (United States): Mr. Chairman, I really think it
would be helpful to us if, before proceeding, we could know the
views of the different Delegations on the substance of the
Australian suggestion.
CHAIRMAN: The Delegate for Cuba.
DR. G. GUTIERREZ (Cuba): Mr. Chairman, I understand that there
was a proposal in relation to the deletion of this paragraph. The
Cuban Delegation does not see the need for this paragraph. This
Agreement is going to be signed together with a Protocol in which
the Contracting Parties will do their best to follow, as much as
9
J. 10
J. E/PC/T/TAC/PV/12
possible, the provisions of the I .T.O Charter. This is
a provisional document and these actions are going to take place
only until the approval of the Charter of the International Trade
Organization. It means that these special provisions will be in
force for a certain period of time only, and in that short period
of time there is no doubt that, quite apart from the United States'
suggested substitution of "Contracting Parties" for "Committee",
the Contracting Parties will have that right without any need to
write it down. Therefore, I do not see the need for this
paragraph which brings in too many implications in our opinion.
CHAIRMAN: Before dealing with the Australian proposal for an
additional paragraph, we will deal with paragraph 8 as it stands
now.
The Cuban Delegation have proposed the deletion of this
paragraph. Are there any comments on this proposal?
The Delegate of the United States.
MR. W. BROWN (United States): Mr. Chairman, we do not feel
very strongly about this point, but it does seem to us that it
would be useful to recognise the fact that, if disputes arise even
in this interim period, the Contracting Parties shall be authorised
to decide how to handle them, and it gives to great an implication
as the paragraph now stands.
CHAIRMAN: The Delegate for Cuba.
DR. G. GUTIERREZ (Cuba): Mr. Chairman, we have in this
Agreement Articles XX and XXI dealing with Consultation and
Nullification or Impairment which state some sort of principle for
. , - /I1 0 the settlement of disputes. Then we have the procedures of the
Charter. Therefore, I do not see the necessity of establishing
a new procedure when we do not know exactly what it will be. That
is why I consider this text unnecessary.
CHAIRMAN: The Delegate for Czechoslovakia.
DR. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman I would
like to thank my Cuban colleague for defending our proposal so well,
because that is exactly what we had in mind when we proposed the
deletion of this Article.
The only thing I would like to add is that we suppose that the
Tariff Agreement is, as Dr. Gutierrez said, only a provisional
document. Therefore, in this case we do not need any social
rules. Otherwise, it will be seem later that, for certain reasons,
it should remain as an independent document for a longer time, but
in this case probably many countries would have to review the whole
position. That is why I would ask; if possible; that this paragraph
be deleted.
CHAIRMAN: The Delegate of the United States.
R. W. BROWN (United States): In view of the arguments advanced
by the Delegations of Cuba and Czechoslovakia, we would be quite
happy to withdraw our objections to this paragraph: Mr. Chairman.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, we adhere to
the deletion of paragraph 8, but I think it would be wise to state
that if a dispute arose before the entry into force of the Charter
the Contracting Parties would follow the principles elaborated in the 12
J. E/PC/T/TAC/PV/12
Charter for the settIment of disputes, as it is stated in the
Protocol of Signature.
CHAIRMAN: The Delegate of Belgium.
Baron P. de GAIFFIER (Belgium) (Interpretation): Mr. Chairman
we second the point of view which was just mentioned by the French
Delegate.
CHAIRMAN: Could we have the proposal of the Delegate of
France in more precise terms?
M. ROYER (France) (Interpretation): Mr. Chairman, I think it
that
could be stated in the Records that we could add/an interpretative
Note should be added to the Protocol stating the obligations for
the Members to follow the principles laid down in the Charter
regarding the settlement of disputes, namely, the procedures
relating to Appeal and Arbitration. 13
Dr. J.E. HOLLOWAY (South Africa): Mr. Chairman, does
that refer to the present Draft of the Charter or the Draft as
it might look after the Havans Conference?
Mr. Winthrop BROWN (United States): Mr. Chairman, I am
afraid I could not agree to the suggestion of the Delegate of
France. If that suggestion is pressed I would revert to
Paragraph 8 as it stands et present. It seems to me that if
we are going to pick out particular parts of the Charter and
give them emphasis in the Protocol we shall got into needless
difficulties and pretty soon we will have the whole Charter,
and its precise terms, as pert of this Agreement.
I agree with the Delegates of Czechoslovakia and Cuba
that it is probably going to be an interim provision and the best
thing to do is to leave it as simple as possible; in fact,
so simple that the point is not even raised. But I do feel
it would be most undesirable to establish, either by specific
reference or in general terms, an elaborate provision for
appeal and all that kind of mechanism.
CHAIRMAN: The Delegate of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, the Cuban
Delegation is of the opinion that, with the deletion of the
paragraph, it would be a sort of compromise which would give
satisfaction to all Delegations, because I understand the
position of the United States Delegate as he expressed it just
now. I think that you will remember the wording of the Protocol
of Signature will have the explanation of the whole thing. We
think that without the paragraph we will then have Articles XX
and XXI, which have already been agreed upon, and the Protocol
of Signature would read like this:
S E/PC/T/TAC/PV/12
"The Governments of . . . HAVING this day . .. signed the
General Agreement on Tariffs and Trade agree 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 an International Trade Organization, thereby
leading to the creation of such an Organization.
"HAVING, in their capacity as Members of the Preparatory
Committee for the Conference, recommended the text of a draft
Charter to the Conference through the Economic and Social Council
of the United Nations.
"UNDERTAKE, pending the entry into force of a Charter, to
observe to the fullest extent of their authority the principles of
the Draft Charter, and, should the Charter not have entered into
force on November 1, 1948, to meet again to consider in what
manner the General Agreement should be supplemented."
So I think that with the deletion of the paragraph and with
the Protocol the whole matter is covered.
CHAIRMAN: Would the French and Belgian Delegates be
prepared to withdraw their suggestion, in order that we may
reach a conclusion satisfactory to all Members of the Committee?
M. ROYER (France,) (Interpretation): Mr. Chairman, I am
ready to withdraw the proposal I have just made if the Committee
agrees on the interpretation which has been given by Dr. Gutierrez.
In tht case I should feel satisfied.
CHAIRMAN: I wish to thank the French and Belgian Delegates.
I am sure we have reached a solution which will satisfy all
Members of the Committee.
It has therefore been agreed that Paragraph 8 should be
deleted.
We will now take up the Australian proposal for an additional
14
S S 15 E/PC/T/TAC/PV/12
paragraph, which is given on Page 6 of Document W/312.
The Delegate of Australia.
Dr. COOMBS (Australia): . Mr. Chairman, we regard this
suggestion purely as a machinery provision not yet embodying
any principle of any sort, but it did seem to us, in looking
at this thing, that if the contracting parties are to take
joint action they will need some sort of facilities for acting
in that way, and that the simplest procedure would probably be
for them to use the facilities of the United Nations Organization
itself. For that purpose it might be necessary - although we
are not certain -- to make some provision in this Article
empowering them to enter into such arrangements.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation) Mr. Chairman, I think
the contracting parties will always have the right to enter into
agreements through tho United Nations if they find it desirable,
and I think we ought to follow the legal maxim, which says in
Latin: " de minimis non curat fraetor" and that we sought not
to write in here such a provision.
CHAIRMAN: The Delegate of Cuba.
Dr. GUTIERREZ (Cuba): Mr. Chairman, the Cuban Delegation
supports the view of the French Delegation.
CHAIRMAN: Are there any other comments?
Does any Delegation support the Australian proposal?
Dr. COOMBS (Australia): We attach no importance to this
suggestion, Mr. Chairman, If any Delegates feel doubts about it,
we ere perfectly happy for it to be withdrawn. S 16 E/PC/T/TAC/PV/12
CHAIRMAN: I thank the Australian Delegate for withdrawing
the suggestion.
We now come to Article XXIV. Members of the Committee will
recall that yesterday we acceded unanimously to the request of
the Delegate of the United Kingdom that the representatives of
Burma and Southern Rhodesia should be invited to participate in
our discussions on Articles XXIV nd XXVIII. We are therefore
pleased to welcome to our deliberations today the representatives
of Burma and Southern Rhodesia.
I wish to apologise to the respresentative of Southern
Rhodesia, that we have not been able to find him a seat in the
right alphabetical order, but I take it he will not mind being
higher in the order than he would have been.
Paragraph 1: are there any comments?
(Agreed).
Paragraph 2: are there any comments?
The Delegate of Czechoslovakia.
H. E. Mr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman,
I would like to raise here the same difficulty we raised before;
that is, about "each government accepting this Agreement", and so
on, because we think the Agreement can be accepted not by
Governments but by parties. I do not know if those States are
parties, or how it is.
We do not want to interfere in the internal metters of each
country, but I would like only to observe the t in our minds any
international agreement can be signed only by those, or on behalf
of those, who have full treaty-making powers.
As to Czechoslovakia, the Government has no international 17
S E/PC/T/TAC/PV/12
treaty-making power. This international treaty-making power is
vested in the President of their Republic and the President of the
Republic gives full powers. So if we are to sign the Agreement
on behalf of the Government the Government cannot appoint
representatives or Delegates and the signature may not be valid.
When we put before our Parliament, for approval, the
Bretton Woods Agreement, which was also signed on behalf of
governments, we had the greatest difficulty and it was almost
rejected by our Parliament. We had to explain that it was
signed during the time of war ¢-d in exceptional circumstances,
when our Government was in exile, and so on, but I had several
times to go before a Parliamentory Committee and cross my
heart that we would never do it again.
I want to make no difficulties for anybody. That is why
we thought we might start this Agreement by saying, simply:
"The Commonwealth of Australia", and so on, and , instead of
saying "The Governments of", to say parties or signatories. We
do not mind if Burma and Southern Rhodesia are signatories also,
because they must have certain rules - T suppose those gentlemen
will be able t tell us - as to who gives full powers for
entering into international obligations for them..
CAI.RAMN: Are tehre any otehr cmoments?
Mr. HASCKLE (nUited Kingdom), rM. Chairman, I must say
this seems to estus amo st idicaten lgale p roblem. heT position,
os far as the United Kigndom is concenred is tahtw e would have
the utmost difficulty if the words" the Government of the United
Kingdom"a re omitetd from the Preamble, aprticualrly in the cease
of our overseas territories. If those wo rdsa er not tehre, ew should
not be in a position to cover them. E/PC/T/TAC/PV/12
If we start this Agreement on the assumption that States
as such are parties to the Agreement, it may raise considerable
difficulties, and I am bound to say that the precedents for
these international governmental agreements are so numerous
nowadays that I find the utmost difficulty in seeing where the
difficulty will arise.
I have heard what Dr. Augenthaler has said about the
difficulties which the Government of Czechoslovakia has had. But
I could mention several Agreements - the Bretton Woods Agreement,
the International Allied Reparations Agency, the International
Civil Aviation Convention, etc. - to all of which I believe the
Government of Czechoslovakia as such is party.
I confess I am gravelled at the moment for a solution. It
seems to me we need a body of legal experts, which unfortunately
is not available.
S
18 E/PC/T/TAC/PV/12
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, this
question has also preoccupied the French Delegation and it seems to
us also a very difficult one.
Since the war it has been the habit to sign international
treaties in the name of Governments, but I think that the Iegal
validity of such a procedure is very doubtful. The Governments
are of course empowered to sign treaties, that is obvious; but a
Government cannot accept a treaty, because accepting means
ratifying, and only the Head of the State is empowered to ratify
a treaty, when he is acting through his Parliament. This is the
case for France and also for Great Britain, and I think that such
a paragraph as this one here stating that the Government accepts
would not be quite constitutional even from the point of view of
the United Kingdom.
I tried to refer myself to the text of the Charter and to look
at Article 99, but it seems that Article 99 bristles also with
contradictions. We see in Article 99, in the first paragraph,
"Each Government accepting this Charter....." and if we turn to
paragraph 2 we see "Each Member may, at any time, accept this
Charter in accordance with paragraph 1 of Article 98...."
Therefore we find no help in the text of the Charter itself.
I wonder if we could not find a way out by adopting the text
which was adopted for the New York Draft, that is, to state
simply that "The Government of each country which accepts .... etc'
Therefore this would cover the case of both the countries which
want to see their Governments accepting this Agreement and also
the case of countries where it is the State or the Head of the
State which has to accept this Agreement.
P. 20
E/PC/T/TAC/PV/12
CHAIRMAN: The Delegate of Cuba.
Dr. Gustavo GUTTERREZ (Cuba): Mr. Chairman, we are going
around a very simple problem of international law, and as we, as
economists, have had to go into the field of international law,
not only now but in previous sessions, this is the result. It
is very hard for an economist to find a way out, but it is vory
easy for a juridical expert, because it is a question of historic
procedure in the development of signature of documents.
First, the Treaties used to be signed by Heads of States, the
King of 3U -3 1 C-.-- . .- Th a place, or the President of such-and-such a
place. Afterwards came the High Contracting Parties, which is a
more judicial term which covers everyone. But during the war,
agreements for conducting the war were signed between Governments,
and the war-time idea is still weighing too much in the minds of
all peoples.
If we could say here "The contracting parties or respective
Governments accepting this Agreement...." it would cover both
cases, because, after all, here are only contracting parties, and
it is for their respective constitutional laws to decide who is
the power to ratify,and so on. So the only way to state this in
a proper form to cover all cases is to say: "The contractingactin;
Prties or respective Governmenats", ed thatd woultcover the case
eof COhoslovakla and the case of the Unitedg Km nxo
CHAIRMI: The Dgale.te of South Africl.
Dr,J.E. HOOWALLJ (South 'frica) Mr. aArmantCh thinkI ½
DGr. utierrez has covered the point which I wanted mato., I f
we try tefo dine the contracting parties in thiocuments d isssi
bound to load to some difficulty. ll A wwet an teois d to say
that the person who is thegh rit person for sthoriessoess oul hd 21
sign, and then let each country determine who is the right person.
If the words just suggested deal with it, I think that settles the
matter.
AIternatively I was going to suggest: "shall deposit an
acceptance according to its constitutional procedure" . That was
just an alternative suggestion.
But do not let us get into the question of defining what is
the right signing party.
CHAIRMAN: Mr. Shackle.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I am bound
to say that I find considerable difficulty in understanding why
there should be so much difficulty over this point, because
certainly in the case of the United Kingdom we have made arrangements
in the name of the Government over since 1933. All our trading
agreements, which I believe total something like 15 or 16, were
made in the name of the United Kingdom Government and the
Governments of the other countries concerned, and that was the case
in our Trade Agreement with the United States in 1938 in which the
colonies were covered and had their own tariff schedule; and I
believe that the United States Trade Agreements were made in the
same way. Those were not war-time agreements. They date from
many years before the war. So I can hardly understand the
suggestion that this is a sort of war-time constitutional innovation.
The only solution which occurs to meat the moment - and I can
only refer it to my legal authorities at home - would be that we
could start the Preamble in this sort of way:
"The contracting parties, namely the Commonwealth of Australia,
Belgium....." and so on
and then it might conceivably be picked up in the later Article
E/PC/T/TAC/PV/12
P. 22
E/PC/T/TAC/PV/12
which concerns the status of the contracting parties - Article XXX:-
"The contracting parties to this Agreement shall be understood to
mean those governments which are applying the provisions ..." etc.
It may be that between those two texts there might be a
solution to this problem, but I am afraid I am not competent to
way, and I can only consult the legal experts in London.
CHAIRMAN: The Delegate of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, if we have to
come to this question we will do it, but we do not think it
necessary for any delegation to consult with the legal experts at
home, because actually it is a very simple fact. When we say at
the beginning "The Commonwealth of Australia, Belgium, Netherlands
..." etc. there is no need to call them the High Contracting
Parties, because they are the contracting parties whether we call
them so or not. You can find in the collection of the Treaties
of the League of Nations here in the Library probably a thousand
or two thousand with that preamble. So I oppose to make any
change of that sort, which will show quite an appreciable
departure from the techniques and precedents of international law.
And as to the part of the Governments, and that Governments
had made treaties before, we always must bear in mind this: that
in some oases of commercial or tariff treaties when Governments
have signed them it is because they have received the delegation
of power from their Parliaments and those were the cases before
the wer, when governments were signing treaties of commerce or
tariff matters; otherwise it is not customary, because the
tendency has been to say "the contracting parties", we do not
need to enter into consideration of which are contracting parties -
States, Governments, or territories. Every one of them will be 23 E/PC/T/TAC/PV/12
contracting parties according to their constitutional laws, and we
cannot come with our constitutional laws and impose them on the
rest of the world. In the provisions for the signing of
international treaties we have to try to arrive at a certain
all
formula which covers the situation of/the countries involved, and
that formula has been developed throughout the year by the words
"contracting parties": that covers the whole thing. If we wish
to consult legal exports around the world, I think it is useless,
because we have everything for consultation in the Library.
Mr. R. J. SHACKLE (United Kingdom): Mr. Chairman, I am afraid
I stand exactly where I stood. The advice we have from London is
we must say "Government o f the United Kingdom" because if we simply
say "the United Kingdom" that does not enable us to pick up the
colonial territories or dependent territories. I do not think it
would be a solution to write in the colonies or dependent territories
into the Preamble because they fall into two categories, those which
are autonomous and those which are not, and if we were to do that it
would involve bringing in the whole of Article. XXIV into the Preamble
and it would cause appalling complication. I can only say it is my
definite advice that to introduce the Heads of States form into
this Agreement, which is after all a Trade Agreement, would cause
extreme complication. I am perfectly willing to submit to our
authorities in London anything that, commends itself to the attention
of this Committee. I could submit the procés verbal for them to
see the arguments implied: but beyond that I cannot go. I am
afraid the suggestion I made just now - "the contracting party,
namely ...." does not comment itself to this Committee but I would
like to hear a little more about that. I think that might be the
right solution. 24
V E/PC/T/TAC/PV/12
CHAIRMAN: The Delegate of Australia.
Dr. H.C. COOMBS (Australia): I do not know anything about
international law, but it does seem to me to be fairly clear that
the Contracting Parties are different from country to country
and therefore it would be preferable to avoid, if we can, any
reference to what the nature of the Contracting Party is - whether
it is the Government, the Head of State, or anything else.
I have had a look at this particular Article with which
we are concerned - Article XXIV - and it would appear to me to be
perfectly satisfactory to substitute the words "Contracting Party"
wherever "Government" appears at present. Then if it is the
Government which is the Contracting Party, the country concerned
would read "Government" for "Contracting Party"; if it is the
Head of State who is the Contracting Party, they would road "Head
of State". If that is done, it does not seem to me that, in
respect of this particular Article, any difficulty arises at all.
So far as the I reamble is concerned, it would appear to me
that, if it is necessary to specify the nature of the Contracting
Party and since the Contracting Party will differ from country to
country, the only possible solution is for each country to decide
whether it wishes to say "the Government of the Commonwealth of
Australia", "the President of the United States of America", or
whatever the Contracting Party is. Personally, so far as I can
see, it will probably be sufficient to say "The Commonwealth of
Australia",operating through whatever is the appropriate
constitutional agency of the Commonwealth of Australia. We
would not wish, I do not think, to specify; but if it were
necessary, we could say that we wish to say "The Government of
the Commonwealth of Australia", and if somebody else wanted merely V E/PC/T/TAC/V/12
to say "The Ripublic of Chile", or "the President of the United
States", we would have no objection to the first paragraph of the
Preamble being a little longer, and having got over that part of
the problem, I cannot see any part of this text where we could not
put "Contracting Party" for "Government".
CHAIRMAN: The Delegate of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): I suggest, Mr. Chairman, that
we suspend discussion of this question for the present and send it
to the Legal Department of tile Secretariat. In the meantime, the
Australian and British Delegates can consult with their exports in
Canberra and london, and I am sure those Legal Experts will find
a solution.
Mr. R. J. SHACKLE (United Kingdom): Mr. Chairman, I have the
utmost respect for the legal Experts of the Secretariat; but I am
afraid that the complications of constitutional law in the United
Kingdom and the Colonial territories are almost incredible, and I
fear that as regards those I should have to go to our own experts
at home.
As regards Dr . Coombs' suggestion, it consists, I understand,
of saying "Contracting Parties" wherever the present text says
"Governments". That, of course, occurs in a large number of
articles throughout the Agreement. On a very hasty run through,
I see one place where we cannot say that, and that is in Article
XXXI, which speaks of "Governments not parties to this Agreement".
One will clearly have to use some other word like "Countries"
there, but I dare say there may be a solution and I am prepared to
submit Dr. Coombs' suggestion to London. That is the best I can do.
CHAIRMAN: I think the proposal of the Delegate of Cuba that
25 E/PC/T/TAC/PV/12
we defer consideration of this problem until the Delegations
concerned have had a further opportunity of consulting their
Legal Experts is a very sensible one. This question arose
when we were considering the preamble. We had a discussion at
that time and we could not come to any solution, so I would
suggest that we leave the question until we come back to the
Preamble. In the meantime, we can leave the word "Government"
in here provisionally and return to it later when we have come
to some agreement about how the Preamble should road.
Dr. Z. AUGENTHALER (Czechoslovakia): Mr.Chairman, it may
be suggested to the Legal Department to also have some
provisions in the final Protocol to the effect that wherever we
speak about Great Britain, it means "British Government", and
some explanatory note. I have no objection to that. To some
Delegates it may seem that it is a matter of minor importance,
but it is of very great importance. For instance, if the Civil
Aviation Agreement were not correct from the legal point of view,
the importance would not be great because it is the States who
are engaged. But here the rights of private people are involved,
and if we sign the Agreement in a form which is not the legal
form, anybody who wished to oppose some reduction of customs
duties could attack the whole Agreement in the highest Court.
CHAIRMAN: It seems clear that this question can only be
resolved in relation to the Preamble, and therefore I think
the best thing is to hold it over again until we come back to
the Preamble, at the same time not making any changes in the
draft text where the word "Governments" appears: just accepting
that word provisionally. I am sure the United Kingdom Delegation
and other Delegations affected will take into account the
26
V E/PC/T/TAC/PV/12
suggestions made during the course of this meeting when they
are consulting their Legal Exports.
When I introduced Article XXIV, I overlooked referring to
Document W/316 of September 2nd, in which the United States
Delegation proposed certain changes to Article XXIV. The
first amendment of the United States Delegation was a new wording
of paragraph 1. Therefore, it is necessary for us to revert to
paragraph 1 and consider the text proposed by the United States
Delegation in Document W/316.
Mr. Winthrop BROWN (United States): Mr. Chairman, the
intention of the amendment of the new paragraph 1 suggested in
Document W/316 was to carry out the scheme of signature and
provisional application which was agreed in general in the
earlier sessions of the Committee. The proposal is simply to
make it clear that the Agreement shall be open for signature
until June 30th next by any Government which is signatory to the
Final Act, and which is not able to sign at the end of this
Conference. The amendment in the present paragraph 4 is purely
consequential.
Dr. H.C . COOMBS (Australia): Mr. Chairman, the general
intention of this new paragraph is in accordance with our views.
There are one or two doubts which I have about it which the
United States Delegate may be able to clear up. I cannot
understand the significance of the first sentence "The present
Agreement shall bear this day's date". It does not seem to
me that it is necessary for it to bear a date in that sense at
all. It is recorded at the end of the document - I have
forgotten the precise wording now, but the suggestion is in
relation to Article XXXII, that it should include words to this
27
V 28
V E/PC/T/TAC/PV/12
effect: "Done in a single copy, in the English and French
languages, both authentic, at Geneva," on such-and-such a day.
If that is all that is meant by the first sentence of this new
paragraph, obviously we would not have any objection to it; but
not
we would/regard that as being the date of the Agreement in any
nense: it is merely the date on which this text is done in single
copy. Therefore, I would like clarification from the United
States Delegate as to whether the words in the first sentence have
any significance beyond that. If they have not, then I do not
consider the sentence necessary. If they have, I would like to
know what it is.
Secondly, I wonder whether it is proper - the Legal advisers
may be able to help me on this point - to refer to this document
as an Agreement then we are saying that it shall be open for
signature. I am not sure at what stage it becomes an Agreement,
but it is at this stage, I presume, really only a project for an
Agreement or something of that sort. I am not worried about
that, provided that it is not legally incorrect to refer to
something which is not yet an Agreement as an Agreement.
The other point that I wanted to raise is in connection with
the "last clause of this first paragraph which reads "wich shall
not have signed this Agreement on this day". I see no reason why
we should makeany distinction between countries according to
whether they sign on the first day, the second day or any other
day in the period during which the document is open for signature.
Our idea was that this document, having been done in single copy,
etc.,was open for signature up to 30th June 1948, and whether you
aign on the first day or on a later day is purely a question for
your own convenience and decision, and is not a question of
relevance to the content of the Agreement at all. Therefore, we
we would wish this reference to "which shall not have signed this
Agreement on this day" deleted from this paragraph. 29
J. E/PC/T/TAC/PV/12
CHAIRMAN: The Delegate of the United States.
MR. W. BROWN (United States): Mr. Chairman, I can assure the
Delegate for Australia that there is no sinister motive behind the
first sentence.. I believe that it was suggested simply to make
sure that we would have a convenience of reference to this document
by being able to sign it as the Agreement at such and such a date.
If the provision to which he refers at the very end of the present
Agreement meets that point, we attach no particular importance to
the opening sentence. It was suggested because, in fact, there
might be signatures at different dates and therefore it was
thought that it might be useful to make clear the date of reference.
As far as calling it an Agreement is concerned, we think that
it would be difficult to find a better word. After all, we are
going to take substantial action, albeit provisionally, under this
document and therefore we have reached agreement at least to that
extent. It never occurred to me that that word would raise any
difficulties.
So far as the last clause is concerned, the clause relating to
Governments which shall not have signed this Agreement at Geneva,
again I suppose that was put in for abundance of caution in drafting,
and I am inclined to agree with the Delegate for Australia that it
is entirely superfluous.
CHAIRMAN: The Delegate for Norway.
MR. J. MELANDER (Norway): Mr. Chairman, there is one point in
this paragraph to which I would draw attention. It is the reference
to the date - June 30th, 1948. I take it that that has been
inserted on the assumption that we shall finish the Havana Conference 30
J.
on the 15th January or the 1st February, and. of course we all hope
that we shall finish round about that date, but - I might perhaps
be frightening the Cubans now - there is also the possibility that
the Havana Conference may continue for another couple of months,
and in that case I think one ought to provide for a little more
time. Perhaps one could say, instead of June 30th, '1948, "four
months aster the end of the Havana Conference", for example.
CHAIRMAN: The Delegate for New Zealand.
MR. J. P.D. JOHNSEN (New Zealand): Mr. Chairman, I would
support the proposal made by the Delegate of Norway, I think also
that this date, 30th June, 1948, has some bearing on the proposal
made for the amendment of Article XXVII, that is, the question of
the substitution of Part II of the Agreement for part II of the
Charter. I was wondering whether this particular question could
not be allowed to stand over until we have considered that
particular amendment.
CHAIRMAN: The Delegate of Australia.
DR. H.C. COOMBS (Australia): Looking for clarification,
Mr. Chairman, I am not entirely clearl what is the relationship
between the signature of the Agreement to which this paragraph refers
and the signature of the Protocol of Provisional Application. Do
I understand that the Protocol of Provisional Application would be
signed by those countries which wish to apply the Agreement
provisionally, and certain countries undertake to make up their
minds about that by the middle of November?
On the other hand, do I understand correctly that if a country
sigged that Protocol of Provisional Application it would subsequently, E/PC/T/TAC/PV/12
prior to June 30th, 1948, sign another Agreement if the country so
desires, and if that is correct, is it necessary to specify in this
paragraph that the Protocol of Provisional Application will be open
for signature after a specific date, that is, 15th November, or
whatever date we agreed upon?
CHAIRMAN: The Delegate of South Africa.
DR. J.E. HOLLOWAY (South Africa): Mr. Chairman, it seems to
me that we believe in the principle of making a simple thing
complicated before we can do anything about it.
Now, I had understood all along that first of all in Geneva we
would authenticate the document only - that is the only really
important thing. That will leave the way still open for the other
things that have gotto be done. Then, there are certain countries
that can sign provisionally, undertaking among themselves certain
obligations to do certain things. The first is to say things, the
second is to do things. Then it would still leave open, for the
certain countries whose constitutional procedure required it,
certain things.
This seems to be getting so complicated now that I am not quite
sure whether, sooner or later, you might find that you just cannot
sign before you have got an agreement, and you cannot have an
agreement before you sign.
I think we must get back to simplicity. We have something
which says: this is the authentic text; secondly, we have
something which says: this is the text among countries provisionally;
thirdly, there is the signature which can be done at tome later
stage by everybody. Now, we have got those three things set out
simply and this discussion is not necessary. 32
I would point out also that the date shown here as 30th June,
1948 has got to be related to another date in the draft Protocol
in document E/PC/T/189, the last paragraph of which says that
countries, undertaking the principles of the Draft Charter, should
the Charter not have entered into force on November 1st, 1948,
only
will meet again. Now, if 84.9%/have signed by June 30th, it does
not come into force, and we have still got four months and you
cannot sign in that period.
It seems to me that whatever date is put into this Protocol of
Signature ought also to be put into this Article for the last date
of signature.
CAAIRMAN: The Delegate of Norway.
MR. J. MELANDER (Norway): Mr. Chairman, I do not think the
problem is as complicated as suggested by the Delegate of
South Africa....
DR. J.E. HOLLOWAY (South Africa): On the contrary, I suggested
that it is not complicated.
MR. J. MELANDER (Norway): .... think the thing is very
simple. We have the Final Act which will be signed when the
Geneva Conference is over - whatever date that might be; then we
have the Protocol for Provisional Application which will be signed
by the key countries according to the date agreed in regard to them,
and in the document proposed by the United States Delegation,
document E/PC/T/TV/316, this Protocol of Provisional Application
shall be open for signature until June 30th, 1948. That, I
think, is quite acceptable and there would seem to be no need to
E/PC/T/TAC/PV/12 33
J. E/PC/T/TAC/PV/12
altar that date because, although it might be, perhaps, only a
month or two after the Havana Conference, it would in any case be
sufficient time, I think, for Governments to decide whether or not
to apply provisionally. But what I think one ought to keep in
mind is the possibility of not excluding parties which have signed
the Final Act from becoming parties to the Agreement when it enters
into force definitely. That is why I suggested that the first
paragraph in Article XXXV, as suggested in the United States
proposal, ought to have a date related to the end of the Havana
Conference, so that the date June 30th, 1948 ought to be amended to,
say, four months after the end of the Havana Conference. S 34 E/PC/T/TAC/PV/12
That, of course, does not at all exclude the possibility
that we shall have to alter the other dates in this document.
I do not want to go into details now. I should just like to
mention that the date suggested in the Protocol of Signature in
Document T/189, namely, November 1, 1948, might perhaps be too
short a period. That, I take it, is related to the assumption
which we had at the beginning, that we should be able to finish
at an earlier date then we now anticipate.
Anyway; I think we can take up the alteration of these
other dates when we come to them. I think it is sufficient now
to try to settle the date for the definite entry into force of
the Agreement and during what period the Protocol should be open
for signature.
CHAIRMAN: The Delegate of the United States.
M. Winthrop BROWN (United States): Mr. Chairman, answering
the question of the Delegate of Australia: the reason for making
a provision for signature of he Agreement was because, of
course, certain countries, under their constitutional procedures,
have to sign the Agreement before they can present it to their
Parliaments. Certain others do not have to do that.
As far as the date of June 30 is concerned, we felt that
would allow ample time for countries to make up their minds,
after the Havana Conference, whether they wanted to bring the
document into force provisionally, and it was thought desirable
not to leave that matter open for too long a period.
As for as the point made by the Delegate of Norway is
concerned; of course there is a general provision in the Agreement
for adherence to it by other countries, and those reasons would be
applicable in the case of any country which did not sign for
provisional application before June 30, so that nobody would be
precluded from coming into the Agreement. S 35 E/PC/T/TAC/PV/12
CHAIRMAN: The Delegate of Norway.
Mr. J. MELANDER (Norway): Mr. Chairman, the clause relating to
adherence, that is, Article XXXL, does make it clear that Govern-
ments not parties to the Agreeement may adhere on terms to be agreed
between such Governments and the contracting parties. That means
that if one of the parties to the Final Act did not enter
definitely before June 30, they would have to enter on the same
conditions as any outsider and, theoretically at any rate, that
might mean that country would have to negotiate all over again.
I think that would be rather impracticable and it would be better
if one could leave the Protocol open for final signature until
such a date when alI the parties to the Final Act should have had
a reasonable time to make up their minds.
I do not say that the date suggested is likely to be
unsatisfactory; in fact, I think it is likely to be all right,
but, on the other hand, we do not know what this famous future
conference will lead to and how long we shall sit there. That is
the reason why I think that it would be better to leave it until
a little later, especially when it is a question of the definite
entry into force.
CHAIRMAN: Are there any other comments?
It is now nearly one o'clock and I do not think we can deal
with all the various suggestions which have been made for amending
Paragraph 1, so I would suggest we break off here.
Before we adjourn, I would like to make an announcement on
behalf of the Chairman of the Sub-committee dealing with Paragraph
3 of Article II. The Chairman would like the Sub-committee to
meet at 3.15 p.m. instead of 2.30 p.m. as announced. Will all
those Delegations who are represented on the Sub-committee kindly
notify their representatives of the change of time of the meeting
of the Sub-committee this afternoon. S 36 E/PC/T/TAC/PV/12
Mr. SHACKLE (United Kingdom): Will it be in this room, Mr.
Chairman?
CHAIRMAN: The Sub-committee will meet in this room, as
given on the Programme of Meetings issued this morning.
There being no further business, the meeting is adjourned
until 2.30 p.m. on Monday.
The meeting rose at 1. 5 p.m. |
GATT Library | mb491cj1399 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenth-Fifth Meeting of Commission "B" held on Thursday, 17th July 1947, at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, July 17, 1947 | United Nations. Economic and Social Council | 17/07/1947 | official documents | E/PC/T/B/PV/25 and E/PC/T/B/PV/24-26 | https://exhibits.stanford.edu/gatt/catalog/mb491cj1399 | mb491cj1399_90250102.xml | GATT_155 | 7,421 | 44,076 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/ T/B/PV/ 25
17th July, 1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UINITED NATIONS CONFERENCE ON TRADE AND EMPLOMENT.
VERBATIM REPORT
TWENTH-FIFTH MEETING OF COMMISSION "B" HELD
ON THURDAY, 17TH JULY 1947, AT 2.30 P.M. IN THE
PALAIS DES NATIONS, GENEVA
The Hon. L.D. WILGRESS
(Chairman)
(Canada)
Delegates wishing to rake 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/B/PV/25
CHAIRMAN: The meeting is called to order.
It is necessary for us to adjourn today at five o'clock
because a Heads of Delegations Meeting has been called at
five o'clock and one or two members of the Commission, in addition
to the Chairman, will have to be present at the Heads of Delegations
Meeting. -We will be meeting tomorrow so that, if the discussion is
not concluded today, we will continue with it tomorrow.
Today we will have a general discussion on the subject of the
composition of the Executive Board. In this connection, the
Members of the Commission should take account not only of the
proposal of the United Kingdom Delegation, given on pages 14 and 15
of document W/210. Revision 1, but also the proposals set forth
in the Report of the Drafting Committee, which are given on pages 59,
60, 61 ad 62 of the Report of the Drafting, Committee. In this
Report there are Observations by the Czechoslovak Delegate on
voting at the Conference and seats on the Executive Board, the
suggestion of the Delegate of Canada regarding Executive Board.
Membership, the suggestion of the Brazilian Delegate referring to
the Executive Board., Formula for Membership proposed by the
Brazilian Delegate, Suggestion of the Belgian Delegate, and the
Su ggestion of the Delegate for France; so that in making their
statements in connection with the general debate on this subject,
Members of the Commission may free to refer to refer to any of these
proposals in order that they may endeavour to reach some indication
as to which of the various proposals is likely to prove most
acceptable to the memberss of the Preparatory Committee.
The Delegate for Norway.
H.E. E. COLBAN (Norway): Mr, Chairman, in order to arrive
at some satisfactory result concerning the Composition of the
Executive Board, I think we should first and foremost make up our
J.
2 E/PC/T/B/PV/25
minds with regard to the number of Members of the Organization that
could be given a seat on the Executive Board.
There are a number of proposals - the original. American
proposal said fifteen Members, but in view of the desire of the
different Delegations to give room for all kinds of particular
interests (I do not say national interests, but particular, legitimate
interests) the sugeestion has been made to increase the number to
eighteen, to seventeen, to twenty.
I would like to say, speaking for my Delegation, that we very
strongly hold that the Membership should not be more than fifteen.
As I said, that is the origiinal American proposal and I think it is
very well founded, because if you have a larger body it will not
really be an Executive Board, it will be a debating, Society and it
will, of necessity, have to separate from its own body a
sub-committee to do the Executive work. As we heard during, the
discussion on voting how important a number of delegates found it
to preserve equality - not only theoretical legal equaality, but also
practical equality - of the Member States, I venture to say that if
the Executive Board were to comprise more than fiftean Members,
it would be unavoidable to have sub-committees, and the real power
would be in the hands of some very few, who would possibly direct
the whole of the Executive work.
I have very little to add. My idea was only to suggest that
the Chairman rule that we should look into the question of the
number of Members of the Executive Board before we try to establish
any definite scheme
J. V 4 E/PC/T/B/PV/25
CHAIRMAN: It has been my intention first of all to have
a general debate on the various proposals which have been
submitted regarding the composition of the Executive Board,
and then to turn to an effort to arrive at a decision with
regard to particular points.
One of the proposals which have been submitted has been
an amendment of the New Zealand Delegation, that the Executive
Board shall consist of not more than fifteen Members of the
Organization elected by the Conference, so that this is one.
of the proposals before us.
It would seem to me as Chairman that if we had endeavoured
to settle this particular point in advance of a general
discussion, it might have prejudiced the position of those who
wish to argue in favour of any particular proposal which
involves perhaps more than fifteen Members. Therefore, if
the Commission is agreeable, I think it would be preferable
to have a general discussion first, in which the Members could.
feel free to discuss the question of the number of Members of
the Executive Board, but that we should endeavour to allow
Members as much latitude as possible in discussing the. various
proposals.
Would that procedure be agreeable to the Norwegian
Delegation and to Members of the Commission?
Mr. Erik COLBAN (Norway): Certainly, Mr. Chairman. I
just wanted to emphasize the importance of the matter.
CHAIRMAN: The first speaker on my list is the Delegate
of Australia.
Dr. H.C. COOMBS (Australia): Mr. Chairman, there are
three phases of this problem to which I would like to refer. 5.
V E/PC/T/B/PV/25
The first is that upon which the Delegate of Norway has
already touched - the number. He has suggested that there
would be disadvantages in a Board larger than tihe original
number proposed of fifteen. We consider, as I believe he does,
that the size of the Board is a technical problem which
ought to be settled on substantially technical grounds.
Obviously, the first requirement is that the Board should
be large enough to be representative of the varied types of
economy of the Members of the Organization, but that it should
be small enough to be manageable - nk eable from the point
of view of the conduct of its work. The total number of
Members of the Organization apparently would be somewhere between
sixty and seventy if everything goes well, and that is a fairly
substantial membership to represent in an Executive Board,
unless the Board itself is fairly large in number. We have
some doubts as to whether fifteen is adequate. We would not
want to put that very strongly; but we do feel there ought to
be some examination of this question in a rather practical
sort of way, to see whether a sufficiently representative board
could be compiled with a number as small as fifteen. M 6 E/PC/T/B/PV/25.
I do not feel quite the same concern as the Delegate for Norway
about the possibility of the board operating, at least partly,
through Sub-committees. As a matter of fact, it seems to me not
unlikely that, provided the Sub-committess are not permanent
standing committees which carry out the functions of the board, and
that they are in fact Sub-committees whose work is directed by
the board as a whole, it may be a form of administration that the
board will find useful, The members of the board, I believe, will
be more than mere representatives of Governments; they will
presumably, ordinarily, be people with a good deal of experience
in the field of activity of the Organisation and it does seem to
me that we should be able to have some degree of international
specialisation, perhaps within our board, by which the members
of the board with particular capacities can be used on types of
work where their experience lies without regarding them all the
time exclusively as representatives of Governments or of parti-
cular countries, It des not seem to me, therefore, that there is
any fundamental difficulty in providing against the danger
which the Norwegian Delegate has outlined of real authority
getting into the hands of a comparatively small number of the
board. We have the feeling, on the whole, that fifteen is per-
haps a rather small number for a really representative board in
view of the quite varied types of economy which you are going to
have and the problems which will be encountered, While we do
not wish to be dogmatic, we have suggested eighteen, not in
any firm sense, but as something which the M E/PC/T/B/PV/25.
Sub-committee might have a look at. That is really all we would
like to propose - that a Sub-committee should consider this point
from the angle of the representativeness of the Board and the
work to be done by a Board of eighteen and whether the danger
of Sub-committee work (which I agree would almost certainly develop
with a Boatd as large as that, although I believe it would
probably develop also with fifteen) has to be guarded against.
The second point to which I want to refer, Mr, Chairman, is
the proposal that the Executive Board might have . number of
permanent members. Our ideas on this follow from our ideas on
the question of voting, Just as we do not think it necessary,
In order to give weight to the views .of major powers, to give them
extra voting capacity, neither do we think it necessary to give
them guaranteed seats on the Executive Board in order to ensure
that they are on it. As a matter of practice, as I pointed out
when we discussed the question of voting here, we have practically
no Sub-committees which have not contained two or three major
people and I think that it is almost impossible to conceive of an
Executive Board which would not include certain powers who, quite
clearly, are economically of the most importance. It becomes
more doubtful, of course, whether those who immediately follow
them in any assessment of economic importance by some sort of
statistical measurement would always be elected if there were no
permanent seats, but I suggest that it is just that uncertainty
that is perhaps a good reason for non-permanency.
One important point that seems to me to weigh very heavily
against permanent seats is the fact that the main purpose of the
board is to represent the variety of economies which are Members
of the Organisation. I think it is perfectly clear that if you/
have
M M
permanent seats for all the major powers, then it is going to be
difficult for your board to be representative of the Members which
make up the Organisation. If you have a board elected by votes
this question of representativeness - and I do not mean that purely
in a geographical e or in the sense of countries being under-
developed, or fully developed, industrially or agriculturally, for
there and a great many ways in which h economies differ- would be
taken into account by the countries when deciding for whom they
would cast their votes. In seeking to have established an
Exceutive board which was balanced from various points of view
they would take these things into account . Now it is not possible
to take these conditions into account in the Assessment of a
formula based upon economic importance.
Another thing which it seems to me will become important -
and I very much hope that it will - is that when the Organisation
has been going on for some time and as the persons who are going
to be associated with its work from the various countries become
known, then the person who is likely to represents a country may
well prove to be an important factor in deciding the countries
to. be elected to the board. That, it seems to me, is a good
thing. It -is important that the people on the board should be
people whom other Countries respect and trust and if there are
people whom they respect and trust to a particular degree, that
should influence the decision as to how the board is to be consti-
tuted. We would place very great importance, therefore, on the
necessity for enabling the great variety of considerations which
must enter into the establishment of a satisfactory board to be
taken into account in the determination of its constitution. The
only way in which that can be done is by allowing the people who E/PC/T/B/PV/25.
choose the board to choose them at the time when the board is
going to operate, with the fullest knowledge of the countries who
are Members and the persons who are likely to constitute the board
itself.
Another factor, Mr. Chairman, is the one to which referred
in connection with voting. That is, the very great difficulty
of determining a formula which is applicable in these cases, I
believe, in connection with the membership of the board even more
than with voting, that the procedure by which people would reach
a decision in this matter would be to speculate as to whom they
thought ought to be permanent members and then to worK out a
formula which would make those people members. That, as I said
before, is not a satisfactory approach. I think the work that
has already gone into this has shown that there are a number of
formulae advanced and I believe most people will look, not at the
logic of the formulae, but at the countries which this or that
formula will put on, and I do not think that that is a satisfactory
way to approach the question. It seems to us, Mr. Chairman, that
we are likely to get the best board if people can give due weight
in their voting to all the considerations, economic importance,
representativeness, geographical distribution, personal qualities
of the people likely to be on the board, and so on; and there is
only one way in which we can do that and that is by permitting
them to vote when they have taken all these things into account.
The third point. Mr. Chairman, to which we wish to refer is
to raise the question, for the consideration of the Committee, as
to whether any provisions should be made for requiring a specific
majority for election to the board. There are, in some other
international organisation, provisions which require a two-
thirds majority before a country is elected to a governing body
M E/PC/T/B/PV/25.
of this sort and while we do not wish to be dogmatic about it,
we think that that provision has advantages. When election can
be achieved by a simple majority it does facilitate a sort of
exchange of vote by previous arrangement, which can frequently
tend to give the governing body an unbalanced character. While
we do not want to exaggerate that, we do think it is worth the
Committees while to look at the possibility of requiring a two-
thirds, or some other specified majority for election to the board.
But, that, like the suggestion with regard to the number on the
Board, . we regard merely as a working suggestion to which we
would not adhere rigidly if the Committee or any of its Sub-.
committees suggest that the decision should be otherwise.
10 G E/PC/T/B/PV/25
CHAIRMAN: The Delegate of Brazil,
Mr. PARANAGUA (Brazil): Mr. Chairman, I wanted
consideration to be given to the Executive Board., because
I belong to an International Executive Board, where we try
to think internationally on every question. We try to forget
what nationality we have.
My first remark would be about the number of Directors on
the Executive Board. We of the Monotary Fund are twelve
Directors, plus twelve alternates, which makes twenty-four.
This number, which seemed to be a large one, never prevented.
us from discussing and reaching decisions; and my experience
is that the number is not sufficient. we have just had. an
election for a thirteenth Director, and the Board of Governors
is empowered by the Articles of Agreement to increase the number
of Directors by a vote of four-fifths, and the reason why the
number of Directors is insufficient is because of the number of
Sub-Committees we have - sub-Committees of Interpretation, or
Monetary Reserves - all kinds, about six or seven Committees
and also because, very often, we are obliged to send a
Director to a country when there is a question that we cannot
clear without a personal contact with the Government of the
country concerned.
For this reason - that very often we do not have a Director
in the place - we like to have more Directors. Therefore, I think
we must all be very careful not to fix a small number of
Directors, and, not to have a rigid. formula preventing the
increasing of the number of Directors. E/PC/T/B/PV/25
The second point is the question of Permanent seats. I
would not call them permanent seats, because the idea of
permanent. seats involves something like a natural right to
a certain place, a certain hierarchy. I would prefer to call
them posts because of their position in world economy, according
to their relative importance.
On this question I disagree with the Australian Delegate.
I think the most Important economic Powers are entitled to have
a seat of a permanent character. It is like the satisfaction
we have to give to the measure of economic policy. The
difficulty is to find a formula for choosing these economic
Powers, but this formula is not impossible.
I should like to quote again the Articles of Agreement of
the Monetary Fund: We had a formula supplied by the American
Government. This formula is not a secret today and I think
I can disclose it. It was based on the external trade,
international trade, on national income, and on monetary
reserves. That is not the case with us. It is not a rigid
formula; there are some imponderables which we have to take
into consideration for the fixing of the quotas and the voting
power. I can also disclose the case of Australia, who has
Just joined the Fund,
In applying the formula we would reach a figure, say, 140
or 150 million dollars, but, by virtue of such impor durables
we reached the figure of 200 million. We took into considera-
tion certain facts and we increased the figure.
The formula naturally ought to take into considsrition
the different areas of the world, the different types of
economy, certain potentialities. The question of their
S
12 S
relation to one another, for example, is very important. If
you take the case of India, for instance, just one yard of cloth
per head used by an enormous population has an enormous effect
on world traee. It is something, which deserves consideration.
With regard to the kind of majority for the election of
an Executive Board, I agree that the majority would not be a
simple one. At least the first poll must be a majority of
two-thirds, or any other kind of majority - not a simple
majority,
I think, Mr. Chairman, on the question of finding a
compromise between the extrome proposals, it would be easier
to find in a sub-committee a formula which everybody could
agres to - everybody giving something and taking something
in this formula.
E/PC/T/B/PV/35 Mr. S.L. HOLMES (United Kingdom): Mr, Chairman, it may be
appropriate for me to say a few Words, thought 1 think that what I am
not
going to speak about will/call for more than a few words because,
while we have a proposaI in front of the Commission for The revision
of the present text of Asticle 68, that proposal can, I think, be
allowed for the most part, toc speak for itself. Once more, I think,
I may claim fort the United Kingdom, Delegation at least a certain
consistency, the proposal in line with what we have suggested
before on a previous oceasion. I do not know therefore, whether
there is any detail which I can usefully add, and I am not anxious
at alI to keep the Commission here longer that it is necessary,
especially as there is another meeting in prospect this afternoon.
On. the question of the number of seats -the, number of Members
of the Exceutive Board - that is a matter which is of some importance,
but on which we would not wish to claim that we have any Very
decided views. We have an open mind, but I feel with the
that
previous speake there will be a great many Membere of the
Organization we hope, and that a fairly large Board is therefore
Justifiable.
As regards the furmule which in paragraph 2of
Our suggested text of this Article, that is a formula with which the
Commission will now be familiar. Once more, however,we have an
open mind on the details of the formula and, as we have provided in
the paragraph, we have the idea that the application of the formula
should be reviewed V periodically and, no doubt, the formula itself
could and would be veried at some later stage in the Crganization's
will not, therefore, follow the Brazilian Delegate into his five
million impondorable dellars, I would like to say that I fully
agree with him that, if everyone uses the same amount of material
then there will be more used in a large population. The remarks/
based on his experience with the International Monotary Fund, are of E/PC/T/B/PV/25
great interest and I was very glad to have the benefit of his
experience on that point.
Now, once more, Dr. Coombs, speaking for Australia, has
unfortunately had to leave, and I have been looking at his remarks
of two days ago. I hope they may apply to him today. He then
said that he was afraid that, in expressing his views, he might
have sounded rather more certain and definite than he was in fact.
I n other words, he had an open mind. But unfortunately he has
taken his open mind away with his person. I have attempted on
that previous oceasion, to reply, in his absence, to one or two
of the remarks he had made. I will not do so again at length,
except to make these points.
15 J.
Once more, perhaps, I did not make myself sufficiently clear.
we do feel that there is a very marked difference between the sort
of work that we do here and the way in which we do it and the work
which will fall to the Organization and its more important bodies
when the Organization comes into existence. That, of course, is
specially true in view of the very many difficult questions with
which the Organization will be called upon to deal.
Here, it is true that the larger trading countries have, in
most eases, been represented on our Sub-committees, but that has to
be qualified. In the first place, it has always been open to
delegations which are not represented on a sub-committee to attend
the sub-committee's meetings and to make their views known. In
fact, in a note by the Charter Steering Committee, which is to be
considered later this afternoon, there is the rather plaintive
remark that the work of some sub-committees has been slowed down
by the extensive participation of delegations not appointed to the
sub-committees, and of course, when it comesto the consideration
of the sub-comittee's Report by a Commission, it has always been
open to those not represented on the sub-committee to consider
themselves quite free to review the sub-committee's work.
That is, however, a different type of work from the work which
the Organization, when it is set up, will have, to do. It will have
to take a number of decisions on very important points within the
terms of reference represented by the Charter.
Then we are told, as I think we have been told before, that it
does not really matter very much whether there is some system of
permanent seats - for want of a better name - or not, because the
important trading countries will inevitably be represented on the
Board. Well, we are therefore asked: "Why bother about a -
provision for pnrma.ent sea s?"t - to which I can only answer vith
anothur qBestion"W tahy, then Obje.t?. One cannot, I think
//P-VT/B/PV/25 J. E/PC/T/B/PV/25
ride both horses at the same time. It that is what is likely, and
what is thought desirable, then let us provide for it.
We are also told - and I would agree with this - that a, good
deal will depend on personalities. The importance of the
Organization is certainly such that, if it is to succeed, it must
have the right representatives of the Member countries, but is that
not rather an argument for a degree of permanance and continuity,
rather than for a degree of change?
So, Mr. Chairman, I hope that the Commission will be prepared
very seriously to consider the proposal we have made, or at least,
the principle of the proposal that we have made, without perhaps
going, at this stage, into the details of the proposal, which I
would suggest might be left for a more appropriate body to consider. E/PC/T/B/PV/25
CHAIRMAN: The Delegate of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): The Cuban Delegation,
Mr. Chairman, does not see with sympathy any formula for the
election of the Members of the Executive Committee on the basis
of qualifications other than geographical considerations and the
free will of the nations who are Members of the Organization,
yet we think it proper to make an exception.
This exception relates to the practical convenience of
giving permanent seats to the most important nations of the
economic World.
We think that we should, try to find out a simple formula,
running a's:r from the practice of establishing an artificial
method of qualification, which is usually conceived, by thinking
first of the nations which it is desired. to elect, and afterwards
finding out the special qualifications required.
For that reason, we dare to suggest instructing the ad hoc
sub-committee to work out a formula based on these principles;
First, the Executive Committee should be composed of a number
of Members not less than fifteen nor larger than eighteen,
Second, the seats in the Executive Committee should be
distributed in order that all the economic regions of the world
would be represented. Third, a number of seats, not less
than a third of the total number, nor larger than half this
number, shall be permanent and will correspond to the nations
of higher value of foreign trade. All others to be freely
elected by the Conference.
If the Committee wishes to establish certain qualification
to be elected, I am affraid we are inclined to accept only the
requirement of a certain minimum amount of foreign trade value
to be elected a member of the Executive Committee.
V E/PC/T/B/PV/25.
MR. STANISLAV MINOVSKY (Czechoslovakia): (Interpretation).
We explained yesterday the reasons why our Delegation was
in favour of the system of weighted voting. On the other hand,
we considered, as being both reasonable and useful, that in the
case of the Executive Committee a special position should be
reserved for the large powers, a position in conformity with
their importance in world economy and also in conformity with
their importance for us as regards the activities and the very
existence of the Trade Organisation. Now there remains to
determine the number of permanent seats in the Executive Committee,
In our note we suggested the number of fifteen or eighteen members
for the Executive Board, but we take it that five permanent seats
will be reserved for the five permanent Members of the Security
Council. In other words, one-third of the seats would be reserved
for the greater powers. Now if it is considered preferable to
have six seats reserved, we would recommend that the Executive
Board should consist of eighteen members.
Finally, as regards the question of majority, we are in
agreement with the United Kingdom note, given on page 63 of the
Report of the New York Drafting Committee.
CHAIRMAN: The Delegate of Belgium.
BARON PIERRE DE GAIFFIER (Belgium) (Interpretation) t I-
With your permission, Mri ChaIrman, I am not going to be
dogmatic,Ibut 1 im golng to be evmnwsoiechat b.utal? It seems
to me that the time foi deflnstirz- om fornulae has passed and
we should be ready now to designate countries which will sit on
the Executiae Bozrd. It seems to me that atethe ond of our
second session we should have gathened hrougi ixperlence ane hav6
M M 20 E/PC/T/B/PV/25.
done sufficient preparatory work to be able now to be precise
in our decisions. The question of the number of Members of
the Executive Board, and of the permanent seats, have been touched
upon by previous speakers, I should like to recall that the
Report of the Drafting Committee has very complete material on
these questions. E/PC/T/B/PV/25
The Report states what has been done in that respect at
the previous Sessions, and we can see from it that the work has
been considerably advanced, and we should not go back now to the
initial stages.
The Delegate of Brazil, in fact, in his remarks concerning
the question of the permanent Members of the Executive Board,
based himself on certain considerations included in the Report
when he said that the permanent seats should be attributed to
the most important countries economically. This is actually the
test laid down in the Report - the greater economic importance.
The Delegate of Australia said that it was important for us to
define how we are going to pursue this programme. I quite agree
with him, this is important, but experience shows how difficult
it is for the Delegates to consider these questions from a
purely abstract point of view. Each of them is, of course,
inclined to consider these questions in connection with the
interests and eventual representation of his own country; so
whichever system we choose for considering, difficulties are
unavoidable, It would be a better method if we could agree to
proceed to the drawing up of the compostion of the Executive
Board.
In this respect the Report contains two alternative proposals
- one the Canadian proposal, which clearly shows the complete
possibilities included in it, and the Committee'rs proposal which,
in my opinion, is too abstract. We are in favour of an inter-
mediate solution.
We think that the Organisation will be worth what its Members
will be worth, and as the United States Delegate said yesterday,
any decision on the voting system before we know exactly what the
provisions Of the Charter are, would be to sign a blank cheque. 22
In the same way, I might say that if we decide on a system
for the establishment of the Executive Board without knowing
who will be represented on this Board, it would also be
similar to signing a blank cheque.
We consider that the alternative "B" included in the
Annexe to the Report might be considered as a useful base for
the work of whateverSub-Committee will be concerned with this
question; but in connection with alternative "B" certain questions
remain to be clarified; and in the first place what must be
understood is, what is meant by Members of the first
category ? It seems to us that if only the economic importance
as shown by the Tables is taken into account, this may lead.
to some disadvantages, and if it were possible for us to proceed
simply by designating the names of the countries, that would
be a speedier procedure. And the last point I wish to make
is that the Sub-Committee which shall be instructed to study
this matter should have well-defined and rigid terms of
reference, so that we should not be obliged to de again the
work which has already been previously done.
CHAIRMAN: The Delegate of China.
H.E. Mr. WUNSZ KING (China): In this matter of the
composition and election of the Board, the Chinese Delegation
may be less open-minded than they are in connection with the
general principle of the voting system, because in this
particular question we think we have somehow or other made up
our mind as to what system or method we consider to be best
for the purpose of the composition and election of the Board.
I have listened to the remarks and statements made by the
various speakers, and I feel very much interested in all these 23
G. E/PC/T/B/PV/25
remarks.
I would like, first of all, to give an assurance to those
of my colleagues who have, as I understand, advocated, the system
of "one Member one vote" in the matter of the general principle
of the voting system; and if the Chinese Delegation should say
they would prefer the weighted voting system in regard to this
particular matter of the composition and election of the Board,
I would give the assurance that those Colleagues of mine who
have strongly advocated against the weighted voting system in
regard to the general principle of voting need not feel that this
might create a dangerous or bad precedent for them, when we come
back to the general question of the voting system.
Now, I would like to come to the que stion of the number of
seats - first things first. As to that question, the determination
of this question would, in our mind, have to depend upon the size
or the total number of Members of the ITO. Now it looks not
unlikely that the total number of Members of the future ITO
may run to sixty or even more, including the Members of the
United Nations and some non-Members, and perhaps some associate
Members - I do not knowp but it seems to me it would be
illogical that the ultimate determination of this question should
have to depend upon that fact.
Roughly speaking, it might be useful or desirable to put the
number of seats of the Executive Board at one-third of the total
number. Therefore, if the total number of the future ITO is, say,
sixty, then we might have to have twenty Members of the Executive
Board. Therefore, tentatively speaking at least, we are in favour
of the number of eighteen. Of course, I am guite impressed by the
argument that this Board should be limited in number of Members in
order to be manageable for the conduct of the business of the ITO;
but on the other hand, it should also be sufficient. E/PC /T/B /PV/25
Therefore we should try to work out a formula on this particular
questi n whereby we can reconcile these two factors, that is to
say, limited in number and yet representative of all the Members,
and for the time being I could not think of any formula be tter
than the number of 18. Of this number of 18, I would say that
either eight or nine Members should be - I hate the word
permanent, but I use it for lack of another word - permanent.
(A loud clap of thunder followed). Well, the word "permanent"
is not a very happy one, you seel (Laughter).
Again I would like to give another assurence, that the word
permanent in this connection seems to have a special meaning;
that is to say, those Members which can permanently hold their
position in the world economy, a position of permanent world
importance, are to be permanent Members. of course , I have
no particular fondness for the honourable title of permanent
members being conferred on these Members, We might just as
well say that these Members are perhaps re-appointed upon the
first determination and upon each succeeding determination,
which amounts to the same thing.
As to the method of election, I would say very frankly and
honestly that the Chinese Delegation, as I have perhaps already
pointed out, is in favour of the United Kingdom formula as set
out on Pages 54 and 56 of the New York Report, and again set out
on Page 2 of Document E/PC/T/W/202.
We accept this proposal, not only because of the Unitd
Kingdom formula, as was rightly pointed out by my colleague for
Canada the other day when he said - may I quote his words -
"Population - the purely democratic factor - is recognized and
given direct weight as one of the factors in the proposed system of
weighted voting" - not only because of that, but also because
this formula, it seems to me, has many virtues. It is
24
S . S 25 E/PC/T/B/PV/ 25
a modest one, as was rightly pointed out by our colleague for
Norway, because it represents a serious and honest attempt to
equalize as far as possible the various weights and factors.
It has another virtue, too: that is to say, a fairly
adequate representation of countries of all economic structures
and ot countrtis at the various states of economic and
industrial devolopment, and again it is also based - if I
understand it correctly - on the basis of the principle of an
adequate geographical distribution, of seats.
In making, these remarks, I do hope that the United
Kingdom Delegate may not feel upset if he finds that the Chinese
Delegats seems to see in his own proposal more virtues than he
himself sees, but, as I have repeateadly pointed out, my mind
is more or less open on certain of the technical details, such
as the base year or base years for the determination of the
criteria. Whether, as the Delegate for the United Kingdom very
modestly points out, the basic vote is motiveless or not, in
this connection I think he is a little to modest. I think
there is a good motive in having this basic vote of 100 votes.
On these small points, I beg to disegree with him. Still,
I am open-minded in another sense, too; that is to say, we have
also examined some other formulse which have been suggested by
various other Delegations, not excluding the Brazilian Delegation.
After a very careful examinstion 3 the United Kingdom formula
In conjunction with the Brazilian formula, I am very happy to say
that we seem to find that this Brazilian Proposal also possesses
the same virtues as I have outlined in regard to the United Kingdom
formula, with a very remarkable emphasis on the, great virtue of
adequate representation on a geographical. basis.
Therefore I would add that the Chiness Delegation, as well as
many other Delegations, would feel extremely happy if we could work
out a formula on the basis of the United Kingdom proposal in con-
Junction with the great idea of geographical distribution; as has
been explained and expounded by the Brazilian formula, as well as
by the Cuban Delegate and the Australian Delegate, too. ER 26 E/PC/T/B/PV/25
Now, I understand that this question might also be submitted
to a Sub-Committee for further consideration, and for the purpose
of formulating the formula to be referred back to the Commission.
Well, I am wondering whether, in view of the relatively simple
and easy nature of this question, it would be necessaryto create
a Sub-Committee for that purpose - but certainly
not because the Sub-Committee which might be set up
night have the vice to which our Delegate for Norway has referred. 27
CHAIRMAN: The Delegate of France.
M. KOJEVE (France) (Interpretation): I have followed with
the greatest attention the statement made by Dr. Colban, and I
agree when he says that the question of the number of seats in
the Execiutive Board is of paramount importance. I also agree that,
from the technical point of view and from the point of view of the
effectiveness of the work to be done, fifteen members, as suggested
by the United States Delegation, is a maximum. I think it would
be very difficult to carry out a really technical work in a large
body.
On the other hand, I have been impressed by what Dr. Coombs
said when he pointed out that all the major types of economic
structure should be represented in the Executive Board.
I do not agree with Mr, Colban when he suggests that it would
be necessary, first of all, to determine the number of seats, bacause
I think that the number will depend on the method that will be
adopted to appoint the Members of the Executive Board. One can,
for instance, conceive of system excluding certain types of economic
structure, for example, the type of under-developed. countries or
backward countries, while another system could be adopted including
all possible types, but in this case it would be necessary to have
a rather high number of Members for the Executive Board. However,
I think that it is also possible to conceive of system in which
both types could be reconciled, that is to say, all types could be
represented while still maintaining the number of Members at
fifteen, or perhaps even less. At any rate, it is impossible to
discuss one question without discussing the other.
Another very important question is that of those members
which have been described as "permanent" in the absense of a more
suitable term. I agree that this is not particularly felicitous, 28
E/PC/T/B/PV/25
but at any rate it means - well, it means what it means. Permanent
seats have some advantage, in my opinion, insofar as they ensure
stability and continuity in the work of the Executive Board. There
remains the rather difficult question of drawing up a list of
permanent seats. 29
V E/P C /T/B/PV/25
In this matter I have an open mind, and my Delegation is
prepared to examine every proposal. I have no objection of
principle to the proposal made by my Czechoslovak colleague;
but here again I think it would perhaps be a good thing if the
various types of economic structure, insofar as these types are
permanent, were permanently represented on the Executive Board.
It would be necessary to avoid, in any case, the creation
in the Executive Board of a bloc of Powers or what was described
yesterday by Mr. Gutierrez as a "pre-fabricated majority"; but
we should not, on the other hand, go to the other extreme, and
should avoid having no majority whatever for important questions,
because in that ease it would be impossible for the Executive
Board to come to any solution.
We have had an example of this in a similar Committee at
this Conference, and it was impossible to solve any question,
Therefore, it is necessary to find some compromise, and insofar
as any proposal that is made Will meet these two requirements
we are prepared to accept it.
Finally, I should like to point out, Mr. Chairman, that we
made a proposal in New York, but it was only submitted informally.
We do not withdraw our proposal, but, on the other hand, we do
not insist upon it. We have only made this proposal as a possible
basis for a compromise. With your permission, Mr. Chairman, I
shall ask that it may not be discussed right at the beginning;
but perhaps it will be possible to find some other proposal
that will prove more satisfactory.
CHAIRMAN: The Delegate of Canada.
Mr. L.E. COUILLARD (Canada): Mr. Chairman, our time is
running out. It may be that Heads of Delegations would wish a 30
V E/PC/T/B/PV/25
break in between their meetings, and I am not particularly
anxious to speak to the accompaniment of thunder and lightning,
I do not think I deserve that, so I am quite willing to put of f
my remarks until tomorrow, if it is agreeable.
CHAIRMAN: In view of the atmospheric conditions, perhaps
it would be better if we adjourn now in order that there shall
be plenty of time for those Heads of Delegations who have to
attend a meeting of the Heads of Delegations Committee to be
there on time.
The next meeting of the Commission will take place tomorrow
at 2.30 p.m., at which we will resume the debate on which we
are now engaged.
The meeting is adjourned.
(The meeting rose at 4.55 p.m.) |
GATT Library | px139rr5744 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twentieth Meeting of Commission A Held on Saturday, 28 June 1947 at 10.30 a.m in the Palais Nations, Geneva | United Nations Economic and Social Council, June 28, 1947 | United Nations. Economic and Social Council | 28/06/1947 | official documents | E/PC/T/A/PV/20 and E/PC/T/A/PV.18-20 | https://exhibits.stanford.edu/gatt/catalog/px139rr5744 | px139rr5744_90240125.xml | GATT_155 | 9,127 | 54,189 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/ T/A/PV/20
28th June 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERBATIM REPORT
TWENTIETH MEETING OF COMMISSION A
HELD ON SATURDAY, 28 JUNE 1947 AT 10.30 A.M IN THE
PALAIS 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) E/PC/T/A/PV/20
CHAIRMAN: The Meeting is open.
Some Delegates have not yet come, but I think we can start.
We are going to examine the Articles 16 - 23 and 37. You
remember we had the same articles in what was the Working party
and we hardly agreed on a re-draft of these Articles, partly
because some of them were referred to Sub-Committees. Four
or five of these Sub-Committees got through in time to report to
the Working Party, but some few Sub-Committees were not ready
when the Working Party had to see Commissions A and B, but
their Reports are now included in the Document T/103, which thus
contains both articles on which the Working party arrived at
more or less final conclusions, and the Reports of the Sub-
not
Committees that had/been reporter to the Working Party.
I take it that you all agree to use Doc. 103 as our agenda
for to-day.
We start by Article 16, Freedom of Transit. You will see
on page 2 of Document 103 the proposal adopted by the Working
Party in the first reading. It simply copies the New York Draft,
with one small but rather important addition to paragraph 1,
"but shall apply to air transit of goods and baggage". That was
agreed. in the Working party, and I would note, as it also is
noted in 103,that the Delegate of Chile and the Delegate of
Canada wanted to confine the Article 16 to goods only, in which
case other means of transport should be deleted.
I would ask the Delegate of Chile whether, after having
the opportunity of re-considering the matter he finds it possible
to join in with the majority.
Next I would ask the Delegate of Canada.
Mr. URQUHART (Canada): Well, Mr. Chairman, I think I prefer
2 E/PC/T/A/P V/20
to refer the discussion of this until I hear the Chilean
Delegate. We simply associate ourselves with... (Oh, here he
is now.)
CHAIRMAN (Interpretation): The Chairman explained to the
Chilean Delegate where we were now standing, and asked the
Chilean Delegate if he could join the Members of the other
Delegations in accepting the paragraph as drafted.
Mr. GARCIA OLDINI (Chile) (Interpretation): The Chilean
Delegate apologises for giving the Chairman this excess of work,
and is sorry to state that he has to maintain his reservation
for the time being, as long as his Government has not had time
to study all the implications of this proposal.
Mr. URQUHART (Canada): I think I still associate myself with
the Delegate of Chile.
CHAIRMAN:I hope it may be possible for those two Delegates
to obtain more precise instructions on the subject before,
finally, the Report is passed through the Preparatory Committee,
Then we find, on page 3 of Doc. 103, the following remark.
"The Working Party agreed that the wording of paragraph 1 covered
transit from one point to another in a given country across the
territory of another country". That was, as far as I remember,
unanimously agreed, and to my mind is correct.
The question is only whether it should go on being a
remark and explanation to paragraph 1, or not. I do not want to
force the minds of Delegates, but I would only say that of course
the fewer remarks, the fewer comments, attached to the Drafts of
the Charter submitted to the General Conference, the better.
G
3 - G 4 _ E/PC/T/A/PV/20
CHAIRMAN: Could we add that you have seen the paper
from the Steering Committee concerning the Draft in the form of
the Report of the Preparatory Committee, and there it is suggested.
that it is an Annexe to the text of the Charter. We could give
some explanations and some comments, in order to help better to
understand the implications of the text we propose. Perhaps
the simplest thing would be to leave it to be considered at a
later stage of the work of the Preparatory Committee; and the
commentary ought to be included in that Annexe, and if such an
Annexe is prepared, this is a case in points. E/PC/T/A/PV/20
CHAIRMAN: The Delegate of the United States.
Mr. Oscar RYDER (United States): Mr . Chairman, I want to
refer to the reservation of Chile and Canada, and ask them what
status it has. Does that mean that the reservation goes to
the World Conference - it would be unfortunate if it did; or
does it mean that it will come up again in the Commission or
where? What is the status of it?
CHAIRMAN: I would say, in answer to that, that I have
already take upon myself to express the hope that before the
termination of the Preparatory Committee it may be possible for
the Delegates of Chile and Canada to obtain instructions
enabling them to forego their reservations. If they are unable
to obtain such instructions, of course, I do not see any other
solution than to let the reservation go on, with the Report of
the Second Session of the Preparatory Committee, to the World
Conference; but I would also repeat what I said just now,
that the fewer reservations - the fewer exceptions - the better.
The Delegate of India.
Mr. S. RANGANATHAN (India): Mr. Chairman, there is one
other minor complication to which I might draw the attention
of this Commission. Most of these Articles will also go
into the General Agreement on Tariff and Trade. What will
be the position of these reservations in relation to the
General Agreement?
CHAIRMAN: In New York, we decided to send on the
draft Tariff Agreement as a Working Paper for the second
Session of the Preparatory Committee, and we said that all
reservations made to the Articles of the Draft Charter
- 5-
V E/PC /T/A/PV/20
were also, provisionally, reservations to such Articles of the
Draft Charter as might be incorporated in the Tariff Agreement.
I am perfectly aware, however, of the complications resulting
from that, and there are, in my view, two ways out: either
to get rid of these reservations or to try to keep out of the
Tariff Agreement those parts of the Charter on which reservations
are maintained.
The Delegate of South Africa.
Dr. J.E. HOLLOWAY (SouthAfrica): Mr. Chairman, I
would like to raise a general question on Note (b), which refers
to all similar notes throughout this document - that is, to all
explanatory notes . The idea now is that these Explanatory
Notes will go into an annexe or such notes an are ultimately
passed for inclusion in the annexe.
Now, throughout our discussions we have found refuge in
explanatory notes to get over difficulties in the drafting of the
Charter. The question has repeatedly occurred to me, what is
the status going to be of these explanatory notes when one day
we are delivered, bound hand and foot, into the hands of the
lawyers? I have had a good deal of experience of the way lawyers
go to work in interpreting a document: they follow the pure wording
of the law and are bound by that wording. They say that if a thing
could have been put more explicitly in a certain way, and it was
not put more explicitly in a certain way, that is because the law
did not want them to put it more explicitly. In other words, my
feeling about the matter is that the lawyers assume that the
law-makers are all-wise and omniscient and that therefore they have
expressed their meaning exactly. Therefore, anything which gives
an explanation the lawyers are generally going to disregard.
That, of course, is not essential, and we have really got over
-6-
V. V -7- E/PC/T/A /PV/20
quite a lot of difficulties by these notes.
It seems to me that it would be necessary for the World
Conference, at some stage - perhaps in its own Interpratation Article
in the Charter, to lay down a rule that the interpdated notes
included in the annexure are part of the material of the
interpretation of which the lawyers, in interpreting the Charter
afterwards, have to take account. I fear that if we do not d o
that, we shall have a good deal of difficulty, because a large
number of Members have accepted certain parts because the note
has given an explanation which has made it perfectly clear that
that is as they like to see the matter, but if those notes fall away,
God alone knows what the lawyers will make of it!
I suggest at this stage - the very first stage at which I can
suggest it - the same thing occurs every time we have an explanatory
note, so that the matter can be considered by whoever is the
appropriate person to deal with it, in order that we can have
clarity about this matter. I think we should have this clarity
before we get to the World Conference, because if these explantory
notes are not to have the status of interpreted material, it is
quite easy for you, Mr. Chairman, to see how much trouble you
would have with new drafts of the Articles themselves. -3-
Mr. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
I second this suggestion.
CHAIRMAN: Any further remarks? May I perhaps say that I
have thought a little bit about this problem, and my own feeling is
that, in the Preparatory Committee we cannot do better than go very
carefully through these explanatory notes - I am not talking about
reservations but about explanatory notes - and only to maintain
laws which really can help the great conference to understand better
the text. I also agree whole-heartedly with the delegate of
South Africa, seconded by the delegate of Chile, that the great
conference ought to, if they keep these explanatory notes annexed
to the Charter, have some statement somewhere perhaps even in the
Charter itself that in the annex there will be found some
explanatory notes that should be taken into account in all questions
of interpretation on the relevant Articles of the Charter; but as I
said, that should be done by the Conference and not by us.
Mr. F. GARCIA OLDINI (Chile) (Intepretation): Mr. Chairman,
of course it would be for the Conference to decide upon this point,
but I think we can suggest this point to the Conference because we
Ourselves know the question far better than the other Members who
Would join the Conference. Therefore, I think it is for us to do
so, because we are better acquainted with the difficulties of the
Charter than the other Member obrz of thference.rc-0e
CHNIRMAd: We arnggoir( toudisciss the form of the Report of
the Preparatory Ctmmit ee inChairman'er lmm Cornittee one of these
days, and I am qpite Drepared to raise the question there.
We have still not quite finished withclrti.ce 16; paragraph 1.
There is a document which was distriboted Only this mornin0 T/1o9,
containing some questions referring to explanatory notes. You have
E/AC/P/;./]V/20 E/PC /T/A/PV/20 -9-
not had this document for twenty-four hours, but unless there is
any objection, we might perhaps just go through it. This
document reads:
"The French delegation desires to make the following observations
affecting both the french and English texts of document E/PC/T/103.
"It might have been advisable to state that:
"'The Netherlands delegation enquired whether the principle of
freedom of transit was applicable to goods of foreign origin arriving
in a country without the final destination being known at the time
and subsequently consigned to a third country after being in bond in
the country in question. By a majority vote, the Working Party
considered that the answer to this question was in the affirmative. '"
You will see that the enquiry presented by the Netherlands'
delegation only got an affirmative reply by a majority vote, and I
do not know whether it would , be of any help to the Coference to
insert some explanatory notes on the subject.
Mr. M.C.E. MORTON (Australia): Mr. Chairman, I suggest that
as we are in the mood to give consideration to this explanatory note,
we leave out entirely any reference to the matter that was discussed
on 16 May, on the grounds that it is entirely unrelated to the
conditions set up in paragraph 1 of Article 16. Paragraph 1 of
Article 16 refers to freedom of transit. It says: "... when the
passage across such territory .... ..... is only a portion of a
complete journey, beginning and, terminating beyond the frontier of
the Member across whose territory the traffic passes".
- 9 - L. E/PC/T/A/PV/20
The note of the Netherlands delegation"s enquiry related to an
entirely different set of circumstances, It refers to a case
where goods wore shipped from one country to another, went into
the frontiers of that country, and were shipped to a third country;
when they arrived in the third country it was not a case of goods
for sale from their original country, but from the second country.
There were certain implications in the thing which may not have
been properly understood. It is a desirable thing at all times
for transit to be given to goods travelling round the world, but
there are certain cases where such a thing may not be very desir-
able. Whiskey may be sent from Scotland to Antwerp - I cannot
understand why it could not be consumed at home - when it arrives
in Antwerp it is put into bond and later on a portion of it is sent
to France. Thereafter the transaction in those goods on arrival
in France is one between the merchant in Antwerp and the importer
into France, and not one with the original supplier in Scotland.
Supposing whiskey was in short supply in Antwerp, and the importa-
tion was prohibited , the Government in Antwerp would be perfectly
within their rights in not allowing those goods to go forward to
France. There would be no question of the freedom of transit in
that case, because it does not involve an instance where the passage
across that country was a portion of the complete Journey beginning
and terminating beyond the frontiers of the member across whose
territory the traffic passed.
CHAIRMAN (Interpretation): I would like to ask the French
delegate if , in the light of the explanation which has been given,
he still presses his point. L. -11- E/PC/T/A/PV/20
M. ROUX (France) (Interpretation): This question was
raised by the Netherlands delegation and not by myself, and the
document which we have had distributed this morning is only to
clarify the metter, and to draw the attention of the delegates to
a situation which might have escaped the attention of the Sacretariat.
Of course, as I took no part in the discussion, I must leave it to
the Netherlands delegate to defend the case. If we look at the
summarised records of the meeting where the question was discussed,
we will see the Netherlands delegate reserved his right to take up
the matter again in the full Committee . Therefore, our document
was only meant to clarif y this matter, and I will not discuss the
substance of the question.
CHAIRMAN: I will call on the delegate of the Netherlands.
Dr. S. KORTEWEG (Netherlands ): This is a special case, but
of course we could study other cases which have a contrary effect,
namely, that if whiskey is sent to Antwerp and sold to France, it is
not necessarily the merchant in Antwerp was the business, it is
also possible for England to take a certain part; in such a case
it is perfectly clear that the goods are in tracsit. From my point
of view, I should say that in must cases these questoins of transit
can be satisfactorily settled. It is necessary to take account of
the related questions of transit and their effect on the channels of
commerce ; questions of duty may arise; it does not seem to be a
point of special importance,to note the . that goods have
gone through. -12-
J.
CHAIRMAN: The delegate of New Zealand.
MR. J.P.D. JOMNSEN (New Zealand): Mr. Chairman, I agree with
the comment made by the delegate of australia. It seems to me
that the Paragraph as it stands is quite clear and that, if a note
were inserted along the lines of that included in document T/109,
it would only confuse the issue. I think we should let it stand
as it is.
CHAIRMAN: The delegate of the United Kingdom.
MR. W.E.H. RHYDDERCH (United Kingdom): Mr. Chairman, I agree
with the delegate of Australia and the delegate of New Zealand.
This, as it stands, seems to me to be likely to introduce the
ordinary idea of goods in transit - a very dangerous concept and
unjustifiable extension.
We in the United Kingdom should not regard the particular case
mentioned by the delegate of australia or the delegate for the
Netherlands as being in transit at all. We might call it entrepôt
trade, which is rather distinct from trade shipped in transit, but
to bring this conception, even by an explanatory note in the Article,
would be very dangerous.
CHAIRMAN: The delegate of Belgium.
M. DE SMEDT (Belgium) (Interpretation): Mr. Chairman, the
cases which were mentioned just now, cases of transit of such a nature,
have always existed and have always, in our trade, been known and
registered as cases of transit, and I do not see why, with goods
which are brought to harbour and shipped away from that harbour,
whether straight away or at a later date because the final
destination is not known or because the ship on which they are to J. -13- E/PC/ T/A/PV/20
be re-exported is not available straight away, we should not
call cases like that transit cases. We have always done so in
our own country.
CHAIRMAN: I think we are all in agreement with the text of
paragraph 1. If these is a question of any explanatory note, then
such an explanatory note is of value to the general conference
only if it represents the concerted views of all the delegations
here. If there is, as I have gathered from this discussion,
considerable difference of opinion on the application to special
cases of the text of paragraph 1, I do not think it serves any
useful purpose to underline that difference of opinion which I
feel quite certain in practical life will work out to be of very
little practical importance.
I would like to ask the delegate of the Netherlands whether,
after this exchange of views, he can forego the insertion of any
explanatory note, which he himself has not asked for.
DR, S. KORTEWEG (Netherlands): Mr. Chairman, you are quite
right. I was not the one who asked to insert it, and it seems to
me a queer position to have to defend an insertion which we have
not asked for. I think it would not be right to insist on it
for I fully agree with you that it would not give to the conference
much light about this paragraph. Nevertheless, it is perhaps
possible to see if that majority vote which is mentioned here
still exists in this Committee, and possibly you would be so kind as
to find out the difference of opinion on this point in this
Committee.
The delegate of Canada. E/PC/T/A/PV/20 -14-
MR. G.B. .URQUHART (Canada): Mr. Chairman, there are two
different considerations involved here in this airticle. The f irst
one is in paragraph I and the second one is in paragraph 6.
Paragraph 1 deals with the treatment by the country through which
the goods pass; paragraph 6 deals with the treatment by the
country of the final destination. Now, as explained by the
delegate for Australia, paragraph 1 says that it is only a portion
:of a complete journey, and to insert a comment or explanatory note
in the draft to the effect that the transaction such as described
by the delegate for Australia should be treated asin transit is not
.in accordance withthe actual provisions of paragraph 1. It would
imply that a country would be forced to refund customs duties paid
on goods which where imported and re-exported, and I do not know
that any country here is going to be bound by any consideration
such as that.
MR. O. RYDER (United States): Mr. Chairman, I see no useful
purpose for the insertion of the note.
J. E/PC/T/A/PV/20
CHAIRMAN: I have been toll by the Netherlands Delegate that
although he does not insist on this being inserted as an
explanatory note, he would like to know whether the Commission
are in favour of the clarification of paragraph 1 as given;
but I feel very doubtful as to whether that is wise, because we
are not here to underline our differences but to try to simplify
them, and the Netherlands Delegate can raise the question of
interpretation without our getting any further, if I tried to
ask for the general view of the Committee; so I would rather
seize the opportunity given me by the Netherlands Delegate
himself, when he said that he did not really insist. He had to
know whether a number of his colleagues here share his view,
but I do not think it would help any; I am afraid it would simply
deepen the difference and prevent the Working Party, in practice,
from obtaining a reasonable interpretation of paragraph 1.
I hope that is satisfactory to the Netherlands Delegate.
Mr. KORTEWEG (Netherlands): I do not think it is quite
satisfactory, but I do not see that it is so dangerous as you
think; but nevertheless I will agree with your proposal.
CHAIRMAN: Thank you.
Then we go on to paragraph 2. There is no remark on the
text already unanimously approved by the Working Party. I think
we pass that in second reading now.
Paragraph 3. The same. No remarks? Agreed.
Paragraph 4. No remarks. Approved.
Paragraph 5. There we have a comment with regard to
Transport Charges. The Working Party understood that the G -16- E/PC/T/A/PV/20
principle of paragraph 5 refers to like products being
transported under like conditions. That is an explanatory note
unanimously agreed to; and I think that that is a note to be
dealt with in the same way as Note B on 16, paragraph 1.
Is that agreed?
Agreed.
Paragraph 6. There we have a comment that the Working
party was in favour of the retention of this paragraph as
adopted by the Drafting Committee, subject to a reservation
by the French Delegation, who will raise this matter when,
Article 14 is discussed; and in Doc. 109 distributed this
morning you will see that the French Delegate draws attention
to the discussion which took place in Commission A on June 3rd,
1947, on the corresponding problem in relation to Article 14.
I would now like to ask the French Delegate to speak in
the light of the results which have been achieved in the
discussion of Article 14. He has some comments to make now on
this paragraph 6 of Article 16.
Mr. ROUX (France) (Interpretation): I would say, Mr.
Chairman, that we only wanted to draw attention in this note to
the reservations which were made by the French Delegation as
regards also Article 14, because we stated that it might not be
possible to adapt in time the French-legislation to the provisions
of this Charter, whenever this Charter would come into force;
and when I look at the note on paragraph 6 I would like to make
a comment on it, subject to a reservation by the French Delegate
who will raise this matter when Article 14 is discussed.
The matter was raised already in Doc. 109 when the matter
came into discussion on 3rd June. I would like, again, to draw the E/PC/T/A/PV/20
attention of the Members of this Committee to the fact
that it might not be materially possible for the French
Government, when the Tariff agreement comes into force, to
modify accordingly the French legislation. We hope to have the
necessary legislative provisions passed before that, but we
are not certain that by that time the French laws will be
modified, and that was the position that was explained by
the head of our Delegation recently.
I would like to point out that the French Delegation was
opposed, with a number of other Delegations, to the inclusion
of paragraph 6 in Article 16.
CHAIRMAN(Interpretation): I would like to ask the
French Delegate if, in the light of the discussion which took
place on Article 16, it is still necessary to maintain the
second part of paragraph 6.
G E/PC/T/A/PV/20
M. ROUX (France) (Interpretation): Mr. Chairman, the second
part of paragraph C of Article 16 was added at the request of a
certain number of Delegations, among which the French Delegation
was not included. In fact, we oppose the insertion of the whole
of paragraph 6; but as paragraph 6 was adopted by a majority of
the Members, we submitted to the majority rule, and we made no other
reservations as regards paragraph 0, Article 16 than we made for
Article 14, because the question at issue is exactly the same.
CHAIRMAN: Then I take it that unless any other Delegate
wants to submit any amendment on the text of paragraph 6, the
text is unanimously approved?
The Delegate of the Netherlands.
Dr. S.KORTEWEG (Netherlands): Mr. Chairman, I do not wish
to speak on the contents of this paragraph, but only on the place.
I am not quite sure that this is the right place for this paragraph
in the Charter. It does not deal with the question of transit,
but only with the way in which countries have to collect duty, and
therefore I should say it would be better if it was added as a
special paragraph to Article 14, for instance.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. W.E.H. RHYDDERCH (United Kingdom): Mr. Chairman, the
suggestion made by the Delegate of the Netherlands was very fully
discussed in the sub-Committee, and I think I am right in saying
that we generally came to the conclusion this was the proper place
for this particular paragraph.
CHAIRMAN: The Delegate of France.
M.. ROUX (France) (Interpretation):
-18-
Mr. Chairman, I would V E/PC/T/A/PV/20
like to point out that if it is decided to maintain this paragraph
in Article 16, then the title of Article 16 does not appear to me
to be appropriate, because one sees in the title "Freedom of
Transit", and paragraph 6 does not deal with freedom of transit;
therefore, the appropriate title, if you want to leave it in
Article 16, would be "Transit".
CHAIRMAN (Interpretation): I would like to point out to the
French Delegate that this suggestion was made by myself in the
Working Party, and the suggestion was not adopted by the Working
Group.
In reply to the Delegate of the Netherlands, I might perhaps
suggest that the final place of paragraph 6 can just be left to
the Legal Drafting Committee and that provisionally we maintain it
here.
Now it only remains to be decided whether we wish to maintain
the comment on Article 16 (6) as is found on Page 5 of Document
T/103. I wonder whether there is any necessity for keeping it in
at all?
(Interpretation) The important question is the interpretation
of Article 14, and a note, summing up the position of the French
Delegation, will certainly appear on Article 14, and therefore it
is useless to repeat that commentary here on Article 16.
The Delegate of France.
M. ROUX (France) (Interpretation): Mr. Chairman, I must
press my point here,as although, of course, our reservation
applies in a larger measure to Article 14 than to Article 16, it
would, nevertheless, not be proper for the French Delegate to
see Article 16 adopted without a comment on its part, because
the French Delegation knows quite well that it may not be able to
-19-
V E/PC/T/A/PV/20
apply the provisions of Article 16, paragraph 6, as soon as the
Charter comes into force. This is not an absolute reservation:
it may only be a temporary reservation, but, nevertheless, it is
only loyal on the part of the French Delegate to state this
reservation,
CHAIRMAN: Unless any other Delegate has any objection, we
should then maintain the comment, in the following wording:
"The Working Party was in favour of the retention of this
paragraph as adopted by the Drafting Committee, subject to a
reservation by the French Delegate who will raise this matter
when Article 14 is discussed".
Is that agreed? (Agreed).
V E/PC/T/A/PV/20
Mr. F. GARCIA OLDINI (Chile) (interpretation): Mr. Chairman,
I would like to point cut that when you read the commentary in
English, the Interpreter does not always read the full text of the
commentaries in French. I think that the delegates follow the
text in French while you, Mr. Chairman, are reading it in English.
Nevertheless, that was not the case when we were dealing with
paragraph 5, and I did not have time to raise a question. In
paragraph 5 my remarks apply to the words "like products", and I
would like to ask if these words are interpreted in a restrictive
way and, in that ease, the word "like" should mean "similar" or
"analogous "
CHAIRMAN: (Interpretation): I would like to point out that the
word "Iike" is used both times in the English text, and in French
once it says "similaire" and the other time "'analogique". Perhaps
the French delegate would clarify this matter for us.
M. ROUX (France) (Interpretation) : Mr. Chairman, I am very
grateful for the honour that you are bestowing upon me now, but I
would hate to discuss the word "like" because this word was
discussed at length, not only here but in New York and London, and I
suppose many times in Geneva before. The only important question
is not quite the word "like" in itself, but the exact translation
of the word which should be used always. After having taken advice
from experts in the Secretariat, we should attack to the translation
and always use it.
CHAIRMAN: I think it was not the intention of the translators
to use two terms of different indication, but "similaire" and
"analogique" were alternatives of practically the same value. But
if we can forego the duties of language, I think it would be
preferable to use one term in both cases and personally, I have the
feeling that "similaire" covers "like". I think it would be better E/PC/T/A/PV/20
to leave the matter to the Secretariat, and eventually to the
Drafting Committee.
Mr. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
it was not only a question of drafting which I was raising. I
am fully aware of the discussions which took place on the words
"like products", but it seems to me that this question had not been
clarified and very often the meaning of the word "like" would not
be of great importance, but at other times it would, and we have to
see the meaning behind the word. In fact, I think that the words
"like products" must have a restrictive meaning, otherwise, in
certain cases, some products could be considered as like products,
and benefit from the advantages of goods in transit, and this of
course we do not want.
CHAIRMAN (Interpretation): For the reasons I expressed just
now, I prefer to use in French the word "similaire" to the word
"analogique", as it has a more restrictive meaning
We have now finished with Article 16, with the exception of
one reservation by the delegate of Chile and one by the delegate
of Canada. We hope to be able to clear away these difficulties
before we terminate our work. E/PC/T/A/PV/ 20
CHAIRMAN:We now come to page 7 of Document T/103. We will
take paragraph (a):
"(a) The delegates for Australia, Lebanan-Syria, New Zealand
and the Union of South Africa may wish to reconsider Article 17
in so far as it bears on the question of rates of exchange in
the light of what may be agreed under Article 18, paragraph
2 (c) and Article 29."
I only wanted to mention this reservation. There is no
positive proposal, but if any delegate wishes to make a suggestion
on any of the paragraphs in the Article, I take it it will be made
when we reach the appropriate paragraph.
There is a comment in paragraph (b).
"The delegate for Cuba oritioised the way of approach
to the problem of dumping by Article 17 which confines it self
to restricting the rights of Members affected by dumping, whilst
not condemning those practising it . He would have wished to
Introduce it by an express statement of condemnation."
Mr. HERBERT DORN (Cuba): The representative of Cuba in the
sub-Committee did not make any formal reservation on this point, but
the point he raised is quite clear; I felt it was necessary to give
a special disposition and make it clear that in principle there
should be no dumping. Therefore the question was only on, of draft-
ing, and framed to stress the point; there is no formal reservation
made at this point.
CHAIRMAN: We will pass on to the examination of paragraph 1
of Article 17. I take it that you have all carefully studied the
text submitted by the sub-Committee on this paragraph so that I do
not need to read it out. We must, however, deal with the comments
on page 9. L . -24- E/PC/T/A/PV/20
"(a) The majority of the sub-Committee is of the opinion that
hidden dumping by associated houses (that is, the sale
by the importers at a price below that corresponding to
the price invoiced by the exporter with which the
importer is associated, and also below the price in the
exporting country) would constitute a form of price
dumping,"
Mr. OSCAR RYDER (United States): I was not a member of
the sub-Committee, but my understanding was that there was nota
minority view in the sub-Committee; I think the note was unan-
imously approved.
CHAIRMAN: I take it that we agree to strike out "The majority
of" and the paragraph will read: "The Sub-Committee is of opinion..."
Is that agreed?
(The Meeting agreed)
CHAIRMAN: I would like to mention that with regard to the
comment we may have to alter the words "The Working Party agreed",
"The Working Party was of opinion", and say: "The Sub-Committee
is of opinion". Of course, all those opinions in the name of
the Working Party may afterwards become our opinion, and then we
shall say: "The Preparatory Committee is of opinion". I just
mention this to emphasise the importance of the remarks which will
eventually be passed on to the Plenary Conference. May I take it
that you are in agreement on this?
(The Meeting agreed) E/PC/T/A/PV/20
CHAIRMAN: We pass on to Comment (b) -
"(b) The Sub-Committee considers that in accordance with
Article 35 the obligation to justify, the imposition
of anti-dumping and countervailing duties, if
challenged by another Member, lies in the first place
with the Member applying this measure."
I call on the delegate of Chile.
M. F. GARCIA OLDINI (Chile) (Interpretation): The applica-
anti-
tion of the/dumping and countervailing duties is only the consequence
of the dumping methods. Therefore, if a Member applies anti-
dumping and countervailing duties it is because he accuses another
Member of in fact applying dumping measures, and it is the Member
who is applying these dumping measures who ought to beer the burden
of the proof, and prove that there is no dumping. It ought not to
be for the Member who applies anti-dumping and countervailing duties
to prove that it was right to take these measures; it is for the
Member who is, in a sort of way, committing the dumping to show that
the anti-dumping and countervailing duties are unjustified.
I am taking up again in an indirect way the criticism made by
the Cuban delegation as regards this Article when it was said that
the practice of dumping has been condemned by the Charter. In
fact the Charter does not ignore dumping measures, it allows Members
to defend themselves against these measures. If the practice of
dumping were condemned formally, then it would be the Member who is
practising dumping who would have to bear the burden of the proof,
because in fact the Member who is defending himself is already
accusing the other Member of practising dumping which is illegal.
What we ought to get at is not the effect but the cause, and the
cause is dumping, and it is the Member who is the cause who ought to
bear the burden of proof.
-25-
L.. -26-
CHAIRMAN: The delegate of France.
M. ROUX (France) (Interpretation): Mr. Chairman, we all agree
that dumping is an illegal practice and that it is quite normal and
lawful to fight dumping, wbut we had another preoccupation when we
drafted this Article - the preoccupation against the mis-use of
anti-dumping measures - which was to render impossible the fact
that nations could, in effect, nullify the most-favoured-nation
provision by raising the customs duties in the guise of anti-
dumping measures and, of course, anti-dumping measures have to be
justified. We do not want to see the results of the most-
favoured-nation clause impaired and nullified by an illegal
procedure.
The reference to Article 35 is quite normal here and, in fact,
we had to mention Article 35 here because we think that these
provisions apply here, and because the provisions of Article 17
fall within the scope of the Charter. In fact, there are no
provisions here which can be applied against Members which are
applying these anti-dumping measures in a lawful way,and what we
want to do is to prevent the mis-use of these anti-dumping measures.
CHAIRMAN: The delegate of Cuba.
MR. H. DORN (Cuba): Mr. Chairman, I only want to call
attention to the fact that in my opinion that is quite a pure
juridical question which is dealt with in this comment.
There are two possible bases of challenging an imposition. First,
the basis that there is no dumping at all and therefore the whole
measure is unjustified, and second, that there is an exaggeration
of the reaction against existing dumping.
J.
E/PC/T/A/PV/20 J. -27- E/PC/T/A/PV/20
That means that there are two quite different juridical points
which have to be dealt with, and I personally am of the opinion
that that is a pure legal question, which has to be dealt with under
the heading of Procedure. I am doubtful if the Committee which
deals with the question of Article 17 can give a goe: ral rule in
such a case, and. I think it would be a question for the Legal
Advisor and the Legal Drafting Committee, if they could find a
general rule, to put it in. Therefore, I have some juridioal
doubts about the general content of this note.
CHAIRMAN: The delegate for South Africa.
DR. J.E. HOLLOWAY (South Africa): Mr. Chairman, I would like
to support the point raised by the Cuban delegate. It seems to
me that in disputing this point the main question was lost sight of,
that is, whether we are going to write little scraps of law of
evidence in the note. Well now, I do not know whether this
sub-committee is juridically able to write law of evidence, but this
is an attempt at law of evidence, an attempt to lay down where the
burden of proof lies in this matter.
Surely, if we are going to have examination of complaints under
Article 35, we must assume also a certain amount of legal sense in
the people that deal with it, and if we want to write little scraps
of law of evidence in those notes I can see ourselves getting into
a lot of trouble. I think the mischief here is not caused by
whether it ought to be the burlen of proof or not, but by having
a foot-note on a subject which has nothing to do with the Article
itself, but 7 which has simply to do with how you prove the thing.
I think the foot-note should go completely.
CHAIRMAN: The delegate for France. GE/PC/T/A/PV/20
Mr. ROUX (France) (Interpretation): Mr. Chairman, I must
come back to the history of this footnote (b), because this
footnote (b) was inserted following a note which was presented
by a certain number of Delegations, including the French
Delegation, regarding the burden of the proof.
The burden of proof, we were told, lay with the importing
country, and therefore the note which we had presented when
that answer was given to us, saying that according to article 35.
the burden of proof lay with the importing country, was
withdrawn; and we only ask that this answer should be mentioned
in the text in a commentary and be taken into account, and that
the interpretation regarding the burden of proof bo inserted
in the commentary.
We are told now, however, that this is a juridical
question, and that we are not here to deal with juridical
questions, but may I say that an interpretation of a text given
here, or even of the Charter as a whole, will always be a
Juridical act; and therefore each time we study the Charter and
give a meaning to any provision of the Charter, we will be
committing a juridical act; and, in fact, the Body which will
deal with the interpretation of the Charter will always find it
more useful to find commentaries telling it what interpretation
lay in the mind of the Charter makers; and it will be very useful
for them to have the explanation on the spirit of the Charter,
when the letter of the Charter is not clear.
Now, if the Committee maintains the interpretation which
was given to us, that is to say that according to Article 35 the
burden of proof lay with the importing country, then this
interpretation is mainteined, and the only thing we ask is that
this interpretation be given here in the commentary.
G G -29- E/PC/T/A/PV/2 0
On the other hand, if this interpretation is not
maintained, then a note will have to explain here what
interpretation is to be given; but, of course, if this former
interpretation is not maintained, then the French Delegation will
have to reserve its right to present the Amendment which it had
withdrawn in the matter previously.
CHAIRMAN: The Delegate of Canada.
Mr. URQUHART (Canada): I agree somewhat with the Delegate
of South Africa, that this thing as a comment should. be withdrawn,
I do not think it makes very much difference whether we have it
in there, or not. Article 35 is quite explicit. It says,
"Each Member shall accord. sympathetic consideration to, and
shall afford adequate opportunity consultation regarding, such
representations as may be made by any other Member with respect
to the operation of customs regulations and formalities, anti-
dumping and countervailing duties, quantitative and exchange
regulations, subsidies, state-trading operations, sanitary laws
and. regulations for the protection of human, animal or plant life
or health, and generally all matters affecting the operation of
this Chapter; and shall, in the course of such consultation,
provide the other Member with such information as will enable
a full and fair appraisal of the situation which is the subject
of such representations."
I think it is quite explicit in article 35, and does not
need, any commentary in article 30.
CHAIRMAN (Interpretation): By including the words "in
accordance with Article 35" in the note the intention of the
note is destroyed, because I do not see why, if we put the E/PC/T/A/PV/20
woras "in accordance with Article 35", we ought to defend here an
interpretation which is quite clear in fact, because the
interpretation of that Article is clear.
On the other hand, the text, and the presentation and.
appearance of the text and commentary, would not be good; and,
in fact, there would be no use for the note, because, in fact, the
words "in accordance with Article 35 were included.
Mr. ROUX (France) (Interpretation): Mr. Chairman, do I
understand that the Committee is unanimous on this interpretation
of Article 35?
CHAIRMAN (Interpretation): I cannot speak in the name of the
Commission, Up to now I have heard no dissenting voice, but that
does not mean that each Member of the Commission is agreed on and
linked by this interpretation; - but this interpretation, as
regards myself, is quite obvious.
I would like to know if, in the light of the discussion
which has just taken place, you consider it necessary to maintain
this footnote? V -31- E/PC/T/A/PV/20
M. Roux (Fiance) (Interpretation): I do not see why, if this
interpretation is so obvious, we should hesitate to insert it here,
because if it is so obvious it may help when cases arise and when
Cases have to be solved.
CHAIRMAN: The Delegate of Chile.
M. F. Garcia OLDINI (Chile) (Interpretation): Mr. Chairman,
to my mind the procedure of Article 35 is perfectly clear, and I
would like to put the question to the French Delegate the other way
round. If the procedure is quite clear, then there is no question
at stake. On the other hand, by quoting Article 35 here, the
French Delegate seems to doubt that this procedure is so clear.
Then why does he quote it?
CHAIRMAN: The Delegate of France.
M. ROUX (France) (Interpretation): Mr. Chairman, if I have
expressed doubt and wished to press my point, it is on account
of the first explanations given by the Chilean Delegate himself,
who seemed to express doubt as to this Article 35 and the procedure
of Article 35 applying to importing Members. If, therefore, the
Chilean Delegate - and I am happy to see that he has the same
opinion as in Article 35 - does not consider that there will be
legal measures - that the procedure will apply to importing
Members, then, of course, there is no question left and there is
no doubt left in my mind.
CHAIRMAN: The Delegate of the Lebanon.
Mr. George HAKIM (Lebanon): Mr. Chairman. I beg to dissent
from the view that in accordance with Article 35 there is an
obligation to justify the imposition of anti-dumping and counter-
vailing duties, which lies, in the first place, with the Member
I_ -32- E/PC/T/A/PV/20
applying this measure Article 35 provides for consultation and
for furnishing of information. Now, I think the obligation to
Justify the imposition goes beyond the mere consultation and
furnishing of information.
I think the Working Party were not right in giving this
interpretation of Article 35. If it is necessary to give this
interpretation, then something must be done in Article 35 itself,
and I do not know whether we are competent to deal with Article 35
here. There is a sub-Committee which is studying Article 35;
there are also legal experts who can furmish us with the inter-
pretation of this Article. We cannot interpret Article 35 here
under Article 17, so I believe the question is more difficult than
appears at first sight, and I should think it must be referred to
those who are dealing with Article 35, and the legal experts, for
a final decision.
CHAIRMAN: The Delegate of South Africa.
Dr. J.E. HOLLOWAY (South Africa): Mr. Chairman, my only
motive in suggesting that we should delete this Article was that
I could see that, most of us, being laymen in the law, we were
running a very great risk of getting bogged by a long discussion
on the law of interpretation. The law of interpretation is the
most complicated law that the lawyers have, and the lawyers know
something about it. As for myself, I do not know a great deal
about it, and I would hate to see another day spent on a
discussion of the law of interpretation, when our time is so short
and when, as far as I am concerned, I am quite incompetent to
discuss the law of interpretation.
CHAIRMEN: The Delegate of France.
V V -33- E/PC/T/A/PV/20
M. ROUX (France) (Interpretation): Mr. Chairman, as an
amendment on this matter was presented some time ago, and this
amendment was very precise, we must know the solution to be given
to this problem. I have no objection to this question being
referred to the legal expects or to the sub-Committee which is
dealing with Article 35, but if the interpretation which has been
given here up to date is not confirmed, then the French Delegation
must reserve its right to present anew its amendment. -34-
E/PC/T/A/PV/20
CHAIRMAN: I personally do not think that very much will be
gained by referring it to the Legal Experts on the Secretariat.
This is a question which has got beyond the technical advice that
we can get from the Secretariat. However that may be, I repeat
what I have said, that in saying "in accordance with Article 35"
you make the note superfluous. If it is in accordance with
Article 35 - and I personally believe it is - then it is absolutely
superfluous. If it is not in accordance with Article 35, then
the argument of the South African delegate must prevail. Then
we cannot here in this Commission enlist the legal assistance
of the Secretariat to start interpreting another Article of the
Draft Charter. So I do not see any other solution than that
the Commission agrees to leave out comment (b), reserving the
right of the French delegate, if he so deems right, to submit
the amendment he spoke about to be considered at our next meeting.
May I take this to be agreed?
Agreed.
On the second paragraph of Article 17 we have the following
comment:
"It is the understanding of the Sub-Committee that multiple
currency rates may in certain circumstances constitute a subsidy
to experts which could be met by countervailing duties under
paragraph 2 of this Article."
This is, of course, something that has been mentioned during
the discussion in the Sub-Committee and some delegate probably has
expressed rather strong feelings about it and has obtained the
unanimous assent of the Sub-Committee. The question is whether
you consider this explanatory note sufficiently important to be
maintained and submitted to the Preparatory Committee as a definite
recommendation, or whether we can simply pass it by.
Mr. J. G. CHERRY (South Africa): Mr. Chairman, the South
African delegation raised this matter of multiple currency rates
in relation to what we term "exchange dumping duties", We had
these expressions of opinion and we withdrew our endeavours to get
the proposed new paragraph 7 written into this particular Article,
by virtue of the fact that ER
-35- E/PC/T/A/PV/20
this commentary was to be included in the notes of this meeting.
CHAIRMAN: Is there any objection, on the part of any
delegate, to maintain this explanatory note?
M. ROUX (France) (Interpretation): Mr. Chairman, I wonder
if we could not make more precise the words "multiple currency
rates". In fact, as the representative of the International
Monetary Fund pointed out when he gave us the explanation of the
matter, there may be sometimes multiple currency rates to favour
the export of certain products and apply certain rates to products
of one kind and other rates to another category of goods. For
instance, they will apply a certain rate to a product which they
want to sell and which is very useful, and then they would apply
quite a different rate to certain other goods in the export of
which they are not so much interested. Of course, the official
adoption of this multiple currency rate is to foster the exportation
~~~. ..^...*-.*-.-. ..
of a country, and thisscondemnable practice of course which
must be forbidden under the provisions of the Charter. I would
like to state here that we cannot consider as multiple currency
rates, the fact that sometimes you will have an official rate
. - - .. ~ .. . .. - .. .. -. - . - -
acCX ..fixe.by the .Irna.tinal Moneary
parities
Fund, and different applied on certain Stock Exchanges and in
certh jsa- ios wih we call in France, Black Market
transac . ereo course) you wll t ve-the-intenton o a
oucountry to handle its currejPr stigalateezmortation
will have the official rate which will be applied to all transactions
and on the other hand, you will have certain rates which will be
re,dealt withI think thin the Black Market dealings. I 1h1Fh
the second ose must not be considered as a multiple currency rate case
and that is our opinion. I suppose it is the opinion of all the
Members of this Commission. -36- E/PC/T/A/PV/20
CHAIRMAN: I call on the delegate of the United States.
Mr. OSCAR RYDER (United States): I was going to suggest
that the phraseology might be made a little clearer if we replace
the word "all" by the word "practice." I wonder whether this
change would meet the wishes of the delegate of France.
I might add that the word "practices" world probably be better -
"governmental practices" might even be better still, from the stand-
point of France.
M. ROUX (France) (Interpretation): I world like to
thank the United States delegate for his proposal which meets our
wishes, but nevertheless, I think it might be best to draft the
phrase in the following way: "that multiple rates are the currency
officially practised in certain circumstances by a State."
Mr. OSCAR RYDER (United States): I think we would have to
consider the phraseology suggested by the French delegate rather
carefully. I would not like to express an opinion off-hand.
CHAIRMAN: As it almost one o'clock, and as we shall not be
able to get very much further to-day, I would suggest that we leave
this matter until our next meting which will take place on
Wednesday afternoon according to the present programme. I am rather
disappointed that we have not made more progress, but I hope it will
be possible to do the rest of our work on Wednesday.
(The meeting rose at 12.55 p. m. )
L. |
GATT Library | zx038hm4699 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twentieth Meeting of Commission B. Held on Thursday, 10th July, 1947, at 3 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, July 10, 1947 | United Nations. Economic and Social Council | 10/07/1947 | official documents | E/PC/T/B/PV/20 and E/PC/T/B/PV/11-20 | https://exhibits.stanford.edu/gatt/catalog/zx038hm4699 | zx038hm4699_90250089.xml | GATT_155 | 11,418 | 69,531 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/B/PV/20
10th July, 1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
TWENTIETH MEETING OF COMMISSION B
HELD ON THURSDAY, 10th JULY, 1947. at 3 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).
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 _
CHAIRMAN The Meeting is called to order.
Commission B is meeting to-day to consider Chapters I and.
II of the Draft Charter. We shall take as our Working Paper
Document E/PC/T/W/238 which is to be read in conjunction with
the Report of the Drafting Committee in New York.
We propose to take up first Chapter I, because there seems
to be more material to deal with in Chapter I than in Chapter II,
and it would, I think, expedite our work if we took up Chapter I
first.
If that is agreeable to the members of the Commission, we
will commence by considering the amendments to the preamble and
paragraph 1 of Article 1, submitted by the Belgian-Luxembourg
Delegation.; a re-arrangement of the preamble and sub-paragraph 1
submitted by the South African Delegation, and amendments to the
preamble and sub-paragraph 1 of Article 1 proposed by the
United. States Delegation. After we have considered these
amendments, we will then take up the other sub-paragraphs of
Article 1. S
CHAIRMAN: If that procedure is agreeable, the discussion
is now open. on the proposals of the Belgium-Luxembourg, South
African and United States Delegations regarding the Preamble
and Paragraph 1,
Does any Member of the Commission wish to speak on these
proposals regarding the Preamble and Paragraph 1?
The Delegate of South Africa,
Mr. A.P.VAN DER POST (South Africa): Mr. Chairman, I
hope that you will permit me in my remarks to refer briefly to
the general tenor of our proposed amendment to Article 1,
because the Preamble is closely bound up with the re-arrangement
of some of the other ArticIes and of Article 1.
In submitting to the Commission the draft on the purposes
of the International Trade Organization standing in the name of
the Delegation of South Africa, I wish to express our appreciation
of the work done on this Article by the New York Drafting
Committea.m In its draft, the Drafting Committee has given
us a good basis on which to work and justice to the New York
Committee demands that I should explain that we have made full
use of that basis.
Our draft is not substantially different from the New York
draft. The differences in the later paragraphs are mainly
slight differences in drafting.
As far as the introductory part of Article 1 is concerned,
the New York draft also gives us a valuable load, but it
assumes a relationship between the I.T.O. and the United
Nations which should not be assumed, in our opinion, but
rather expressly defined in such a document as the Charter
we are attempting to write in Geneva. In elucidation of this S - 4 - E/PC/T/B/PV/20
observation, may I explain first that the South African Delegation,
in searching for another formulation of Article 1, started off
in full appreciation of the great goal which the United Nations
set themselves in their Charter, namely, the goal of peace, as
expressed in the first objective defined in that Charter in the
words "Determined to save succeeding generations from the
scourge of war". But we also appreciated to the full the
connection which the United Nations found between peace and
economic and sociaI progress, - not that peace is solely
determined by economic and social conditions, On the contrary,
even more important than material conditions are perhaps
spiritual factors. But our Conference has been entrusted with
the important task of attempting to promote better economic
and social conditions and, therefore, we of the South African
Delegation, while recognizing the importance of other factors,
particularly the spiritual factor, in the promotion of world
peace, have, found it sufficient in our draft to stress economic
and social progress in relation to world peace,
Chapter 1, Mr. Chairman, dealing with the purposes of
the I.T.O. is the one part of the Charter where we can permit
ourselves some mental licence - the bulk of the Charter is
necessarily prosaic, if not drab in parts - but here at the
very beginning where we can indulge in some idealism - and the
world today certainly needs somewhat more idealism - Chapter
1 is the one part of the Charter where we can permit our
minds a flip of imagination - and that the South African
draft does without sacrificing realism. ER - 5 - E/PC/T/B/PV/20
The New York Draft assumes a certain relationship between UNO
and ITO. It begins by saying that, "In pursuance of the
determination of the United Nations to create conditions of
economic and social progress, essential to world peace, the States
party to this Charter hereby establish an International Trade
Organization". In its opening paragraph, the New York Draft,
therefore, assumes that it is a function of the ITO to co-operate
with the United Nations in the promotion of the United Nations
objectives, in other words, to do certain things envisaged by the
United Nations. But to express myself somewhat bluntly, what
we
right or authority have/to assume that the ITO is the chosen means
to the United Nations objectives towards economic and social
advancement? The object of the South African draft is to answer
that question and give the ITO the necessary status.
That draft proceeds from the United Nations Charter in the
recognition of the United Nations supreme purpose the pursuit of world
peace. By implication, the opening sentence of the draft
recognises that it is also an object of countries which will
subscribe to the ITO Charter to pursue that supreme aim -
world peace.
But the United Nations' field is a much wider field than the
ITO field will be, and we therefore have to narrow down our pursuit
of peace to our own field. The United Nations Charter points the
way - the way of what I would call the bridge between the United
Nations and the ITO. If we study the first page of the United
Nations Charter, we find that it defines four objectives and four
means to those objectives - the four being, in each case, economic
and social.
"We, the Peoples of the United Nations, determined. to promote
social progress and better standards of life are, for this end, - 6 -
determined to employ international machinery for the promotion of
economic and social advancement for all peoples", and those are
the opening words of the United Nations Charter, but that is
peculiarly the field which we are trying to deliniate for the
ITO. Therefore, the South African draft states that the countries
who adhere to the ITO are determined, in the field of trade,
industry and social advancement, to realise the objectives set out
in the Charter of the United Nations, and therefore, also, the
supreme aim of peace.
That sentence bridges the gap between the United Nations and
the ITO and also gives the ITO the status necessary to justify the
States party to its Charter to "establish an International Trade
Organization for the purpose of resolving economic and social
problems by co-operation and attaining higher standards of living,
full employment and conditions conducive to economic and social
Progress and development", and to define the means to that purpose
as is done in paragraphs 1 to 8 of the South African draft. In
that draft, the emphasis is on co-operation in the solution of
economic and social problems as well as co-operation in national
and international action in the utilization of the means to the end.
In this connection, I would explain that in the South African
opinion the purpose of the ITO is not sufficiently brought out in
the New York draft, in which it actually is hidden away in sub-
paragraph (a) of paragraph 1. We have, therefore, taken the
liberty to split up paragraph 1, especially sub-paragraph (a), and
to summarize in effect paragraph 55(a) of the United Nations
Charter and call it the purpose of the ITO.
in doing so, Mr. Chairman, we also had in mind that an
Article defining the purposes of an Organization should be so
drafted as to make an appeal not only to those directly interested
in the Organization, but also to that vast multitude of outsiders
E/PC/T/B/PV/20
ER ER E/PC/T/B/PV/20
who would be anxious to know something about the Organization, but
have neither the time nor the inclination to wade through its
Charter. Mere mention of Article 55 (a) of the United Nations
Charter does not serve this purpose, The reader, particularly
the casual reader, does not want to turn up the United Nations
Charter - he wants to know immediately what Article 55 (a) stands
for. Therefore, the South African draft attempts to give him
the information he would desire, in the hope, of course, that the
form in which it is supplied may encourage some outsiders at
least to take a greater interest in the lTO; ard Its work.
The New York draft, moreover, Mr. Chairman, does not define
the specific Purpose of the ITO, it mere ly states that the States
party to the Charter establish an Organi zation through which they
will work for the fulfilment of the purposes set out in the
Articles that follow.
the
In doind. so, the New York draft intermits purpose and/means
to the purpose. The United Nations in their Charter, however,
have shown us the proper way to proceed in this respect.
"Determined to save from the scourge of war, determined to
reaffirm faith in human rights, to establish conditions and,
lastly, to promote social progress" - these are the purposes of
the United Nations, but
"For these ends, the United Nations will practice tolerance,
unite their strength, ensure that armed force be not, used, and
promote economic and social advancement, as the means for the
accomplishment of its purpose."
The South African draft follows this set up. The purposes
of the ITO are (a) resolving economic. and social- problems by
co-operation and, (b) attaining higher standards of living, full
employment and conditions conducive to economic and social
progress and development, and the means to this end is national ~~ ~ ~ ~~- 8 - ,§Ztv/W
and international action (in other words co-operation) for doing
the various things set out in paragraphs 1 to 8 of our draft.
I do not think it is necessary for me, Mr. Chairman, to
exThain these paragraphs-in et'aI1- at can be done better in
the Sub-Committee, or if we consider the Articles by themselves,
individually. These paragraphs define the various means to the
end, in detail. They are not substantially different from those
defined in the New York Charter, or from those embodied in the
various drafts submitted to this Preparatory Committee by other
Delegations. I would claim, however, that the manner in which
they have been set out, and particularly the splitting up of sub-
paragraphs (b) and (c) of Article 1 and their restatement as
separate paragraphs (1) to (4) promotes greater clarity and
better emphasis.
We have also taken the liberty of making slight changes in
word order and construction and even in the substitution of one
word for another. For example, paragraph 2 of the New York
draft reads: "To further the enjoyment by all Member countries,
on equal terms, of access to the markets, products and productive
facilities which are needed for their economic prosperity and
development ".
FvPpr /m Pn Pn
V1 -9-
J. E/PC/T/B/PV/20
Paragraph 5 of our draft, which is the corresponding
paragraph, reads "to further the enjoyment, on equal terms, by all
Member Countries of access to the markets of the world and to the
products and productive facilities which are needed for their
economic development and prosperity". I submit that as re-drafted
paragraph 2 - or as new proposed paragraph 5 - will make for
greater clarity and better emphasis.
In this connection I would draw attention to the re-print of
this paragraph in Document T/W/238, page 5 where the little word
"the" has been omitted before the words "markets of the world".
Another change of words to which I might draw attention is
the substitution of "abstain from" in our paragraph 8 for "avoid
recourse to" in paragraph 5 of the New York Draft - in each case,
the third line from the end.
One very important addition to the New York paragraph. 4, I
would specially draw attention to. Paragraph 7 of our draft
formulates as a prexequisite of co-operation in the solution of
problems in the field of international trade, employment and
economic development - as a prerequisite, I say, of a fuller
understanding of one anothers problems. Our paragraph reads "to
encourage amongst Member Countries a fuller understanding of one
another's problems and thus to facilitate, through consultation
and co-operation, the solution of problems in the field of
international trade, employment and economic development.
It is because of a lack of understanding of the problems of
others, whether they be individuals, private or public bodies,
nations or states: that so many efforts at co-operation, at the
solution of problems, at the attainment of peace, have trailed and
will continue to fail. - 10 -
J. E/PC/T/B/PU/20
To encourage better knowledge and fuller understanding amongst
men and countries of the various problems facing their colleagues
is, therefore, a very important function that the International
Trade Organization can perform. In fact, I doubt whether it is
too much to say that the success of the International Trade
Organization will depend, to a large extent, if not wholely, on the
success it attains in enabling Member Countries to acquire that
fuller understanding of one another and one another's problems.
Consultation and co-operation within the International Trade
Organization's borders can have no results unless Member Countries
realise that knowledge and understanding of one another. May we
hope that the International Trade Organization will not fail its
Members in this respect, nor its Members fail the International
Trade Organization, because knowledge is the basis of understanding
which, in turn, is the basis of co-operation, and co-operation,
finally is the basis of world peace.
May I, with these words, submit our draft to the favourable
consideration of the meeting. G - 11 - E/PC/T/B/PV/20
CHAIRMAN: Any other speakers?
Mr. WILCOX (United. States): The Agenda that has been
prepared for this Meeting provides the suggested Amendments
presented by various Delegations referring to paragraph and
sub-paragraph in a way that makes it rather difficult for me to
address myself to it, since what is being done in the re-draft
of Article 1 is pretty much what has been done in the proposed.
re-draft of South Africa - that is, a certain re-arrangement of
the present material.
I think that is also the Belgian idea. So if I may I will
speak with reference to the Draft as introduced by the United
States, and which tends to explain what we there had in mind.
Let me say first that whereas the introductory Chapter in the
New York Draft contains a number of ideas which appear to us to
be valid and desirable and worthy of retention, the organisation
of the material seems to be somewhat illogical and repetitive.
There is a great deal of duplication and overlapping, for
instance, there is reference in the Preamble to the conditions
of economic and social progress, and there is reference again in
paragraph 1 (a) to conditions of economic and social progress.
There is a reference in 1 (a) to higher standards of living, and
then we find reference in (b) to high and steadily rising levels
of effective demand and real income. There is reference in (b)
to the expansion of production, exchange and consumption, and then
in 1 (c) to an expanding world. economy.
There is reference in 1 (b) again to the development of the
economic resources of the world, and. then there is paragraph 3 on
the development of economic resources. There is discussion in - I2 -
G E/PC/T/B/PV/20
1 (b) of the reduction of tariffs and other trade barriers, and
then we find paragraphs 2 and 4, and so on; and all we have
attempted to do is to retain almost precisely the existing text
and re-arrange it, and I hold no particular brief for our re-
arrangement as opposed to that suggested by South Africa or
Belgium. It seems to me that that problem will have to be
wrestled with in the Drafting Committee, but I would like to
indicate the reasons for the particular arrangement that we
chose.
The first point to make is that our Preamble relates
entirely to the obligations of States party to the Charter. The
States party to the Charter hereby undertake to promote national
and international action, and the purposes are set forth as the
purposes of the States party to the Charter, and. not the Trade
Organisation. Following these purposes, we have at the end the
paragraph which says, in order to effectuate these purposes, the
States pledge themselves to accept obligations set forth in the
Charter, and hereby establish an International Trade Organisation
through which Members will co-operate. We had thought that in
the Charter a large number of substantive commitments on the
establishment of the Trade Organisation are incidental to the
fulfilment of these commitments. Another thing that we have done
throughout the Charter is to use the word "countries" instead
of "Members", because we have put the reference to the Organisa-
tion as amended at the end of the Chapter. What we seek with
reference to countries is an objective, and I see no objection
to using the word "countries" throughout the statement of
general purposes. It is our opinion generally that matters should
be left general. On the other hand, in the very last line we - 13 -
E/PC/T/B/PV/20
retain the word "Members" immediately following the words
International Trade Organisation; and we think by that device
we may have obtained the reference to Members of the
Organisation that is needed for the Chapters on Employment,
Commercial Policy, Cartels, and so on; so that we can move that
"Member". or "Membership", back into the Organisation Chapter,
where we feel that it belongs.
The only argument I have for keeping the Chapter on
Membership, Chapter II, is that people would start reading
Chapters III and IV and so on and Members have not been
mentioned before. Therefore we propose to mention them in
Chapter I. V - 14 - E/PC/T/B/PV/20
We have two new things here. The first is the reference
in our paragraph 2 to encouraging the international flow of
capital for productive investment". That, of course, follows
upon the amendments that we have introduced with reference to
that subject and is a very considerable abbreviation of our
earlier amendment. The earlier amendment was "to encourage
the international flow of capitel for productive investment
through measures designed to ensure fair and equitable
treatment of investments". We have in thies re-draft
considerably contracted the wording that we previously
suggested.
The other new thing that We have included is in
sub-paragraph 4, which new reads: "to facilitate the solution
of problems in the field of international trade, employment
and economic development". Our suggestion there is that
we should include mention of each of the areas covered by the
Chapters of the Charter: "to facilitate the solution of
problems relating to international trade, including problems
of employment, economic development, international investment,
commercial policy, business practices" and rs n.
Aside from those points, I believe that the only other
thing that is involved in cur suggested amendment is a
re-arrangement of the wording of the definition of the
substance of the Charter -one, to eliminate duplication, and
two, to bring about a more logical arrangement of the material.
I might say in this connection that I think that this
could be further simplified with value, but there are words in
here to which various Delegations attach considerable
importance, and there may be no harm in being explicit. We V - 15 - E/PC/T/B/PV/20
refer, for instance, in paragraph 1 to standards of living,
real income and effective demand. It is all the same idea.
I am not sure that you need to say it three times; but I have
no objection to saying it three times. I think you will find
on examination that that is true of each of the points. But we
are not particularly insistent on the exact wording. This can
be taken as a suggestion for the re-organization of Chapter I
for the consideration of the Drafting Committee. E/PC/T/B/PV/20
- 16 -
CHAIRMAN: The Delegate of Belgium.
M. van TICHELEN (Belgium) (Interpret..tion): I would
likefirst of all), Mr. Chairman, to associate myself with the
lofty feelings expressed by the representative of South Africa,
I think that it is not useless from time to time to recall here
the purposes of our meeting, in order to keep these purposes in
mind and try to carry them out now, without waiting further,
Like all the other countries, my country is divided by
two feelings: one is the desire to go back home with a text
likely to ensure the progress of the world, and the other is
the desire to adopt measures likely to overcome existing
difficulties. In other words, we are confronted with a number
of beautiful promises and hopes and we have to take cautious
measures which take the form of what has been described as
escape clauses.
I can assure you, Mr. Chairman, that our Delegation will
do everything that is in its power to make the feeling of
idealism prevail over the necessity of taking measures which
are due to existing difficulties, but difficulties which we
hope will soon disappear and should not form the essential
element of our concern.
In the presence of the amendments submitted by the
United States and the South African Delegations, we have
found, in the two texts, equal qualities and therefore it was
extremely difficult for us to make a choice. Finally
we have given our preference to '. A; that would run along
the general lines of the South African amendment, because
we have found a valuable element in it, in this sense,
that it draws a distinction between the main purposes and the
secondary or minor purposes or the means to reach the main
purposes.
S S - 17 - E/PC/ T/B/PV/20
In the other text we have found that all the aims are
on the same footing and that there are so many objectives
that it is permissible to ask oneself whether the Organization
will be in a position to pursue them all at the same time.
We fear very much that, being faced with difficulties in
the carrying out of the provisions of the Charter, the
Organization will have to make a choice, and I think that if
we give the same importance to all the purposes at the same
time we run the risk of coming to a deadlock. For instance,
let us take a definite purpose, that of expanding production. E/PC/T/B/PV/20
It is quite possible that this purpose cannot be achieved if
it is found necessary to avoid excessive fluctuations of world
trade, and I think that, if we desire to overcome such difficulties,
it is of paramount importance to make firstly a list of essential
purposes, and secondly to list the means to reach these purposes,
or to list the secondary purposes.
Finally, as regards the question of wording, I think this
can be usefully dealt with at a later stage by the Sub-
Committee or Drafting Committee.
Mr. A.H. TANGE (Australia): Mr. Chairman, before I proceed,
may I ask whether you would prefer that I discuss only paragraph 1,
or discuss the amendment to the whole Article?
CHAIRMAN: The amendment to the whole Article.
Mr. A.H. TANGE (Australia): Mr. Chairman, after reading the
three amendments proposed to Chapter I,my delegation believes that
there is something in each of them which could be usefully
amalgamated into a text which would be an improvement on the New
York draft. So far as the preamble on paragraph 1 and the
paragraph are concerned, we prefer,,on the whole, the Belgian text.
The Belgian text is so formulated that the Article expresses one
group of superior purposes, and then sets out a series of other
purposes which might be called intermediate objectives. They are
objectives which are important enough in themselves, but which are
subordinated, as it were, to the superior group of objectives.
The South African amendment achieves the same purpose, but uses
different language, and the significant change in the South African
draft is that it drops specific quotation of the objectives of the
United Nations in the economic and social field. We think that
this would be a disadvantage, and it seems to us that we should ask
ER
-18 - - 19 -
this question: "Does the statement of economic objectives of the
United Nations, as quoted in the New York text, namely higher
standards of living, full employment, and conditions of economic
and social progress of development, provide a sufficiently wide
umbrella under which you can specify the particular objectives
which will be the special concern of the ITO in achieving those
purposes?"
We believe that the Charter of the United Nations does give
you an adequate umbrella, and it should be retained because, to
our mind, it has additional advantages. We believe that it is
useful to retain a reference to these United Nations objectives,
as a kind of symbol of the family relationship among the
specialised agencies and the United Nations. I believe we need
feel no diffidence about asserting that the ITO will attempt to
achieve these particular objectives, and on this score I do not
foresee the same sort of difficulties as the Delegate of South
Africa. We believe that mention of the United Nations
objectives might encourage the particular attaiinment of the kind
of co-operation between the two Organizations which we laid down
as an objective in other Articles, and there is a general overall
advantage in implying the ultimate indivisibility of economic and
political harmony.
Moreover, it would be helpful to the United Nations to have a
towards
specialised agency whose work and operations were directed/assisting
the United Nations in the achievement of its objectives and my
government is as interested in the success of the United Nations as
it is in the success of the International Trade Organization, and
we believe that anything which can be done tb assist the family of
agencies in the achievement of those particular purposes, should be
done.
In paragraph 1 we come to the group of various peoples'
children, about which Mr. Wilcox spoke. We feel that these
ER ER -20- E/PC/T/B/PV/20
children should be classified according to their size and weight,
and that perhaps the United States text gives us a somewhat ragged
classification. We believe that the text could be usefully
rearranged to place the promotion of full employment side by side
with the raising of standards of living, and that the development
of a steadily growing volume of effective demand, in the words of
the United States text, might be moved down to take the place of
full employment as it appears in their draft.
It is a suggestion which perhaps the Sub-Committee might look
at. It is that the rearrangement that we propose would, in our
mind, accord more closely with the order which now appears in
Article 3 of the revised text of the Charter, where you have
specified first of all, the avoidance of unemployment or under-
to
employment,as a means/full employment, and then you specify the
creation of opportunities, the promotion of production and
promotion of effective demand as a means to the promotion of full
employment.
Similarly, we feel that the mode of expression of these
objectives which we have suggested would accord rather more closely
with the obligations which all Members have accepted in Articles 55
and 56 of the Charter of the United Nations, and insofar as this
general purpose of the Article of the ITO Charter purports to be a
restatement of an undertaking by Member States in the field of
employment and related matters, we believe that there should be a
similarity between the declaration alreedy made in the United
Nations Charter and the drclaration made in the ITO Charter. J. - 21 E/PC/T/B/PV/20
On the objection raised by Mr. Wilcox to the repetition of the
phrase "economic and social progress" in the New York Draft - and
I believe it appears again in the Belgian text - that does not cause
us any particular difficulty, but if it does offend, perhaps the
repetition could be corrected by altering the opening phrase in the
first two lines of the Belgian text.
There is one aspect of the United States Draft which, on the
whole, we prefer to the Belgian Draft, and that is the expression
of these objectives as being the responsibility of the States party
to this Charter, rather than the responsibility of the Organization.
On the whole, we prefer to have them set forth as objectives which
each Member undertake s to pursue through the Organizat ion.
To move on from the preamble on Article 1 to one or two other
aspects of the United States amendment, we have some difficulty in
deciding about paragraph 2 in the United States amendment in view
of the fact that the subjectscontained there, namely, investment
and other aspects of industrial and general economic development,
are still under discussion in the sub-committee which is handling
Chapter IV and the particular Articles in Chapter IV. We find
nothing objectionable in this objective, namely, the encouragement
of an international flow of capital for investment, but whether or
not it is relevant to the purposes of the International Trade
Organization, will, we believe, depend to a large extent on discussions
in other Committees which have not yet been completed.
In any case, we feel that the balance in that paragraph is
somewhat upset, and we find that the whole of Chapter IV, apart from
encouragement of investment, is compressed into the single word
"otherwise" which, to our mind, somewhat disturbs the - .'ance and J. E/PC/T/B/PV/20
fails to give an adequate appreciation of the alternative measures
of promoting a general economic development, which it will be the
task of the International Trade Organization to promote.
Similarly, we have a reservation about the use of the phrase
"international investment" in paragraph 5, until such time as the
other Committees have finally agreedupon the way in which the
subject of international investment will be treated. E/PC/T/B/PV/2 0
CHAIRMAN: The Delegate of the United Kingdom.
Mr. FAWCETT (United Kingdom): Mr. Chairman, we in the
United Kingdom Delegation have studied these Amendments, and we
too think that they all contribute in varying degrees of
importance to Article 1 of the New York text. But I think there
is one general point which we would like to make on this Article,
and that is the ccnnection between the word "purposes" in this
Article and the expression "purposes of the Charter" where it
appears, and it appears in many places.
Now this expression "purposes of the Charter" has given a
great deal of difficulty, particularly to the Legal Drafting
Committee in New York, and the Legal Drafting Committee here.
We had a good deal of discussion as to whether we should speak
of the purposes of the Organisation or the purposes of the Charter,
and I think that it would be useful if the Commission could
perhaps decide the question here. It seems to us that the States
who sign this Charter alone have purposes. They meet together
and determine those purposes, and write them into the Charter;
and it follows that the Organisation has no purposes and no
powers other than those provided in the Charter, and it cannot
in the course of its work and development acquire any purposes
otherwise than by an Amendment of the Charter.
We feel that that is a very important principle to
establish, because there is a danger, and. I think I have even
heard it in discussions at this Conference, that it may be
possible to take action that is not quite in accordance with, or
is even contrary to, the provisions of the Charter; but that in
some metaphysical way it will be concordant with the purposes and
therefore it may be permitted.
- 23 - -24- E/PC/T/B/PV/2 0
Well, we feel that is a very dangerous point of view, and
we feel that it should be made quite clear in this Article which
deals with purposes that it is only the States Members of the
Organisation who have purposes. That principle, I think, is
already recognised in the Charter, in, for example, Article 38,
where it is provided that separate customs territories shall for
the purposes of Chapter V be treated as if they were separate
Members - not as Members, but as if they were separate Members,
and that seems to me to mean that the rights and obligations,
at least in Chapter V, are imposed on the States not as Members
of the Organisation but as separate customs territories. In
other words you have some rights and obligations and some
purposes which belong very clearly even in the Charter as it stands
to the States parties to the Charter, and not to those States as
Members of the Organisation.
It is true that in Articles 83 and 84 we say that the
Organisation has legal personality, but that is nothing more than
a fiction to enable the Organisation to acquire property and so
on, and do various things which it would be otherwise awkward for
it to do, if we did not clothe it with this fictional personality
in the Charter; and therefore I do not think from that that it
can be concluded that the Organisation has any purposes.
We feel, therefore, that the inclusion of the purposes in an
Article and not in the Preamble to the Charter has a very
great use, because the purposes of the Charter then become a
provision of the Charter, and I would like the Commission to
consider a little whether, that being so and the purposes being
made an Article and therefore part of the Charter, we cannot get
rid of the expression throughout the Charter of "the purposes
of the Charter", and say simply "provisions of the Charter", which - 25 -
E/PC/T/B/PV/20
I think will remove the source of danger which I have indicated,
and I think will perfectly satisfactorily cover what is meant.
The provisions of the Charter are all the provisions, including
Article 1, which sets out the purposes of the States setting up
the Organisation.
Well, with those considerations in mind, we feel that the
United States Amendment to this Article comes really nearest to
the way we would like to see it done. In the U.S. Amendment the
link between what we may call the Preamble and the main numbered
paragraphs is the word "undertake". That is the same idea as
in the New York text, but the U.S. Draft has, to our mind, a
great advantage in that it separate this undertaking from the
establishment of the Organisation. It makes it quite clear that
the State will undertake to promote international and national
action for the achieving of these purposes. They are then set out
and then in a final paragraph the states establish the
Organisation; and that seems to us the clearest and best way
of putting it. The South African and Belgian/Luxemburg
Amendments are not quite so clear in that respect.
The South African Amendment places the Organisation at the
beginning, and does slightly suggest that it is the Organisation
which has the purposes, and similarly, in the Belgian/Luxemburg
Amendment, the Trade Organisation has a rather prominent place
before the word "purposes" is mentioned. Therefore we think
that the suggestion by the United States is far the clearest and
the best; but there are certain points in the Belgian/Luxemburg
Amendment, and the South African -Amendment, which we think could
also be added. V
The first is the Belgian suggestion that the words "as an
agency" should be adden after the word "Organization". That
seems to me to look forward to the time when the Organization
is a specialized agency of the United Nations, and it also
stresses once again that the Organization is only a machine:
it is something subordinate to the States setting it up - it is
an agency of the States, and that seems to us a very valuable
amendment.
The South African preamble, we think, is also an improve-
ment on the New York text, and has the advantage that it does
set out in rather braver terms the general purposes, and is to
be preferred, because the New York text - and, I think, the
texts suggested by Belgium and the United States - are a little
bald at that point.
The only thing I would like to ask the South African
Delegate is whether he would not agree to have the word
"employment" substituted for "social advancement" ("Being
determined in the field of trade, industry and social
advancement"). Since the idea of social progress is fully
covered in the words lower down in the preamble, where
Article 55A of the Charter of the United Nations is quoted,
we wonder whether "social advancement" is really proper in the
place where it occurs. Social advancement is, of course, one
of the ultimate goals of the Organization; but it is not a
primary one, and it rather goes outside, we feel, the real
field of the I.T.O. - it is not properly in its field. We
think the words "in the field of trade, industry and
employment", or even "trade and employment" (which, after all,
is the correct title of the Conference at the present moment)
would really be preferable, and I would like to know if the
E/PC/T/B/PV/20 V E/PC/T/B/PV/20
South African Delegate considers that a possible amendment.
To conclude, I would say that we would like to see the
United States draft adopted as the lay-out of the Article;
but with the South African preamble as far as the words "United
Nations", but omitting the words "The States party to the
present Charter hereby establish an International Trade
Organization", and then continue down to the end of the preamble.
I may not have got my selection of what I want to strike out
quite right, but that is a matter of drafting; but it is the
establishment of the Trade Organization that I would want to see
taken out. If the preamble is joined on to the United States
draft at the point where the United States draft says that "the
States party to this Charter hereby undertake", that seems to
us the vital link; and then, in the last paragraph of the
United States draft, insert the words "as an agency" after
"they hereby establish an International Trade Organization".
Finally, I wonder if the Commission could give some
little direction to the Legal Drafting Committee on this
expression "purposes of the Charter". It may be thought that
the expression "purposes of the Charter", which I think is not
unsatisfactory, is sufficient; but if my suggestion that the
words "provisions in the Charter" should be substituted
throughout wherever this expression occurs does find any support,
then I think it would be useful for the Legal Drafting
Committee to be given some guidance on the point.
- 27 - S E/PC/T/B/PV/20
CHAIRMAN: The United Kingdom Delegate wishes to add a
brief suggestion to those he has put forward in the speech we
have just heard. So, with the permission of those Delegates
who have asked for the floor, I will just call upon the Delegate
of the United Kingdom to add his brief suggestion to those he
has already made.
Mr. J.E.S.FAWCETT (United Kingdom): Mr. Chairman, I
wonder if, on the question of the expression "purposes of the
Charter", it would not perhaps be of assistance to the
Commission if they were to direct the Legal Drafting sub-
committee to consider it and produce a very brief report for
consideration by the Commission or its sub-committee at a
later stage. I think that might be best.
CHAIRMAN: I think it would be very helpful if the legal
and drafting committee could first of all consider this question
and submit a recommentation before we consider th matter in full
Commission. Next week, after we have discussed the question of
voting and composition of the Executive Board, we will have to
direct our attention to the proposed re-arrangement of material
in the Charter suggested by the United States Delegation, and if
at that time we could take up this recommendation here it might
be the best way in which we could deal with it.
Does that procedure meet with the approval of the Commission?
The Delegate of Czechoslovakia.
M. Stanislav MINOVSEY (Czechoslovakia) (Interpretation): This
is a very important decision to take, Mr. Chairman, and I suggest
that we take it after the discussion and not right away.
CHAIRMAN: My proposal was that we should take it up next
week, after we have considered the other questions that are before
the Commission.
The Delegate of France.
- 28 - - 29 -
ER E/PC/T/B/PV/20
M. ROYER (France) (Interpretation): Mr. Chairman, I would
like to support what has been said by the Czechoslovakian Delegate,
before deciding to refer the matter to the Legal Drafting Committee.
I think it would be a good thing if the Members of this Commission
had a possibility of expressing their opinion on the matter raised
by the United Kingdom representative.
CHAIRMAN: Would the Commission then, agree to discuss this
question now, or shall we postpone it till next week?
Dr. GUSTAVO GUTIERREZ (Cuba): The Cuban Delegation, Mr.
Chairman, is of the opinion that we should proceed with the general
discussion of the Chapter, and at the end of this discussion next
week, take up the particular question presented by the
representative of the United Kingdom.
CHAIRMAN: The Commission is, therefore, of the view that we
should discuss this question before receiving a recommendation from
the Legal Drafting Committee? As I understand it, then, it is not
the view of the Commission that we should, first of all, have our
recommendation from the Legal Drafting Committee?
Mr. A.H. TANGE (Australia): Mr. Chairman, in my view it
would assist us to discuss the question after we receive the
opinion from the Legal Drafting Committee, which will go through
the Charter and which will examine the implications of the use of
and
the particular phrase which we are discussing,/after we have
received the report we would then discuss it in full Commission
with a better appreciation of what it involves. I would, therefore,
propose that we defer discussion, as I have suggested, until after
we receive an opinion from the Legal Drafting Committee. ER E/PC/T/B/PV/20
M. STANISLAV MINOVSKY (Czechoslovakia) (Interpretation): Mr.
a
Chairman, I do not think this is a legal matter, but rather/matter
of principle which we should solve here.
CHAIRMAN: Perhaps it would meet with the wishes of all the
Members of the Commission if we simply requested the Legal Drafting
Committee to prepare a paper setting out the question at issue,
giving indications of the parts of the Charter that are involved
in the proposal to change the words "purposes of the Charter" to
"provisions of the Charter". It would simply be a paper which we
could use as a basis for our discussion without any recommendation.
M. STANISLAV MINOVSKY (Czechoslovakia): (Interpretation): Mr.
Chairman, I take it that we cannot see the implications very
clearly. The purposes are the enunciation of a general principle,
while the provisions themselves show how to attain those purposes.
These are two concepts which are quite different and, as far as I
am concerned, are perfectly clear to me.
CHAIRMAN: The question at issue may be clear to the Delegate
of Czechoslovakia and a number of other delegates, but there may be
other Members of the Commission to whom the issue is not quite so
clear. I wonder if it would be satisfactory if we could ask the
Delegate of the United Kingdom if he would be willing to supply the
paper which would supply the basis of our discussion.
Mr. E.H. KELLOGG (United States): Mr. Chairman, I was
merely going to suggest that the Legal Drafting Committee would
probably have a better draft of the two sides of this problem than
any other group which we could have available. Possibly they could,
after some deliberation, present a paper showing both sides, and
possibly they could present a compromise solution which would be
satisfactory to us all in tangible terms. J.
31
E/PC/T/B/PV/20
M. ROYER (France) (Interpretation): I am going to make a
practical suggestion, Mr. Chairman, I think that the Legal
Drafting Committee can do some very useful work as follows: we
could ask this Committee to examine the whole Charter and indicate
to us those Articles where the expression "purposes of the Charter"
or "purposes of the Organization" are used, and to examine the scope
of these Articles, because if it is desired to withdraw from the
discussion the concept of a purpose, the discussion here becomes
meaningless .
According to the legal value given to the word "purposes",
Article 1 will be drafted in one way or another way, but if we want
to withdraw from the discussion the idea of purposes, then it is
unnecessary to discuss this any longer.
CHAIRMAN: The Delegate of Cuba.
DR. G. GUTIERREZ (Cuba): Mr. Chairman, I would like to make
a suggestion that we do not go further into this discussion which,
in my opinion, is really too technical. The question of the
distinction between "principle" and "provision" is studied by students
of law in the first years of their career, and we are not now going
to enter into international discussion about. that differentiation.
Therefore, in order to be practical, I think it would be a
good thing if we asked the United Kingdom Delegate to present his
paper to the Legal Drafting Committee, have the Legal Drafting
Committee work on that according to the suggestions both of the
United Kingdom Delegate and the French Delegate, and in the
meantime we will continue the consideration of the whole thing,
because it is a very technical point, and I do not think we should
discuss such a thing as that until it has been further explained. 32 E/PC/T/B/BV/20
CHAIRMAN: I think we have enough suggestions now to know in
what way we should proceed, and I would like to suggest that we
follow the proposals just made by the Delegate of Cuba and France
that the United Kingdom Delegate should bring the question up to
the Legal Drafting Committee, with a view to seeing that some paper
could be presented to us for discussion, if it is found necessary
by the Legal Drafting Committee.
Is that agreed?
MR. L.C. WEBB (New Zealand): Mr. Chairman, I did not quite
catch the force of your suggestion, but I take it that it is still
proposed that this issue will come up in the Commission at a later
date?
CHAIRMAN: If the Legal Drafting Committee so desire.
MR. L.C. WEBB (New Zealand); Well, I am afraid I do not
follow the proposal, Sir, because we have taken no decision on
this question this afternoon, so surely it hardly rests with the
Legal Drafting Committee to decide whether it should come back for
discussion.
M. S. MINOVSKY (Czechoslovakia): (Interpretation): Mr. Chairman,
a suggestion has been made here and it is now proposed to refer
this to some other Committee without giving us the opportunity of
expressing our points of view. In my opinion, we should discuss
it right away.
CHAIRMAN: Well then, in view of the points that have been
raised it will be necessary for the Legal Drafting Committee to
present us with some paper which will enable the discussion to be
carried on in this Commission, becuase I am sure that many of the
Members of this Commission are not quite clear as to all the issues
involved in the proposal that has just been made. Is that agreed?
Agreed.
The discussion will now be resumed on Article 1. The first
speaker on my list is the Delegate of France. - 33 -
M. ROYER (France) (Interpretation): I must confess,
Mr. Chairman, that I feel rather embarrassed, because it was my
intention to develop some ideas not directly regarding the problem
raised by the United Kingdom representative, but his general
conception.
Article 1 needs two requirements. One has been developed
by the South African representative very eloquently, and it is a
solemn confirmation of general purposes, which purposes remain
to be determined. States will meet to sign a convention, which
will be without precedent in economic history, to re-establish
order: to promote social and economic progress in the world.
The first part of the Article is, therefore, similar tp any
preamble in an ordinary convention; but in addition to this,
Article 1 has a determined legal value, because it contains
provisions of positive law, and therefore, before referring the
matter to a sub-Committee and asking the sub-committee to draft a
final text for Article 1, I think it would be a good thing to
examine thoroughly the legal scope of the Article and to examine
all the Articles in which mentioned made of the purposes of the
Charter, in order to see if there is no contradiction in the text
of Article 1 itself.
E/PC/T/B/PV/20
V. S E/PC/T/B/PV/20
Now the question is, on the other hand, whether we should
choose between the New York text, which lists a considerable
number of purposes on the same footing, which would raise the
danger of conflicts of interpretation, or if, like the South
African amendment, we should adopt a shorter text. Personally
I prefer the latter solution, provided this is possible. If it
is possible to reach unanimous agreement on a shorter formula,
which would, for instance, repeat the contents of Article 55 (a)
of the United Nations Charter, the French Delegation would be
very gratified, because if there were only one purpose to the
Charter it would be very easy to solve the problem, but if there
are five, six or seven different purposes, with contradictory
implications, there would be, as was pointed out by Mr. Fawcett,
the danger of legal conflicts which would be almost insoluble.
For this reason, the French Delegation is in favour of the
South African amendment provided, I repeat, that this is feasible.
May I recall that a few months ago we had to start from a
concise formula, but everybody wanted to add something and we
finally came to the text submitted by the Now York Drafting
Committee.
On the general scope of Article 1, we have two conceptions
here: one is the purpose of the Charter, to set up an inter-
national organization; another purpose of the Charter would be
simply to register the agreements arrived at by the cortracting
parties. According to this latter conception, the Organization
would be a more machine or an instrument of the contracting parties.
This is the problem raised by Mr. Fawcett when he spoke a few
minutes ago.
The French Delegation is of the opinion that there is no
reason to ask for the International Trade Organization more rights
or less privileges than for the other axisting organizations; - 35 -
S. E/PC/T/B/PV/ 20
for instance, may I recall that in Article 2 of the United Nations
Charter we read: "The Organization and its Members," which
shows that the Organization of the United Nations has its own
clearly defined legal personality. This is also the case of
other organizations.
And now Mr. Fawcett has just disavowed his own child. I
refer to Article 83, which he has interpreted as meaning that it
had been suggested just in order to make it possible for the
Organization to acquire property, have a banking account, etc.
I am not of the same opinion. I think that this Article is
intended to give the Organization exactly the same status as
that of other international organizations and therefore I do not
see why, for the International Trade Organization, we should go
back to about a century ago, or even more, and revert to the
status of the Congress of Vienna, that is, the status of a mere
diplomatic conference or a club in which well-behaved people
would exchange abstract ideas.
This does not mean that the French Delegation desires to
confer upon the new organization exorbitant privileges, but
when we refer to purposes we have in mind similar purposes as
in the case of the statute of a bank or a company, and the
first Article of a bank or company is always entitled "Purposes
of the Corporation."
As for the way to reach those purposes, I agree with the
suggestions made by the United States Delegation, that we should
give permanence to the undertaking made by the States, provided
the result is the setting up of an organization endowed with a
legal personality. To that effect it would be necessary to
modify slightly the United States amendment. ER -35- E/PC/T/B/PV/20
In this amendment, the undertaking of the Member States is set
out on two different planes. First, in the preamble and then it is
stated that "States undertake etc." This might give a wrong
impression, and I think . a solution to that difficulty would be
to state, in the last paragraph "Consequently, the States agree to
accept the obligations set forth in this Charter, and they hereby
establish an International Trade Organization in order to aid the
foregoing purposes".
Now, as regards the use of the words "as an agency", in the
Belgian proposal, I wonder if it really means an international
agency of the United Nations or if, in the opinion of the Belgian
Delegation, the use of this word "agency" means a legal agency.
We have submitted no amendment to this text, either in London or
in New York or here. With regard to the mention of Article 55(a)
of the United Nations Charter, we have no objection to it being
expressly mentioned, but I do not think this is essential, and, as
in the South African amendment, I am of the opinion that it would
be sufficient to repeat the essential provisions of 55(a) without
expressly mentioning the Article. There would be some disadvantage.
in that because we will invite a number of countries that are not
Members of the United Nations, and we should find perhaps some
difficulty in adhering to a Charter which contains an express
preference to the Charter of the United Nations.
With regard to point 2 of the United States draft, my
Delegation, like the Australian Delegation, would like to wait for
the result of the discussion of the Sub-Committee on Chapter IV.
With regard to point 3, we are very glad to see that the United
States have mentioned all the countries, and the United States
-Delegation are right when they raise thus the principle of freedom
of access to the markets for all countries without any distinction. ER -37- E/PC/T/B/PV/20
I think that the word "product" could be usefully replaced by
the expression "sources of supply", because this is more important,
and on point 4 1 suggest that we replace the words on the second
line - "all forms of discriminatry treatment" - with "all harmful
forms of discrimination".
Finally, in point 5 1 suggest that we substitute "affecting"
for "relating to". - 38 -
E/PC/ T/B/PV/ 20
I agree with certain formulae contained in the South African
amendment. We have no prejudice as regards Article 1, provided
that a close legal connection is established between the purposes
as mentioned in article 1 and the other provisions of the Charter,
to avoid any possibility of conflict
Finally, we are of the opinion that the important problem of the
purposes of the Charter or of the Organization should be settled,
and we think that the Preparatory Committee should, once and for
all, take a decision as to whether the new Organization must be
mistress in its own house, or just merely a diplomatic conference.
CHAIRMAN: The South African Delegate has asked for the floor
in order to reply to the suggestion made by the United Kingdom
Delegate regarding the re-arrangement of the South African
amendment.
DR. W.C. MAUDE (South Africa): Mr. Chairman, I do not propose
to join in the hunt for the fox, which Mr. Fawcett has mentioned.
This is a chase which has been going on for a long time and I am
perfectly happy to leave that to the Commission. I do not propose
to discuss the verbal amendment but merely to answer one specific
point on the suggestion of the change of "social advancement" with
"employment". I might mention that at one stage we had in mind
the words there "the field of trade and employment", to coincide
with the title and name of the Conference, but after seeking advice
and consultation with other people, we would be quite willing to
consider the suggestion of the United Kingdom Delegate.
DR. G. GUTIERREZ (Cuba): Mr. Chairman, I have learnt through
practice and experience the wisdom that there is in an old French.
proverb "Le mieux est l'ennemi du bien" . Really, of all the -. 39 -
E/PC/ T/B/PV/20
Chapters of the Charter, I think that Chapter L, Article 1, is the
best drafted of all, and yet we have heard today very illustrative
gestures implicating, not only economic principles, but law
principles, philosophical principles and even psychological principles,
and that is why I am very much afraid to accept all these changes
proposed in the drafting of Chapter I.
This Chapter I and its Article, we can think what we like, can
do only two or three things, and has to do those things. The
first one is to be the constituent act of the Organization, if we
want to have an Organization; the second is to establish the
purposes of the Organization and the third, which is not so clear,
'would be the establishment of the objectives of the Organization.
In the old text books of International Law there was a very clear
distinction between principles, purposes, objectives, provisions,
undertakings, but in the new world that we are living in, we have
now found words that greatly confuse terms of technology that have
a very established meaning, and so it happens with the word "purposes"
Purposes, in my opinion, relates to something psychological, that is,
something that is inside the minds of the persons that are drafting
a law or a constitution. It could be considered the
philosophical aim of the act, while the objective is the focussing
of those philosophical principles into realities, into certain
activities, into objects. Here, all is confused, and then would
come the distinction between what is the principle or the purpose
or the objective, and the provisions to carry out those principles,
purposes, or objectives.
If we wish to establish these differentiations in the Charter
in this Article and through all the other articles of the Charter,
it would mean difficult work, because we are working here as
economists and not as experts on law or philosophy. E/PC/T/B/PV/20
Nevertheless, if you take the amendments presented, you will
find, especially in the Belgian/Luxembourg amendment, as well as
in the South African amendment, that they really have the three
main aspects of a constituent document. They establish the
Organization - that is what they call the constituent act - then
they talk about a purpose, and immediately when they say,
with different words, "For the furtherance of these purposes the
Organization will seek", I call those objectives. When the
South African Delegate says "To this end, of promoting national
and international action, designed to", those are objectives, so
the two amendments, in my opinion, are better from the technical
point of view, as to the structure of the framework of Article 1.
I must declare myself a little bit puzzled about the amendment
of the United States Delegation, because I have been trying to,
find out where the constituent act of the amendment is, and what I
have found is the proposition to delete the part that says "'establish
an International Trade Organization through which they will work
for the fulfilment of the purposes set out hereunder", and instead
of that the United States Delegation uses this phraseology:
"The States party to this Charter hereby undertake to promote
national and international action for the fulfilment of the
following purposes", so the International Trade Organization
disappears - vanishes into the air. There must be some reason
for that, so that is one of the questions that I wish to put to
the United States Delegate.
Of course, I know that we have Chapter VIII, covering
Organization, but if we abolish in this first Chapter the
establishment of the International Trade Organization as an agency
of the United Nations, I do not see how the..Organization in
Chapter VIII can work, so that is a problem, in my opinion, of
V
- 40 - V 41 E/PC/T/B/PV/20
primary importance. Perhaps I had read this United States
amendment too quickly and thus had not found where the
constituency of the International Trade Organization was.
Now, all the other matters are, in my opinion, juridicial
and technical matters that can be settled after the
clarification of.the discussion.
The other question that I wish to put to the United States
Delegation is that I have found, in relation to paragraph 3,
that the United States Delegation proposes the deletion of
the corresponding actual sub-paragraph 3, and this is one of
the most important provisions of the Charter in relation to
what have been called the under-developed countries.
We do not desire to divide the nations of the world into
classes, but there are facts, and one of the facts of
international life is that there are nations highly developed
from the economic point of view, and many other nations that
have not completed the stages of their economic development.
In this Commission, we might say that we are in a proportion of
fifty-fifty; but when we come to the World Conference, where
probably sixty nations will be represented, it will be almost
impossible to add much to the number of those industrialised
nations, and, on the contrary, practically all of the other
nations of the world might be considered in the early stages
of industrialisation. If we scratch out this sub-paragraph
which was inserted from the beginning in London and afterwards
in New York, it will create a certain fear in those nations,
because this sub-paragraph, though it might not, in my opinion,
express the purposes and objectives of the Organization very
technically like the others, is very clear in its meaning
from the economic point of view. E/PC/T/B/PV/20
This sub-paragraph says that one of the purposes of the
Organisation is to encourage and assist industrial and economic
development of Member countries, particularly of those still in
the early stages of industrial development; and instead of that
we find in the U.S. Amendment, in relation to paragraph 1, that
they undertake to promote national and international action for
the following purposes:
(1) To raise standards of living, assure a large and
steadily growing volume of real income and effective demand,
and. contribute - and so forth; and
(2) To develop the economic resources of the world by
encouraging the international flow of capital for productive
investment, and otherwise assisting the industrial and general
economic development of all countries, particularly of those
still in the early stages of industrial development.
I think it is a tremendous difference, between the actual
text of sub-paragraph (3), which has, as its real purpose and
objective, as is said there, to encourage and assist the
industrial and general economic development of particular
countries, particularly those still in the early stage of
industrial development, while in this Amendment now it seems
that this case of the economic development of Member countries,
particularly of those still in the early stages of industrial
development, is only a possibility for the use of international
flow of capital for productive investment; and as I am sure
that is not the aim of the United States Delegation, I wonder
if I could receive some explanation, especially of the deletion
of sub-paragraph 3.
That is why I did not enter into this magnificent controversy
- 42 - G -43 E/PC/T/B/PV/20
on philosophic principles which we have had the good fortune
to hear to-day, and kept outside it, so as not to be
implicated too deeply in it; but I would simply ask to
maintain in Article 1 more or less the structure presented
by the Belgian and South African Amendments, and.would very
much thank the U.S. Delegate if I could know the reason for not
establishing the International Trade Organisation here, and
for the deletion of sub-paragraph (3). - 44 -
J. . . E/PC/T/B/PV/20
DR. G. GUTIERREZ (Cuba): Mr. Chairman, I would like to add
a remark with regard to the translation. It seems to me that an
expression that I have used has been taken too literally, and I
would like to explain myself.
What I wanted to say was that the constituent act of the
International Trade Organization was placed at the beginning of this
Article in the Draft Charters of New York and London. It is
amended to disappear, however; and only a reference is made to it
in the very last lines of Article 1 - so far away from the beginning
that it almost indicates that it has vanished in the air.
Of course, I want to make it clear that I have seen in the
Article the creation of an international organization. My attention
is drawn to the fact, more particularly after what has been said
by the Delegate of the United Kingdom, that this new Organization
will have no juridical personality in contrast with the personality
of the different states that comprise it - there would only be
rights and obligations ot the states, and not rights and obligations
of an international organization - and we very much favour the idea
that the International Trade Organization will be a juridical body
different from all the states. In the common state of society, the
State is differeny from every one of the citizens that make the
State, and that is why we put emphasis on the amendment of the
United States Delegation, which has taken away the constituent act
of the Organization from the very beginning and placed is in the
last line of Article1 .
As there must be some reason for that, I would like to know it. E/PC/T/B/PV/20
CHAIRMAN: The hour is getting late, and I have still
one more speaker on my list, but perhaps we might adjourn the
Debate now, because I feel that before referring these
proposals to a Sub-Committee it will be necessary that we
take a decision on the question of principle involved in the
Belgian and South African Amendments, which is that, first of
all, there should be stated the purposes, and then, following
that, the means whereby those purposes may be attained.
I therefore propose that to-morrow we continue the
discussion and after the discussion is concluded we endeavour
to reach a decision on this particular point for the guidance
of the Sub-Committee.
The Commission will meet to-morrow at 2.30 p.m. in this
room, and we will attempt to conclude the discussions both on
Chapters I and II.
There being no further business, the Meeting is adjourned.
The Meeting rose at 6.20 p.m.
G
- 45 - |
GATT Library | vy062vj2330 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twentieth Meeting of the Tariff Agreement Committee held on Monday, September 15 1947 at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, September 15, 1947 | United Nations. Economic and Social Council | 15/09/1947 | official documents | E/PC/T/TAC/PV/20 and E/PC/T/TAC/PV/19-21 | https://exhibits.stanford.edu/gatt/catalog/vy062vj2330 | vy062vj2330_90260072.xml | GATT_155 | 14,706 | 88,948 | UNITED NATIONS
ECONOMIC
AND
SOClAL COUNCIL
. Q
CONSEIL RESTRICTED
ECONOMIQUEPE/2C/T/TAC/20/ko
15 September 1947
ET SOCIAL
SECOND SESSION OF HE-PREARATORY COMMITTEE OHETr
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
TWENTIETH MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON MONDAY, SEPMBTEER516 1947 AT 2.30 P.M. IN
THE PALAIS DES NATIONS, GENEVA.
Hon. L.D. WILGRESS (ahrirman) (Canada)
Delegates wishgnr to make corrections in their speeches should
addre sstihe r communications to the Documents Clearance fice,eo
omoi 220 (Tel. 2247).
le~egatea 4re reminded that the texts of interpretations, which do
Zot pretend to be authentic translations, are reproduced for
general guidance only; corrigenda to the texts of inrezpretatisna
nnpnot, therefore, be accepted.
NATIONS UNSE5 P.
CHAIRMAN: The meeting is called to order.
At the close of our last meeting I announced that the first
item we would take up today would be the document prepared by the
Secretariat on the Signature of the Final Act, Agreement and
Protocols. This document was circulated on 13 September, W/333.
This is an attempt on the part of the Secretariat to give
expression to the wish of the Committee to set forth in written form
the relation of the various documents one to another. The
Committee will note that the Secreteriat have set forth that the
Protocols other than the Protocol of Provisional Application should
be described as the "accompanying Protocols" to the Agreement, and
that the Agreement and its accompanying Protocols should be signed
at the same time. They have also pointed out that there is no
provision now for the signing of the General Agreement and its
accompanying.Protocols at the same time as or before the Protocol
for Provisional. Application is signed, but it appeared in the
course of our discussion at one of the meetings last week that it
.would be the intention of the Committee to make some provision
in this respect. Therefore this is a point upon which we should
reach a decision, as to in what way we should provide that the
General Agreement and the accompanying Protocols should be signed
'before or at the 'same time as the Protocol of Provisional
Application is signed.
Are there any comments?
M. ROYER (France) (Interpretation): Mr. Chairman, it seems
that there is a slight error regarding point 2 of this document.
I understood that it had been agreed that the Protocol of
Provisional Application should remain open for signature until the
30 June 1948 and it seems to me that no change has been made. in
that decision.
2
E,/PC/T/TAC/PV/20 E/PC/T/TAC/PV/20
CHAIRMAN: That understanding, Monsieur Royer, I think is
correct, but the date of November 15th applies to the Signature by
key countries, after which it would remain open for Signature by
other countries until June 30th. Is that not the position?
M. ROYER (France) (Interpretation): Well then, Mr. Chairman,
we ought to make this point more specific and state: until
November 15th, 1947 for the so-called key countries, and until
30th June, 1948 for the other countries.
CHAIRMAN: I think that change should be made. I think the
Committee will agree to any revision to this document which is felt
necessary.
Are there any other comments?
The Delegate of Australia.
Dr. H C. COOMBS (Australia): I must confess, Mr. Chairman,
that I am a little puzzled by the second paragraph under the second
*heading. I am sorry that I was absent for some time last week, and
"that may account for the fact that I do net understand this.
I am puzzled to know what is the significance of signing the
Agreement prior to effecting provisional application. When we
finish at Geneva by signing the Final Act we authenticate the text.
My understanding was that when we signed the Protocol providing for
Provisional Application we would be undertaking to apply the proviciuis
of the Agreement as contained in the authenticated text provisionally,
and that later we would give effect to the Agreement definitively.
Now, it does not seem to me that anything further is necessary at that
stage.
J . 4 , , , . -
I would like to know, therefore, why it is considered necessary
that we should sign the Agreement, and secondly, if it is intended
that we should sign the Agreement before living effect to ProvisionaL
Application, what we are undertaking by that signature in addition
to what we are undertaling by signing the Protoco' of Provisional
Application.
MR. J.M. LEDDY (United States): Mr. Chairman, we have prepared,
for our own purposes, a short memorandum which describes each of the
instruments which appear likely on the basis of the discussion that
has so far emerged from the negotiations, showing for each instrument
the Title, Time of Signature, Place of Signature, Signatory Countries,
etc.
With regard to the question raised ba,the Delegate for Australi,;
we had writnatudown this as to thg ae-Ire of the General aSreemunt
on Tariffs gnd Teade: The General Ahreemcnt is subject to an
acceptance procedure, that is, each country accepts the General
Agreement only when it deposits an instrument of acceptance to the
SeoretaDy-General of the United Nations, Signature of the Agreement;.
'therefore, does not bind any country, although it implies a moral
obligation to submit the Agreement to their legislatures where this
is necessary. ehe Sillature of the Agreemont wi11 have the full
powers..... and so forth.
Now, I am not quite clear as to what the legal position is with
regard to Signature of the Protocol of Provisional Application and
signature of the General Agreement, but I think it would be anomalous --
Tor a country to sign the Protocol of Provisional Application without
signing, at the same time or prior to, the General Agreement, because,
E/PC/T/TAC/?V/20
J . E/PC/T/TAC/PV/20
after all, it is the General Agreement which is to be applied, although
provisionally. There would be some substantial difficulties, as I
see it, if a country did not sign the P'rotood of Signature which is
relating, to the Charter and which starts out by saying: "At the
moment of s signing the General Agreement on Tariffs and Trade the
undersigned agree to live up to the principles of the Charter to the
fullest extent of their executive authority". So, it is envisaged
that the Protocol of Signature of the General Agreement will be
signed at the same time, Now, if a particular country should sign
the Protocol of Provisional Application without signing the General
be
Agreement there would as I see it,/no coommitment whatsoover with
regard to the principles of the Charter by that country.
CHAIRMAN: Are there any other speakers?
Mr, Shackle.
MR. R.J. SHACKLE (United Kingdom): Mr Chairman, there is
just one remark which , would like to make and I think it has a
bearing on what has just been said. As the Protocol of Provisional
Application i s at present, that is as compared with document
E/PC/T/W/3162 it przovides for provisional application
of Parts I, III and II of the General A.greement. I think it follows
from, that, as Mr. Leddy has just said, that as the documents are at
present drafted concerning the protocol of Provisional Application
and the Protocol of Signature, the principles of the
Charter would be brought in. It would be quite simple to rectify
that by changing the draft of Provisional. Application, because that
is the effect of the documents as at present drafted.
J.
5 J /PC/T/TAC/PV/20
DR. H.C. COOMBS (Australia): Mr. Chairman, I am sorry but I
missed the first sentence of Mr. Leddy's remarks, and the answer that
I was seeking may have been in the first sentence, but if it was not,
it certainly was not in the balance.
So far as I understood him, he said that it would be anomalous
for one to sign the Protocol of Provisional Application without
aigning the Agreement, but I still did not detect any reason why it
would be anomalous, except that the Protocol of Signature begins:. "At
the time of the signing of the General Agreement on Tariffs and Trade'.
Now, that is the only reason, and as far as I can see the proper thing
to do is to alter that working to: "At the time of the signing of
the Protocol of Provisional Application'
The real problem, Mr. Chairman, is that it does not seem to me
to be necessary to sign the Agreement to apply it provisionally.
A.ll you need to do is to have a text, on the contents of which you
-are agreed, and to sign the .Protoed applying the provisions of that
text 'provisionally.
iNow, if some thing more is required - and I cannot see why - the
only conclusion I can come to is that signing the Agreement implies
something further than an undertaking to apply it provisionally, and
if it is something furthers then I want to know what it is.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I think,
nevertheless that the United States Delegate is right in the statement
he made.
The Signature of the Agreement does amount to the beginning of
a commitment, and the Provisional Application is a provisional
J. 7
Implementation of applying these principles. The ratification vil1l
mean the definitive entry into force of these undertakings. If
only the Protocol of Provisional Application were to be signed, there
would be no commitment regarding the principles of the Charter, and
I think that Dr. Coombs, as everyone else, wishes that the executive
powers should undertake to observe provisionally at least the principles
of the Charter.
Therefore, the procedure for Signature would be the followings
One would sign the Agreement and the Protocols and the protocol of
Provisional Application, and then the ratification of the Agreement
would come at a later stage. There would be no trouble, in fact,
in signing also the Agreement and the Protocols, because I think that
the Signature of the Agreement is, for the time being, a leas precise
undertaking than the Signature of the Protocol of Provisional
Application.
E/PC/T/TAC/PV/20
J. S - 8 - E/PC/T/TAC/PV/20
CHAIRMAN: The Delegate of the United States.
Mr. LEDDY (United States): I was just going to repeat the
portion of my remarks which apparently the Delegate of .Australia
missed,
I said we had prepared a paper for our own use, listing the
various instruments and describing them, and that we had said this
about the General Agreement on Tariffs and Trade: the Genaral
Agreement is subject to an acceptance procedure; that is, each
country accepts the Agreement only when it deposits an. instrument
of acceptance. Signature of the, Agreement therefore does not
bind any country, although it impliss a moral obligation to submit
the Agreement to its Legisleture where this is necessary.
I think that is the substance of the part of my remarks which
the Delegate of Australia probably missed.
With respect to the suggestion that we might re-cast the so-
-called Protocol of Signsture, so that it would be signed at the
time of signing the Protocol of Provisional Application, I do not
see any difficulty there that some countries my sign and accept the
General Agreement without ever signing the Protocol of Provisional
Application.
We are certainly not sure what the status will be. There-
fore I think it is wiser, unless there is some good reason for a
country, having signed the Protocol of Provisional .Application, not
being in a position to sign the General Agreement, to leave the texts
as they stand.
I am not quite sure I see any objection to signing the General
agreement if a country is able to sign the Protocol of Provisional
Application, which puts it into effect provisionally. E/PC/T/ TAC/PV/20
CHAIRMAN: The Delegate of Norway.
Mr. J. MELADER (Norway): Mr. Chairman, we look at this
programme, perhaps, from e slightly different angle. We feeI that
the Final Act should contein the text of the General Agreement,
with the Schedules and the interpretative notes, and that we should
have Protocol of Provisional Application laying down the principle
that, by signing that Protocol, we eccept Parts I and III according
to the Draft here and Part II according to the Draft and also to
the principles of the Charter. That would cover the position.
With regard to the definitive entry into force of the
General Agreement or this signature of that Agreement by parties who
have not signed the Protocol of Provisinal Application, that, of
course, could either take the form of signing a Protocol of Signature
on the lines suggested here and letting that be laid before the
appropriate constitutional authority - Parliament or Congress or
whatever it is - for ratification, or it could also - to quote
the case of Norway - probably be done in the way that the agreementt
as such, as contained in the Final jAct, would be laid by our
Government before our Parliament, which would say whether or not
it could be accepted.
After the decision of Parliament has been reached - if it were
a decision for acceptance - then, and only then, a representative of
Norway would sign the Protocol of Signature if we had not signed it
provisionally, and that Protocol of Signature would, of course, con-
tain also the provisions of the Charter as embodied in the General
Agreement .
Is far as I can see, it would certainly be possibls to Operate
with a Protocol of Signature as outlined here, but, in myr view, it
ought not to be compulsory to sign at some time previous to the
Protocol relating to provisional applicntion. It could be made
S E/PC/T/TAC/PV/20
optionel, so that it would suit those countries whose constitutional
system is such that they have to sign first and then ask for
ratification, That, I think, would solve the problem. In that
case, in the Protocol of Provisional Application one ought to have
the principles of the Charter, so that it could be operated
independently.
CHAIRMAN: The Delegate if Australie.
Dr. Coombs (Australia): What the United States Delegate
has said has confirmed me in my impression. Ie has made it quite
clear that a signature of the Agreement, whatever it may be legally,
is a moral undertaking on behalf of a Government; an undertaking
to present the Agreement, in the form in which it is signed, to
the Legislature with the Government's approval.
It does commit the Government. It may not commit it legally,
but, in fact, it does commit it. When it signs the Agreement it
is, in effect, saying: "We will put this ;Agreement, in the form
in which we have signed it, to our legislators with our support.
We will not guarantee that they will accept it, but we guarantee
that we will put it up with our support."
My point is that that is neither necessary nor desirable at
the time of provisional applicition.
So far as we are concerned, as I understand the position it
is this: our Government says: "We are prepared to apply this
because we believe provisional application will assist along the
general course of agreement in this matter, but there are certain
things in this Agreement which we do not like."
There is an understanding that if the provisions of the Charter
turn out to be different, there will be automatic supersession of
some if them, at any rate, subject to certain conditions. We do
not know, therefore, what is going to be the final text of this
Agreement until next year. It is not necessary for us to sign this
S
-10- - 11 -
Agreement until next year, because it is not going to enter into
force definitively until next year - possibly fiarly late next year.
At least, we have until 30 June 1948 to sign it.
Therefore we want to say we will sign this Agreement, or its
provisions, provisionally. That is nothing; it does not commit
us about the Agreement at all. It is an undertaking to do something.
Next year, when we have seen the outcome of the World Conferenoe
and we know with reasonable certainty what is going into the
Agreement, we will decide as a Government whether we will recommend
this to Perliament or not. We can do that: we can' apply the thing
provisionally and then next year we can have a look at it and decide
we are not going to submit it to Perliament, and we have not mis-
led anybody,
We have said we will apply it provisionally; we have not said
we will recommend it to Parliament. Our hands are free, although
we. have applied It provisionally. That is the position we want to
keps
We are prepared to apply this provisionally from the 15th
November, or whatever date Is agreed upon. We do not want the
Government of Australia to be committed to recommend this Agreement
to Parliament until next vear and I do not think it is necessary to
have the Agreement signed in order to make it come into force
provisionally; that can be done by signing the Protocol of
Provisional Application, and then we can have the signature Of the
Agreement - if that is necessary - before the final date for
definitive application.
It will then be for the Government of Australia to make its final
decision as to whether or not it will recommend it to Parliament.
It seems to me, Mr. Chairman, the position is almost the reverse
of what Mr. Leddy has said, unless there is really something necessary
about the signing of the agreement at the same time as the signing
of theProtpcol of Provisional Application. It is preferable, it
seems to me, not to provide for that signature.
E/PC/T/TAC/PV/20
S 12
CHAIRMAN: The Delegate of the United States.
Mr. LEDDY (United States): I would like to point out that
signature of the agreement does not commit a Government to submitting
the Agreement to its legislature at any particular time or to accept
it at any particular time. So far as the Government of the United
States is concerned, we will not be in a position to accept until the
middle of next year.
What we do feel is that the signature of the Agreement by
Governments does indicate that the Governments support it and are
satisfied with it. We have gone a lone way, it seems to me, to
provide for cases where countries are dissatisfied with a particular
provision, and for reservations to the same provision in the
Charter, by providing for supersession of the Agreement by the
Charter.
Now the undertaking with respect to the Protocol of Signature
-- that is to say, to abide by the principles of the Charter. -
presents a difficulty for us, because it means that the Executive
Branch is undertaking obligations within its power which normally
cannot be given full effect except after approval by the Legislature;
undertakings so far as the Executive has authority in matters of
internal policy. And it seems only ressonable to us that if we
are to be asked to sign an instrument of that sort other countries
can be asked to subscribe to the policy of the Trade Agreement
without tying them to any time or place of submitting the Agreement
to their Legislatures or accepting it offcially. Naturally,
many countries will WAIT to deposit their instruments of acceptance
until they see that other countries are going to do so.
E/PC/T/TAC/PV/20
S E/PC/T/TAC/PV/20
CHAIRMAN:. Are there any other speakers?
The Delegate of Brazil.
Mr. E.L. RODRIGUES (Brazil): Mr. Chairman, if we are not
able to put this Agreement of Provisional Application into force
we should like to make the entry into force in order to apply
the Agreement to begin with January 1st, but in order to get
the approval of our Congress we have to wait until November 18th
and we will have only .12 days for getting this approval for
putting into force before January let, because 30 days are
required after the lodging of this Instrurment of Acceptence.
Now, What I should like to know is, how could you get the
Agreement put into force definitively if up to January 1st
less than 85% of te0 countries representing world trade had not
accepted the Agreement definitively. I think it is a very
difficult situation for us.
CHAIRMAN: I am not quite sure that I understood the
question of the Deregate of Brazil. I quite understand the
-problems we have in connection With the constitutional procedure.
The position would seem to be this. The Delegate of Brazil
'would probably wish to sign the Agreement and the accompanying
Protocol before presenting it to his Parliament
Mr. E. L. RODRIGUES (Brazil) Yes.
CHAIRMAN: Brazil could sign the Protocol of Provisional
Application before November 10th is a; Ult certain that she
could apply the Provisions after January 1st;. if Brazil was not
certain of that, then she would probably wish to wait and sign
the Protocol of Provisional Application Later when she could be
sure as to the date on which she could give force to the Provisional
Application.
R . E/PC /T/TAC/PV/20
14
As to the definitive entry into force, that would depend
upon what countries representing 85% of the trade had accepted
the Agreement, and it is quite possible that Brazil could be
one of those countries and could contribute to tho 85%. If not,
then the Agreement would come into force definitively for the
other countries that represented 85% of world trade and the
entry into force as for Brazil when she had so accepted.
Mr. E.L. RODRIGUES (Brazil): I would like to add another
word, Mr. Chairman. Let us assume that you cannot get the
approval of Congress for the definitive entry in to force one
month before January 1st 1948. Then would Brazil have to wait
for 85% of the other countries before the Agreement of Provisional
Application could be put into force, if Congress's approval has
not been obtained for putting the definitive agreement into force.
I think it will be necessary, for Budgetary and technical reasons,
to put the Agreement into force after January 1st.
CHAIRMAN: I see no reason why Brazil could not deposit
the instruments of acceptance a. d sign the Protocol of Provisional
Application at the same time, if that is what the Delegate of
Brazil means.
May I suggest to the Delegate of Brazil that as these problems
are of a very difficult nature arising out of the constitution
.of the-situation in Brazil, perhaps it would be profitable if he
-could discuss them with the Tariff Negotiations Working Party
at the Meeting they will have some day this week, who could go
into them and give him the answers he is seeking,
Mr. E.L. RODRIGUES (Brazil): Yes.
CHAIRMAN: The Delegate of New Zealand.
Mr. J.P.D. JOHNSEN (New Zealand.): Mr. Chairman ; just wish 15
to add general support to the viewpoint put forward by the Delegate
of Australia. It is quite probable that apart from key countries
there will be other countries which before the 50 June would wish
to give provisional application to the Agreement. I,, however,
there is no sense of commitment by signing the Agreement and that
signature has got to be attached at the same time as the signing
of the protocol of Provisional Application, it is quite possible
that such action may be withheld. It is, therefore, essential
that the Agreement should be signed at the same time as the
protocol of Provisional Application and as that does riot as yet
appear to have been definitely demonstrated, we would, prefer that
that requirement should not be there.
CHAIRMAN: Are there any other speakers?
There is a difference of opinion in the Committee as to
wether or not there should be an obligation upon countries when
they sign the Protocol of provisional Application at the same time
to sign the General Agreement and the accompanying Protocols if
they have not already done so before. I think Mr. Shackle
pointed out that the way the Protocol of Provisional Application
is Worded now, there is no such obligation to sign the General
Agreement. So the point at issue is, whether or not we should
provides: in the Protocol of Provisional Application that at the
time of signing that instrument the countries should first of all
have to sign thu General Agreement and its accompanying Protocols
-if they have not already done so.
I do not know how we should endeavour to resolve this question.
Would the Committee consider it a desirable step if we appointed
sub-Committee to go into this matter and see if they could not
reach some agreement?
The Delegate of the United States.
E/PC /T/TQC/PV /20
R . 16
Mr.J.M. LEDDY (United States): I think that would be a
good plan, Mr. Chairman, because it does present some very
difficult. problems on both sides. For example, what we would
propose is to obtain legislation which would enable us to deposit
th0- instrument of acceptance with the Secretary General. If in
seeking that legislation we talked about an agreement which had
not been signed by anybody, it might be a little embarrassing,
a-nd I think we ought to have an opportunity of examining the
difficulties on all sides to see if we cannot reach some agreement
that would be acceptable.
CHAIRMAN: Is the proposal to appoint a sub-Committee to
examine this question approved?
The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I quite
agree with the procedure which you have outlined. I would only
ask if Dr. Coombs could not envisage the following suggestion,
that is, if he could not sign the Agreement ad referendum.
CHAIRMAN: Does Dr. Coombs wish to comment on the proposition
of the Delegate of France.
M. ROYER (France) (Interpretation): I have only made that
suggestion so that Dr. Coombs could talk over this question at
the Meeting of the sub-Committee.
CHAIRMAN: I take it that the proposal for a sub-Committee
to examine this question is approved? I should like to nominate
the Delegates for this sub-Committee: The Delegates of Australia,
Brazil, France, Norway, the United Kingdom and the United States,
and I should like to nominate as Chairman of the sub-committee
Mr. Melandor of Norway.
E/PC/T/TAC/PV/20
R. 17
CHAIRMAN: Is the composition of the Sub-Committee approved?
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I am
willing to renounce representation of the United Kingdom.
CHAIRMAN: In that case we will have a Sub-Committee of five
instead of a Sub-Committee of six. I think that would be agreeable
Are there any comments regarding the composition of the Sub-
Committee?
Approved.
The Sub-Committee will meet tomorrow morning at 10.30.
The Delegate of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, before passing
to any other document, 1 would like to make a reservation in
connection with the text of the General Agreement. The document
says both texts, English and French, are official texts of
reference and authentic, But I would like to state that the
Republic of Cuba will consider the English text as the text of
reference and will use the Spanish translation of the English text.
While awaiting the official translation into Spanish of the United
Nations, the translation made by the Cuban Government would be
considered the official one for the Cuban Government and its
officialsv. We cannot present to our Congress, nor can our Customs
Officers apply, a document in a foreign language.and we wish to
make clear that we accept both texts but we shell use as the.
official text, inside the country, the Spanish translation of the
English. text, provide: that the United Nations can supply us with
a proper official Spanish text..
CHAIRMAN: Due note will be taken of the statement just made
by the Delegate of Cuba which does give rise to certain problems
of. a technical character which the Secretariat would hot be
E/PC/T/TAC/PV/20
P. P. 18 E/PC/T/TAC/PV/20
expected to give an answer on; therefore the Working Party would
consider the question he has raised and give an answer on a later
occasion.
Wo will now take up, so far as it is possible to do so, the
Protocol of Signature. When we were considering the Protocol of
Signature on Friday evening we agreed to hold it over until we had
considered the question of the relation of the various documents set
forth in the Secretariat's statement which we have just been
considering. I take it now that it will be in order for us to
consider the Protocol of Signature.
We had agreed at our meeting on Friday evening that we would
have the Secretariat set forth a text of the Protocol of Signature
with the amendments which had been tentatively agreed at that
meeting. . This has been done And is given in
document W/332. The members of the Committee will, I think, on
examining this document, see that while the Secretariat have
attempted to incorporate certain suggestions put forward at that
meeting, the resulting document is not at all a satisfactory one.
The difficulty of course arises in: the reference in the first
paragraph to "the undersigned" and the various implications that
that brings. We then go on to say in the third paragraph that
the undersigned "in their capacity as Members of the Preparatory
Committee for the Conference". That seems to a certain degree
illogical. And then in the final paragraph we say that the
,undersigned undertake, "pending their acceptance of a Charter in
accordance with their constitutional procedures, to observe to the
fullest extent of their executive authority the principles of the
Draft Charter'.
I am wonde. ng if, rather than taking this text as a br',
we might not more profitably return to the text which was given in
our original draft prepared by the Tariff Negotiations Working
Party and consider the two texts together: I think in that way we
are more likely to arrive at a satisfactory text for the Protocol
of Signature. 19 E/PC/T/TAC/PV/20
-Mr. R. J. SHACKLE (United Kingdom); Mr. Chairman, may I say
I think I have a solution. I am inclined to think that, without
reopening discussion on the general form of this text, we might
possibly be able to solve the problem if we replace the words "the
undersigned" by this formula: "The. signatories of the present
Protocol". The word "signatory" is quite often used to denote a
country which signs any agreement and I think if we say "the
signatories of the present Protocol through their duly authorised
Representatives" that would as it were pick up the fact that it is
the countries on behalf of whom the Protocol is signed who
undertake to do the various things the Protocol involves. I
suggest that as a simple way of getting over this difficulty
without returning to the original text.
CHAIRMAN: I want to thank the United Kin -dom Delegate for
having made that proposal, which may solve our difficulties. I
would. like to know if this proposal does meet with the approval of
the Committee.
The Delegate of Czechoslovakia.
Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I have
"no objection to that, though I see no difficulty in "the
undersigned": I thought that the difficulty was not in the word
"undersigned" because it is quite clear that "undersigned" is not
personally, but it is my country or my government who is the
underdgned and I am only the authorised representative; so I
thought that the whole problem is solved at the end by the
signatures which would be given: that is to say, for example:
Belgium, Mr. So-and-so, The Czechoslovakian Republic, Mr. So-and-
so, The Government of the United Kingdom, Mr. So-and-so. So
that would overcome the difficulty of the signature itself. But
otherwise I have no strong feeling against "the signatories". P. 20 E/PC/ T/ TAC/PV/20
CHAIRMAN: Is the Committee in accord with the substitution
of the words "the signatories of the present Protocol" in place
of "the undersigned"?
Agreed.
Are there any other comments with regard to paragraph 1?
'Dr. H.C. COOMBS (Australia): Yes, Mr. Chairman. in view
of the question which we have raised as to the necessity for
signing this Agreement at the time of signing the Protocol of
Provisional Application, there are some problems which arise. If
it is not necessary to sign the General Agreement at that time, in
that case it would be necessary to provide for the undertaking at
present embodied in the Protocol of Signature to be accepted by
those parties who merely sign the Protocol of Provisional
Acceptance. And from some points of view, Mr. Chairman, it does
seem to me that the whole question of the text of this Protocol is
so bound up with this question we are discussing and have referred
to the Sub-Committee that there may be some advantage in deferring
consideration of the text until after that Sub-Committee has
reported.
Mr. J.M. LEDDY (United States): Could we refer this back to
the Sub-Committee?
CHAIRMAN: Dr. Coombs has proposed that we defer further
consideration of this Protocol until the Sub-Committee has made its
report. Mr. Leddy has just made an alternative proposal that we
should refer the question of the Protocol of Signature to the Sub-
Committee. I would like to know if that would also meet with the
accord of Dr. Coombs, in which case we could combine both
suggestions.
Dr. H.C. COOMBS (Australia):
Yes, I would agree. P.
21 E/PC/T/TAC/PV/20
Mr. J.P.D. JOHNSE5 (New Zealand) Mr. Chairman, I have no
objection to that procedure, but Ihad prepared an amendment to
the final paragraph and I wonder if I might refer that to any Sub-
Committee set Up? I was also going to sugest that the title
might be more properly in these words: "Prrotocol of Provisional
Application of the Principles of the Charter" rather an "Protocol
of Signature".
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, would it
not be better to say "Protocol of Provirsional Observance of the
Principles of the Charter" rather than "Application"?
CHIRMAN: If there are going to be proposal with regard to
a change in the title or in the operative part of the Protocol, I
think it woud be useful to have a general discussion of these
proposals before we refer the question to the Sub-Committee, so
that the Sub-Committee could take into account the' views expressed
in the Committee, I therefore think it would be useful if we
did now consider the question of the title.
The New Zealand Delegate has proposed that the title be changed
to "Protocol of Provisional Application of the Principles of the
Charter", to which Mr. Shackle has proposed an amendment "Protocol
of Provisional Observance ...." The Cuban Delegation also
suggested a change in the title at our meeting on Friday afternoon.
It will be recalled that at that time there were suggestions for
a number of protocols. Since then we have eliminated one, the
Protocol of Interpretative Notes, Iu. making, it an Annex, and. I
understand that there is a possibility that it may not be
- necessary to have one of the other Protocols we had in view;. a it
may be that we are left with only this Protocol in which case the
title "Protocol of Signature" might not be as inappropriate as it
seemed at first However, before referring the title to the Sub-
Committee, it might be useful if we had an expression of views of
any members of this Committee who have any views at this time.
E/PC/T/TAC/PV/20 22
CHAIRMAN: Are there any comments on the title of the Protocol?
The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, if there is
only one Protocol left, then we could adopt the title which appears
here: "Protocol of Signature". If there is to be more than one
Protocol, the Protocol would have more strength if its title were to
be modified and we could adopt, perhaps, the following title:
"Declaration Relating to the Observation of the Principles of the
Charter". That is just a suggestion.
I would like to add, Mr. Chairman, that, to my mind, it does
nos seem indispensable here to use the word. "provision",
-M.P. FORTHOMME (Belgium): Mr. Chairman, could we not put
all the suggested titles in a hat and draw one!
CHAIRMAN: Are there any other comments?
I think we can refer this question to the Sub-Committee in view
of the fact, that Members do not feel very strongly on the question
of the title.
Could the Delegate of New Zealand tell us what his proposal is
regarding the last paragraph?
MR. J.P.D, JOHNSEN (New Zealand.): Yes, Mr. Chairman, in the
second paragraph from the end I think there is just a slight verbal
amendment. - the word draft" before "Charter" should, I think, be
with a capital "D".
No far as the final paragraph is concerned. the difficulty that
I see in it is that countries are being asked there to give effect to
the principles of the Draft Charter, even though there may be some of
J.
E/PC/T/TAC/PV/20 J.
23
those principles to which they may not, at the time of Signature of
the Agreement, subscribe; Furthermore, it is quite possible that,
at the time of that Signature, a Charter may have emerged from the
World Conference, and presumably in that case the idea would be that
it would give effect to the principles of the Charter, subject again
to any reservations. which you may have made in connection with it.
To cover that particular position, I have suggested a re-wording
of that paragraph in the following form: "UNDERTAKE pending their
acceptance in accordance with their constitutional procedures, of
:any Charter which may be adopted by the Conference, to observe to the
fullest extent of their executive authority but subject to any
reservations they may have made on particular provisions, (a) the
general principles of such Charter, or (b) in the event of no such
Charter having been adopted at the time of their signature of the
General Agreement, the general principles of the said Draft Charter
until such time as the text of the Charter is finally established,
Win which case the foregoing undertaking shall then relate to the
,general principles of the Charter.
THEY UNDERTAKE further that should a Charter not be adopted by
the Conference or if adopted, should not have entered into force by
November 1, 1948, to meet again to consider in what manner the
General Agreement should be supplemented"
CHAIRMAN : The Delegate of France.
M. ROYER (Prance) (Interpretation): Mr. Chairman, may I remind
the Committee that, some months ago, I had a long discussion in
New.York with Mr. Nash on a somewhat similar subject. The discussion
was about t'..e provisions, the observation of the principles embodied
E/PC/T/TAC/PV20 E/PC/T/TAC/PV/20
24
in Chapter 7 of the Charter, which is now Chapter 6. Mr. Nash made
some objections to these principles of the same kind as those which
have, been made now by the New Zealand Delegate. I pointed out to
Mr. Nash that his position was entirely safeguarded and that one was
asked not to observe specific provisions, but general principles..
Here,., I would like to point out to the New Zealand Delegate that the
situation is the same and what the Governments of countries are asked
todo is to observe general principles and not specific provisions
of the Charter.
Therefore, if we agree on the principles, his position is
safeguarded, and I think we all agree on the principles of the Charter -
otherwise nothing, of course, would be meant by the Protocol of
Signature if we did not.
There is the slight difficulty that the Charter might be adopted
at Havana during the period of validity of the Protocol of Signature,
but wehave to work, and we have been working, on the assumption that
the principles of the Charter as it is adopted in Havana will not
differ from the principles of the Charter as laid out in Geneva.
There might be some difference of detail in the provisions of the
Charter but the principles will remain the same.
I have a number of objections to' the text which was submitted by
the New Zealand Delegate, and. one of these objections is that we
would be agreeing to any Charter which might be adopted at Havana,
and that seems to be implied in the New Zealand text.
As to the last point of the New Zealand amendment, I think that
this point does not matter very much because, in any case, this last
passage will be replaced by the provisions of Article XXVII. 25
CHAIRMAN: Are there any other comments?
MR. J.P.D.: JOHNSEN (New-Zealand): Mr.. Chairman, I might say
that I put forward this proposal merely to clarify these issues with
a view to assisting and giving a text that might be generally
acceptable. It was mainly for the purpose of calling attention to
the fact that there might-be a commitment to specific principles,
and so long as the Committee attain to general principles only that
would cover the situation.
So far as the last paragraph is concerned, or the last sentence,
that is merely a re-writing of the provision that is already in the
draft in another form.
CHAIRMAN: Are there any other comments on this Protocol?
Then, I think we can leave it in the hands of the Sub-Committee
to consider the Protocol of Signature, after they have discussed the
relationship of the Protocol of Provisional Application to the
General Agreement and the Protocol of Signature.
-Iam wondering, now that the terms of reference of the Sub-
Committee have been broadened, whether Mr. Shackle desires to be
included in the Sub-Committee now?
MR. R.J. SHACKLE (UInited Kingdom): Yes, Mr. Chairman, I am
prepared to Join it.. Thank you..
CHAIRMAN: The Sub-Committee will now, therefore, consist of
six Members and will meet tomorrow at 10.30, and they will study the
Protocol of Signature as well as the original Terms of Reference.
The next order of business is Article XXVII, paragraph 1. The
Australian Delegation circulated their proposal, which is given in
E/PC/T/TAC/PV/20
J. 26
document E/PC/T/W/334, and this afternoon there was circulated
another proposal of the Australian Delegation, which is given in
document E/PC/T/W/ 335. I take it this supplants the proposals
given in the original document.
M. ROYER (France) (Interpretation): Mr. Chairman, I would
Just like to make a brief remark, in the name of the French-speaking
Delegations, on the French text of E/PC/T/W/335. I do not wish to
go into details of the errors which have been made in establishing
that text, but there is one important point, that is, the word
"décider" in the sixth line of paragraph 2 of the French text ought
to be replaced by the word "convenir", and that same word has to be
replaced in the third line of paragraph 3, and also in the fifth
line of paragraph 4.
E/PU//T/TAC/PV/20
J . S - 27 - E/PC/T/TAC/PV/20
M. ROYER (France) (Interpretation): Mr. Chairman, to avoid
debate on the subject, I would like to point out that the words
"ou de modifier" which appear in the sixth line of Paragraph 2
of Document W/335 ought to be deleted, because there is no
question here of modifying the provisions of the Charter.
CHAIRMAN: I wish to thank the Delegate of France for
having pointed out these mistakes in the French text and I may
say that a re-draft of the French text in the form agreed upon
by the French-speaking Delegations is now being prepared and will
be circulated to Delegations in a few minutes.
The Delegate of Australia.
Dr. COOMBS (Australia): Mr. Chairman, as we indicated
at the conclusion of the last meeting, we felt that the previous
draft we prepared was open to possible misunderstandings. In
particular, we felt perhaps it was open to the criticism
directed towards it by the Delegate of Irdia; that it did not
deal clearly with the two problems.
The first arose from the fact that it was desirable that
those parties to the Agreement should accept all the obligations
of the Charter, whether they were obligations which were
incorporated in Part II - General Commercial Policy undertakings
- or whether they were obligations arising out of other parts
of the Charter, such as those relating to employment, industrial
development and commodity policy.
The second problem was that of possible difference in the
nature of the text of the General Agreement and the corresponding
charter provisions when finally decided upon. S 28 - E/PC/T/TAC/PV/20
We have therefore prepared a second draft which seeks to
deal with those two problems quitc separately.
The first two paragraphs deal with the position of a possible
difference between the tent of the Charter when agreed upon and
that of the General Agreement, as authenticated at this meeting.
The third paragraph deals with the situation which may arise
where one of the contracting parties does not accept the Charter,
which, however, has come into force.
The last paragraph deals with the situation which might arise
if the Charter does not enter into force or ceases to be in force,
Generally speaking, so far as the other provisions of the Charter
are concerned, this draft seeks to establish a position where, if
all the contracting parties to the Agreement do not adhere to the
Charter, action can be taken to decide whether they can be called
upon to accept corresponding obligations - perhaps not in their
gentirety but at any rate to the degree considered necessary by
the remaining contracting parties.
So far as the possible differences between the Charter as
finally agreed upon and the General Agreement are concerned, the
procedure is that, in the absence of any objection the provisions of
the Charter automatically replace the provisions of the Agreement
as they are agree upon here. If there is an objection, then
provision is made that the contracting parties must meet to consider
that objection, with a view to agreement as to what action shall
be taken in relation to that provision.
I want to make special reference, Mr. Chairman, to the fact
that we have used the word "agreed." This is invended to mean
'that every effort shall be made to obtain agreement between the
parties . What is intended is that there will be discussion and
negotiation, out of which it is hoped that all the contracting
parties will agree uanimously to some course of action: either S E/PC/T/TAC/PV/20
the supersession by the Charter provisions as they stand or the re-
tention of the original Agreement provisions, or the adoption of
-:oime compromise between those two which is acceptable to everybody
We think that shade of meaning is implied, by the use of the
word "agreed" rather than by the use of the word "decide," but it
is clear that if any agreement is re ched to which some party
cannot adhere, then he should have the right to withdraw. We have
covered that by the recommendation attached to the bottom of this
document, where we suggest that the definitive entry into force of
the Agreement shall not take place until after it has been agreed
what will be the precise provision in the Agreement, whether it
will be the provision in the Charter or some variation therefrom.
That means that if it is unacceptable to one of the contracting
parties that contracting party still possesses the right of with-
drawl which it has during the period of provisional operation.
I do not think it is necessary for me to add anything further,
Mr. Chairman, except to say that the text was prepared after con-
sultation with a number of the countries which expressed interest
in the matter, and I think most of the Delegations have had some
opportunity of having a look at it.
CHAIRMAN: Are there any other comments?
The Delegate of the United Kingdom.
Mr. SHACKEE (United Kingdom): Mr. Chairman, I think the
substance of the proposal would be entirely acceptable to my
Delegation.
There is just one small drafting point I could like to mention.
In the second line of Park raph 2 there is an ambiguity in the words
,'tox';s soon thereafter as is practicable." Does the word "thereafter"
refer to-the period after 60 days have expired or does it refer to
after the final date of the lodging of the objections? - 30 -
If it refers to after the final date of the lodging of the
objections, then it seems, to me that a reference to the 60 days
is probably superfluous and one could say "as soon as practicable."
If, on the other hand, the 60 days shall be an absolute limit,
then I think one should drop the words "or as soon thereafter,"
I do not know What is intended, but I think there are two
possible alternative ways of making the point clear.
CHAIRMAN: The Delegate of Australia.
Dr. COOMBS (Australia): Well Mr. Chairman, I think what
was meant was that the aim should be to hold this meeting within
60 days after the final date for the lodging of objections. We
did not want to make that absolute, as it might cause serious
inconvenience to do so. Therefore we added the phrase "As
soon thereafter as is practicable," so that there would be some
let-out. But it would be clearly the intention that the meeting
should be held within 60 days after the final date of lodging
the objections.
However, we would not attach great importance to it and if
it is decided to adopt either of the two solutions suggested by
the United Kingdom Delegate we would raise no objection.
CHAIRMAN: The Delegate of the United Kingdom,
Mr. SHACKLE (United Kingdom): In the light of the explanation
which Dr. Coombs has given, I think I was probably too meticulously
logical, so I think I will go back to the original text.
CHAIRMAN: The Delegate of Chile.
M. Angel FAIVOVICH (Chile) (Interpretation): Mr. Chairman,
I would like to come back to the reservations which we have made
here regarding certain special provisions of the Charter. I am
now referring to Article 16 of the Charter, which appears in part
I of the Agreement.
E/PC/T/TAC/PV/20
S 31
We have stated previously that Parts I and II of the Agreement,
as far as they embody provisions of the Charter, should follow the
same rules of supersession, especially regarding the provisions of
the Charter on which we made some reservations.
CHAIRMAN: Are there any other comments?
Ttie Delegate of the Lebanon.
Mr. J. MIKAOUI (Lebanon) Mr. Chairman, the Labanese Dale-
gatiion had presented the same reservations to Article 16 as the
Chilean Delegation. Therefore I must say that the text presented
by the Australian Delegation is fully satisfactory to us, except
that we should prefer that the reservations we made to Article 16
should automatically be superseded in the text of the Agreement in
the same respect as the reservations made to Part II of the Agreement.
CHAIRMAN: The Delegation of Cuba.
Dr. GUTIERREZ (Cuba). Mr. Chairman, as I have so many times
stated the position of the Cuban Delegation with reference to
reservations, I really think it is a pity that I have to take up
your time. but I :lust say that we are under the impression that
Paragraph 2 of the Final Act, which deals with reservations to the
Draft Charter, is still open for a final decision, when, in our
opinion, a way will be found to settle this matter to the satis-
faction of all the Delegations.
CHAIRMAN: Members of the Committee will recall that on Friday
afternoon, when we were discussing the second paragraph of the Finel
Act, it was agreed to defer further consideration of this paragraph
and the whole subject of reservations until we had agreed on the text
of Paragraph 1 of article XXVII. We are now in the process of
endeavouring to reach agreement on Paragraph 1 of Article XXVII.
That will enable us, when we have reached agreement on these
particular provisions of the General Agreement, to take up again
the question of reservations. I propose to allot an afternoon -
which will probably be Wednesday afternoon - to the discussion of
that subject.
E/PC/T/TAC/PV/20
S R. E/PC/T/TAC/PV/20
CHAIRMAN: The Delegate of New Zealand.
Mr.. J. P.D .JOINSEN (New Zealand): Mr. Chairman, there
are one or two points I should just like to raise in connection
with this draft; in the third line of the first paragraph,
is speaks of suspension and supersession. In the third
and last lines of the first paragraph it says "suspended or
superseded". I do not know what the sense is there - I think
it is in ended to be "suspended and superseded".
Another point I should like to make, which is really of a
drafting nature, is that in the first paragraph, fourth from
the last line; we speak of "any provision or provisions". Now,
in the second paragraph; fourth line, we refer to the "relevant
provision". That could be covered by the, word "any" "any
relevant provision".
The other point. wished to comment on was in connection
with the notification of objections. The way I read this is
that E contracting party to the Agreement, signatory to the
Agreement or signetory to the Protocol of Provisional Application
would advise the other contracting parties of any objection,
That .objection would be determined in accordance with paragraph 2.
Now, any countries who are signatory to the Final Act would, I
think, be very interested in knowing what objections had been
lodged and also .in knowing what decisions had been tacken on those
objections. The decisions reached or objections made may
influence thelr attitude ::;xards signing the Agreement themselves.
I Would suggest, therefore, that provision may be made that all
countries signatory to the Finaal Act should be advised of such
objections and decision there. -
CHAIRMAN: We shall be able to deal with the drafting
points suggested by the ,New Zealand Delegate when we take up the
Australian proprosal paragraph by paragraph.
The Delegate of India. Mr.B. N. AIARKAR (India): Mr., Chairman, we will accept
the draft suggested by the Australian Delegate, but we would
like to have some clarification about paragraph 2. If I heard
him correctly, the Delegate of Australia stated that it is hoped
that the contracting parties, when they consider objections would
agree unanimously on whether the objections would stand or
whether the corresponding provisions of the Charter should be
applied in place of the existing Agreement.
He stated that it was hoped, and that is also our hope,
and we should be grateful if the Committee would confirm that
this paragraph 2 would operate in a flexible way and will not
be interpreted so as to imply any definite and precise rule
about voting or other matters of procedure. Of course, we
hope that we shall reach unanimous agreement, but if such
unanimous agreement is not reached it will not necessarily block
any amendment which is Acceptable to the other contracting parties.
We would Joint out that we did not experience any practical
difficulty in the course of Dur diliberati ns in London or Geneva
as a result of not having adopted beforehand any precise rules
about the particular voting requirements for reaching - decision
/on elny particular matter. That encourages me to think that
it is unnecessary at this state to lay down any precise voting
rules. It is only that consideration which makes us accept
the very flexible formula embodied in paragraph 2. We would,
therefore like the Committee to confirm our understanding that
this paragraph 2 will actually operate in a flexible manner so
far as voting is concerned.
As regards paragraph 1, we would only suggest the insertion
of the word "corresponding" before the word provision" of the
Charter, appearing in the last but onc line of that paragraph 1.
In the third line of paragraph 1, one finds "corresponding
provisions of the Charter". Since the original proposal will
E/PC/T/TAC/PV/20
R. E/PC /T/TAC /PV/20
34.
only deel with the corresponding provisions of the Charter
there is so question of any contracting party objecting to
incorporating anything but the corresponding provision of the
Charter. As it stands it is rather inconsistent with the
earlier part of this paragraph and we would therefore suggest
the insertion of the word "corresponding" before the words
"provision of the Charter" in the last line but one of paragraph 1
in order to make it clear.
CHAIRMAN: Are there any other general comments before we
begin to deal with the Australian proposal?
The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I would
only like to state that it was precisely to get the flexible text
that is required by the Indian Delegate that we asked the
Australian Delegation to revise the text which it had formerly
proposed. We quite agree with Dr. Adarkar that this text which
we have now before us is flexible enough.
We have to read this text in a spirit of compromise for the
negotiations and in such a spirit should these negotiations be
approached. This is the reason why no precise rule of voting
was provided for in the text here.
CHAIRMAN: Are there any other comments?
We can now take up paragraph 1 of the Australian proposal.
The first suggestion which we had was the suggestion of the New
Zealand Delegate to replace the word "or" in "suspended or super-
seded" in the 8th line, by the word "and"..
Mr..R.J. SHACKLE (United Kingdom): I think that is right,
Mr. Cheirman.
Are the Committee in agreement with the proposal
R.
CHAIRMAN: R . E/PC/T/TAC/PV/20
35
of the New Zealand Delegation that the word "or" in the third line
from the bottom of page 1 should be replaced by the word "and".
The Delegate of India propose to add the word "corresponding"
between the word "any" and the word "provision" in the second line
from the end. Are there any objections to the proposal of the
Indian Delegation?
Mr.R.J.SHACKLE (United Kingdom): Mr. Chairman, I should
like to be clear about this. It seems we are here defining the
things to which a contracting party may object. We are saying
here that a contracting party may object to the incorporation of
the Agreement in the Provisions of the Charter. Now, supposing
we put "any" corresponding provision, it would seem to follow there
that the contracting party could not object to the incorporation
of some Don-corresponding provision - I may be wrong.
Dr. H.C . COOMBS (Australia): I am not sure, Mr. Chairman,
that it would not be adequate if we stopped the sentence at
"superseded". I think the last sentence is unnecessary, and I
think the meaning will be quite clear if we stopped at "superseded".
CHAIRMAN: Is the proposal of the Australian Delegation
to delete the last sentence, or at least, the last part of the
last sentence which says "or to the incorporation in this Agreement
of any provision of the Charter" approved?
Any objections? Agreed.
The Delegate of Chile.
Mr. Angel FAIVOVICH (Chile) (Interpretation): Mr. Chairman,
we have moved that the words "Part I and Part II of this Agreement
shall be suspended and superseded", because, as we have stated
previously, Part I and Part II would follow the same rules of
supersession and we would like to have the opinion of the Committee
on this question. R. E/PC/T/TQC/PV/20
36
CHAIRMAN: The Delegate of Lebanon.
Mr. J. MIKAOUI (Lebanon) (Interpretation): Mr. Chairman,
the Australian proposal admits the principle of substitution
of the Articles of the Charter for the Articles of the Agreement,
but it limits the substitution to the Articles included in Part II
of the Agreement. Nevertheless, there are several Articles
of the Charter which appear in the Agreement, namely Article I,
which is in Part I and which corresponds exactly to Article 16
of the Draft Charter. P.
E/PC/T/TAC/PV/20
For this reason I second the proposal which was Just made by
.the Chilean Delegate and this proposal could be implemented in
either or both of these ways; or we could, as the Chilean
Delegate proposed, insert.the words "Part I" before the words
"Part II' of this paragraph "Part I and Part II of this Agreement
shall be suspended" or we could draft paragraph 1 as follows:
"On the day on which the Charter of the International Trade
'Organization enters into force the application of the Articles of
the Charter embodied in the present Agreement shall be suspended
or superseded".
CHAIRMAN: The Delegate of Norway.
Mr. J. MELANDER (Norway): Mr. Chairman, on this paragraph 1
.of the Australian Delegation's draft, we completely agree as to
the points raised by the Delegate of Chile and the Delegate of the
Lebanon. I have the impression that the Committee discussed
that problem rather thoroughly a couple of weeks ago and that we
really settled in principle that the solution should be as contained
in the Australian draft which we have before us.
CHAIRMAN: The Delegate af Norway is quite correct, as I
think the verbatim record will show. When we were discussing
Article I at the second reading there was a very full discuss on as
to whether or not Article I should be included in Part I or Part II
of this Aireement. The basis on which the General Agreement has
been divided into Parts I, II and III is that Part II should be
superseded in some manner or other by the Provisions of. the Charter
and this Article XXVII is to give effect to that provision. So
that the Committee has already decided. that Article I should be in
Part I and what we are doing now is simply giving effect to the
supersession by the Charter of Part II of the Agreement. Mr. J.Y. LEDDY (United States): Mr. Chairman, as I understand
it, the difficulty that the Lebanese Delegate had with the Most-
Favoured-Nation Clause of the Charter was on the question of
regional preferences for economic development and I think that
properly goes into Part II anyhow, because the provisions relating
to economic development are in Part II of the Agreement, so
presumably whatever is included in the Charter at the Havana
Conference on that subject will then supersede Part II of this
Agreement. So I believe therefore that the position of the
Delegate of Lebanon is already covered.
CHAIRMAN: The Delegate of Lebanon.
Mr. J. MIKAOUI (Lebanon) (Interpretation): Mr. Chairman, I
regret very much that I should have to waste the time of the
Committee, but nevertheless we want to state that if we made
reservations on Article XVI it was on the instructions of our
Government.
I would like to thank the Chair for the explanation which the
Chairman has just given on the division of Part I and Part II.
What I asked is not that we should come back on a decision which
was made some days ago that part of Article I should be inserted
in Part II, but I asked only that the text of the first paragraph
of the Australian amendment should be amended so as to include also
Articles of the Charter which are, just as well as the Articles
appearing in the second Part, Articles of the General Agreement.
~~~~~ M .Ch i m n
Mr. Angel FlIVOVICH (Chile) (Interpretation): Mr. Chairman,
the Chilean Delegation could agree, on conditions, to the
AuLstralian amendment. Since the beginning of this discussion
Relating to the Draft Agreement the Chilean Delegation has pointed
out that the idea to be followed was the possibility of
substituting the Articles of the Charter for the Articles
-/`C/T/TJC/PV/40 E/PC/T/TAC/PV/20
39
of the Agreement, and here therefore it seems somewhat anomalous
that we should agree to follow a different procedure in respect of
certain of the Articles of the Charter. This furthermore would
place certain of the delegations, delegations which have made
reservations on certain Articles of the Charter, in a most
embarrassing position. This refers mainly to reservations made to
Article XVI of the Draft Charter. This would be a situation may
I say which would be entirely unbearable for certain delegations.
Regarding Article XVI I should say that the situation would be
unbearable for the Chilean Delegation and I suppose also for the
Syrian and Lebanese Delegations. If Article XVI is to be modified
by the Conference, then it would seem quite logical and natural that
Article I of the Charter could be also modified, in the same way as
other Articles of the Charter which will replace the corresponding
Articles of the Draft Agreement will be modified at Havana.
Mr. Chairman, we would not be in a position to accept the draft
of the Australian amendment regarding paragraph 1 if alongside with
Part II of this Agreement Part I were not also to be mentioned.
One Delegate here gave as an explanation that some of the points
raised by one of the Delegations was covered by Article 13 of the
Draft Charter on Economic Development. It seems to me Mr.
Chairman, that the whole matter would not be covered by that
Article and anyhow we have now received instructions from our
Government which compel us to insist on the insertion of Part I in
the first paragraph of Article XXVII.
CHAIRMAN : The Delegate of France.
M. ROYERR (France) (Interpretation): Mr.Chairman, I fully
understand the point of view cf the Chilean and Lebaness Delegations,
but nevertheless I would. like to draw your attention to a material
fact, it may be a minute fact, but a fact which is here, what is
that Article I is not entirely identical with Article 16 of the 40 / ,-, --_,.,_
Draft Charter and the conditions laid down in Article I of the
Agreement are somewhat different from the conditions laid down in
Article 16 of. the Draft Charter and it would not be possible to
replace, without alteration, Article I of the Agreement by Article
16 of the Draft Charter. The only procedure to be followed if
this replacement were to take place would be the procedure of
Amendments, and therefore I think that this question ought to be
raised when we come to discuss this question of amendment, that is
when we come to take up the examination of the following Article
on Azendments.
tr. Angel FAIVOVICH (Chile) (Interpretation): Mr.. Chairman,
I am afraid I cannot answer the French Dolegate on the point which
he has. just raised because I have not the text of the Article
before me, but I would like to ask him a question: that is, do
the Articles of the Draft Agreement reproduce faithfully the
provisions of the corresponding Articles of the Draft Charter?
P.
R/Po T IrP1U1Po E/P C/T/TAC/PV/20
41
CHAIRMAN: The Delegate of France.
M. ROYER (France )(Interpretation): Mr. Chairman, I think I
can answer in the affirmative, except perhaps on just one point.
will not insist on this point because the corresponding Article has
not yet been adopted by the Committee, but nevertheless in Part II
the Articles of the Draft Agreement reproduce 'faithfully the
Articles of the Charter. On some points there are modifications.
,but they are only formal modifications - for instance, the insertion
of the words "contracting-parties" - and there would be no difficulty
for the functioning of the Agreement to replace the Articles of the
Draftf Agreement by the Articles of the Draft Charter.
CHAIRMAN: The Delegate of Chile.
MR. A. FAIVOVICH (Chile) (Interpretation): Mr. Chairman, I
have now found the text which I did not have before, and I would like
to answer the remark just made by the French Delegate with his
-usual clarity and state that the Articles of the General Agreement
in Part II do not represent exactly the Articles of the Draft
Charter, and that rule which he sets forth for Part II also applies
-to Part I.
CHAIRMAN: We have two proposals before us. One, of the
Chilean Delegation, which provides that Part I and II of this
Agreement shall be suspended and superseded by the corresponding
provisions in the Charter, and another, of the Syrian Delegation,
lph reads somewhat as follows: "On the date on which the
International Trade Organization enters into force any provisions of
this Agreement which correspond to the provisions of the Charter
J . E/PC/T/TAC/PV/20
shall be suspended and superseded by the correspond provisions of the
Charter;
(Interpretation)
MR. J. MIKAOUI (Lebanon)/: Mr. Chairman, speaking in the name
of both the Syrian and Lebanase Delegations, we would like to state
that either one of these formulae vo uld satisfy us.
CHAIRMAN: Does any other Delegate wish to comment on this
proposal?
MR. J.M. LEDDY (United States): Mr. Chairman, my view is
-that the general most-favoured-nation clause is an application of
customs tariffs, and exceptions to this clause are, in our view, so
inexorably bound up, that the putting into effect would affect
Tariff Schedules, and it is not practical to provide for an
amendment procedure with regard to this clause. Therefore, I do
not feel that we can see our way to placing the most-favoured-nation
clause on the same basis as Part II of the Agreement) from the point
of view of supersession by the Charter.
CHAIRMAN: Any other comments?
The Delegate of Belgium.
M. P. FORTHOMME (Belgium): Mr. Chairman, I would Just like t0
say that, although we are not absolutely wildly enthusiastic about
,the Agreement, at least we know what it is, and.we will not favour
any antomatio extension of any part of this Agreement apart from
what is necessary, and as there are amendment. provisions which would
:enable people to take care of any necessary change that could be made
In Article I we would not favour these two suggested amendments,
J . CHAIRMAN: The Delegate of India.
MR. B.N, ADARKMR (India): Mr. Chairman, it seems to me that
this question could -be decided independently of whether any further
exceptions should be admitted to the most-favoured-nation rule laid
down in Article I. In fact, this rule is subject to exceptions not
merely those stated in paragraph 2 of that Article, but also to
Several other exceptions laid down in certain parts of Part I I.
If all that the Chilean and Lebanese Delegations Wish is that
this rule should be subject to one further exception, namely, the
exception in favour of regional preference arrangements, they could
.'secure that object by getting the necessary amendment adopted in the
Charter and then Part II, when it is superseded by the provisions of
the Charter, would automatically cover that point, It is
thererore not necessary for them to risia ton Part I also being subject
ito the process of supersession.
Of course, the existing Article, Article XVIII on adjustment
in connection with economic development, sets forth the procedure
which provides for release for any discriminatory measures needed for
economic development or reconstruction, and under the terms of the
Australian amendment we have only provided for a procedure for the
provasions of Part II being superseded by the' corresponding provisions
of the Charter, Since there is so provision at present in Part II
on the subject on regional preferential arrangements, the words
"corresponding provisions" might perhaps create difficulties for those
Delegations which wish to see some provision included in Part II in
regard to regional preferential arrangements.
I would therefore suggest that we could find a solution to this
problem by reaching an understanding here in this Committee that,
J. 44 I
although Article XXVII speaks of Part II being superseded by the
corresponding provisions of the Charter, we understand that if an
Article on regional preferential arrangements, Article 15, is
adopted, that will be included among the provisions of the Charter
which would apply in place of Part II should supersession be decided
upon in accordance with paragraph 2 of Article XXVII.
CHAIRMAN: The Delegate of the United States.
MR. J.M. IEDDY (United States): To meet the position of the
Chilean and Lebanese Delegates, it would be possible to put in an
Interpretation in the Agreement along the lines suggested by the
Delegate of India, that is, that Articles 13, 14 and 15 of the
Charter do correspond with Article XVIII of the Agreement. I do
not think that there is any doubt about that with regard to this
group of Articles on economic development.
CHAIRMAN: Would that meet the point raised by the Delegates of
Chile and Lebanon?
MR. A. FAIVOVICH (Chile) (Interpretation): Mr. Chairman, I
would like first to thank my colleagues here for the goodwill and
spirit of oc-operation which they haee just shown, but I must stato
that, to my regret, it is not possible for us on the instructions of
our Government to accept paragraph 1 of the Australian amendment
.without including the words "Part I".
CHAIRMAN: The Delegate of the Lebanon.
UR. J. MIKOUI (Lebanon) (Interpretation): Mr. Chairman, first
of all I would like to thank all the aelegates who have shown suchb
EIFOYTITAC117120
J. J. E/PC/T/TAC/PV/20
45
of comprehension in widening the field of understanding here, but I
must state that with deep regret, in my name and in the name of the
Syrian Delegation, we cannot accept the compromise which has just
been put forward.
CHAIRMAN: I also regret that it has not been possible to
reach agreement on this, point.. Therefore, due note will be taken
of the statements just made by the Delegates of Chile and Lebanon.
Are there any other comments or. paragraph 1?
Monsieur Royer.
M. ROYER (France) (Interpretation): Mr. Chairman, I would like
to ask the Lustralian Delegation whether they have any objection to
the deletion of the words "at Havana" in the first paragraph? I
think What these words are useless.
CHAIRMAN: The Delegate of France proposes the deletion of the
words "at Havana". Are there any objections?
Agreed.
Are there any other comments on paragraph lt
The Delegate of China.
MR. D.Y. DAO (china): Mr. Chairman, may I ask whether there is
any special significance which will be attached to the words;
"Contracting Parties". I understand that when is is in capitals it
means Contracting Parties meeting as a Committee; 'Is there any
special significance to be attached to the capital letters of
Contracting Parties here? S
46 - E/PC/T/TAC/PV/20
CHIRMAN: Yes; if the Delegate of China will refer to
Article XXV of the new text he will see that the purpose of
putting capital letters to Contracting Parties means that the
Contracting Parties are acting jointly. I would refer him
to Paragraph 1 of the new Article XXV
Mr. DAO (China): Yes, Mr. C.- i: - I :1 that point
in connection with the definition of contracting parties because
contracting parties would mean countries who are applying the
provisions of the Agreement provisionally, or those who have
accepted the Agreement. This case will probably happen only
60 days after the closing of the next Conference, say, in
April or earlier, and at that time I should imagine the Agree-
ment would not come into force definitively. There are so
many countries who will apply the provisions of the Agreement
provisionally.
Now, when the Agreement is not definitively in force, would
there be Contracting Parties as a Committee among the countries
-plying the provisions of the Agreement provisionally?
CHAIRMAN: I would take it that the Contracting Parties
who would be acting as a Committee would be those who are con-
tracting parties according to the definition of contracting
perties given in Paragraph 1 of Article XXXII.
Are there any other comments?
The Delegate of New Zealand.
Mr. J. P. D. JOHNSEN (New Zealand): Mr. Chairman, there, is
just a. point I would like to raise regarding the Finel Act. I
do not know whether you wish to deal with it new or when you
deal with Paragraph 2.
E/PC/T/TAC/PV/20 S
- 47 -
E/PC/T/TAC/PV/20
CHAIRMAN: Does that relate to Paragraph 1?
Mr. KOHNSEN (New Zealand): Yes; my suggestion was that any
objection should be brought to the notice of the signatories to
the Final Act.
CHAIRMAN: The New Zealand Delegate has proposed that in
please of the words "contracting parties" in the sixth and seventh
lines, the provision should read: "that any contracting party
to thin Agreement may .zaI;. 3 with the signatories to the Final
Aot an objection to any provision, " etc. I take it that was
your suggestion, Mr, Johnson?
Or was your proposal simply that all signatories of the
Final Act should be informed of the objection and appraised of
the decision?
Mr. JOHNSEN (New Zealand) . That was the sense of my
suggestion, Mr. Chairman.
CHAIRMAN: Are there any comments on the suggest ion of
the New Zealand Delegate?
The Delegate of the United Kingdom.
Mr. SHACKLE (United Kingdom.): Mr. Chairman, I do not know
whether it is appropriate to discuss a drafting amendment et
this point. My suggestion would involve a new paragraph, but I
thought something simple would meet the cace,
My suggestion would regd "Any objection lodged by a con-
tracting party under the provisions of Paragraph 1 of this
Article and any agreement which may be reached between the
contracting parties under Paragraphs 2 and 3 shall be notified
for information to the sinstories of the Final Act which are
not at the time applying the General Agreement either provisionally
or definitivey." E/PC/T/TAC/PV/20
I thought of that as a new additional paragraph to this
Article.
Mr. JOHNSEN (New Zealand): That would be satisfactory from
my point of view, Mr. Chairman.
CHAIRMAN: Where would Mr. Shackle suggest that paragraph
should come?
Mr. SHACKLE (United Kingdom): It should come at the end.
CHAIRMAN: Between Paragraphs 3 and 4?
Mr. SHACKLE (United Kingdom): Either there or after
Paragraph 4.
CHAIRMAN: Are there any comments on the proposed new
Paragraph 5 suggested by Mr. Shackle?
Are there any objections to the proposal just put forward
by Mr.Shackle for a new Paragraph 5?
(At the Chairman's request, Mr. Shackle agreed to write
out the text of his amendment, for trensmission to the
Secretariat).
CHAIRMAN: Whilst we are waiting, for Mr. Shackle to write
out the text, I will call upon the Delegate of Chile to raise
another point.
M. Angel FAIVOVIOH ( Chile (Interpretation): Mr. Chairman,
regarding Paragraph 2, we read: "the contracting parties shall
confer to consider the objection and to agree whether the
relevant provision of the Charter," etc. I would like to know,
in relation to that word "agree", what kind of quorum would be
required so that one could say there had been agreement.
S
- 48 - 49
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, if I may
explain briefly .what we had in mind when we adopted that draft,
I would like to sey that the word "agree", on which we agreed,
was used instead of the word "decide" because if we had used the
word "decide" here this would have implied some certain precision
as to the condition of voting and the * I majority required
to come to a valid decision. We tried to ...lve this problem in
such a way as to include these various conditions, but all the
formulas which we found were successively dropped. Therefore, if
we now have the word "agree" it means implicitly that the former
agreement in certain cases may have to be dropped and that a new
agreement may have to be negotiated, and the: this agreement, to
be legally valid, will have to be a new one.
This was the subtle and elegant way which I we found to indicate
that a new agreement was to be negotiated. In fact, here we
shall be in the same position as we were in London, but there is
one interpretation which we have to discrard; that is, that this
word "agree" may mean the use of the right of veto for any of the
parties.
CHAIRMAN: The Delegate of Chile.
M. FAIVOVICH (Chile) (Interpretation): Mr. Chairman, I would
like first of ell to refer once again to the subtle and elegant
expression which was devised by the French Delegate, to use the
word "agree" instead of "negotiate". This is a serious matter
word I think we ought to find an appropriate word instead of
finding an expression, although it might be elegant or subtle,
E/PC/T/TAC/PV/205)n
P S 50 E/PC/T/TAC/PV/20
because this problem will be raised and it would be most
interesting to know beforehand, in the case of the implementation
of the provisions of Paragraph 2, what class of quorum will be
used if the purpose is to come to an agreement.
In fact, the word "agree" obviously means to come to an
agreement, and if there are more then two parties involved in
negotiation it means that all must have the same opinion and that
the opposition of only one party would be enought to prevent the
provisions of Paragraph 2 from being applied.
Therefore we must state what category of quorum will be
applied here: whether it will be the rule of the simple
majority, or the rule of the two-thirds majority, or the rule
of unanimity which will come into force, so that the provisions
of Paragraph 2 can be applied freely.
I do not think we can leave this to the goodwill of the
contracting parties, because if we open the door to goodwill
I am afraid we will, in fact, be opening the door maybe to
misunderstandings and to difficulties which might not easily
be solved. R
- 51 -
CHAIRMAN: The Delegate of Belgium.
M. P. FORTHOMME (Belgium) (Interpretation): Mr. Chairman,
with regard to the Australian text which is now before us I would
like to second the thesis which was put forward by the French
Delegate. We only have to recall, as I certainly do, what happened
here in Geneva. We had the rule of the simple majority, but we
avoided always applying that rule and therefore when any problem
was put forward we pondered over and over again to see if we could
find a solution to this problem. That is the reason why finally we
have arrived at a Draft Charter, in fact a Charter which is not so
wordy that we cannot send it by Air Mail, we would have had to insert
a page after the page of Notes and reservations, if we had not
followed this rule to which I am now referring. Therefore, I think
it would be wise not to insist on having here provisions relating to
a Quorum. If questions arise, and they will arise, then these
questions will have to be taken up and pondered on over and over again,
and over these problems we may have to torture our brains to find a
solution. But it will be the only way to find a solution which will
give satisfaction.
CHAIRMAN: The point raised by the Delegate of Chile relates
to paragraph 2 and we have not yet passed paragraph 1. We will have
to return to paragraph 2 tomorrow, so I would now like to finish
paragraph 1 before we break up tonight, and that involves the
consequential approval of the new paragraph 5 in the form proposed by
Mr. Shackle, I will now read over the latest draft which has been
approved by Mr. Shackle.
"Any objection lodged by a contracting party under the provisions
E/PC/T/TAC/PV/20 - 52 -
of paragraph 1 of this Article and any Agreement which may be
reached between the contracting parties under paragraph 2 or 3 shall
be notified for information to those signatories of the Final Act
which are not at the time contracting parties".
Is this proposal approved?
Agreed.
Is paragraph 1 approved?
Adopted.
Tomorrow we will continue with the Australian proposal regarding
Article XVII, now new Article XXIX. After that I propose to take
up the am endment to new paragraph 6 of Article XIV, formerly
Article XIII and the Belgian-Luxembourg amendment, which was given in
document E/PC/T/W/336 which was circulated today. After that we
will take up the form of the Schedules.
I hope that it will not be necessary for us to have evening
meetings, but if we do not make more progress than we have made
today it may be necessary to call an evening meeting tomorrow.
M. P. FORTHOMME (Belgium): I would just like to say something
which we forgot to include in this paper 336; that it supersedes
the fomer paper 331.
MR. J.R.C. HELMORE (United Kingdom): I wonder if you would
allow me to ask the Committee whether it would be convenient to take
Article. XIII, now Article XIV, paragraph 6, as the first business
tomorrow? We have not very often asked for any arrangement, of the
business of this Committee to suit our convenience. I can only say
I wish myself to be present for the discussion and it would be
extremely difficult for me if the discussion Article XXVII,
paragraphs 2, 3, and 4 lasted very long.
R.
E/PC/T/TAC/PV/20 53 -
CHAIRMAN: Is the Committee in agreement to accept the request
of the Delegate of the United Kingdom?
H.E. Dr. Z. AUGENTHALER (Czechoslovakia): I agree, but I was
wondering if it would not be possible to have also a meeting
tomorrow morning at eleven. If we are in sub-committees I would
suggest in that case that the sub-committees should have night
meetings.
CHAIRMAN: I would like to point out to the Delegate of
Czechoslovakia that from the very outset we agreed, to avoid holding
morning meetings in order not to conflict with the tariff negotiations.
There are certain Members of the Committee who are regularly attending
the Committee who also have to participate in the tariff negotiations
and I think it would be undesirable if we were to interfere with the
tariff negotiations as they are going to last longer than the
proceedings of this Committee.
Any other comments?
MR. E.L. RODRIGUES (Brazil): I would suggest that it might be
possible to have a break, say at 5 o'clock, and to continue to
8 o'clock.
CHAIRMAN: The Delegate of Brazil has suggested we go back to
the time-table we had for the Preparatory Committee - meet at 2.30,
go on to 4.30, have a break of half an hour, and then go on to 8
or 8.30. Is that more acceptable to the Committee than holding
occasional evening meetings?
The Delegate of Norway.
E/PC/T/TAC/PV/20
R. R.
- 54 - E/PC/T/TAC/PV/20
MR. J. MELANDER (Norway): I do not think that proposal would
lead to any progress. I think we do work harder if we stay at it.
Would it perhaps be useful to have a meeting tonight?
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): We should have thought that
it would have been better to meet tomorrow morning. You stated a
rule, but it has been our previous experience that the Charter
provides that there is no rule which could not be amended by extension
and therefore I would like to know whether some Delegations here
would have any objection to our meeting tomorrow morning.
CHAIRMAN: I would strongly recommend against that suggestion,
for the simple reason that it would interfere with the tariff
negotiations. Some Members of the Committee asked me particularly
not to arrange meetings that would interfere with the programme of
the tariff negotiations. I do not think we should in any way interfere
with the tariff negotiations because that is the meeting that has to
make progress if we are to finish in time. I therefore hope that
Dr. Augenthaler and Monsieur Royer will not insist upon their proposal.
I would like to find the sense of the meeting regarding the
proposal of the Brazilian Delegate to carry on till 8 o'clock in the
evening with a break of half an hour for tea. Will those in favour
of that please raise their hands.
The proposal is carried. I cannot guarantee that there will be
no evening meetings.
Accordingly we will meet tomorrow at 2.30 and continue until
8 o'clock or whatever time we feel that we have made enough progress,
with half an hour break for tea.
According to this decision the Sub-Committee will meet tomorrow
at 10.30 a.m.
The meeting is adjourned.
The meeting rose at 6.25 p.m. |
GATT Library | hz582hj5458 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty -Third Meeting of Commission "B" Held on Tuesday, 15th July, 1947, at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, July 15, 1947 | United Nations. Economic and Social Council | 15/07/1947 | official documents | E/PC/T/B/PV/23 and E/PC/T/B/PV/22-24 | https://exhibits.stanford.edu/gatt/catalog/hz582hj5458 | hz582hj5458_90250096.xml | GATT_155 | 11,484 | 68,039 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/B/PV/23
15 July 1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
TWENTY -THIRD MEETING OF COMMISSION "B" HELD ON
TUESDAY, 15th JULY, 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).
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 VKP E/PC/T/B/PV/23
CHAIRMAN: The Meeting is called to order.
I am requested to ask members if possible to speak somewhat
more loudly than they have been accustomed to doing in this room
because the interpreters and verbatim reporters have found difficulty
in hearing all members of the Commission when they have been speaking.
Members of the Commission will recall that when we were
considering, Chapter VIII in Commission B, the Commission approved a
suggestion of the United States Delegation that consideration of the
Articles pertaining to voting and composition of the Executive Board
should be deferred until work on certain portions of the Charter had
been substantially completed. Eventually it was agreed that these
particular Articles should be taken up on July 15 and that is the
reason why we are meeting today to consider these Articles.
The Articles which come into question are Article 64;
paragraph 5 of Article 66; paragraphs 3 and 4 of article 67;
Article 68 and Article 69.
I would call the attention of the members of the Commission to
page 6 of document T/W/210, Rev. 1. In this document attention is
called to the fact that the Drafting Committee was instructed to
formulate alternative schemes as regards voting taking account of
suggestions concerning weighted voting and permanent membership of
the Executive Board. The Drafting Committee did not reach any
final conclusions on weighted voting. The attentioin of members is
drawn to the Report of the Administrative Sub-Committee commencing
on page 53 of the Drafting Committee's Report.
The Delegate in New York who submitted a formula on weighted
voting and the note on a two-thirds majority was the united Kingdom
Delegate. Perhaps our discussion today might open with a
statement by the United Kingdom Delegate as it is the United Kingdom
Delegate who has submitted the proposal regarding weighted voting
which was given later on in our working paper. V. CHAIRMAN : The Delegate of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): Before going into that,
Mr. Chairman, I would like to ask a question. Could we possibly
discuss this matter in two parts - first, the question of Voting,
and then the question of the organization of the Executive
Board? I think it might be very possible to find a formula
of agreement in relation to the Executive Board, whereas the
differences of opinion as to Voting are more acute.
CHAIRMAN: It was my intention that the two subjects
should be discussed separately, and it was my intention that
we should, first of all, consider article 64 (and the amendments
thereto), which is the Article dealing with Voting.
The Delegate of Norway.
Mr. Erik COLBAN (Norway): Mr. Chairman, before we enter
upon a discussion of this problem of Voting, I would like to
say that in London my attitude was most definitely in favour
of the ruling "one State, one vote"; but I added and emphasized
that I had an open mind, and if I should be presented with a
suggestion which seemed to me to be reasonable - a suggestion
on weighted voting that it was possible to put into practice -
I would not have any preconceive:. idea in opposition to such
a suggestion, and I want to repeat that to-day.
I hope that all of us will enter upon this very difficult
discussion in the same sprit as I am going to, with an entirely
open mind, willing to be convinced by arguments on either side.
I cannot tell you what my final attitude may be. That will
depend upon the arguments brought up in our discussion; but
I would allow myself to express the hope that it will be kept
in mind that in this Organization, dealing with practical
commercial problems, it is, in itself, very logical that
3
E /PC/T/B/PV/23 E/PC/T/B/PV/23
certain States, having a preponderant share in world trade, and
a preponderant share in the making of full employment, should
also have an important. place in our Organization, and if that
place can be secured. to them by a practical system of weighted
voting, I would welcome it. I do not know whether it is
possible: the propositions we have seen up till now, are not,
taken separately or all together, very satisfactory; but they
contained elements of a possible solution. I do not want
to call it a compromise - I expressly say a possible solution,
and (I repeat myself now) this is the spirit in which I am
going to take part in the work of this Commission on this
problem.
4
V. M 5 E/PC/T/B/PV/23.
CHAIRMAN: The Delegate of South Africa.
DR. W.C. MAUDE (South Africa): Mr. Chairman, I shall not
be long. I had come here this afternoon with the thought in mind
of making a passionate appeal to my colleagues to be as objective
as possible in the approach to this problem, but looking round
the table, I have the feeling, Judging from the restricted numbers
present, that this is going to be a business meeting, not a meeting
on a search for self-interest. Mr. Colban has already developed
his approach to it and I should merely like to endorse what he has
dald, that we should come here to this problem in a rational search
for the truth and nothing more. If we approach our discussion
here this afternoon with any preconceived ideas I am convinced -
basins myself on the little bit of contact which I have already had
with such matters - that we shall not reach a solution at all. We
must approach this thing with the firm intent to reach a reasonable,
objective, and response ible solution.
I could develop this still more by saying that we have
certain dead lines to meet - the dead line for the -finish of the
work of the commissions, the dead line of the date for the World
Conference - but I do not think I need do that, I would merely
like to say that any unnecessary delay would be irresponsible in
view of the very grave economic situation in the world today. Any
delay here involved by a discussion which might last over a week
will not react to the credit of this Conference. I hoped that we
should emerge from this Conference very rapidly with, in effect, a
declaration to the world that we have been responsible people here
making a concerted attack on the economic situation which is already M 6
E/PC/T/B/PV/23.
beginning to worsen. I have used the expression that we must do
whatever we can to stop the rot. The rot is very nearly beginning.
We must not waste time; the situation does not brook any delay.
Briefly, therefore, let us look at this thing as a problem which
we are to solve as responsible people.
CHAIRMAN: Before I call on the next speaker I would like to
mention that the Secretary, in drawing attention to the report of
the Administrative Sub-committee at New York, which is given on
pages 53 and following, of the Report of the Drafting Committee,
means that all of those proposals set forth in the Administrative
Sub-committee's report are before the commission. The fact that
none of them has been mentioned in this working paper does not
mean that any of them have been dropped. The Secretary considered
there was no object in repeating the proposals which were con-
tained in the Administrative Sub-committee's report and that is
why attention has been drawn to the report of that Committee in
the note on page 6 of the working paper, W/210 Rev.l.
DR. H.C. COOMBS (Australia): At the London Conference the
Australian Delegation indicated that its views were very close to
those which have been repeated here today by Mr. Colban. That is,
*we had an open mind on the question and indicated that while we
had an actual preference for a system of voting based upon "one
country, one vote", we were open to conviction in the light of
evidence which presumably would be submitted to those who are
interested in departures from that general principle. I hope
your minds are still open, but I must say that our examination of
this question since London has tended to confirm the natural
preference that we started with and to increase our doubts as to
the adequacy of any of the alternatives which have been submitted, 7 M
E/PC/T/B/PV/23
and our doubts as to the validity of the arguments on which they
have been based.
Briefly, we would say that a departure from the "one State,
one votes principle does need to be justified and we do not consi-
der that it has been justified. We recognise that the facts of
economic relationships do make certain countries more important
than others, and that it is proper that there should be a special
weight attachable to the words and actions of those who are more
important in that economic sense. We feel, however, that it is
unnecessary to take any special provisions to ensure that special
weight. The conduct of this Conference, in the first session, I
think made it fairly clear that the countries who might fall into
that class do in fact carry a special weight in the work of a
conference of this sort, and I think it is fairly clear that their
views would carry very special weight in the conduct of any
international trade òrganisation, whether they had any votes or
not. 8
G E/PC/T/B/PV/23
For instance, I think I am right in saying that I can
not recall a.Sub-Committee or Committees set up by this
Preparatory Committee which does or do not include certain
countries here, which would fall, into that category.
We are all aware that without them the work of the Sub-
Committee would be like Hamlet without the Prince of Denmark,
and we do not need to have to give them extra votes to ensure
that we all pay special attention to their words.
So therefore we are, on the whole, convinced that to
give special significance to countries of particular economic
importance is not necessary; indeed, it may savour of a policy
of giving to him that hath, and taking away from him that hath
not; and therefore it is additionally unnecessary.
Our second objection, Sir, to which we come to attach
increasing significance, is the quite obvious difficulty of
measuring what it is you. will be trying to express in such a
system.
Various formulae have been put forward, and it is clear
there are certain, factors which to some extent are relevant to
a judgment on this point. Size, dependence on international
trade and so on are clearly in the same sense significant; but
precisely. how you would combine these things to give you formulae
which were in any sense a. proper measure of what it was you were
trying to do or assess, we feel has been demonstrated to be a
task of very great difficulty, if not impossibility, and we
bare very much afraid that if the search for this sort of
formulae continues, it will degenerate under the guise of a
search for a significant formula into a straight piece of
hagging, in which people will have another means of deciding the
sort of answers they want to give, and they will adjust their G 9
E/PC/T/B/PV/23
formulae until they look like getting the sort of answer they
think is a desirable one. We think on the whole it is dishonest,
and as we have already said, unnecessary.
The difficulty is there is not clear relationship, Here
we are setting up an Organisation to which come various
countries represented here, and these it is hoped will become
Members. That Organisation imposes certain obligations, grants
certain privileges to the Members, but there is no clear
relationship between the working factors, which we would take
into account in the assessment of any formula, and the
obligations imposed upon Members. It is unlike a financial
institution, where the risks which a person takes by participation
are proportionate to what he puts in. Here we are putting in
to a certain extent our freedom of action, and we are taking out
certain benefits which we hope will be derived from common
action in the fields with which the Charter is concerned.
Now the limitations involved in the sacrifice of freedom
of action are as real and as acute for a small country as for a
large country; the obligtions which they accept will be as
difficult to carry out and the benefits will be proportionately
no different in any very obvious way, and we feel, therefore,
that in the absence of a relationship of this sort it is hard
to determine on what basis any assessment of this question
would proceed.
I think the work in New York, which was interesting, did
demonstrate that there people faced the question on the whole
reasonably objectively, and I am sure with considerable
ingenuity, but not only failed to reach agreement as to the
results but did have quite marked differences as to the
particular bases on which the question might be approuched; and 10
G E/PC/T/B/PV/23
all these differences tend, we think, towards the conclusion that
the simplest and easiest thing to do is to leave the situation
as one State one vote, relying upon natural inevitable consciousness
which all Members will have of economic strength, or the nature
of the obligations accepted in particular situations, to ensure
that they will, in addition to assessing the thing from their
own point of view, take into-account the significance attachable
to the views of countries which are either important or are
particularly affected by the type of obligation with which we are
concerned.
Mr. Chairman, I have, I am afraid, in expressing my views
on this sounded perhaps rather more certain and definite than
I am in fact. I would not like the impression to be created that
our minds are, in fact, finally made up on this issue, because
I agree that that is not the way in which we should approach this
question; but I do wish to make, it quite clear that we have given
this quite a lot of thought, and we are satisfied with the weight
of evidence provided in New York. Our experience in the conduct
of the two Sessions of the Committee did not, in our opinion,
produce adequate evidence for departing from what we believe is
a good general rule - that is, one State one vote. S 11 E/PC/T/B/PV/23
CHAIRMAN: The Delegate of Brazil.
Mr. 0. PARANAGUA (Brazil): Mr. Chairman, I heard the appeal
by our eminent colleague, Mr. Colban, and by the South African
Delegate, and I can assure you that I am of the same spirit and
I think we ought to have an open mind on this question of
voting.
I am very glad that the two questions ware separate and
that we can discuss the voting in relation to the deliberations
and the voting in relation to the composition of the Executive
Board.
In regard to the voting on deliberations, I think it would
be very difficult to have any kind of compromise, because,
whether we introduce one formula or another, we would always
have the same result; it is the changing of a minority into
into a majority because of a privileged vote. We cannot escape
from this result.
This problem is not a new problem; it is a very old
problem. It is the same problem which the Americans had when
they discussed their Constitution. I think the American Delegate
will agree with me that, when the Constitution was discussed, the
small States like Delaware, New Jersey and Rhods Island opposed
any Constitution where they would be squashed by the more
populated States. The result of that discussion was one which
nearly broke the Convention - was the House of Representatives
to be constituted according to the number of votes of the popu-
lation, and was the Sonate to be on equality of representation?
It is a very old problem with which we are confronted, and,
as I said, I cannot see any ground for compromise on this question
of weighted voting for the deliberations, because, in spite of our
open mind, our sense of responsibility, we cannot give a certain
kind of control of this institution to a few countries; matters 12
S E/PC/T/P/PV/ 23
of economic policy, the question of industrialization, cannot stay
in the hands of a few Members disposing of a weighted vote,
We are obliged to have equality in votes on these major
questions and my impression is that if we agree to any kind of
weighted voting we are undermining the confidence of the majority
of the countries from the beginning of this Organization. This
weighted voting would be something new on such questions. When
we have weighted voting in other institutions it is a result
of a certain quota; it is the result of what a country is
bringing to the institution, but here everybody is bringing the
same thing. It may be that the most important countries are
bringing more difficulties for the Organization than the small
countries, and it would be something like being a judge on
questions discussed by the Executive Board or by the Conference,
For this-reason I agree entirely with the arguments of Dr.
Coombs and I think that any departure from one country, one
vote, "would have very difficult results for the Organization. E/PC/T/B/PV/23
Mr. H.E. WUNSZ KING (China): Mr. Chairman, the only thing
I would like to say at this stage of our deliberations is that
the appeal made by Mr. Colban and supported by many other
colleagues has very much impressed me and consequently, Mr.
Chairman, I would like to assure you and my colleagues that I
will be open-minded and ready to be convinced by arguments on
both sides in spite of the fact that with regard to the two
questions now before as the Chinese Delegation has taken a
stand. But I repeat I promise you to be open-minded and to
hold myself ready to be convinced by the arguments.
As regards the method -of our work, the Chinese Delegation
has no difficulty in agreeing 'to the suggestion made by the
delegate of Cuba, that is that the two questions for the
purpose of our discussion should be separated; but I venture to
express a slight disagreement, which is that while it would be
very logical that we should discuss the questions of the voting
system first, I am wondering whether it would be more practical
and perhaps easier to obtain a satisfactory. solution if we
should tackle the other question first, that is to say the
question of the composition of the Executive Board. As to this
particular question, I understand that the United Kingdom
Delegation and several other delegations have made a number of
concrete proposals, but, as I find that the United Kingdom
Delegation has made a concrete proposal as late as June l7th
along the lines of these proposals which that delegation has
made in the earlier stages, I would like to support the suggestion
made by the Chairman that the United Kingdom delegate should be
asked to be kind enough to expound his views and then we shall
be ready to be convinced by his argument whether it is logical,
sound, fair and practical to apply this weighted voting system
to this particular question of the election of the Board.
ER
13 E/PC/T/B/PV/25
CHAIRMAN: The Delegate of China has raised. the question of
procedure. Members will recall that, in reply to the question
raised by the Delegate of Cuba, I have ruled that first of all we
should consider the question of principle involved in the United
Kingdom proposal in relation to voting in the Conference, that is
weighted voting - one State, one vote - and that we should take up
the question of the composition of the Executive Board later when we
come to deal with Article 68.
In this matter of procedure, however, I am entirely in the
hands of the Commission, and if it is the wish of the Commission that
we should proceed along the lines proposed by the Delegate of China
and first of all consider the composition of the Executive Board,
the Chair will be quite agreeable to that procedure.
There might be another compromise which we could follow, that
is, first of all have a general discussions of the whole question,
and after the conclusion of the general discussion, then take up
the subsidiary question of principle involved in the United Kingdom
proposal in relation to the method of voting in the Conference -
one State, one vote - and then take up the question of the composition
of the Executive Board. But before coming to a decision on this
point, I should like to obtain the views of the Commission, and if
any other Member would like to talk on this. question of procdure
before I call upon the United Kingdom Delegate, I should be very
gald to hear from him.
The Delegate for Brazil.
MR. 0. PARANAGUA (Brazil): Mr. Chairman, I support the
proposal of the Cuban representative and your ruling, because I
think we ought to begin with first things first.
The most important question is the question of voting on the
deliberations of the Organization in the Conference and not the
14 J. 15 E/PC/T/B/PV/23
Executive Board. The composition of the Executive Board is
secondary question compared with the question of voting.
CHAIRMAN: The Delegate of the United Kingdom.
MR. S.L. HOLMES (United Kingdom): Mr. Chairman, I am of
course entirely in your hands, but I wonder whether it bright not be
best if, having embarked on this question of voting in the Conference,
we should proceeds with it and discuss voting in the Conference.
So far us I am concerned, I am quite happy to fal1 in with anything
that anyone else says, but-I feel there are certain questions,
certain points, which perhaps I ought to be answering, and I had,
before the representative of China suggested that I should speak,
already asked to speak, but I will do whatever you wish, of course.
CHAIRMAN: The Delegate of Cuba.
DR. G. GUTIERREZ ( Cuba): Mr. Chairman, we consider this
matter such a delicate matter that we do not dare to try to
interpret the opinins of some other delegations or nations here
represented, but strictly confine ourselves to the opinion
predominant in my country in relation to all matters of this kind,
I do not consider that this question can be taken as a type of
voting in the Conference and a system of voting for the election of
the Executive Board. In our opinion, the question of voting is
one, and the question of the composition of the Executing Board is
a different one.
For our part, we feel ready, and as open minded as the most
open-minded delegation here, 'to admit any scheme to give a
permanent or principle representation uf the most important nations
of the world in the economic field. If they had not asked for it,
we would have appealed to them to act in that capacity, because we J.
need their guidance, their influence, their economic force. But
there is a very big difference if those nations are elected or
re-elected or elected in any form other than by means of the free
expression of wills of the other nations.
So, although from the practical point of view it would probably
be better to follow the amendment of our Chinese colleague, we
consider that from the point of view of principle. from the point
of view of the substance involved in this debate, we could go on
with a general discussion, as the Chair later suggested, bearing
both things in mind without coming to a debate specifically on any
one of the two questions, because they are involved one with the
other in some form but, in our opinion, they are separate questions.
For example, I am just expressing the Cuban view that it will be
ready to come to any compromise in relation to the composition of
the Executive Board, but I do not suppose that I will be so open-
minded when we come to the question of voting.
16 E/PC /T/B/PV/23
CHAIRMAN: The Delegate of China.
Mr. WUNSZ KING (China): Mr. Chairman, I can assure you that
in this matter of procedure, I am entirely in your hands and also
in the hands of my colleagues; but I am very pleased to get a
concession from my colleague of Cuba, if I interpret his words
oorrectly that he seems to agree with me that we might tackle this
problem of the composition of the Board first.
After all, those two questions are, to my mind, equally
important; but it seems to me that the general question of the
voting system is far more difficult of solution than the other one.
Therefore, I would like to suggest that we might discuss the easier
and simpler question first, so that we might be able to obtain some
satisfactory solution in a relatively short time, without prejudice
to the general question of the voting system.
CHAIRMAN: The Delegate of India.
Mr. D.P. KARMARKAR (India): With your permission, Mr. Chairman,
I propose only to express the view of the Indian Delegation, which
is in favour of separate discussion of the questions of voting and
the composition of the Executive Board.
The point of view which my esteemed colleague, the Delegate
of Norway, very admirably expressed and of which other Delegations
have spoken, shows us the rather delicate ground we are on. As
I listened to Delegates during the discussion, I was reminded of
a small inscription in French on the hill-top at Chamonix, which
says "Deep precipice - Danger of death!" We are discussing
questions which are very complicated; therefore I submit that
we should take up the questions separately, so that we may be in a
position to discuss each question on its own merits - though,
Mr. Chairman, if I may be permitted to digress at this point, I
V.
.17- 18
often wonder whether the economic importance in such cases should
not be considered from the point of view of people who are not
very well developed economically, because they are in danger of
being submerged.
With your permission, Mr. Chairman, I respectfully support the
view that these two questions need not be mixed up. In spite of
the very open mind which we are trying to keep today, there is the
danger of our mixing up the two matters. It is best, in my
opinion, to separate the two questions, because the first is a
question of principle and the second is a question on which it may
well be considered that it is possible to accomplish something.
CHAIRMAN: I interpret the sense of the Commission, in the
light of the speeches which have just been delivered, to be in
support of the original ruling of the Chair that we should first
of all discuss the question of principle involved in voting in the
Conference. However, I realize that the question of voting is
very much bound up with the question of the composition of the
Executive Board, and therefore I would ask Members, in speaking on
the question of voting in the Conference, to confine themselves
mainly to that particular point. They will be at liberty, if they
find it necessary in the elaboration of their arguments to deal
with the composition of the Executive Board, to do so if they
so desire.
I think, therefore, we can commence with a general discussion
of the question of voting in the Conference, giving Members of
the Commission sufficient latitude to refer to the composition of
the Executive Board if they find it necessary to do so.
E/PC/T/B/PV/23
V 19
CHAIRMAN: The next speaker on my list on the question of
substance is the Delegate of the United Kingdom. I therefore
propose to call on the United Kingdom Delegate.
MR. S.L. HOLMES (United Kingdom): I will attempt, as far as
possible, to abide by your suggestion and to address myself prin-
cipally to this question of voting in Conference. I will also -
and I am sure members of the Commission will correct me if my
attempt is unsuccessful - try to be audible at the far end.
The views of the United Kingdom I think are fairly well known.
That-is not to say that we have-not listened very carefully to the
suggestion made by the Delegate of Norway that we should conduct
our part in this discussion with a reasonably open mind, but I
cannot conceal the fact that for some time now the United Kingdom
view ha. been that the provision "one State. one vote" for the
voting in the Conference is not a wholly satisfactory provision.
I say that our views are fairly well known because I do not wish
to take too much time in this Commission and we have been reasonably
consistent. It fell I think, to myself to develop those views
when we held our first session of this Commission in London. The
difference perhaps now is that I am speaking to people to whom it
comes as no surprise that we do not feel that this particular
system of "one State, one vote" should be adopted.
I can assure the members of the Commission that I speak with a
full sense of responsibility. I am not sure that I wholly share
the views of the Cuban Delegate that this- is a matter of great
delicacy, because we have got to know' each other pretty well in
these last few weeks and I think we can say quite honestly to each
other what we think. Dr. Coombs, speaking for Australia, said
E/PC/T/B/PV/23,
M M
20
that while he had basically an open mind, he felt rather strongly
that we should stick to the idea of "one State, one vote". I am
rather sorry that his duties in another part of this building have
taken him away, because he was prepared to be convinced, as he
said at the end of his remarks. But his remarks were, I think,
directed rather closely and narrowly to the sort of discussions
that we have had here in the various meetings of the Preparatory
Committee. I would submit, Sir, that there is really something
of a difference. We are here to see whether we can reach general
agreement on the setting up of an international trade organisation
and the Charter under which that organisation should operate.
What we are looking to, however, is a rather different state of
affairs where you have got an organisation which will have very
great responsibilities from year to year, or perhaps more fre-
quently than that, and, of course, almost from day to day in
respect of its detailed work. The circumstances, therefore, we
feel are very different. We have never suggested, for instance,
here, that there should be any system of weighted voting in our
talks round these tables, but when it comes to the actual operation
of the organisation it is a rather different thing. Dr. Coombs
suggested too, that to attempt the principle of weighted voting -
and of course I do not propose at the moment to enter into any
details ( I doubt whether this is a suitable place or time to do
it ) -he suggested that to admit the principle of weighted voting
was rather like "giving to him that hath".. Does Dr. Coombsreally
suggest, I wonder, that there should be a system of weighted
voting in inverse proportion to a country's responsibilities, to
a country's share of world trade ? That is surely the logical
deduction to be made from that quotation from the Bible. We
E/PC/T/B/PV/23. M E/PC/T/B/PV/23.
in the United Kingdom would feel that there was a much more
appropriate quotation; "unto whomsoever much hath been given, of him
shall much be required", It is a fact, Sir, that there is a great
deal required, both under the proposed organisation and Charter,
and generally, of the great trading countries of the world. They
do, inevitably, bring more into the organisation. They have to,
and it is right that they should. I could point to places in the
Charter - I think in Chapter IV - where it is more or less specifi-
cally provided that countries should help each other and, naturally,
the larger countries should help the smaller countries more than
the smaller countries should help the larger, What they bring to
and
the organisation is long experience/much respensibility; and in
many cases it is no idle boast, but merely a matter of fact, to
say that on a good many problems they must have greater knowledge
and experience. It has been suggested from time to time that
there is something undemocratic about any other principle than
"one State, one vote".
2I 22 E/PC/T/B/PV/23
We should claim, Mr. Chairman, that this was far from
being the case, when countries are so very different in size and
in their share of world trade; but on the other hand we should
recognise - we should very freely recognise - that there may be
anxieties on the part of some countries that this might be an
attempt on the part of the larger trading nations to acquire
a wholly undue place in the Councils of the Orgsinisation.
Now that is very far from our minds, and those Members of
the Commission who have studied the sort of proposals we have
made for the weights in weighted voting - again I won't refer
in any way to the details - will see that it is no enormous vast
weight of votes that we have wished to attach, perhaps, to the
United Kingdom. Our attempt has been to secure something which
* was eminently reasonable, taking account of the fact; as I
suggested, that some countries have greater experience - more to
bring to the Organisation, and more, perhaps, to put into it on
-the one hand, and on the other, that it would. not be for the
benefit of the Organisation if one or two countries were to
swamp the Organisation every time they happened. to have a
particular point of view to put forward.
Let me, if I may, just suggest that this is the way in which
purely as an example the principle of "one State one vote" might
work out. You might, in the Conference which we hope will be
very generally representative of the countries of the world,
have a narrowly contested vote. Now on the ons hand you might
have the following countries - I take them purey as an
example; it is in no way exhaustive; there would no doubt be
a certain number of abstensions, but it might work out that
countries on the one side - Peru, Turkey, Venezuela, Greece, E/PC/T/B/PV/23
Saudi Arabia, The Phillipine Republic, Costa Rica,
Albania, Trans-Jordan, Irak, the Domiaican Republic, Haiti,
El Salvador, Paraguay, Iceland, Panama, Ethiopia, Honduras,
Guatemala, Ecuador, Siam, Nicaragua, Afghanistan, Liberia,
The Yemen - those countries might on a narrowly contested vote
on an important question out-vote, what shall we say - I have
included on this side all the Members of the Preparatory Committee
and a number of others who we hope will join the Organisation,
and their share of world trade is quite an important one - they
might out-vote the United States, France, China, India, Belgium,
the Netherlands, Sweden, Poland, the Argentine, Australia, Canada
Brazil, the Union of South Africa, Norway, Czechoslovakia,
Portugal, Denmark, New Zealand, Egypt, Italy, Chile, Cuba,
Uruguay; and last of all, the United Kingdom.
G 23 S E/PC/T/B/PV/23
That would be 25 votes against 24, and that is an illustration of
how the matter might work out in practice.
I would like to say just something about the suggestion that
someone made - I am not quite sure where the suggestion came
from; I am not sure it was not Dr. Coombs again - that there
was something dangerous about this discussion, in that it would
inevitably lead at some stage - as it certainly will, we hope -
to a consideration of the weights that might be given under a
system of weighted voting. He suggested that there might be
elements of dishonestycreeping into the discussion - haggling.
That again, Sir, is not at all our intention,
We have made a proposal which is reproduced in the Drafting
Committee's Report. We do not necessarily stand on every letter
or figure of that proposal, so long as the weights to be given
to the larger countries are not too large, and so long as some
extra weight is given to the larger countries.
I think it is also fair, in this general discussion - and
perhaps I need not repeat my remarks in connection with the
question of the Executive Board, because, to some extent, clearly
the same considerations arise - to point to the sort of shape
which the Charter, after all our labours, has assumed. The
Charter -speaking again with the fullest sense of responsibility
which we of the United Kingdom Delegation believe to be
potentially an instrument for the good of the world - I would
go further; an instrument which it is very necessary, indeed
vital, that the world should have - has assumed a shape which
involves not only a great many means of escape - especially in
the difficult transitional period - but also involves a very
great responsibility being attached to the Organization itself.
If there were no deviation from "one State, one vote", we
should ourselves feel much more apprehension about the way in
24A
_ , _ __ } _ _ 28 E/PC/T/B/PV/23
which the Charter has developed, about the enormous number
of decisions or determinations that the Organization will have
to take. We should feel that it might be necessary to look
much more closely at those provisions in the Charter which,
perhaps as a matter of convenience at this stage, have crept
in, leaving to the Organization a large number of matters to be
dotormined in the light of circumstances which perhaps we have
not been able entirely to foresee here.
We feel, in brief, that the Organization will have to be
extremely good;. it will have to work extremely well; it will
have to be baokad up with all the experience that it can draw
from the various Members, and we feel that it will be able
to draw - or it should be able to draw - more expereince
from some Members than others, which is really a reflection of
the principle which we have put before the Commission.
I think, Mr. Chairman, I have spoken probably much too
long, unusually long perhaps for this corner of the room, but
we do very earnestly hope that the fullest possible and the
fairest consideration will be given to what we feel to be an
eminently sound, reasonable and fair propositions
S ER
M. KOJEVE (France) (Interpretation) Mr. Chairman, since
the beginning the French Delegation has supported the system
contained in the Draft Charter submitted by the United States,
that is to say a simpIe vote "one State, one vote". Since then,
I have attended the meetings that took place in New York and have
taken part in the discussions, and I have not been convinced.
I have therefore reported to my government, and the report which
I submitted has not compelled the French Government to adopt
another viewpoint. I think this statement is sufficient, but
in response to the appeal made by our Norwegian and South African
colleagues, I shall now state the reasons for my point of view.
I fear very much that it will be rather difficult for me to
be objective, because I do not think there is such a thing as
objectivity in a field where so many interests are involved.
Therefore, with your permission I shall substitute frankness
for objectivity.
26 J. 27 The reasons for our attitude are as follows: First of all,
I fully agree with Dr. Coombs when he says that, in fact, weighted
vote has always existed. Of course, it is difficult to speak of
something; absolute in an Organization like the International Trade
Organizat ion.
There will be two catagories of countries, one in which there
will be a smaller number of countries and another with a larger
number of countries. The difference will be that, if a country in
the former category, Category a, is net satisfied with the working
of the Organization and withdraws from it, will be the
Organization that will suffer thereby and not the country. In
Category B, the situation is the reverse. A country withdrawing
from the Organization will have to take the consequences, but its
withdrawal will not affect the existence of the Organization.
Therefore, that is the reason why, at the Preparatory Conference,
we have sometimes found that two or three rotes carried greater
weight than the voves of fourteen or fifteen other countries.le oL ntr esl
I think e labso t equalt to otuthe liganizin Lno Or6gaiaaiofl
et Will bs nGo;as entirely e ;fer nt g diftifeey wei-hted vot,
ane inagree senso I pittatheninter.rM'ttior which Ir. Holmes
has parenof teat eme ppath stCoombs, and atztnt of Dr.I also
aHo s whe~i.e M~l~z~whe h sas that inaoc q t i
to although ; is 114 u.'thtIls aca t C.r AC t. t ew _W ii
diffgereFurthermore I agree thaa weighted vote is , 'hat
lie.yttongeren th_ posiof tierog countiies s,giving .L
more stabil ty- the Lrga iOa,inzton; butam not cer art.in that this
andvat age will ou;w'2&h eteven gre -ertd* cdvange of makin
po~w~rau ccountrieseven :ore pw.rftl, aindweaher c3outriie even
more weak., 28 E/PC/T/B/PV/23
J.
Mr. Holmes has also mentioned the experience of highly
industrialized countries. I have no doubt about it, but I think
that reasonable advice based on experience will be accepted by the
Conference, even if it is not supported by a few additional votes.
I have listined to the list of countries given by Mr. Holmes, and I
admit that a case like the one he has mentioned is quite possible,
but I wonder if, in certain cases, the votes or certain countries
included in those lists do not in fact realise a system of
weighted vote similar to the system which it is desired to
introduce in the Charter.
I have another reason which goes against weighted vote, The
reason is this: the Trade Organization will have, mainly, a two-
fold purpose - one is to develop world trade, in other words to
maintain the economic power of highly developed countries, and the
other is to develop countries that are economically weak.
Therefore, we must admit that in certain cases the opinions of
these countries will carry as much weight as those of powerful
countries, and for that reason I think that the principle of
weighted vote in the sense that has been suggested is, to a certain
extent, contrary to the spirit of the Charter. 29 E/PC/T/B/PV/23
Thirdly, and I might almost say last but not least, there is
the question of the criteria that have been selected and suggested
for the weighting of the votes. In New York I have seen several
lists, and I had the impression that those who drew up those lists
had first of all made the list and then tried to find criteria
that were more or less objective.
Let me take as an example the figures of national income.
As far as my country is concerned, the specialists in this matter
the technicians - do not agree on the various elements that should
be taken into account to determine the figure of national income,
and I very much doubt whether many other countries will be in a
position to supply objective data in this matter.
For these three reasons, Mr. Chairman, I am in favour of
the original solution suggested by the United States Delegation.
and we are therefore compelled to maintain the standpoint which we
had already adopted both-in London and in New York.
CHAIRMAN: The Delegate of Canada.
Mr. L.E. COUILLARD (Canada): Mr. Chairman, the Canadian
Delegation is happy to subscribe to the business-like atmosphere
which is permeating our discussion on the question before us,
although I must say that some of the open minds we have heard about
have clearly revealed what th e. minds contained ! It has been
the attitude of the Canadian Delegation that this question of
weighted voting in the Conference should be treated as a
business-like matter. At the London Session we stated our
position by not categorically supporting either the principle
of weighted voting or the principle of "one State, one vote",
but rather by stating that we favoured and saw benefit in the
principle of weighted voting. We suggested that the Drafting
V V 30 E/PG/T/B/PV/23
Committee should devote its attention to this problem,. in order
to provide statistics and further basis of discussion.
Since then, we have given long and careful consideration to
this question, and I must say that we remain of the opinion that
for the various reasons which I should like to outline quite frankly
and in view of the nature of the proposed International Trade
0rganization as a specialized agency, the principle of weighted
voting in the Conference is preferable to the principle of
"one State, one vote".
We feel that in discussing this question it is imperative
that we should bear in mind the nature of the Oraganization which
we are attempting to set up. I.T.O. will be a specialised
Organization, with all that the term implies, dealing with
specific aspects of international economic relations. It
is for that reason and in recognition of that fact that the
Canadian Delegation has always advocated that membership in
a specialized Organization should be on as broad a basis as
possible, and should be extended on functional principles.
Now, it goes without saying, that Members of such a
specialized and functional Organization will vary in size,
economically speaking, and in the degree of interest, and
the importance of their contributions to the Organization.
We feel, therefore, that it follows that the voting power
of the members of the Organization cannot be equal; but
rather that it should reflct the economic importance of such
members in those fields which fall within the terms of the
Charter. Obviously, this argument could be amplified.
We leave it to stand on its logic. Indeed, it would be
difficult to conceive how an economically, and from the I.T.O.
point of view, a functionally uninmportant member, should
carry the same voting power as an economically and functionally 31
important member.
This would be the converse of the system of weighted voting
which we are discussing, as Mr. Holmes has pointed out.
Conversely, and for the same reason, we feel that the principle
of "one State, one vote", would be unrealistic. It would
not only lack realism, but it would be undemocratic. This
condition is closely related to, and might answer in part,
the argument which has been made here this afternoon by certain
Members who say the principle of "one State, one vote" as being
democratic, implying thereby that the principle of weighted
voting is undemocratic.
I regret to say that we find difficulty in following the
reasoning underlying such an argument. We have always believed
that a system founded on the purely democratic principle would
necessarily have to be based on population figures, namely, in the
case of I.T.O., on the population of the Members of the Organization,
or, in other words, representation by population. We fail to
see, therefore, how the principle of "one State, one vote" is
democratic, since it completely disregards the population factor.
Indeed, we feel that it is closer to the other extreme - that is,
the nationalistic attitude reflected in the "one country, one vote"
principle.
The Canadian attitude, in support of the United Kingdom
proposal, attempts to find a solution between these two extremes:
that is, the extreme on the one hand of the purely democratic
principle of representation by population, and on the other hand
of the nationalistic attitude of "one State, one vote".
Under the United Kingdom proposal, for example, (the system
which Canada will agree to and which is given on Page 55) population-
that is, the purely democratic factor--is recognized and given
direct weight as one of the factors in the proposed system of
weighted voting.
E/PC/T/B/PV/23 32 M E/PC/T/B/PV/23.
Population is also given an indirect weight in the national income
factor. Similarly, on the other hand, the nationalistic atti-
tude is reflected and recognised by the fact that all Members are
assigned a basic vote which, in the United Kingdom proposal, is
100. Although this appears to us as relatively high, we would
agree to it. In this way, therefore, we suggest that both extremes
of population and nationalism are satisfied to an appreciable degree.
After these two extremes are met, we think that it is only fitting-
in view of the international nature of the organisation - that the
most important factor in the weighted voting formula should be
that of the value of foreign trade. It is difficult to see how,
in an international trade organisation, this factor can be com-
pletely ignored, as it would be under a system of "one State, one
vote". The Canadian Delegation, of course, is quite willing to
of other factors
discuss the inolusion/in the relative weights to be assigned, and
we take note of the argument which the French Delegate has revived.
It will be remembered that one of the arguments used at Church
House against the principle of weighted. voting was the unavailability
of statistics on which the various factors entering into a system
of weighted voting- would be based. In London I think this argument
was not without force. We tackled, this problem without due pre-
paration and most of us were not familiar with the facilities which
the United Nations Secretariat could. afford, but we now have the
assurance - and we take it at its face value - contained in the Draft-
Committee's Report, page 53, that such statistics, including
statistics on national income, are available and undoubtedly could
be amplified and refined to the satisfaction of the Members and to
the benefit of the organisation. M 33 E/PC/T/B/PV/23.
As regards the reservation made by certain countries (and in
this case I may be reviving an argument used last Fall) that any
system of weighted voting should take into account not only the
actual importance of the Members but also their potential impor-
tance, I should think that this perfectly logical request is met
by the fact that such statistical factors as are adopted would be
based on the running three-year average and would be subject to
review and amendment by the organisation in the light of changing
conditions.
A further argument which has been used against the principle
of weighted voting is based on the assumption that there might be
a danger and a tendency on the part of large States - that is States
with a large number of votes - to force their views upon the
organisation. I think it would be well to bear in mind in this
connection that the same danger might exist under the system of
"one State, one vote". Nothing would prevent, for example, as
Mr. Holmes so dramatically illustrated, a group of relatively small
Members with common interests from imposing their decisions on
larger Members who would not always be apt to accept this type of
imposition and yet on whose Membership the very existence of
the organization might depend. There is also, of course, the
counter argument that, large States would not necessarily vote as a
block. I think we have had sufficient experience in the past of
large States disagreeding. I think we must also bear in mind that
large States have a proportionately larger stake in the successful
operation of the organisation and that it is very doubtful that they
would act in such a way, singly or as a block, as to threaten the
existence of the organisation. Indeed, if they wanted the E/PC/T/B/PV/23.
organisation to fail, their mere withdrawal would conceivably
bring about that result.
I have no doubt, Mr. Chairman, that there are a good many
other arguments and counter-arguments which could be amplified,
such, for example, as the fact that other specialised agencies
have recognized the principle of weighted voting and the fact that,
as the United Kingdom Delegate has expounded voting in the
Conference has become of much greater significance as a result
of our discussion on the Charter in this second session.
I have tried as briefly as possible to set out the position
and the reasons for the Canadian position in the spirit outlined
by Dr. Colban at the beginning of this meeting v- -must say that
for these various reasons my Delegation would support the proposal
put forward by the United Kingdom and in favour of the principle
of weighted voting in the Conference.
34 M 35 E/PC/T/B/PV/23
CHAIRMAN: The Delegate of Belgium.
BARON PIERRE DE GALFFIER (Belgium) (Interpretation):
I should like, Mr. Chairman, to be brief and to respond to
the appeal, or rather the appeals, made here by the Delegates of
Norway and South Africa and we shall approach this problem
in the same spirit as the Delegate of Norway; that is to say
that we are prepared to study this problem without any precomeived,
idea, and the attitude of the Belgian Delegation in this
connection will be the same as that adopted at other international
conferences: We shall try to be logical and consistent.
We are convinced. that the work of several international
organisations is vitiated by the difficulties in reaching a
decision. In the case of the United Nations it is the veto
provision. With regard. to our Organisation, we might run into
the same dangers if we apply the principle "one country one vote"
- and the example quoted by the United Kingdom Delegate in that
respect was convincing.
If a better way can be found than the adoption by the
Organisation of the weighted votes system, we would be in
favour of that system; although it should not be considered as
universal remedy it is worth while studying.
At the same time we recognise that the weighted or votes
system constitutes a safeguard for the economic power of
economically strong countries, and we think that we could find a
counterpart and that the necessary protection of the economy of
each country should be studied at the same time; and the
Belgian Delegation is of the opinion that such a safeguard will
be found in the proper application of the principles of justices. S 36 E/PC/T/B/PV/23
At the same time we consider that Article 64, on the voting
system, should be considered in connection with and at the same
time as Article 86, Interpretation and Settlement of Disputes,
and if Article 86 can be worked out and adopted in a satisfactory
manner we shall feel much more happy about the adoption of the
weighted system proposal.
CHAIRMAN: The Delegate of Brazil*
Mr. O. PARANAGUA (Brazil): Mr. Chairman, I apologist for
insisting on this question and speaking about it again. The
Delegate of the United Kingdom knows with what sympathy I
consider his proposal, but I cannot find any weighty argument
in favour of the wieighted vote. Analysing his arguments, I find
the first one is about this case of the inverse proportion
because of the number of the countries. This argument proved
too much for me, because, supposing you apply it to the voting
on political matters, everybody knows that a citizen in a
country has a quite different value but nobody wants to give two
votes to a citizen because he has more politicalinfluence or
more economic influence.
There is a base, a unity, that cannot be reduced. For
this reason I cannot accept this argument of the inverse
proportion.
The other argument was about the larger economic Powers
helping the smaller. 'Well, we have the example of smaller
countries helping the big countries. Take the case of,
Switzerland, the case of Sweden, the case of Canada, the
case of Australia; they can bring effective help to the
larger countries. There is another argument there which I
cannot accept.
Then the other argument was about the greater experience S 37
of large economic Powers. In the case of the United Kingdom,
I would like to say that the experience is not so large as that
of the other countries, because the operation of the Free Trade
system for such a long period did not bring experience in tariff
matters. Their protection is of vary recent date. I
cannot see more experience in Great Britain in this matter than in
France, for example, or other countries,
Mr. Holmes quoted an extreme case, of a sort of coalition of
small countries on important questions affecting large and
important countries. That is an extreme case. I do not
think we shall have such cases here in the ITO. We are not
dealing with trade questions on a political basis. Every
case will be considered according to its morits, not because it
is a great Power or a small Power,
We regard to the voting power, if 'we accept this argument,
then every other international organization must have a weighted
vote. We ought to have weighted voting in the Assembly of the
United Nations, in all other organizations because this case of
a coalition of the small countries against the big ones can happen
in other international organizations. My experience is just the
opposite. Take, for example, the International Monetary Fund.
The 'United Kingdom only has 13 per cent of the voting power. I
have not seen one case in which the United Kingdom was outvoted.
We always considered a case according to its morits. The
United States has 27 per cent of the votes but has never crushed
any country because of this vote. It means that every case is
not a political case but a case on an economic or financial basis,*
E/PC/T/B/PV/23 E/P/T/B/PV/23
For this reason I think we ought to accept the reasoning
of the Delegate for Australia, that the most important economic
countries have a dominant position in the world. This
institution would be meaningless without them and the influence
of the larger economic Powers is beyond the existence of the
ITO and there is no danger for the large economic Powers,
but there is a real danger for the smaller ones to be under
the control, or under some kind of Guardianship, of the large
economic Powers, For this reason I cannot agree, in spite of
my open mind and my sympathy for the British proposal, with
weighted voting. I stick to the principle, "One country, one
Vote."
38
S 39 E/PC/T/B/PV/23
Mr. GUSTAVO GUTIERREZ (Cuba): Nature, Mr. Chairman,
has provided any human being with effective means of procuring
its food and defending its ways of living, and every human being
uses those means at its disposal as much as it needs them. That
explains why in this corner of the room we stick to reasons and
to words necessary to express them. In this case I think that
there is no need for many words to express the reasons why the
Cuban Delegation is against the weighted vote. If we make a
short history of this question we will find that in Article 53
of the original United States proposal it is expressed that each
Member shall have one vote in the Conference. Such principle
is repeated in Article 58 in relation to voting in the Executive
Board. In the London report which is the subsequent stage in the
development of this problem, the report expresses that the
majority of delegates favour the principle of "one country one
vote" in the Conference and in the Executive Board. That is the
second stage.
In the New York Draft, which is the third stage of this
discussion which continued for more than a year, it is expressed
in page 53 of the report that the sub-committee concentrated its
attention on the issues centering around the composition of the
Executive Board, using as a working hypothesis the assumption of
a weighted vote both in the Conference and in the Executive Board.
throughout
That means that/the three stages that this matter has gone through
in a year or more than a year, the prevailing opinion of the
delegates was in favour of the principle of. "one country one vote".
If we look through the present United Nations Charter we
Shall find Rule 77 and others which state in connection with
this procedure that each Member in the General Assembly, as well
ER E/PC/T/B/PV/23
as in the Council, shall have one vote with the well-known
exception of the veto system. In our opinion the weighted vote
is a new form of veto, and as my country has opposed the veto
system in San Francisco we have to be consistent in our well-
established criteria. We think that the economically important
nations are and always will be respected by the other nations,
more by the weight of their reasons and actions than by their
strength. The strength and power in politics or in economy
comes and goes as history has shown. We are working here on
the equality principle and I think that we are succeeding. In
fact, I pay much more attention to the usually sound arguments
exposed by Mr. Holmes in the discussion of a problem than in the
number of points that he could accumulate in the weighted -vote.
We are against the weighted. vote firstly because there
are numerous questions of exceptional importance that the Charter
has submitted to the decision of the Organization, either through
the Executive Board or through the Conference and the weighted
vote not only would make certain nations judge but it would have
the matter decided from the beginning. Secondly because it is
very difficult to find a formula which would not be discriminatory
in some way or another to the different nations of the world.
Thirdly because if you add all the economic resources of the
small nations together and the employment problems of those
nations in comparison with the very few favoured nations by the
weighted vote, the weighted vote changes their majority into-
minority. Fourthly because the classifications of nations
according to certain economic ideas will divide the world into
"have" and "have-not" nations, and this has proved to be dangerous.
Fifthly and lastly because a prefabricated majority will throw
away the value of reasons and will make the people of the world
40
ER E/PC/T/B/PV/23
lose their faith in the moral force of decision freely adopted
and freely accepted.
We have been advised not to confuse democracy and total
equality, but we do not desire to follow the opposite and confuse
democracy with other systems in which the majority does not
prevail. All the reasons expressed by the United Kingdom
Delegate are good reasons to organize the Executive Board in a
form giving permanence to certain nations but not departing from
the traditional system of "one nation one vote". Democracy,
in our opinion, is not only a numerical majority resort but
more than that; the fact of accepting by the majority of decisions
taken in their representation.
The CHAIRMAN: The Delegate of Czechoslovakia
(A translation of the speech of Mr. MINOVSKY will be circulated
as a separate document.)
41
ER 42 E/PC/T/B/PV/23
CHAIRMAN: The Delegate of the Netherlands.
Baron S.J. van TUYLL (Netherlands): Mr. Chairman, the
Netherlands Delegation has come to this Second Session of the
Preparatory Committee without any fixed opinions about the
weighted vote system. We have come here to hear the arguments -
to listen to the pros and cons - and to see if there were any now
arguments added to those we had worked out ourselves.
Now, I should add, however, that perhaps more by intuition
than by reasoning, the Netherlands Delegation is more inclined to
favour the system of "one country, one vote' than to agree to the
system of weighted. voting. In going through the arguments
which have been put before us this afternoon, I would like to
mention two points only. It has been said by the United
Kingdom Delegate that the most important trading nations
should also play the most important part in the I.T.O., and
have more influence in the I.T.O. I think that most of us
can agree on that point: indeed, the most important trading
nations should have bigger parts to play in the I.T.O.; but
'I do not think that the system of weighted voting is the only
system of achieving that. There is the other alternative
of giving the most important trading nations a permanent seat
in the Executive Board. There is also the natural authority
which countries with great experience and much knowledge possess.
It is with nations, I think, the same as with most private
or public communities: the men who have the most knowledge
and the most experience in matters dealt with by those commu-
nities, quite naturally have most important parts to play in
those communities, and. I think that in past Conferences, and
also in this Conference, it has already been proved that the
largest trading nations have the most influence in Conferences.
V M 43 E/PC/"T/ B/PV/23.
One of the counts, one of the arguments against the weighted
vote is that it is extremely hard to find a fair system and fair
criteria, of giving weight to the vote. I think that argument is
indeed valid. .. If we work out a system of weighted voting then
we should find criteria which are very closely related to the matters
dealt with in the ideal Charter. There is not only the matter of
foreign trade; there are also the matters of the other Chapters,
for instance, unemployment and employment. How is it possible to
work out criteria for employment condition? Should unemployment or
employment be the criterion ? Then there is economic development;
should development or a state of under-development be the criterion ?
And there is the matter of cartels; should the absence or the
presence of cartels be the criterion ?
For all these reasons I am inclined to agree with those
Delegates who have expressed the view that it will be extremely
hard to find criteria which are fair and adequate. I have said,
Mr. Chairman, that we have come here to find out if there are any
other arguments for or against those we have worked out for our-
selves. Now I have heard, indeed, some new arguments and I want to
take those up with my Delegation, so I am not prepared at this
moment to state what our position is, although I have expressed
already the view that we are more inclined to accept the system of
"One country, one vote" than the other system. Still, we have not
decided on that question and there may be an opportunity to state
our position later.
CHAIRMAN: It is now nearly six o'clock and I have no doubt
that other members of the commission would wish to take part in
this debate, I therefore propose that we adjourn the discussion 44 M
now.until 2. 30 p.m. tomorrow.
DR. W.C. NAUDE (South Africa): You may be right, Mr.
Chairman, in saying that it has been decided to hold the next
meeting at 2.30 p.m. tomorrow, but I was advised this morning that
the Commission would meet tomorrow morning because the Sub-
Committee has already arranged to meet tomorrow afternoon.
CHAIRMAN: The South African Delegate is better informed than
I am. I understand that he is correct: and the Commission will
therefore meet at 10.30 a.m. tomorrow.
The meeting is now adjourned.
(The meeting rose at 6 o'clock).
E/PC/T/B/PV/23. |
GATT Library | xv026tx5773 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty-Eighth Meeting of Commission A. Held on Tuesday, 8th July, 1947, at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, July 8, 1947 | United Nations. Economic and Social Council | 08/07/1947 | official documents | E/PC/T/A/PV/28 and E/PC/T/A/PV.27-29 | https://exhibits.stanford.edu/gatt/catalog/xv026tx5773 | xv026tx5773_90240156.xml | GATT_155 | 13,401 | 82,723 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/A/PV/28.
8th July 1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
TWENTY-EIGHTH MEETING OF COMMISSION A.
HELD ON TUESDAY, 8TH JULY, 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).
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. L -2 - E/PC/T/A/PV/28
CHAIRMAN: (Interpretation): The Meeting is called to
order.
We shall resume the discussion of Article 26, and I
invite Delegates, if they wish to do so, to express their
views on Paragraph 1 of Article 26.
If nobody wishes to speak, we will pass on to Paragraph
2. This paragraph contains several sub-paragraphs. With
regard to sub-paragraph (a), there is an amendment tabled by
the Australian Delegation.
Does the Australian Delegate wish to speak? E/PC/T/A/P V/28
Mr. J.G. PHILLIPS (Australia): I do not think it is
necessary, Mr. Chairman, to say more than a few words. This
was connected with the amendment of ours which I presented yesterday,
it
and I was going to make/quite clear that the possibility of
alternative methods of dealing with the balance of payments
position would not prevent the imposition of quantitative
restrictions under this Article. It is connected with para-
graph 1.
CHAIRMAN (Interpretation): Are there any other observations
on sub-paragraph (a) of paragraph 2?
M. BARADUC (France) (Interpretation): Our Delegation has also
tabled amendments to sub-paragraph (a) of paragraph 2, but I have
nothing to add to the observations presented by me yesterday in
connection with Article 26 in general.
CHAIRMAN (Interpretation): In the circumstances, we can pass
on to the French amendment, which is related to sub-paragraph (b)
of paragraph 2 of Article 26. (Remarks to French Delegate not
interpreted).
Then we pass on to sub-paragraph (c) of paragraph 2 of Article
26. We have several amendments here. The first amendment is
that of the Chinese Delegation, which proposes the deletion of
sub-paragraph (c ).
Mr. C.Y. HSIEH (China): Mr. Chairman, with regard to Article
26, paragraph 2, sub-paragraph (c), we find it difficult to adhere
to the original version on two main grounds: first of all, in
principle, and secondly, on technical and administrative grounds.
Now, to take up the first objection that we have: that is,
that the original version is not sound in principle. Let us look
at what the sub-paragraph intends to do. Well, as it stands it
- 3 -
V. V - 4 - E/PC/T/A/PV/28
seeks to enjoin the Member country, if and when it imposes
quantitative restrictions on certain classes of commodities, not
to push them to the extent of total exclusion or prohibition.
In our view, this injunction tends to defeat the very purpose
which the restrictive scheme is intended to serve. Why? Well, we
know that the purpose is to safeguard or restore balance-of-payments,
and how can this be achieved?-because we must leave it to the
Member country contemplating such measures to have full discretion.
As the Delegate of the United States pointed out yesterday,
we are facing a situation of disequilibrium or economic malady
which it would be to the interest of all Member countries to make a
temporary phenomenon and not to allow it to develop into a chronic
disease. That being the case, I think it would be only logical
to allow the Member country a large measure of discretion, to see
whether simply decreased importation or total ban or prohibition
would be adequate under the circumstances. I think it would be
dnagerous to stop at half-measures in that case.
If we pass on to paragraph 4 of this Article, we find that
the Charter takes account of the need to leave discretion in the
hands of the Member. I am aware that there is a certain amount
of uncertainty as to the precise implication of this Article;
but taking it as it is, it is difficult to avoid the implication
that with limited, or even precariously limited, exchange
resources at the disposal of the Member country, total prohibition
of certain commodities cannot be avoided if the purpose of the
restrictions is to be achieved and achieved quickly. I think
the case is especially clear in the matter of luxuries, - things
like perfumes or fineries like silk stockings. Heaven knows
that the Member country contemplating restrictive measures under
those circumstances has difficulties enough, from the consumers, V - 5 - E/PC/T/A/PV/28
without having to cope with interference on the part of the
Organization; and so I think, taking all these considerations
into account, that we have to face the problem as to whether we
intend to rectify a serious situation or threat of disequilibrium
in the matter of balance-of-payments, or to allow this situation
to develop into a chronic disease. E/PC/T/A/PV/28
That is on the grounds of principle.
Now I come to the matter of technical or administrative
difficulties. Here it is largely an objection to the phrase
"class of goods" used in the paragraph.
I do not think we have any generally accepted scope for
this phrase and the Charter does not seem to throw any further
light on the matter, so it is difficult to draw a line or to
draw an exact definition of this phrase, We are aware that a
substitute formula has been put forward in the Amendment of
the United Kingdom that takes the form of a description
of goods in minimum commercial quantities; but we are not at
all sure that this substitute formula would enable us to get
over the difficulties I have pointed out.
Now if we accept this condition it would surely impose an
added burden and many difficulties in the matter of administra-
tion. Now if these difficulties and added burdens can be said
to advance the purpose for which this Article was framed, well
and good. Unfortunately they do not; they tend, on the
contrary, to defeat the purpose for which the restrictive scheme
we had in view is intended.
Thank you very much, Mr. Chairman.
CHAIRMAN: (Interpretation): We have a second Amendment
tabled by the United Kingdom Delegation.
Mr. HELMORE (United Kingdom): I am glad of an opportunity
in the Commission to discuss the general subject raised by this
sub-paragraph, since I think it would be fair to say that as
there were a few accidents to our programme in London, very little
attention was paid to it and it appeared in the London Draft
without there being an opportunity to hear the views of the
G -6- _ G -7- E/PC/T/A/PV/28
Members of the Preparatory Committee on the principle involved.
If, therefore, I take a few minutes to talk about the principle,
I think I may be excused.
This sub-paragraph, Mr. Chairman, however it is drafted, is
intended to write into the Charter a principle which the United.
Kingdom likes to think it invented as an effort to do away with
some of the worst incidental effects of payments restrictions,
and we have been applying such a principle now in many cases for
over a year. The restrictions on balance of payments grounds
contemplated in this Article of the Charter are, as the
Article says, to defend Members' monetary reserves and balance
of payments against excessive pressure, and they are not for
protective purposes. None the less, it is quite clear that if
a restriction of a quantitative nature on imports is imposed,
there is an incidental protective effect, and the degree of that
protection varies according to the severity of the restriction on
the particular class of goods concerned. S -8- E/PC/T/A/PV/28
Obviously, if the restriction only limits countries to
100 per cent of a previous period, or 75 per cent, the protective
effect is not very bad, but if, as very often happens, a
particular class of goods is selected for complete exclusion, the
protective effect is infinitely higher. That, it seems to us,
is a danger which should be guarded against, not merely in the
interests of the country which may have been supplying the goods
but in the interests of the country which is imposing the
restriction. It cannot be good for any manufacturing industry
to be completely isolated from all outside competition. To take
a simple example: we firmly hold that for a United Kingdom
manufacturer of fountain pens to have the whole of the United
Kingdom market reserved for him without the United Kingdom
consumer having the chance of seeing in the shops, shall I say,
the fountain pens of the United States - so that there is some
incentive for him to improve his efficiency and improve his
design - is a very bad thing and does, one might almost say,
more harm to the country imposing the restriction than the
country which suffers the restriction. Therefore we say that
complete exclusion is wrong in principle.
On the other hand, as the Chinese Delegate has reminded
us, there are some serious difficulties in applying such
restrictions, difficulties of a policy nature - I will come to the
administrative ones later - and one might perhaps summarize them
like this: it seems illogical to say that when one has so little
foreign exchange that even imports of essentials have to be limited,
it is wrong to spend foreign exchange on things that are less
essential, and that by so doing one casts doubt on the seriousness
of the attempt the country concerned is making to put its balance
of payments right. Of course, as one goes on, from the less
essential to the luxury type of goods, the objection becomes S - 9 - E/PC/T/A/PV/28
stronger and one which it is easier and easier to put in a
political atmosphere.
There is a further argument against this which we in the
United Kingdom hear very often, that is, that when we are forcing
our own manufacturers to export a far higher proportion of their
goods than is normal, or than they wish, it is particularly
galling for them to see additional quantities of foreign goods
taking the home market, or that part of the home market which
they have always had and would always wish to retain.
Some of those objections, Mr. Chairman, we nave tried to
answer in our amendment; in particuler by introducing the
provise, where we say that during a transitional period, to be
determined, Members should not be required to admit minimum
commercial quantities of a description of goods in respect of
which domestic production to meet domestic demand is, for the
time being, severely restricted. If I might apply that to the
particular case of perfume, mentioned by the Chinese Delegate
I hope he will forgive me for appearing to comment on Chinese
internal policy, but it is difficult to explain this without
taking an example - I think it would work in this way: if the
Chinese balance of payments is in a bad state and if they
therefore decide that they do not wish to spend any of their
foreign resources on imports of perfume, then the economies of
the argument require that likewise they should not spend their
internal resources on porfumes and if they are manufacturing
any perfume they should be endeavouring to use it to put right
their external balance of payments by exporting it , and, in
order to do that, they would have to restrict severely the production
to meet domestic demand, in which case the provise would
operate and the reservation would not apply to this particular
kind of luxury. S E/PC/T/A/PV/28
- 10 -
I have described this, Mr. Chairman, at some length from the
point of view of both the country applying the restriction - because
I think it is important to make it clear that we recognize this is a
difficult thing to do but, none-the-less, we think it is well worth
while from the point of view of the country which is actually
applying it - and the country suffering the restriction.
Now if I could turn to the position of the exporting country,
there is nothing that is so damaging to international trade as the
complete cutting off of connections. We have had in two world wars
one of the larges-scale examples of that which we could possibly
want, the actual physical and commercial difficulty of re-establishing
contacts once they have been broken and the consequences which that
has in slowing down the resumption of trade are much greater than
is generally realised. The object, therefore, from the point of
view of the exporting country, is to keep open, as we say, the
channels of trade, to make it just worth while for the exporter to
keep his sales organization togother in the overseas market.
That is why we have chosen the phrase "minimum commercial
quantities." That phrase is open to a wide interpretation, but
it is a matter of common sense on which Members in good faith
ought not to disagree very seriously.
The other objection to this general principle which has been
raised is, I think, one to which we have to pay attention, and
that is the administrative difficulty, It is undoubtedly true
that to administer import licances for minimum commercial
quantities takes more staff than to administer import licances
when you have made up your mind beforehand that you are going to
say "No" to every application. That does not take a highly
intelligent staff , nor very many,. and I take it that it is for that
kind of reason that the Australian and indian Delegates have put down
the amendments which immediately follow ours on the paper. ER - 11 - E/PC/T/A/PV/28
I do not think, Mr. Chairman, that we would be very well
disposed towards this amendment, if that is their intention, because
I know quite well what would happen. Countries which are not
already doing this would say: "We simply cannot get the extra
staff together to do this, so it isn't reasonably practicable for
us to do it", that means it is not at all possible, and therefore
countries which are already working such a system would be left in
the position where they were operating total import schemes,as
we call it, while other countries would not. Now that is not a
position which it would be possible for us to maintain. The
objections which I have mentioned and which are seriously put
forward by the United Kingdom would become, I am quite certain,
overwhelning, unless the principle would generally be carried out by
all Members of the Organization. Therefore, I apologise to my
Indian and Australian colleagues for opposing their amendments
before I have heard what they have to say about them, but, if that
and
is the intention in these amendments./I feel pretty certain that
could be the interpretation of them, then I would say that we would
oppose them rather strongly. In other words, Mr. Chairman, we
feel that, by our amendment, we have gone as far as possible to
meet the legitimate objections to the so-called total import policy.
We firmly believe that it is to everybody's advantage that this
principle should be generally followed on the lines that we suggest,
but we certainly could not follow it unless everybody else were
going to. E/PC/T/A/PV/ 28
CHAIRMAN (Interpretation): Gentlemen, we have before us the
two following amendments, one presented by the Delegate for
Australia, the other by the Delegate for India. Both are aimed at
alleviating the intent of this paragraph by adding the words "as far
as possible". I will ask both Delegates whether they have anything
to add to the amendments
MR. J.G. PHILLIPS (Australia): Mr. Chairman, as you say,
the prime reason for our amendment was to alleviate the rigidity of
the existing text. We felt that it is too rigid to be applied.
successfully as it stands. We did not have in mind to oppose the
whole principle of the thing. On that point, we quite appreciate
the force of the argument put by the Delegate of the United kingdom.
We also appreciate the difficulties which the Chinese Delegate
referred to.
I think there are still a number of points which are not clear
and which are not covered absolutely in the United Kingdom
amendment. There is the question of importation of goods where no
importation has taken place before, where there are no established
channels of trade. I am not sare whether it is intended to
require imports of such goods in minimum quantities. It does
seem to me that at least the same arguments apply thero.
The second point is, just what meaning does one give to the
words "any description of goods", about which I am not clear myself:
However, I do not suggest that our amendment is any clearer on that
point, but taking the example which the United Kingdom Delegate
used, if you allow the import of fountain pens, does that mean you
must allow the import of every brand of fountain pens? How far
do you take those words "any description of goods ?
I think that is all I have got to say, except that
we do not oppose the principle of lE. imports, but we feel the
J. -12- -13- E/PC/T/A/PV/28
actual wording of the clause should be carefully examined by the
sub-committee.
CHAIRMAN (Interpretation): The Delegate of India.
MR. B.N. ADAKAR (India): Mr. Chairman, the Indian Delegation
accepts the principle underlying this sub-paragraph, and have
therefore not suggested the complete deletion of it. It has
never been our intention that quantitative restrictions imposed for-
balance-of-payments reasons should be utilised for protective
purposes.
At the same time, we feel that if such restrictions are to be
administered, with due regard to the relative essentiality of imports,
the Governments concerned should be allowed some measure of freedom
and some discretion in administering these restrictions.
We do not think that the proviso suggested by the United
Kingdom Delegation would cover our point completely. It would be
necessary, oven if that provise were adopted, to insert some such
words as "as far as possible" because relative essentiality of goods
has a different meaning when foreign exchange which is scarce has
to be used to obtain the goods, than when no expenditure of foreign
exchange is indolved.
We would therefore suggest that we should liberalise the
provision to some extent by inserting the words "as far as possible"
even if the provise suggested by the United Kingdom is adopted.
CHAIRMAN ( Interpretation ): Mr. Deutsch.
MR. J.J. DEUTSCH (Canada): Mr. Chairman, like the Delegation.
of the United Kingdom and Australia and India, we consider it
important that we should maintain the principle involved in this
sub-paragraph. Whenever quantitative restrictions are imposed for
J. balance-of-payments reasons we feel that the incidental protection
that is involved should be reduced as far as possible, and that
the commercial connections that have existed before should not be
broken any more than is absolutely necessary. For that reason,
we think it important that total imports arrangements should be
worked out.
However, we are not happy about the language of the present
sub-paragraph. The wording excluded completely imports of any
class of goods and is extremely vague and it is very hard to
determine what it means. Therefore, we would like a more precise
expression of the meaning that is intended in the sub-paragraph.
The British amendment, I think, offers some useful suggestions.
Even there, however, I am not altogether clear as to what certain
of the phrases mean or are intended to mean.
J. -14- E/PC/T/A/PV/28/ E/PC/T/A/PV/28
I appreciate it is a very difficult thing, and I appreciate,
too, the attempt that has been made by the United Kingdom to
define the meaning; but I feel some of the words are still not
very clear, particularly "any description of goods". What does
that mean? Does it mean "description" in the sense of the tariff
item, or "description" in the sense of a dictionary definition of a
product? These are all difficulties which we would have to try
and overcome. I think the proper place to do that, probably,
sub-
is in the/Committee - it is a drafting matter, and we would like
to see the sub-Committee attempt a more precise formulation of the
principle. The sub-Committee might also consider whether the
paragraph is in the right place. There is another paragraph
later on in Article 26,-- paragraph 4 --which says: "In so doing
the Member shall avoid all unnecessary damage to the commercial
interests of other Members". Well, that idea is somewhat
analogous to the idea expressed in sub-paragraph (c) , and
perhaps these ideas can be amalgamated to some extent, and maybe
the whole Article can be placed in a more logical position in these
balance-of-payments Articles. I would like the sub-Committee
to consider that question.
CHAIRMAN: The Delegate of Norway.
Mr. Erik COLBAN (Norway): Mr. Chairman, the Norwegian
Delegation originally was not very happy about this sub-paragraph
(c), more or less for the same reasons as those given by the
Delegate of China. We found that paragraph 4 of this Article
contains the necessary ruling; but we do not feel very strongly
about it, and in particular, after the declaration of the
United Kingdom Delegate, we feel that some reasonable compremise
ought to be possible. I would also like to support the suggestion
V
-15- V -16- E/PC/T/A/PV/28
of the Canadian Delegate that perhaps the idea of sub-paragraph
(c) should be worked into paragraph 4.
CHIRMAN: The Delegate of New Zealand.
Mr. L.C. WEBB (New Zealand): Mr. Chairman, like the
Delegation of Norway, we have no strong feelings about Article
26(2)(c) as to the general principle of it; but we do feel that
it involves two difficulties. The first one is the difficulty
mentioned by the Delegate of China, that there is, in a sense, a
conflict with paragraph 4 of Article 26. The second difficulty
we see is an administrative difficulty. For that reason, we
feel than if Article 26(2)(c) were left in its present form, it
would really break down for that administrative reason.
I do not think that Mr. Halmore has dealt quite adequately
with the administrative problem when he says that a staff dealing
with a question like this finds it much easier to totally
prohibit an import than to make a rather messy administrative
arrangement for bringing in a minimum commercial quantity.
I am afraid that is a true generalisation about public
administration; but I think there is, nevertheless, another
difficulty involved, and that is, that with the best will in
the world on the part of the Administration, it may be
extraordinarily difficult, in certain cases, to make any sort
of arrangement for the admission of minimum commercial quantities
where you have a very small market overall, or perhaps a very
small market for some particular product.
As I say, if this goes into the Charter, we would, of
course, do our best to administer it in good faith; but we feel
that in the absolute form in which it is at present, it would
really defeat even the most honest attempts to administer it. G .AE/- E/C/T/A./PV/28
CH IRMkZ: The Delegate of the Unitcd States.
Mr. BO~Z e nitel States): Mr. Chairmen, in thc Draft Charte.
that fas prescntet to the London Session oi this Committee, we
had a conjesidercabemnergedr provision on the subct than cer¢Ie
from the Lnndon Meeting.
After discussion in London it was a-reed that a simple
formulaWion appeared to meet the situation. 'e felt that the
langSuag in the Lonzon Draft imposed the smallest measure of
oblipatinn in t!is field that coull be im:osed, subject, however,
to the fact that it is a definite obligation covering the entire
field of the Articles of Trade; but there is no obligation
about the quantity of voods, as Ion-, as there is no complete
exclusion.
I am sure that to gn a step further and give a country the
discretion to find that it is impractical to admit even the
smallest quantity of any kind of product would destroy the
effectdveness of the provision entirely, an: for that reason the
mentt portion of the .ustralian 2mexilmen and the proposal of
the Indian Delegation, I feel, would be undesirable.
ing to the general philosophy unlerlyirE this proposal,
I think the Statement made by Mr. Helmore in this discussion set
forth the considerations so well that I really have nothing to
add on that score. questuionse Delegate raised a policy questim
whln he asked whether a country in baLance of payments
dificulties should be expected to use part of its short supply
of fore gn exchange in order to import total-luxury articles
among other things.
It is true that on the face of it there is considerable E/PC/T/A/PV/28
force in the observation of the Delegate of Chine, but there is
another site to the picture, and that is that restrictions imposed
while a country is in balance of payments difficultics necessarily
have their effect in the years afferwards when the country is no
longer in balance of payments duffucyktues, and the complete
exclusion of goodsover a period of several yeaxr, during which
time the country has financial difficulties, would probably have
considerable protective effect for a number of years afterwards,
when the country does not need financial protection, and it is
in an effort to minimise the future protective effect of present
balance of payments quantitative restrictions that we feel
strongly that a token import provision in the Charter is
necessary. Commercial channels are, of course, difficult to
set up. The Australian Delegate mentioned the possibility of
new products arising which never come into the market at all -
consumers in the country may either not know about such products,
or know only by seeing them, and it may take many years after
a country's financial difficulties are entirely over before any
effective commercial competition can enter into that market,
simply because of the slowness of trade, There-fore, it seems to
me that even though there would be some lost in the foreign
exchange to a country which is in foreign exchange difficulties,
that much ought to be yielded in favour of the future fair
international competition. It is not an unusual type of
provision. We found during the war that at a time when we were
severely restricting a great many industries in an effort to
expand war production, that we did permit a small production
in a great many fields which woud normally be considered
luxuries, in order to keep certain channels of trade going, and E/PC/T/A/PV/28
I am sure that most of the other countries in the war did the
same, and undoubtedly a greater many countries imposing restrictions
on imports for balance of payments reasons to-day are permitting
the import of some quantities of luxury goods, and I do not
believe it was intended to preclude that possibility.
As to the precise wording of. the New York Draft, we are, of
course, not wedded to it any more than anyone else who has
commented on it to-day is. The words "class of goods" as in the
New York Draft, or the word "product' as in the Australian Draft,
were a description of goods as in the British Draft - all phrasing
which could well be worked over in the Sub-Committee, in an effort
to get the clearest possible wirding.
I think one thing is perfectly clear, whether you mean
fountain pens as a class, or each brand of fountain pen. You
certainly do not mean the importation of one particular kind.
It is a matter which I think the Sub-Committee can work out.
I may say, incidentally, I am entirely in agreement with the
observations of the Delegate of Canada, including his suggestion
that perhaps this clause would be better would into paragraph 4
than paragraph 2.
Mr. Chairman, may I add that I would favour the proviso of
the United. Kingdom Delegation. The United. Kingdom Delegation
proposes an exception in favour of goods where either domestic
production is severely restricted entirely, or so much of the
domestic production is forced. into that condition that domestic
production for the domestic market is severely hampered:
In those two cases the United Kingdom Delegation would make an
exception from the token import rule. There is a provision in.
Article 25 which while not precisely parallel has some similarity
- 19 -
G - 20 -
to this. I am referring to articIe 25 2 (e) , where a country
finds it necessary because of a surplus of a commercial
product to restrict domestic production, The rule established
there is that imports must be permitted to come in and the goods
in production and imports must be in the same proportion.
Now, if a country finds that it roust cut down its own
production for the domestick market, it hardly seems fair to
exclude completely imports. The present Draft only requires
a token import - that there should be no complete exclusion -
-the rule is much less rigid than the rule of Article 25 2 (e) ;
but the-proviso submitted by the U.K. Delegation would require
that in a situation where domestic production is not being
met because of short Production at home, imports like wise be
excluded, and that during this period, while the importing
country, or importing and exporting country, is restricting its
domestic production or sales, imported goods be kept out of the
market completely; and I submit that that would have precisely
the same effect as the exclusion of token imports from any
other market. But the lines of commercial communication would
be broken. At the time when the need for quantitative
restrictions for balance of payments reasons had disappeared,
it milgh take a very considerable time for commercial
quantities of imported goods to come in, not for price reasons,
but possibly because of the absence of commercial connections.
The consumers' psychology of being familiar with the
product should be kept alive, and it is because that is what
commercial contingencies are for that we feel strongly
import restrictions should be included without exceptions. ER -21 - E/PC/T/A/PV/28
Mr. L. GOTZEN (Netherlands): Mr. Chairman, after the very
clear explanation given by Mr. Helmore. I think we can agree with
the principle underlying the amendment of the United Kingdom.
There are only two difficulties which have not yet been solved,
in my opinion. The first one was already raised by the Delegate
of Australia, and even after the words said about this subject by
the Delegate of the United States, I feel we are not yet clear and
not quite certain about the meaning of the words "of any description
of goods". Does that really include all new goods in the future,
or only goods we were used to buying from one another?
The second one is the inclusion of the words "by governmental
action" at the end of the amendment. I feel that perhaps it might
be better to put a full stop after the word "restricted", and not
include the words "by governmental action".
M. P. BARADUC (France) (Interpretation): Mr. Chairman, I
should only like to add a few words to what was said here. I think
that France is one of the great trading countries which experiences
now the greatest difficulties with regard to balance-of-payments.
Nevertheless, we think that the principle of token imports should be
maintained, and this for the following reasons.
In the first place, we think that any restrictions which may be
necessary now in order to protect the balance-of-payments should be
devised in such a manner as to cause the smallest possible damage
to international exchanges and to the resumption of international
trade, when this would be possible. In this respect, the Delegate
of the United Kingdom made observations which I am prepared to share.
In the second place, it is our intention not to give to our
domestic producers the impression that restrictions which are beirg
now applied in order to safeguard the balance-of-payments, are
intended to afford them protection. I agree, in particular, with - 22 -
E/PC /T/A/PV/28
the suggestion made by the Delegate of Canada that this point should
be considered in connection with paragraph 4 of Article 26, and I
hope that, if this question is referred to a Sub-Committee, we shall.
be able to reach a satisfactory solution.
Mr. B.J. BAYER (Czechoslovakia): Mr. Chairman,. as it is
noted in the document we have here before us, the Czechoslovak
Delegation on expressed to the Drafting Committee in New York their
preference for the London Draft. Now, in the light of so many
amendments submitted and suggestions made by other delegates, out
of which, as we think, a new Draft would undoubtedly emerge which
might be less rigid than the one we have at present, I think, Mr.
Chairman, we need not keep our preference for the London Draft.
Mr. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
during the discussions in New York, our Delegation took the same
position as the Delegation of Czechoslovakia, and we consider now
that the London text, together with all the amendments submitted,
should go to the Sub-Committee, which should be instructed to study
carefully that problem.
Mr. C.Y. HSIEH (China) : Mr. Chairman, after listening to the
statements made by various delegations on the amendments we have
so far put forward, we seem to come to the conclusion that the
United Kingdom amendment embodies the main principles that we had
to consider in order to arrive at a just and workable arrangement.
Now I agree as well, that the two sides of the question should
be carefully studied so That the requirements of the exporting as
well as of the importing countries should be given due weight. I
also subseribed to the idea that it Would be bad to leave any door
open for possible misuse of the quantitative restrictions allowed
for purposes of balance-of-payments. I find still, on careful ER - E/PC/T/A/PV/28
study of the content and spirit of the amendment, that it is
difficult to avoid the impression that the United Kingdom amendment
seems to be less concerned with seeing that the remedy is adequate
for caring the economic ill-health,than with making sure that the
remedy is not being abused for other purposes than the safeguarding
and restoration of the balance-of-payments. I think this
impression is becoming still stronger when I come to the final part
of the amendment - to the part where exception is made for the
general application of this obligation.
It is not difficult to conceive certain categories of goods
which would come under the sphere of this sub-paragraph, and of
which there is no domestic production, so the exception here seems
to serve no useful purpose for the simple reason that,more likely
than not, the commodity in question, especially if it is a luxury,
is one of which we have no domestic production, even though there
is a domestic demand. Therefore, for these reasons I still feel
that every careful consideration should be given to the question of
the due balance between the interests of importing and exporting
countries. J. - 24 - PC _4z /PV/28 ~~~~~~~~~~~~~~~E/:P / T/.A INI e,
CHAIR21A (Interpretation): Mr. Helmore.
MR. J.R.C. HIK'Ol' (United Kingdom): Mr. Chairman, I would
like to have your permission just to reply to one or two points
that have been made.
As far as drafting is concerned, I would very much support the
suggestion, first made by the Canadian Delegate and seconded by
others, that we should see if this paragraph cannot be fitted into
with
paragraph '.which, it seems to a=-,to have a good deal of
eslationship. os far as the vaguenesses of drafting which have
beset us all in discussing this a-e concerned, I would be delighted
ragraphwhat could be done to Bake the para;raph less open to
different interpretations by dciSffeent countries. I take no pride
inathe phrase any description of goods", end I do not suppose the
authors of the other phrases that have been used - "product" or
"olass of goods" - would be any more proud of them. It is a matter
Which the sub-cormittee will have to turn its attention to very
seriously. At the same tine, I wouldsay that it is possible for
an interpretation of such worts to be worked out which is likely to
be observed generally by all countries, whereas the insertion of
a phrase "as far as possible" leaves it to anybody to say for
himself what is possible, azc I do not think that that is a
situation in which the Preparatory Committee ought to leave this
paragraph.
I mentioned the subject of administration in this connection
when I spoke mafirst, and I do not think I could have de myself
very clear. I am very well aware of the difficulties of
administering a non-complete exclusionor the administration of
minimum commezoialquantities, and it is just the knowledge of
tham administration difficulty, which soze countries have solved
and others may not solve, that makes me so nervous of the words
. 1- . __ J. - 25 - E/~/PT/A/PV/28~, .P~~VI 28
"as far as practicable" or "as far as possible".
In the second part of his remarks, I found the Delegate of the
United States objecting to the proviso which we hav inserted, and
I am afraid I must defend myself a little against this. In
particular, he compared this principle to .article 25, paragraph 2(o),
and said that ifKingdom the United amendment ware passed
substantially in its present form it woule require thj complete
oAclasion of _ny description. of goods if domestic demand were
seriously restricted. Of course, it would not do agy such thins.
This paragraph doss not require anybody to exclude anything. It
only penits him to exclude it if he wishes. iBut mhere -s a aore
serious difficulty than that in admitting any comparison between
Artiale 25, par:grapA 2(c) and ,rticAre 26. article 25,
paragraph 2(c) relates to the use of quantitative restrictions to
enforce a scheme for the control of what one might call briefly
home agriculture, and Article 25, paragraph 2(c) is put in in order
to see that the scheme for the control of home agriculture is not
mis-used. Therefore, it is perfectly right and fair, it seems to
usthat parallel treatment for imported and home produced goods
should be required. Now, in Aweicle 26, vi say that a country
may liait its tot.l imports in order to defendeits balanco-of-
payments, and in paragraph 4 we say that Mgmbers may &ive priority
to the importation of particular products according to their
semality essesw-.a2. This paragraph on tokenbimports, auout
which te are now Ualking, takes us a little way from that
absolutaLy complete freedom to determine priority. It says that
while you may still determine priority, do not determine it down
to nothing in any particular cdlss of goons. mstancesrcuaLst-anc
are therefore altogether different.
- .25 -
J . - 26 -
We then go on in our proviso to say that you may determine it
down to nothing if the home production of the goods is severely
restricted.
Now, Mr. Chairman, we are trying to bring two rnain objections
to quantitative restrictions for balanceof-payments reasons in
this sub-paragraph. One is their incidental protective effect,
and the other is the cutting off of channels of trade, and to our
minds, the incidental protective effect is considerably more
serious than the cutting off of channels of trade.
I imagine it is rather difficult for a country which is not in
balance-of-payments difficulties to understand entirely the
circumstances in a country which is, but it must be taken as a
fact that being in balance-of-payments difficulties and, imposing
quantitative regulations, thereby liaiting supplies to consumers,
is not an enjoyable situation, and it is not a situation which
consumers accept very happily.
E/PC/T/A/PV/E/28
J . V
- 27 -
Those who look at it solely from the point of view of exporting
to a country which is in balance-of-payments difficulties sometimes
seem to assume that it is "original sin" that gets one into
balance-of-payments difficulties, and "original sin" which ke eps
one there, and that one thoroughly enjoys exercising the restrictions
which are necessary in order to prevent further damage. That is
not so at all, and I think the United Kingdom is entitled to speak,
as representing both the classes into which the Chinese Delegate
divided those who are considering this point -that is, importers and
exporters.
Now, there is a limit beyond which people at home cannot be
pushed, and I ask the United States Delegate to take it from me
that if one pushes this principle to a point at which one tries to
preserve both objectives, that is, preventing protective effects
and keeping the channels of trade open in a class of goods which is
already severely restricted at home, then the whole thing is likely
to break down, because it simply will not be accepted by public
opinion.
We have, therefore, come to the conclusion that it is necessary,
in cases where the protective effect is severely limited because of
the severe limitation on home production, to give up, for the time
being, keeping the channels of trade open, and to concentrate our
attention on those cases in which the protective effect is really
serious.
In that connection, Mr. Chairman, I would say that the point
raised by two Delegates - the Chinese Delegate and another (I forget
which) - that it is not necessary to provide for token imports
in a case where there is no/production because there never has
been any, seems to us one which might well be considered.
To sum up, Mr. Chairman, I think I must say that it would be
E/TC/T/A/FV/28 E/PC/T/A/TV/28
undesirable to push this to a point at which it cannot be explained
to the people. One can explain to public opinion that balance-of-
payments reasons mean a restriction of consumption. One can
explain, up to a point - up to the point of minimum commercial
quantities - that even in balance-of-payments difficulties it is
worth while to have token imports. When you add to that a severe
restriction on home production, you just tip the scale to the point
at which the thing is not explainable to public opinion.
CHAIRMAN (Interpretation): It seems to me, gentlemen, that
we could now conclude the discussion on sub-paragraph (o) and
pass on to the next paragraph.
Paragraph 3, sub-paragraph (a) is now under discussion. We
have two amendments to that sub-paragraph The first, the United
States amen'ment, seems to me to be of a purely drafting character,
and I hope the United States representative will have no objection
if we send that question, without discussion, to the sub-Committee.
Mr. George BRONZ (United States):
V
- 28 -
I am entirely agreeable. - 29 -
E/P C/T/A>/PV/28
CEAIR1M.!j (Interpret;..tion): The other Jaenc1ment is that
presented by the Chinese Delegation, and. it seems to me that
it has a bearing unon the substance of the matter under
discussion. I shall therefore invite the representative of
China to speak on that amendment.
Mr, HSIEH (China): Mr. Chairman, consistently with the
emphasis that I laid. on the point of urgency in the other
propose we rut forward., I would. also like to impress on the
Committee this matter. Now the sub-para graph un; er discussion
requires a Member which is not actually applying restrictions
unier paras. 1 and 2 of this .rticle, but is considering the
application, to consult the ITO before the enforcement in these
circumstances make such consultation compulsory. Now, in the
opinion of my Delegation, this'procedure imposes an unjust
obligation on t he said bMember.
We all know that quantitative re Frictions for the
purpose of ensuring balanced of payments are in most oases designed
to meet the urgent necessity, and can therefore ill-afford any
lnnz delay. Moreover, prior consultation may easily cause
leakage of information, and thi- may in turn lead to aggravation
of the very crises which the restrictive measures are intended
to avoid. In our view, therefore, any Member Government should
be free to apply these measures, provided that it proceeds
immediately to consult the ITO.
If it is found as a result of this consultation that the
said measures have produced serious effects on the trade of any
oth-r Member, then it is incumbent on the Members concerned to
start negotiations with a view to finding a remedy,; but prior
consultation'as leid down in Article 26, paragraph 3 (a) involves - 30 - E/PC/T/A/PV/28
too many grave risks to the interests of the Member Government
initiating it to be able to serve the purpose of safeguarding
or restoring balance of payments.
For these reasons we propose in respect of this sub-
paragraph that the first sentence should be amended as follows:-
"Any Member which is not applying restrictions under
Paragraphs 1 and 2 of this Alrticle but finds itself in need of
instituting such restrictions shall, immediately following upon
their institution, consult with the Organisation...etc., etc."
The original wordiing should be followed; and we also propose
to delete the final sentence of this sub-pararaph.
CHAIRMAN: The Delegate of the United States.
Mr. BRONZ (United States): Mr. Chairman, the language in
the New York Draft on which the Chinese Delegate has proposed an
Amendment bears on its face the signs of compromise, and of
course that is what happened at London. He would have preferred
to require prior consultation in every case. Other Delegations
began by preferring to have post consultation in every case, and
we split the differences by a compromise, whereby there would be
prior consultation when that is practicable, and consultation
immediately thereafter when it is not practicable.
The proposal of the Chinese Delegate now in effect means
that in cases where prior consultation would be entirely
practicable, the country would nevertheless not be required to
do so,
Prior consultation is of crucial importance in connection
with the later language in this same sub-paragraph, but the
sub-paragraph calls for consultation with the Organisation as
to the nature of the balance of payments difficulties, the - 31 -
various corrective measures available and the possible effects
of such measures on the economics of other Members.
When a country has already committed itself and announced
and out into effect quantitative restrictions, it would
obviously be extremely - difficult to consult with that country
with any hope of having any effect by suggesting the possibility
of other measures short of quantitative restrictions.
Once the restrictions are put in it is very Difficult to
get a country to retract at that stage of the game, If there
could be consultation with the international organisations
before the final decision is made, and publicised, there is
much more likelihood that an arrangement could be worked out
with the country to save the necessity of having restrictions.
E/PC/T/A./PV/28
G S - 32 - E/PA/T/A/PV/28
As to the secrecy point, I believe the Australian Delegation
has proposeed en amendment a little later in this Article which will
deal with the subject of these consultations and avoid one of the
difficulties suggested by the Chinese Delegate.
CHAIRMAN: M.Oldini.
Mr. F. Garcia OLDINI (Chile) (Interpretation): It is
correct, Mr. Chairman, that the text before us is a compromise,
but nevertheless it may be considered that this compromise is not
entirely satisfactory. In fact, there is an important principle
involved, namely, that each Member State concerned should be free
to decide on the action which it will resort to in order to safe-
guard its balance of payments, and this principle is actually
better safeguarded in Paragraph 4 of Article 26 and in Paragraph
2 (b) of the same Article, on the elimination of restrictions,
But in Paragraph 3(a) now bcfore us it may be said that this spirit
of necessary freedom of action for the Member States has been
somewhat obscured, if not abandoned, If we look at these pro-
visions in the light of that general principle of freedom to act
for the Member States, we coms to the conclusion that the consul-
tations provided for with theTrade Organization and with the
Monetary Fund should be exclusively of a technical nature. They
should bear on the best moans to achieve the necessary results in
order to protect the interests involved, but from this point of
view the text appears to be too vague. The text speaks of consul-
tations, but what character will they have and to what extent; how
far will they go? All these questions remain open to various
interpretations and the two statements just made here on that
question confirm that there is a possibilivy of different
interpretations of these provisions. Therefore we come to the S - 33 - E/PC/T/A/PV/28
conclusion that if all the Member States apply the provisions
of this paragraph in the right spirit the results may be
satisfactory, but if they try to apply the letter of this
paragraph they may come into considerable difficulties, Therefore
we support in principle the proposal made by the Delegate of
China. We think that it should have the effect of making
these provisions clearer and easier to apply. ER -34- E/PC/T/A/PV/28
We agree with the principle as it was stated by the Delegate
of the United States, that consultations should take place when and
if they are possible, but the text says something different. The text
says that "Any Member ....... shall, before instituting such
restrictions . . . . consult with the Organization ......." It
is true that the text also provides for an exemption. It is said,
in brackets, that "in circumstances in which prior consultation is
impracticable, immediately following upon the institution of such
restrictions", but this again leaves a certain field for various
interpretations. Therefore, we think that the Chinese proposal has
considerable advantages, and in any case the Sub-Committee should
study that problem carefully.
On the other hand, the Chinese Delegation proposes to delete this
last sentence. Obviously, as I understand it, if the text of the
previous sentences of the paragraph were entirely satisfactory, the
last sentence would be unnecessary, but in the whole of this text,
precisely the last sentence, in our opinion, should be maintained
because it is the only one which was drafted in the practical spirit,
The last sentence says that "No Member shall be required during such
discussions to indicate in advance the choice of timing of any
particular measures which it may ultimately determine to adopt", and
pending the final drafting of this paragragh, we think that this
last sentence is useful and should be maintained. However, we agree
that it should be possible for the Sub-Committee to work out a
better wording for these provisions. It should be possible to
maintain what was useful and good in the London compromise, and to
improve on what was not entirely satisfactory.
CHAIRMAN (Interpretation) : Does anybody else wish to speak on
this paragraph? In these cireumstances, the paragraph will be
submitted to the Sub-Committee. There is no amendment to sub- ER - 35 - E/PC/T/A/PV/28
paragraph (b). In sub-paragraph (c) there is an amendment
presented by the Australian Delegation. I call upon the Delegate
of Australia.
Mr. J.G. PHILLIPS (Australia): Mr: Chairman, this is a small
point, I think, but we have suggested that, when a Member obtains
prior approval from the Organization for restrictions under
paragraph 3(c) , it seems unnecessary to require that he should then
still be compelled to consult again the Organization under sub-
paragraph 3(a), as well as consult it before be introduces the
restrictions. We therefore suggested that, in a case where the
Organization had already given its approval to restrictions under
3(c), the provisions in 3(a) should be overlooked, and the prior
consultation should be sufficient. It may be that the wording we
have suggested might possibly be approved, but we think the point
is perhaps worth covering.
CHAIRMAN (Interpretation) : I take it that this question can
be submitted to the Sub-Committee. We pass on to sub-paragraph (d).
There is an amendment presented by the United States Delegation.
I presume that the United States Delegate would wish to take the
floor.
Mr. GEORGE BRONZ (United States) : Mr. Chairman, I really
have no observations to make beyond those contained in the comment
which appears in the United States agenda.
Mr. J.E. MEADE (United Kingdom) : Mr. Chairman, on this
amendment there are two points of possible importance. One is the
suggestion that, when the Organization finds that a Member has
opposed their restrictions against the rules as it were, it shall
be obliged to recommend the withdrawal or the modification of these
restrictions. -36 -
ER E/PC/T/A/PV/28
I think the United Kingdom Delegation would be in complete
agreement with this proposal, but there is, however, another proposal
of some substance here, and that is that the sanctions, as it were,
of the sub-paragraph 3(d) should apply to restrictions which are
proposed, not only against the substantial rules of paragraph 2, but
also if they are inconsistent with any other part of the Article,
that would be, presumably, with paragraph 3, sub-paragraphs (a) and
(b), namely, rules for consultation. We should like to see that
change made, and we believe that, for these sub-paragraphs as well
as for the other sub-paragraphs of the Charter, there is the
procedure of Article 35, and it menas special sanctions should only
be preserved for imposing import restrictions against the substance
of the rules of paragraph 2 of this Article. J. -37 - E/AC/T/A/PV/28
MR. H. DORN (Cuba): Mr. Chairman, may I only call the
attention of the Commission to the fact that the sub-committee on
Chapter VIII, at this moment and next week I think, will discuss
the general question as to whether there is a possibility of
unifying the procedures in the Charter, especially on the basis of
Article 35 and articles 85 and 86, and I think that the question
raised by the Delegate of the United Kingdom could be discussed in
this connection in order to avoid as far as possible, procedures
which are only slightly different one from the other, without
giving special advantages based upon these differences.
CHAIRMAN: Monsieur Oldini. - 38 -
M. F. Garcia OLDINI (Chile) (Interpretation): It was in
accordance with the spirit of our London discussions,
Mr. Chairman, that any complaint presented by Member States
should be considered by the Organization, provided that it is
sufficiently established that there are definite presumptions
in favour of the point made by the claimant State. It seems
to me, however, that the United States proposal now before us
does not take this sprint fally into account: in fact, we read
in the United States proposal that "If the Organization is
satisfied that there is a prima facie case" etc. Now, what
exact meaning must be attributed to this expression? It
seems to me that "prima facie" may be interpreted as a partial
proof. Well, this is obviously more than was expected in the
London arrangements. In other words, the United States text
provides for more severe conditions to be fulfilled by the
claimant State before the Organization takes the complaint into
consideration.
V
E/TC/T/A/PV/28 - 39 -
E/PC/T/A/PV/28
Further we read in the United States text that the
Organisation shall afford the member applying the restrictions
full opportunity to justify its action and shall consult etc.
I do not like very much that expression "to justify",
although I .would be in a difficulty to suggest any better one;
but it seems to me that this wording implies the idea that the
Member State must bring in advance justificition of its actions
and this idea was not included. in the previous text.
Furthermore, the United States proposal says that the
Organisation shall recommend (and this is to replace the original
wording) that the Organisation may make recommendations.
The intention of this provision was that if the
Organisation finds that the provisions of the Charter have
been misused, the Organisation should apply the necessary
sanctions; but the question arises if the Organisation finds
that there was no misuse of the provisions that in that case
we think that the Organisation should say so and act
accordingly. Failing that the Urganisation will not be
fulfilling its task.
It may be said that this paragraph should be in
conjunction with the previous paragraphs, and in particular
with paragraph 1, but I submit that this does not entirely
settle the question.
In conclusion I hope and think that the Sub-Committee in
studying this question will take into account the observation
presented. by me.
CHAIRMAN : The Delegate of New Zealand. - 40 - E/PC/T/A/PV/28
Mr. WEBB (New Zealand): Mr. President, I Just wanted to say
that we agree with the contention of the United kingdom
Delegate, that in the first sentence of the U.S. Amendment the
Substitution of this article for those paragraphs is not an
improvement. We also find difficulty with this sentence, as in
the U. S. Amendment: ""If no such settlement is reached, the
Organisation shall recommend the.withdrawal".
It seems to us that "shall" should be "may", and we have
one reason in mend in particular for taking that view, and that
is that in article 26 3 (e) it is provided that the Organisation
in reaching its determination on sub-paragraph (d) shall not
recommend the withdrawal or general relaxation of the
restrictions on the ground that this can be avoided by a change
in the Member's reconstruction, development or social policies.
In view of that provision, it seem to us clear that the word
in (d) should be "may" and not "shall".
E/PC/T/A/PV/28 -41-
CHAIRMAN: (Interpretation): Does anybody else wish to
speak on this paragraph?
The question is referred to the sub-committee
In connection with Paragraph 3 (d), a reservation has been
made by the Belgian Delegation.
The Delegate for Belgium,
M. F. de LIEDEKERKE (Belgium) (Interpretation): During the
discussions in New York the Belgian Delegation proposed the
addition of the text which will be found on Page 22 of the English
text ot the Report of tke Drafting Committee. It says: "One
Delegate, who was the Delegate of Belgium, supported by the
Delegates of Canada and the United States, suggested the following
addition: 'The organization may initiate proceedings analogous
to the foregoing, if it considers that any Member is applying
import restrictions under paragraphs 1and 2 of this Article in
a manner inconsistent with tho provisions of paragraph 1 and 2 of
this Article, or of Article 27. "'
It was not possible to get unanimous support for this
proposal during the discussions in New York, but considerable
support was indicated and in particular by the Delegations just
named. Therefore the Belgian Delegation hopes that the sub-
oommittee, in studying this proposal, will be able to achieve a
satisfactory result in inserting that into the text of the paragraph.
CHAIRMAN: The Delegate if Canada.
Mr, J.J. DEUTSCH (Canada): Mr. Chairman, the Canadian
Delegation supported the Belgian Delegation at the New York
meeting and we feel that it may be useful to give the Organization
power to initiate proceedings where there is a breach of some
obligation in this Article, even though no Member complains or
S
E/PC/T/A/PV/28 S - 42 - E/PC/T/A/PV/28
no Member can establish that ho is being adversely affected.
It may be thought desirable for the Organization, as a matter of
policy, to be able to intervene when there is a breach, We do
not suggest it should be compulsory, or anything like that, but
it should be open to the Organization to act when there is a breach
of the agreement.
We would like, Mr. Chairman, that this should be considered
in the sub-committee and, if there is any merit in the proposal,
it might be incorporated into the paragraph. ER
Mr. GEORGE BRONZ (United States) Mr. Chairman, we would
like to indicate our agreement with the observations made by the
Delegates of Belgium and Canada.
Mr. J.R.C. HELMORE (United Kingdom): Mr. Chairman, I think
there is a real intellectual difficulty in this amendment. The
Organization is not a super-state or something separate from the
Members. It is, as far as I can understand it, when it takes
action, the majority of the Members, so that, if no member is found
complaining I do not see how this could ever happen, and certainly
I woud not like lo see the thing read "The staff of the
Organization may complain on the shape of the proceedings". That
would be quite improper, it seems to me. Or the other hand, I
admit there is the problem that it may be rather difficult to
establish that one particular Member has suffered injury noticeably
enough for him do wish to take the onus on himself of starting the
proceedings, whereas, if the matter could be brought up in the
Organization as a matter which could be looked at and then various
consequences might follow, perhaps we should be doing better.
I also see same danger to the Organization in putting it in
the position where it will initiate a complaint on which it would
be the judge. That is a difficulty which one meets over and over
again in these various International Organizations.ngInatiCns. Th effect,
es wants the International Organization to ._;!.tion tact as a
podithen one wants it to act as a o , c^and I ury, ai 1; think It
able to insert in the Charter words which makerds .r, h that dual
ite as blatart _e an blat as I presume the Sub-Committeeub-Comm,'tt
couhd dthe problem. witl --he
HAIEFS (Australia). Mr. Chairman,aIC13ir.~anke to
ssupport the comments of the Delegabe of the United Kingdo on this
ssubject and to add the observation they, as far as I know, thi
- '3 - ER - 44 - E/PC/T/A/PV/28
would be the only place in the Charter to give the Organization the
right to intervene in this way. Article 35, for example, which
is in favour of this general procedure, gives no similar power to
the organization itself to initiate the complaint. We take it
to be undesirable, particularly from the point of view of the
prestige of the Organization itself, that it should have this
power, and we find it hard to foresee a case where damage is being
done by restrictions which are not in accordance with the terms
of Article 26, when no Member can be found to complain, but I
expect there would be no difficulty in finding complaints. Mr. L. C. WEBB (New Zealand): Mr. Chairman, for reasons which
have been better expressed than I could express them, we also oppose
the proposal which has been put forward by the Delegations of
Belgium, Canada and the United States.
CHAIRMAN: Monsieur Kojeve.
M. KOJEVE (France) (Interpretation): I cannot agree with the
Delegate of the United Kingdom when he says that the Organization
will have no Cistinet moral or juricical personality beyond that of
its Members, but it is not my intention now to pursue that
philosophical discussion with my distinguished United Kingdom
colleague. I shall simply indicated that I share his douets as to
the usefulness of the proposal before us. Infact, if it is
possible for the Organization intervene or to initiate certatin
procedures without any complaints being presented by the Member
States and without any Member States considoring themselves as
being prejudieed, this will only be possible for reasons of doctrine
if, so to speak, the Organization disagrees with certain economic
theories etc., and I do not think that it would be a desirable
thing to trausform in such a way the Organization, which would
remain strietly technical ina sort of academic form. Therefore,
I think that this proposal is not only superfluous, but perhaps
also dangorous.
The Delegate of Brazil
J.
E/PC/T/A/PV/28 -A V - 46 - E/PC/T/A./PV/28
Mr. J. G. TORRES (Brazil): I would just like to say,
Mr. Chairman, with due regard for the Delegations who put
forward this amendment, that I also agree with the United
Kingdom's views. I think the amendment would not serve any
great purpose for the reasons he has pointed but, and it
might even not be very wise from a psychological point of view.
CHAIRMAN: The Delegate of Chile.
M. F. Garcia OLDINI (Chile) (Interpretation): I wish to
support the observations made by the Delegate of the United
Kingdom. As I have indicated previously, we are of the opinion
that the Organization should leave the greatest possible measure
of freedom to the Member Stuates, and act rather in its
technical capacity. The role of the Organization is essentially
to act in response to requests for consultations which may be
made by the Member States. In other circumstances, it may also
be called upon to act as a judge; but, as I have mentioned
previously, even when there is a complaint, it is laid down that
the Organization must be of the opinion that sufficient
presumptions for the complaint have been established. These
presumptions are required if a complaint is presented by a
Member State. In these circumstances, it is difficult to see
how we can afford the Organization the right to initiate
proceedings when no complaints have been presented and when
no Members consider that they have suffered damage.
- 46 - - 47 -
G E/PC/T/A/PV/20
CHAIRMAN: The Delegate of Czechoslovakia.
Mr. BAYER (Czechoslovakia): We also wish to associate
ourselves with the opinion of the Delegate of the United
Kingdom. We think that the instance in which no complaint
will be made will show that no serious damage has been done
to a Member country Thank you.
CHAIRMAN: The Representative of the International
Bank.
Mr. HEXNER (International Bank): Mr. Chairman, I would
like to restrict myself to one point raised by the Australian
Delegate, that in the Charter this would, be the only provision
in which the sanctions would not be concentrated on the
satisfactory settlement of the issue on the one hand, and on
the other hand where the Organisation would have the
initiative to proceed.
I would like to call your attention to Article 28 para. 2
where the Organisation has the initiative, and where the
action is concentrated on the breach of the provisions and
not on the satisfactory settlement of the interests of
one Member. E/PC/T/A/PV/28
CRAIRMAN (Interpretation): I am obliged to state that there
is apparently strong opposition to the amendment presented by the
Delegation of my country, and this is in spite of the precious
thought given to us by the Canadian and United States Delegations.
In these circumstances, I must ask the representative of Belgium
whether they insist on the adoption of this amendment.
M. de LIEDEKERKE (Belgium) (Interpretation): We ask that
this question should nevertheless be referred to the sub-committee.
CHAIRMAN (Interpretation): I would be agreeable, but it seems
to me that we are expecting great virtues on the part of the
Sub-committee and in particular we expect the Sub-committee to
resolve difficulties which we have been unable to resolve
ourselves.
Mr. Helmore.
Mr. J.R. C.HELMORE (United Kingdom): Mr. Chairman, I
think it would be fair, as several Delegates said they agreed with
the views expressed, to explain that I ended my speech. by saying,
subject to the comments I have made, I would like the problem
to be examined by the Sub-committee." Those are the only views
I have.
CHAIRMAN: Mr. Deutsch.
Mr. J.J. DEUTSCH (Canada): Mr. Chairman, my position is
exactly the same as that of Mr. Helmore.
Mr. de LIEDEKERKE (Belgium) (Interpretation): I thank the
representative of the United Kingdom.
GHAIRMAN (Interpretation): The question will accordingly be
referred to the sub-committee.
- 48 -
S E/PC/T/A/PV/28
Gentlemen, since we trust the wisdom of the Sub-committee,
I think that we can refer, without further discussion, to that
Sub-committee two amendments which have been presented to sub-
paragraph (e) of this paragraph and which do not raise any
considerable points of substance. On the other hand, I propose
that we should discuss here a new proposal submitted by the
Australian Delegation, contained in Document W.231 date July 2,
and which intends to insert in this Article a new paragraph 3(f).
I call upon the Delegate of Australia.
Mr. J.G.PHILLIPS (Australia): Mr. Chairman, the purpose
of this amendment is to stress the importance of secrecy in the
consultations which are required under article 26. I think the
point has already been raised by the Chinese Delegate in relation
to Paragraph 3(a) and we reel very strongly that unless adequate
secrecy is maintained in any. consultations between a Member and
the Organization the consultations will be of very little value,
because the circumstances of the case will be such that the Member
will not be able to be frank about his position unless he is sure
that his frankness will not result in knowledge of his possible
actions beforehand. I think that is particularly clear when you
are discussing the possibility of bringing in import restrictions.
If it becomes known beforehand that you are likely to impose them,
and particularly if the character of the restrictions you are
likely to impose becomes known, then the difficulties of your
position are likely to be greatly increased. In the same way,
if you are discussing with the Organization possible alternative
actions which might include the possibility of a change in your
exchange rate, it would clearly be embarrassing if there were any
possibility of the fact that you were considering that
alternative leaking out.
S
- 49 - S E/PC/T/A/PV/28
I do not wish to say much more then that about it, except
to ask that the matter be sont to the Sub-committee for con-
sideration.
I might perhaps add that although we have made an attempt
to spell out the secrecy provisions in our amendment, we are
quite aware of the difficulties in the wording we have suggested
and we think it very possible that the Sub-committee may be
abb to find considerable improvements there.
CHAIRMAN (Interpretation): Does anybody wish to speak
on this proposal? 51
Mr. F. GARCIA OLDINI (Chile) (Interpretation): There is one
question, Mr. Chairman, in connection with the following passage
of the Australian amendment, which I should like to ask. We read, _
under (f) (iii), "provided that a Member can not unreasonably
withhold consent to such disclosure if the Organization considers
that disclosure is desirable".
My question is, in what circumstances is it contemplated by
the Delegate of Australia that the Organization may decide that
such disclosure is desirable before information has been submitted?
Mr. J.G. PHILLIPS (Australia): Mr. Chairman, it only means
that, in some oases, particularly perhaps where the Member, after
consultation, has decided not to take action, the Organization
might feel it desirable that the fact that the Member had consultedrisiitea
shouldished rbe publed ot shuld. bmpe keptecra iii,.l,^>'et, At
least, it seems to me unnecesisary to prode that in those
circumstances, the Organization should be debarred from making
public or making more public than we would otherwise allow, the
fact that consultation had taken place, and I think there might
be other cases where the Organization would consider it desirable,
or at least would consider it not undesirable, -that disclosure
should take place where a Member might perhaps unreasonably withhold
his consent.
Mr. HERBERT DORN (Cuba): Mr. Chairman, I agree completely
with the tendency of this amendment, that details of this should
be discussed in the Sub-Cominittee. I only want to raise the
question that it would not be desirable to suggest to the competent
whether
Committeee to examine the more generar/l question ocorresponding
provisions should be inserted for the treatment of' complaints.
E/PC/T/A/PV/28
ER E/PC/T/A/PV/28
CHAIRMAN Mr. Gotzen.
MR. L.. GOTZEN (Netherlands): Mr. Chairman, I think my remarks
are going in the same direction as those made by the Delegate of
Cuba, because I was wondering if we are not going into too many
details if we introduce all of what is said here into the Charter.
Would it not bt better to delete the words beginning with "In
particular" to the end.
(The CHAIRMAN LUJi madem rk.:ric in French which was not
interpreted).
MR. L. GOTZEN (Netherlands): "In particular" after the first
senten"ce - In particular in relation to any such consultation....",
and so on. sh I ould loike t state the principle only and not the
technical details.
MANCRI ' The Delegate of Cuba.
MR. H. DORCN (uba) M rh. Caairmn, I think that the idea of
the Delegate of the Neethrlands coincides with my idea, because I
think that we will make the procedures throughout the Charrte very
difficult to handle if gwee iv too many details in different parts
of the Charter instead of having a unified procedure in the right
place, that is, in Chapter VIII.
That wase th basic idea which aI wnted to express, and I am
thankful for the obsaervtioadn me by thee DIegatfe o thee Ntherlands
which stressed just this point which I wanted to raise. Therefore,
I think it ddwoel b very useful to put the principle in here, and
to take the necessary steps in order that the competent mComittee
may deal withe th question as to how this principle should be applied
in detail and consider whether Ist i notd inispenseabl to extend its
application to other procedures.
J. 53 -I _, - I ,
CHURPL nterpretation): Does anybody else wish to
speak on this question? Then we can refer the matter to the
sub-Committee.
Gentlemen, we have still to consider paragraphs 4 and 5 of
this Article. With regard to paragraph 4, in the first place
four Delegates felt that the text should be clarified. Those
are the Delegations of Brazil, Chile, Czechoslovakia and France.
On the other hand, we have two amendments to the same paragraph 4
and the amendment presented by the Australian Delegation seems t.
be more important. Therefore, I invite thiae Delegate of Austral
to explain that proposal.
Mr. J.G. PHILUPS (Australia): Mr. Chairman, in putting
forward our amendment, I think we were mainly trying to carry out
the wishes of the four Delegates who felt theat the text should b
clarified. Our purpose was mainly one of clarification. We
thought the previous wording was obscure, and we thought that
this wording was less obscure.
We have also altered. the sense a little, perhaps, in the
last sentence of our amendment, although I do not think there
is really great alteration. The previous sentence read: "In
so doing the Member shall avoid all unnecessary damage to the
commercial intere"sts of other Members. We suggest that that
should read "the Member shall take account of the effects of its
restrictions on the emecronomics of otheeer Mbes, and shalL .sk
to avoid unnecessary damage1.
I think t he on ly remark I wangreet-o aidt- that is, ; l
that whatever t, ext is finallya decaih 2dedthe existing pragrp)z
on token imports could fit very appropaphriately into this paragr.
E/PC/T/A/PV/28
V G. 54 E/PC/T/A/PV/28
54:
CHAIRMAN JU4I2IA2 anterpret:-tioa): does .nybo"y else wish to
seEkon thios que s i-
The Delegate of Brazil.
YiTORPUE(Brazil): Mar. Chl-ian, we also think that
the AustraAliadmn menent clarifies the question aa dgret eal;
aglthnw we ha-e pnot 7rtaicipcet 'n D'e dbate refngerrix
to the question of total imports we think that ghtit mi very
weell b cdovere in the last sentence of this papragrah as
adment.by tehe DoegateA of istralia.
I would like tggo suest thaet th Sub-Committee when
cdonsigerin the matter look fcareully into thed wgorin of the
Unitedgd KiAmnomm enent tod fin out the exacpt imlications of
the exproessin domestic dd emanand production, in the second
paragraph (o), becaused we o not quite clearly know what that
means, in vifew o the peculiar monetary schemes of Great Britain
anWher Empire.
That is all we have to say, Mr. Chairman,
CRMARII: Does anybody else wish to speak?
Then we pass on to the lasAt mdenmente rfernrigo t
Sticle 26, which is anA !ednient presented by the Cuban Delegate
and inetdns to introduce a new paragraph 5. I call upon the
Delegate of Cuba.
Mr. ORDN (Cuba): M.r Chairman, the Cuban Amenmdent is
intended to coodirnate het remedies ofA rticles 6 and 26, whcih
serve the smae purpose, activating thereby one of the basic
fneraliideas of the Charter that restrictive measures should be
avoided as far as possible. Therefore the amendment provides
that the remedy of article 6 should. be tried out first, S - 55 - E/PC/T/A/PV/28
The Member who suffers from persistent balance of payments
difficulties shall try to co-ordinate with the country with
persistent maladjustment within its balance of payments, which
has caused its difficulties, before using restrictions to
safeguard its balance of payments.
In the meantime, as the Secretariat has pointed out in its
comment, Article 6 has receive a formulation which mentions the
resort to trade restrictions, and possibly the idea of the
insertion of the words "without resort to trade restrictions,"
which is to be found on Page 22 of Document W.223, tries to
make the same necessary co-ordination, but I think it will be
necessary to examine carefully if this aim has really been
realised. Therefore I think it would be useful to discuss
this question in the sub-committee.
CHAIRMAN: Mr. Helmore.
Mr. J.R.C.HELMORE (United Kingdom): Mr. Chairman, I
appreciate the spirit in which the Delegate of Cuba has put
this forward, but I feel bound to say that an excess of cross
references in the Charter is apt to be extremelyy dangerous in
interpretation and I hope that on reflection, and after study
in the sub-committee, we shall not include this reference here
to Article 6.
It seems to me that Article 6 is looking at the matter
primarily from the point of view of t of the counry wvith the
persisteftly 'avle ral: ba-ance of payments and refers
incidentally to the posioion -frothe countries which are
thereby involved in an unfavourable ba'ance, whereas the Article
we awe no; discussing is looaingh_t tne matter almost absolutely
from the point of view of correcthng tae halance of payments
of the country which is in difficulties,tand fhere'ore the cross 56
reference might involve some difficulty in fitting the two
together.
There is a further point of a practical kind which ought to
be considered and that is that as this amendment stands it would
remove from a Member which considered that its balance of
payments difficulties were based on a disequilibrium in the
balance of payments of another Member the possibility of
acting before consulting the Organization. It might well be
consultation with the Organization would be right, and our
present draft of Article 26 indeed encourages Members to consult
beforehand, but we have not gone so far as to take action first
and consultation afterwards away from them and I suggest it
might not be right to do so.
S
E/PC/T/A/PV/28 57
Mr. HERBERT DORN (Cuba): Mr. Chairman, I will not go into
details at this moment because I think you will have the opportunity
of talking things over in the Sub-Committee. I would only like
to say that the words inserted in Article26, expressly state
"without resort to trade restrictions". I have the impression
that the idea of coordinating both these Articles was also the
sense of this new insertion, because I think it is better to leave
out the details for the moment.
CHAIRMAN (Interpretation): Does anybody else wish to speak?
In these circumstances, the discussion on Article 26 is closed.
of
There only remains the establishing/the Sub-Committee from which we
expect considerable work done. I propose that the Sub-Committee
should be composed of the representatives of the following Members:
France, United Kingdom, United States, Canada, Australia, Cuba and
Czechoslovakia. It will be on the condition that this Sub-
Committee, necessarily restricted in its composition, consult in
every case all the delegations directly concerned. It will also
keep in contact with the representatives of the International
Monetary Fund and of the International Bank.
The meeting is adjourned.
The meeting rose at 6.15 p.m.
E/PC/T/A/PV/28
ER |
GATT Library | nc366mc8129 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty-Eighth Meeting of the Tariff Agreement Committee held on Wednesday, 24 September 1947 at 2.30 p.m. in the Paiais des Nations, Geneva | United Nations Economic and Social Council, September 24, 1947 | United Nations. Economic and Social Council | 24/09/1947 | official documents | E/PC/T/TAC/PV/28 and E/PC/T/TAC/PV/26-28 | https://exhibits.stanford.edu/gatt/catalog/nc366mc8129 | nc366mc8129_90260102.xml | GATT_155 | 11,620 | 71,335 | UNITED NATIONS UNIES
ECONOMIC CONSEIL RESTRICTED
. AND ECONOMIQUE E/PC/T/TAC/PV/28
SOCIAl COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
TWENTY-EIGHTH MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON WEDNESDAY, 24. SEPTEMBER 1947 AT 2.30 P.M. IN THE
PAIAIS DES NATIONS, GENEVA.
Hon. L.D.WlLGRESS (Chairman) (Canada)
Delegetes wishing to make corrections in their speeches should
address, their communications to the Docuaments Clearance Office,
Room 220 (Tel. 2247).
Delegates are reminded that the texts of interpretations, which do
~ ~~~os '. et $tdu:e. 'or
.qt prltend s repautuced forransiationae i'jrodae
*)euea1 guidance only; corrigenda to the texts of interpretations
canmot, therefore, be accepted.
.,;, -2-
E/PC/T/TAC/PV/28
S
CHAIRMAN : The Meeting is called to order.
We will take up where we left off and come to Article XIX -
Emergency Action on Imports of particular products. This will be -
found on page 90 of Document T/212.
Paragraph 1(a): any comments?
M. ROYER (Interpretation): In the eighth line of Paragraph
1(a) of the French text the comma should be deleted after "contractante"
and an "s" should be added to the word "quantité".
CHAIRMAN: Are there any other comments on Paragraph 1(a)?
( Agreed ).
Paragraph 2: are there any comments?
Mr. SHACKLE (United Kingdom) : Mr. Chairman, in the sixth line
from the bottom of the English text on page 92, I think it would
read much better if we altered the order and made it read: "action
undor paragraph 1 of this Article may be taken", omitting any
commas.
CHAIRMAN: Are there any objections to, this change?
Mr. LEDDY (United States): In line eight, the words
. "Contracting parties" should be capitalized.
CHAIRMAN: Yes
M. R0YER
AIw. hRM'AN: !,x
r.a ph 3$(e
Paragraph 3(b
irticle XX -
.
'S~~~~~~~
.
Are there any other coi;ents?
;erpret-at:n): Mly emarks refer to the French text.
re there any Dtler counts on
I): are thereany com..:ents?
are, there -ny comrents?
General Excepitions. Are there
r ragraph 2?
(^r eu. ),.
('gre d) .
any comments? S E/PC/T/TAC/P'V/28
Mr. SHACKLE (United Kingdom): Mr. Chairman, I do not know
whether we have got to it yet, but there is a wrong reference, I
think, in sub-paragraph (d) on Page 95 of the English text.
Actually, I think the paragraph which refers to concessions by
State trading monopolies is now paragraph 4 and not paragraph 3
of Article II .
CHAIRMAN: The reference in sub-paragrajph (d) should be to
paragraph 4 of Article II, instead of paragraph 3.
Are there any cornment.. on page 95? (Agreed).
page 96: any comments? (Agreed).
Page 97: any comments? (Agreed).
Page 98: any comments? (Agreed).
Page 99: any comments? (Agreed)
Are there any comments on the last paragraph on page 100?
(Agreed).
Article XXI - Security Exceptions. Are there any comments?
Mr. LEDDY (United States): The comma after the words
"security interests" in the English text on page 100 should be
changed to a semi-colon.
CHAIRMAN: Sub-paragraph (b): are there any comments?
M. ROYER (Interpretation): There is an "s" missing from the
word "destiné" in the French text of sub-paragraph (b)(ii).
CEAIRMAN: Are there any other comments? (Agreed)
Sub-paragraph (c): any comments? (Agreed).
Article XXII -Consultation . Are there any comments? (Agreed).
Article XXIII - Nullification or Impairment. Parargraph 1:
are there any comments?
Mr. SHACKLE (United Kingdom): Mr. Chairman, I presume that the
word in paragraph 1: "or its accompanying :protocol", in the fourth
and fifth lines, are intended to be omitted. If so, the reference in
,_.--... .. .. . . .,.. . S -4- E/PC/T/TAC/PV/28
lines 12 and 13 should also be omitted. I take it the reference
is not to the Protocol of Provisional Application but to the former
Protocol of Signature.
s A MA. IRH...INa Mr. Shr:okle is cDrrcct.
Are there any other compartg on r.uagraph 1 of Article XXIII?
;aragraph 2: any comments?
Mr. SHACKLE (Unitmd Kingdor): There is another case in which
"Contracting parties" should be capitalized; in the seventh and
eighth pines18f IagO le5.
CI'IRMAN: The first reforenoe tD "Cgntractin, parties " on
Page 105 should be in capital letters.
Are toere any Dther comPents in lararaph 2?
M. ROYpRe(IntonorctMti D): 1r. Chairman, at the end of this
text here we have "nserted Ttar Seeret,ry-Gcneral of the United
Nations" instead of "the Contracpara es r artist." In other provisions
relating to withdrawal it is tae Secret:ry-Genora1 who receives the
notice of withdrawal; therefore we thought it would be clearer if
all the notices relating to withdeawalwwero fortarded to the same
address. This is not of great importance but it is better to
adopt phe eame Devecdure uvurywhere.
CILIRJLN: -Are there any objection to this*proposed change?
.(Jgreed) . Are there any other compentg on -arairAgh 2? (i reed).
Ww will npr take uD the Annexea, which ere gocen in D cument
T/215 - the Report of the Legal Drafting Committee on the Annexes
and Schedules attached to the general Aureement.
Annex A - List of Territories referrpd to in -aragraph 2(a)
of .rticle Il
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~r Chimn .n th iE
Mr. L.J. BEYLEVELD (Sou-h u t'ca): Mr. Chairman, in tLW English
text it should read: "UniDn of South Africa including South-west
Africa" .
. . -5-
S E/PC/T/TAC/PV/28
CHAIRMAN: That change will be made.
.Are there any other comments on the List of Territories? (Agreed)
.Are there any comments on the following paragraph? (Agreed).
Are there any remarks on the next paragraph?
.Mr. SHACKLE (United Kingdom): I think there should be a comma
after the words "following paragraph" at the bottom of page 3 of
the English text.
CHAIRMAN: A comma will be inserted after the words
"following paragraph:".
Are there any other comments?
.M. ROYER (Interpretation): I read the paragraph as it ought
to be,
printed .
CHAIRMAN: The-paragraph on Page 3 is therefore agreed.
Are there any comments on the paragraph on page 4?
M. ROYER (Interpretation): Mr. Chairman, the square brackets
around the Words "and hams", are special brackets; they are not
brackets signifying deletion, but brackets indicating postponement.
CHAIRMAN: The Secretariat will take note of that in framing
t he revised text.
M. ROYER (Interpretation): In the last line but one of the
Frerch text 'ces négociations" should be altered to read "des:
négociations. "
CHAIRMAN: The paragraph is now agreed.
Are there any comments on thc paragraph or page 5? (Agreed).
Annex: B -. List of Territories of the French Union referred
to in Paragraph 2(b) of Article 1. Are there any comments on
the list of. Territories?.
' ' .. J
'' V '
........... . . .. ... .... .. . .......... ..
1 S E/PC /T/TAC/PV/28
M. ROYER (Intepretation) In the heading of the French text
"Article I" should be altered to read "'L'article Premier."
CHAIRMAN: Are there any other remarks?
Annex B is approved.
Annex C List of Territories of the Customs Union of Belgium,
Luxemburg and the Netherlands referred to in Pargraph 2(b) of
Article I. Are there any comments?
Mr. G.A. LAMSVELT (Notherlands) We might delete the word
"The" before Netherlands" in the list.
Mr. LEDDY (United States): Mr. Chairman, with regard to the
footnote - "For imports into the metropolitan territories" - is
that to apply to all the main territories or is there supposed to
be an asterisk beside the territories to which it is to apply?
CHAIRMAN: That is the way it is in the Charter. The note
appears at the end of the list of territories, so presumably it
applies to them all.
Mr. SHACKLE (United Kingdom): Is it not a fact, Mr. Chairman,
that only the metropolitan territories constitute the customs
union? Would it not therefore be better to say: "the metropolitan
territories constituting" instead of "metropolitan territories of".
My point is that I have always understed a customs union does not
include colonial territories; therefore I thought the word
"constituting" was better than "of"
Mr. LAMSVELT (Netherlands): That is so.
CHAIRMAN: Are there any Objections to replacing the word
of" by the word "constituting"?
.(Agreed)
Are there any other comments on Annex C?
(Agreed )
"'.
_ E/PC/T/TAC/PV/28
Annex D - List of Territories refarred to in paragraph 2(b)
of Article I as respects the United States of America. Are there
any comments?
Mr. LEDDY (United States): Mr. Chairman, there was an
unfortunate mistake in the Charter which has been rectifited in
this draft. In: the Charter the Republic of the Philippines
is listed as being one of the territories of the United States
of America and I was just wondering whether the Secretariat would
be soC: enought. to issue an erratum notice: on that particular poin
because it is a matter of some importance that the error. should
be corrected.
CHAIRMAN: I will ask the Secretary to reply to this point
which has been raised by Mr. Leddy.
Mr. ,E. RITCHIE (Secretariat): This point was raised when
the Charter was in proof and it was not possible at that time,
apparently, to have the chance made,. .At the present stage it
is difficult to have an erratum issued which would reach all
recipients of the Charter. We should be happy to issue one and
circulate it as far as we were able to do so,
Mr. LEDDY (United States): You will issue a notice on that?
Mr. RITCHIE: Yes.
Mr. LEDDY: Thank you.
I
' ; !.
I P. E/PC/T/TAC/PV/28
CHAIRMAN: It is understood, of course, that it is quite
impossible to have this erratum in the hands of each and every
person who has a copy of the Charter.
Are there any comments on Annex D?
M. ROYER (France) (Interpretation): There is a modification
to bring about in the French text. The word '"qui'' should be
inserted d in the fifth line and the words "était appliquée" should
be deleted,
CHAIRMAN: Is Annex D approved?
Approved .
Annex E. - List of Territories covered. by Preferential
Arrangements between Chile and Neighbouring Countries referred to
in Paragraph 2(d) of Article I.
CHAIRMAN: Are there any comments?
. Annex E is approved.
Annex F. - List of Territories covered by Preferential
Arrangements between the Lebano-Syrian Customs Union and Neighbouring
Countries referred. to in Paragraph 2(d) of' Article I.
CHAIRMAN: Are there any comments?
The representative of Syria,,
M. I.TRABOULSI (Syria) (interpretation): Mr. Chairman, we
agree to adopt as a rule the formala 'Lebano-Syrian Customs Union"
but this formula, if it were to be adopted here, might lead to
some juridical confusion, because the preferential arrangements
have not been concluded between the Lebano-Syrian Customs Union,
but between Syria and neighbouring countries on the one hand and
between Lebanon and neighbouring countries on the other hand.
: Therefore, if ther, were no objection, I should prefer that the
: following form might be adopted: "Between Syria on the one hand P.
and neighbouring countries, and on the other hand, between Lebanon
and the neighbouring countries".
Mr. R. J. SHACKLE (United Kingdom): Might I just raise one
point, Mr. Chairman? It is a matter of drafting, probably
As it says "Preferences in force", that is a statement of fact,
is it not? Then, as to the territories between which they are
in force, Lebanon and Syria and Palestine and Transjordan, I
presume for this purpose the Lebano-Syrian Customs Union would be
actually the unit concerned, and therefore if we say "in force"
is it not correct to say "Lebano-Syria Customs Union"? I quite
appreciate that in the case of the preferential arrangements, the
formal completion of them, it would be different, but in describing
arrangements which are in force then I think it probably would be
accurate to say "Lebano-Syrian Customs Union".
M. I. TRABOULSI (Syria) (Interpretation): Mr. Chairman, if
my objection is not justified, then I will not press that point.
CHAIRMAN: I thank the Delegate of Syria. I think that
perhaps his observations would be justified in regard to the title
and not in regard to the text of the Annex. Perhaps if we had
the title to read: "List of Territories covered by Preferential
Arrangements between Lebanon and Syria and Neighbouring Countries..."
Is the Delegate of Syria in accord?
M. I . TRABOULSI (Syria): Yes.
,1~ . . LS
CHAI N: Then that change will be made in the title, but
the rest of the Annex will remain as it is.
Are there any mother coments?
Annex F is approved.
9 ]?. A 1z' ~~~~~~E/PC/T/TMC/PV/28
P. 10
Annex G: - rDates Establishing Maximum Margins of Prefeence
referred to in Para aph 3 of Article I.
Mrr R.J. eSL'T (nited Kingdom): Mr. Chaiinma thore
is a typographlical rror which occurs both in the Engcsh and
the French texts in the date set against Southern Rhodesia.
It should be 1941 and not 9<s
CAu R Tuhaneo wl b mae. Are there any
other comments?
nnex G is approved.
Annex H: - Total ExLrnl lTade of the Territories of the
Signatory Governments SAignatory to putphe Final ct for the rose
of making the Determination refer.red to in Article XXVI
Mer.K Rg.Jm.: SH"ACKLE: (Un d In oc * ?ignatory" in the second
lline onf the title soud he ould it noi? square brackets, sht
Baron Pierre de CLFIER a(Bmelgiium): Mr. Che1:., Inthe
title of Annex H do we need "Signatory" twice? I had not
notied it in the Drafting Committee.
CCIDI,uNTe title sholl.d ed: "Total External Trade of
Governments Siegnatory to th Final Act for thme pugrpo"se of akin...
Mr. J.LEDDY (United StMates): ]IrChairman, it says "Total
external trade of the territories ..." I do not think that is
wAhat t Irl1Ite i. T pi the *ercntage. Unless we want to
put the figures in? o We culd do that, sbut I hould just leave
"Tota" out completely and say r"Exte-a. Trade"T
CAUIMIN I:sit agreed to delete the word "Total"?
Agreed. P. 11 . E/PC/T/TAC/PV/28-
Mr. HNr R.J. SIIACKLE (Uomed KingdOln): Of course, these are
percentagess of the global total. I wonder whether we should
indicate that. It might help. I do not see that anywhere now.
It is obvious, of course, when you look at the column, because
you see it is up to 100, but it is not specifically indicated.
CIL-LN Arae there ; nother comments?
MLr. J.M. EDDY (United States): I think t"he word "Country"
at the head of the list of countries should probably come out.
CLJMZN The word "Country" will be deleted. Any other
comments?
MPr. J..D. JOHNSEN (New Zdealan ): The asterisk at the foot
of the pMage, r. Chairman, is in a different form from that in the
list of Perces.ntage Is it intended, that there should be no
ratification of thosperre rctive figures by all of the Delegations?
CHi WN: That asterisk only refers to India and Pakistan.
India has giver us these percentages as being the proportion in
which the 3.3 per cent should be divided between the two countries.
We are still awaiting confirmation frPom akaistn. It does not
affect any but those two countr.ies
Mr. J.P.D. JOHNSENe (Nw Zealand): But the asterisk should be
in a different form.
CIRAMkN Yes, that is a mistake in the typing.
Hf Ye, h
M.p ROYER (France) (Inteorretation); ppe This Nte will disaar
from the final text, of course.
CIRMAN: After we have the confirmation the Note will
disappear. P. 12 E/PC/T/TAC/PV/28
Mr. E.L. RODRIGUES (Brazil): Why don't we start the title
with "Total Composition of External Trade"?
Mr. E. McCARTHY (Australia): There is something in the
point. "Total Trade" suggests total figures rather than
percentage figures.
Mr. R.J. SHACKLE (United Kingdom): If you had the words
"Percentage shares of" in front of "Total External Trade" -
"Percentage Shares of Total External Trade of the Governments .."
and so on, it might be clearer.
CHAIRMAN: We had thought we had dealt with this point
by deleting the word "Total" but suggestions have been made which
probably are an improvement. Mr. Shackle suggests that the
heading should read:
"Percentage Shares of Total External Trade of the Territories
of the Governrnents Signatory to the Final at for the purpose
of making the Determination referred to in Article XXVI."
- Is that agreed?
Agreed.
The Note on page 13 is suppressed.
Mr. R.J. SHACKLE (United Kingdom): Well, Mr. Chairman,
I wonder if it ought to be suppressed, because, after all, it
does call attention to a very relevant fact, namely that when
one says "United Kingdom of Great Britain - and Northern Ireland'
that does not mean what it seems to say, but it means the United
Kingdom plus its colonial dependencies which are not self-governing.
That is a very material fact in considering the figures and I
think that that Note should remain. It seems to me that it is
very necessary that it should be mantioned.
- -A . E/PC/T/TAC/PV/28
M. ROYER (France) (Interpretation): Mr. Chairman, we
thought that this Note was not indispensable because now the
territories which are autonomous in respect of these matters
here appear in the list by name; therefore, we thought this Note
was not indispensable; but nevertheless if the Delegate of the
United Kingdom wishes to press his point, we might keep this Note.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, this
document, for those who come after us, may not be nearly so
expressive of what we mean as it is to Members of the Committee;
so in order to avoid them falling into a trap I think we had
better keep this Note here.
Baron Pierre de GAIFFIER (Belgium): Mr. Chairman, I am
just wondering; whether the expression "Belgium-Lexemburg-Netherlands
Customs Union"is quite correct, because, if my knowledge is right,
the figure 10.9 includes also exchange between the Netherlands
and Belgium and their overseas territories. So I think it would
be more correct to put "Belgium-Luxemburg-Netherlands" without
"Customs Union". At the same time my colleague from the
Netherlands Delegation reminds me that yesterday in this Committee
the Meeting took a decision to put "Belgium-Luxemburg-Netherlands"
without "Customs Union".
CHAIRMAN: I take it that the Committee has no objection
to the deletion of the words "Customs Union" after "Belgium-Luxemburg
Netherlands".
Agreed.
Are there any objections to the proposal of Mr. Shackle to
retain the Note on page 13?
Agreed.
The Note will then be maintained.
.I.
13. P. 14 E/PC/T/TAC/PV/28
M. ROYER (France) (Interpretation): In the French text the
words "du commerce " must be inserted after the words "en tenant
compte": - "en tenant compte du commerce de tous les territoires".
CHAIRMAN: Are there any other comments?
Approved.
Annex I - Interpretative Notes.
CHA R A MLUN: The NoteAto article I.
Mr.RAN S. GHAANATN Indiar) M. Chairman, there is one very
small poihnth wic I wish tos raie. Is it necessary to have the
word. "re-application"? Will "apnot plica"tion be enough? I
have one case in mind where the existence of the word. "re-apapliction"
may not technically be correct. We had a preference for Burma,
giving free entry on one commodity, but before the free entry
could be legislated for,the war came. and, by special dispensation,
we continued to levy tuhe dty. Free entry has since been conceded,
but after the base date, So if it is "on the application" there
will be no trouble, but if it is "re-acppliation" it may be
construed that we had granted a new preference after the bdasee at.
In practice it is not going to give any trouble, because all the
Delegations were notified.
CAANIRMI Afe there anymm connts on the proposal of the
Delegate of India?
Mr. C.E.R MN (Australia): Mr.OTO Chairman, that Note was
inserted both in the Charter and in the Agreement to take care of
what is, in fact, the reapplication of a duty, such classification
or rate having been temporarily suspended or inoperative at a
certain date. That is to say, it did not operate on one occasion
but was temporarily suspended or became inoperative and is now
p'posed to be re-applied. So the word. "re-application" is the
-' '' ' 15
correct one in this text and I am not altogether certain whether
changing it to "application" has any significance, whatever.
Certainly "re-application" is the correct word to express what
was intended here.
CHAIRMAN: I hope the Delegate of India will be satisfied
with the explanationn given by the Delegate of Australia, because
I fear that if the word "re-application" were to be changed to
"application" it would be necessary to make adjustments in the
latter part of the paragraph in which we refer to "cases in which
the application of such classification or rate to such product
was temporarily suspended ......"
Mr. S. RANGANATHAN (India): Well, it is only one isolated
case, so I do not want so press my point, but I hope the Committee
will bear this in mind and not, later on, say that it is not covered.
CHAIRMAN: I thank the Delegate of India. Are there any
other comments on the Note to Article I?
Approved,
The Note to Article I, paragraph 1.
The Note to Article I, paragraph 1 is approved.
M.ROYER (France) (Interpretation): This Note ought to have
beep underlined, because this is a new draft.
CHAIRMAN: Is the Note approved?
Mr. J. M. LEDDY (United States): Have you passed the note (ii)
under ad Article I? I should just like to ask Mr. Morton whether
it means substantially the same. thing as the original Note.
, . OYER M. R (France): (reply given under a misaoprehensiun
not interpreted).
M LEDDY (UJnted States): I was referring to the second
'; -.:'.' E/PC/T/TAC/PV/28
part of the Note to Article I, the beginning part of Article I,
not to paragraph 1 of Article I. I think it is alright,
Mr. Chairman. I just wanted to get it clear.
Mr. C.E. MORTON (Australia): Well, Mr. Chairman, it
seems to me to conform with the ideas which we had when the
original Note was brought back to the Charter. This is one of
the children of doubtful parentage which was forced into my house,
Mr. Leddy being the actual author of the Note. I think if he
is also of the opinion that it does state what we intended to
state originally, I am content.
Mr. J.M. LEDDY (United States): I am willing to take the
risk which I detect in Mr. Morton's reply.
M. ROYER (France) (Interpretation) M~r. ,airmane', in th
French text th"e words" de base ereemain hr. We had asked for
their deletion, but theyp still apear in the third line of (ii)
on page 14.
(hrher remark concenlrned orogfa typao;phicelerror in
tnhe Frech text)
ANCCIMsI TAe there any more remarks on the Note to
rticle I, paragraph 1?
4rove.,
The Note to Article II.
M. ROYER (Farnce) (Interpretation): Mr. Chairman, in the
French text the following words ahve been left out: "Paragraph
2(b:) Voir la note relative na apragraph 1 del' articlel 1".
HACIRMAN: Is that approved?
pp3ove
P. P.
The Note to Paragraph 3 oflArticle II.
comments?
The Note to Paragraph 3 is approved .
Are there any
Mr. J.M. LEDDY (United States): Mr. Chairman, to go back: -
In Article II the reference, I think, is to paragraph 4, not to
paragraph 3. It is the same change as we made before.
There should also be a comma after "concession" in line 6.
Mr. C.E. MORTON (Australia) Mr. Shackle will have to
look out. Mr. Leddy is rapidly catching up on him with his commasl
CHAIRMAN: Article V. The Note to Paragraph 5 at the top
of page 16.
The Note to Article VI.
Paragraph 1. Agreed.
Paragraph 2.
M. ROYER (France) (Interpretation ):
text had been drafted by an Irishman:
Mr. J.M. LEDDY (United States): A
CHAIRMAN: Are there any comments
Agreed .
Most probably the former
half Irishman, Mr. Chairman
on paragraph 2?
E/PC/T/TAC/PV/28 CHAIRMAN: The Note to paragraph7: are there any comments?
The Note to Article VII: paragraph 1: are. there .any comments?
The Note to Paragraph 2 of Article VII: any comments?
The Note to Articlel, VIII, Paragraph 4omae c._rnm. nts?
~~~~~~(.~gre k -.,).
Th Note t)Articmlere XI, .;h (c) any co;muLfnts?
( oc)
TeNb-paotgrae t o co m nts? 2, lrstsuahph:tay Cme
agrapThe Nt t~i)-ricl rXI mem r ( (I: any omircrnts
ThePa agNopte t A ticaloXIIIme, ?-,oh2(d): .~ com:ns?
~~~~~~~~~~(,.r ci~. ) .
Th Note to 4:rah cloirn?
Tmhe Note to ,rticle XIV, pui.ap 3: ally nmoons
". ROYER'(Irmtrpert--.t): The worde 'lj~Ay haecn o)iitod
o the Frcenh text.
C Lhe thXrI ay -hc commns?
gBumro: DE G~UIZER(3li) In the English, and Frernch exts-
oCtraching ParTies",airan. "Cn f tS a e oin the irst nd c)nd lines
capotnawe25 ssi s ng sial er noiill Er,-lh reo-t irnch.
CHcIa!Mev The e ohpncwnll brL enc ir tke raer-ext.
Are other any ethse- com t ?
ROi. (Ienaterprotrtn)e: Ae.fotr h. wrdo "le opétaireFeDn mni
international"l tohe fulstp meplaust be rcedmma by a co lin.
5 i ycvtl etr nB'~ihbti~ nFe~h
'''
1
-
1 S
E/'/T/L-CV/28
18 19 S E/PC/T/TAC/PV/28
I wonder if the Belgian Delegation would have any objection
to replacing the word "pertinents" by the word "appropriés"?
CHAIRMAN: Is there any objection? (Agreed).
Are there any other comments on the Note to Article XIV?
(Agreed)
The Note to paragraph 6(b) of Article XIV: any comments?
M. ROYER (Interpretation): There is just a modifiction in
this paragraph, which refers only to the French text.
CHAIRMAN:) Are there any other comments on the Note to
Paragraph 6 (b) ? (Agreed).
The Note to Article XV, Paragraph 4: are there any comments?
Mr. MORTON (Australia): On page 26, in the 16th line, we have
the word's "contravene against"; is not the word "against" redundant?
M. ROYER (Interpretation ), This is a typographical error. The
word "against" had been deleted.
CHAIRMAN: The word "against" should be deleted.
4
M. ROYER (Intperretiaton ): Twoo wrds havee ben emitted from, the
ennh text, sevce lineosbefore then,aen, afi'r "pjernrev euxmIpe".
CHAIRMAN: Are there any othe r comments on the Note to
Paragraph 4 of Article XV?
Mr. SHACKLE (United Kindom) Two lines from the end of Page 26,
in the English text, the word "licensing" should be spelt with an "s".
CHAIRMAN: Are there any other comments? (Agreed)
The Note to Article XVII, Paragraph l1. any comments.?
..11,. ROYER (Intetre+.ation): The Legal DragtinE Commétted did
not, change the draftPa ogf prarah 2 of this Notet, bu neverthseles
we thought the information which was given to the unfoartunte reader
. S 20 E/PC /T/TAC/PV/28
was rather scarce; we tell him that he has to apply regulations
governed by the relevant Articles of this Agreement, without
specifying what are these Articles.
Mr. SHACKLE (United Kingdom). It is rather late in the day to
try to remedy this omission. I assume the Article is the one
relating to national treatment.
CHAIRMAN: Are there any other comments?
Baron DE GAIFFIER (Belgium) (Interpretation): Mr. Chairman, I
would like to ask M. Royer if he would not agree to replace the
word "pertinents" by the word "appropriés".
M. ROYER: I agree.
CHAIRMAN: I take it the Committee is agreed that the second
paragraph should remain in the way it is new. (Agreed).
Are there any other comments on the Note to Paragraph 1 of
Article XVII? (Agreed ).
The Note to Paragraph 1(a) of Article XVII; any comments?
M. ROYER (Interpretatoin): On Page 28, four lines from the end
of this paragraph, we should delete the word "sur" after "diriger"
CHAIRMAN: Are there any other comments? (Agreed).
The Note to Paragraph (b): are there any comments?
Baron DE GAIFFIER (Belgium) (Interpretation): Mr. Chairman, if
we insert the words "sub-paragraph (a)" in the first part of page 27,
we ought also to insert the words "sub-paragraph (a)" in this paragraph.
CHAIRMAN: The brackets should be taken out.
The Note to Paragraph 1(b) is agreed.
The Note to Paragraph 2: any comments?
M. ROYER (Interpretation):, Quotation marks should be inserted
after the word "produits" and before the word "marchandises" in the
. S 21 E/PC/T/TAC/PV/28
first and second lines of the French text, because in the French
text we might have, "poduits et rnarchandaises " ) or "produits" and
"marchandises" separately .
CHAIRMAN: Is the Note to Paragraph 2 approved? (Agreed).
The Note to Article XXIV, Paragraph b: any comments?
M. ROYER (Interpretation) The word "pas" has been omitted
from, the French text.
CHAIRMAN: Are there any other remarks on the Note to
Paragraph 5 of Article XXIV? (Agreed) .
Mr. LEDDY (United States) Mr. Chairman, I am to leave
the discussion at this point, but before doing so I just wanted to
say I think the Committee is very fortunate indeed in having had
the services of M. Royer as Chairman of the Legal Drafting
Committee. I think he and his colleagues have done a remarkable
piece of work in a very short time and we should all be greatly.
indebted to them for their efforts.
CHAIRMAN: I am sure all Members of the Committee will endorse
unanimously the rernarks just made by Mr. Leddy.
M. ROYER (Interpretation): Mr. Chairman, I would like to tell
Mr. Leddy how grateful I am for the kind words he has just spoken,
but I think these words apply more to the other Members of the
Committee than to myseIf. We certainly all feeI very happy in
accomplishing this task w i h was ieh wa- vsrsc.ru uSe if' the carying out.
o oenDbued Memre task :±,eoibrs oeef th eCmmnartt(c ocrne.te their
work t de arliaer o at atehbeeS. possn:au h:'.tnp le,n perhaDs,ij
hmsearce, oirukcts
C-WeLI'-~:;ew oaw tAp-e u Fthal Ne'in n ot, Atheenncx f
eInteraprtetiv, eNots. The teoxt f stNhi otae hs noet yeet bn
SoprOebd t ethcCo.mitetecand eteh.<eorcits icnow eopno fz
dcus ion. sn Ar.e Ae thoremm acsoraent~? S . 22 E/PC/T/TAC/PV/28
Mr. SHACKLE (United Kingdom): Mr. Chairman, whilst I do not
think this Note is quite as we would have wished to see it, I am
prepared to recommend it to London, after hearing about the
discussions which have taken place on this subject, as being a text
which they might do well to work on. I shall have to send them a
cable about it. I rather assume it will have their agreement.
If there is any comment, of course, the Committee will be
acquainted with it at the earliest possible moment, but I rather
think it will be accepted.
Mr. J.W. EVANS (United States) Mr. Chairman, perhaps I should
be a little cautious myself in indicating the possibility, although
I think it is a very slight possibility, that Washington might slap
our wrists for having said this now. It is quite a departure from
the Protocol we originally inserted but we felt it was the most
reasonable compromise between the various views which have been
expressed here. It would not have the effect of prejudicing the
obligations which might or might not exist, but it would simply
neutralize this Agreement so far as the occupied areas are concerned.
We believe it will be acceptable to Washing ton but we will make it
known if that is not the case.
CHAIRMAN: The Delegate of the Netherlands.
Mr. LAMSVELT (Netherlands): Mr. Chairman, I would like to know
if we are discus sing at the present moment the text of the Final
Note, given in Document T/215, or also the latest proposal of the
Delegation of the United States, in Document W/344. I take it we
are discussing the text in Document T/215 at the moment.
CHAlRMAN: I should have pointed out that the text we are
discussing is that given in Document T/215; that is, the revision
made by the Legal Drafting Committee of the Note proposed by the
Delegation of the United States in Document W/344. I think that for
the purposes of discussion we can take the text adopted by the Legal
Drafting Committee, as that is the form in which it will appear. 23 E/PC/T/TAC/PV/28
Mr. L.AMSVELT (Netherlands): Thank you..
Baron DE GAIFFIER (Belgium) (Interpretation): Mr. Chairman. I
know how delicate it would be to change any of the words of this
draft which is now before us, but, nevertheless, as I read the draft
the first part says the contracting parties have made no commitments
in the General Agreement on Tariffs and Trade. This first part of
the sentence does not seem very useful to me because in the General
Agreement there is no provision relating to this question of the
Occupied Territories. Therefore we are stating here something
which is already stated, if only implicity, in the General
Agreemet. If on the other hand, we said that the contracting parties
have no power to commit themselves here in regard to this question,
then we would he saying something useful; we would be providing
interesting information to the forthcoming reader of the Agreement
and we would be adding something constructive to the text of this
Note.
M. ROYER (Interpretation) Mr. Chairman, first of all I think
that, from the point of view of the French reader, some clarification
is necessary by adding, in the fifth line of the French text, before
the words "concerne des territoires occupés", the words which were
dropped by mistake.
As regards the first part of this sentence, it seems to me that
it has a certain legal value. If this first part of the sentence
did not apper here, then the case of undertakings which exist
.-implicitly in he iAgreement relating to the militarily occupied
territories would notbe covered. It seemsm to e this first part
ought to be inserted to give satisfaction to the United States
legation.
As regards the form in which this text coulde b drafted, it
might be improved and I thkin the form which was proposed by M. de
Gaiffier does not differ much from the present drafting.
veNertheless, this text is better because iit s clearer. S 4 E/PC/T/TAC/PV/28
CHAIRMAN: The Delegate of the Netherlands.
M. LAMSVELT (Netherlands): Mr. Chairman, as you know, this
Final Note has already a long history. It would be acceptable to
my Delegation and, in our opinion, it, might be the bust solution
not to have any further alteration.
CHAIRMAN: Theo Delegate of Australia.
Mr . E. McCARTHY (Australia): Mr. Chairman , our view from the
outset was, I think, that we would prefer to see no reference at all
to this matter in the Annexes, but as the drafts succeeded each
other, we thought we should make, some effort to reach agreement on a.
compromise, and the present Note, though far from what we think we
might accept, is subject to confirmation from Australia. But even
as it stands now, we would like a little alteration to make it clear
that the contracting : parties have made no commitment one way or the
other on this subject of the part which the areas under military
occupation will play.
There is just a hint in the drafting as it stands now that the
contracting parties have made no commitments to apply the General
~atc hav -j o
Agreement on Tariffss and Trade which might sugget that the areas
.undeer military occupation are exmpt from the provisions of the
|rb&mt r
On suggestion I have which should at any rate make the point
clrear, even if the final wod on drafting has yet to be said, is:
:"The adc be commontractir partis have meOtment in the General
eTement o;iTrif'S ad, lraein reaspect of the applicoiabiy of
the greement to the areas undeir military occupat D . We think
that makes it, clearer that the conatracting parties hve made no
decision or even given an opinion one way or the other. If that
were accehpted, we would wis to add e a few words to makit clear
that ow ar e rdeeferring t;thetr- of the contracting parties with
the areas unpder m.ilitary occuation S E/PC/T/TAC/P V/28
P perhapss a; a basis of dicuIon, b suggestJ tingetht full
wording we ehav eher, it wdoul be the esaam s the Note in the draft
own to "The contracting parties havmadee nno commitments in the
nG ra lA,reenento D Tariffs a?d Trade in respect of" and then
insert the words: "itsap pliabcility to the trdea", then omit teh
words "fo and with" and rpealce tehm by" betwee"n the terriotiers
of thec ontractign parties and"; tehn omit the words "The question
of the applicability of the Agreeemnt to sucha oars"a dn put in
theirp lace '"this matter".
HAIRCANM A:re there any ocmments on the revised text poposerd
by the Delgate ofA usraalia?
The Delgateto f theU nited Staets.
Mr. EAVSN (United States): M r. Chairman, I m anot a allt sure
hat tthe the suggestionm dea by the eDlgeate ofA ustralia chagned teh
'nsf o the Note; at any rate, the meaning seems to be whnt we
had intended in our proposed draft and if it is acceptable to the
other interested Delegations we would be glad to accept the changes.
CHAIRMAN:. The Delegate of China..
V. Mr.HHN CITIEF (China): MIr. Cai asan, ,.s the United States
Delegte hasa indic-ed ethat howould be prepared to acceept thu
chngs, we think it woulde be bE;er to drop the whole maandtter i.
not to make any reference to it in gtehmis .A-vznt,If a Note is to
be added at all, we would prefer to support the text probposed y the
Unitged Kindogam.Deletioni, as crculatede in thir PWhite aper .
t the same time we would like t. reserve our position on this
ttr and .hae. adkel forinstructi on from our Government . So
r wWehave not received any reply.
CHAIRMAN: Are there any other comments?
., E/PC/T/TAC/PV/28
Mr. SHACKLE (United Kingdom): Mr. Chairman, I should be
prepared to recommend rny Government to accept the revised text
suggested by Mr. McCarthy.
There is just one question I should like to ask; I assume
that neither of these texts can be regarded as ousting the
nullification and impairment Article. The nullification and
impairment Article talks about "the applicstion by another
contracting party of any measure, whether or not it conflicts
with the provisions of this Agreement." Nothing is said in either
of these suggested texts - I presume I am, correct in saying this -
that in no case would a territory occupiee by a contracting party
be exempt from the provisions of Article XXIII.
CHAIRMAN: The Delegate of the United States.
Mr. EVANS (United States): Mr. Chairman, it is our opinion
that Mr. Shackle's interpretation is correct, both in regard to
our draft and to the draft as revised by Mr. McCarthy. The
nullification clause would still be operative.
. <'
26 P. 27 E/PC/T/TAC/PV/28
M. ROYER (France) (Interpretation): Mr. Chairman, I think
that in our Final Note here we ought to reach a final note of
agreement and compromise and therefore I think that we ought not
to complicate matters here.
The advantage of the first text which was submitted to the
Legal Drafting Committee was that this text left absolutely no
doubt as to the applicability of the provisions of Article XXIII.
It seems to me that the text which Mr. McCarthy has now proposed
to clarify matters seems to east a certain doubt and one may draw
the/conclusion from Mr. McCarthy's drafting that the provisions
of Article XXIII are not applicable in respect of these territories.
Therefore it seems to me that the previous text was better in
that respect.
Now, as regards Article XXIII, the French draft of Article
XXIII has as yet no proper title, .and I think that the correct
title for Article XXIII should be "Protection des concessions".
Dr. G.A. IAMSVELT (Netherlands): Mr. Chairman, I think
that M. Royer is quite right, that the insertion of the word
"applicability" has raised the doubt if which M. Royer speaks.
Therefore, I repeat that the Netherlands Delegation would prefer
to retain the text which has been drawn up by the Committee.
CHAIRMAN: The Delegate of Belgium.
Baron Pierre de GAIFFIER (Belgium) (nterpretation): Mr. Chairman,
this morning we acknowldged M. Royer's high qualities, and, there-
fore it may seem that this is the moment to bow before his
juridical capacity.
Mr. R.J. SHACKLE (United Kingdom) I feel myself, Mr.Chairman,
that there certainly is an element of doubt introduced in Mr.McCarthy's
proposed text with the introduction of these words "its applica-
bility to the "trade" because its applicability must include the
. P.i, . 28 EAPCP/TkC/leV/28
applicability of the Nullification and Imp airmentArticle which
ispart and parcel of it; whereas if we say that we ahave mre
no commitments that does not exclude the possibility of this
point::- whether or not it conflicts with this Agreement.
Therefore, on second thoughts, I think perhaps the original text
is better if we want to be sure thaNt the ullification clause
can be invoked.
Mr. E. McCARTHY (Australia): Mr. Chairman, my point is not
really to clarify the draft. It seems to me there is a difference
in substance between the two drafts. One, that is the draft
of the Committee, does seem to me to suggest that the contracting
parties have made no commitments in the GeAgneral reement on
Tariffs in respect of trade, which means that the areas under
military occupation might be considered to be exempt from the
provisions of this. You say the contracting parties have made
no commitments in the General Agreement on Tariffs pin resect of
these people, therefore it doespp not aly to them. l Wel, that
8 ot our intention. Our intention is to say that we have made
nocommitments one way or the other; we have not decided whether
it is applicable to them or not. I agree that the second
sentence does perhaps clear the point, but what we wish to say
is that we have not considered whether it applies to them or not;
not that we have not made any commitments in respect of .......
They are two different things.
I am quite prepared to consider alterations in drafting but
first I should like to know whether that distinction is recognised
, dsf it is recognidse , what then does the Committee desire?
We are clear what we want. I am quite prepared to take other
iews-on the meaning of the words, but that is what is really
nifluenicng our attitude.
_. _ E/PC/T/TAC/PV/28
Mr. J.W. EVANS (United States): Mr. Chairman, I have a
feeling that, wlhile Mr. McCarthy's point is a substantive one,
the substantive differences in our points of view are not as great
as he may feel. It is quite clearly our intention in our draft,
and I also think it was a proper interpretation of his draft,
that at the present time the revisions of the Agreement do not
in fact apply to the Occupied areas in the sense that an obligation
has been undertaken to apply them. I do not think that either
draft prejudes the question as to what decision may later be made
as to the application of the provisions, but it seems to me that
any draft which would be acceptable must necessarily imply that,
in fact, at the present time no commitment has been undertaken to
apply the provisions to the Occupied areas, though they might be
applied in future. There is no obligation at the present time.
Whether such obligation might be undertaken later on is, I think,
left wide open by the present draft.
Mr. E. McCARTHY (Australia): Mr. Chairman, on the point of
the application of the Nullification and Impairment clause, does
not the same objection as put forward in that respect apply to
the second sentence of this Final Note draft? The question of
the applicability of the Agreement to such areas is reserved. If
you are reserving the applicability of it, how can you apply a
particular clause of that Agreement to them?
Mr. R. J. SHACKLE (United Kingdom) : Mr. Chairman, in certain
earlier versions of this text we had the words "without prejudice
to the possible aplication of Article XXIII. I am wondering
whether it might not be good to re-introduce those words. They
might come at the beginning of the Note:
"without prejudice to the possible application of Article XXIII,
the contracting parties .......... ." and so on.
Would that not clear the point?
i .
29
P. P.
M. ROYER (France) (Interpretation) Mr. Chairman, this
phrase which has just been mentioned by Mr. Shackle was deleted,
or was not inserted, at my request, and the examination of this
question was taken up again by the Members of our sub-Committee,
and we came to the conclusion that it was better not to insert
such a phrase because one might infer from its insertion that in
the case of other Interpretative Notes these words should not
apply, the words "without prejudice to ...."etc.
Furthermore, the question was raised by certain Delegations
in regard to other Interpretative Notes also, and we were able to
convince those Delegations that this addition was not in such
cases necessary and might even be cangerous in certain cases.
Therefore it was better to drop all reference to the Provisions
of Article XXIII on Nullification and Impairment.
Nevertheless, we wonder if the second sentence should not be
modified slightly. I see quite well the objection which the
Australian Delegate has made to the second sentence, but it seems
to me that in the Australian proposal the draft spoke of "no
commitments" etc. in the first sentence and therefore the question
was not only reserved but it seemed settle , but in the second
sentence hero the question is just reserved and not settled.
CHAIRMAN: Could we now perhaps come to an agreement to keep
the first sentence of the Final note as it is in Document T/215,
and chance the second sentence to road:
" This question is res rved with a view to further study
at an early date".
Dr. G.A. LAMSVELT (Netherlands): Mr . Chairman, I could agree
to that.
4
HACIRAMN: A re there any objections?
f, Mr.. E. McCARTHY (Australia) Well, I am afraid, Mr. Chairman,
I have to rather press that point; that there is a difference
in saying that you made no commitments in respect of those areas.
I still think you can read that to mean that they are exempt;
that there is a decision that you are not applying the agreement
to them. Whereas what I am trying to get at is that no decision
has been made. I repeat it does seem to me that when you say
the contracting parties have made no commitment in respect of
the areas under military occupation, you can read that to mean
that that decision has been made that the Agreement shall not apply
to them. All I want to say is that no decision has been made,
and to say that as plainly as we can, so that it will then fit
in with the second sentence which says that the question of
applicability will be dealt with a: a future date.
You might run the two together in the way which has been
suggested by the Delegate of China: "The question of the appli-
cability of the Agreement to areas under military occupation is
reserved with a view to further study at a future date". That
just covers the whole thing.. We have not dealt with it: we have
reserved it.
Baron P. de GAFFIER (Belgium) (Interpretation): Mr. Chairman,
it seems that the latest proposal made by Mr. McCarthy is somewhat
similar to the point of view which was upheld by our Delegate,
M. Forthomme, and therfore we would be ready to agree to this
suggestion. If the Committee is rather 1ula "2.to refer to
Article XXIII, and if we want to avoid referring , to this Article,
I wonder if this difficulty could not be met by quoting a sentence
XXIII, which could be inserted as a last sentence to
the Final Note:
%
"hTe cntoractign party may, with a view to the satisfactory
ajdustment of the amtter, make written rporesentatonss or proposals
to the other contracting party orp arteis hwichit considesr to
be concerned".
>'~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~'
E/C1T/T1`1128
31 E/PC/T/TAC/PV/28
Mr. J.W. EVANS (United States) I sympathise with the
purpose of the suggestion of the Delegate of Belgium, but I have
an idea that that would be rather a difficult solution. I think
you would have to go further back in the Nullification and
Impairment Clause and pick up some earlier words, and we would
find that this Note consisted of Nullification and Impairment
Clause subject matter. I should have thought that the application
of the Nullification and Impairment Clause was taken care of in
other wordings which we adopted here.
In view of the question which Mr. Shackle has asked, and
the fact that no-one has raised any question of its applicability,
I think that this could be greatlmp:.:clified if it could simply
stand on the record in that respect, and that we should not attempt
to write this in such a way as to ensure that it covers the
Nullification anda Impirment Clause.
If that is not the position, heowevrt, I hink a better way
to accomplish pour urp ose,better, that is, than any direct or
indirect reference to the clau msge, iht be to say in the second
a line of the draft oin Dcument T/215: have made no commmitents
in the provisions of the General Agreement on Tariffs ..."...
and so forth.
In the croesese-rfrnce between that and the Nullification
and Impairment Clause you would find that the Nullification and
Impirment Clause refers to " hether or not it conflicts with the
provisions of thAis greement"d an I think that might meet the point.
Mr. R.JHA. SCKLE (UeniKtd ingdom): Mr . Chairman, I would
like to support Mr. Evan 's suggestion, and I would rather like to
suggest a slight amendment and say instead of "in the provisions of"
"nder the substantive provisions of". eThawhole ithIg would be:-
'
P. 33 E/PC/T/TAC/PV/28
"The contracting parties have made no commitments under the
substantive provisions of the General Agreement on Tariffs ..."
and so on. I think that would make the whole thing much clearer.
CHAIRMAN: Would that meet the point of the Australian
Delegation?
Mr. E. McCARTHY (Australia): Well, I am afraid I still
88 see the same objection. I was wendcgin- wheholr the word
"decisions" instead "cof ommitments"in this aFinl Note as it
stands here would be acceptable.
Mr. J.W.A EVNS (United States): Mr. Chairman, in tfhe irst
place I would like to comment, on Mr. Shae'ckls gsugestion, that
it does not seem to me tffero o a very satisfactory solution,
I think it simply means that some more questions would be raised
as to what are substantivpe rovinsios and whaaet r not.
I still feel stronglya tht there is no possibility of
einterprting eeithr of these proposed drafts, mine or Mr. McCar'thys,
as excluding.e th use of the Nullification and Impairment Cla.use
I am really prepared gto o back to the Final Note as suggested
by the Legal Drafgtin Committee or to accept MMr. rcCa'thys
original changes, but I do not think we could changee th actual
substance; I do not think we co uldaccept the last change which
Mrc. MCarthy has suggested - not becausee w disagree with his
purpose, but because there is an ambiguity th,ere too. The
squetion whether the decision has been taken could be read in two
ays. I think that no deciisZn has been taken by this Meeting
two heth erultimately, at somte ime ,in the. near futureor, at
tiit not yet dete-linedc_he substa..ive provisions of this
Agreement will be applied to the Occupied Areas: but a decision
has been taken that no commitment has been made at the present
time regarding them. If you say no decision has boon taken, that
leaves us the possible later question as to whether a commitment
_ P. 34 E/PC/T/TAC/PV/28
was undertaken here and that is what we want to make clear:-
that no commitment has been taken by the Occupying Countries
on behalf of those areas, or, for that matter, by any other
party to the Agreement in regard to the Occupied Areas. I think
it is very clear that that is a statement of fact - that no
commitment has been taken, and I think if we leave the original
wording we do make that clear.
EM. ROYR (France) (Interpretation): Mr. Chairman, I would
like to revert now to the definition of an Interpretative. Not,
An Interpretative Note is a Note which is attached to the Agreement
to avoid possible disputes on the interpretation oAf tche rtile.
If Mr. McCarthy's note were introduced here I think that it would
possibly give rise to forthcoming conflicts of interpretation.
The Note wounld mea that esome Dlegations think that there are
commitments and some Delegations take the opposite view - that
there are no commitments. Therefore, by inserting this Note
we would sanction a disagreement on an interpretation, which
would give rise to future conflict.
I think that Mr. Evans was quite right here, and that we
have decided that the Occupying Powers have taken no commitments
vis vis the territories which they occupy and that the other
contracting parties have made no commitments either with regard
to those territories. But if this is what we want to say, and
if it is clear from the juridical point of view, we must state
it in a very revise way. But to draft an InterpretatiNve ote
which would only be a source of forthcoming conflict is something
which we really cannot do, and, in fact, rather than to do that
it would be better not to inasert ny Note at all.
To itake nto account the observation made by Mr. Shackle
,
... P. 35 E~~~~~~~A/PC/T/T.-.C/PV/28
fI wonder ia solution would not be to iwnsertsp the cord "ecifi"
before the word. "commitment" :-t c"The cponrating arties have made
no spmecific comitmeents eien thA e m Gn......r,,,,"al g.
HMr. R.J. SACKLE (United KiMngdom): m r. Chairan, that
would meget our sugestion.
CHIRMAN: The Delegate of Chile.
MPA. Angel AIVOVICH (Chile) (Interpreta.tion): Mr Chairman,
I udid not intend tospeakc here, but, like some other Delegations,
I have been listening to this discussion as a spectator, and it
seems to me now that the principal actors cannot reach a decision
and, as this discussion has lasted now for almost an hour and a
half, and as we are all very tired with listening to this debate,
I think it woauld be good to dopt thep solution just roposed by
the French Delegate.
Propomasals have been de by the United States, the United
Kingdom, the gAustralian Deleation andg also by the Leal Drafting
ICoritee, and iee asae able nto scKohgdathe Ulled in,: and
a theg Unid St2.tgeDele.'ates, Ithou-ph they were n comyiletely
nsfied with the text which hwas proposedd y tneCom~mttee, were
9.' evertheless, to agre.e t this text. And. thn a new
statAement of the ustralian Delegation complicated the matter
further. Therefore, it seems to me that the solution is either
onacept the text proposed by the Committee, which does not give
complete satisfaction to some Delegations but nevertheless seems
to be acceptable to most of the Delegations: or, on the other
hand, fgor the Deleations concerned to meet again, let us say,
tomorrow morning , come to an agreement on a text which would be
accept le by the Committee, and then mat that tin we should be
rady to listen to 'heir new explanationsc wpeiteh a metagoodwill. 36 E/PC/T/TAC/P V/28
CHAIRMAN: I quite agree with the Delegate of Chile that
too much time has already been occupied by the discussion on this
question, but I fear it would not be practical to defer this
matter until tomorrow, because some of the principal actors to
whom he has referred wish to leave Geneva, and therefore, it is
desirable, if it is at all possible, to reach agreement tonight.
I believe we are approaching agreement. The Delegate of France
has made a very constructive suggestion, in suggesting the
addition of the word "specific" before "commitments". I would
like to ask the Delegate of Australia briefly to inform us if that
would be acceptable to him and if he could then accept the text as
given in Document P/215.
The Delegate of Australia.
Mr. E. McCARTHY (Australia): Mr. Chairman, before answering
that, if I could just contribute one more turn to the performance,
I would like to say that I do suggest that the main point that I
made has not been answered, and I would put it thiis way:-
This Agreement which we have before us commits us to do
certain things to our trade. it requires that we undertake
various obligations in regard to the trade between our various
countries. Then we wind up by saying: "The contracting parties
have mad no commitments ... " (we have made all sorts of commit-
ments amongst ourselves, but we have made no commitments..)
"......in respect of trade of and with the areas under military
Occupation". Now I say that is not the meaning that. is intended,
but that is the meaning that can be read into it. Now, am I
right or wrong on that point?
CHAIRMAN: Before asking the other side of the House to
reply to the question just asked by Mr. McCarthy, I would ask them
36 P. 37 ~~P~~~~~AE/-C/T/T..^C /PV/28
at the same time to reply to a question which I wish to put to
thm. 1old gthey be aLteable, n.ow that M, oyer hads proposeW
the addition of tphe wc"ord "secif before thome word "'cmitments"
to accept theugg swording seted bya thef ADelegte o ustralia:
that is "ion respaect cf its ppliability to trade between the
territories of the g pacontraactinrties nd the areas under military
occupation."
HAMr. R.J. SCKLE (gdUnited Kinom) Mr. Chairman, it seems
':~ohat vwemugst recom, nee a inaar f fact which there is no
cttingf amway io.- that ounsome ctriees conc ned inma this bter
e nepaot praed at sthis oage teo ent; ipnto secific commitments,
and have , in fact, noet don so. Therfore, it would be a simple
setatemnt of fact if we made the first sentencae; red,. as M Royer
haps roised, "The.contragctinEparties have made no specific
commitments". It i s no use tgryin to find am for of words
which evades that issue.e Thse countries are notp prdeare to make
Commitments and we had erbett, therefore, keep that sentensce a
it standsf. I we were to introduce "specific" into thee othr
version, so that it would read "The contracting parties haave mde
o'specific commit ents in the eGen a Agl -,eement on Tariffs in
respect of its apcpliiablity ...."... thatm si/lplyeaves a sort
of ambiguous statement. It leaves it unclear whethpert ariacuIr
countries have or have not committed themselves asg reards the
generalpl alicability ofe Ath greementnd i, at seems to me that
thiat st, aay rate , an nbseuuitriry. the first sentence
of thex tet in Document2 T/15, with the addition of the word
~crCfc"' wll at once mn±a a clear statpee-n of incevtapbl fact
at the same time, will not prejudge the position as regards
the applicability of the Nullification and Impairment Clause.
So I would suggest very strongly that we adopt the first sentence
with the addition of the word "specific". CHAIRMAN: The Delegate of Australia.
Mr. McCARTHY (Australia): I would like an answer to my question,
Mr. Chairman, whether this means that the trade with the occupied
areas is free. If so, is that the intention?
Mr. EVANS (United States): Mr. Chairman, I should have thought
it is very clearly our intention, so far as the United States
Delegation' s proposal is concerned. We have not undertaken any
commitments; nothing in the document commits the Occupying Authorities
with respect to their trade with the occupied areas, nor does it
commit any other signatory with regard to its trade with those areas.
I think it is equally true that we have undertaken no such
commitment : neither has Australia or any other country undertaken
a commitment here to extend Most-Favoured-Nation treatment to the
Occupied Areas. In other words, the answer to Mr. McCarthy's
question so far as we are concerned, is "Yes".
I think, however I should qualify that by saying it does not
mean we have decided here at Geneva that we will not, in fact, in
the future apply these provisions to those areas . It is not an
attempt to prejudge whatever decision may be taken at Havana with
regard to the applicability of the provisions of the Charter to
those areas. What it means is that, so far as this Agreement is
Concerned, there is no commitment.
Mr. McCARTHY (Australia): Mr. Chairman, if it is the view
of theCommittee - and I judge this from the statement which Mr.
Evans has just made - that pending consideration of the applicability,
the trade between these areas is quite free of any retriction of
any sort, I think we would just have to report to our Government.
That is all we could do, because their view is that no decision should
~ ~ ~ ~ ~ ~ ~ ~ ~ t
be taen one way or the othe-, tot the present position is hat the
fakct that no decision has been taen to apply it means that it does
not apply.
E/C/T .L TV/ 2 8
S 39
S
My understanding, when I attended the meeting the sub-
committee yesterday morning , and during. the discussion this
afternoon, was that the intention of the Committee was to decide
that it would not deal with it. When I say it has dealt with it,
in effect, by saying that it will n t apply, it has not decided
that it does apply. Therefore, in effect, it does not apply.
CHAIRMAN: May we then accept provisionally the text as given
in Document T/215, with the addition of the word "specific" before
"commitments", as proposed by M. Royer? Perhaps the Delegations
which are concerned in this matter would then ondeavour to obtain
the concurrence of their Governments to this clause and, if they
do so, inform the Secretariat.
If their Governments Cannot agree, I suggest there should be
another informal discussion between the Delegations concerned,
after which we could hold a meeting of this Committee to consider
the matter. It would be understood, of course, that, any such
meeting would have to without the of Verbatim Reportersi r. z-
it
ht
-svz u vuUd,.vrLm JW
or Interpretrs.
-. E\JUr)itLa t:tCs MeChafhi mightrmen, I oncd.r it'
ust, whilingt accept ,C t deceiDsligaon, swhen thu deoX ido
report thisnm nts,to their ofGnts, in case anyght doubt they mi
bara eien mind a stpmnt which I nbelieve tht Urted States
D maele2tnnh-e s deandbre bofor :s]ch I shall bea; very glud t
repeat: thate it is toh ifntentinn o tlhea Uisted sSudtte tro ty
the matter and, at ethe osearleist psieble dateo, ntr int an
.~~~~~~~~~~~~~~~~~~~~~~~~~.
eagrtoeement with otohr Mcbers with ras ) t applic5ati:)n
all or a much ) thtieneAgreemanl a t)retss possible to the
Oupii Ar s.a t is possi~lc ta:thatmicy maka decision f'or
the acceptanc ea DIiios Nooamtofe a little 0:.xr ?fs tie other
c ntries invlvcd
-. '; '
E/C /T/TI./'./8 S E/PC/T/TAC/PV/28 VI rD0
CHIL.N: that aregrecd?
M' JOHNJEN (New ZendalaMr: ;. Chairman, there is just one
small amendment needeod te th text. I thinke th title of the
eAm<ncnt is e"Goaerog eA.ecmct on Tarfif' and Trade."T
CHIANRD2 Ye., ethEwords Tand Trade" should be added after
ariffs.*
On Pgae30 of Docuemnt T/215 you will find, under "Scheduels"
note to the effect that the Schedules oD Tariff Rates would
follow at this point. Are there any comments on this note?
(Agreed) .
There is one more point which we have to clear up; that
pertains to the decision to include Article I in Paragraph 2(.a)
of Article XXIX, which ha.s the effect that Article I of the
Agreement shall also be suspended and superseded by the corresponding
provision ef tho Charter. ohe CDmmitte, willlleca11 that we only
a6eod a tis provisionally at eon of oure mEegtnas aswt vee and
t sintwa nece~asry ot)confirm this definitively.
the time, the Delegat- of Australia said some Deleg0tions
would have to have time to consult with their Governments. I will
now ask the Delegate of Australia, or any other Delegates, whether
they are now in a position to give an answer regarding the decision
whether or not to include this paragraph of Article I in Article
(To the Delegate of Australia): I take it you are now in a
. -position to give a definitive decision.
Mr. McCARTHY (Australia.): Our position is that we advised
Australia about the change in paragraph 2 and I think we are in a
position to agree, but we would just like to get it confirmed,
because it means we have now to tell them about the change in the
proposal. I think we could agree subject to confirmation.
/- ar / p S 41 E/PC/T/TAC/PV/28
CHAIRMAN: Are, there any other comments?
I therefore, take it the Committee is in accord with this
decision which we made provisionally last week and, subject to
confirmation by the Australian Delegate, we can confirm that
decision.
We have come to the end of our work for the time being.
The Committe, however, is not to be dissolved; it will be kept in
being subject to the call of the Chair. The reason for this is
that there may be matters arising which may require a decision of
the Committee; therefore it is just as well it should be kept, in
suspense.
The only matters which are likely to arise would be, perhaps,
confirmation of this Final Note regarding Germany, Japan and Korea,
or matters pertaining to the procedure for giving ,effect to the
signature of the Final Act.
The Tariff Negotiations Working Party will be meeting from
time to time in connection with their responsibility for having
a general review of the tariff negotiations, and there may be
certain recommendations of the Tariff Negotiations Working Party
which will require confirmation by this wider body. This will
not, however, necessitate Delegations keeping top-level represent-
atives here for that purpose, because I do not think many
questions of importance are likely to arise in that connection or
matters which could not be referred home, for decision and
confirmation by the Committee afterwards.
I wish also to add that the Secretariat will prepare the
clean texts of the General Agreement, together with the Annexes,
both in English and in French, and also the clean texts of the
Final Act and the Protocol of Provisional Application in bilingual
form . It is hoped to have these available by Friday morning next
7 S 4 2 E/PC/T/TAC/PV/28
and Delegations will be asked to submit any comments which they
may have regarding the text to the Secretariat before Monday
morning, because the Legal Drafting Committee is meeting again
on Monday t have a final review of the texts and. clean up any
inaccuracies which may have escaped our notice, so that we may
have a complete text some time. next week.
I should also like to mention that it is not possible for us
to keep any longer in Geneva our very efficient and hard-working
Verbatim Reporters and Interpreters, who have served us so well
up to now; their services are badly needed elsewhere and they
will be departing for New York tomorrow. Therefore., if any
further meetings of this Committee are held, we shall have to
improvise some arrangements for transacting our business in the
two working languages. ,
Dclo-e f ute.r
Mrman.a d SEollowRGIO I. CL .;b. ): r. Ce irin n-lW
dDloeETt, I wisho t2D -y maafLow r:1s Jthnks to Mur Cair,,sn,
ff Mre WZand .m1ess, for the c:.. n 2s prtiain
wdhich d he hs oc ion:u-e. t. -dissi .nsiv vey ".ifcult
mateters th w*havc ealt awith Agieemn ethis Te.fef _r; Committec.
Thsrouns)t the SeGso). of ee Mthiis gCorsmittoc Wilcrs has
dennstrceer once morc is qualaditiesp of' es-shei4 hich havo
aelrdeeaeddy ben .vainoucoby ehis oieUe oetha- iconfeECcC .tcitit.
am sure W; lpprel ofe us aecatc.is spairiet ofnd fALnscs r,
juesogtice an ri)eize thaget h1eipos lbaer foy rs.si: £ the success
ofss oonsur*e;ecu hcr.
Wlweeenhop haveeged o_wow Pivilc tD vwo rk with him will always
orembc ' ole Mhe Wiig esLItantp :ledi.orilshs olay. swel to
sbrinn:our SG porsto conal shan.-p Loud 'u! ( e . aU:5 usL)
', S 43 E/PC/T/TAC/PV/28
CHAIRMAN: I wish to thank the Members of the Committee,
and in particular Mr. Clark for his very kind words. If there
has been any success attained by this Committee it is, in my
view, entirely due to the Members of the Committee, and I think
we can all congratulate ourselves on the work we have
accomplished.
There to There is one particular banchof the; Org'anization, however,
to whom I think a specialg measure of ratitude is due. I wish
to refer to ouwr very haerd-orking. Scoretemaries. N Mber of the
Committee, awaI thaink. is re, s I am awaare; of the hrd work
they have put in. They have worked at nightsa and on Sundys
and have aalways been ble to present us with documents in time,
d, in othaeer words, h Gcarried out the work connected with the
Conference in ana efaficiaenet nd dmirbl manner.
I etahinek we ow o ggrat debt f ratitude to Mr. Lacarte and
Mr. Ritchie for the herd work they have put in on our behalf.
(Arplause).
T; eeteinag of Negths rff &Wcikatgions V:'inParty will
etake lacFnow in Room 218.
The Meting is adjourned.
(T Meeting rose at a.m5.30 ;;.
-; ' :'
'
. - .;\ |
GATT Library | rg924bb2347 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty-Fifth Meeting of Commission A held on Thursday, 3 July 1947 at 2.30 p.m. in the Palais Des Nations, Geneva | United Nations Economic and Social Council, July 3, 1947 | United Nations. Economic and Social Council | 03/07/1947 | official documents | E/PC/T/A/PV/25 and E/PC/T/A/PV.22-25 | https://exhibits.stanford.edu/gatt/catalog/rg924bb2347 | rg924bb2347_90240145.xml | GATT_155 | 10,627 | 63,607 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQU E
ET SOCIAL
RESTRICTED
E/PC/T/L/PV/25
3rd July 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
-UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERBATIM REPORT
TWENTY-FIFTH MEETING OF COMMISSION A
HELD ON THURSDAY, 3 JULY 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 UNlES
q I -f K 2 E/PC/T/A/IPV/25
CHAIRMAN: The meeting is called to order.
We terminated our meeting yesterday by a statement by the
New Zealand. Delegate concerning paragraph 3 of Article 21. The
New Zealand delegate suggested. an addition to that paragraph
in the following terms
"Nothing in this paragraph shall require the elimi-
nation or substitution of existing procedures which
conform fully to the principles of this paragraph."
That question is now under discussion. I hope the delegates
have had. time to consider this question and I would like to oall
for comments .
MR. OSCAR RYDER (U. S. A): Mr. Chairman, in the time
available it has not been possible to go into this to the extent
I should like to. The amendment as suggested by the delegate
from New Zealand I think would be unacceptable. In fact it
nullifies most of the paragraph as it exists. It might be t hat
something could be worked out that would take care of the situa-
tion that the Delegate for Australia suggests. I am not
certain of that.
I would. suggest that we might defer this until we have the
mooting on the Valuation Section and. meantime see if we cannot
get together, some of us, with the New Zealand Delegate and see
if something can be worked out. CHAIRMAN: The Pelegate of Australia.
Mr. MORTON (Australia): I have been listening to the
lengthy dissertation of the Delegate of New Zealand. on the type
of procedure whichhis country possesses, and, having been
assured that it has stood the test of time (and amongst other
things has received. the blessing of a Royal Commission) I am
sure we all feel certain something should be done which would
enablec us to proceed.
However, I am far from hopeful that this would be
accomplished by the inclusion of a note in the terms that the
New Zealand Delegate has himself suggested., when he says that
nothing in this paragraph shell require the elimination or
substitution of existing procedures which conform fully to this
paragraph.
The procedure does not conform fully, in so far as it is
admittedly not an entirely independent tribunal. Now I think if
the suggestion of the United. States Delegate was adopted,in the
might
meantime we/arrive at some formula which might cover the New
Zealand. proposal. It might be time saving and desirable.
CHAIRMAN: The Delegate of the United. Kingdom.
Mr RHYDDERCH (United. Kingdom): I have every sympathy with
the Delegate for New Zealand. in trying to maintain a system which
has worked satisfactorily for a long time, and. I think the
suggestion of the United. States is a good one, We should, try to
reach some compromise which would meet him.
I can quite understand his difficulties, but at the same time
we do not want to fall into the danger of allowing any country
to use its powers arbitrarily. in any way. E/P C/T/4/P V/2 5
CHAIRMA.N: The Delegate of Canada.
Mr. URQUHART (Canada): Mr. Chairman, Canada is prepared.
to accept an Amendment along the lines proposed by the Delegate
for New Zealand., but we feel the same as the Delegate of the
United. Kingdom - it might leave the door too wide open, and we
think perhaps in the meantime some agreement can be reached on
the wording which would meet the situation
CHAIRMAN: The Delegate of New Zeal and.
Mr. JOHNSEN (New Zealand): Mr. Chairman, I appreciate
very much the sympathy expressed. by several Delegates for the
case put forward. on the part of New Zealand. 'We will be only too
happy to try and. work out some solution which would be accept able
to everybody.
With regard to the statement male by my colleague from
Australia, I think he made a slight omission there. The proposal
which we put up Was that the procedures would conform fully to
the principles of this paragraph, not to the paragraph. It is
``the principles" that is the determining factor.
CHAIRMAN: The Delegate of Australia.
Mr. MORTON (Australia): Oh, quite, I am fully in
support... (Laughter).
CHAIRMAN: The Delegate for India.
Mr. RANGANATHAN (India): Mr. Chairman, I just wish to say
that we have a problem almost similar to that of New Zealand. in
India. and we also welcome this promise of a fresh effort to find.
something to fit our conditions.
- 4 -
G CHAIRMAN: I think we all are in agreement with the
suggestion of the United States Delegate that we should take this
question further when we have finished with the rest, in the
hope that at that time we shall be in possession of a text
acceptable to everybody, and. because of certain expressions used
by one or two Delegates I would underline that what the New
Zealand Delegation proposes is not to Keep the door open for
anything but already existing procedures . That limits very
considerably the scope of the proposal
I take it that this proposal is accepted, an, that we al1
now adopt paragraph 3 in the text of sub -Committee, leaving
it open for further discussion and d ecision whether we should add:
anything to it.
E/PC/T/A/PV/25 - 6-
CHAIRMAN: Is that agreed? (Agreed)
We pass on to Article 22, on pages 36 and 37 of Document
T/103, "Information, Statistios end Trade Terminology". On
paragraph I you have the comment: "The Delegate of France drew
"attention to the prectical difficulties of many States in
supplying the information relative to subsidy payments and
quantitative restrictions''.
(Interpretation) I shall ask. the Delegate of Franee whether
he will consent to the omission of his comment from the text
which will be sent to the Preparatory Committee, in the light of
the :fact that paragraph 1 of the draft already speaks of supplying
"as much detail as is reasonably practicable".
11. ROUX (France) (Interpretation) Mr. Chairman, I do not
attaeh undue importance to the insertion of this commentary,
particularly as you justly said yourself that the paragraph itself
says "as promptly and in as much detail as is reasonably practicable".
Therefore, I think it is pointless to maintain this commentary.
I simply wanted, in the course of the discussion, to draw the
attention of the Commission to the fact that one should not have
too many delusions about the accuracy of the information supplies
owing to the technical.. difficulties which the Administration
will have in governing the information.
CHAIRMAN: May I take it that the Commission agrees to
the text of paragraph I submitted by the subcommittee with
the omission of the comment? (Agreed).
I would like to mention that in paragraph 1 we have
letters (a) and (b) and the third paragraph should be marked
letter (c).
V V.
- 7 - E/PC/T/A/PV/25
Mr. C.E. MORTON (Astralia): Mr. Chairman, I wonder if
that provision is correct? Paragraph 1 says "the Members shall
comrnunicate to the Organization certain statistics, that is,
those mentioned under (a) and (b). Actually, the next paragraph
could be paragraph 2.
CHAIRMAN: It seems to me that that is correct, and that
the right thing would be to put (2) at the head of this para-
graph beginning "So far as possible", and then to say "So far
as possible, the statistics referred. to in (a) and (b) of para-
graph 1 shall be related to", and to re-number the following
paragraphs in consequence of tnat.
Mr. J.P.D. JOHNSEN (New Zealand): Mr. Chairman, would it
not be sufficient merely to refer to the statistics in paragraph 1:
need it be mentioned as (a) and (b)?
CHAIRMAN: That is a possibility, but I do not know whether
it is worth our while to go into it any further. We have a
Legal Drafting Commiittee and they will see to it that everything
is put into final shape.
I think that, as far as we are concerned, we could abide by
the solution to put (2) at the head of the paragraph beginning
"So far as possible"', and alter the following paragraphs. What
is of importance, of course, is that we all agree to the text,
and I would now ask whether there is any comment on these para-
graphs, and whether we are all in agreement with paragraphs 2, 3,
4 and 5. May I take it that we all agree to this text?
(Agreed.).
We pasa on to the next page of Document E/PC/T/103. Here
we have the old paragraph 5, which now becomes paragraph 6. I do
not think there is anything for me to say about the drafting, with
the one exceptions that the Delegate of the United Kingdom would
prefer the wor "may" instead o" ,shall" in the first line. wo5ould
leik tasoak the legateDa othe f Unid kitgddmio whether , in the same
spiriat s shnow stardaydy by eth Delaeegt of the United States, he
can abide by the et:at s adopted by the sub-Comtmitee. - 8 - E/PC/T /A/ PV/25
Mr. S.L.. HOLMES (United Kingdom): Mr. Chairman, I would not
regard this point as one of vital importance which is going to make
or mar the future of the world, but we have thought that there is
sentence of the first
something to be said for bringing the first/paragraph into line with
the second. You will see that, in the first sentence, it says that
the Organization may study this question, and we do not see why
it is necessary to use a different word in the first sentence.
CHAIRMAN: My own meaning of these two paragraphs has been
that the first sentence is a general instruction to the Organization
to make it one of its tasks to see to it that the statistical
information is collected and published, and it seems to me that the
rest are not definite instructions but indications of in what way
the Charter feels that the Organization may work. I do not know
whether that is acceptable to the delegate of the United Kingdom.
Mr. S.L. HOLMES (United Kingdom): Mr. Chairman, we should
feel that a mandatory obligation in the first sentence is not
really necessary. I think that a genuine preoccupation on the
part of us all is that there should be no overlapping. The re
should be economy and there might be, in this case, someone else
doing the same thing.
Mr. OSCAR RYDER (unit 1 States): Mr. Chairman, I would like
to call attention to the fact that the first sentence relates back
to the first paragraph of this Article, and what the statistics
required to be furnished by Members in that paragraph shall be; then
it provides that the Organization shall act as a centre for the
collection of these statistics. There may be a dispute on that
subject. The second sentence provides that "The Organization may,
in collaboration with the Economic and Social Council ......" I ER
-9- E/PC/T/A/PV/25
have no strong views one way or the other. I think, in general,
it is better to leave things of that sort to the discretion of the
Organization, and therefore I would recommend the word "may".
Mr. J.P.D. JOHNSEN (New Zealand): Mr. Chairnan, I think this
particular Article must be taken in injunction with Article 61.
It says there "In addition to the functions provided for elsewhere
in this Charter, the Organization shall have the following functions".
One of those functions is "to collect, analyse and publish
information relating to international trade....." That is why
there is an obligation here, and the word "shall", in our opinion,
is preferable.
Mr. S.L. HOLMES (United Kingdom): Mr. Chairman, I feel quite
overwhelmed by the arguments against my modest suggestion. I think
that we should be happy to withdraw our objections for the general
good.
CHAIRMAN: We have next, comment (b) "The delegate of France
wished the record to suggest that the Organization should resume as
soon as possible the work begun by the League of Nations on the
preparation of a standard customs nomenclature. The Delegate of
the Union of South Africa dissented".
May I ask the Delegate of France whether he wants to maintain
this comment? Personally, I feel that this point might be raised
at the moment when the ITO is created, and I do not think that it
is of any use to raise it now. -10- E/PC/T/A/PV/25
M. ROUX (France) (Interpretation): The only purpose of this
remark was to show that when the question of statistics was raised
in the Charter the nomenclature was in conformity with that
of the standard customs nomenclature. In Article 22 much stress
is laid on the necessity of having comparable customs statistics;
it would be absolutely useless to try to achieve this if the
present nomenclature is not unified, because in all countries
customs statistics are established from statements sent in by
countries, and these statements have to be made in conformity
with customs terminology, We have rather a tendency here to
put the cart before the horse. If there is any lack in the
Charter in this respect, and if the work which should be done
is not done, this would sooner or later be clear, Therefore,
I am willing to withdraw my remark.
CHAIRMAN: The Delegate of Belgium.
M. de SMEDT (Belgium) (Interpretation): I simply wanted to
remark that the new customs nomenclature in use in the customs
union between Belgium and Luxembourg is copied from the terminology
established here in 1937. We think this nomenclature is almost
perfect except in some small points. Therefore, the Belgian
Government hopes that countries will be able to adopt it also.
CHAIRMAN: If there are no further remarks, I take it that
we adopt Paragraphs 6 and 7, leaving out the comments (a) and (b).
The Meeting agreed,.
Mr. S. RANGANATHAN (India): There is one minor amendment in
Paragraph 7, Line 2, where the reference should be to Paragraph 6
and not 5.
CHAIRMAN: Thank you.
Im I I Isr t__
L L -11- E/PC/T/A/PV/25
Then we have Comment (c) on Page 39:-
"The Delegate of the United States expressed the wish that
Chapter VIII on Organization should be framed so as to leave the
Organization sufficient latitude to call into consultation the
experts of various governments when investigating technical
problems such as standard classifications."
May I ask the Delegate of the United States whether his
Delegation is a Member of the Committee dealing with Chapter VIII,
and does he consider this is important?
I might perhaps add the practice adopted by the Committee
so far has been to call on Members of the Commission who are
highly qualified experts in a personal capacity and not as experts
of their governments. We must not forget that on the Executive
Council there will be representatives of a considerable number of
governments, surrounded, I take it, by technical advisors, This
combined practice should give full satisfaction to the United
States Delegation and fulfil the purpose it has in mind.
Mr. Oscar RYDER (United States): I do not think the
American Delegation expected this statement to be placed here.
I cannot see that any useful purpose would be served by retaining
it.
CHAIRMAN (Interpretation): We have then finished with
Article 22;. and it should be noted the Article is adopted
unanimously without any commentary.
We pass now to Article 23 - Boycotts, Here we have a text
which has not been altered by the Committee and which was unani-
mously agreed to by the Working Party. There was some discussion
on a query put in by the Delegate of Lebanon and Syria and you
will see in the comment on Page 41 it is stated that these
Delegates reservedtheir decision.
I should like to ask whether one of these Delegates would
like to speak on this matter. J . - 12- E/PC/T/A/PV/25
CHAIRMAN: The DeIegate of the Lebanon.
MR. J. MIKAOUI (Lebanon) (Interpretation): Mr. Chairman, the
amendment we have presenteu in relation to Article 23 has a point
of importance for us, both from the economic and from the political
angle.
We are tied by the decision of the Arab League to boycott
Zionist goods, and when we proposed our amendment we explained the
motive which brought the Arab League to this decision, and therefore
I do not think that it is necessary to repeat myself.
However, I must call the attention of this meeting to the
following: Durine the course of the first discussion on our
amendment, two Delegates took the floor. I believe that these
were the Delegate for the Netherlands and the Delegate for
Dzechoslovakia. The first speaker observed that this Article did
not imply the boycott or Zionist ods since this Article
did not imply a boycott of goods on account of their origin. The second
speaker declared that this Article could not apply to our case
since Palestine was not a Member of the United Nations. If this
Article really cannot apply to our case, We are ready to accept it
in its present form, provide we receive a formal confirmation
that this Article and its conditions cannot apply to our case.
We have no intention whatsoever of boycotting a Member State.
At one of the Past meetings of the Heads of Delegations, it
was decided to invite two more States which are Members of the Arab
League, that is, Transjordania and Yeman. This brings the total
fingbre of Members of the Arab League who have been invited to
seven, and I am confident, Mr. Chairman, that none of them is in
a position to accept Article 25 under its present form. Therefore,
we would like to. reseve our position in relation to this Article. J.
- 13 -
CHAIRMAN: I would like to say at once that I do not think
that this Commission or the Preparatory Committee, as such, is in
a position to give any authentice interpretation that would entirely
satisfy the Delegate from Lebanon. So, unless he can accept the
text as it stands, I do not see any other case than to note that
they reserve their position in regard to this Article.
My own view would be, as I explained when we discussed it on
an earlier occasion, that when this Charter is a living reality I
firmly hope that the political difficulties to which the Delegate
of the Lebanon has just referred will have been solved and that it
will be easy f or them to drop their reservation. Of course, I
have only spoken in my personal capacity, and I would like to hear
whether any delegates would like to comment on the statement of the
Lebanese Delegate.
If no delegate wishes to speak, I then propose that we adopt
Article 25 as it stands, with the following comment: The Delegates
of Lebanon and Syria reserve their position in regard to this
Article.
E/PC/T/A/PV/25 - 14 -
Mr. MIKAOUI (Lebanon) (Interpretation): Mr. Chairman, allow
me to thank you for your wishes and to express the hope on my
own behalf that there soon will be found a fair solution to this
problem which gives rise to our reservation.
I would furthermore like to ask you,. Mr. Chairman, to have
our reservation put on record.
CHAIRMAN: Any remarks?
Agreed.
We pass on to article 37.
There you have on page 43 a number of general comments, but
I shall take them as we arrive at the points of the Article to
which they apply. The first applies to the Introduction of the
Article. It is a suggestion by the Delegations of Belgium,
France, Netherlands and Luxemburg to substitute the words,
"Members shall be entitled to take measures" for the clause
beginning "nothing in Chapter V shall be construed", and so
forth. This change was dependent upon a re-arrangement of the
order of the Sections in the latter part of Chapter V, and in the
Working Party we did not consider ourselves to be within our
terms of reference with regard to a re-arrangement of the whole
Chapter; but I take it that Commission B may quite well take
it upon itself to consider also that aspect of the question.
Speaking for myself, subject to correction, I would say that
whether you maintain the words "subject to the requirement" etc.,
or you say, as suggested by these Delegations, "Members shall be
entitled to take measures" etc. - whether you use the one or the
other wording, it seems to me it does not prejudice at all the
re-arrangement of the :articles of the Charter; so I take it we
should simply decide whether we like the one or the other wording
the better.
G. G - 15 - E/PC/T/A/PV/25
CHAIRMAN: The Delegate of France.
Mr. ROUX (France) (Interpretation): Mr. Chairman, it is not
the question of what form we finally adopt for this Article, or
what number it will take in the Charter. It is far more a
question of substance.
In our opinion, which is shared by other Delegations, the
provisions of Chapter V, such as they are expressed in
Articles 34, 35 and 36, more particularly the questions of appeal,
equally apply to this part of the Charter, since it was decided to
put all exceptions to Chapter V within the framework of Article 37.
The impression might easily be created that appeals are no longer
valid for cases which are dealt with in Articles 38, 39 and so
forth, therefore our proposal was to re-arrange Chapter V in such
a way that it would. clearly show that appeals are possible even
when a country makes use of exceptions provided for in Article 37,
provided they make use of their possibilities to avail themselves
of the exceptions which are mentioned in Article 37.
CHAIRMAN (Interpretation): Your intention is therefore to
place Article 37 before Articles 34 and 35.
Mr. ROUX (France) (Interpretation): Yes, exactly.
CHAIRMAN: The Delegate of the United States.
Mr. OSCAR RYDER (United States): I wanted just to say that
this question of arrangement will have to be taken up later.
As I understand it other Delegations are proposing various re-
arrangements of the Charter, and there will have to be a
Committee on the proposals sooner or later, or may be the Drafting
Committee, to decide on the proper order. - 16 -
E/PC/T/A/PV/25
I do not think a large Commissionof this sort gets very
far in drafting, and whether the language suggested by the
French Delegate or the language at present in Article 37 should
be used, I think might well be referred to a Legal Drafting
Committee for opinion and solution.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. RHYDDERCH (United Kingdom): I agree, Mr. Chairman, I
think it is placing quite an impossible task on this Commission
to decide the re-arrangement of paragraphs such as this,
because, as we all know, re-arrangements may have different effects
at different times, and I would agree with the Delegate of the
United States that it should be left to people e more competent to
deal with. V - 17 - E/PC/T/A/PV/25
CHAIRMAN (Interpretation): Has the French Delegate any
objections whatsoever to the re-arrangement of Chapter V being
left to a sub-Committee, which will certainly be constituted at
an opportune moment?
M. ROUX (France) (Interpretation): Mr. Chairman, this
Committee is, in fact, in existence: it is. the Legal Drafting
Committee. Therefore, I think we should refer the question to
that Committee but give it an indication of what we want, and I
think we are all agreed on the provisions of the Charter to apply
to Article 37 as wall as to the other parts of Chapter V.
CHAIRMEN: - That is really a question tiat is strictly within
the competence of our Commission to decide,-whether we want the
clauses of Article 37 to be amongst those clauses to which the
provisions of Articles 34 and 35 can apply. That is what the
French Delegate wants, and I think we must try to define our
attitude to that question. That is not a matter for the Legal
Drafting Committee.
Does any Delegate wish to express an opinion on the proposal
of the French Delegation, namely, that in the establishment of
the text of Article 37 we shall have in mind that any complaint
brought against a Member for having abused the liberties given
under Article 37 may be subject to the redresses contained in
Articles 34 and 35.
I would add that it may be difficult, on the spur of the
moment, to have a definite opinion on this matter; and I would
consider it quite reasonable that that question could be put to
some other organ of our Conference - for instance, the sub-Committee
dealing with Articles 34 and 35.
(Interpretation) Will this be agreeable to the Delegate of
France? E/PC/T/A/PV/25
M. ROU (France) (Interpretation): Yes, Mr. Chairman, this
is quite agreeable to me However, would it be possible, when we
refer the question to the Committee, to draw their attention to the
nature of the question which is put before them? Incidentally,
this same question arises again in Article 38, which we do not
have to consider within our terms of reference here, and I think
Articles 37 and 38 are both subject to the course mentioned .
Therefore, the question has a rather more general aspect.
CHAIRMAN: As we all agree that the main question brought up
by the Delegate of France is a question of the extent to which
the clauses of Articles 34 and 35 are applicable to Articles 37 and
38, it is reasonable to refer that question to the sub-Committee
dealing with Articles 34 and 35. Is that agreed?
(Agreed)
We now pass on in our discussion of the text of Article 37.
The introduction will, then, remain as in the text on Page 44
of Document T/103, and now we come to the different sub-headings.
(a) "Necessary to protect public morals". There we have a
specific comment: "The Delegate for Norway referred to his
country's restriction on importation, production and sale of
alcohelic beverages that had as its chief object the promotion of
temperance. He re-statted the view put forward by the Delegation
of his country to the Drafting Committee that the taxation and the
price policy of its State liquer and wine monopoly was covered
by sub-paragraphs (a) and (b) .
Does the Delegate of Norway want to maintain that
reservation?
Mr. MALTERUD (Norway): Mr. Chairman, I only wish to remind.
- 18 -
V V - 19 - E/PC/T/A/PV/25
the Commission of the point made by the Norwegian Delegate to the
Drafting Committee in New York. The comment was repeated here in
Geneva in the Working Party. As far as we now can see, our
restrictions on importation, production and sale of alcoholic
liquors are covered by sub-paragraphs (a) and (b), especially seen
in connection with paragraph 4, Article 32, and we suggested the
addition of the word "social" to that paragraph. ER
- 20 - E/PC/T/A/PV/25
Mr. MALTERUD (Norway): Mr. Chairman, I think it is sufficient
to mention that we have made the proposal here to paragraph 4 of
Article 32.
CHAIRMAN: Does this mean that you will withdraw your
reservation under reference to the Norwegian amendment to Article 32,
paragraph 4?
Mr. OSCAR RYDER (United States): Mr. Chairman, I do not
understand what was exactly meant there.
CHAIRMAN: Will the Norwegian Delegate tell us what is the
content of the amendment to paragraph 4 of Article 32?
Mr. MALTERUD (Norway): Mr. Chairman, it is the addition to
the last sentence of "... and operated mainly for cultural and
social and for revenue purposes."
Mr. OSCAR RYDER (United States): As there has been no
discussion on that amendment in the Commission, and the Sub-Committee
has not considered this Article either, I do not know yet what
has been accepted and what was rejected.
CHAIRMAN: In this condition, perhaps it would be desirable
provisionally to say that the Delegate of Norway .... well, it is
not for me to formulate that.
Mr. W.E.H. RHYDDERCH (United Kingdom): I think that everybody
here would agree with the delegate of Norway if he wishes to take
such an extreme view on morality as he has taken. I should suggest
there is no real point in putting it in at all. It ought to be
withdraw. I do not think anybody would quarrel with the Delegate
of Norway, although it might have a different effect in other
countries. ER
- 21 - E/PC/T/A/PV/25
Mr. C.E. MORTON (Australia): I think that the rote doesn't
matter really. I note that it only refers to the price policy, but
it does not refer to the quality of liquor. It is good for
protection of animal life.
CHAIRMAN: As there is some uncertainty as to the situation
is
as it/explained by the Delegate of the United States, and as the
Norwegian amendment on Article 32 has not yet been considered,
perhaps it might be better to simply state that "The Delegate of
Norway ......... re-stated the view put forward by the delegation
of his country to the Drafting Committee that the taxation and the
price policy of its State liquor and wine monopoly was covered by
sub-paragraphs (a) and (b)", If you like. And then, when paragraph
4 of article 32 has been discussed and settled, the Delegate of
maintain his
Norway will then decide whether he will/reservation or not.
We pass on to point (b). There is no other comment, and I
take it that we all agree to the text that we adopted at the
Working Party. Is that agreed? Agreed.
Mr. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman
I wander whether it is the heat or my desire to be away from here,
however, I must say that, from this Article, I do not gather easily
the meaning as it is worded here. I know what is meant, but the
text is not clear. It says: "Necessary to protect human, animal
or plant life or health provided that corresponding safeguards are
applied in the importing country if similar conditions exist in
that country." I think the text is far from being satisfactory,
and I very much doubt whether any outsider would construe it in
the right way. E/PC/T/A/PV/ 25
CHAIRMAN (Interpretation): This text was established
after a difficult and prolonged discussion, and the intention
behind the words is quite clear. If a country refuses to
import a product in order to protect domestic animals, it must
establish the proof that it has measures of protection comparable
to those of the exporting country. It might appear at the
first glance perhaps somewhat complicated, but the intention
is quite clear and logical.
M. F. GARCIA OLDINI (Chile) (Interpretation): I am not
entirely convinced of the logic of this text.
Of course, I do not wish to set aside the French text,
but do you not think it would be expedient to recommend to the
Legal and Drafting Committee that the possibility of providing
a clearer drafting of this Article should be considered?
Mr. C.E.MORTON (Australia): I have much sympathy with
the Delegate of Chile. I think this is one clause on which
an explanatory note is justified. It is extremely difficult
to understand this text without a note along the lines which
the
you have indicated being included in/explanatory notes.
CHAIRMAN (Interpretation): Mr. Ryder, the Delegate
for the United States.
Mr. Oscar RYDER (United States): As this was a compromise
between two very opposing views, after a long and arduous dis-
cussion, I think it should stand as it is,
Mr. C.E.MORTON (Australia): This paragraph may be read by
all and understood by none.
CHAIRMAN: Could we not leave it as it stands and see whether
some
the Delegates to the World Conference are able to find/clearer
phrasing.
L Mr. C.E.MORTON (Australia): The only bright spot is that
Article 35 affords means of action where a Member considers that
Sanitary Laws are being inequitably employed to his disadvantage.
If it were not for that fact I would be very unhappy regarding the
terminology of sub-paragraph (b).
(No French interpretation)
CHAIRMAN: As the United States Delegate has said, there has
been a very long and arduous discussion and it is necessary for us
to come to a decision.
M. F. GARCIA OLDINI (Chile) (Interpretation): The traces
of this long discussion are very visible in the text, - the dis-
cussion led to a compromise - but the two conflicting viewpoints
should not be left in the text, and I think it would be very
advisable to have a note here in order to clarify it.
CHAIRMAN: I have no objection and will ask for a draft of
wording to be submitted to me. We can then insert this new
draft and see if the Executive Committee will accept it.
May we now consider that (b) is approved with this proviso?
The Meeting agreed.
CHAIRMAN: We have a comment on (c):-
"The Delegate for the United States mentioned that he understood
the term "fissionable materials" to include"source materials",
Mr. Oscar RYDER (United States): When this was being
discussed, a number of Delegates, raised various points. The
matter was not raised by the United States as to the discovery of
the source of fissionable materials. We stated that our under-
include source-materials.
standing was that it did; The clarify the point, we think the
wording should be "fissionable materials and their source-materials".
E/PC/T/A/PV/25
L J. - E/PC/T/A/PV/25
CHAIRMAN: Have I understood that you want this paragraph to
refer to fissionable materials and the materials from which they are
derived?.
MR. O. RYDER (United States): No, Mr. Chairman; what I
suggested was that to make it clear we might make Article 37 (c)
read:
"Relating to fissionable materials and their source materials."
MR. C. E. MORTON (Australia): Mr. Chairman, that surely is a
matter of substance, which it is not right to take up here unless
you wish to re-open discussion on this item - not that I wish to
discuss it.
CHAIRMAN : It is certainly a question of substance. Do you
feel very strongly about it, Mr. Ryder?
MR. O. RYDER (United States): Well it was thoroughly
understood that fissionable materials included source materials.
It was stated in a previous discussion, and no one questioned it, that
fissionable materials should include the source materials. I think
that the language used there would cover the source materials. But
it was only to make it absolutely clear, in view of the preceding
discussion, that I made the suggestion.
CHAIRMAN: Is it not perhaps best to maintain (c) in the text
of the Drafting Committee and to maintain also this amplification
by the Delegate for the United States?
Well, I do not suggest to replace the words "The Delegate for
the United States" in note (c), by "The Commission". It is simply
because I do not think the Members of the Commission have
sufficient technical knowledge to be able to say whether they agree
or not. I have not heard anybody opposing this interpretation, E/PC/T/A /PV/25
but I do not think that the Commission as a whole is ready to accept
this straight away.
MR. O. RYDER (United States): Mr. Chairman, it seems to me
that it should be understood not only by the United States but by
the Commission that this applies to the raw materials of which
fissionable articles are made. Article 37(c) would be meaningless
unless it included the source materials from which fissionable
materials are made. I do not think there could be any question of
that.
CHAIRMAN: I entirely agree with the Delegate of the United
States. My only difficulty is that if we say "fissionable
materials and their source materials", we give a very restrictive
definition of fissionable materials.
MR. O. RYDER (United States): Mr. Chairman, it would be just
as agreeable, I think, to the United States Delegation if you had
this note reading:
"The term fissionable materials is to be understood to include
source materials".
MR. W.E.H. RHYDDERCH (United Kingdom): I think it would be
clearer to all the delegates generally if we did not use the words
"source materials". It has a curious meaning. I rather liked
your phrase, Mr. Chairman, "the materials from which they are
derived." I think that would be clearer to everybody.
Is that all right with you, Mr. Ryder?
MR. O. RYDER (United States): Mr. Chairman, that would be
acceptable to me.
J. E/PC/T/A/PV/25
- 26 -
CHAIRMAN: Thank you. That seems to me to make it much
easier for the Commission to have an opinion. Could we say:
"The Commission is of the opinion that the term fission-
able materials also includes the materials from which
they are derived."
Is that the opinion of this Commission? No objection?
(M. ROUX (France) made a correction to the French text)
CHAIRMAN: Are we all agreed to this? Thank you. That
is agreed.
We peas on to point (d). There are no comments and I take
it that it will be unanimously approved in the text of the
Drafting Commission.
Agreed.
Paragraph (e). There we have a comment. The Chinese
Delegate again drew attention to his proposal in the Drafting
Commission that permission should be given for measures "tempora-
rily imposed to prevent, arrest or relieve conditions of social
disturbance, natural calamity or other national emergencies,
proved that such measures are withdrawn as soon as the said
conditions cease to exist".
J. E/PC/T/A/PV/25
Mr. MORTON (Australia): Could I ask the Chinese Delegate
how he proposes to prevent or arrest a natural calamity?
Mr. MA (China): I didn't quite hear...
CHAIRMAN: I think I remember from the discussion in the
Working Party that after considerable discussion the Chinese
Delegate sail that he did not know exactly whether in second
reading he would maintain this statement, or whether he might
accept the text of point (e) as it stands.
I would ask the Delegate of China what his decision is
to-day.
Mr. MA (China): Mr. Chairman, this Article 25 2 (b) does
not quite cover our point, and as this is rather an important
question with us, my Delegation has not yet come to the decision
to drop this proposal. May I request that this reservation
be provisionally retained for the further reflection and
decision of my Government at a later stage.
May I also add in this connection that as I had no
knowledge that Commission A had begun discussion of this paper -
nothing had been indicated in the Agenda before to-day - I was
therefore not present when Article 19 was discussed.
In Article 19 3 (a) we have also a reservation. We will
not insist on that reservation so much: but an this our
Delegation has not decided to drop it.
CHAIRMAN: I thank the Delegate of China for having withdrawn
his reservation on paragraph 3 of Article 19, and as to his
reservation on Article 37 (e) I think we could perhaps write it
in as follows:-
"The Chinese Delegate provisionally maintained his proposal
that permission should be given for measures (and so on,...) cease
to exist" - and strike out the last two lines. Agreed.
- 27 - G. -28- E/PC/T/A/PV/25
CHAIRMAN: Point (e) is then agreed, with this provisional
reservation on the part of the Delegate of China.
We pass on to (f).
The Delegate of the United States.
Mr. RYDER (United States): I would like to call attention
to the fact that much of what we are doing with this Article is
there are proposals
bound to be tentative, because our proposal is tentative, and/in
various Sub-Committees which would require Amendments to this
Article. For instance, there is a proposal to transfer this (f)
to Article 29, dealing with Exchanges. That is under consideration
and it would change somewhat, as I understand it, the purport of
this exception. Then, in the next paragraph (g), there is a
proposal which was submitted to this Commission and which was
referred to the Sub-Committee on Article 25, and that proposal
involves an Amendment to (g).
Then there is also under consideration in the Sub-Committee
on paragraph 15 a proposal for the transfer of sub-paragraph 2 (a)
of 25 to Article 37. Then the United States proposed, and the
Working party recommended - although they bad no power to take
action - that sub-paragraphs (c) (d) (e) and (k) be made a general
exception to the whole Charter, and be put in Chapter VIII, or
the final Chapter of the Charter.
I do not think I have enumerated all the suggestions which
will involve this Article, so I think all we can do now is pass
tentatively on what we agree.
CHAIRMAN: I entirely agree with the Delegate of the United States
that when we went through the text provisionally it was his
intention to come to the different proposals made in other
Committees.
Mr. RYDER (U.S.): Some of them. CHAIRMAN. Yen, some of them. V - 29 - E/PC/T/A./PV/25
Mr. Oscar RYDER (United States): Mr. Chairman, I think that
the text of this Article will have to be decide in connection
with the new Article on exceptions to the whole Charter, in view
of the work of all the committees that are interested.
CHAIRMAN: I entirely agree, but that does not prevent us
from passing the text as far as we are concerned today.
Mr. Oscar RYDER (United States): I just wanted, on this
particular sub-paragraph (f), to say that I am willing to pass
this tentatively, subject to consideration of the proposals of
the sub-Committee on Articles 2 , 28 and 29.
CHAIRMAN: We might, perhaps, insert a note on (f), stating
exactly what the United States representative has just said -
provisionally agreed to, subject to any decision taken on Article
25 and following Articles.
With this explanatory note, I take it that (f ) is agreed?
(Agreed)
We pass on to (g) No comment?
Mr. Oscar RYDER (United States): I have the same comment to
make.
CHAIRMAN: We can let the remark apply to both (f) and (g) .
We arrive at (h) "Relating to the products of prison labour".
Any comment? (Agreed)
( i) . No comment? (Agreed) .
( j) "The Delegate of India repeated the suggestions made by
his Delegation at the First Session that the words following
upon "natural" resources" should be deleted ." Does the Delegate
of India still maintain that desire? V - 3 0 - E/PC/T/A/PV/25
Mr. S. RANGANATHAN (India): I shall give an illustration
which will clarify the reason for this suggestion. A mineral
of much strategic and industrial importance is being extensively
mined, and practically the whole production is being exported.
We wish to conserve it for more effective or beneficial and planned
use later. The easiest and most effective way to secure this is
by limiting exports . We cannot do this with item (j) as it
stands, unless we link it with a somewhat unrealistic restriction
on domestic production or consumption. It is to avoid having
recourse to such steps that we made this suggestion, and if the
Commission see no objection, I would request that the suggestion
be left on record.
CHAIRMAN: Does not this really involve general permission to
restrict any kind of export? Obviously, it is limited by the
words "exhaustible natural resourcess", I agree; but nevertheless
it leaves the door wide open, and without any opportunity for the
Organization to control and criticize.
Of course, if the French suggestion should materialize and
Article 37 be subject to Articles 34 and 35, then there would be
some possibility of checking the steps taken; but we do not know
how that will work out, so unless the Indian Delegate can forego
this reservation, I do not see any other solution than to maintain
the text, of the Committee and also the reservation of the Indian
Delegate, and the whole question might then be reconsidered when
we know what will happen to the place of Article 37.
Mr. S. RANGANATHAN (India): Could we then have this
reservation maintained on a provisional basis?
CHAIRMAN: Yes, on a provisional basis.
The note will, then, be "The Delegate for India provisionally V 31 E/PC/T/A/PV/25
maintained his proposal that the words" and so on and so on,
"should be deleted"
We pass on to the next point (b); "The Delegate for Brazil
provisionally suggested that the words "are taken pursuant to
international agreements or" be deleted. He would, however,
study the matter further." ER
- 32 - E/PC/T/A/PV/25
Mr. E.L. RODRIGUES (Brazil) Mr. Chairman, the Atlantic
Charter reads, in Chapter IV, "They will endeavour, with due
respect for their existing obligations, to further the enjoyment
by all the States, great or small, victor or vanquished, of access
on equal terms to the trade and to the raw materials of the world,
which are needed for their economic prosperity". Because of
these words, we cannot accept the words"...pursuant to international
agreements". We can accept very easily the paragraph reading
"Relating to the conservation of exhaustible natural resources if
such measures .... are made effective in conjunction with
restrictions on domestic production or consumption".
CHAIRMAN: I will draw the attention of the Commission to the
fact that the Sub-Committee dealing with Chapter VII has adopted a
recommendation to delete, in sub-paragraph (b) of Article 37
"are taken pursuant to international agreements or" which is the
deletion proposed by the Brazilian delegate, and unless there should
be any objection in our Commission, I do not see why we should not
abide by the resolution of Commission B.
Mr. OSCAR RYDER (United States): Mr. Chairman, concerning
this matter, I do not know whether it would be agreeable to my
Delegation to delete those words, but nevertheless, the decision
of my Delegation depends somewhat upon the language used in
Chapter VII and the language proposed for insertion in Article 37.
decision
I think our Delegation would have to defan/ on the question of whether
we should follow the suggestion of the Delegate for Brazil, and
delete the words "Are taken pursuant to international agreement",
until we have considered the form taken in Chapter VII. ER
- 33 - E/PC/T/A/PV/25
Mr. W.E.H. RHYDDERCH (United Kingdom): Mr. Chairman, we
would support the suggestion of the Delegate for Brazil, but I
quite agree with the Delegate of the United States that we should
not go further until we consider the actual form of the new
we
exceptions which/are going to propose here in accordance with the
suggestion made by this paper.
CHAIRMAN: In the Report of the Sub-Committee on Chapter VII,
it says on page 8: "In the light of the new Article 53 on Types
of Agreements" (that is commodity Agreements) "and the new text of
the Exceptions Article 62, the Sub-Committee recommends:(i)acceptance
of the proposal that agreements falling under Chapter VII should be
classed as an exception to Chapter B, with the consequential
deletion of sub-paragraph (d) of paragraph 2 of Article 25, and
(ii) the deletion of sub-paragraph (b) of paragraph 1 of Article 45."
They recommend that agreements falling under Chapter VII
should be classed as an exception to Chapter V, Article 37. That
proposal is before us. We have another statement in the same
direction on page 47 of document T/103: "The United Kingdom
Delegation has proposed that a reference to Chapter VII should be
inserted in Article 37 in the following form: `(1) Undertaken in
pursuance of obligations under inter-governmental commodity
arrangements concluded in accordance with the provisions of
Chapter VII". That is an elaborate text, covering the point
submitted in Chapter VII.
Mr. W.E.H. RHYDDERCH (United Kingdom): I should like to
suggest one small amendment to that. This was drafted before we
got this Report, and I should rather like the term "agreements"
substituted for "arrangements". That would be more in accordance
with the Report on Chapter VII.
CHAIRMAN: I take it that we agree to include a new
paragraph in Article 37. It will be paragraph 10. E/PC/T/A/PV/ 25
Mr. Oscar RYDER (United States): I think some time is
required. I should like time to consider this amendment in
view of this note. The question of whether we should delete
this phrase in sub-paragraph j, which the Brazilian Delegate
suggests, I think should be considered in connection with the
phraseology we may adopt here for making an exception in
regard to Chapter VII.
CHAIRMAN: In reply to the Delegate of the United States,
I would like to draw attent ion to the fact that the answer is
contained in the Report of the Committee of the 19 June; the
recommendation of Commission B is based on the Report of the
recommendation of the Sub-committee which was unanimously passed
a couple of days ago.
Mr. Oscar RYDER (United States): I thank you for your
explanation Mr.Chairman, but nevertheless, I did not know of
this decision, and as a very important question is involved,
I should like to have a postponement.
CHAIRMAN: We have not yet considered Paragraph k of 37,
and I take it that we all agree it is superfluous in its
reference to obligations under the United Nations Charter.
Mr. E. L. RODRIGUES (Brazil): After the suggestion of the
United States Delegate for which I thank him, I should like to
know exactly when we will have an opportunity to discuss this
again.
CHAIRMAN: The Secretary informs me that if it is con-
venient to the United States Delegate, we could have a meeting
tomorrow.
L
- 34 - L - E/PC/T//PVr/25
Mr. Oscar RYDER (United States): I would have no serious
objection to that, but I doubt whether it would be advisable
to have a meeting of this Commission just on one small point at
this .time
RC4UA: I hope the Delegate of Brazil will show the
necessary patience and wait af we day.s Personally, I can assure
him everything will be satisafctorily settled.
Page 43 contains an important point:-
"The eDleagte for Canada suggested that the following new
sub-paragraph be adedd: " Relating to importation of goods the
production of which was prohibited in the country of importation
prior to 1J luy l93".9
I will call upon the Delegate of Canada.
Mr. .G.BURGHUART (Canada): As I thinkI explained once
before, and my predecessors before em, the purpose of our proposal
was to premit us ot maintain a prohibition against the manufacture,
sale and importation of margarine which has been in effect for
some 20 odd years. We rgeard it asr ather an important item and
we would like to be able to continue the saem prohibitio.n
M.r Oscar RYDER (United States): May I ask the Canadian
Delegate if he would mind changing the date to the 1 January 1939
so that the same measures could be applied to alcoho.l
Mr. .G .B RUUHARAT ( Canada):
eVhave no o3jection. - 36 - E/PC/T/A/PV/25
CHAIRMAN: I got the impression from the discussion on this
matter last time that there is only one commodity, just mentioned
by the Canadian Delegate, to which his reservation applies, and I
wonder whether it might help if, instead of suggesting a general
sub-paragraph,he simply makes a reservation with regard to that
commodity.
MR. C.E. MORTON (Australia): Would the Delegate of Canada
indict margarine on the same basis as liquer, that is to say, as
a danger to public morals?
MR. G.B. URQUHART (Canada): I might ask the Chairman if he
thinks that that would get more general support?
CHAIRMAN: No, my idea is simply to try to restrict the
dissent between us to the necessary minimum. You and the rest of
the Commission are not in disagreement about such sweeoing clauses
as ""importation of goods the production of which was roohbi%tde in
the country of importation prior to 1st July1 39"9, but simply
about whether you can maintain the prohibition on margarine. That
perhaps
is one unique case, and / that cuodl eb covered in some way or
another without opening up for other prohibitions- but I do not
know whether very many countries still have such old prohibitions
in force.
I asked some weeks ago whether the Delegate of Canada saw
any possibility of waiving his proposals and Ig ot a negative
answer, and I understand that the same position prevails today.
R. G.B. URQ.HAiT (Canada): Mr. Chairman, I wouldLhave been
glad to maintain it, but as I gather from your remarks that I am
the voice crying in the wilcerness here, in the circumstances, I
see no alternative but to withdraw it.
J - 37 -
J. E/PC/T/A/PV/25
CHAIRMAN: Well then, I take it that we maintain this
proposal of the Canadian Delegate that a further sub-paragraph (b)
be added. "Relating to the importation of goods the production of
which was prohibited in the country of importation prior to
1st July 1939".
MR. G.B. URQUHART (Canada): No, I said that I would
withdraw it.
CHAIRMAN: Thank you very much. Well, that solves a problem
which has been worrying me very considerably. Thank you very much.
We pass on to page 43, point (c). "The Delegate for India
maintained his suggestion in the Drafting Committee that a Member
should be allowed temporarily to discriminate against the trade
of another Member when this is the only effective measure open to
it to retaliate against discrimination practised by that Member
outside the purview of the Organization, pending a settlement of the
issue through the United Nations".
May I ask the Delegate of India whether he can follow the
example of the Canadian Delegate?
MR. S. RANGANATHAN (India): Mr. Chairman, I regret I have to
disappoint you. Two words have been omitted in the typing,
After the word "Member" in line 5, there should be two words "in
matters", reading "by that Member in matters outside the purview.."
You are aware, Mr. Chairman, of the reasons for this suggestion,
but I am not anxious to start a debate on it. I made our
position quite clear during the discussion in the Working Party
on Article 23 and also on Article 37. The legal position in
regard to the applicability of the provisions of this Charter to
the circumstances of our particular problem is not yet authoritatively clear, I would, therefore, request that this suggestion be
formally maintained on record, until we roach the stage of signing
the General Agreement or the Charter, as the case may be.
CHAIRMAN: Should we say "maintained until further notice" or
simply "maintained"?
MR. S. RANGANATHAN (India): "maintained".
CHAIRMAN: Of course, we bow to any request of any delegate
to have his proposal put on record.
Then we pass on to paragraph 3. "The Delegate of the United.
States suggested that sub-paragraphs (c), (d), (e) and (k) be
removed from Article 37 and inserted in a new article elsewhere in
the Charter. The Working Party considered such a change beyond
its terms of reference but agreed to recommend to the Executive
Committee that the proposed transfer of the sub-paragraphs in
question be made".
We are here in Commission A, and that is a kind of Executive
Committee, and I do not see that it is outside our terms of
reference to consider this proposal on its merits. The proposal
is to transfer these sub-paragraphs to somewhere at the end of the
Charter, so as to make these sub-paragraphs apply to the Charter
as a whole, not only to Chapter V.
- 38 -
E/PC/T/A/PV/25 E/PC/T/A/PV/25
Mr. RYDER (United States): Mr. Chairman, I would just
like to remark that this Commission should probably transfer it
to the care of a new Article, but the new Article might have to
be framed and possibly include other paragraphs, for example,
(e) and (f) of the present Article.
CHAIRMAN: May I take it that we all agree that these
paragraphs of Article 37 be transferred to another part of the
Charter, so as to make them applicable to all the Charter and
not only Chapter V. There is, in a paper by the United States
Delegation some time ago, a provisional Draft of the new Article
in which this sub-paragraph would be included. It says,
"Nothing in Chapter V shall be construed to prevent the adoption
or enforcement by any Member of measures:" - and then five
paragraphs. And then, as the United States Delegate just said,
there is always a possibility that other items may be included
in the same new Article.
What we have to decide here is not the text of the new
Article, but simply that we place this paragraph at the disposal
of the Conference for inclusion in such a paragraph of such an
Article when it is established.
The Delegate of Brazil.
Mr. RODRIGUES (Brazil): I have nothings against the proposal
of the Delegate of the United States. but I am afraid that we here
in the Commission who are discussing this Chapter V have not
competence, perhaps, to extend these exceptions to the whole Charter.
I am not sure, but I think the other people who have dealt
with a different Chapter did not know anything about that, and
some information should be given to them before taking such
measures, E/PC/T/A/PV/25
- 40 -
CHAIRMAN: I entirely agree with Brazil, and that is why I
used the expression
"We cannot decide the terms of such a new Article, we can only
tell the Preparatory Committee that we place these sub-paragraphs
at its disposal." We, in dealing with Article 37, say that we can
keep them, but we think it is better that they are transferred to a
general Article; but how the general Article shall be framed does
not de pend upon us, and they all may be returned to us, which I
think would be a pity, but it is always a possibility.
May I take it that we all agree to this solution?
Mr. ROUX (France) (Interpretation): Mr. Chairman, I wonder
if there is not some inconsistency in saying that Commission A
is competent for deciding to transfer Article 37 to the end of the
Charter in a Chapter which is not even numbered V; and saying, as
we did previously, that the same Commission A is not competent
for deciding to transfer Article 37 to another Article it the
same Chapter V, namely, 34. If we do not want to accept the
possibility for a minor change, we should never accept the
possibility for a much more substantial one.
G -41-
CHAIRMAN (Interpretation): No, I do not believe there is
any such inconsistency. We decided that we could not change
the order of article 37 before we had given the Commission
which was dealing with Articles 34 and 35 an opportunity to
state their views.
Concerning the sub-paragraphs, we have not decided, as I
said before, to do anything about them, or to change their
wording or transfer them. We have simply decided to put
them at the disposal of another part of the Preparatory Committee,
for possible inclusion in a more general Article at the end of
the Charter. If at that time we are told that these sub-
paragraphs do not belong in the new Article, we will keep them
in Article 37, but, as I said before, that would be rather a
pity. May I take it that we are now in agreement with regard
to this procedure?
The Delegate of France.
M.ROUX (France): (Interpretation): Mr. Chairman, may
I merely point out, in the light of the remarks you made just
now, that we are, in fact, discussing the disposition of the
whole Article 37, since the article as a whole is discussed
in the light of knowing whether it should not be placed before
Article 34, and some parts of it are being discussed in con-
formity with the remarks made by the Delegate of the United
States as to whether this could not be taken out of the said
Article and put elsewhere in the Charter.
CHAIRMAN (Interpretation): I think we should congratu-
late ourselves on having established the text of Article 37,
which, after all, was our main task. It is not for us to
determine the place it will have.
(In English): I have one more point to submit to you
V
E/PC /T/A/PV/25 V.. : -4 - 2 E/PCAT/./PV/25
before we adjourn. You. will find it in the report of the
sub-Committee on Chapter VII inc Doument W/228 (page 19) which
reads "The provisions of Chapter VII shall not apply" etc.
Sub-apaagraph (d) states "to agreements. relating to fissionable
materials, to the traffic in arms, ammunition and implements of
war" and so on, and there is a footnote sayinAg " proposal has
n beemade for thele detion of this sub-paragraph in the light
of an amendment to conbensidered by Commission A regardinge th
exclusion of such agreemenfrots me th wholhe Carter."
This means that if, flinalyh, Amtei ercan proposal to
traensfr the sub-paraaagphsin question to a final Article of
the rChater is accepted, this point (d), Aof rticle 62 in
Chapter VII will diseappar. We cannot decide anything about it
here. I thought I would just mention it.
Unless any egDelate has any point to raise in connection
with our work, we oadjurn till next week.
The Delegate of New Zealand.
Mr.P.D,. .HN JOSEN (New Zealand): Mr. Chairman, I would
just like to ask whether it is proposed that any special pro-
e
edure should/followed for Delgeyt.s t s confer on this question
of Article 21, in connection with which we made a suggestion.
CHAIMANR: I do not think that there should be any necessity
for as ub--Committee on this point.
Mr. .PJ.D. JOHNSEN (NIew Zealand ): It couldj ust be left,
perhaps, for me to confer with other Delegations who are interested,
and if any Delegation has any special proposal, they could possibly
get ni touch with me.
HCARMIA:N The United States Delegate opposed your proposal,
and I would suggest that you start with an eye-to-eye talk with
him so as to convince him. V. - 43 - E/PC/T/A./PV/25
Mr. J.P.D. JOHNSEN (New Zealand): I do not think he
opposes it: he wants to consider it further.
CHAIRMAN: Yes, but I do not like to appoint a sub-Committee
for such a point. I think it is much better that we should
gain some time. That was really the intention - that each of
us should think the matter over further, and then that a private
arrangement should be reached between you and two or three
of the other Delegates who took part in the discussion here today.
I think that is more constructive than to appoint a small sub-
Committee. Is that agreed? I really think that is the better
procedure in this case.
Mr. J.P.D. JOHNSEN (New Zealand): I think that is satis-
factory, Mr. Chairman.
CHAIRMAN: The Delegate of Australia.
Mr. C.E. MORTON (Australia): Mr. Chairman, in regard to
your kindness to me in granting an adjournment of this Meeting
for a week, may I suggest this Meeting should be arranged for
this day week, when I hope I shall be able to be fully briefed
in regard to Article 18 and to raise certain other matters in
regard to Article 17 which are related to Article 18.
CHAIRMAN: I think that is agreeable to us all. No
further remarks? The Meeting is adjourned.
The Meeting adjourned at 5.30 p.m. |
GATT Library | zt115sq6897 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty-Fifth Meeting of the Tariff Agreement Committee held on Saturday 20 September 1947 at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, September 20, 1947 | United Nations. Economic and Social Council | 20/09/1947 | official documents | E/PC/T/TAC/PV/25 and E/PC/T/TAC/PV/24-26 | https://exhibits.stanford.edu/gatt/catalog/zt115sq6897 | zt115sq6897_90260094.xml | GATT_155 | 6,727 | 41,107 | UNITED NATIONS NATIONS UNIES
RESTRICTED
ECONOMIC CONSEIL E/PC/T/TAC/PV/25
AND ECONOMIQUE 20 September 1947
SOCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ONANA E JiND EMPLOYMENT.
VERBATIM REPORT
TWENTY-FIFTH MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON S,ATURDAY EMBEEPT00,fR 194. at 10O30 A.M. IN
~ ~ ~ iHES, GTAS D.S NAI.ONJ CENE VA
s ' .-
~~~~~G A.
Hon. L.D. WILGRESS (Chairman) (Canada)
1:,-:',--Delegates wishing to make corrections in their speeches should
,-',;,:addres 'their communications to the Documents Clearace Off±ice,
Room220 (TelO2247).
e g-t are reminded that the texts of~ interpretations, which do
pretend to be autthentic translations, are reproduced f-or
1~eal guidance only; corrigenda to the texts of~ interpretations
~i"oottherefore, be accepted~
.-'' ' ,- - -- E/PC/T/TAC/PV/25
CHAIRMAN: The Meeting is called to order,
Ww are assembled this morning to consider the Report of the
Legal Drafting Committee on Part III of the General Agreement.
I will ask M. Royer, the Acting Chairman of the Legal Drafting
Committee, to make some introauctory remarks regarding this
section of their Report.
M. ROYER (France) (Interpretation): Mr. Chairman, I wish
to be extremely brief, The Legal Drafting Committee had to
work in all haste and had to work on moving texts which would
change in the course of the examination by tho Committee itself
of this text. Therefore a certain number of errors managed
to slip in the draft which is now before you.
There is one I should point out straight away which is very
important, that is, that the word "et" has been omitted in
sub-paragraph 2 (a) in the fifth line on page 23 of the draft.
This word is a very important word; "et" will have to
New. .thclees. tnere is are point I shauld like to .t I i lat
away that is, that once we have gone ever this text with the
LegaI Drafting Committee, that should have enother look at it
to see that the text is quite correct, that the observations have
been taken care of and that no Grrors have been overlooked.
We , ' . W e important alteration in the draft
whics is now before you, and we have only made those alterations
that were strictly necessary to get a clearer and more accurate
text.
Is regarde the words "Contracting Parties", We have
change in thase words - I am speaking of Contracting Parties acting
jointly as a Committee - but nevertheless I wonder if it would not
be clearer from the typographical point of view to have the whole
of the words printed in capital letters and not only the first two
letters.
-2-
R. -3- E/PC/T/TAC/PV/25
As for the translation into French of the word "Annexes" into
"listes" we have made no alteration in Article XXXIV, but we
have included Annexes A to I in that Article, and therefore
there is still the possibility of using the word "Annexes"
instead of "Listes" in the French, and putting an asterisk in
front of that word stating that in Canada the word Annexes
appear and have same meaning as the word "listes".
These are all the observations I have to make, Mr. Chairman,
at the moment. In the course of the Discussion other points may
arise.
CHAIRMAN: Are there any comments on the points referred
to by Mr. Royer, particularly his reference to the words
"Contracting Parties" in capital letters, and the use of the
word "Annexes" instead of "Listes" in the French text? Are
thare any comments? No comments,
We can now deal with these points as we come to them in the
text.
We will now take up the resort of the Legal Drafting Committee
which is given in Document T/209, by going through it Article by
Article and paragraph by paragraph.
That being agreed; we come first to Part III, Article XXIV:
Territorial Application - Frontier Traffic - Customs Unions.
Paragraph 1. The Delegate of Chile.
M. Angel FAIVOVICH (Chile) (Interpretation) Mr. Chairman
I would like to know what corresponds to the word "chacun" which
has been inserted in the French te.Lt in relation to the original
drraft.
M. ROYER (France). (Interpretation): We took over the
terminology which was used in the Article of the Charter; otherwise,
we had not inserted the word "chacun" one could have construed
.. .... E/PC/T/TAC/P1/25 l
that text as meaning that tpis aoplied to the whole of the
territories and what we mean here is rsat lhe rights and obligstion
apply in respect of each customs territory.
M. AngelVFAI1OVICH (Chile) (interpretation): Mr. Chairman,
I agree with the explanation which has been given by Mr. Royer.
CMAIRK1N: I should like, with che Consent of themCom-ittee,
to invite M. Royer to take a seat at thedheac of the table, where
I think he would be in a better position to give the exalanetions
which are necessary as we go through this draft.
M. ROYER (France): Thank you very .uch,
CMAHRU -e there any other comments on paragraph 1?
Agreed.
ragraph 2 - - sub paragraph (a); sup-.aragraph (b);
Are there any comments?
Paragraph 3 - sup-Qaragraph (a).
M. ROYER (France) (Interpretation): In the French text
there is a~mistake; the word "a"x' in the fourth line of page
4 has to b 'deleted.
CHAIAM2N: It is in this paragraph 3 that we come across
the words "CONTRACTING PAREIFS" in capital letters instead of
just a capital C and capital P. Are there any observations
on that point?
Sub-paragraph (b).
M. REYTR (France) (Interpretation): Delete in the French
xttt in the ninth line the word "proposees".
CHAIRMAN: Are there any other comments?
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R. R. -5- E/PC/T/TAC/PV/25
Sub-paragraph (c)
M. ROYER (France) (Interpretation): In the French text
the word "Contractantes" has also to be in capital letters.
CHAIRMAN: Are there any other comments?
Paragraph 4. Any comments?
Mr. LE. COUILLARD (Canada) I take it that M. Royer
wants to keep the quotation marks in "Union douanière" and not
in "customs union".
M. ROYER (France) (Interpretation): Regarding the
deletion of the quotation marks around the words "union douanière"
in French, the French speaking delegates thought it was necessary
to keep these quotation marks; but, on the other hand, the
English speaking delegates thought these quotation marks would
serve no useful purpose in the English text.
CHAIRMAN: Does that explanation satisfy Mr. Couillard?
Mr. L.E. COUILARD (Canada): Yes.
CHAIRMAN: Are there any other comments on paragraph 4?
Paragraph 5. Are there any comments?
,
r S 6/- 10- -A E/PC/T/T1,C/PV/25
CHAUMSN: Are thera agy pomments on P:-;; ajh 6?
Mr0aL. E. COUILLhair(C nada): ng. Ci;uiman, the Er~lish text
of Para-raph 6 reads: "take such reasonable measures as may be
available to it." TI tnd eslation, as ur erstand it, is
fshall take all measures which may be available to it." The word
-reasonable"l has been dropped and the word "such" has been
Qli e4 to "a2L-',
*. ROYER (France) (Interpretation): On the first point,
Wtlough the. drench Delegation cwos not think the v;:d
srablII It fis indispensable, novertneless it is only due to
t ,s,,e ! thatz/
atypographical error,/th¢ first part oft the brackets was put
fobqre the word "raisonnables i in the French text.
As regards the second poir,, we have taken this text over
frot ehe tex}"t of the Charter and ir French thc wor toutse"
mayhave the equivalian of "tIh in such cases; therefore It does
fot.en ."ll" in this case; he corresponding A^rtcle of the
Chartex is. Article 99, Paragraph 5.
Mz' CO I agRD (Canada) (Inferpretation),. 1::ree that this
ls only a typographical error.
M- ROYER (France) (Inerpretation): As regards the formula
6er drat uses the vors 'de son ter-.ito.re"instead of
th qds "guiddgentdle2'.es"w;,hi are now in brackets.
, .ecarsela has b "sed épeceuiu thee words '`q~ipndont d'oles",
meaningdeponding from it, could have been applied to overseas
teri~tories and not to the metropolitan territory.
C0UIRMUN: Are there any other comments on Paragraph 6?
Mr.3OX:NSr. (New Zealand:. M-, Chairman, was there any
ptioule3r reason for chanaing "ensure" to ",ssure"?
_ "e',,'
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M. ROYER (France) (Interpretation): It seems to me there is
a difference in the usage of the English and American languages
on that point.
Mr. LEDDY (United States): I should say that as "assure"
it used in the Charter it is better.
Mr. JOHNSEN (New Zealand): I think there is a certain
American influence there.
M. ROYER (France) (Interpretation): We had to reach a
compromise between the American and English languages. We
re-inserted the "u" in endeavour, but we had to follow the
American suggestions regarding the dates.
CHAIRMAN: The word "assure" is in the Charter.
Are there any other comments on Paragraph 6?
We now come to Article XXV - Joint Action by the Contracting
Parties. Are there any comments on Paragraph I?
Mr. LEDDY (United States): The period ought to be taken out
after the word "Agreement" in the ninth line, Mr. Chairman,
CHAIRMAN: Are there any further comments on Paragraph 1?
Paragraph 2: are there any comments?
Paragraph 3: are there any comments?
Paragraph 4: here we have a Note by the Legal Drafting
Committee.
Mr. SHACKLE (United Kingdom): Mr. Chairman, I think it will
be very desirable to make it possible for postal and telegraphic
voting to be used. I should think that, at any rate in the
various stages, there may very well be need for almost continuous
operation and I do not see how we can rely upon that being done
if there is not some provision for postal and telegraphic voting.
I should therefore be in favour of making the change suggested in
the, footnote, to read: "majority of the votes cast."
,'...' 0' S
E/PC/T/TAC/PV/25
CHAIRMAN: Are there any objections to this proposal?
(Agreed).
Are there any other comments on Paragraph 4?
Paragraph 5; sub-paragraph (a): are there any comments?
Sub-paragraph (b): are there any comments?
Article XXVI - Acceptance, Entry into Force and Registration.
Are there any comments on Paragraph 1?
Are there any comments on Paragraph 2.
M. ROYER (France) (Interpretation): Mr. Chairman, we had to
work very hard on this Paragraph 2 and it was extremely difficult
for us to express exactly what we had in our minds. Eventually
it was the English text which was drawn nearer to the French text.
Mr. LEDDY (United States): Mr. Chairman, is the Agreement
which is going to result to be set up in English and French on
the same pages? If that is not going to be done, how will it
be set?
CHAIRMAN: In two separate copies.
Mr. LEDDY (United States): Will the same procedure be
'followed with the Protocol of Signature and the Final Act?
CHAIRMAN: Yes; that has been our understanding up to now;
that there will be an original English text and an original
French text, both of which will be signed.
M. ROYER (France) (Interpretation): Mr. Chairman, I do not
know if it is really indispensable to have two different copies
for the Final Act and for the Protocol of Provisional Application.
I think that for these two documents we could envisage only one
bilingual copy. As for the Agreement itself, it is for material
reasons that we could not decide to have only one copy regarding
the Annexes.
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1
I
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I
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Mr. SHACKLE (United Kingdom): Mr. Chairman, I should have
thought it better to have a uniform practice, in order to avoid
confusion; either to have a bilingual copy or two separate
copies in English and French.
CHAIRMAN: I think we are in accord that the Agreement itself,
on account of the Annexes and Schedules, has to be in two
separate forms, one French and one English. If we wish to
consider later on the question of putting the Final Act and the
Protocol of Provisional Application into bilingual from, we can
take that up when we come to consider the Legal Drafting
Committee's reports on these two documents.
Mr. COUILLARD (Canada): I take it, Mr. Chairman, that the
exceptions which will be made in the case of some Schedules which
may not be authentic in either French or English were overdruled
in this general provision.
CHAIRMAN: Our decision was that each Schedule would be
authentic in either English or French or in both languages, at
the option of the country whose Schedule was concerned. The way
it was decided to provide for this was to put in parentheses at
the top of the Schedule the words: "Authentic in the English text
only" or. "authentic in the French text only," if it was to be
authentic only in one of these two languages. For this reason
it was not considered necessary to refer to that here,
I do not know if that decision is a good one or not, but
that is the decision we reached and that is why the LegaI
Drafting Committee did not deal here with the texts which are
authentic only in English or only in French. E/PC/T/TAC/PV/25
M. ROYER (France) (Interpretation): Mr. Chairman, if there
are any doubts on that point, although it does not seem
indispensable to me, we could add a point to this effect in
Article II, where mention is made of the Schedules.
Mr. SHACKLE (United Kingdom): Might it not be well to do that
for precaution's sake?
CHAIRMAN: Are there any other views on this point as to
whether or not it would be just sufficient to refer in the
Sohedules to the fact that any particular Schedule is authentic
only in English or in French?
Mr. LEDDY (United States): I think that would do the trick,
Mr. Chairman; if you specifically say in the Schedule that it is
authentic in one language only, I think that should be sufficient.
CHAIRMAN: That was the view we had when we were considering
this matter previously in the Committee. Is that still the
general opinion or does Mr. Shackle wish to press his point?
Mr. SHACKLE (United Kingdom): No, Mr. Chairman, I do not want
to insist. If the legal expert is satisfied, that is good enough
for me.
CHAIRMAN: I think the Chairman of the Legal Drafting
Committee expressed the opinion that it was not indispensable to
refer to it here.
Are there any other comments?
Paragraph 3: are there any comments:
Paragraph 4: are there any comments?
Mr. SHACKLE (United Kingdom): Mr. Chairman, in the fourth line
the word "territories" should read "territory." It is in the
singular in the French and it was in the singular in the earlier
draft. I think this must be a typographical error.
- 14 -
S S -15- E/PC/T/TAC/PV/25
CHAIRMAN: Are there any other comments on Paragraph 4?
Paragraph 5; sub-paragraph (a.).
Mr. SHACKLE (United Kingdom): Mr. Chairman, have we left
Paragraph 4, because it strikes me it would be best to say, in
the sixth line from the end, "such territory" instead of "such
a territory." The previous text had no "" and I do not see
why the "a" has crept in here.
CHAIRMAN: It will read "such territory."
Are there any other comments on Paragraph 4?
M. ROYER (France) (Interpretation): We must add a comma
after "contracting parties" in the French text, four lines before
the end of the paragraph.
CHAIRMAN: Is Paragraph 4 now in order?
Paragraph 5 (a): are there any comments?
Paragraph 5(b): are there any comments?
Mr. LEDDY (United States): Mr. Chairman, there is just a
small point on sub-paragraph (b). It says that this Agreement
shall not enter into force until a decision on supersession has
been reached. Now there is a Protocol of Provisional Applic-
ation which says the Agreement shall be applied on January 1.
Is the construction there to be that, applying it provisionally,
you cannot apply it until a decision has been reached under the
after
supersession clause? I think we should add/"shall not enter
into force" the words "under this paragraph." That would put it
in order.
Also, I believe there should be a comma after the word
"paragraph" in the third line of sub-paragraph (b).
. 1??
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E/PC/T/TAC/PV/25
CHAIRMAN: Are there any objections to this proposal by
Mr. Leddy?
Accordingly the words "under the present paragraph" will be
added after the words "enter into force", and a comma after the
word "paragraph" in the third line.
Are there any other comments?
We will pass on to Article XXVII.
Mr. SHACKLE (United Kingdom): Mr. Chairman, the word "in"
seems to be missing between "set forth" and "the appropriate
Schedule" in lines 6 and 7. It should be "set forth in the
appropriate Schedule. "
CHAIRMAN: That was a typographical error,
Mr. SHACKLE (United Kingdom): Yes; it should replace the comma.
Mr. LEDDY (United States): we should take out the erroneous
comma and insert one after "Agreement-"
CHAIRMAN: The title reads: "Withholding or Withdrawal of
Concessions.
Are there eny other comments on the first paragraph?
Article XXVIII -Modification of Schedules. Are there any
comments on Paragraph 1?
Are there any comments on Paragraph 2(a).
M. ROYER (France) (M. Royer 's remarks related only to the
French text).
CHAIRMAN: Are there any other comments on Paragraph 2(a)?
Paragraph 2(b). The figure 2 will be deleted before (b).
Are there any other comments on this sub-paragraph?
Article XXIX - Relations of this Agreement to the Charter
for an International Trada Organization. Are there any comments
on Paragraph 1? S 17 E/PC/T/TAC/PV/25
Mr. SHACKLE (United kingdom) Should it not be a small "p"
in the first line of the French texct?
M. ROYER (Frence) (Interpretation); The French text which
you have before you now has, in practice; been replaced by the
text which appoars at the bottom of tho page.
CHAIRMAN: Are there any comments on Paragraph 3(a)?
T'he Delegate of Chile.
M. FAIVOVICH (Chile) ( Interpretation ): Mr. Chairman, I would
like to point out that the word "et" is missing f'rom the fifth
line of the French text in sub-paragraph (a) It should be
inserted between the word '¾,rernier" and the words "de la Partie. "
CHAIRMAN: The Chairman of the Legal Drafting Committee
called our attention to this at the beginning of our meeting.
It is a very important osmission and of course the word "et"
should be there,
Are there any other commens on Paragraph 2(a)?
No further comment on Paragraph 2(a).
M. ROYER (France) (Interpretation): In the French text, in
the fourth line of Page 24, the words "aux autres parties
contractantes' should be replaced by "aux parties contractantes"
and the wards '.arties contractantes" should appeer in capital
letters, as they do in the English text. At the same time, it
seems to me that The draft which has been adopted by the Committee
. is somewhat embucus a atat h -the Comit'tee should e kG a
decision tois ioint.)2.
IRMAN: Ar',the here any comments on the remsrk. of the Chairman
of the egal Drafting i,mmortit.ee P 13 E/PC/T/TAC/PV/25
Mr. J.M. LEDDY (United states): Mr. Chairman, with regard
to the words "within sixty days of the closing of the United
Nations Conference on Trade and Employment any contracting party
may lodge with the Contracting Parties ..." Well, I think the
first meeting of the Contracting Parties is scheduled for about
March 1 and I think that probably it would be better to say that
any contracting parties wishing to lodge an objection should let
the other contracting parties know, since no meeting of the
Contracting Parties as a Committee may have taken place.
CHAIRMAN: I take it that, if Mr. Leddy's suggestion is
approved, the words of the third line on page 24 would read "may
lodge with other contracting parties", "contracting parties" being
in small letters. Are there any comments on this suggestion of
Mr. Leddy?
Mr. R. J. SHACKLE (United Kingdom) I think it will be
advisable to make that chance, Mr. Chairman.
CHAIRMAN: Any objections.
Agreed.
Then the French text will read as it is now on page 24.
Are there any other comments on paragraph 2 (a)?
Mr. J.M. LEDDY (United States): Mr. Chairman, this reads
that the contracting parties shall, within sixty days, "confer to
consider the objection and to agree .... ." I think that might
possibly be open to the construction that agreement must be reached
within sixty days, but it was intended that it was the meeting
which should take place within sixty days. I think it could be
taken care of by changing the word "and" to "in order" so that
it would read "confer to consider the objection in order to agree. ."
' E/PC/T/TC/PV/25
19
M. ROYER (France) (Interpretation): I wonder if we could
not draft the English text to agree with the French.
Mr. J.M. LEDDY (United States): I think it is a bit awkward
to translate. Really I think in the English text it is simpler
to change "and" to "in order".
CHAIRMAN: Does that require any changes in the French text?
M. ROYER (France) (Interpretation): I think that the French
text is perfectly clear as it stands.
CHAIRMAN: Are there any objections to the proposal of Mr.
Leddy to change the word "and" after "objection," to the words "in
order". Is that agreed?
Agreed.
Are there, any other comments on paragraph 2 (a)?
Paragraph 2 (b)?
Paragraph 3.
Mr. J.P.D. JOHNSEN (New Zealand): Mr. Chairman, I have a
small point to raise on this paragraph. The present text reads
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, this Agreement, insofar as it
affects relations between the contracting party which has not
accepted the Charter and other contracting parties, shall be
supplemented or amended."
Now some of the other contracting parties may not have
accepted the Charter either. I was wondering whether we should
put in there "which has not accepted the Charter and other
contracting parties which have accepted the Charter".
7 E/PC/T/TAC/PV/25
20
Mr. J.M. LEDDY (United States): Mr. Chairman, I see no need
for limiting further the scope of this paragraph.
Mr. J.P.D. JOHNSEN (New Zealand): It was only a suggestion,
Mr. Chairman. I would not insist on it.
CHAIRMAN: Are there any other comments on the point just
made by Mr. Johnsen?
M. ROYER (France) (Interpretation): Mr. Chairman, I would
support what Mr. Leddy has just said, because, if we followed Mr.
Johnsen's proposal, we should have the following case arise:- If
two countries do not accept the Charter, then, according to Mr.
Johnsen's proposal, we could rule the situation between those two
countries and the other contracting parties, but the relations of
the two contracting parties which have not accepted the Charter
would not be provided for.
CHAIRMAN: Mr. Johnsen does not insist on his proposal, so,
unless there are any other comments, can we leave it as it is?
Are there any other comments on paragraph 3?
Paragraph 4.
Mr. C.E. MORTON (Australia): Is life so short, Mr. Chairman,
that we cannot say "on the first day of January 1949"?
M. ROYER (France) (Interpretation): Mr. Chairman, on this
point a discussion took place between the English-speaking experts
and, as a compromise, we agreed to the formula "January 1 1949",
similar expressions appearing in the Charter.
Mr. J.M. LEDDY (United States): Mr. Chairman, I wonder
whether we should say that "On January 1, 1949 . ... the contracting
P E/PC/T/TAC/PV/25
21
parties shall meet". Would it not be better to say "During January
1949"?
Mr. C.E. MORTON (Australia): As a Sootsman, I think meeting
on 1st January is very inappropriate.
Mr. J.M. LEDDY (United States): I suggest that we say:
"During January 1949" and then in the fourth line from the last
say: "shall arrange to meet".
CHAIRMAN: Are there any comments on these suggestions of
Mr. Leddy?
M. ROYER (France) (Interpretation) Mr. Chairman, I would
agree to the first suggestion stating that the meeting shall take
place during January 1949, but the second suggestion is somewhat
disturbing, because it could be construed to mean that this meeting
can be postponed indefinitely. I quite see the point that it might
be very difficult for Scotsmen to meet on the 1st January because
then they might find themselves in a most unfavourable position!
But nevertheless we can agree to meeting in the course of January.
CHIRMAN: Are there any objections to the proposal to change
"On January 1" to "During the month of January'"?
Areed.
Are there any other comments on the proposal of Mr. Leddy to
insert the words "arrange to" before "meet". Mr. Luddy does not
insist on this proposal so we shall leave the rest of the text as
it is. P E/PC/T/TAC/PV/25
22
Are there any other comments on paragraph 4?
L MG.A. .&IAtVELT (Nebherlands): Can we then keep in the
word "§0te" - 'on such earliar daoe" ;nd " n such later date"?
.r. J.M. LEDDY (United States): It would have to be "at
such earlier t"at and ':rz such later time".
CHAIRY1N: I think the Netherlands Delegate is quite right
and then we should have to change the words in the third line to
"or at such earlier time".
R. J.S,
. . Mr. R. g SYKLCIEd UzgatedKin.,dom) Anf aj;.in in line six,
".r at such later time1'
CHIRMAN: I, Tjat a,,eed?
Mr. J.M. .EDDh (Uni ed States) Trere is one other small
point. I thinksprobably ttee word ".hould" in zht third line
from the botto"wshould be "sAgll": 1'hether this L.reement shall
be amended", because what wt have in mind is thaT they should
reach agreement on the amendment.
:-.
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;
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' E/PC/T/TAC/PV/25
M. ROYER (France) (Interpretation): Mr Chairman, we must
change this conditional into the future. We have to use the future
tense because we refer to a preceding paragraph, 2 (a), and if we
adopt the conditional there would be a sort of anomalous situation,
because in paragraph 2 (a) on page 24 we find "confer to consider
the objection and to agree whether the provisions of the Charter
to which objection has been lodged, or the corresponding provisions
of this Agreement .... shall apply." So the provisions of this
Agreement shall apply.
CHAIRMAN: Is the Committee agreed to change the word "should"
to "shall" in paragraph 4?
Are there any objections?
Agreed.
Are there any other comments on paragraph 4?
Paragraph 5.
M. ROYER (France) (Interpretation): In the English draft,
on p. 26, five lines from the end of the paragraph. the figure
"3" has to be deleted after the word "Article" and added after "2".
It should read: " paragraphs 2 or 3 of this Article."
Mr. R. J. SHACKLE (United Kingdom): Mr. Chairman, I have
a point here. I think that we should say "2, 3 or 4". The reason
why I suggest that is that if you look at paragraph 4 you will
see that that is what happens should the Charter not have entered
into force or ceased to be in force. Should that situation
arise and the contracting parties come to some agreement as to
what they are to do in these circumstances, I see no reason why
the other signatories of the Final Act should not be informed,
just as they will be informed under paragraphs 2 or 3. So I
'''.-4.- P 24 E/PC/T/TAC/PV/25
suggest that this should read "2, 3 or 4".
CHAIRMAN: Are there any comments on this suggestion of
Mr. Shackle?
Is it agreed that we should put "under paragraphs 2, 3 or 4
of this Article" at the end of this paragraph?
Agreed.
Are there any other comments on that paragraph 5?
Article XXX: Amendments.
Paragraph 1.
M. ROYER (France) (Interpretation): Mr. Chairman, in the
French draft some words have been .:tItted after the words
"'Article XXIX" (this only refers to the French text), the words
corresponding to the English "or of this Article". Also there
i 8s another correction to maki In the French text, in the fourth
line from the bottom of the page. (This correction refers to the
French text only)
Mr. Angel FAIVOVICH (Chile) (interpretation): Mr. Chairman,
ought we not to. say "Amendments to the provisions of Part I of the
Agreement with the exception of article I of this Part I in
accordance with the provisions of paragraph 2 of Article XXIX"?
M. ROYER (France) (Interpretation): Mr. Chairman, the Legal
Drafting Committee examined the point which has jusb enw raised
by the Chilean Delegate and, after this examination, we decided
to alter the text to the original draft here. As you can see,
the former draft only covered modifications which could be brought
to the Schedules and modifications which could riot be considered
as amendmen.s Now the text has a wider scope and covers the
case in which the automatic supersession of the Articles of the
A 25 P E/PC/T/TAC/PV/25
Agreement by the Articles of the Charter is carried out, and the
reason why we did riot insert Article I here as an exception is
the following:-
We thought that it was the sense of the Committee that the only
way to amend Article I, without applying the rule of unanimity, was
by superseding the Articles of the Agreement - that is to say,
Article I of the Agreement - by the corresponding Article of the
Charter, once the Charter had been adopted; but that if any other
amendment were to be inserted into Article I at a later date, then
the rule of unanimity should cone into force. This was the reason
why we decided not to mention here Article I as an exception, as
we say here in the text: "Except where provision for modification
is made elsewhere in this Agreement" and this covers the case of
supersession of Article I by the corresponding Article of the
Charter, But in the case of further amendments to that Article we
think that the Committee would decide that they would have to be
carried out following the rule of unanimity.
CHAIRMAN: That was also my understanding of the sense of
the Committee when we were considering this question the other day.
Mr. Angel FAIVOVICH (Chile) (Interpretation): Mr. Chairman,
if such is the interpretation given by the Committee on this point,
I shall accept it; but nevertheless I should have preferred that
that exception should have been inserted here.
CHAIRMAN: Are there any other comments? Are there any other
comments on paragraph 1?
Paragraph 2.
No further comments on paragraph 2?
.-'''".~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ -;'''' 26
E/PC/T/TAC/PV/25
Article XXXI: Withdrawal.
Are there any comments on this Article?
M. ROYER (France) (Interpretation): Mr. Chairman, you will
notice that we have inserted the following words at the beginning
of this Article:
"Without prejudice to the provisions of Article XXIII or of
paragraph 2 of Article XXX"
We inserted these words following a discussion which took
place here and in which the Delegate for China, if I remember
rightly, pointed out that there seemed to be a contradiction
between the provisions of Article XXXI and corresponding provisions
of the Charter which provided for the possible withdrawal of a
under
Member / different conditions . I should like to point out that
a comma has to be inserted after the words "Article XXX" and that
there must be no blank space in the text. Therefore the text will
read
"Without prejudice to the provisions of Article XXIII or of
paragraph 2 of Article XXX, any contracting party may ..."
Mr. R. J. SHACKLE (United Kingdom): Do we not need to
introduce a reference here to Article XXVIII, paragraph 2 (a)
and (b)? Because there, in cases where there is failure to
~~~~~/
agree upon some chan e or modification/of Schedules, the
montracting party/nay withdra'w upon .hirty days notice, That
surely is one of ghe cases which ou;ht to be mentioned in this
enumeration in/addition to Article XXIII and Article XXX. 27 R. E/PC/T/TAC/PV/25
~~~~~~~2
Mr.R.J.SHACKLE (Unitem Kingdou): Shptld we not also insert
a reference hero to paragraph i of ArtIcle XXVIII concerning (a)
and (b) of this Article, beeause those are cases in which, if
there is failure to agreo upon spme change or modification of the
f Schedule, a Contr cting Partyrmay withdraw at 30 days notice.
That, surely,hi one of tle/ cases in which it is enumerated in
this Article in addition' to Article XXX.
Mr, hairman, I.,am sorry I am wroni. I see it 1s to withdraw
e/ coioncess2e9nsndnot withdraw from the Agre.ments
CHAIRMAN: Are there any other commentsrtn leuicie?XXXI.
Mr. J.M. LEDDY (United States) There may be some possible
ambiguity in this Article. The first sentence says that any
Contracting Party may withdraw on or after January 1, 1951, but
the last sentence says that withdrawal shall take effect upon
the expiration of six months. I think the intention was that
while a country's withdrawal can take effect on January 1 1951,
t must have given notice six mopths *rior thereto. In order
Po avoid the possible construction thit th.s means withdrawal
cannot be made effective until six months after January 1 1951,
V should likp to )ropose the insertion in the last sentence of
the English text of the phrase: "on or after January 1 1951" after
the word "effect." so that it would read "The withdrawal shall
take effect on. or after January 1 1951, upon the expiration of
Six monthsc. "et. etc.
I notice in the French text that with respect to separate
ustoms territory it provides that notice of withdrawal may not
'n efore January 1 1951. I think this probably should be
so as
changed/to permit 6 months notice, terminating on January 1 1951,
so that the withdrawal would become effective on that date. E/PC/T/TAC/PV/25
28
CHAIRMAN: Are there any objections to the proposal just
made by Mr. Leddy?
M. ROYER (France) (Interpretation): Mr. Chairman, I would
like to ask Mr. Leddy whether it would be possible to give notice
of withdrawal beginning say, in August 1950.
Mr.J.M. LEDDY (United States) Yes.
CHAIRMAN: Are there no objections to the proposal of
Mr. Leddy? Agreed.
A ny other comments on Article XXXI?
Article XXXII - Contracting Parties. Paragraph 1.
Mr. J.M. LEDDY (United States): Mr. Chairman, the present
text may lead to a situation in which a Government has accepted
the Agreement under Article XXVI; but the Agreement has not
entered into force under that Article, and the Government has not
provisonally applied it. Such a Government should not be deemed
to be a contracting party. I think the matter might be handled
by recasting the sentence to read as follows: "The contracting
parties to this Agreement shall be understood to mean those
Governments who are applying the provisions of this agreement
under Article XXVI or pursuant to the Protocol of Provisional
Application". It would make it clear that no Government is a
contracting party unless it is applying the Agreement in either of
these two ways.
CHAIRMAN: Mr. Leddy proposes to change the text of the
fourth line to read as follows: "which are applying the provisions
of this Agreement under Article XXVI or pursuant to the Protoool
of Provisional Application". Are there any objections to this
proposal?
Mr.J.P. JOHNSEN (New Zealand): Would it be clearer if we put E/PC/T/TAC/PV/25
"through acceptance under Article XXVI, instead of just "under
Article XXVI"
Mr. J.M. LEDDY (United States) Article XXVI covers both
the entry into force and the acceptance, It is better to leave it
that applying under Article XXVI it must be accepted, Article
XXVI contains the acceptance and the entry into force.
CHAIRMAN: Mr. Johnsen. are you satisfied with that
explanation?
Mr. J. M. ~ ~ ~ ~ (New Zealand) : I am satisfied.
CHAIRMAN: I take it that the Committee is in agreement with
regard to the changeu proposed by Mr. Leddy. Are there any other
comments on paragraph 1? Agreed.
Paragraph 2. Are there any comments? Agreed.
Article X XXIII - Accession.
M. ROYER (France) (Interpretation) Mr. Chairman, the
question has been asked of the Legal Drafting Committee whether
"Accession" should not be used in the French text, but after
referring it to the due authorities the conclusion was reached
that "Adhesion" was the accurate translation of "Accession".
CHAIRMAN: Are there any comments on Article XXXIII?
Article XXXIV - Annexes.
Mr. J. M. LEDDY (United States): Mr. Chairman, I would not say
"Annexes A to I are hereby made an integral part of this Agreement".
That seems to lead the reader to suppose that Annexes J and K are
not . I do not see why we cannot say "The Annexes to this Agreement
are hexeby made an integral part of this Agreement". Is there any
need for saying "Annexes A to I". E/PC/T/TAC/PV/25
R 30
Mr. CE. MARTIN (Australia) It indicates the number of
Annexes.
M. ROYER (France) (Interpretation): Mr. Chairman, the
only purpose of this indication was to facilitate a decision in
the Committee about the French translation of Schedules. If
this purpose is not retained there is no point to be served by
these letters.
CHAIRMAN: The Members of the Committee will recall that
Mr. Leddy, in his introductory remarks, made suggestions as to
how it would be possible to get over the difficulty occasioned
by the fact that the Canadian Delegation wished to describe
their schedule in French by the word "Annexes" and this, I take
it, is one of the objections why the Legal Drafting Committee
made this change.
In Article XXXIV another suggestion M. Royer made was that
the Committee would make an exception in the case of the Canadian
Schedule of the word 'Annexes" keeping the word "Listes" in the
General Agreement.
Have members of the Committee any views on this question?
Mr. J.M. LEDDY (United States): Mr. Chairman, I would
withdraw my suggestion.
CHAIRMAN: Are there any other comments on Article XXXIV?
This brings us to the conclusion of our consideration of
the Report of the Legal Drafting Committee, Part III of the
General Agreement. I think the fact that we have been able to
conclude our consideration of this part of the Agreement in such
a short time is a great tribute to the work of the Legal Drafting
Committee. and I am sure I am expressing the thanks and appreciation
of all the Members of the Committee to M. Royer and his collabo-
rators for having worked so hard and so long in having the text
.. R.
31
available for us this mornning. I think we also owe a great debt
of gratitude to the docurments Department for having been able to
distribute this text to us in time to enable us to give consider-
ation to this document on this occasion.
I have been struck throughout this Conference by the
efficiency of the Documents Office and there fore I am very glad
to have this opportunity of paying a tribute to the work they have
done on this occasion.
I would now like to ask M. Royer if it would be possible
for us to meet on Monday morning to consider other sections of
the Report of the Leagal Drafting Committee.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ea Drafting
,; M. ROYER (France) (Interpretation): Mr. Chairman, I do
not believe it will be possible to hold a session of the Committee
On Monday morning, for the simple reason that we will work this
afternoon on the other parts of the General Agreement and it will
not be possible tomorrow to prepare the text to be circulated
to the Committee. Therefore, I think it would be better to let
the Drafting Committee work to-day and Monday morning and let
the Secretariat circulate the report on Tuesday.
CHAI IUN: I might also add to NI. Royer's remarks that
t-would be almost a case of impossibility for the Secretariat
to produce the documents on Monday morning because the Documents
Office does not work Dn Sundays unless special provision is made
for that, and the Secretariat have not at .Resent the facilities
for enabling the Documents Office to work on Sunday.
Accordingly, I Dropose that we meet on Tuesday morning at
01.30 to consider the remainder of the Report of tbe Legal Drafting
Committee. Is that agreed?
The Meeting is adjourned.
The Moeting rose at 12.15.
r |
GATT Library | pg853gb9100 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty-First Meeting of Commission A Held on Monday, 30 June 1947 at 2.30 PM. in the Palais Des Nations, Geneva | United Nations Economic and Social Council, June 30, 1947 | United Nations. Economic and Social Council | 30/06/1947 | official documents | E/PC/T/A/PV/21 and E/PC/T/A/PV.20-22 | https://exhibits.stanford.edu/gatt/catalog/pg853gb9100 | pg853gb9100_90240128.xml | GATT_155 | 11,659 | 71,552 | UNITED NATIONS NATIONS UNIES
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQU E
ET SOCIAL
RESTRICTED
E/PC/TA!/PV/21
30th June 1947
SECNiD SESSION OF HTE PRAPAETORY CMMITTTEE OF THE
UNITED AT'IONS CNiFERENCE ON TALDEA ND EMLOYMUNET
VEBASTI T REPORT
TWENTY-FIRSTMElETING OF CMMIJSSION A
HELD ON MNIDAY, 30 JN1E 1947 AT 2.30 PM2. IN THE
AL1AIS DES NATIONS, GENEAI
. MAK- SUETNHS
Delegates wishing tom;ake corrections in their speeches should
address their comaunications to the Documents Clearance Office,
Room 220 (Tel. 2247)
-..;.'S UN'1ES
(Cumirman) (Belgiaw) E/PC/T/A/PV/21.
(Interpretation)
CHAIRMAN:/ The Meeting is called to order.
Gentlemen, we shall discuss, or resume our discussion
to-day, at the point we broke off at on Friday. On Friday
25.2,
we were considering Article . Paragraph (e). A number of
Amendments concerning the substance of this paragraph were
introduced, and we cannot conceal to ourselves but must
recognise that no agreement was reached within the Commission
on these Amendments.
I shall recall these Amendments to you. First there was an
Amendment which had the intention of extending the sections
not only on certain restrictive measures, but also on quantities.
Then we had an Amendment which had in mind to extend the
explanations on measures which were concerned with the
stabilisation of prices, and also on industrial products-
Finally, we could not find an agreement on the text proposed.
by the Secretariat, which wanted to establish a certain amount
of proportion between imports and national production.
I shall now ask whether there are Delegates who want to
take the floor on paragraph (e) of Article 25.
The Delegate of China.
Mr. TUNG (China): Mr. Chairman, the Chinese Delegation
wants to clarify its position on the Amendment which it
presented at the last meeting.
At the last meeting we hear several Delegates enquire
about the meaning of the word "Regulation".
We want to state, frankly, that when we put the word
"regulate" we mean that that Member Government which applies a
restriction upon imports may increase or decrease their domestic
prodution of like products.
G
2 3 -
We want to because we think it is obligatory for the
country to regulate its economy in order to safeguard their
stabilising of prices, or to prevent, or arrange for in case of,
an emergency. That is the first point I want to clear.
The second point is that although we stick to the
principles of this provision of paragraph (e), to have this
general restriction on agricultural products, our view is merely
confined to the staple foodstuffs and essential materials, and
even with the staple food products and essential materials we
do not intend it to serve as the basis of our economy; but we
want to have a wide margin of safety in order to stabilize our
agricultural prices in normal times, and to prevent very serious
shortage in times of emergency; and we also want to make it
clear that China will be perfectly willing to participate freely
in any inter-Governmental arrangements, because we have a surplus
of certain products. But that has to be done by free negotiation,
and cannot be bound by this rigid measure in the Charter,
Finally, we want to make it clear that China does attach a
great deal of importance to this issue of agricultural products.
Our whole attitude on the Charter will depend upon this vital
issue. If the Chinese Delegation is not convinced. by the
Committee here in general, we are afraid we will have less chance
to commit our Legislature, which is composed largely of popular
representatives from the whole country.
G E/PC/T/A/PV/21
CHAIRMAN: (Interpretation): Does anybody else wish to
take the floor on this subject?
Gentlemen, in that case we are in a position to pass on to
Sub-
the next paragraph of this article -/paragraph (f). The United
States Delegation has submitted an amendment proposing the
deletion of this sub-paragraph. I will call on the representative
of the United States to give a clarification of this amendment.
Mr. C.L. TUNG (China): Mr. Chairman, is it understood
that the sub-paragraph is going to the sub-Committee?
CHAIRMAN (Interpretation): I would like to have proposals
after the general examination of Article 25.
Mr. Oscar RYDER (United States): Mr. Chairman, the
reason we suggest the deletion of this sub-paragraph is
explained in our note:"paragraph (f) should be omitted
inasmuch as its substance is already covered by sub-paragraph
(g) of Article 37" That sub-paragraph in Article 37 exempts
state-trading monopoliesfrom the other provisions of Chapter V
as well as from the provisions of Article 25. "In order to
make this perfectly clear, sub-paragraph (g) of Article 37
might be amended as follows:-
(g) Necessary to secure compliance with laws or
regulations which are not inconsistent with the provisions
of Chapter V, such as those relating to the enforcement of
state-trading monopolies".
CHAIRMAN (Interpretation): Does any other Delegate
wish to speak on this amendment?
Mr. J. T. DEUTSCH (Canada): Mr. Chairman, I just wish
to ask for some clarification of the United States amendment.
V
-4- E/PC/T/A/PV/21
- 5-
If you have a monopoly for, shall I say, the import of any
commodity and you set up an Organization to administer that
monopoly, you give it the exclusive right to import. In order
to enforce that exclusive right, you may have to put on an
import prohibition against the import of that commodity by any
private or other Organization. Would that be permitted under
the American amendment? It says one may do such things as
"are not inconsistent with the provisions of Chapter V".
Chapter V says that there shall not be any import prohibitions,
so I am not quite clear how you would enforce a state-trading
monopoly unless you are able to put on import prohibitions
against the persons or entities to whom you do not wish to give
the power to import, because by seeking a monopoly, you give
exclusive rights to a particular entity, so you must prevent
other entities from carrying on the trade. The only way you
can do that is by putting on certain prohibitions. Unless
you can do that, it seems to me you have not got the authority
you need, and I wonder whether Mr. Ryder would explain how that
would operate. Mr. OSCAR RYDER (United States): Mr. Chairman, I daresay
there is an error of drafting in our amendment and we would like to
reconsider the phraseology used in the amendment, as I think that
the amendment, as it stands, is subject to the objections of the
delegate of Canada.
Mr. R.J. SHACKLE (United Kingdom): Well, I would like to say
that this amendment does not raise any other objections of principle,
but we think that the drafting should be revised very carefully.
Mr. L.C. WEBB (New Zealand): Mr. Chairman, I would like to say
that, in the main, we have no objections to this proposal, but we
feel, nevertheless, that the change could conceivably be one of
substance if the amendment is drafted in a particular way, but we do
not think that the amendment is clear as it stands. We would like
to have an opportunity of seeing the United States amendment
revised.
R. E. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, although
we are expecting a new draft of the United States delegations
amendment, I would still like to make a few comments about the
present wording, because we sreter the origirial wording as it is in
Article 25. Now, I feel that it is not important whether this
Sub-paragraph (g) is in Article 25 or in Article 37, but in
this case probably all exceptions should pass, also to 37 and should
not be here and there. It will then be quite clear that if there
is a monopoly there must be some possiblities to control this
monopoly so that everybody would not be entitled to import if there
is this monopoly. On the other hand, as the United States draft
stands here, if we say "Necessary be secure compliance with laws or
regulations which are not inconsistent with the provisionals of
Chapter V..." does it mean that some Organization would be entitled - 7- E/PC/T/A/PV/21
to decide whether some laws or regulations of some country are
consistert or inconsistent with the provisions of Article 257
Because if it doos we would nct be acting in the spirit of the
Charter of the United Nations, which says: "Nothing contained in
the present Charter shall authorize the United Nations to intervene
in matters which are essentially within the domestic jurisdiction of
any state or shall require the Members to submit such matters to
settlement under the present Charter". I also think that the other
provisions for Customs Regulations, prevention of restrictive
practices and the protection of patents, trademarks and copyrights,
are going tw ar a I thinkt tny ciuntry has Its own means to prevent
the restrictive practices and the protection of patents and so on,
and.it. is not necessary to mention it in connection with state
monopolies.
Mr. OSCAR RYD R (United -States): I would like to go back to
the phraseology of our proposed amendment to (g), Article 37. It
is possible that there is a drafting error in this amendment.
However, if you read it in connection with the introduction to
Article 37, you will see that it is perfectly all right. The last
sentence of the introduction to Article 37-reads: " .. nothing- in
Chapter V shall be construed to prevent the adoption or enforcement
by any Member of measures.. say : N=Now, itSY'ecessary to secure
Compliance with the laws and regulations which are not inconsistent
with the provisions "f Chapter V, and state trading monopolies are
not inconsistent with Chapter V. In other words, anything
necessarc t carry Gut-laws which are permitted under the Charter,
such as state trading mon polemp, ds. exenrtec underArtiole 37. L. - 8- E/PC/T/A/PV/21
CHAIRMAN: Mr. Augenthaler.
H.E. Z. AUGENTHLER (Czechoslovakila): I was going to fefer
to the explanation given by the United States delegate. I am not
sure whether this explanation meets the difficulty, because Chapter
V. nowhere provides for the conditions necessary to establish a
monopoly . It simply says if there are monopolies they shall con-
duct their business in a certain way. The Chapter nowhere provides
certain
that/conditions will be necessary in order to have a monopoly.
There is nothing in Chapter V to prevent measures which are not in-
consistent with Chapter V, but import prohibitions or export pro-
hibitions are inconsistent with Chapter V. I do not think the
situation is met by that explanation.
Mr. OSCAR RYDER (United States) : It seems to me that this
is a question which should be referred to the sub-Committee. I
do not think there is any differences of opinion as to what should be
done, it is just a matter of drafting.
CHAIRMAN (Interpretation): Be will now pass to the other
amendment referring to Article25. There are three amendments, and
all of them introduce new exceptions. The first amendment is intro-
duced by the Cuban delegation which wants to extend import restric-
tions to any products in which a Member considers domestic production
essential to the economic development of its country. The second
amendment is presented by India; this amendment seeks to make
legitimate prohibition or restriction which might be imposed as a
safeguard against the effects of inflationary tendencies. The third
amendment is presented jointly by Syria and Lebanon and seeks to ex-
tend the exceptions to certain restrictions which will be trade in
order to protect domestic production. I will ask the authors of
the amendments to speak in turn. E/PC/T/A/PV/21
Mr. R.L. FRESQUET (Cuba): The Cuban delegation submits
a proposal to allow the use of import restrictions as a protective
measure for the economic development of a country. We make no
difference between agricultural and industrial products, because, as
I said before, we frankly present this proposal as a protective
measure.
We are aware of the fact that we cannot give a blank cheque to
any country for the use of protective measures of this kind, and
therefore, in our proposal, we have established the necessary re-
quisites to make use of this proposal. So we said that a Member
will use import restrictions only in case subsidisation has proved
or is likely to prove inoperative, and that a Member will eliminate
import restrictions if, after a reasonable period of time, which
ordinarily shall not exceed three years, the conditions of its
agricultural or industrial production intended to be developed, have
proved that it is not capable of maintaining itself without further
protection during an unlimited period of time.
Moreover, if the Organisation thinks that the measure is likely
to have an extraordinary and unduly restrictive effect upon inter-
national trade, it may intervene in the matter and request the Member
that has established such measures to consult with any interested
Members with a view to a satisfactory adjustment of the matter.
If no such adjustment can be effected, the Organisation may,
nevertheless, make the appropriate recommendations to the Members
concerned. In any event, paragraph 2 of Article 35 shall be applied.
in this case.
Allow me, Mr. Chairman, to explain briefly the reasons why our
delegation has submitted this proposal and similar ones in the Articles
of the Charter dealing with subsidies and internal taxation.
L.
- 9 - L. -10- W/PC/T/A/PV/21
Cuba exports a little over 50% of her national output. Out of
that 50%, almost 85% is represented by sugar and nearly 10% by
tobacco.
In the progress of our negotiations here in Geneva we have come
to this realisation: Even if our largest sugar consumer market
allows us a substantial reduction on the sugar tariff, we do not
see how we will be able to export one single additional pound of
sugar to that country, because that importing country has estab-
lished a quota system by virtue of which the amount of sugar we can
export to the said country is limited, and has further established
a system of subsidies to domestic producers, which keep her domestic
industry alive, notwithstanding that it has proved through long
years unable to live without protection and unable to fulfil its
own quotas in case of a war emergency.
That same nation is also one of our best markets for tobacco,
and it also maintains a quota system for our manufactured product
and a system of high internal taxes which make it impossible for
our manufactured product to reach a wide number of individual con-
sumers.
Other nations with which we have dealt here in Geneva have been
unable - so they say - to reduce their tariff on sugar, because they
have come to consider this item as a source of great importance for
revenue purposes. That is also the case of our tobacco, barred
from the markets of the majority of the countries represented, on
account of the system of monopolies and State enterprises they
maintain, or in other cases due to the social legislation in connec-
tion with this particular item. E/PC/T/A/PV/21 /
- 11 -
Out of our export trade, we have - especially with one big
country - a small tre c in several other items, among tm :. mineral!
and r.m Our experience in the negotiations hasebcen that,due to
the policy of elimination of preferontials, we may lose the small
muipetitivo margin we now enjoy in these products. eha policies of
those Countries mentioned above have found their ratification in
the Chartur and will continue to be applied agnirst ournirtres'sts
in spite of the general purposes of the Charter.
So our position is that after negotiations, riL,ff negotiations.
in Geneva have been morpled,;d we cldbt iw ,e will be able to
increase ba u single dollar our exportradlde.
I do nowt ant to brina _t this time the consideraon ' that,
after the termination of t eh-reigency situation now existing in
regard to sugar, we may also have to reduce our sag3r pdocu.tion.
So, not only will we be unable to increase our export trade, tua we
will also have to face a decrease inusach export tdace within a
yCar or so.
3ot me now sayM 2r. Chairman, that our production of sugar and
tobacco only provideabou ot %3, of the employmentewveed Ed to viVe
Jobs to those aelc and willing to work, In the ra'tucJlar casef 0
sugar itmaust be said that the moplomuent it provdes . is only fr
a limited period during, the year and that no matter how large our
sugar crop aay be, the amount of persons employed does not vary.
If we have a production limited to the around we had in 1932, we
will use the same number of workers for two two-and-a-half months,
and if we have a large crop, such as the one we have had this: year
we use the same number of for workers for five or six months.
Let me say also that we had practically the sarme sugar crop
in 1920 as we have this year, and in l920 we only had one-half of
the population we have today. J. E/PC/T/A/PV/ 21
Therefore, we have to provide employment for 75% of our
working population by means of an expansion of our agricultural and
industrial enterprises. Any industrial enterprise in Cuba has to
face the competition of the highest industrialised country in the
world only 90 miles from our shores and also the competition of
low-wage producing countries within the hemisphere. I may say
that on account of the specific provisions of the Cuban
Constitution enacted in 1940, our workers are enjoying today one of
the most liberal social legislations in the world. This means a
high cost of production of a kind that we cannot eliminate by a
simple change of legislation, because, as I have said before, our
labour legislation is to a large extent embodied in our
Constitution.
In accordance with the rules established by the Tariff Working
Party Commission, if we do not negotiate an item here, that will
mean the consolidation or binding of the tariff we have in force if
that tariff has been negotiated in any previous treaty we have
made. Naturally, we were not isolated in the trade field before
we came to Geneva, and we had negotiated prior to our coming here,
in all our tariff system.
Therefore, if we want to protect any particular item through
tariffs, the only way is to negotiate an increase in the tariff
here. We have not found in the other parties with whom we have
been negotiating an understanding of this simple deduction and they
have not been willing to accept it and to enter into negotiations-
to that end.
So, if we do not have the instrument of tariffs as a protective
measure, what else can we do to protect our infant industries
agricultural enterprises, which we must. develop to provide jobs
for the remaining 75% of our population able and willing to work?
- 12 -
J. - 13 -
E/PC/ T/A/ PV/ 21
That is why we have come to this particular case of quotas and
have included among the causes in which quotas should be permissible
the industrial products. That is why we have gone to article 30,
dealing with subsidies, and. have presented an amendment aimed at
the use of the only kind of subsidies to which a small country like
mine, without experience in the credit system and without the
necessary training in deficit budgetting, can resort to. I refer to
the direct method of exempting domestic producers from consumption
taxes. This is not the time to repeat here the reasons I gave when
we presented our amendment to article 30, but allow me to say now
that the economic effects in the costs and prices of a subsidy taken
from the general budget or through any particular kind of
government financing are the same as in the case of a direct subsidy
such as we proposed.
That is also why we have presented in article 15 an amendment
to protect our domestic industries.
We have observed all throauh the Charter how the only changes
some countries will have to make are those connected with tariff
in accordance
reductions through negotiations which are not being carried out/with
the general principles of the Charter. We have also watched all
through the Charter how nations with difficulties in their balance-
of-payments have managed to get the blessing of their restrictive
policies now in force.
On the other hand, we have seen established onerestriction after
another upon under-developed countries which have had to content
themselves with the drafting and printing of highly-inspired
declarations that have no practical value for them.
If, after joining this Orgainization, we are going to be
prevented from the use of any protective Measures and if through
negotiations we have been unable to get a free hand in any - 14 -
J. E/~~~~~A/~~/PC/T/x' 4APV/21
particular item to use the tariff as a means of protection; if we
do not see any increase in our export trade as a result of our
dealings ie this Confercnce, what benefits do we get from this
structure aimed to realize high standards of living, full employment
and conditions of economic and social progress, and so forth, as
established in the General Purposes of the Charter?
Now, let m- bring this consideration to the Committee. If
any nation such as ours, outside of the 17 here represented, is -
as it should logically be - enjoying through previous treaties trade
with other nations
relations/of the world of particular importance to its economy and
without any limitation whatsoever as to what to do in domestic
policies, do you think that any such country will be willing to
Jin us in this enterprise?
Up to now, v do not see that wv are going to get any increase
in our trade as a result oef this annorence, izd on the other hand
we are committed to reduce our tariffs so as to increase the trade
of owhers, and ve will alsommave to conrit ourselves to a lot
of prohibitions which will prevent aec further uzonomic development
in our country amd will haraamhe small uiount of industrialization
we have achieved.
We excuse ourselves for the length of our speech and we beg
you to bear in mind the above realities when you come to consider
our proposals. Thank you. G - 15- E/PC/T/A /PV/21
Mr. HAKIM (Lebanon): The subject of quantitative restrictions
in the interests of economic development is now under discussion
in the Sub-Committee on Chapter IV.
The question at issue there is whether protective measures
involving a departure from Article 25 should be subject to the
prior approval of the Organisation. The Delegation of Lebanon
would prefer to wait for the result of the discussion in the
Sub-Committee on Chapter IV before taking a definite position on
this question.
In this connection I would like to point out that the question
of the use of quantitative restrictions for protective purposes
is raised by numerous Amendments to different parts of the Charter.
In addition to our Amendment and the Cuban Amendment, there are
Amendments by the Indian, Chinese and New Zealand Delegations.
It would be desirable, Mr. Chairman, to centralise the discussion
on this subject in some joint Body including the Sub-Committee
on Chapter IV which has been indicated. in this discussion for
quite some time. V 6 E/PC/T/A/PV/21
CHAIRMAN (Interpretation): Gentlemen, I am very grateful
to the Delegate of the Lebanon for his proposal. As a matter
of fact, on the suggestion of Mr. Coombs, I was about to submit
a similar suggestion. As soon as we have completed our
discussion on Article 25 and a sub-Committee is established to
go further into this Article, I propose to suggest a joint
meeting between the sub-Committee which will deal with Article
25 and the sub-Committee which is now dealing with Chapter IV.
The Delegate of Australia.
Dr. H.C. COOMBS (Australia): Mr. Chairman, I feel
somewhat worried about the procedure which we ought to follow
in this case. It is true that this question of the use of
quantitative restrictions for protective purposes has arisen
in our work on Chapter IV, and it arose as an issue whether
the exceptions to the prohibitions embodied in Chapter V which
are granted in Chapter IV (particularly in Article 13), should
require the prior approval of the Organization. In certain
cases it was agreed that they should; in other cases, agreement
was not reached, and it was felt necessary, therefore, to
discuss the matter with the sub-Committee dealing with the
various Articles in Chapter V concerned. We commenced that
discussion this morning, but it was clear very early that the
nature of the argument would but very similar to the argument
which has been goning on here and will continue if this
matter is dealt with in full Commission.
However, Mr. Chairman, I feel that this is not a question
which it is appropriate to deal with in a sub-Committee.
Generally, it is assumed that when a subject has been referred
to a Working Party or sub-Committe, the sub-Committee is - 17 -
given a direction as to the general line of content, and the
discussion is essentially one of the means of impllementing that
and the precise wording that should be adopted.
I feel that the amendments submitted on this Article_ and
those which have been suggested to Article 13 in our work on
Chapter IV, go beyond amendments of form or of minor substance
and represent a material change in the general substance of
the Charter, insofar as the use of protection is concerned;
and I think it proper, Mr. Chairman, that this question, if
not dealt with in full Commission, should at least be dealt
with by a committee or a sub-Committee which includes all the
countries present."
At the same time, it is clear (as the Delegate of the
lebanon has pointed out) that the issue cannot be confined to
a particular Article or group of Articles - it arises right
through the Charter, and I > . .. g some responsibilities for
two of the sub-Committees, have been concerned to avoid
procedure which would involve going over the same arguments
again and again. We have had or are in the process of
having the argument in Chapter IV; we have had it in the
Committee on Articles 14, 15 and 24; it is clear that when
a sub-Committee is set up to deal with Articles 25 and 27
we will have it again, and we may have it yet again the
Article dealing with exceptions to Chapter V and again on the
Article dealing with procedures and organization.
I would like to suggest, Mr. Chairman, as a variation on
the proposal which you your self have made, that we convert
the point sub-Committee on Chapter IV and Articles 14, 15 and
24 into a sub-Committee on the whole, or something of that
sort, which is instructed to deal with the various amendments
V
E/PC/T/A/PV/21 V
18-
which have been brought forward affecting different parts of
the Charter, where the substance of them is a proposed change
in the general attitude towards protection for industrial
development purposes. If we can do that, I think it might be
possible to bring these suggested amendments together and
have determined the decision of policy which it may be possible
for the various sub-Committees to apply without further
argument to the particular Articles with which they are
concerned; but I think, unless something like that is done,
Mr. Chairman, you may find that this procedure of going over
the same arguments again and again in various places is
going to continue to the detriment of our time-table.
E/PC/T/A/PV/21 ER
- 19 -
Mr. OSCAR RYDER (United States): I want to support the
general suggestion made by the delegate for Australia. This
amendment is of fundamental importance to the Charter. It is,
in a sense, the same question as is now occupying the attention
of the Sub-Committee on Chapter IV. As Mr. Coombs so rightly
said., it is no use fighting that battle all over the Charter.
As I see it, the decision should be made there and should be
incorporated in Article 13 without further ado.
Mr. R.J. SHACKLE (United Kingdom): I would like to support
Dr. Coombe suggestion also. We have of course already, this
morning, started a discussion on prior approval in the Joint
Sub-Committee on Articles 14, 15 and 24, and Chapter IV and in the
other Sub-Committee on Chapter IV. Well, I must say it seems to
me a little strange that we should be discussing a matter of
such substance in what is after all only a Sub-Committee, and I
do feel very much that it is desirable to widen the arena so as
to become at least a Joint Sub-Committee of the whole. I am
wondering whether we can possibly regard the proceedings of this
morning as a beginning of the proceeding of the Committee as a
whole, because it would be a pity to go over the same ground again.
Therefore, I would like to support Dr. Coombs' suggestion.
M. KOJEfVE (France) (Interpretation): In our opinion it would.
be preferable if all delegations could take part in the discussion
on this amendment.
Mr. C.L. TUNG (China): The Chinese delegation is highly in
favour of the Cuban and Lebanese amendments to place their pro-
posals as an exception to paragraph 1 of Article 25; and in fact
the Chinese delegation had made a similar proposal during the
First Session of the preparatory Committee. I think that all
E/PC/T/A/AV/21 ER
- 20- E/PC/T/A/PV/21
delegations present in this Committee recognize that under-
developed countries should have a chance to adopt protective
measures in the form of a tariff restriction or a quantitative
restriction or otherwise. The point of contention is whether
we should have a previous consultation or not. In Article 13
of Chapter IV it provides that all protective measures for the
protection of underdeveloped countries should go through a
number of processes, on previous consultation. The Chinese
delegation attended the meetings of the Sub-Committee dealing
with that Article and. have repeatedly objected to this previous
consultation. - 21
Inthe first place, there must be some response to any pro-
tective measures from other countries similarly affected. Then
there will be an interim period, perhaps a long time, during which
many changes may happen either in the country itself or in other
countries. Also, there may be something secret about the commodity
which the country it going to protect, and if there is suddenly
disturbance in the market that will defeat the very object the.
country is going to protect. If we really want to give a country
the chance to adopt protective measures either for the general good
or for the good of itself, I think we should not insist upon this
previous consultation. If we adopt the Cuban or the Lebanon
amendment and pu. these measures as an exception to Article 25, it
will not Gcn:SQfi.t in any way with article 13 at all. It should be
placed as an exception to paragraph 1 of Article ?.5 so the Articles
can go on as they are,without any consultation,within the Charter
itself. Therefore, I am highly in favour of the Cuban amendment or
the Lebanon amendment, but in connection with this I must express tea
opinion of the Chinese delegation and say that we strongly object
to the proposal of previous consultation, because we feel firmly it
will not have the proper effect but will be a camouflage.
CHAIRMAN (Interpretation): Yielding to the desire t--
several delegations that the problem of measures for safeguarding
the protection of new countries - measures which were the object of
discussions on Article 14, 15, and 21, as well as on chapter IV and
Article 25 - should be discussed in a plenary session of Commission
A I suggest that this discussion take place on Wednesday morning
I believe the joint meeting of two Committee which h was fixed for
Wednesday morning has already met to-day, so that we can reserve
Wednesday morning for this discussion in plenary session. Are you
all agreed?
E/PC/T/ A /PV/21-
I. - 22 - E/PC/T/A/PV/21
Mr. B.N. ADAKAR (India): There is a meeting of the
Tariff Working Party on Wednesday morning.
CHAIRMAN (Interpretlation): I regret, but there simply
does not exist one single day in the week when we shall not find a
similar inconvenience; therefore we must make our choice.
Mr. B N. ADAKAR (India): It was expected that the debate
on the amendment we proposed would take place after the discussion on
Article 26 . We have moved an amendment in the form of an additional
Article - Article 26 (a), and the date was fixed as the 16th July, or
after, in view of the fact that all amendments relating to
quantitative restrictions are to be considered together in plenary
session, I wonder whether it will be possible to have that discussion
some time next week.
L. J. - 23 - E/PC/T/A/PV/21
CHAIRMAN (Interpretation) : I will make a different suggestion.
Since your amendment is of the same type as the question which we
shall discuss on Wednesday, that is, the creation of a new
article 26A, I suggest that your amendment be discussed on
Wednesday during the course of the general discussion.
MR. B. N. ADAKAR (India); Mr. Chairman, I understand that
position precisely, but I was wondering whether the discussion could
be postponed until some time next week because the discussion is
now taking place much earlier than we expected. We expected our
amendment much later, according to the time-table which has just
been set out. If it is possible to postpone that discussion until
some time next week without much inconvenience, that should be alright.
CHAIRMAN (Interpretation): However, I must insist on the
discussion on this amendment on Wednesday. This amendment was
prepared in advance and we are all familiar with the text of it.
It would really offend the Indian delegation, whose excellent
representation we have heard so many times, should we think that the
Indian delegation were not in a position to discuss their amendment
on Wednesday.
I shall address myself again to the Indian delegate. There
is another Indian amendment in relation to Article 25, which
proposes the prohibition of restrictions applied as a safe-guard.
against the effects of inflationary conditions. This is an
entirely new question.
MR. B.N. ADAKAR (India): Mr. Chairman, the amendment which
we have proposed is the counterpart of a provision which exists in
Chapter III, under which Members of the Organization cantake action
to safeguard themselves against external deflationary pressure. - 24 -
V ~~~~~~~~~~~E/P C/ T/A/PJ/ 21
It seems to us that it is as i.portant to provide against
external inflationary pressure as against external deflationary
pressure. However, at the tine when we proposed this amendment,
we were not awaee of the aaondrent ruled by the Australian dolegation
to sub-paragraph (b) of paragraph 2 of this Article.
This ameecement was discussed in this Commission, it roeived.
considerable supmport, and it has been referred to the sub-comittee.
We think that the point we have in mind could perhaps be solved by
a suitable re-drafting of this paragraph, and in the circumstances,
we would be prepared to with-draw our amnd.ent with the request
that the sub-conaittee which will be set up to deal with article 25
should consider whether sub-paragraph (b) of paragraph 2 as
re-drafted would be adequate to deal with the situation in which
Membcrs of the Organization will have to protect themselves against
external inflationary pre ssre .
ene same applies to the consequential amendunat to article 28,
paragraph (b), whioh We have proposed.
Thank you very rmch.
E R.J. SLAiE (nited Kligdm): Mr. Chairman, I presume
hat the .stralirn axendueat reforrec. to is that in NIte 5 on
page 3 of document W/223?
CHLjRbAN (Interpretation): That is correct.
The celeg to for Brazil.
ER_ E.L. ROrIDlUES (Brazil): Mr. Chairman, I think the
Australian amenddent does not completely cover the Incian
amendment. In the case of over-employment in a country, like we
have at present in Brazil, sometimes we need to make some export
prohibition in order to avoid the use of man-power in certain - 25 -
J. E/PC/ T/A/PV/21
industries., I give an example. We have the textile industry in
our country and we can export and get a very high price in some
particular Latin American countries but it is very difficult for
the production of other goods, because at present we have over-
employment and I think the same thing is happening in other countries.
Because of this, I would support the Indian amendment and I think
we need to have something like the Indian delegate has suggested
in order to cope with such a situation, as view have at present in
Brazil and in other countries, caused. by inflation. - 26 -
E/PC/T/A/PV/21
CHAIRMAN (Interpretation): Gentlemen, I believe that the
best solution mull be for the Sub-Committee to consider the
Australian amendment in the light of the remarks made just now
by the Delegates for India and Brazil.
We can now pass onto Article 27. Non-Discriminatory Adminis-tration
of Quantitative Restrictions.
There is something particular about paragraph 1. No
Amendments were submitted in relation to this paragraph.
Therefore we can pass on to the next paragraph.
The first Amendment concerns sub-paras. (d) and (e) of
Article 27,2,The Amendment was introduced by the U.S. Delegation;
therefore I shall call on the representative of the United States.
Mr. OSCAR RYDER (United States): This Amendment relates to
cases where import licenses are issued in connection with quota
allocation. The Article as it stands in the New York Draft
requires that no provision shall be made for prohibition on
import licences, providing that the licencess are utilised
for the importation of the product concerned from a particular
country or source.
Now, particularly in cases where there is no quota, where
imports are regulated by licence, it is of particular importance
not only that the licences do specify the country from which
the imports are permitted, but that the licenses are not
distributed among importers in such a way or under such
conditions as would actually cause discrimination between
countries: and it is to take care of that that we introduce
our amendment, which reads, "Moreover, such licenses or permits
shall not be distributed among importing or supplying enterprises
in such manner, or be subject to such conditions, as to result in
discrimination against any Member".
G G - 27 - E/PC/T/A/PV/2l
This makes it clear that the paragraph provides there shall
be no discrimination, either direct or indirect, in the
administration of the import licence system.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. SHACKLE (United Kindom): I feel rather doubtful about
this Amendment, because it seems to me it attempts to define, by
means of certain rather vague terms, a point which, I think, is
already clearly, implicit in the text we already have. In
(a) of para. 2 of this Article, we real: "The administration
of the restrictions should be carried out in such a way as to
result in a distribution of trade which approaches as closely
as possible to the shares which the various Member countries
might be expected to obtain as the result of international
competition in the absence of such restrictions.
That paragraph was put in, I think, to indicate the general
governing idea of the whole of this Article. It is, in fact,
I think, a sort of attempt to say what discrimination or non-
discrimination should be, in this connection. And then again,
we have already in this paragraph (d), as it now stands, a
provision that the issue of import licences or permits shall
not provide or require that the licenses or permits shall be
utilised for the importation of the product concerned from a
particular country or source.
Well now, my feeling is that in those two paragraphs you
have already a sufficiently clear intention of the whole object
and spirit in which these provisions should be administered, and
I very much doubt if you further the matter at all by introducing
these new words, which, as far as I can see, depend entirely on
what you mean by discrimination, "Such licenses or permits shall G - 28 E/PC/T/A/PV/21
not be distributed.. in such a manner or be subject to such
conditions as to result in discrimination against any Member".
Discrimination is not a term which explains itself,
particularly in connection with a matter like quantitative
restrictions, and I do feel that in so far as you can have a
definition of what non-discrimination can be taken to mean, (a)
of para. 2 is an admirable definition, and provably the best
you will ever get.
So I should be strongly inclined to leave the butter with
the text as we have it. I doubt if this addition makes
anything clearer. It seems to me it rather introduces doubt.
It does seem to me, if we introduce this Amendment we
rather compel ourselves to go round and round in circles; because
the title of the Article is "Non-discriminatory administration
of quantitative restrictions". The object is to define what
Non-discrimination is, and when we say licenses and permits
are not such as to result in discrimination against a Member,
it is a circle. We go round and round. V
- 29 -
CHAIRMAN: The Delegate of France.
M. KOJEVE (France) (Interpretation): Mr. Chairman, I
merely wish to say that I entirely support what my colleague
from the United Kingdom has just said.
CHAIRMAN: The Delegate of the United States.
Mr. Oscar RYDER (United States): I do not quite understand
the cogency of the argument put forward by the Delegate of the
United Kingdom. If his argument were correct, then you would not
need sub-paragraph (d) at all, as far as I can see. Sub-
paragraph (a) merely states general objectives, then what
follows gives a detailed prescription. Now, the first part
of sub-paragraph (d) provides that "import licenses or permits,
whether or not issued in connection with quotas shall not
(save for purposes of operating quotas allocated in accord-
ance with sub-paragraph (e) of this paragraph) require or
provide that the license or permit be utilized for the
importation of the product concerned from a particular
country or source". Now if you are going to do that,
it seems to me it is necessary to go further, because the
mere formal requirement of a license is not by any means all
that there is to the matter. There are various practices
which have been and can be continued; which result in dis-
crimination between countries: discrimination in the
distribution of licenses among different importers who have
connection with different countries, also discrimination,
in the conditions under which the licenses are granted.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I must
E/PC/T/A/PV/21 V - 30 - E/PC/T/A/PV/21
confess I find difficulty in understanding how this amendment
alters the situation, or just how it could be worked in practice.
Discrimination, after all, is not a term which explains itself
in the context of quantitative restrictions. In essence, as
I understand the idea--as, indeed, paragraph 2(a) seems to
define it--it is that there should be very much the same state
of affairs as if there were no restriction, so that competition
would have free play. It is in the nature of things that when
you have quantitative restrictions, competition does not have
free play, so that the signification of non-discrimination is
by no means obvious. That is why I am very worried by anything
which attempts to lay down a rule on the basis of this word
"discrimination".
When one comes to try to think out how this would work in
relation to the day-by-day work of licensing--there again it
is not easy to see just how it would work. It is clear that it
would not do for us simply to have regard for the concerns which
were engaged in the trade in the past. Trade is always liable
to change. You have got to make some kind of alliance for that
change; but it is not an easy matter to see just what you can
do.
I do feel that one needs to have a much clearer indication
of the kind of practical application that the United States
Delegation has in mind, before one can really make up one's
mind about it.
CHAIRMAN: The Delegate of China.
Mr. L. TUNG (China); Mr. Chairman, in the case of
issuing import licenses, if the issuing country finds it is
convenient to make a reference for the purchase of a V - 31 - E/PC/T/A/PV/21
particular commodity from a certain country, not because of
the low price, not because of the good quality, but because
the exchnge is favourable, would that constitute discrimination
against other Members? I wish the American Delegate would give
me a little enlightenment on that.
CHAIRMAN: The Delegate of the United States.
Mr. Oscar RYDER (United States); The Delegate of the
United Kingdom appears to be distressed about the word
"discrimination" The title is "Non-discriminatory
administration of quantitative restrictions". Sub-paragraph (a)
of paragraph 2 gives a general principle, and that would be kept
in mind, of course, in administering all that follows. I think
it is clear what kind of practices would be covered by the United
States amendment.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I still
feel very fogged over this. It seems to me that what it comes
down in practice to is: if, in order to secure the kind of result
contemplated in paragraph 2(a), loosely called non-discrimination,
you have to think out the position as between a number of firms
which have been in the trade in the past, and a number of new
firms that want to come into it,
just what is the right rule for dealing with a case of
that kind? Clearly, if you confine your licenses to the firms
that were in the trade in the past, you freeze the trade and
plainly, it would not do to throw all licenses open to new firms
and ignore the licences of the old ones . It seems to me that
this is a matter where you have to try a compromise in practical
administration, and the best thing you can do is to keep in view
the principle which is defined in paragraph 2(a) already, and
I fail to see, by adding the word "discrimination", you clarify
the matter one little bit. ER
-32 - E/PC/T/A/PV/21
Dr. A.B. SPEEKENBRINK (Netherlands): Mr. Chairman, I must
also say a little bit about this matter. I have some doubts,
because in paragraph 2(a) it says "The administration of the
restrictions should be carried out in such a way as to result in
a distribution of trade which approaches as closely as possible to
the shares which the various Member countries might be expected to
obtain ...." On the other hand, in (e) it says that you will
give shares to special particular countries. It might be fairly
difficulty to fulfill the obligation of (a), although I quite agree
that we should not have discrimination. I only want to point out
that the more stipulations you make here the more difficult it
becomes.
Mr. OSCAR RYDER (United States): I do not see any useful
purpose in continuing the argument with Mr. Shackle. The question
that he raises applies to the whole of the Article, particularly the
succeeding sub-paragraph, and I do not see that there is any more
difficulty here than elsewhere. It seems to me that, in this
matter, the necessity of additional language and changes of
phraseology can be submitted to the Sub-Committee.
CHAIRMAN (Interpretation): That is also my opinion. We can
close the discussion on this amendment and refer it to the Sub-
Committee.
Having looked at the other amendments relating to this Article,
I find that they are mainly amendments of form. The amendments
were introduced by the delegations of Czechoslovakia, the United
States and China. At a first glance it seems to appear that all
these amendments could be referred to the Sub-Committee. If,
however, anyone of the delegations concerned wishes to express
an opinion on these amendments I shall of course give them
Opportunity to speak. ER
- 33 - E/PC/T/A/PV/21
Mr. L. C. WEBB (New Zealand ) Mr. Chairman, the New Zealand
delegation does not regard the proposed amendment of sub-paragraph
(e), as proposed by the United States, as an amendment of form.
We regard it as an amendment of substance. I do not know whether
this is the appropriate moment for me to put forward our point of
view, but justly speaking, it is this. We feel that there is a
very substantial difference between 27,2(a) and 27,2(e). Paragraph
2(a) refers to the "distribution of trade which approaches as
closely as possible to the shares which the various Member countries
might be expected to obtain as the result of international
competition in the absence of such restrictions". Now, the
proposal, it seems to me, ignores the difference between that and
commercial considerations. In other words we would find great
difficulty in deleting the words which the American delegation
seeks to delete from (e): ".. the shares of the various supplying
Member countries should in principle be determined in accordance
with commercial considerations such as price, quality and
customary sources of supply". All that is proposed to be deleted
in the American amendment. We would only say that we do not mind
where those words go as long as they go somewhere. L. -34- E/PC/T/A/PV/21
We submit paragraph(a)should read something like this:
"The administration of the restrictions should be carried
out in such a way as to result in a distribution of trade
which approaches as closely as possible to the shares which,
in the absence of such restrictions, the various member
countries might be expected to obtain as the result of inter-
national trade based on commercial considerations."
We see a considerable difference between international com-
petition and trade based on commercial considerations; for one
thing, international trade is a short termaffair, and there are
many considerations in our view which would lead a member to ignore
the prices immediately current in international trade in the interests
of commercial considerations. In other words, countries selling
may not consider it expedient to sell at an immediately current market
price, or to buy at an immediately current market price.
For these reasons, we would very strongly oppose the change
which the United States delegation proposes to make, and our hope
would be that (e) would be left more or less as it is; but if (e)
is not to be left as it is, then (a) should be changed.
Mr, R.J. SHACKLE (United Kingdom): I am not ready to give
way on this point of form or substance. It does seem to me that
this overlooks the distinction between Article 27 and State trading
in Article 21. In Article 27 we are dealing entirely with govern-
mental regulation of private trade, The point about State trading
was dealt with in Article 31 at the end of the paragraph where it says:
"To this end such enterprise shall, in making its external purchases
or sales of any product, be influenced solely by commercial considera-
tions, such as price, quality," and so on.
I do feel the point the New Zealand delegate has made is really
a point for Article 31 and not one that should be made here. I
should have thought so far as the regulation of private trade is L. - 35- E/PC/T/A/PV/21
concerned, there is no relation between this paragraph and the
reference to commercial considerations which the United States
proposes to delete from paragraph (e).
CHAIRMAN: Mr. Webb.
Mr. L.C. WEBB (New Zealand): I would only say I did not
have in mind when I was raising the point the question of State trad-
ing. I. ill think that in (a) if we are going to make this change,
proposed by the American delegation, we must change (a), because it
is in my view commercial considerations which will determine action
as part of the Charter, rather than the short term and rather
chancy question of international competition as it happens to be
at the particular moment. That is what I was getting at.
CHAIRMAN (Interpretation): Would the representative or the
United States like to answer this objection?
Mr. OSCAR RYDER (Uni ed States): Sub-paragraph (a) states
the principle involved. When we get down to sub-paragraph (e) in
the New York draft, there is the same idea of commercial considera-
tions given in the text, and illustrations follow of certain things
that are of doubtful validity for commercial considerations. If
we read the comments in construction with this amendment, you will
notice we say:
"An objection to the mention of the principle of commercial
considerations in this context is that it seems to imply that
the government would have its own commercial interests in mind
(as in the case of State-trading) whereas in fact governmental
allocations should merely reject the factor of commercial con-
siderations as it may be influencing, or may have influenced, L. -36- E/PC/T/A/PV/21
all trade, whether public or private, in the product sub-
ject to the restrictions. This application to quota
allocations of the principle of commercial considerations,
however, is already fully covered by sub-paragraph (a)."
The question has been raised by Mr. Webb as to whether sub-
paragraph (a) should be reframed. I have an open mind on that, and
I think it can very well be referred to the sub-Oommittee. - 37-
J. E/PC/ T/A/PV/21
CHAIRMAN: Monsieur Kojeve.
M. KOJEVE (France) (Interpretation): Mr. Chairman, I still
believe that there is a difference between sub-paragraph (a) and
sub-paragraph (e). Sub-paragraph (a) deals only with the
operation of competition, whereas in (e) we have the notion of the
usual sources of supply. These are two quite different concepts.
I think the best way of intensifying and extending international
trade' is by consolidating and strengthening the traditional currents
of trade, and I think, in the light of this remark, that to keep the
questionable sentence in sub-paragraph (e) would serve the same
purpose.
CHAIRMAN (Interpretation): I think, Gentlemen, we can
instruct the sub-committee to propose suitable text.
The delegate of Chile.
MR. F. GARCIA-OLDINI (Chile) (Interpretation): Mr. Chairman,
I also believe that the whole text could be usefully referred to
the sub-committee. In fact I see a considerable difficulty in
the application of this article. This article, which deals with
restrictions relating to licenses and import permits and all
relevant communications, is so established that most time periods
do not coincide, and apparently the authors of the article were
quite aware of it since we constantly meet in the text with terms
such as "when possible" or "where possible" or "in principle".
These terms give the Article necessary flexibility, but at the same
time,the text is sometimes found to be too rigid, and is in
singular contrast with the flexibility of other sub-paragraphs
"in
Sub-paragraph (e) also provides for cases/which this method is not
reasonable practicable,"which seems to imply that the authors E/PC/T/A/PV/21
-38-
of the sub-paragraph quite foresaw that sometimes the methods they
provided for were not reasonably practicable. However, immediately
afterwards,a very rigid method is proposed, which is by no means
simpler than the method to which the words "In oases in which this
method is not reasonably practicable" apply. For all these reasons,
Mr. Chairman, I would suggest that the sub-committee consider very
carefully the whole question and, without departing from precision,
which after all is necessary, try to introduce more flexibility into
the whole text.
CHAIRMAN (Interpretation): Are there any more delegates who
wish to speak on article 27?
Monsieur Augethhaler.
H.E. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, if you
consider that we have finished entirely the discussion on Article 27,
I would like to stress here the importance of our amendment to
paragraph 3(b).
I think that all countries present would recognise that,
especially in the administration of quantitative restrictions in
general, and especially how it is here, the procedure is most
difficult for such a country if you think of a country of this kind
which is surrounded by other countries not applying the provisions
of the Charter. I cannot envisage what would be the consequences
of one country having free trade surrounded by countries which have
no free trade and which are maintaining the restrictions on foreign
trade.
J. G.
- 39
I think that it could be an economic disaster for this
country. That was the reason why we made a provision for this
case in our Draft, to the Article concerning relations with
Non-Members, and here we thought just to put the small amendment
about the publicity, which may be extremely important in these
matters too. We still hope that we will find a certain way
how to make it possible for a Member in its relations with Non-
Members to apply the Charter without endangering its own
economic life. Thank you.
CHAIRMAN: The Delegate of New Zealand,
Mr. WEBB (New Zealand): Mr. Chairman, I merely wish to
refer to Note 43 on the Document we are considering, and to say
that the New Zealand Delegation would be opposes to the
elimination of the words which the United States Amendment
proposes to eliminate, namely, the words "provided, however,
that there shall be no obligation to supply information as to
the names of the importing or supplying enterprises".
We do not think that it would be wise or practicable to
envisage a practice which is really not in conformity with the
commercial considerations which are mentioned. elsewhere in this
Charter.
CHAIRMAN: The Delegate for China.
Mr.TUNG (China): The Chinese proposal, after the
deletion of certain principles in Article 27 para. 4, is a cross-
reference to Article 25; so I simply want to mention that I
wish that to be discussed in connection with Article 25 2 (4)
in the Sub -Committee. Thank you.
CHAIRMAN: The Delegate of the United Kingdom. E/PC/T/A/PV/21
Mr. SHACKLE (United Kingdom): We also have the feeling,
with the Chinese Delegation, with regard to the proposed
deletion of the proviso at the end of that paragraph in Note 43
in our Working Paper, as we feel that this is a matter in which
it is not competent for a firm to give away their names.
CHAIRMAN: The Delegate of the United States.
Mr. RYDER (United States): I appreciate, in presenting this
Amendment, it is an Amendment based on the view that since the
granting of a licence for an enterprise would constitute
discrimination of particular countries, the namesof enterprises
receiving licenses should not be withheld. I doubt if there is
any case where there is any confidential information involved.
It is usual for competing enterprises in the different countries
to know who their competitors are, and I do not know of anything
about which there is more nonsense spoken than in regard to
confidential information in regard to matters of this kind.
It seems to me, unless you can know the names to whom
licenses are distributed, there is no way in which an Organisation
can determine whether or not there is discrimination.
CHAIRMAN: The Delegate of the Netherlands.
Mr. SPEEKENBRINK (Netherlands): With regard to this last
point, I think as the information is given from a Government to
a Government, that the Government giving the information
should have the right to accept that the information given, if
of a confidential nature, shall be treated as such. We have no
objection to this.
CHAIRMAN: The Delegate of Norway.
G.
-40 - G - - 4A -E//PC/T/./PV21
Mr. DER (Norway): Mr. Chairman, we think that the
proviso ought to stand as it stands now. As far as I can see,
the information referred to in paragraph 3 (a) in the first
part of the paragraphdD wou be sufficient; and, of course, when
given from a Government to a Government, it is obvious that should
be quite satisfactory and reliable, and I foresee certain
difficulties if we should go so far into details as indicating
names, which would also, of course, mean indicating quantities -
you get into all sorts of problems relating to quantities,
qualities, prices and competition, and you really risk getting
into rather deep water.
CAAAIUM: The Delegate of the United Xingdom.
MHACKEHQCEL (United Kingdom): Mr. Chairman: ,ould
to say I agree with the.iem rk ofrthaioxre Noawegelegate.
CHULSIPIRMANterixetapron): Gentlemen, are thox-a ere r
speakers on this subject?
The Delegate of Czechoslovakia.
Mr. AUGENHIr1ETHALEechoslovakia): Mr. Chairman, I woula
like to stress the point that we would support the opinion of
the New Zealand Delegation.
CH:IMAN:IRIhterpnetatron) I *elieve, Gentlemen, we
can leave articAe 27 to the Sub-Committee.
Gentlemen, it now remains for us to establish the Sub-
Committee which will deal with articAes 25 and 27. Here are
my proposals:-
The Sub-Committee would. be onstituted of the Delegates
of China, Czechoslovakia; the Netherlands, United- Kin dom,
UnitediSta es, an- Norday.
are you all agreed, Gentlemen? - 42 -
M. F. Garcia OLDINI (Chile): Mr. Chairman, may I take it
that it is understood that the sub-Committee will not deal with
the substance of the text before receiving the decision and
instructions of the Commission ?
CHAIRMAN: (Interpretation): That is agreed.
I have yet another announcement to make, gentlemen. As you
probably recall, we decided to refer Article 33 to a special
committee. It was further decided that the new Committee would
examine Article 33 only after completion of the examination of
Article 25. The special committee was composed as follows:-
the United States; Czechoslovakia; the United Kingdom; Australia
and New Zealand, with myself as Chairman.
I must now suggest two modifications. The first modification
is to add another Delegate to the sub-Committee, on the request
of the Members of the sub-Committee itself. I propose the
inclusion of the representative of Canada. The other
modification is that, unfortunately, I will not be in a position
to undertake the Chairmanship of this Committee. I must leave
Geneva for a few days at the end of this week, and I would like the
Committee to start upon its labours. Therefore, I will propose
another Chairman, a person who is just as neutral as myself and
who enjoys the general confidence of his colleagues: the
Delegate of Belgium, M. Forthomme.
I have yet another proposal to make, gentlemen, As you
know, tomorrow afternoon We are free. Therefore, I would suggest
that the discussion upon the question of measures of protection
necessary for the development of new countries is begun
tomorrow afternoon, and not on Wednesday, as scheduled.
Mr. Oscar RYDER (United States): Does that mean that
we will have a Meeting tomorrow instead of Wednesday afternoon?
V
E/PC/T/A/PV/21 - 43 -
CHAIRMAN: Yes.
The Delegate of New Zealand.
Mr. L. C. WEBB (New Zealand): Mr. Chairman, I missed
the point in the translation of your statement on the Committee
on Article 33. Did I understand you they that these changes
had been made at the request of the Members of the Committee?
I think it was an error in the translation.
CHAIRMAN (Interpretation): Not on the request, but in
conformity with the esire of the Members of the Commission,
that is, regarding the addition of the representative of Canada
to the Members of the Committee.
Mr. L. C. WEBB (New Zealand): As a point of accuracy
on the record, though, Mr. Chairman, the Delegation of New
Zealand (as a Member of the Committee) was not consulted in
this.
CHAIRMAN (Interpretation): Mr. Webb, have you any
objections to the Membership of the representative of Canada
in this Committee?
Mr. L.C. Webb (New Zealand): No, I raise no objection.
I merely wish to set the matter right on the record.
Mr. Oscar Ryder (Unites States) Mr. Chairman, the
Delegate of Canada is on the Committee on Article 33 and not
on the Committee on Articles 25 or 27, or on both?
CHAIRMAN (interpretation) No, only on the sub-Committee
on Article 33.
Mr. J.J. DEUTSCH (Canada): Mr. Chairman, I do not think I
have got correctly the membership of the sub-Committee on Articless
V. V -. 44 - E/PC/T/A/PV/21
25 and 27. Could I have the names again?
CHAIRMAN (Interpretation): China, Czechoslovakia, the.
United States, the Netherlands, the United Kingdom, and Norway.
Mr.J.J. DEUTSCH (Canada): Mr. Chairman, Article 25,
sub-paragraph (e) has occasioned a lot of discussion in this
Commission and affects very much the position of agricultural
exports, And I do think they are not adequately represented on
this sub-Committee and I would like to suggest the addition of
the Member of Brazil. E/PC/T/A/PV/21
Mr. C.I. TUNG (China): I think the discussion of Articles 25
and 27 is chiefly concerned with the underdeveloped and agricultural
countries. I therefore suggest that we should add the delegation
of India to this Sub-Committee because India has also a now
proposal on this protective measure in connection with Article 25
although it is put there as Article 26 A.
Mr. B.P. ADAKAR (India): Mr. Chairman, I appreciate very much
the intention of the Chinese delegation in making the suggestion,
but I do not wish to add to the difficulties of the Commission in
constituting this Sub-Committee. Already the number has increased
to seven, and I personally believe that the point of view which
India represents would be adequately represented by the delegations
of China and Brazil, and in the circumstances I do not support the
suggestion by the delegate for China.
Mr. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
when, a moment ago, I asked you whether the substance of Articles
25 and 27 would be solved by the Plenary Commission which is to meet
tomorrow, I had in mind precisely that question. On second thoughts,
however, it occurred to me that even if the question is solved here,
the Sub-Committee is bound to give it a phrasing which corresponds to
the Members who sit on it. It strikes me that unfortunately the
list of Members does not include any Member who is against the
proposed amedments to sub-paragraph (e) which had set one half of
the Commission against the other half Acting under the proposal of
the Canadian delegate, you have added the delegate for Brazil but
it rather strikes me that he will be lonely in that Sub-Committee.
Mr. R.L. FRESQUET (Cuba): Mr. Chairman, I propose that we
after
defer the composition of the Sub-Committee until/we have had full
discussion of that matter in tomorrow's meeting. E/PC/T/A/PV/21
- 46 -
CHAIRMAN (Interpretation): Gentlemen, I am in the hands of
the Commission, and I see no objection whatsoever in associating
myself with the proposal made by Mr. Fresquet.
Dr. J.E. HOLLLOWAY (South Africa): I propose that the
composition of the Sub-Committee be left to the Chairman, and that
it should be constituted of five Members, and that there should be
no right of appeal!
Mjr. OSCAR RYDER (United States): I endorse the suggestion of
the delegate for South Africa, except that I would let you appoint
six Members if you want to, and I think that the Sub-Committee
should be appointed now and should get to work immediately.
Mr. R.L. FRESQUET (Cuba): Mr. Chairman, I have no objections
at all to the suggestion made by the delegate for South Africa, that
is, to leave in your hands the composition of the Sub-Committee, but
I object to your being able to decide yourself about the composition
of the Sub-Committee now, before the Plenary Session tomorrow. I
think that, if the Sub-Committee will start working now, it will not
have a perfect idea of what the full Committee thinks about the
subject. L.
- I7 -
E/PC/T/A/PV/21
Mr. E.L. RODRIGUES (Brazil): I thank the delegate of Canada
and the delegate of the United States, but I should like to explain
that I would be very proud to give my cooperation to the Committee.
However, I do not like to create difficulties for you, Mr. Chairman,
and I will accept with pleasure your decision if you take out Brazil.
Mr. R.J. SHACKLE (United Kingdom): I should like to ask when
it will be possible for the Committee to meet. The Chairmen of
Committees and two sub-Committees meet tomorrow morning; I presume
it is not intended to have a third Committee at the same time.
CHAIRMAN (Interpretation): Since it is absolutely impossible
for the sub-Committee to start on its work tomorrow, I see no objection
whatever to accepting the view that has been expressed. Besides,
it is quite possible that after the general discussion tomorrow more
light will be thrown on the subject and we may perhaps be able t
obtain a better composition of the Sub-Committee.
H.E. Z.AUGENTHALER (Czechoslovakia): I think there is a mistake
about the Committee on Article 36, it cause it meets on Wednesday and
not tomorrow.
Mr. R J. SHACKLE (United Kingdom): I am sorry to appear
argumentative, but in the blue document No.130 which was last dis-
tributed, the meetings are set out as: Chairmen of Committees,10.30;
Sub-Committee on Article 36, 10.30; and Sub-Committee on Chapter VIII,
10.30. As far as I know, that is the up-to-date programme for to-
morrow. L . - 48 - E/PC/T/A/PV/21
CHIRMAN (Interpretation): At any rate, the composition
of the sub-Committee will be discussed tomorrow, and I propose to
convene the meeting not at 2.30, but at 3 p.m., because in the morn-
ing we have a meeting of the Heads of delegations, and it is quite
possible that this meeting maye somewhat prolonged.
The meeting stands adjourned.
(The meeting rose at 5.45 p.m.) |
GATT Library | cx678sx5578 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report Twenty-First Meeting of Commission B Held on Friday, 11th July, 1947, at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, July 13, 1947 | United Nations. Economic and Social Council | 13/07/1947 | official documents | E/PC/T/B/PV/21 and E/PC/T/B/PV/20-22 | https://exhibits.stanford.edu/gatt/catalog/cx678sx5578 | cx678sx5578_90250092.xml | GATT_155 | 11,466 | 70,172 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/B/PV/21
13 July, 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERBATIM REPORT
TWENTY-FIRST MEETING OF COMMISSION B HELD
ON FRIDAY, 11th JULY, 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)
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 UNlES E/PC/T/B/PV/21
CHAIRMAN: The meeting is called to order.
Today we will resume the discussion on Chapter I and, in
order that we can conclude our work today on both Chapter I
and Chapter II, I would like to put a time limit to the
further discussion on Chapter I. We will endeavour to
finish Chapter I in an hours
After the discussion on Chapter I, it will be desirable
for the drafting sub-committee to take a vote on the question
which was raised by the Belgian Delegate in his speech
yesterday and which is: "Does the Commission approve of the
principle inherent in the Belgian and South African proposals,
of stating first the purposes of the Organization and then
the means by which these purposes may be attained?"
There is a further question which has developed out of
the discussion which we had yesterday, and that is the order
in which the establishment of the International Trade
Organization should come; . that is, whether it should come
at the beginning or at the end. That, however, I think is
more a matter of drafting, which we could leave for the
subcommittee to decide in the light of the discussion which
has taken place in the Commission.
Does the Delegate of India wish to speak to the question
of procedure or the question of substance?
Mr. D.P.KARMARKAR (India): Mr. Chairman, since the
whole of this Chapter was kept over for discussion, I should like
to concentrate our attention on the United States amendment
regarding Article 1, Paragraph 2, namely, "To develop the
economic resources of the world by encouraging the international
flow of capital . . .", if that is permissible,
S
-2- - 3 -
S E/PC/T/B/PV/21
CHAIRMAN: When we adjourned yesterday the Delegate of
New Zealand was on my list of speakers, so I will give the floor
first to the Delegate of New Zealand and then to the Delegate of
India, unless there are any questions with regard to the point
of procedure I have mentioned.
The Delegate of New Zealand.
Mr. L.C.WEBB (New Zealand): Mr. Chairman, I will not keep
the Delegate of India waiting more than a brief moment. You have,
I think, adequately defined the issues which we have to decide
here today and I am only sorry that the New Zealand Delegation
did not realise the legal terrors which there are in Chapter I.
We had to travel very light and we left our legal export behind,
so I feel it is perhaps adequate if I indicate that the New
Zealand Delegation, in its simplicity, had rather a liking for
the New York Draft of Chapter I.
We realise that, as Mr. Wilcox said yesterday, it has many
redundancies and one or two points of bad drafting and some
repetition. We like it because it seems to us to have the right
distribution of emphasis; that is, it seems to us that the
objectives are set out in the right order and with the right
emphasis, and in this respect we agree pretty completely with
what was said yesterday by the Delegate of Australia.
We are anxious about the order of these and the emphasis
which is given to the objectives - I am not sure whether I should
really be using the word "purposes", but perhaps it will be
understood what I mean - and in particular we are anxious that
such objectives as the maintenance of full employment and maximum
demand shall keep the due place which they hve in the New York
Draft. E/PC/T/B/PV/21
Now, the American proposal has undoubtedly had the virtue of
clear drafting and logical order, but it has, for us, two
difficulties. The first, is that we believe that it does
substantially alter the emphasis of the New York Draft, and I would
call attention to just one example of that. I think the Delegate
of Australia gave an example yesterday. The example I had in
mind was the proposed United States amendment to paragraph 4 of
Article 1. There we talk about facilitating the solution of
problems in the field of international trade, employment and
economic development. The United States amendment to that article
reduces the whole thing to a matter of international trade, and makes
the employment problem, as it were, merely incidental to trade
problems. It seems to include employment problems within trade
problems. I do not know whether that was the intention of the
United States Draft, but it seems to me to convey that impression
very s trongly.
We also find the United States Draft unsatisfactory and, if I
am appearing to be critical of the United States Draft it is because
it seems to us the best of the drafts submitted. We feel in
agreement with the Delegate of Cuba when he said that a weakness of
that draft is that it does leave the creation of the International
Trade Organization until very late in the draft, and that it slips
out almost as an afterthought. That seems to us to be very
definitely a weakness.
Now we come to the final question which revolves round this
business of purposes or objectives and provisions, and I must say
that I would find it extraordinarily difficult to vote on the bare
issue, as you have defined it, because, although you have defined
it very clearly, I still find difficulty in seeing the
implications of adopting one course or the other, because it seems
to ma that if, for instance, you. were going to adopt the Belgian
proposal, then you have to take the Belgian proposal in its present
- 4 - - 5 -
form or in some revised form, and work through the Charter. I am
not sure what the results would be then. I would, however, say
this, that we have always felt one difficulty which is that, being
under the impression that there was a difference between objectives
and purposes an the one hand and provisions on the other, we have
felt that there is some possibility of conflict, The Charter has
of
in it a sort/fastidious form - a great number of political and
economic philosophies. It has in it the philosophy of liberal
trade, it has in it the sort of state control philosophy or fall
employment, and it seems to us that there is a very real possibility
that a country carrying out a policy of full employment through
measures of economic control, which you. have got to take in the
policy of full employment, may find itself in conflict or
difficulties over some of the liberal trade provisions of the
Charter and that, we think, is a consideration which should be borne
in mind in any proposal to telescope purposes and provisions. J. - 6 - E/PC/T/B/PV/21
CHAIRMAN: The Delegate of India.
MR. D.P. KARMARKAR (India ): Mr. Chairman, I should admit at
the outset that regarding the general purposes of the Organization,
the Indian Delegation feels that the requirements of the situation
in respect of the work of the Trade Organization are sufficiently
satisfied by the original Draft.
Now, as regards the other Drafts offered to us for consideration,
the Indian Delegation, apart from one of the amendments proposed
by the American Delegation, are in general agreement with the way
in which the American Delegate put this Draft.
There are also other things that the Indian Delegation are
interested in, but in view of the briefness of the time at our
disposal, I should like to invite the attention of the Commission
tp one particular point on which the Indian Delegation feel very
Strongly.
The Indian Delegation amongst others was one of those who
proposed, at the London meeting, that there should be, amongst the
objectives or General Purposes for which the Organization should
stand, one definite object, namely, that covered by sub-paragraph 3
of Article 1 "To encourage and assist the industrial and general
economic development of Member countries, particularly of those
still in the early stages of industrial development'. Now, in the
opinion of the Indian Delegation. Mr. Chairman, the way in which
this paragraph is sought to be amended by the American Delegationn
is not exactly satisfactory. There was oeMmenrit bouwt the
~urposes stated in theorigienal Draft, nd that was that it put
te; question of the economicdCeelopment of industrially backward
nations in a prominent position. I migLht es sadc that teo
proposed pararxaph, which would replace thiss paragraph, nmeoly;
.T
/PC/T/B/PV/21 J. E/PC/T/B/PV/21
to develop the economic resources of the world (I am leaving out
the question of investment for the time being) and otherwise
assist those still in the early stages of industrial development,
broadly covers the point of view which was originally intended by
sub-paragraph 3 of article 1, as it now stands in the original
Draft, but, Mr. Chairman,. if I may say so, the difference lies in
the emphasis - and the emphasis was perfectly clear in the original
Draft - but in the proposed draft the emphasis is shifted onto the
development of economic resources of the world in general, and our
attention is diverted by what follows, namely, by encouraging the
international flow of capital. So, it comes to this, that one of
the objectives of this Organization as now proposed by the
american Delegation - "To encourage and assist the
industrial and general economic development of Member countries,
particularly of those still in the early states of industrial
development" stands, but the emphasis is shifted onto the means by
which this development is sought to be achieved, and that is
precisely where the Indian Delegation feel differently on this point.
Now, it is obvious, Mr. Chairman, that international investment
can only be said to be one of the means of economic development,
and is by no means the most important, nor can it be said that in
all circumstances international investment alone occupies the
primary place. For instance Article 12 in Chapter IV recognises
this in the first sentence of that Article "Progressive economic
development is dependent upon adequate supplies of capital funds,
materials, equipment, advanced technology, trained workers and
managerial skill". We fail to see, very respectfully, why, of all
the various means of economic development mentioned in Article 12,
international investment alone should be selected, for special
mention in the Purposes of the Charter and thereby given a special
emphasis or priority. If international investment alone is mentioned vary prominently to the exclusion of other means of economic
development, we think tht we thereby run the risk of implying
something, which may not be really intended, namely, that
international investment is of greater importance or urgency
than other means of economic development. We are afraid that
such implication may result in giving a wrong direction to the
policy of the International Tradee Organization.
Secondly, Mr. Chairman, the draft appears to imply that, so
far as international capital is concerned, the only thing we need do
is to encourage it to flow freely into productive investments. It
might be misunderstood to rest on the belief that so long as
international capital goes into productive investments, it needs
no control or regulation. The Indian Delegation, Mr. Chairman,
finds it difficult to accept this principle. Anything which
commercially pays its way may be described as a productive
investment, and yet not all productive investments in this sense
may be necessary from the point of view of the particular country
receiving the international capital. Again, as is obvious,
these are different orders of Procuctivity, some projects are
productive in the short run and other productive only in the long
run, and perhaps only indirectly. - 9 -
V E/PC/T/B/PV/21
From the point of view of the balance of payments position
of the country receiving international capital, it is of some
vital significance, Mr. Chairman, what proportion of the capital
resources goes into projects which increase production
immediately and what proportion goes into long-term projects.
Further, a free influx of foreign capital may hamper the growth
of local initiative and enterprise by enabling foreign investors
to capture an excessive proportion of the investment opportunities
available in any country.
For these among other reasons, on which I shill not dilate
at the present moment, Mr. Chairman, the Indian Delegation feels
strongly opposed to the specific reference to international
capital contained in the proposed amendment.
The second idea sought to be incorporated in this draft,
namely, "developing the economic resources of the world", can
be discussed more briefly. It will be notice that in the New
York draft this expression occurs in paragraph 1(b) where it
forms part of a connected. statement of objectives of national
and international action. The reason for putting it there was that
none of the other objectives mentioned in paragraph l(b) of the
New York draft, namely, expansion of world production, exchange
and consumption, high level of effective demand, reduction of
trade barriers :nd elimination of discrimination, fully coversthe
idea of development of the world's economic resources -that is,
the idea of promoting the development of all parts of the world
as distinct from expanding production, consumption and trade in
the world as a whole.
The mention of developing the world 's resources was,
therefore, appropriate in that place. The United States draft
pulls it out of that legitimate context and places it here in V - 10 - E/PC/T/B/PV/21
paragraph 2, which in our humble opinion is not the place for
it.
We have really no objection if the emphasis is maintained
as in the original draft, that is to say, if the sub-paragraph
stands: "To encourage and assist the industrial and general
economic development of Member countries, particularly of these
still in the early stages of industrial development", and if it
is found to be necessary and relevant at this stage to add an
additional paragraph.
On these questions, Mr. Chairman, the Indian Delegation
feels strongly opposed to the proposed amendment. We would
strongly urge that the original draft of that subparagraph
referring to the development of underdeveloped countries should
remain as it is, and if it is felt really necessary, at this
stage, to make a reference to the international flow of capital
and other means of assistance to development, another paragraph
may be added.
CHAIRMAN: The Delegate of China.
Mr. D.Y. DAO (China): Mr. Chairman, Article 1 of the New
York text and three amendments all contain two parts: one a
preamble, and the other a statement of purposes. As regards
purposes, we understand that a statement of purposes is but a
summary of functions which have been laid down in the Charter
and which are Designed to fulfil the purposes or to attain
objectives (whichever you would call it). Therefore, we feel
that the American amendment, with the exception of the reference
to international investment and the shifting of emphasis in
paragraph 2, is a logical arrangement, and it represents a clear
statement of the purposes. E/PC/T/B/PV/21
It is first set out in a positive manner, "the purposes
of the Organisation", and then we come to the negative side
of the purposes, and paragraph 5 summarises the different
Chapters in the Charter. We heard arguments on both sides as
to whether or not the purposes should be attributed to the
Organisation or to Members.
The Chinese Delegation feels that while it is true that the
Organisation has no purposes, if the Members participating in
the Organisation have different or divergent purposes, 'it is also
true that, on the other hand, it is unfortunate that we cannot
at all times find that Members have identical purposes. So we
think it is through the Organisation that Members would. work
towards common purposes, irrespective of conflicting interests
or conflicting purposes.
For instance, if we take the American Draft, which can be
interpreted that the purposes should be those of the States
party to the Charter, if we read, say, paragraph 2, the purpose
of a party to the Organisation is to develop the economic
resources of the world, etc., etc. - then I think it is obvious
we can infer the implication on any particular Member is to
develop the economic resources of the world, We know, of course,
that each Member would like to develop those of its own
particular country.
reads
Again, paragraph 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". So we feel that the purposes
stated in Chapter I should be attributed to the Organisation,
instead of to Members.
- 11 - G - 12 - E/PC/T/B/PV/21
We believe that Members should work for a common good.
for the good of the Organisation, but it is not necessary that
a Member will have at all times identical purposes with another
Member.
Then, with regard to a Preamble, we find that the South
African proposal is set out in broad terms and with a very high
idea, but we would like to make this remark, If there would be
no general Preamble to this Charter, when the Charter is
embodied in the final Act, perhaps it is desirable to have a
longer Preamble in Article 1. Incidentally, then it would bring
us to the question, whether in this Preamble we should
differentiate larger purposes from lesser purposes. That
question, we believe, depends upon our decision whether there
will be a general Preamble to the Charter, If there be a
general Preamble to the Charter, we believe that the South
African Amendment could be very well used in this connection;
otherwise, we prefer to have a longer Preamble in Article 1.
CHAIRMAN: The Delegate of the United States.
Mr. KELLOGG (United States): In reply to the comments of
the Delegates of Cuba, India and China, and with respect to our
Draft and. our suggested paragraph 2 on Economic Development,
the U.S. is entirely sympathetic to the views expressed to-day
about the importance of the economic development of the
countries still in the early stages of industrial development.
We have no intention of re-emphasising that matter in
putting in our suggestions on Article 1, and we are very sorry
indeed if we gave the impression to anybody here that we were
not sympathetic to this matter. We are confident that some appropriate language will be worked
out by the Drafting sub-committee which will reflect fairly
the matters and concerns expressed in this Commission, and we
will certainly agree to that line. We are at the same time
glad to hear the Delegate of Indian express the view that he is
not unsympathetic to a fair reference somewhere in Article 1
to the importance of international investment.
CHAIRMAN: The Delegate of Brazil has asked to speak and,
as I mentioned at the outset of this meeting, we are anxious to
conclude the debate on Chapter I by 3.45, so I propose to close
the debate after hearing from the Delegate of Brazil.
The Delegate of Brazil.
Mr. L.D.MARTINS (Brazil) (Interpretation): Mr. Chairman,
I have not asked for the floor to discuss the these which were
put forward here yesterday and the theoretical considerations
which were put forward by the various Delegations. What I
went to do is to state our position on this Article and on
the amendments which have been presented.
As regards the various amendments which we have now before
us, I think our preference goes to the United States draft. We
find it more logical, clearer and more simple, but it ought to
be amended in conformitywith the suggestions which were
rightly made here.
I think that I would agree with what the Indian Delegate
has stated, and we do not think it right to delete sub-paragraph
(3) and, in fact, the text which is proposed by the United States
Delegation mentions the same purposes which are mentioned in
sub-paragraph (3), but, nevertheless, after reading the draft
which was adopted in New York, readers might get a wrong view
if that paragraph wre to be deleted, and this might be inter-
preted as a step backward in the consideration of the interest
E/PC/T/B/PV/21 S - 14 - E/PC/T/B/PV/21
which has to be devoted to undeveloped countries. Therefore
this would be quite contrary to the position which was assumed
and taken up here by the various Delegations.
As regards the mention of the name of the Organization
itself, I do not think that it ought to be left to the end of
this Article but it ought to be put in the first place; that
would be a more pragmatic solution and a clearer one.
Mr. Chairman, you said yourself there were two things here:
first the objectives and the means to achieve these objectives,
but I think one cannot separate these objectives in two parts
- on one side the general objectives which could be considered
as the most important ones, and on the other hand objectives
which would not be so important. I do not think that this
would be a correct solution, because that would mean that to
oonsider whether some objectives are more important than others
one ought to be moved by a criterion which would, in fact, be
subjective. That would be left to the appreciation of Members
to know whether they considered some of the objectives more
important than others. One cannot separate them but should,
in fact, enumerate them in a logical order.
CHAIRMAN: Before we pass on to the vote, the Belgian
Delegate has asked to say a few words and, as we still have
12 minutes left, I propose to give him the floor. E/PC/T/B/PV/21
M. J. van TICHELEN (Belgium) (Interpretation): Mr. Chairman,
I would only like to recall the general meaning of our amendment,
which is almost similar to the South African amendment, and their
structure is practically the same. The discussion today has
confirmed in my mind the opinion that it is necessary to draw a
distinction between two categories of purposes. Several delegates
have shown, in their speeches, a marked preference for what has
been described as being their child. Others have suggested that
no decision should be taken now, and that the decision should be
left until a later stage, but if we do not introduce order in this
matter now, we shall leave all the disorder for the Organization
and this will be even worse.
I would like to give you an example to show that there may be
some insoluble contradiction on which the Organization may have to
take a decision when it will act as a Judge. Let me take the case
of a country which is strongly in favour of industrial development,
while another country considers that it is preferable to avoid
excessive fluctuations in world trade. In other words, one country
desires to speed up production, while the other is, for some reason,
of the opinion that production should be reduced. We have here two
conflicting interests and both points are equally sincere and
justifiable. The Organization will find itself in the present of
an extremely difficult problem because these two purposes will have
been definitely mentioned in the Article on General Purposes, and
the Organization will, therefore, be bound by the Charter to give
satisfaction to both complainants. If we give the same weight and
importance to these two kinds of criteria, it will be practically
Impossible for the judge to pronounce upon such a conflict. Our
purpose is, therefore, to list a number of purposes among which no
contradiction is possible, and these general purposes are the
maintenance of peace, economic progress, social progress and full
ER
- 15 - ER
- 16 -
employment. This will make it :possible for the Organization to
resort to a small number of higher purposes when it will have to
pronounce between conflicting purposes. The Organization will
thus be in a position of a legal instrument to settle conflicts
that otherwise would prove insoluble, and this is the general
meaning of both our amendment and the South African amendment when
they say "To this end, the Organization will seek," or "for the
furtherance of these purposes, the Organization will seek". We
do think that these would afford, the Organization the most
appropriate means of solving such problems.
Mr. L.D, MARTINS (Brazil): (Interpretation): Mr. Chairman, I
would like to answer the Belgian Delegate by just stating that he
has supposed and assumed that there should be a conflict, but this
conflict is non-existent because, if it existed, we would not be
here to discuss the purposes and, setting up of an International
Organization,
CHIRMIAN: We have now had a very full discussion of the three
proposal that are before us,in relation to Chapter I. Eleven
delegations have expressed their views on these proposals. Some
delegations have made more than one speech, and I therefore think
the time has now come to refer these proposals to the Sub-Committee
on Chapter VIII, to whom we have entrusted the proposals in
relation to both Chapters I and II. Before, however, referring
the three proposals to the Sub-Committee, it is necessary, as I
pointed out at the end of our meeting last night, that, we should give
the Sub-Committee some guidance on the question of principle. It
is implicit in the policy of the Belgian and South African proposals,
namely that the purpose thaw we should, first of all, set forth, is
the purposes,and after that the means of attaining these purposes.
With regard to the remarks of those delegates who have expressed the
view that they would not like to vote on this question at the
E/PC/T/B/PV/21 -ER 17 E/PC/T/B/PV/21
present time, I wish to assure all Members of the Commission that
this is in no sense a final or irrevocable vote. The vote is
simply being taken for the guidance of the Sub-Committee in order
that they may obtain the sense of the Commission on this important
question. If, after the Sub-Committee has established a text and
that text comes back to the Preparatory Committee, the Preparatory
Committee will be perfectly free to reverse the decision that has
been reached by this Commission and any Member of this Commission,
without exposing himself to a charge of inconsistency, will be able
to vote in a different manner from that of today. I hope that all
the delegates who have expressed reluctance to vote will be able
to do so. J. -18 - E/PC/T/B/PV/2l.
Will those members of the Commission who are in favour of the
principle inherent in the Belgian and South African proposals that,
first of allthere should be studied the purposes, and after that,
the means of attaining those purposes, please raise their hands.
(7 Members voted in favour and 7 against).
CHAIRMAN: I am afraid the Sub-committee will not get much
7.
guidance because the voting was 7 to I think we shall now have to
leave it to the Sub-committee to endeavour to provide a draft, along
with the other questions which we have discussed. I think the
discussion has served a very useful purpose and the Sub-committee
will have more guidance than they would have had if this discussion
had not taken place.
Is it agreed that we should refer the three proposals and
Chapter I to the Sub-committee ?
(The proposal was agreed).
CHAIRAMAN: We will now pass to Chapter II - MEMBERSHIP
M. ROYER (France) (Interpretation).
Mr. Chairman, you have decided to refer the examination of
Chapter I to the Sub-committee which is now examining Chapter VIII.
I would like to mention that this Sub-committee has a very heavy
Agenda before it, and I wonder if it would not be possible to rec-
commend to that Sub-committee to divide itself up so that the
examination of both Chapters could be achieved at the same time, and
in a parallel manner. I do not know if all Delegations would fin d
it possible to attend the meetings if those meetings were to take
place at tho same time, but I know that the French Delegation would
be interested in seeing hastened as far as possible the discussions
on Chapter I and Chapter II. - 19 -
CHAIRMAN: We have already decided that this Chapter I should
be referred to the standing sub-committee on Chapter VIII. I do
not thinly that the setting up of a separate sub-committee would
entirely solve the situation, because it would be necessary that the
same delegations, in a number of instances, should be represented
on both sub-committees, and those delegations have only a limited
number of men, and in most cases have only one man who is working
on Chapter VIII is well as Chapters I and II. It might meet the
points raised by the Delegate of France it we were to ask the
sub-committee to give priority to their consideration of Chapters I
and II.
If that is agreed, we shall ask the Chairman of the sub-committee
on Chapter VIII to give early consideration to the proposals in
relation to Chapters I and II.
With respect to Chapter II, we have proposals submitted by the
United Kingdom Delegation and the United States Delegation. The
United. Kingdom Delegation has proposed a new text in relation to
article 2. The United States Delegation has proposed amendments
to the New York text.
We shall, first of all, take up the United Kingdom proposal,
the essential feature of which is the provision for Associated
while
Members comprising those Customs territories who not having
full autonomy in relation to their international relations, have
full autonomy in respect of customs and all other matters provided
for in the Draft Charter.
The discussion is now open on the amendment.
J.
E/PC/T/B/PV/21 E/PC/T/B/PV/21.
Sir Stafford CRIPPS (United Kingdom): Mr. Chairman, perhaps
I may move the amendment of the United Kingdom Delegation, which
we regard as one of very great importance.
We ard -most anxious that the territory ant area covered by
the Organisation should be as wide as possible, andn that the
representations on the Orge.nisation should be as truly democratic
as possible. As you have mentioned, there are certain territories
which, while being responsible for their own international trade
obligations and for their own internal trade Organisation, are
yet not international personalities in the full sense of the word.
Such territories, to give an example, are Burma, Ceylon, and
Southern Rhodesia.
We believe that it is very desirable that those territories
should be able to undertake and implement the various obligations
under the International Trade Organisation, being territories which
have a substantial stake in world trade and in all the matters
with which the Charter is concerned, they are fully self-governing.
The metropolitan country has, it is true, formal responsibility
for their international obligations at the present moment; but
cannot undertake the actual implementation of those obligations
which will be assumed under the International Trade Organisation.
We therefore think it is not only desirable, but obviously equitable,
that the representatives of those territories should take part in
the activities of the Organisation when matters for which they will
themselves be responsible later on are being discussed.
The form in which we have proposed the amendment divides
the classification of membership into two categories; first of all,
full Members of the Organisation, and secondly, persons termed.
"Associates". The full Members fall into three categories.
V
- 20 - E/PC/T/B/PV/21
First of all, the States invited to the World Conference who
automatically become Members under the procedure of Article 88.
secondly, States who are Members of the United Nations, but who do
not accept the invitation to the, World Conference, but later decide
that they wish to adhers to the International Trade Organization.
thirdly, States who are not Members of the United Nations which,
either because they did not accept, or because they did not receiver
an invitation, did not attend the World Conference, but which also
later wished to adhere to the International Trade Organization.
Then paragraph 2 deals with that other classification of
territories which I have mentioned, separate Customs territories
not fully independent but possessing in all matters with which the
Charter is concerned full autonomy. Those are divided into two
classes - firstly, those invited to the World Conference who, if
they wish, would be able automatically to become Members when the
matropolitan State which has the nominal international
responsibility for them had complied with the procedure laid down
in Article 83; and secondly, those not invited to the World
Conference who could only become Assooiatas after the Organization
had approved their application made in due form.
Now, not only is it necessary to make provision for those
categories that I have mentioned, but it is also necessary to
make special provision, we believe, for Trust territories
administered by the United Nations, and also the free territory of
Trieste when the Trieste Statute enters into force, and those are
dealt with in a paragraph in this suggested amendment.
We hope very much that this more logical and precise analysis
of the categories of membership will be introduced in place
of the existing Article 2, and in sub-paragraph 4 of the new
- 21 -
V V - 22 -
suggested Article, we leave the question of the rights and
obligations of Associates, as against Members, to be determined
by the Organization. We feel that this is the logical step
to take, because th sc persons will, we hope, themselves be
Members of the Organization, and they will be able to take part
then in the discussions as to what the precise Difference should
be between th, status of an associate and of a Member. We hope,
therefore, that the Commission will see its way to adopt the
amendment that we suggest. G
- 23 -
E/PC/T/B/PV/21
CHAIRMAN (Interpretation): Do any Members of the Commission
wish to speak to the United Kingdom proposal which has just
been introduced by Sir Stafford Cripps?
The Delegate of the Netherlands.
Mr. VAN TUYLL (Netherlands); Mr. Chairman, the Netherlands
Delegation is very favourable to the Amendment which has been
put forward by the United Kingdom Delegation. We also think
that it is very important to have collaboration with the ITO by
those territories which are fully autonomous in the conduct of
matters which relate to this Charter. We think it is important
not only for those territories but also for the ITO itself,
because there will be some of those territories who are much
more important for the Organisation, and. international trade,
than quite a few independent Members.
As you will probably know, Mr. Chairman, at this moment
there are discussions going on between the authorities conoerned
about a review of the constitutional relations between the
territories now forming part of the Kingdom of the Netherlands,
and as it is very likely that during the process towards
independence some of these territories will have at one stage full
autonomy in matters relating to this Charter, we would certainly
like to see them co-operate - in the form of associates, to be
determined at a later stage of the Conference - in the work of
the ITO.
Therefore, for those reasons, we support the British
Amendment.
CHAIRMAN: The Delegate of France. - 24
Mr. ROYER (France) (Interpretation): The French
Delegation is grateful to the United Kingdom Delegation for
having clearly stated the problem of Membership in the
International Trade Organisation; and in this connection the
United Kingdom Draft Amendment is a substantial improvement
on the New York Draft.
We consider that it was wise to provide in sub-paragraph (2)
of paragraph 1 of the Draft that any State Member of the United
Nations not represented at the United. Nations Conference on
Trade and Employment can become a Member without having to
undergo the procedure laid down in the New York Draft - that is
to say, without a special, vote being take by the Conference,
We also consider that the distinction between Members and.
non-Members of the United Nations is extremely useful.
Similarly we consider that the paragraph of the United Kingdom
Draft relating to Trust territories administered by the United
Nations is also useful, and. we feel that it was essential to
have a provision with regard. to the free territory of Trieste,
because according to the New York text, this territory could not
be covered by any of the existing categories. E/PC/T/B/PV/21.
As regards Associate Members, we are very anxious, like the
United Kingdom and the Netherlands representatives, that over-
seas territories should be associated with the Trade Organization,
but, when a draft resolution was discussed at the Chairman's
Committee, I should like to recall that the French Delegation
made some reservations purely on legal grounds and for reasons of
what I might call international courtesy.
The introduction of new Members would indeed be a novelty
in public international law. We consider that it would be
ditfficult for the Preparatory Committee to come to conclusions
that are nit in conformity with rules already established for
other organizations of the United Nations, and for these reasons
the French Delegation suggested at the Chairman's Committee that
these constitutional questions should be referred to the
Economic and Social Council for their advice,
We are therefore of the opinion that the position of this
Commission should be in harmony with the position adopted at the
Chairman's Committee and that, before settling this matter
definitely, it should be possible for the Economic and Social
Council to examine the whole problem and to see to what extent
it is possible to create within the Organization a category of
countries which has not been provided for with regard to other
specialized agencies.
CHAIRMAN: The Delegate of the United States.
Mr. E.H. KELLOGG (United States): Mr. Chairman, the United
States has always favoured steps which would conduct to the poli-
tical and economic development of dependent territories. According
we are sympathetic to the idea behind the British amendment, There
are, however; a few points in connection with the terms of the
amendment which we would like to raise.
- 25 -
S - 26 -
First, as to the United Kingdom's paragraph 1 we notice that
the United Kingdom suggests the suppression of the idea now con-
tained in the New York Draft, of the distinction between original
Members and other Members, the other Members being subject to a
and
screening process on the part of the Conference, /it seems to us
quite reasonable for the Charter of the Organization to provide a
kind of mild pressure to get prompt ratification of the Charter
within the next two or three years, after the Charter has been
approved. It seems to us, therefore, that the provision for a
sorsening process on the part of the Conference, through which
States who do not ratify promptly must. pass, is not unreasonable,
We would like to have this matter considered by the subcommittee
at greater length,
Secondly, with respect to the status of Associates, we notice
that the United Kingdom suggests Associates may, If the Conference
so decides, receive a vote. If the Associates then receive a vote,
it becomes somewhat difficult to see what difference there is
between. an Associate with a vote and any other normal Member. This,
in turn, raises the question of how does an Associate pass from the
status of an Associate to the status of a full Member. This is not
a question which I think we could settle here, but I would like to
.raise it and put it before the sub-committee.
Finally, we see there is a difference in the way in which the
United Kingdom suggestion handles the trusteeship territories and
the present draft of Article 2. Although this differences may not
be very important, it seams to us to be sufficiently important to
receive the further consideration of the sub-committee.
CHAIRMAN: The Delegate of Norway.
Mr. Erik COLBAN (Norway): Mr. Chairman, I shall not go into
E/PC/T/B/PV/21.
S E/PC/T/B/PV/21
any technical details. I would only like to say that the idea
of the United Kingdom proposal strongly appeals to me. I think
that the observations of the Delegate of France can be met by
saying that, after all, we are not creating new States; we are
simply making it possible for these territories to co-operate.
We all agree it is very important for it to be possible for these
territories to continue to work in our Organization and I do not
think it necessary, before we define our attitude in this problem,
to obtain any advice or any opinion on the part of the Economic
and Social Council.
I strongly recommend that the sub-committee should go into the
points raised by the United States Delegte and I do not think
there will be any great difficulty in finding a proper solution
of all these points.
- 27 -
S ER -28- E/PC/T/B/PV/21
Dr. GUSTAVO GUTIERREZ (Cuba): Mr . Chairman, we feel a great
.sympathy for the British amendment because it gives facility to the
economic and political development of certain groups of territories,
but at the present moment we do not see how we can reconcile that
sympathy with the actual status of international law. We are
absolutely in favour of the principle of equality of nations, and
we are very much afraid that either we give to those territories
exactly the same rights and exactly the same duties that all the
Members of the ITO possess, or else we wreck the principle of
equality, and we are not in a position break that principle for any
other consideration. That is why we feel very much embarrassed as
Members of this Preparatory Committee to carry out such a daring
proposition, because I do not know if we are an Organzation outside
of the United. Nations. On the contrary, I think that the ITO is
an agency of the United Nations as a whole. We are not a different
United Nations, but the same one as, for example, the one at Lake
Success with the Security Council, the Assembly and all other
Organizations, and we cannot have a different type of Organization
than the United Nations itself. It seems that this problem was
considered by the United Nations at San Francisco and elsewhere, and
it was solved at that time by Article 4 of the Charter of the United
nations s which probably gives a solution to this problem. It is
said in the Charter: "Membership in the United nations is open to
all peace-loving States which accept the obligations contained
in the present charter and in the judgment of the Organization, are:
any
able and willing to carryoeut these obligations. The admisoion of/
-uch State toMemebership intzhe UnitedNsaion:s will be affected by
decisiono_f the General Assem.bly, pon t he rceomrvndation of the
ecurityiCouncil". If we coudi have the possibility of establishing
.a provision like that, leaving to the Gneral Asssembly here and to
-he excoutive bodies, this decision, any f ± theterriItories that the
ritishi amendment is il-lig& to bringintot the category of Members of the United Nations Organization for Trade and Employment, could
be Members of this Organization. We will not prevent that, and I
am sore that the Cuban Delegation would be ready to vote for its
admittance at any time, but I think it is very dangerous to give
such a wide definition that we would not know how many territories
are in that position. There may be three, or there may be twenty,
I do not know, because our autonomous position will not
depend on international society but on the decisions of the nations
having their political representation, and in the second place, by
all means, the Sub-Committee should study the question of this
division of Members against which we feel very strongly. It they
are to be Members, they should be Members with full rights. We do
not favour the division of membership among Members and associate
Members. If they have accepted to be Members, they should be
Members with the same rights and the same duties, otherwise this
paragraph 4 establishes that the rights and obligations of
associations shall be determined by the Organization, and this leaves
open a question of paramount importance.
We do not consider yet the question of the vote, because
not
something very important has been developed called a vote, and we do/
know yet how this will work in connection with the way to vote.
Nevertheless, we will always be in favour of one nation, one vote,
and if there are forty more nations, we do not care, we shall vote
for them also,
Mr. A.P. van der POST (South Africa): Mr. Chairman, I think
we all share the view or equality expressed by the Cuban
Delegate, but I would point out that all Members of the family have
equal rights. Nevertheless, a child of five would find he is not
allowed the same Privileges as the child of ten, nor is the child
of ten allowed the same privileges as the boy of fifteen, and the boy
of Sixteen, the same privileges as the young man of twenty-five. ER - 30 - E/PC/T/B/PV/21
Time and development of a structure are required for the boy of
fifteen before he can act as a man of twenty-five. Now, the
British proposal fully recognizes this equality, and also these
differences. In the view of the South African Delegation, the
proposal reflects fully the British commercial, economic, social
and political thoughts and practices to grant full equality and
rights to adults, and place facilities at the disposal of the
young generation to gain experience, prepare themselves for
manhood and the assumption of the obligations which manhood brings.
Therefore, we are fully in support of the United Kingdom proposal. E/PC/T/B/PV/21
J.
There is just one more point, Mr. Chairman - the incorporation
of this principle in the Charter of the United Nations would enable
us to welcome our neighbours, Northern and Southern Rhodesia, into
this family of nations.
CHAIRMAN: The Delegate of China.
MR. D.Y. DAO (China): Mr. Chairman, the Chinese Delegation
is in agreement with the idea behind the United Kingdom's proposal,
particularly with regard to the independent Customs territories,
because we believe that the International Trade Organization, if
it is going to be a going concern, should be broadly based, and I
believe that not only Member States but all other territories would
have a vital interest in the activities of the Organization. The
activities of the Organization will affect,not only Member States,
but also the millions of peoples now living in these territories.
Therefore, we are in agreement with the proposal of the
United Kingdom Delegation, and we are also content to leave the
question of their rights and obligations to be determined by the
Organization, because we think that the Organization will be wise
enough to define their rights and obligations in the light of
reality, as well as the purposes for which we set up this Organization.
CHAIRMAN: The delegate of Australia.
MR. A.H. TANGE (Australia): Mr. Chairman, I wish to add the
support of the Australian Delegation to the United Kingdom
proposal concerning Associate Membership. We have nothing to add
to the reasons given by the Delegate of the United Kingdom, which
are completely acceptable to us.
The Delegate of Cuba raised the question of the possibility
of creating equal rights among Members and Associates. It seems
- 31 - J.
- 32 -
to, me that the United Kingdom Draft leaves that question to be
determined by tho Conference of the Organization; the question of
both the rights and the obligations of Associates in the United
Kingdom Draft is left to the Organization, although one should say
in passing, I think, that in fact many of the obligations of these
territories are determined by the Charter itself, and it seems t o
me that that fact adds weight to the United Kingdom proposal.
I recall that at the World Health Conference, where a similar
proposal was made for the admission of Associate Members, it was
agreed that there should be provision for Associate Membership for
territories of the kind which we are now discussing, but because of
tho kind of difficulties which the Delegate of Cuba raised concerning
the number of territories which might be eligible for entering
into the Organization under this category, it was deicided to leave
it to the assembly of the World Health Organization to determine
exactly the rights and obligations of these territories.
The Delegate of the United States drew attention to the fact
that the United Kingdom Draft ommits the former distinction between
orginal Members and, those Member States who later elect to take up
Membership. It seems to us that very little is lost by omitting
that distinction. It always seems to us that if a State declines
immediately to join an International Organization, it does that for
very good reasons, and in weighing up those reasons against the
possibility of joining later, the Organization may impose conditions
on its entry. It seems to me that the good reasons which preveiled
in the first place would continue to prevail, and therefore the
mild sanction of which the United States Delegate speaks would
seem to have very little force.
E/PC/T/B/PV/21 - 33 -
I have one minor comment on the United Kingdom text, that is,
I would suggest that consideration be given to altering the Word
"Organization" where it appears in paragraph 1 (iii), paragraph 2 (ii),
and paragraph 4 to "Conference". In this Charter, powers given
to the Organization fall automatically into the Conference, but
unless the Confercnce is specified, the power does rest upon the
Conference to delegate the function, and we have adopted the
practice that, in all those cases where we believe that the power
should reside only in tho Conference, we specify the Conference,
and it would seem to me that this was the type of case where the
powers of decision could rest on the Conference alone and that there
should be no powers of delegation.
E/PC/T/B/PV/21 E/PC/T/B/PV/21
CHAIRMAN: The Delegate of Brazil.
Mr. L.D. MARTINS (Brazil) (Interpretation): Mr. Chairman,
I would like to state, first of all, that the proposal of the
United Kingdom Delegation meets with cut complete approval,
because its ideas are moved by a spirit which is quite in
conformity with the policy and the constant tradition of Brazil
itself .
Now, I would like to make a remark on paragraph 4. This
paragraph is very short, only containing two lines, but,
nevertheless, it is extremely important. I think that it ought
to be examined at the same time as Article 64, which relates to
the Vote, because, as the Cuban Delegate rightly pointed out just
now, certain proposals in this Article 64, and the solution which
is given to the procedure of voting in the Organization, might
perhaps conflict with this paragraph. The matter of this
paragraph will have to be solved one way or the other - in
parallel with the way that the voting question itself is solved.
In fact, as the Australian Delegate pointed out just now, the
word "Organization" ought to be replaced by the word "Conference".
If you look at Article 66, paragraph 1, you will see that the
Conference has the power to determine the question of voting and
of voting of Members and Associates, if associates were to be
created. Therefore this question of Associates might change
the whole question of voting, and might in itself be changed
following the solution which is taken and which is adopted on
this question of voting. I would suggest that this quetion
of Associates should only be taken up after this question of
Article 64 on voting is discussed.
CHAIRMAN: The Delegate of Chile.
- 34 -
V G - 35 - E/PC/T/B/PV/21
CHAIRMAN: The Delegate of Chile.
Mr. FAIVOVICH (Chile) (Interpretation): Mr. Chairman,
I shall not repeat here the remarks which I have already made
at the Chairman's Committee, but I will merely state a few ideas
in connection with the Amendment.
The Trade Organisation will be a branch of the United
Nations, and therefore I consider that to accept an Amendment
authorising countries which enjoy autonomy with regard to
their trade relations to take part in the Organisation is to
violate the principle of equality laid down in the Charter of
the United Nations.
On the other hand, to accept this Amendment would be to
open the door to a number of territories whose number and
characteristics are not entirely unknown, and which have not
their own standing in international law. They have not internal
or external political organs which correspond to fully sovereign-
ty of State,whichmakes it possible f or them to sign an instrument
like this Charter.
Furthermore, the question has also a political aspect in
connection with the number of votes which will be enjoyed by
certain Member States. If the question has this political scope
we must finally admit that the position taken by the Chairmen
of Delegations to refer the matter to the Economic and Social
Council is the most reasonable. Indeed, the Preparatory
Committee under its own terms of reference cannot accept the
British Amendment, and therefore to our regret we cannot
support the Delegate of the United Kingdom.
CHAIRMAN: The Delegate of Canada. G E/PC/T/B/PV/21
Mr. ANGUS (Canada): Mr. Chairman, the Canadiain Delegation
is in favour of the Proposal that customs, territories which
enjoy full autonomy in customs matters, which are the only
authorities which can give effect to the provisions of the
Charter in respect of their territories, should be associated
with the Organisation; and the method adopted or suggested.
the method of according associate membership - seems to us an
appropriate one for recognising the position of communities
which have all the powers necessary for Membership in a
functional Body of, this character, even though they have not
the powders necessary for Membership in the United Nations.
I can see some difficulties with regard to paragraph 4;
perhaps not quite those that have been pointed out by earlier
speakers. If the rights and obligations of an associate
are to be determined by the Organisation, .or by the Conference.
it means that they cannot be determined until after the date
on which these three territories have been asked to join, or
at least allowed to join; and you may put them in the rather
curious position of having to decide whether to join an
Organisation or not, before they know what their rights and.
obligations will be.
I can see some practical difficulties there - that their
financial obligations might conceivably be heavy, and their
voting power very low, or something of that sort, Then they
might have some hesitation about it; but I cannot see that
the, other Members should. be worried. as to what might happen. S
- 37 -
-E/PC/T/B/PV/21
M. J. van TICHELEN (Belgium) (Interpretation): My Dele-
gation, too, is in sympathy with the United Kingdom amendment. My
country has always been traditionally favourable to the ideas of
democracy and equality and we consider that this proposal affords
us a now opportunity to show this traditional position on our part.
Legal objections have been raised, to the effect that in
International Law certain territories were not treated on a tooting
of equality and that therefore it was difficult to treat them on that
same footing in an economic organizations I do not consider these
objections as valid. If in Common Law there are principles regarding
equality, and if all the Members of a political organization cannot
welcome such territories, this should not be the case in an economic
organization: in fact, in the Constitutional Law of a number of
countries the distinction between the country and the territories
is admitted. For example, in our national law we recognize the
existence not only of minors and adults but also of an intermediate
category, which we call emancipated minors, which do not enjoy full
rights but nevertheless can be given a number of rights to sign and
to conclude agreements, etc. I think that these territories should
be treated here in a similar way if, politically speaking, they are
treated otherwise.
This is not only a question of democracy and political doctrine;
it is also a question of interest. Our Delegation has always been
in favour of the rapid development of territories which have not yet
reached the stage of the fullest possible development. They must
have the right to speak, to defend their rights, and thus gradually
to acquire their full developments
As the under-developed countries have a more favourable economic
situation, I think that this will be favourable to the interests of
older countries, because they will thus have better clients.
CHAIRMAN: Are there any other speakers? E/PC/T/B/PV/21
Sir Stafford Cripps.
Sir STAFFORD CRIPPS (United Kindom): Mr. Chairman, perhaps
I may very shortly reply to some of the points that have been raised
I will not deal with the points in detail, such as those raised by
the United States Delegation, which are obviously very suitable to
be considered by the sub-committee.
There seem to be three main points of principle which have been
raised. The first is the question of the relationship of Inter-
national Law to the creation of these Associate Members, and I would
point out that we are not suggesting here the creation of new
international persons for all purposes. It is a question of a
specific function and for the purposes of that function I think it
is generally recognised that these associate territories would be
fully capable of carrying out the purposes of the Organization and
accepting the responsibilities.
I would point out that this is not a new departure in inter-
national organization. Under the World Health Organization, in
Article 8 of Chapter III, an almost precisely similar arrangement has
been made: "Territories or groups of territories which are not
responsible for the conduct of their international relations may be
admitted as Associate Members by the Health assembly upon application
made on behalf of such territory by the Member or other authority
having responsibility for their international relations," and so on,
so that it is a matter which has already been dealt with,
Secondly comes the point of the relationship to UNO and where,
by adopting this form of Membership, the idea would then be contrary
to any of the provisions of the UNO Charter.
I would draw the attention of Delegates to the fact that the ITO
will not be a branch of UNO. It is a specialized agency set up
under the aegis of UNO, but It is a specialized agency for the very
S
- 38 - S
- 39 -
E/PC/T/B/PV/21
purpose that; it has particular functions and it contemplates
therefore a membership different from that of UNO.
If I may take the exemple of the full membership under Part I,
sub-paragraph (3) of our suggested amendment , any State not a
Member of the United Nations may become a Member of the ITO. That,
of course, would not bc possible if the membership of ITO had to be
the same as that of UNO.
Now it is to be noticed that If these territories are not
allowed to come in as Members or Associate Members, then the trade
and commerce of their areas must inevitably be wholly left of
the International Trade Organization and responsibilities, because
the metropoliton States which are responsible for their international
relations in. other matters are not able to discharge, in respect of
those territories, the functions which the ITO demands. Therefore,
unless this method is adopted of bringing them in, their territories
will remain outside the range of any of the regulations which we are
trying to bring into international trade, and that would be a very
serious matter, in my view, for the International Trade Organization,
Thirdly, I think that a number of Delegates are concerned with
the question of how many of these associate Members are there likely
to be, and what will be the result upon the voting under Article 64.
I would explain, Mr. Chairman, that so far as we are concerned
this is only a trensitory state, the state, which would qualify for
Associate membership. In the development of self-government a
stage is frequently or almost always passed through, in which the
economic control is passed to the local government, while broader
questions of international policy may still remain in the hands
of the metropolitan government.
I gave Burma as an example of the countries I mentioned. It
is almost certain - I hope it is certain - that by the end of this
year, or very shortly afterwards, Burma will be a fully independent S
- 40 -
State, in a position to apply for full membership of UNO, and she
would then pass from this transitory state of associateship into
the state of full membership, and that is the normal course of
development so far as we see the matter in this respect,
Of course, the question of voting under Article 64 must be
regarded in the light of what the membership is, and therefore
Article 2 and Article 64 must be considered closely together,
and I have no doubt at all that that will be done and that in the
Conference, when the two Articles come to be considered, they will
decide upon the way in which the voting shall take place, in the
light ot what they have decided as regards the membership there
shall be.
I am very grateful for the very general measure of support
that has been given to the idea which lies behind this, and I hope
that the Commission will allow the matter now to go to the sub-
committee, in order that the various suggestions of amendment may
there be carefully considered.
E/PC/T/B/21 - 41 -
CHAIRMAN: Before we decide to refer the United Kingdom
proposal to the sub-committee, it might, be useful if I were to
sum up the discussion which we have had on this important subject.
So far as the proposal to provide representation in the
Organization of separate Customs territories having autonomy in the
conduct of their external relations, is concerned, ten delegations
have expressed themselves in favour of the principle of this
proposal, namely, the delegations of the United Kingdom, Netherlands,
United States, Norway, South Africa, China, Australia, Canada,
Belgium and Brazil. The Delegation of Brazil proposes that
consideration of this question be deferred until after the question
of voting has been discussed, but as it is noted, this Commission
will be discussing, the question of voting next week, and the
sub-committee to whom we propose to refer the United Kingdom
proposal will also have to take into account the question of voting.
Two Delegations have spoken against the United Kingdom proposal
as being contrary to the principle of equality in international law,
namely, Cuba and Chile.
The Delegation of France has proposed reference to the
Economic and Social Council. This suggestion has also been
supported by the Delegation of Chile.
The Delegations of the United States and Australia have
raised drafting points, which can be considered by the sub-committee.
I therefore suggest that we now refer the United Kingdom
proposal to the sub-committee, taking into account the views which
have been expressed in this debate.
MR. L.D. MARTINS (Brazil) (Interpretation): Just one
correction, Mr. Chairman, I have expressed myself in favour of
the United Kingdom amendment. I have only made a reservation
with regard to paragraph 4 of this amendment, which should be drafted
in conformity with the question of voting.
J . - 42. -
DR. G. GUTIERREZ (Cuba): I am sorry that I have to correct
the Chair, but Cuba is not opposed. to the admittance of the
territories, but only expresses doubts in relation to the juridical
question that it raises, and at the same time I would remind the
Commission that the mattershould be referred to the Economic and
Social Council.
MR. F. GARCIA OLDINI (Chile) (Interpretation): The position
of the Chilean Delegation can be interpreted as being almost
similar to that of the Delegation of Cuba. We consider that the
matter should be settled first by the Economic and Social Council.
CHAIRMAN: Due not will be taken of these further remarks
by the Delegates of Brazil, Cuba and Chile, who have further
expressed. their position. I thank them for having corrected me
in the statements I made.
- Is the Commission now agreed to refer the United kingdom
proposal to the sub-committee,
Mr ROYER (France) (Interpretation): Mr. Chairman, the
French Delegation has no objection to referring this problem to the
sub-Committee, but before the question is solved finally by the
Commissionitself, we would like to wait for the decision of the
Economic and Social Council on matters referring to Burma, Ceylon
and Southern Rhodesia.
J. V - 43 -
The reasons why we would not like to see a final decision
taken before the recision of the Economic and Social Council
is known are of a general character, and also because similar
questions are now being studied by other bodies depending on
the Economic and Social Council I am referring here to the
Far Eastern Commission, and it would seem unwise if contra-
dictory conclusions were to be reached by two sets of bodies both
depending upon the Economic and Social Council.
We underlined in the discussion in the Chairmen's Committee
that, in fact, the problem which had arisen was to solve a
precise question, raised by the United Kingdom - the question of
the application of Burma, Ceylon and Southern Rhodesia and, as
the United Kingdom Delegate himself painted out, to cover the
transitory period for the three territories. This was only a
provisional problem which was circumscribed in Article - 2.
It seems to us to solve a precise problem of a temporary nature.
We were asked to set up a standing and permanent mechanism, and
I think that a solution could be found to this precise problem
by adding at the end of Article 2 the territories which were
qualified under paragraph 3 of the British proposal.
CHAIRMAN: The sub-Committee will be able to study this
question in the light of the discussion which has taken place in
the Commission, and it will always be open to the Delegate of
France to re-open the question when the Report of the
sub-Committee is referred to the Preparatory Committee, and by
that time, no doubt, the Economic and Social Council will have
acted on the Report of the Preparatory Committee which is being
submitted to it.
Does the Commission agree that the proposal of the United
Kingdom be referred to a sub-Committee? E/PC/T/B/PV/21
M. F. Garcia OLDINI (Chile) (Interpretation): I adhere
to the remarks made by the French representative with regard to
the procedure. It would be useful to wait for the opinion of
the Economic and Social Council.
CHAIRMAN: I have already ruled that the sub-Committee can
proceed, and it would be open to any Delegate to raise this
question in the Preparatory Committee after the Report of the
sub-Committee has been received. The reference to the sub-
Committee is approved?
(Approved)
We now have to consider the proposals of the United States
Delegation, which involve amendments to the New York text. I
take it that these can be regarded as drafting points which we
can refer to the sub-Committee without further discussion?
The Delegate of the United States.
Mr. E.H. KELLOGG (United; States): Mr. Chairman, I have
nothing to say in addition to the notes already included in the
paper we are now discussing.
CHAIRMAN: Is the Commission agreed that this proposal of
the United States Delegation should be referred to the sub-Committee?
(Agreed)
--There will be a short meeting of the sub-Committee on
Chapter VIII in this room, following this meeting, to discuss further
organisation.
There being no further business, Commission B will adjourn
until Monday at 2.30 p.m. when we will consider the Report on
Article 30 and also Article 45.
(The meeting rose at 5.40 p.m.)
V
- 44 - |
GATT Library | nm379jp6796 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty-First Meeting of the Tariff Agreement Committee held on Tuesday, 16 September 1947 at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, September 16, 1947 | United Nations. Economic and Social Council | 16/09/1947 | official documents | E/PC/T/TAC/PV/21 and E/PC/T/TAC/PV/19-21 | https://exhibits.stanford.edu/gatt/catalog/nm379jp6796 | nm379jp6796_90260075.xml | GATT_155 | 16,943 | 102,086 | UNITED NATIONS
ECONOMIC
.AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQU E
ET SOCIAL
RESTRICTED
E/PC/T/TAC/PV/21
16 September 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
TWENTY-FIRST MEETING OF THE TARIFF AGREE,EMTCOMMITTEE
HELD ON TUESD..Y, 16 SEPTEMBER1947 AT 2.30 P.M. IN THE
PALAIS DES NATIONS, GENEVA.
Hon. L.D. WILGRESS (Chairman) (Canada)
Delegates shing 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.
NAlTIONS UNIES E/PC/T/TAC/PV/21
CHAIRMAN, The meeting is called t order.
It was agreed at our meeting yesterday that our first order of
business today would be the United Kingdom proposal for a new
paragraph 6 of Article XIV, formerly XIII of the General Agreement
on Tariffs and Trade. The United K-ingdom proposal is given in
paper W/327 to which there is an amendment of the French Delegation
given in W/329 arid an additional sub-paragraph proposed by the
Belgium-Luxembourg Delegation which is given in paper W/336, this
supplanting the previous proposal of the Belgium-Luxembourgxembourg
Delegation whgiven in paper in pazp W/331.
C. HELMORE RUnited Kingdomt(c :iJL) Mr. Chaliran, I think. I
could be veri briefodusing this amendaent. It willl be . ID wi be
within the reof he Committee that when we came t thisen we came this
Artreading the United Kingdom Delogation said dom lic.ogation that,
owint external financial circumstances, .. Czom tnce, they would
beinto fo to pthe provision of that of :'-ois5; Article in the
Provisional of Yrov:isional ';hJ10;- and we promised to circulate a
text which would give effect to the most reasonable solution we
could think of lor that difficu.ty. I think in putting forward
this amendment I shouldmexpress our firr support for the Drovisions
of the previous parArticle of this Ar'ticl. This is simply a
question olfits application.ts applieation1.
If I might justendments the amiendments to our amendment which
of
you hhairman, I would a.nan, Iwould like to say/the French
amendment which amends oI think so that T ,ri.nk perhaps it would
be clearer and more explicit than our wording and I would gladly
move the ameFreent wmendment added toaazriLrment addo it. As
re ards the pDoposal of ohe lgiumation cf ref ium/ Ler bou g in
paper W/336, it seems to us also that this is a very reasonable
addition to boulddeaand we shc-al h ve no object ion at all to that
being added to our new paragraph. E/PC/T/TAC/PV/21
CHAIRMAN: Are there any other comments? Since the United
Kingdom Delegation has accepted the amendment proposed by the
French and by the Belgium/Luxembourg Delegationswe can now regard
this proposal as being one, amended according to the amendments
proposed by the other two delegations: I would like to know if
any other Delegation would like to speak on this proposal as a
whole.
If not we will take up the proposal paragraph by paragraph.
The first would be sub-paragraph (a) which is the original
United Kingdom proposal as amendeded by the French proposal with
respect to the proviso, The numbers of the Articles referred to
in the original United Kingdom proposal will have to be changed.
That is Article No. XII on the first line, becomes Article XIII,
A tiole XI in the third line becomes XII, and Articles X and XII
. the sixth line become XI and XIII respectively.
M. ROYER (France) (Interpretation): Mr. Chairman, I would
Just like to make a remark on a typographical error in the French
amendment. In the fourth line of the English text, third line of
the French text, the words contracting parties" should be printed
without capital letters.
I think that regarding the words ."contracting parties" we will
have to find something else than capital letters to differentiate
because this morning in the Drafting Committee we went over
Article XXIV, paragraph 3(a) which reads:
"Any contracting party proposing to enter into a customs
union shall consult with the Contracting Parties and shall
make available to the Contracting Parties such information
regarding the proposed union as will enable them to make such
reports and recommendations to contracting parties as it may
deem appropriate".
So this seems rather complicated.
CHAIRMAN: We will be able to deal with this question after
the Legal Drafting Committee have given some more study to it, but
P.
3 4 E/PC/T/TAC/PV/2M
I hope they will find a way of reconciling the use of "Contracting
Parties" with capitals with the other "contracting parties with
small letters and avoid this complication in the text.
CHAIRMAN: Are there any other comments with regard to the new
paragraph 6(a) of Article XIII?
We, will now pass to sub-paragraph (b) of the new paragraph 6.
This is given in document E/PC/T/W/336. Are there any comments?
Agreed.
There is also a proposed Note for the Protocol of Interpretative
Notes regarding paragraph 6 (b) of the new Artiole XIV. Are there
any comments on the proposed Note?
MR. J.R.C. HELMORE (United Kingdom): Mr. Chairman, I am
willing to take your arbitration on the point, but the English of
"interpretive " is "interpretative".
CHAIRMAN: I do not accept that challenge.
Are there any comments with regard to the proposed Note?
Agreed.
We will now resume our discussion of the former Article XXVII,
paragraph 1. We dealt yesterday with paragraph 1 of this new
'Article and we now come to paragraph 2 of the Australian proposal,
which is given in document E/PC/T/W/335. Are there any comments
with regard to this paragraph?
The New Zealand Delegation yesterday proposed that the word
'the" in line 4 and also in line 6 should be replaced by the word
any".
MR. J.P.D. JOHNSEN (New Zealand): It was only in line 4,
Mr. Chairman.
2 CHAIRMAN: The New Zealand Delegation proposed that in line 4
the word "the" should be replaced by the word "any", reading
~~~pae by th..-dad J. 5 E/PC/T/TAC/PV/21
"whether any relevant provision".
MR. R.J. SHACKLE (United Kingdom): .I had read the words
relevant provision" here as referring back to paragraph 1 - "an
objection to any provision or provisions of this Agreement". Well,
if that is so, I rather doubt whether it is necessary to make this
substitution. If one provision is objected to under Paragraph 1,
then that is the relevant provision in paragraph 2,. and if more than
one provision is objected to, then those are brought up under the
relevant provision in paragraph 2.
Therefore I really do not see the necessity for making this
change. This is a case where the singular includes the plural.
CHAIRMAN: Are there any other comments on the New Zealand
proposal?
The Delegate of the United States.
MR. J.M. LEDDY (United States): Mr. Chairman, I think there
some confusion here in some cases about the corresponding
provisions of the Agreement and the relevant provisions of the
Charter and so forth. However, I think we all know what we are
talking about and could we not just ask the Legal Drafting Committee
if they could put this better in a clearer ways
CHAIRMAN: Would that be agreeable to the New Zealand Delegations
Mr. J.P.D. JOHNSEN (New Zealand): Yes, Mr. Chairman.
CHAIRMAN: Are there any other comments on paragraph 2?
The Delegate of France, 6
M. ROYER (France) (Interpretation) Mr. Chairman, I apologise,
but I would like to ask the Australian Delegate again if he cuuld
not agree to the deletion o-f the words "or as soon thereafter as is
practicable" because the delay which is provided for is already very
long sixty days after the end of the Havana Conferenre - and that
will make one hundred and twenty days altogether and if we add
another delay we might find ourselves still sitting in November of
next year. Therefore, I should like to ask the Australian Delegate
whether he could not agree to the deletion of these words.
CHAIRMAN: Dr. Coombs.
DR. H.C, COOMBS (Australia): I have no objection, Mr. Chairman
If you have got a last day on which objections will be received, you
will then have to call the countries together and, while it would be
reasonable to expect that you could arrange a time within sixty days
,when it would be convenient for then to meet, it is perhaps not
certaon that you could, and it would be a little embarrassing if you
could not arrange a meeting within two months, However, I presume
.that this is not the sort of Article which is likely to cause a
revolution, and therefore I have no objection to the deletion of the
words "or as soon thereafter as is practicable".
CHAIRMAN: Are there any objections to the French proposal to
,delete the words "or as soon thereafter as is practicable' in the
second line of paragraph 2?
Agreed.
Are there any other comments with regard to paragraph 2?
Mr. Faivovich.
J .
E/PC/T/TAC/PV/21 EE/PC/T/TAC/PV/21
MR. FAIVOVICHI (Chile) (Interpretation): Mir, Chairman , I
will not press my point here and ask that we should decide to what
the world "agree" corresponds. It seems to me that there is a
tacit agreement between the Members of the Committee to leave the
setting of this very difficult problem to the future.
CHAIRMAN: I thank the Delegate of Chile.
Are there any other comments on paragraph 2?
Are there any comments on pararagraph 3?
Are there any comments on paragraph 4?
The Delegate of China.
.MR. D.Y. DAO (China): Mr. Chairman, in the Protoool of
Signature I think the date given was the 1st November. Is there any
reason why we should change to January Ist here and then go on to
state "or on such earlier date as may be agreed"? Is there any
special reason, because in the Protocol of Signature it is stated that
should the Charter not have entered into force on November 1st, 1948
the contracting parties will confer and decade what to do with the
Ag reemen t?
CHAIRMAN: The Delegate of China will recall that when the
Tariff Negotiations Working Party made their first draft of the
General Agreement it was provided that provisional application would
commence on November 1st, 1947, and it was ajar e--. 'ra: t a year after
the provisional application would be a reasonable period for the
entry into force of the Charter. Now that the period for provisional
application has been fixed for January 1st, 1948, this date has also
been moved back by two months,
Are there any other comments on paragraph 4?
J.
7 There will also be added to this new Article a paragraph 5
which was approved yesterday. This Article will now be Article XXIX
and it will be headed "Suspension and Supersessionl'. It will take
the place of the Article which appears on Sages 62 and 63 of document
We now have to consider the consequential amendment to what is
now Article XXVI, paragraph 5. This is the Article dealing with
Entry into Force. At the bottom of document E/PC/T/335 is given
a proviso to be added to paragraph 5 off Article XXVI, This reads as
follows "provided that no such entry into force shall take place
until any Agreement necessary under the provisions of Article XXIX,
paragraph 2, has been reached".
J.
E/PC/T/TAC/PV/21 E/PC/T/TAC/PV/ 21
CHAIRMAN: Are there any objections to this proposal
regardomg Paragraph 5?
(Agreed)
Before passing on to the form of the Schedules, which is our
next item of business, I would like to draw the attention of the
Committee to a note from the Tariff Negotiations Working Party,
whioh was considered at our meeting this morning and which is
given in Document W/338, which has been circulated to Members of
the Committee.
At the request of the Head of the Norwegian Dalegation, the
Tariff Negotistions Working Party gave consideration to the question
of the earliest date on which the Final Act could be signed.
In the light of all the circumstances, the earliest date which
the Tariff Negotiations Working Party decided could be fixed for
this purpose would be October 15. Accordingly, tlie Tariff Nego-
tiations Working Perty recomends that every effort should be made
to conclude the tariff negotiations, so that the, Final Act can
be signed about that date.
The Delegate of the United Kingdom.
Mr. SHACKLE (United Kingdom): Mr. Chairman, the Committee
will remember that the other day, when we were discussing paper
W/330 -Jont Action by the Contrecting Parties, we left over
Paragraph 6, which was about the transfer of the functions of the
contracting parties to the ITO, That was left over to be con-
sidered along with article XXVII, Paragraph. Now that we hav
considered paragraph 1 of Article XXVII, it seems to me that wè
can simply leave Paragra ph 6..
..We can either leave Paragraph 6 as it stands or we can delete
it altogether. Between the two, I have no preference. I think
it would do no .arm to, leave it exactly now drafted.
_ 9 ._
S S - 10- E/PC/T/TAC/PV/21
CHA IRMAN: Are there any comments on the proposal of Mr.
Shackle?
The Delegate of the United States.
Mr. LEDDY (United States): Mr. Chairmen, my view of this
paragraph is exactly the same as that of the Delegate of the
United Kingdom, I think it is unnecessary, but if any Delegate
considers it is necessary I should have no objection.
CHAIRMAN: It has been suggested by the United Kingdom end
the United States Delegates that Paragraph 6 of Article XXV - Joint
Action by the Contracting Parties - might be deleted. When we
were considering Article XXV the other day, we decided to leave over
this paragraph until we had established the text of the Article
dealing with suspension and supersession. I would therefore
lika to know if any Members of the Committee have any obJection
to the deletion of Paragraph 6 of Article XXV.
The Delegate of New Zealand.
Mr. J. P. D. JOHNSEN (New Zealand): I have no particular
views on the subject, but this Paragraph 6 does seem to indicate
a definite course of action, on which I think we are all in
agreement, and I would be in favour of it being retained.
CHAIRMAN: Are there any other comments?
The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I thought
it would be preferable to keep Paragraph 6, but to stop the
wording of this paragraph after the words "to the Organization,"on,"
deleting the last part of the sentence. Whan Port II is super-
seded by the corresponding provisions of tha Cherter, once the E/PC/T/TAC/PV/21/T".C/PV/21
' Claer is adopted, then the functions of the contracting parties
(with small letbers) will bc transferred to the Organization,
I foresee no difficulty here.
Unfortunately we also refer to contracting parties with
oa-pita letters iof art Agreement; krioeemen if nothing is
provided hare in this text we shall have to have recourse to the
f amodurs of amendment wherever the words "contracting parties"
*capital th aopiltal letters in Part Agreement. ht.reement.
I wonder if it would not be clearer here to adopt the
. £l3owing text: "As scontracting ontractina parties heve made a
decision under the terma of Paragreph 2 XXIVArticle XIX their
'aiit functions will be transferred to the Organization."'
COhIRlsMN Are there omments Er c-inment?
e of the ThoD:-lKingdom.egatnX.
Mr. SHACKLE (Unigted Kindom): Mr. Chairman, should it not
be "unless the contracting parties decide otherwise, under the
teras of PnragrapA 2 of .rticle XXI"X . .?
CHAIRMAN: The Delegate of Belgium.
M. FORTHOMgE (Belaium): I would just like to ask, if we
adopt .the text proposed by the Feench Dzlegate, what happens if
contracting parties have to make a decision under Paragraph 3?
M. ROY3R (France) (Inaerpretstion): Mr. Chairman, under
Paragreph 3 of Article XXIX, tha congr ctin6 parties are not
labelled with capital letters.
NILIIRMA:e The Dclegate of the United.States4 S _12 E/PC/T/TAC/PV/21
M . LEDDY (United States): I think we really ought either
to delete this paragraph or leave it as it is, because under the
supersession provisions as they now stand the contracting parties
must agree whether some or all of the provisions of Pert II
.shall be supcrsedcd or whether some or all of the provisions of
the Agreement shall be retained. It may be that the contracting
parties will agree to retain some provisions of Part II. In
that case we would not want a provision allowing for the
automatic transfer of those functions to the ITO. Perhaps in
some cases it may be feasible to transfer even those functions
to the ITO, but in the absence of any definite information we
cannot reach a decision.
Paragraph 6 as. it now stands makes provision for that, with
the exception clause: "except to the extent that they may agree
otherwise under Paragraph 2 of Articlee XXVII.""
I really think we had better stick to the present text
unless this is needed to complete the paragraph.
CALIRMAN: Do any othermembers s of the Committee wish to
speak?
The Delegateo.fCreohoslovakia..
H. E. Mr. Z. AUGENTALER7 (Czechsslovakia): Mr. Chairman,
I would like to support the French proposal, because I think that
what we are doingheree - drafting the GneralALgreeennt on Tariffs
and Trade - is only subsidiary to the Charter, and I think we
have to consd-er it as an interim measure. That is why I think
It should be clearly expressed and that is the right plcoe to
express it, as proposd- by the French Deleates..
HAIRMAN:: The ealegate of Norwa., S
- 13 -
E/PC/T/TAC/PV/21
Mr. J. MELANDER (Norway): Mr. Chairman, I do not think
it matters very much whether we delete this paragraph or not,
but, in view of the fact that some Delegations attach some
importance to it, I do not think it could do any horm et all
to maintain it. It does add clarity and therefore I would
support the French proposal.
CHAIRMAN: The Delegate of France.
M. ROYER (France ) (Interpretation): Mr. Chairman, there is
another solution, an alternative proposal, which the Committee
might prefer. That would be to insert a clause in Paragraph 2
of Article XXIX stating that the contracting parties will agree,
[or will reech agreement, on the transfer of their functions to
the Organization, in accordance with the provisions of Article
XXV.
(After the interpretation, M. Royer corrected the sentence, to
read as follows:- "TTh: contracting, parties will agree on the
transfer of their functions under Article XXV . . .").
CHAIRMAN: Would that be a new Paragraph 6 to Article .XXIX?
M. ROYER (France (Interpretation): No; this would follow
Paragraph 2.
CHAIRMAN: -Another paragraph?
M. ROYER (France) (Interpretation): No; that would not be
necessary; just a sentence could be added. S . E/PC/T/TAC/PV/21
14
CHAIRMAN: We are now faced with a. number of alternatives:
one is to delete Paragraph 6 of Article XXV; another is to
retain it in the way it is worded at present; another proposal
is to re-word it according to the proposal made by the French
Delegate, and the fourth proposal is to add a sentence to Para-
graph 2 of Article XXIX, reading as follows: "The Contracting
Parties (with capital letters) will agree to the transfer to
the International Tradae Organization of their functions under
Article XXV."
M. ROYER (France): No, Mr. Chairman; contracting
parties "with small letters..
CHAIRMAN: I would like to know which of these many
proposals meets with the general wish of the Committee.
The Delegate of the United Kingdom.
Mr. SHACKLE (United Kingdom): I would suggest the
adoption of two of the solutions. That would have the
advantage of diminishing the residue of the unsettled matters.
I would suggest that we adopt M. Royers latest proposal and that
we keep Paragraph 6 of Article XXV as it is.
The French proposal was that the contracting parties
will agree "regarding the transfer", not "to the transfer" of
their functions to the Organization. That would mean his
addition to Paragraph 2 of what is now Article XXIX would then
be complementary to what is said in the present paragraph of
Article XXV.
I think that by those two proposals we should have a
logical result. R. E/PC/T/TAC/PV/21
15
CHAIRMAN: Since we cannot adopt all four proposals,
perhape Mr. Shackle has made the best compromise possible in
suggesting that we adopt two of them.
Is the Committee in agreement Any objections?
The Delegate of France.
M. ROYER (France) (Interpretation): I have no objection:
I %s that paragraph 6 is superfluous but this
is only a personal opinion.
CHAIRMAN: Perhaps we could first of all agree to the
wording to be added to paragraph 2 of Article XX1. . Would
the folllowing wording meet with the Committee's approval:
"The contracting parties will agree concerning the transfer
to the International Trade Organization of their fusctions
under Article XXV." Is that agreed? Agreed.igred.
The part of Mr. Shackle's acczlc proposal is to delete
the sbracke as around paragraph 6 of Article t-Xc.e XiV, Are
there aectingscti -n?
J. SHACKLE tC''nited KingdomXi n3d): would be quite
ed to agree to the proposal of M. Royer to supress thisess th
aph.agraph
AN: Mr. Sheckle now comes back to tho comee original
proposdelete this oaragraph. Are there any objections Fany
elegate of China.Ci:;
Mr. D.YA; D,hinai:ji)with regard to paragraph 6
A~rArticle XXV I must take ;zsf .granted that when decision sion is
ed under Article XXIX. Paragraph 2, the function will not be ill n
ferred until the Organization has been established,qV~ei because
under ArtiXXIX, Xlx,. wendecision is taken, aken, I assume that
neither thrter nor the Agreement has come into e ont .arce, E/PC/T/TAC/PV/21
CHAIRMAN: Are there any remarks on the comments just
made by the Delegate of China?
The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I think
that the draft which we have just proposed must not prejudge the
issue. I really do not see how the contr acting parties could
transfer the question to a non-existent Org:.nization.
CHAIRMAN: Can the Committee come to a decision as to
whether or not to delete paratgraph 6 of Article XXV? Will all
those Members who are in favour of deletion, please raise their
hands.
Dr. H.C. COOMBS (Australia): Is it on the assumption that
the other one is in?
CHAIRMAN:Yes.
Against? Two dissentients.
I trust that the Delegates for China and New Zealand do not
feel strongly on this point. The paragraph is deleted.
Before taking up the form of the Schedule I would like to
call the attention of the Committee to Document E/PC/T/W/338 -
Note from the Tariff Negotiations Working Party regarding the
establishment of the earliest date on which the Final Act could
be signed. The date given is October 15th, as I mentioned earlier
in this Meeting. Are there any comments?
As there are comments on that Document we will pass on
to the next order of business which is consideration of the form
of the Schedules. There are a number of Documents concerning the
form of the Schedules. The relevant Document is that given in
Document E/PC/T/153 which sets forth the proposals for the Tariff
Negotiations Working Party. There is also an Annotated Agendaxenda
relating to the Schedules whicgiven in Document 'uinnE/PC/T/W/325.
R. R. E/PC /T/ TAC /PV/ 21
17
These are the two main Working Papers regarding the form of the
Schedules, but delegates may wish to take into account the
comments given in Document, E/PC/T/195 regarding the procedure
necessary for the preparation of the signature to the Final Act
and to the General Agreement.
On pages I and 2 of Document T/153 there a: set forth the
proposals of the Tariff Negotiations Working Party regarding the
Identification of Schecules. These follow closely the contents
of Section E and Section G of Annexure 10 to the Report of the
First Session as well as Part III of the Drafting Committeee
relating to theGUeneral Agreemnxt.
Nocomments s were received from Delegations regarding thsa
part of the Report of the Tariff NegotiationsWorking Party,y
and therefore I can take it that there is no need forusi to
have any discussion regarding agese 1aJnd 2 of Docmentl T/153.
The Delegate of France.
M. ROYER (France) (Interpretation): In front of Schedule XI
see "French epubtlic French UnionL". * I think we aught to
have'"rench Union", ,and one sub-division regarding the metropolitan
territories and another regarding overseas territories.
CCHAIRMAN Then I take it that the DEeegation of France
would wish to have this Schedule headed '"chedule XI - French Uinion."
M. ROY1R (France) (Interpretation): UM. GChairman,
think we may have to -alter the nnumberingof thfe1last items, because
Southern Rhodesia is not listed at present;, f I am righ-t and
therefore it would not be proper to havceaa blank in front of the
name of the country.
Mr. RJ. SH!ACKLE(United Kingdom): As far as I know, this
Iisperfectly correct,. R E/PC/T/TAC/PV/21
18
CHAIRMAN: In that case we would delete Southern Rhodesia
from this list and remove the countries that come below that
up one number.
Are there any other comments?
Mr. J.P.D. JOHNSEN (New Zealand): We would profer that
instead of the "Dominion of New Zealand" , "New Zealand" should
be inserted.
CHAIRMAN: That change will be made at the request of
the New Zealand Delegation. Are there any other comments?
We will then pass on to point 2 in our Annotated Agenda,
covering the statement relating to each Schedule, that is, that
one page 5 of Document T/153 paragraph 1 should be replaced by
the paragraph on page 4 of the same doument, to meet the case
of territories which are negoetiating exclusively on maximum
margin ns of preference.
You will also recall that we had an amendment of the French
Delegation to paragraph 2 of Article II and when we were considering
this amendment in the second reading we agreed that we would
defer consideration of this proposal until we had come to dealing
with the heading or the covering statement to the Schedule, so that
it will now be in order to take into account the amendment proposed
by the French Delegation to paragraph 2 of Article, II, in
considering the covering statement in the Schedule.
Referring to paragrap h 1 of he c0)-Vuerirn statement, the
40te e-lv.r on pagP 1 oDi Documcnt AW/325 is that the Pronch Delegation
:Qonsider that tth-s veparagrnph i9 unnrecessary in view of thle provisions
of paregraph 2 of the General grgeement and in view of the following
redraft of Faragr-h 2 of' Arszticle >,T proposed by the French Delegation' 19
M. ROYER (France) (Interpretation): As we stated
previously, it would be rather inconvenient to insert in the
heading of the Schedules provisions which ought to appear in
the text of the Agreement itself. This might only be a question
of form of presentation of the text, and not of substance, but,
nevertheless, this is, to our mind, an important point.
If one inserts in the headings provisions which are already
in the Agreement, then there might arise difficulties in the
interpretation of this text in the future; therefore, this is the
reason why the French Delegation propose to delete Paragraphs 1, 2
and 3 which are to appear in the headings of the Schedule, and we
would be si6ressing there difficulties which may arise in the
fututre. This is, I think, the proper method of dealing with
this question. The method should be that the General Agreement
must quote undertakings which countries are going to underwrite
and in the List one ought only to state the rates of tariffs and
the various charges or taxes.
E/PC/T/TAC /PV/21
R. P. 20 E/PC/T/TAC/PV/21
As regards paragraph 2 we would be ready to megotiate on the
proposal which we have made and we think that we could reach
agreement on a text which could be satisfactory to everyone; but
as I have stated it seems to me that there is some inconvenience
in inserting provisions which ought to appear in the Agreement in
the headings of the Schedules, because these provisions, if they
should appear in the headings of the Schedules might be interpreted
in a different way and they might have a different juridical
validity.
Dr. G.A. LAMSVELT (Netherlands): Mr. Chairman, generally
speaking, my Delegation quite agree with the observations made by
the Delegate of France that the contents of the covering statement
are unnecessary and my Delegation would prefer Schedules as just
Schedules which do not need any covering statement. Actually the
question seems to be that either the covering statement repeats
principles laid down in the Agreement and is therefore superfluous
or it contains some new elements and, in that case, those should,
in my opinion, not be in the covering statement but in the Agreement.
If there should be opposition to this idea I should like to
hear the arguments in favour of retaining the covering statement
in the hope that these arguments would convince me that it is not
here a case of in cauda venenum.
Mr. J.M. LEDDY (United States): Mr. Chairman, I do think we
need something which says that the duties we shall apply shall not
exceed those in the Schedules plus any other supplementary charges
which might be in force on the date of signature of the Agreement.
It is only that way that we know exactly what the concessions are
that we are getting. On the other hand we do feel that there may
be some merit in these proposals of the Delegations of France and
the Netherlands that these provisions should appear in the
Agreement itself. If we can work out a draft which will cover all E/PC/T/TAC/PV/21
the Schedules on this matter we shall save duplicating these
various paragraphs shown in the Tariff Negotiations Working Party's
Report fourteen or fifteen times, and, if that were agreeable in
principle, I would suggest that we appoint a small Sub-Committee
to prepare that draft . It will require rather considerable
recasting of the provisions given in the Report of the Working
Party. But w e have no objection to, and I think probably come
preference for, making an attempt to put them in Article II of the
Agreement rather than repeat them in the Schedules.
CHAIRMAN: The Delegate of Belguim.
M. Pierre FORTHOMME (Belgium): Mr. Chairman, while agreeing
with all that has been said up to now, I think that the first
sentence of paragraph 1 ought to be kept in any case because that
is the one that stipulates that there will be reductions or
concessions in the various tariffs .
CHARMLA: IAe there any other comments?
Dr. H.C. COO3B S(uAstralia): ir . Chairman, I think that Mr.
Leddy's suggestion is a good one. I feel that it is not necessary
ni teh Schedules to have anything more than headings which a re
sufficiently descirptive for understanding the nature oftnh
various parts of the Schedule, without seeking to embody any
oommitments in the Schedules; but actually I think it is
unnecessary to add anything to the Agreement itself. It seems to
me it is already in the Agreemcnt. That ma rnot be oso b-t I
think the only way we could check on that would be by having a
very small group to work over it.
CHIARAMN: Are there any other comments?
2P. 1 P. 22 E/PC/T/TAC/PV/21
Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I think
also that these preliminary notes to the Schedules should be
suppressed to avoid confusion. Anyhow, if anything remains here
I have certain doubts whether, in the expression "ordinary customs
duties", the word "ordinary" is correct. I think that word should
be entirely deleted. It is "from customs duties in excess of
those ....."
CHAIRMAN: Ae there any other comments?
The Delegate of the United States has proposed that a small
working group be established t ostay this question of the Corering
Statement to the Schedule in its relation to the amendment proposed
by the French Delegation to paragraph 2 of Article II. Is this
proposal approved?
Agreed.
I therefore wish to propose the following delegations to
compose the Sub-Committue:- A.ustralia, Belgium, France, Unitod
Kingdom, United States
Dr, H.C. COOMBS (;nutralia) :I suggest, Mr. Chairman, that
any other delegation who believes that, because of oddities of their
tariff, they have a special problem should notify this Sub-Committee
so that those problems can be taken into account by calling the
particular delegation in. I think some of the problems will arise
rofm the ecpularities of the tariffs of the particular country.
CHARMIAN: Is the compoesonti of the Sub-Committee approved?
I would nominate Dr. Coomb, to be Chairman of this Sub-Committee.
This Sub-Committee to meet tomorrow morning at 1030: and, as
suggested by Dr. Coombs, they should invite any delegations who have
any special problems to appear before them or tor Ppsent the
problems in writing Dstohat they can take them into consideratoni.
Is that approved?
gLreed. E/PC/T/TAC/PV/21
We have some other proposals with regard to the covering
statements which are more of a special character, but it will be,
I think, desirable that we should discuss them here before we
decide whether or not to refer them to a Sub-Committee.
On page 3 of document W/325 we have a proposal of the
Czechoslovak Delegation to insert a provision into this Schedule,
and it would have no objection if a similar clause were attached to
any other Schedules as far as specific rates are concerned. This
provision relates to the value.of the currency of a national unit.
in which the specific duties are expressed.
The French Delegation associates itself with this proposal of
the Czechoslovak Delegation.
Are there any comments on this proposal?
The Delegate of Brazil.
Mr. E.L. RODRIGUES (Brazil): Mr. Chairman, because we have a
tariff in most parts specific, and because we had occasion already
to present our case in the Preparatory Committee, I have to associate
Brazil with this proposal of Czechoslovakia. I should like to be
clear whether later on, if we have some depreciation of the value
our currency, we shall be able to make another readjustment; or
have to wait until the end of the three years, the first
period of this Agreement.
CHAIRMAN: The Delegate of Norway.
Mr J. MELANDER (Norway): Mr. Chairman, we have also a
tariff which is to a large extent specific, and we take it also for
granted that if we have a formal depreciation of our currency - I am
not talking about.a fall or rise in prices but a formal depreciation
of the currency, - in our case in accordance withthe Articles of
the Monetary Fund Agreement to which we are a party, then of course
that would lead to an automatic adjustment of the Tariff Schedules
as contained in this Agreement.
P.
23 24
CHAIRMAN: The Delegate of the United States.
Mr. J.M. LEDDY (United States): Mr. Chairman, I think the
negotiations here at Geneva have shown quite conclusively that
it is impracticable to contemplate a provision which will allow
countries automatically and unilaterally to increase specific
duties that have been agreed upon in conjunction with depreciation
of the currency. I think there is really nothing automatic about
it because the effect of the depreciation is quite different in
different cases. For example the United States reduced the gold
content of the dollar, I think, in 1934. Well, now, that should
have had an effect on prices, but as a matter of fact it did not
and it would have been patently ridiculous for us to increase our
specific duties to offset that and we should not for a moment, if
we had had trade agreements in force, have considered that we had
any right to do so.
I notice this also; that there is no provision in any of the
parallel provisions for reducing specific duties in terms of
depreciation of the currency in terms of the Monetary Fund's par
value, and I should think that any proposal would be balanced on
both sides.
Now we must recognise that there is a problem and I would
suggest that there are two cvays of handling it: one, to insert a
general provision in the Agreement providing for consultation with
a view to any appropriate adjustments which might be agreed upon in
the event of a change in the par value of the currency of any
contracting party: or, alternatively, that the countries which
desire to have some such provision in connection with their
Schedules make that proposal directly to the countries with which
they are in negotiation. But I do not see any possibility of
agreeing upon a provision which would give every country a
unilateral right to increase duties in connection with depreciation.
P.
E/PC/T/TAC/PV/21 J. E/PC/T/TAC/PV/21
25
CHAIRMAN: The Delegate of the Lebanon.
MR. J. MIKAOUI (Lebanon) (Interpretation): Mr. Chairman, the
Lebanese Delegation, as well as the Syrian Delegation, would like to
support the proposal made by the Czechoslovak Delegation, which was
in Its turn seconded by other Delegations.
CHAIRMAN: The Delegate of Czechoslovakia.
H.E. Dr. Z AUGENTHALER (Czechoslovakia) Mr. Chairman, when
we were discussing this matter for the first time in London, it was
or devaluation
decided there that changes in tariffs, owing to the depreciation/of the
country
currency of the/maintaining the tariffs which do not result in an
increase of the protective incident of the tariff, should not be
considered as new tariff increases under this paragraph.
Well, what we have proposed here is a logical consequence of
this decision taken in London, and I think it is quite just, because
if a currency is officialty depreciated it is actually a new currency,
and it means that customs duties have to be re-calculated to the
levels of the new currency. It does not mean that each country is
obliged to do so, but it should have the right to do so.
For instance, Czechoslovakia has devaluated its money, and,
instead of 30 crowns to 1 dollar before the war, now it is 50 crowns
to 1 dollar, Now, we recalculated our customs duties but we always
remain below the highest level, and we consider it as our right to
do so because we think that there is no wrong done to other countries.
If,. for instance, some commodity costs 1 dollar or, let us say, 50
crowns,. and then later the dollar is equal to 100 crowns, if the
duty is raised from 10 crowns to 20 crowns, the incidence remains E/PC/T/TAC/PV/21
exactly the same, that is, it would remain at exactly 20 per cent.
Therefore, if this is not admitted, it would mean that the
countries which have specific duties are put in a situation of
inferiority against the countries having duties ad valorum..
CHAIRMAN: The Delegate of Belgium.
M. P. FORTHOMME (Belgium); Mr. Chairman, I do find that there
is considerable force in the objection advanced by the Delegate for
the United States. I was wondering, perhaps, whether we could not
have a compromise to meet his objection by adding after "in proportion
to the depreciation of its currency" some such words As "provided
that the movements of the general index of wholesale prices
consequent upon this depreciation justify such action.
Perhaps we should change the word "consequent" to "commitment"
to indicate that at some time the movements in the index precedes
the necessity for depreciation.
Dr. H.C. COOMBS (Australia): Another possible compromise,
which follows out of the extract from the London Report which the
Czechoslovak Delegate read, might be to substitute for the words
"in proportion to the depreciation of its currency" the words "to the
extent that the protective content of the rates is not increased".
The difficulty about that, of course, is that it is less precise,
but it would give a basis for judgment of particular cases, and
perhaps a basis for complaint if the country did abuse the situation.
CHAIRMAN: The Delegate of the United States.
MR. J.M. LEDDY (United States): Mr. Chairman, I appreciate the
suggestions made by the Delegates of Belgium and Australia, but, quite
J. J. 27 E/PC/T/TAC/PV/21
frankly, I do not think that it will matter what indicators or texts
we might attempt to apply to the proposal.
The provision for a unilateral right would be acceptable to us.
We have had provisions in our trade agreements dealing with this
question, and perhaps something along the lines of those provisions
might work. I am going to read from the Agreement between France
and the United States of, I believe, 1936; "In the event that a
wide variation occurs in the rate of exchange between the currencies
of the United States of America and France, the Government of either
country, if it considers the variation so substantial as to prejudice
the industries or commerce of the country, shall be free to propose
negotiations for the modification of this Agreement or to terminate
this Agreement in its entirety on thirty days' written notice".
In other words, an agreement must be reached as to what is done,or
if the Agreement fails then the country which is dissatisfied with the
situation can withdraw from the Agreement at short notice.
I think that is a reasonable proposal, but I do not think that
a unilateral right to increase duties no matter on what basis is
reasonable without adjustment of the matter by the other countries
concerned.
CHAIRMAN: Are there any other comments?
The Delegate of Norway.:
~~~~~~~~~~~~~~~~~,~~~~~~~~~~~~~~~~~
MR. . MELNDER (Norway): Mr. Chairman, the Agreement to which
Mr. Leddy just referred wouldet not seem to cover the case complely.
he.agreement of 1936 abetween France and the United Stces refers to
the fact that there were fluct.uations in the rates of exchange Now, E/PC/T/TAC/PV/21
in that period the rates of exchange were fluctuating, but now we
operate with fixed rates of exchange under the Monetary Fund Agreement,
so that the circumstances are really not the same. In the pre-war
period you had a fluctuation in the exchange rate to a much higher
extent than you have now, and consequently the circumstances are not
exactly the same.
On the other hand, I think there is some force in Mr. Leddy's
point that there might be cases where the depreciation ought not
automatically to lead to an adjustment in the specific duties and the
protective incidence ought to be the criterion, I think, It might
be that the best solution would be to have a clause, preferably in
the Agreement, to the effect that if there is devaluation of a currency
which does alter protective incidence of their specific customs duty,
then that duty could be altered, but I think also that it is
reasonable to have a provision for consultation, or perhaps one could
establish the right of a country to make an alteration, or an
adjustment, subject, of course, to the right of other countries to
maintain that the circumstances could not justify such action.
J. S 29 E/PC/T/TAC/PV/21
CHAIRMAN: The Delegate of Brazil.
Mr. E. L. RODRIGUES (Brazil): M . Chairman, I think this
matter of monetary devaluation or depreciation in regard to
tariff rates should be considered in the light of the level
of the tariff. A country with a low level of tariff will be
extremely affected by a monetary devaluation or depreciation,
whilst a country with a high tariff will not be effected in
the same way by a monetary devaluation or depreciation.
Because of this, some countries, like Brazil, had a very
sad experience. In Brazil, most of. the specific rates -
what we cell the ad valorem rates - of 30 per cent were decreased
by the monetary devaluation to as little as 8 or 10 per cent.
You can very easily see what the situation would be if the
same thing were to happen again.
As Mr. Melander said, we do not expect to have to face
the same situation in the future, but we must be prudent when
we are discussing this matter here.
Another remark I should like to make is that if you are
dealing here with a multilateral agreement it is neither fair
nor wise to reason on the lines of a bilateral agreement,
especially in regard to the procedure for deciding this question.
If we hove later on - automatically or not - to deal again
with every other country which has taken part in this Agreement,
we shall have a lot of difficulty. I think there should be
a general principle attached to this Schedule, or to the Agreement,
giving to a country which finds itself with a low level of tariffs
caused by monetary devaluation or depreciation the opportunity
to correct such a situation. 30 -! /
It is not unilatarel action, because it tF kes into
consideration the necussity of correction to pit all countries
on the see level of negootiation, nrt to give to De country
a privilege or s advantage in that matter over another country.
RPM: aThe Dclc rae o nada.
Mr L. v.GOUITLLRD (Canahaida): Mr. Cn.-a, we would
agree with thea statement amde by Mr. Lddy, that consultation
and apeproval by th contractiong parties wuld be a fair and
equitable way of dealing with this problem. We recognise, of
ecourse,e the xistenoc of this prblem and, ianadandeed, the C-
Unigreeted Stecs.A^nt of 1938 contains, in Article XIII, a
clause very simielar t.o th orne awhich M. Lddy reed out of
thtate Uteed Ss;gree-eFrl'h A* t -o 1936.
The 4-eet as it now stands provides for consultation
and approval. It is my impression at least that attacks on
the benefits to be derived from concessions scheduled in the
Agreement are less serious then the attack which might be
reflected in unilateral action of raising specific rates as
a result of depreciation.
e erTh Nwegiean Dlegate mentioned that the situation
obtaining on variations in rates of exchange in 1936 was
different from what obtains now, because the rates are fixed
by the Monetary Fund. That may be, but the very fact that
he doesp suport, along with otherer legates, the inclusion
in tgreemenhe At of a clause providing for variation points
to the very existence of the problem, wheth-r those variations
be wide or not.
/PC /AT/T /21-'/
S S
- 31 -
E/PC/T/TAC/PV/21
The Canada-United States Agreement of 1938, for example,
reads as follows: "If a wide variation should occur in the
rate of exchange between the currencies of Canada and the
United States of America, and if the Government of either
country should consider the variation so substantial as to
prejudice the industries or commere of their country, it shall
be free to propose negotiations for the modification of this
Agreement; and if agreement with respect thereto is not
reached within thirty days following the receipt of such
proposal, the Government making such proposals shall be free
to terminate this Agreement in its entirety on thirty days'
written notice."
It might be the best solution, Mr. Chairman, to refer
this question to the Sub-committee Appointed this afternoon,
since it has closely related aspects or the same problem, namely,
the preface to be included with the Schedules to the Agreement,
Canada is not a member of that Sub-committee and therefore I
was anxious to state our position. .
CHIRMLN It is now time for us to adjoeerurn for r.eshments,
I am wonderinge if the Dlegate or the United States wishes to
speak nows oor if I huld call upteonw him afr e resume.
Mr. LEDDY (United Statemes): I edrely wish to support
the pfroposaelela o the aDagte of Cnda, to refer this matter
to tmhe Sb-.cozittee,
l WC Deleogate,o f anada has proposed that
this question be referred to the Sub-committee which we set up
to deal with the form of the Schedules. I am wondering if it
right not be possible, before referring the matter to the S - 32 - E/PC/T/TAC/PV/21
Sub-committee, to obtain the sense of the Committee on the
question of unilateral action versus consultation and adjustment,
There seem to be two different schools of thought in the
Committee: some Members propose that countries should be
given a unilateral right to increase specific rates of duty in
the event of devaluation or depreciation of their currencies;
others consider that this should only be done after consul-
tation with the other contracting parties.
The Delegate of the United States.
Mr. LEDDY (United States): Mr. Chairman, if the Committee
is to take a decision or come to a conclusion on this point, I
shall have to make a very much stronger statement than I have
made before, I wonder if it would not be better to allow the
Sub-committee to explore the matter a little further.
CHAIRMAN : The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I
support Mr. Leddy's proposal to refer this question to the
Sub-committee, but I would ask that the Delegate of Czechoslo-
vakia be included in the list of members of the Sub-committee.
I notice that amongst the members of the Sub-committee there
is no country represented which has a large pert of its tariff
constituted by specific duties.
CHAIRMAN: I might say that before the Delegate of France
made his statement I had already come to the conclusion that it
might be necessary to add the Delegate of Czechoslovakia to the
list of members of the Sub-committee, or to broaden the terms
of reference of the Sub-committee. I was poing to propose, 33
in order that there should be full representation of all points
of view, that. the Delegates of Canada and Czechoslovakia be
added to the Sub-committee, making the total number of the Sub-
committee seven instead of five.
The Delegate of the Netherlands.
Mr. G. A.. LAMSVELT (Netherlands): Mr. Chairman, as you
have decided that this question is going to be dealt with by the
Sub-committee, I would suggest the insertion in the text of the
Czechoslovakian proposal, after the words "specific -rates of
duty", the words "and other charges expressed in money."
CHAIRMAN: The Sub-committee will take due note of the
remarks just made by the Delegate of the Netherlands and, as I
mentioned earlier, all Delegations are invited to present any
special problems they have in connection with the Schedules to
the Chairman of the Sub-committee. Then they can either attend
a meeting of the Sub-committee to explain their points of view
or submit their proposals in writing. No doubt, in the case of
the Netherlands, it will be possible for the representative of
Belgium on the Sub-committee to put forward this particular
proposal.
Mr. LAMSVELT (Netherlands): Thank you, Mr. Chairman.
CHAIRMAN: Is the proposal to refer this question to
the Sub-committee and to add to the members of the Sub-committee
the Delegates of Czechoslovakia and Canada approved?
(Agreed)
- There will now be an adjournment until 5.20 p.m.
(The Meeting adjourned at 4.50 p.m.)
E/PC/T/TAC/PV/21
S R.
- 34 -
CHAIRMAN: The meeting is called to order.
The next point on page 3 of Document 325 concerns the schedule
itself. The French Delegation suggests that Part I should be headed
"Most Favoured Nation Tariff "and that Part II should be headed
"Preferential Tariffs".
The Delegate of France.
M. ROYER (France) (Interpretation). Mr. Chairman. We only
proposed this for reasons of convenience. We did not think that
this would create difficulties to the Canadian Delegation; if it
does we apologise for it. But we thought it would be easier in
this way for those who would refer themselves to the text; and
now the possibilty of solving this problem will be to put at the
beginning of the schedule a statement a few words stating that the
first part refers to Most Favoured Nation Tariffs and the second
part to Preferential Tariffs. Otherwise would would have to look
out the item in the Agreement itself to find the proper reference.
CHAIRMAN : The delegate of Canada.
M. L.E. COUILLARD (Canada) (Interpretation) Mr. Chairman I
would like. to thank the French Delegate for his statement. Really
we do not see the necessity of repeating the words "Most Favoured
Nation Tariffs"and Preferential Tariffs" on the top of each page of
the Schedule. We might find a solution of compromise by just
putting this after Part I on page 1 and after Part II on page 2.
CHAIRMAN: Any other remarks regarding the French proposal?
Any objections to putting the words "Most Favoured Nation
Tariffs" after Part I on page 1, and "Preferential Tariffs" after
the wordsPart II on page 2?
Mr. R. J. SHACKLE (United Kingdom) I take it that would
apply to each schedule for each particular country. There will be
E/TC/T/TAC/PV/21. E/TC/T/TAC/PV/ 21.
Part I and Part II for each Schedule and each would have "Most
Favoured Nation Tariffs" and "Prerferential Tariffs" on the first
page.
CHAIRMAN: That would only apply to those countries that
have preferential tariffs. I would judge from the remarks of
certain members that they have no preferential tariffs and therefore
they could not have a Part II.
The Delegate of Australia.
Dr. H. C. COOMBS (Australia) I am not quite sure what we
are discussing.
CHAIRMAN: We are discussing page 3 of Document 325. Bottom
of the page.
Dr. H. C. COOMBS (Australia) What I wanted to add, Mr.
Chairman, was that from an examination of our own position it does
appear to us that there will need to he more parts than two. I do
not know if it is relavent to raise that point at this date.
CHAIRMAN: Yes, this is the place to raise that question.
Dr. H. G. COOMBS (Australia) The position is that,as
Delegations who are negotiating with us are aware, we have in
our tariff, in addition to the normal customs duties, certain
other duties, and while these are modified along with the
customs duties, in some cases there are a number of items of
which the only part of the tariff which is affected by negotiations
is the primage duty itself, and we feel it may be necessary,
therefore, for us to have a Part 3 dealing with these items,
where the only concession involved is a concession on the primage.
furthermore , it does seem to us that it would be desirable,
at any rate, to have a further part which would deal with items
on which the commitment accepted relates to the preferential
margin,: but not to either of the rates. We have some items for
which we have requests where, for reasons relating to the protective
R.
- 35 - _ E/PC/T/TAC/PV/2
incidence of the item, we are unable to bind the rates, either
the preferential rate or the Most Favoured Nation rate, but
where we are prepared to negotiate and bind the protective
margins, and it does mee to be a rather different category,
and, just offhand it would appear to us that we would need to
have, for the purpose of clarity, four groups of items - that is,
four parts under this schedule.
CHAIRMAN: I should like to call the attention of Dr. Coombe
to page 6 of Document E/PC/T/15o in which a sample schedule is
given. The Tariff Negotiation Working Party, in consideringLUingd
i.; Ad
this question , ave very careful consideration to the possibility
dividing the Sctnu t i br :f 1_Xtudi one
part to take care of special charges such as primage, and another
part to take are of maximum margin of preference.
e rvereThe Tarif fot .tne Workng P,..ty, .a; vZar
consideration and locnge deliberation of this problem deidd that
it nsfwould be muo better after the tra:r, for the sake of
94plification, to confine the schedule to the two parts we have
recommesndeavourdd, oeation rates, to take care of the Mo. F N ..tc
ntial rates whiandappl thoeQ er to take care of P f-i*:eth
another group of countries.
; recom LT. theY h-v Xr.ended ha t s
taken care of in a manner set forth in this sampl.e schedule
f yoUwll note under Item 538 of this Secheableeldul3 T.d
KirXanle Abtc; - there is a provision here. or gtakin' fare ot
erima6.
g swars maximum margin of preference, for which no boundary
provided, a similar example is given at the top oIfthe page
in Item. 48 - Eeocric&al .Ap:aatus,. There you have a binding
ami4mmu of 1%0 lithuot any binding of the rate . Yuo will also Bse
hwit reagrd to Table and iK..cL rAticles that provision is made
rfo the binding of prilage without any binding of the rate.
R
36 R. 37 E/PC/T/TAC/PV/21
The Tariff Negotiations Working Party considered in this
way it would be possible to take care of these various types
of items without providing for a number of parts which would
unduly complicate this schedule, and the various schedules would
then lack uniformity. Some countries would have four parts,
others one part, others two parts, and in this way some countries
would only want Part 1 of the Schedule and other countries which
have preferential rates would have two parts, so that there would
the
he/maximum uniformity that it would be possible to obtain in the
drawing up of the schedule. 38
E/PC/T/TAC/PV/ 21
CHAIRMAN: Are there any other comments ?
Dr. A.J. BEYLEVELD (South Africa): Mr. Chairman, we just have
another exception to Parts I and II and that is where the
preference is eliminated but the rate is not bound.
CHAIRMAN: That could be done under the example which is given
here for electrical apparatus. We could then have a note that
items provided for in Article 48 shall be exempt from ordinary
Most-Favoured-Nation customs duty which do not exceed the rate for
preferential purposes.
Are there any other comments?
Dr. H.C. COOMBS (Australia). Mr. Chairman, your Committee
is.quite satisfied I presume that the advantages of uniformity
between Schedule and Schedule are sufficient to outweigh what
appears to me, at a relatively superficial study of this question, to
be a somewhat confusing way of representing these items, with
particular exceptional cases scattered through the main lists.
It does seem to me that the main purpose of the Schedules should be
to enable the countries interested to consult them for purpose of
reference readily and from that point of view there might be some
advantage in having more than two parts. I am not sure about this.
CHAIRMAN: The Tariff Negotiations Working Party did come to
the conclusion that this division into two parts would have the
advantage of facilitating consultation of the lists by countries
interested. For instance, a country that was entitled to Most-
Favoured-Nation treatment, not preferential treatment could look at
Part I and see there the treatment accorded to it in respect of
various s types of tariff treatment. It would not have to consult
various parts to find out what its tariff treatment was. For
instance, if it was interested in electrical apparatus it would
only have to look at this part. 39 E/PC/T/TAC/PV/21
For instance, if there were three parts, it would look at
Part I to see if the rate were bound; it would look at Part II to
see if the Most-Favoured-Nation rate applied, it would look at
Part III to see if the primage duty were covered. In this way it
could readily find out what treatment was accorded to electrical
apparatus.
Similarly a country enjoying preferential tariffs could look
at Part II to see what it so enjoyed, and the countries of its same
category, and then it could turn to Part I to see what the Most-
Favoured-Nation countries were enjoying under the various types of
Tariff treatment in Part I.
It was therefore felt this was a simpler way of dealing with
it and it would simplify consultation by countries interested.
The Delegate of the Netherlands.,
Dr. G.A. LAMSVELT (Netherlands): Mr. Chairman, our Delegation
would like to know whether the Committee could agree to have in
some cases three columns of rates of duty instead of one. For
instance, at the present moment a surtax of 50% in the Netherlands
is levied on products of the Netherlands Indies. So it would be
more clear if we had one column for the basic duty, one column for
the surtax, and one for the total tax, In fact it has been asked
for by one of the delegations to draft the Schedule like this.
CHAIRMAN: The most practical difficulty in the way of having
more than one column is the size of the paper which it is
necessary for us to use. Mr. Lacarte pointed out, when we
were discussing the question of procedure the other day, that
the only type of paper which is available in the quantity and
quality required for this purpose is paper of this width. 40
P. E/PC/T/TAC/PV/21
That does not permit more than one column to be placed conveniently
on the sheet. That was in the minds of the Tariff Negotiations
Working Party when we were considering this question. The
Delegate of the Netherlands will see one example, under Automobiles
on page 6 of document T/153,where a product is subject not only to
duty but to, special charge in addition, and that was the way we
thought it could be dealt with. We feel that it is quite
impracticable to have more than one column because of our
limitation of the width of the paper which we have to use.
Mr. R. J. SHACKLE (United Kingdom): Mr. Chairman, I do not
want to make any revolutionary suggestions. I am not pronouncing
on the substance of the question at issue, but it does strike me
that it might be possible to broaden our paper. If we do that
it might save a certain amount of waste space which the setting out
of, say, page 6 involves. It seems to me you might conceivably
economise some space that way.
CHAIRMAN: That has also been considered but that would
really lead to a great waste of paper, because you would be taking
up all this space for the sake of getting in. more than one
column; and then the appearance would not be at all in keeping
with a document of this character and, moreover, it would be very
difficult to consult it.
Dr. G. A. LAMSVELT (Netherlands): Mr. Chairman, in the case I
just mentioned it might perhaps be better to insert a note stating
that there is a surtax. Otherwise you have to repeat "surtax"
on every item.
CHAIRMAN: If the surtax applies in every case, then it would
be proper to put it down in the heading or some other place. P.
Dr. G.A. LAMSVELT (Netherlands): Mr. Chairman, on page 4 of
paper W/325 there are some observations of the Netherlands
Delegation of which the first seems to be covered by the new text
of paragraph 3, Article I; so we could pass that by.
In regard to the second observation about the note in the
Schedule on item 331 where the words "internal tax preference"
seem to cause some confusion, if that be the case, on "internal
Tax", it is going to be withdrawn.
(After interpretation)
Perhaps it would clear the confusion out of the way if we
delete the word "preference"; it has many meanings.
Mr. J.M. LEDDY (United States): Mr. Chairman, I am not quite
clear what the problem is but I think that this note here is meant
just to be illustrative. It is not an attempt to set out
precise language. It is just an illustrative way of handling the
problem.
It is to be recalled that at one stage it was proposed to
except in the regulations all existing internal tax preferences,
and then the Committee examined the number in existence and they
thought that a better way of doing it would be to permit the
imposition of a tariff preference equal to the internal tax
preference and provision was made in one of the Annexes saying that
the replacement of internal tax preference by tariff preference
would not constitute a new tariff preference under the Agreement;
and this note is simply designed to illustrate the way in which a
right could be observed in the Schedule to impose a tariff
preference equivalent to an internal tax preference. It was
really with no intention of drafting exact language.
41
E/PC/T/TAC/PV/21 42
J. E/PC/T/TAC/PV/21
CHAIRMAN: As Mr. Leddy mentioned, these are merely examples
to show the way in which the various concessions agreed upon in the
course of the negotiations can be expressed in the Schedules. In
this case, it does refer to a margin of internal tax preference.
was
If what is agreed upon between the negotiaters,/the difference relating
to stimulation between internal taxes on domestic products and
imported products, that would be an entirely different matter.
Dr. G.A. LAMSVELT (Netherlands): Mr. Chairman, we saw the
possibility of two cases in the observations made on page 4, the
last sentence, and I would like to ask Mr. Leddy to explain to me
which of these cases he meant. I take it was No. 1, but there is
a distinction here.
Mr. J.M. LEDDY (United States): Yes, it is related to a Note
appearing in Annex A and, I thank, Annex D, which says "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, shall
not be deemed to constitute an increase in a margin of tariff
preference", and what this Note refers to is the margin of
preference in internal tax as between the country receiving the
preference and all other countries.
Mr. G.A. LAMSVELT (Netherlands): Mr. Chairman, I thank
Mr. Leddy.
CHAIRMAN: Would the Delegates kindly speak somewhat louder.
The Verbatim Reporters are finding it impossible to take down verbatim 43
J. E/PC/T/TAC/PV/21
because they cannot hear Delegates at this end of the room at that
end of the room.
M. P. FORTHOMME (Belgium): Mr. Chairman, I am wondering if we
are not losing a good deal of advantage in having only two parts by
the somewhat can be some method of expressing concessions. In
Article II we say "Each contracting party shall accord to the commerce
of the other contracting parties treatment no less favourable than
that provided for. . .etc.". Then, would it not be sufficient, for
instance, on page 6 - No. 48 Electrical apparatus - to say "maximum
margin of preference 10%" instead of having that whole Note? The
same applies at the bottom of the page with Table and Kitchen
Articles, one could just say "primage at so much".
CHAIRMAN: As I mentioned before, these tables which are given
at the end of this document are purely for the purpose of illustration.
If the parties to the negotiations agree on a simpler wording, and
the parties to the Agreement also agree, that would be quite in order.
It is important, however, that the wording should be sufficiently
clear in order that there should be no dispute in the future, and it
is possible that by just stating "the maximum margin of preference
10% " there may be some dispute in the future as to what that 10%
means - whether it means the difference between the most-favoured-
nation rate and the preferential rate or something, else.
The Delegate of France.
M. ROYER (France) (Interpretation) Mr. Chairman, I had
written on my document indications similar in nature to those
observations just made by the Belgian Delegate. 44
J. E/PC/T/TAC/PV/21
I am afraid that, we are going to have a very long document, and
one which is most difficult to read. Therefore, I am wondering
about the solution which has just been suggested, that is, that we
should come to an agreement between the different countries to make
these Notes.lighter or to suppress them, because if the seventeen
countries have various ideas on the Notes, then we would have a most
heterogeneous list and notes varying in nature and in appearance for
each article.
It seems to me that the presentation of the tariff lists of most
countries represented here are somewhat similar and therefore we could
simplify the presentation of the lists here and, let us say for
item 48, just put "preferential rates plus 10% ad valorum; for
item 367, instead of having this somewhat cumbersome Note in the
margine, just simplify it and say in one line "40% ad valorum" and
in the next line "primage duty 8%"; for item 338, instead of having
this very long Note, we could just state the customs duty on the
first line, then in the second line "primage 8% ad valorum", or we
could. suppress the first line. This would avoid, I think, these
Notes which have only a juridical appearance and which are most
complicated. It would give to this document a clearer appearance,
which would be most necessary to our mind.
MM P. FORTHOMME (Belgium): May I add that I do not think there
could be any confusion if we put "maximum margins of preference" in
view of the fact that paragraph 3 of Article I explains in great
detail what margins of preference there are.
Mr. J.M. LEDDY (United States): May I suggest that the nature
of these Notes and the way this is stated will depend upon the language E/PC/T/TAC /PV/21
decided upon for tying up the Schedules to the Agreement. You may
use one method and follow the procedure suggested by the Tariff
Nogotiations Working Party, appearing under Parts I, II and II. On
the other hand, if we simply have a provision that the treatment to
be accorded will be no less favourable than that provided for in the
Schedules, then you must follow a different procedure, and I think
that we cannot make any real progress until we settle first the
questions relating to the concessions in the Schedules which are to
be included in the Agreement itself.
CHAIRMAN: We shall have to give further consideration to this
question of the Schedules as Delegations begin to commence the
preparation of their consolidated lists, and, no doubt, Delegations
will, be bringing their problems for attention and we will have to
consider them further.
I think that the suggestions made by the Delegations of Belgium
and France are very practical ones, and anything which can simplify
the Schedules and make them less lengthy is to be commended. We
will take another look at this question later on when we come to
deal with the mechanics of preparing the different Schedules.
I think there has been general agreement that the general form
proposed in this document is one on which we can work, and the other
details can be worked out later.
Monsieur Royer.
M. ROYER (France) (Interpretation): Mr. Chairman, I would
appreciate for practical reasons if we could get by tomorrow a pattern
of the Schedules, e pattern specifying the frame of the Schedules, the
width of the paper of the Schedules, the number of columns and the
width of each column. This would help us in preparing the stancils
for the frame of the Schedules themselves.
There is another point which I would like to raise, I think
that before the numbers of the Items we ought to put "ex" if the
Items following the negotiations have been broken up.
J.
45 E/PC/T/TAC/PV/21
CHAIRMAN: At the conclusion of this discussion I was going
to deal with the mechanics for preparing the stencils; perhaps
the Delegate of France could wait until then. I will deal
with that particular point then.
I think we have agreed that there can be only one column
according to the width of the paper, which is this (holding
up a document of foolscap size).
As regards the suggestion of "ex", that of course is
entirely up to the country concerned. In the case of Canada,
we must put "ex" because that is our custom. It depends
entirely upon the practice of the country. There cannot be
uninformity in that respect, because the practice of countries
differs. It is entirely up to the country concerned to deal
with setting forth the items in accordance with their usual
practices.
The Delegate of the Netherlands.
Mr. G. A. LAMSVELT (Netherlands): Mr. Chairman, as you are
aware, the actual wording has been produced by the Delegation of
Canada so it might be useful for all parties concerned to know
whether they can follow that example or not.
CHAIRMAN: The Canadian Delegation, in preparing the con-
solidated list, were guided by this paper of the Tariff
Negotiations Working Party. They used that as a model so
far as it is possible to do without contravening the usual
practice of setting forth the Canadian tariff and Ishould
think all countries would have to make that exception, The
only way in which they have deviated from that what would be
necessary is in respect of the size of the paper, because, as
Mr. Lacarte explained, there is only one size available in
46 .
8 E/PC/T/TAC/PV/ 21
volume and that size does not happen to coinoide with that of
the Canadian Delegation.
- The Delegate of Czechoslovakia.
H. E. Mr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman,
as the Schedules of different countries should have a legal
Value in those countries, so we suppose they must correspond
to the general customs of those countries. That is why we
proposed - though it not exactly is it is reproduced in this
Tariff Negotiations Working Party Paper W/325 - our suggestion
that the explanatory remarks or notes should not be directly
in the Schedules, but separately;
It refers only to Czechoslovakia because in our legal
procedure the customs duties have a different legal value
from the remarks themselves. So we are forced to put remarks,
such as, for instance,the remark below Item 331 on Page 6 of
Document T/153. We would be obliged to put it separately
after the Schedules, but I think it has nothing to do with
other countries; it is only in the case of Czechoslovakia,
because of our legal procedure.
CHAIRMAN: The Delegate of New Zealand.
Mr. J.P.D.JOHNSEN (New Zealand): Mr. Chairman, unfortunately
I was away during part of the discussion, but I was wondering
whether you finally disposed of the question whether there
should be Parts I and II. From my point of view, I think it
would be much more convenient to show all the information in
one part, under the headings of "Negotiated Most Favoured Nation
Tariffs" in one column; "PreferentiaI Tariffs" in the second
column, and, where there was a purely maximum margin of preference,
that could be in the third column. Then there is no need to
refer to the different parts.
S
47- E/PC/T/TAC/PV/21
I notice, in this fine example of the Canadian Delegation,
that in the second part there is a quite considerable volume;
if there is any question of saving paper, it could be effected
there.
This example. which we heve before us is not, I think, a
good one from the point of view of setting out. It is quite
evident a lot of space could be saved by setting up these
columns and putting a reference to the ad valorem or the
specific unit at the side of the first column. I assume that
aspect was fully considered but I was not quite clear and am
not aware what decision was arrived at.
CHAIRMAN: We did discuss, as soon as we came back from
tea - those of us who took a short time over our tea - the
question of the division into two parts.
With regardto the suggestion of the New Zealand Delegate,
I take it he is proposing two parallel columns.
Mr. JOHNSEN (New Zeland): Two or three.
CHAIRMAN: That question was raised by the South African
Delegate and we did explain the difficulty of having more then
the columns dictated by the size of the paper, but the main
reason which led the Tariff Negotiations Working Party to
decide on division into two parts was that Part I related to
one group of countries and Part II to another group,
There was a suggestion earlier in our meeting to make
more parts. The objection to that was that it might be con-
fusing having to look at a number of places. The suggestion
of the Delegate of New Zealand would simplify reference, having
only to look at one place, but I am afraid that the practical
difficulty of having more than one column is due to the width
of the paper we must use.
48
S S E/PC/T/TAC/PV/21
I want to reply to the other point raised by the New
Zealand Delegate with regard to placing "ad valorem" to the
left of the column. He will notice that is a procedure
followed by the Canadian Delegation in preparing their con-
solidated list. That is the usual practice of setting out
the Canadian tariff. I am afraid one point we shall have to
agree to is that each country will set forth its Schedule in
the form in which it usually sets forth its official tariff.
The Delegate of Canada.
Mr. L. E. COUILLARD>UDaneaaade): Mr. Chairman, I want
to thanhk teee Dlgate of thee Ntherlands and I shallal gdly
pass on his kind remarks to our Secretariat.
t the samei,t-e he has opened thedo or - a krndly door -
and I would like to take advantage of the kindly attitude of
the Committee to raise two points in the French text, on the
headings to the various Scdheul.es
Yu referred, Mr. Chairman, to the fact that the paper we
used is not the correct size, for the raeson it was not
available in Geneva at the time of reprinting. However
the stencils are cut something like 250 stencils. We
certainly hope we shalln ot have to re-type the stencils,
except for corrections.
If you will permit me, I would like to raise those points
and speak in French on them because they concern the French
text.
(Mr. Couillard continued his speech in French).
(Interpretation): I would like to state that our tariff
position is published in Canada both in French and English.
Therefore, in that connection, Iw ould like to raise two
questions regarding the translation of two words from English
into French. Teh first is the word" Schedule" and the second
expression is the words "rates ofd uty". 50
S E/PC/T/TAC/PV/21
In making this statement I look at M. Royer from the
corner of my eye and of course I adhere wholeheartedly to
the criticism he has made on the use of the word "Barême",
which was used to translate the word "Schedule" into French,
but he proposed the words "Liste Tarifaire" and I would ask
him if he would see any inconvenience in adopting the word
"Annexe" in French instead of the word "Liste".
I see advantages in the proposal which I make and, after
looking through the text of the Agreement and seeing that the
word "Annexe" is used in the General Agreement, we shall have
the General Agreement Annexes labelled "A", "B", "C" and "D"
and we may also have numbered Annexes.
Then, in the text of the General Agreement, when re-
reading it, if we replace the words "Liste Tarifaire " or
"Schedule" by the word "Annexe", I do not think it will lead
to any confusion or wrong interpretation; indeed, in Canada
the word "Annexe" is used in official documents to mean
"Schedule ".
There is another reason, which is a practical one. This
in
is, that/the unification of our tariff we have used the word
"Annexe" and therefore we would have to correct everything which
we have done already. We do not want to correct what we have
done, except of course where this is essential.
As regards the second point - the translation of the words
"rates of duty" -.instead of the word which is used in the
French text, I would propose the following translation:
"Taux des droits", which is the proper expression as used in
Canada. 51 E/PC/ T/ TAC/PV/21
CHAIRMAN: The IBMLO Ttie Delegate of France.
M. RO(YnEe (France)n Cuapretatioz Mr. Cheairem~r, th1r s ms
tbe a difficulty which arises when two nations use the same
language. The same difficultyarises at times beAtween the merican
and Enuaglish langges. The word "liste " is used in our trade agree-
ments and therefore this is why we have used the worssd, and iteems
to me that the wo"rd "annexe in French gmight brin about some confu-
±onbNevertheless we could avoid this confusion and misinterpreta-
tion. We could alter in some places the word to agreement. I am
referring here to AXXXrticle IV of the Agreement which states that
the Annexes to this Agreement are hereby made an integral part of
thi agreement. Bu. we see also in Article II oAgar the eement it
s . ed that the appropriate schedule annexed to thAgies .8gmnt
~~~~~ the.f T., ;vi l n
llo be made an integral part of 2at I thcrof T 0 avid ll con-
fu on regardinAg irioleX:=I, ou could add the words "nnexs
and B and this would avoid confusion. There would be other parts
f the gigeemerirme perhaps amrnndmot ouhto be wade so a to
replace in Fnrench the word Tiste" by "anaxe"; but of course we
i the Fr nch;
o"uuld prgefer to keep "liteU nhaDn-e./but if the Canadian l'egate
xperienoe _
adlI difficulties re-grdinigthe Us or the word "liste" we
would be ready to agree. Nevertheless, I wonder if the Canadian
Delegation in order not to change the heading of the schedules,
could not use the following procedure, that is, use a rubber stamp
and before the word "annexe'" in nFrench stamp the word "liste". Tha
e W1d h liste"' and "2nnexein the general schedule. We
woulhave no objection to that.
Regarding the other matter brought up by the Canadian Delegate
regarding anslation of the words "rat e. f duty" we would have no
oebtin to the translation which he proposes, although this
expresioman wa lF il be custora.in Prech. R.
E/PC/ T/TAC/PV/21.
CHAIRMAN: The Delegate of New Zealand.
Mr. J.P.D. JOHNSEN (New Zealand) Arising out of the two
parts of the Schedule, there is one point I would like clarified.
In our negotiations we have made it known that where we take off
the surtax in the fixed MFN rate, we take a primage off the prefer-
ential rate, the object being to endeavour to get a single unit
tariff. In some cases the surtax is also taken off the preferential
rate.
I take it in a case like that the position could be covered
merely by marking with an asterisk the articles in Part I where
such action was taken, and adding a fitting note to the Schedule.
not
If that is/done all the items affected would have to be repeated
in Part II, I take it, and that would involve a lot of work and
use of paper which might be avoided. I would just like to have
that point made clear.
CHAIRMAN: I think that would depend largely on what the
countries with which Brazil was negotiating preferential rates
would wish. If the suppression of the surtax in the case of
preferential rate is consequential upon the expression of the
most-favoured-nation rate, I think it should be left to the
legislative authority to take care of that. The preferential
application in the Trade Agreement would only apply to the most-
favoured-nation; if it applied also to the preferential country
that country would want it shown in Part II.
Mr. J. F. D. JOHNSEN (New Zealand). I do not think the
preferential country has any particular wish. It is a matter of
convenience, largely, and from their point of view I gather they
would not want it to be shown in Part II. I think it would serve
their purpose if it is covered by the Note. I just wanted to
52 , 33
E/PC/T/TAC/PV/21.
make sure that it would not be necessary to list all these
articles separately.
Mr. C. E. MORTON (Australia). For the purpose of saving
paper, would it be possible, where we have a number of Notes which
are similar running down the Schedule, to express these in terms
of "See Note A.", "See Rote B. "and at the end of the Schedule set
out the matter to which the Note refers, and repeat it on each
page of the Schedule?
CHAIRMAN; I should think that could be done.
Mr. J. M. LEDDY (United States). I should think that a
number of countries wilI have specia l notes that will have to be
included in the Schedule for legal reasons or for reasons of
convenience. Where you cannot cover many items by one note, they
might well go as a general note rather than in the Schedule itself.
I see no reason why that procedure should not be followed.
CHAIRMAN. Are there any other comments?
The Delegate of Brazil.
Mr.. E. L. RODRIGUES (Brazil). I have no wish to disturb
the discussion, but this is an important matter and is rather
different. We have been presssed by certain Delegations, especially
this afternoon, to present a complete list of the taxes and charges
on imports. We have no object ion to doing that, but we should
like to know if the other countries are willing to give the same
list; in this case we will do so immediately. The matter is
a very important one, because the negotiations may not perhaps
be finished as delegate will be leaving, and we may not have the
list within this week. It is because of this I am forced to
bring this matter to the attention of the Committee.
It is my understanding that when finally dealing with this
second paragraph of the last part of this paragraph 1 of Schedule 1, R. 54 E/PC/T/TAC/PV/21.
page 5, Document E/PC/T/153, it is indicated that this Committee will
have to decide in what manner we have to give this list to indicate
the tax or charges on imports. I would like to know if we have to
wait for the decision of the Committee as to inserting this indica-
tion in the Schedule in a general way for everyone, or if we have to
send the list to the other delegations.
The Delegate of Norway.
Mr. J. MELANDER (Norway). Mr. Chairman, as representative
of one of the countries which have asked for this list, I will only
say that we are very well content to have a statement from the
Brazilian Delegation on the import charges relating to those specific
products on which we are negotiating. It is only three or four
products and we find that it is no good negotiating on tariff
duties if at the same time we do not know what the import charges
are, or the specific charge of a more or less discriminatory
character.
We feel that on the basis of the principle of Article
XVI of the Draft Charter, that would be quite a normal thing.
We would not, of course, demand that the Brazilian
Delegation should make a long list to all the Delegations. We
are quite satisfied if we get a statement from the Brazilian
Delegation on the charges relating to the particular products
on which we are negotiating, and we think that the most practical
way in which to deal with that would be to include those in the
Schedule relating to those particular items. Of course, we
on our side have given the Brazilian Delegation information
about the import charges for any of the products which we import
from Brazil and which are included in our tariff negotiations. So
from our point of view it would be quite satisfactory to have just
information on the charges relating to specific products and we
think that the practical solution would be to have them included in
the Schedule relating to these particular products. P.
CHAIRMAN: I should think the request of the Norwegian
Delegate is a reasonable one. When we consult Article 18 of the
Charter we see that taxes of this kind can be subject to
negotiation, and I take it, that what he is asking for is a list of.
the taxes of this kind which apply to the products that are subject
to negotiation between Norway and Brazil.
Mr. E.L. RODRIGUES (Brazil): Mr. Chairman, I had no
idea to make any commitment unpleasant for my Norwegian colleague.
I have been pressed by the Negotiating Team and they told me
specially that the requirement for the Norwegian Delegation was for
a complete list. At the same time I always understood that this
matter could be decided in regard to the discussion of this same
provision which we are treating in this schedule: perhaps in a
general way to have at the end of the Schedule for each country a
complete list of taxes arid other charges imposed on imports. If
I am not correct I would accept the suggestion of the Delegate of
Norway and in this case we have to give this information on to the
countries with whom we have to negotiate; but if, as I understood
before, we will have to give a complete list in the Schedule, I do
not see any reason for giving to different countries different
lists, even in regard. to particular products. In any case the
Brazilian Delegation has no objection to giving lists to other
countries. But the feeling .of our Negotiating Team is that if you
give to a certain country you are giving to all countries, and we
are not receiving from all countries this same treatment.
I am not giving the final word, I am not here in a
Negotiating Team; but in the sense of the conversation I had with
my Brazilian colleagues, I had no other way than to explore the
views of this Committee and to have a decision upon it.
CHAIRMAN: Mr. Leddy.
55 56 E/PC/T/TAC/PV/21
Mr. J.M. LEDDY (United States): Mr. Chairman, I do not quite
see how this matter gets into this Committee. I should think
that the ordinary procedure would be this: that the Tariff
Negotiating Teams, each Tariff Negotiating Team negotiating with
another, would ordinarily be familiar with this Tariff and Customs
List, would have documents on it, and, if there were any doubt
about any particular product they would normally ask the other team
what the situation was and the other team would give the
information. I do not think that the Brazilian Delegation is
being treated in any different way from any other delegation here.
I should think that the countries are expected to provide any
information that is not available to the other country if they
want it.
On the other hand I see no need for all of us sitting down
and trying to find all of the charges other than regular customs
duties which may be collected on importation for all of the
products, and distributing lists to everybody. I think that would
be just wasted effort. And there is no need to put them in the
Schedules unless they have been subject to particular negotiate on;
because if. the regular customs duties are bound against increase,
then all other supplementary charges except internal taxes, anti-
dumping duties and fees relating to services, are all bound against
increase. So I think this is entirely a matter of referring to
the negotiation of a particular product. And I think certainly
the Delegate of Brazil need not feel that he is being dealt with
any differently from anybody else. He should provide information
requested by the countries in question.
CHAIRMAN: The Delegate of Norway. P. 57 E/PC/T/TAC/PV/21
Mr. J. MELANDER (Norway): Mr. Chairman, there are just one
or two points I might mention in this connection. The list which
we have in mind is, of course, the list of charges referred to in
Article 16 of the Charter, that is charges of any kind imposed on
or in connection with importation. That is the one category.
Secondly, there are the charges on like products; that I do
not think comes into this picture to a large extent. I do not
know myself - I am not familiar with the details - but I do not
think that that would cover much. It might be that it would cover,
a little, some few items, but there of course I take it that in
regard to like products there would have to be a complete abolition
of the existing internal taxes in so far as they are higher for
imported products than domestic products.
Then there is a third category, namely that referred to in the
second sentence of Article 18, paragraph 1, the charges referred
to in regard to products other than like products. I do not know
whether they would cover a large part.
But what we have in mind is that there is a possibility that
there might be taxes under each of these three headings and that,
of course, we would like to know them in order to be able to
complete our negotiations.
That is just an explanation to show what we have in mind.
On the other hand, of course, I would certainly say that we do
not ask for information on the whole complete tax system in Brazil
dealing with all products. That is nut of the question. We
only ask for information dealing with those particular products on
which we are negotiating. I do not exactly remember how many
There might be - probably somewhere in the region of between five
and ten.
e _ . - I A A-l 58
Mr. E.L. RODRIGUES (Brazil): Mr. Chairman, I am satisfied
with the explanation given by the Delegate of Norway and I thank
the Delegate of the United States also for having given an
interesting explanation. I feel that we can leave this matter, if
there is some other difficulty, for the Tariff Negotiations Working
Party, because I think that the interested, countries can go there
and discuss the problem.
CHAIRMAN: I would suggest that the Norwegian and Brazilian
Delegations have a further discussion on this matter and then, if
either one or both the parties think that the Tariff Negotiations
Working Party can be of assistance, we would be very glad to take
the matter under advisement and to consult both Delegations.
Are there any other comments on the form of the Schedules?
May I take it, then, that the Committee is in accord with
adopting the model set forth in this document T/153 with the
variations which have been agreed upon during the course of our
discussion? I would also ask if the Committee is in accord with
the suggestion of the Netherlands Delegate in which he so kindly
suggested that the Canadian Consolidated List might also serve as
a model.
Is that agreed?
Agreed.
Before we leave the question of the Schedules, I would like to
reply to a question which was raised yesterday by the Delegation
of Cuba regarding a Spanish translation of the General Agreement
and the Schedules. As I replied yesterday; this question raised
certain technical difficulties which it was necessary to refer to
the Headquarters of the United Nations in New York. The
Secretariat have received a telegram which reads as follows:
E/PC/T/TAC/PV/21 59 E/PC/T/TAC/PV/21
"The Cuban position seems fair, that they accept the English
text as final in case of dispute. There are no rules
regarding the way in which a Spanish, text may be made operative
for Cuban purposes. The Secretariat can be expected to supply
a reasonably accurate text, but the Preparatory Committee
itself will have to decide whether to accept the United
Nations Secretariat text without examination or not."
I would also like to ask Delegations if they would be so kind
as to supply the Secretariat with the information requested in
document T/195. So far, only five or six delegations have replied
giving the information requested in this document, It is
particularly desiredd that the Secretariat should know at an early
date the number of mimeographed copies which will be required of
the General Agreement on Tariffs and Trade, because they wish to
place orders for the paper in the near future, and they cannot do
so until they have some indication from the delegations as to the
number of mimeographed copies which will be required. In view
of the necessity to preserve the secrecy of the document, I take
it that delegations will confine their requests to a limited
number. E/PC/T/TAC/PV/21
CHAIRMAN: The Secretariat are also proposing to arrange for
a meeting of Secretaries of the various Delegations to discuss the
mechanical details of preparing the Schedules. The Secretariat will
meet with the Secretaries of Delegations to go into the various
points which have to be attended to concerning the mechanical
preparation of the Schedules. The first meeting is proposed to be
held at 9.30 on Thursday morning, to last for one hear, and this
will be followed by another meeting on Friday at the same time, also
to last for one hour. So, the first meeting will take place at
9.30 a.m. on Thursday next.
Tomorrow I propose that we should take up as the first order of
business the Report of the ad hoc Sub-Committee on the new
paragraphs 6 and 7 of Article XVIII, to be followed by the Report of
the ad hoc Sub-Committee on paragraph 3 of Article XXIV; after that,
if the Delegations are ready to discuss the question, I propose to
refer to the Protocol dealing with treatment to be accorded to
Germany, Japan and Korea; after that we shall take up the paragraph
in the Final Act which is given in document E/PC/T/W/319, and which
deals with the question of Reservations.
H.E. Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
apologise for coming back to this question of copies to be ordered,
but I think that the Tariff Agreement remains restricted only until a
certain date, that is, 15th November. Now, it is possible that
different countries will need a larger number of copies, but it would
not be necessary for all those copies to be supplied at once, and I
was informed that it would be of certain advantage for the Secretariat
to know the number of copies to be ordered. I think that possibly
60
J. E/PC/T/TAC/PV/21
Delegations might first order a restricted number of copies to be
supplied immediately, and then a larger number of copies to be
supplied later, say about the 15th November when the Tariff Agreement
is no longer secret.
CHAIRMAN: As outlined in document E/PC/T/195: this is envisaged
in two separate editions. The first is the mimeographed edition,
which would be prepared at the same time as Signature - that will be
both in English and French; then there will be the printed edition,
which will be available only a few days after the date of the
simultaneous announcement. It is not possible now to envesage the
exact date on which that printed edition will be ready, but we will
endeavour to have it ready as soon as possible after the date of
simultaneous announcement.
Therefore, Delegations will have to take that into account in
determining the number of mimeographed copies they will require,
The Secretariat would like to know what number of copies in English
and French of the mimeographed edition, and what number of copies in
required.
English it the printed edition are/ The requirement for secrecy of
course, only applies to the mimeographed edition, but Delegations
cannot be sure that their Governments will have the printed copies
until a few days after the date of simultaneous announcement.
I : :~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~tneisanoc
X J.P. D.JOHNSEN (New Zealand): Mr. Chairman,. tere is just
one point in connection with this matter - where will the printing
b'one? The mimeographed. dition; of course, will be done in
Geta but Lt ill. deend on wherethe printing is done as to what
aiibtion might be made. If the printing is going to be donei 62
E/PC/T/TAC/PV/21
New York, then it might be a case of arranging delivery of copies to
Governments - I do not know who is going to pay the postage from
their to the various countries, because if it is a matter of air
mail it is going to cost a lot of money.
CHAIRMAN: It has not yet been decided as to where the printed
edition will be printed - that will depend on where facilities are
available, but I imagine that it will be either in Geneva or
New York.
As to the cost of sending the documents to the various Governments,
I imagine that the Secretariat will have something to say about that,
and if a large number of copies are ordered Delegates may have to
pay for their carriage, but I am not sure.
I am afraid I cannot be more exact in replying to the question
of the New Zealand Delegate.
Mr. J.P.D. JOHNSEN (New Zealand): Mr. Chairman, it is really
more a question of when the printed copies will be available.
Obviously, unless they are going to be sent air mail they will not
be distributed to some Governments until a few months later.
Mr. R.J. SHACKLE (United Kingdom): I imagine, Mr. Chairman,
that as there are no author 's rights attached to this, any Government
which want to re-print it can always do so.
CHAIRMAN: Are there any other comments?
The Sub-Committee on Schedules will meet tomorrow morning at
1030.
The meeting is adjourned.
The meeting rose at 7.30 p.m. |
GATT Library | yy837nq0725 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty-Fourth Meeting of Commission A held on Wednesday, 2 July 1947 at 2.15 p.m. in the Palais Des Nations, Geneva | United Nations Economic and Social Council, July 2, 1947 | United Nations. Economic and Social Council | 02/07/1947 | official documents | E/PC/T/A/PV/24 and E/PC/T/A/PV.22-25 | https://exhibits.stanford.edu/gatt/catalog/yy837nq0725 | yy837nq0725_90240142.xml | GATT_155 | 9,667 | 57,612 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL RESTRICTED
ECONOMIQUE E/PC/T/A/PV/24
ET SOCIAL 2nd July 1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERBATIM REPORT
TWENTY-FOURTH MEETING OF COMMISSION A
HELD ON WEDNESDAY, 2 JULY 1947 AT 2.15 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 UNlES E/PC/ T/A/PV/24
CHAIRMAN: I think we will start in spite of the fact that
some delegates have not yet turned up. There were one or two who
mentioned to me this mornig that they would find it rather
difficult to be here at 2.15. I quite appreciate that - I have
not had time myself to have lunch, so I understand the difficulties
of the other delegates, but nevertheless we have to start.
Our discussion, when we finished on the 28th June, ended up
with a proposal by the French Delegation concerning the note you find
on page 9 of the document T/IOS, relating to Article 17, paragraph 2.
The French Delegation propose (I have not get the French text, but
I will read the English that the note should read as follows:-
"It is the understanding of the sub-committee that multiple
currency rates may in certain circumstances consitute a subsidy
to exports which could be met by countervailing dutiee ender
paragraph 2 of this Article".
When that proposal was made, the Delegate of the United States
expressed a wish to have some time to think it over, and I would now
like to know whether Mr. Ryder is prepared to make a statement on
it?
Mr. O . RYDER (United States): Mr. Chairman, I expected to
speak to the French Delegate about the matter, but with all the
other things that have _ in the meantime I have not had an
opportunity to do so.
I wonder if it might not be satisfactory to the Delegate of
France if we chnge in the second line the word "rates" to
"practices", and then add at the and j n, t- il> enrrency
practices is meant practices by Governments or sanctioned by
Governments". That is rough, but that is the idea.
J. J. -3-
M. ROUX (France) (Interpretation): This is agreeable to me,
Mr. Chairman,
CHAIRMAN: You have heard the proposal of the United States
Delegate. Is there any objection?
Therefore, the note stands with the now version suggested by
the Delegate for the United States.
MR. S. RANGATHAN (India): May we just take down the wording?
CHAIRMAN: "It is the understanding of the sub-committee that
multiple currency practices may in certain circumstances constitute
a subsidy to exports which could be met by countervailing duties
under paragraph 2 of this article. By multiple currency
practices' is meant practices by Governments or sanctioned by
Governments".
MR. R. L. FRESQUET (Cuba) Mr. Chairman, we would also like to
see the amendment in black and white before we decide about it.
CHAIRMAN: Well, the simplest thing then would be for us to
adopt in principle the new wording, and it will be circulated for
our next meeting to be considered in second reading.
E/PC/T/A/PV/24 E/PC/T/A/PV/24
CHAIRMAN: We pass on to paragraph 3 of Article 17. We have
in the text on page 10 of Document 103 an Amendment, and you
see on pave 11 there is no comment, and as the Sub-Committee
were unanimous I take it that the Draft as it now appears is
agreeable to all of us.
The Delegate of Cuba.
Mr. FRESQUET (Cuba): Mr. Chairman, on page 7 para. (b)
there is the position of the Cuban Delegation in relation to
the whole of Article 17. That is, that we think the approach
the
to dumping matter is not satisfactory at all, so notwithstanding
the tentative approval of the different paragraphs we still
maintain the same situation about the Article as a whole.
I do not think it is necessary to repeat here again the
reasons why we have come to this position.
CHAIRMAN: I would mention - I do not know whether it was
the same Delegate of Cuba who was at our previous meeting - but
as far as I remember we discussed this question rather fully
and came to the conclusion that for different reasons it was
difficult to introduce in the Charter a definite statement to
the effect that dumping is condemned. One reason which was not
brought up, but which I had in mind, was that dumping is not
practised by Governments but by private commercial business
firms; and what we can do in dealing with dumping is simply
to enable the Governments of affected countries to take
measures in order to obtain rights, and in my copy of Doc. 103
I had struck out (b) on page 7, believing that we all agreed
that it was impossible to deal with his statement that
dumping in principle is a bad practice. We all agree that it
G
- 4 - p.
is a bad practice, but it is something done by private
commercial firms, and here we think it does not need any weight
to state such a thing - it is implied in the rules concerning
redress against dumping.
The Delegate of Cuba.
Mr. FRESQUET (Cuba): Mr. Chairman, as we understand it,
I think the main reason for not trying to follow our line of
thought in respect of this question was that the Sub-Committee
was unable at the time to fine a definition of what dumping is;
but as we are still hopeful that we will be able to do so, that
is why we tried to keep the door open. It any other opportunity,
or another group of men are able to find out that formula, it
will be much better to put the formula in the text, and not
take the text as it is to-lay.
CHAIRMAN: I wonder whether the Cuban Delegate could agree
that we would not submit to the Conference this reservation. It
is obvious that it is open to all of us in the light of new
technica.& conclusions to reopen any question; but by transmitting
this under (b) on page 7 to the Conference, we force the
Conference to reach a Discussion on the question. I wonder
whether it is not quite as well to leave it, keeping well in mind
that obviously if a better solution can be found, we will all
be very happy.
,L;, 1 ^I A /*'. ;- s'.'oes V - 6 - E/PC/T/A/PV/24
M. R.L. FRESQUET (Cuba) Mr. Chairman, I promise you that I
will do my best to convince our Delegation on this point and will
convey your message to them. I am sorry that at this stage I am
not in a position to withdraw the reservation. Perhaps before we
finish the whole story of the matter, I may be in a position to
come here with an answer that will satisfy your desire.
CHAIRMAN: Then we pass on to paragraph 3. I take it that
we are all in agreement with the draft submitted by the sub-Committee
(Agreed)
paragraph 4. No comment?
(Adopted)
Paragraph 5. You will that the sub-Committee has modified
the New York text to some considerable extent, and you will find on
page 11 of Document T/103, note (a):
"The Delegations of Belgium, France, Luxembourg and the
Netherlands expressed the fear that abuses might be committed
under cover of the previsions of paragraph 5 regarding the threat
of injury, of which a State might take, advantage on the pretext
that it in intended we establish some new domestic industry in the
more or less distant future. The Commitee considered that, if
such abuses were committee, the general provisions of the Charter
would be adequate to deaI with them".
I would ask one of the Delegate who expressed the fear to
kindly let me know whether that is still the case. The Delegate
of Belgium.
Baron Fierre de GAIFFIER (Belgium) ( Interpretation):
Mr. Chairman, as the Committee knows, we have proposed an amendment
expressing those fears of cure. During the work of the
sub-Committee, as we are rather conciliatory minded, we V -7 - E/PC/T/A/PV/24
accepted that it be embodied in the comments, but as this fear is
very real, we have to maintain it, and we therefore wish to
keep it embodied in the Commentaries.
CHAIRMAN: This means, if we do not continue the
discussion, that this reservation will go on to the International
Conference, and perhaps give rise to considerable discussion,
so if it were possible I would try to solve the question here.
However, in the face of the unanimous sub-Committee report
I do not think that is possible, so unless some Delegates
wish to speak, I think we have to accept the request of the
Belgian Delegate - a request to which, I take it, all the
Delegates mentioned adhere, and maintain this note in our text.
The Delegate of Czechoslovakia.
Mr. B. J. BAYER (Czechoslovakia): Mr. Chairman, I
merely wish to express the desire of our Delegation that
Czechoslovakia be added to the reservation we are just dis-
cussing. Like the other Delegations, we feel that there is
no serious damage -- no material injury - done to a country
which is importing the merchandise and where the particular
industry does not exist. It is true, however, (and the idea
is contained in the note we are talking about), that there are
other general provisions in the Charter which might be used
in the case where a country fears that these particular
provisions are being abused.-
In our opinion, however, the Charter should not be
over-loaded with provisions which might lead to the possibility
of abuses. If it is, we might experience in the future
that the Organization is over-crowded with representations
under Article 35 and this, in our view, is not the desire of
any of us.
CHAIRMAN: In the light of these declarations by the Belgian
and Czechoslovakian Delegations, I think we have no alternative
but to maintain the note (a) on paragraph 5 of Article 17. -8- E/PC/T/A/PV/24 CHAIRMAN: We pass on to note (b) on Article 17 paragraph 5;
"The same delegations maintained that there could, in practice, be
no material injury if the price charged by the exporting country was
not less than that of the importing country or than the world price.
The Sub-Committee felt, however, that this did not provide a valid
test of injury".
May I take it that the same attitude is maintained with regard
to this note?
Baron PIERRE de GAIFFIER (Belgium) (Interpretation): Mr.
Chairman, personally, I would have no objection against the deletion
of these commentaries if my opinion is shared by the Delegates for
France and the Netherlands.
M. ROUX (France) (Interpretation): Mr. Chairman, since the
remarks concerned were expressed by several delegations, we believed
that it was necessary to put them into the Report addressed to the
Commission, but since this paragraph is not a justification of our
is
text, and it/not absolutely necessary to maintain it in the final
text, we are of the opinion that all explanatory comments should be
maintained. They will probably figure in an appendix of the Charter
when it will be signed. We also judge it necessary that certain
explanatory comments must be maintained in order that they could be
presented to the Members of the World Conference, and especially to
those who are not present at the deliberations of the Preparatory
Committee. This should be done in order that our text would not be
criticised without sufficient explanation of this text on our part,
and also in order to prevent amendments which might be rendered
unnecessary by the comments to our text. But since this particular
sub-paragraph does not present any of the characteristics I referred
to, we do not insist on its maintenance. E/PC/T/A/PV/24
Dr. S. KORTEWEG (Netherlands): Mr. Chairman, I agree with all
that the Delegate of France has said, especially with regard to
this note, in general with the other notes that are to be added to
this part of the Charter.
CHAIRMAN: I take it that, in view of this, we can strike out
note (b) on paragraph 5 of Article 17. Is that agreed? Agreed.
We pass on to (c) on page 11 of T/103: "In cases of dumping
in third markets of a serious character such as might not be
adequately covered by the new second sentence of paragraph 5, the
matter could, in the view of the Sub-Committee, be taken by an
aggrieved Member to the organisation under Article 35 with a view
to obtaining an appropriate release from its obligations towards
the offending Member". Do you think it will be of any use to the
World Conference to maintain the text of this note?
Mr. C.E. MORTON (Australia): Mr. Chairman, I suggest that the
note on the paragraph in the text simply says that the Organization
is authorised, in its requirements, to permit a Member to take
or
action/to leave it. I think that, such being the case, the
maintenance of the note is advisable although it is of no great
value, but helps to complete paragraph 5.
Mr. W.E.H. RHYDDERCH (United Kingdom): Mr. Chairman, I really
think that this note should be . mitted as it does not add one bit
to the text.
Mr. C.E. MORTON (Australia) Mr. Chairman, I have no strong
views about this, I just thought that we could support a weak
Article by giving it a crutch to lean on.
Mr. OSCAR RYDER (United States): Mr. Chairman, I will agree
if the delegates are agreeable to omitting the note.
CHAIRMA: If the Dele!ate of Australia does not feel very
strongly about it, I take it that w- may omit that note. Is that
agreed? Agreed.
Note Vi. page 12.
- 9 - E/PC/T/A/PV/24
"Nothing in this Article shall preclude Members,
parties to a regulatory commodity agreement conforming to the
principles of Chapter VII, from incorporating in such agreement
provisions prohibiting, as between themselves, the use of anti-
dumping duties in cases in which dumping, within the meaning
of paragraph 1 of this Article, may be permitted under the terms
of such an agreement."
I take it this Note must be provisionally maintained.
Mr. Oscar RYDER (United States): As I understand it,
this particular paragraph is an important amendment. I do not
think we should pass final judgment on it until it has been
considered by the Sub-committee.
CHAIRMAN: I take it that we all agree that we maintain
it provisionally until we know the fate of the Articles to which
this paragraph has reference.
We will pass on to Paragraph 6. It will be noted that
there is a new draft. The New York Draft has been replaced by
a new draft, which reads: "No measures other than anti-dumping
and countervailing duties or charges shall be applied by any
Member for the purpose of offsetting dumping or subsidization."
You will find in the comment on page 13, this was not
unanimously agreed in the Sub-committee, You will note that
the Sub-committee was rather a strong committee and of its
members, two representatives of Delegations, China and India,
opposed this new draft of Paragraph 6. I would like to ask
the Indian representative whether he still maintains his point
of view.
-10 -
L L - 11 - E/PC/T/A/PV/24
Mr. S. RANGANATHAN (India) We still feel the new
paragraph should not be added. It care about in an almost
casual manner during our discussions. Our main objection to it
is that we do not know what exactly we are asked to give up.
Rather than have some omnibus revision of this kind without
knowing exactly what it implies, we feel the Article would be
much better without this amendment.
CHARMNA: The Chairman of the Sub-committee is not
present, so r vould nsk tre Dceegate of Cuba, who did not parti-
cipate in the disc-sSion, vh-ehcr ho has any views on the matter.
Mr.R.L. FRES&QUT ACuaa): Vu would epprociato a slight change
in the two las. lnice of th; C oment, Instead of sayingl The
Delegate for Cuba ;ar noi Drescnt ai this discussion", we would
like these words die;etd anr thU n2me of Cuba added to those
who opposedt he nce ^rit:cl.
CHAIRWMAN: -e huve n)w heard the reasons for opposing the
new draft of Farargaph $, -I ould like t- know whether any of
the members of she 2sb-caommttee could give any reason in
support of thl draf ,
`r. IJ. E CHLTOAWY(AS.f ia)a I wao not a member of the
Sub-committees but it seems to mc that thero is no ulterior
motive in this paragraph. it appears to be a case of a man
being hung, drawn and ouretered, If you could be hung for
dumping, you cannot b^ drawn an- cnFrtreed at the asme time;
that seems to me to be porfectl.W c-rr,
Mr. C,FE. OKRTO :taUsrlia,) A3 ;he Delegate for India
has implied that the paragraph aame abcut in a somewhat nrf-
handed manner, I suggest Lhat teh decision might be left to
the Indian Delegatlon, -12- E/PC/T/A/PV/24
CHAIRMAN: Does the Delegate of India want to speak?
Mr. S. RANGANATHAN (India); Mr. Chairman, some Members in
the sub-committee expressed the fear that to deal with dumping a
country might take recourse to criminal penalties agains the
importer. Likewise, some other Members expressed the fear that
Governments might restrict the available exchange for people dealing
with countries that practice dumping. These measures, they thought,
should not be used, and that, to prevent dumping, countries should
have recourse, one day, to countervailing duties or anti-dumping
duties, and not take any other steps. Personally, I do not see
what other steps could be taken, except in the extreme instance -
quantitative restrictions.
I recollect that there was some dumping, of textiles from Japan
many years ago, and the only effective method that India could
adopt was to fix a quota. I do not know whether such a
circumstance will apply, but I think it is somewhat pre mature or
dangerous to completely write off all such preventive powers
that any country may find it necessary to employ, and to regard
only the anti-dumping and countervailing duties as reliable
resources with which to fight dumping.
CHAIRMAN: Are there any further observations on this?
The Delegate of Chile.
MR. F. GARCIA-OLDINI (Chile) (Interpretation): Mr. Chairman,
I wish to support the remarks just presented by the Delegate for
India.
CHAIRMAN: The Delegate of South Africa.
J. J.
- 13 -
E/PC/T/A/PV/24
DR. J.E. HOLLOWAY (South Africa): Mr. Chairman, would any
Member be allowed to use quantitative restrictions unless
provision were made in the Chapter dealing with quantitative
restrictions?
CHAIRMAN: I do not think so.
MR. S. RANGANATHAN (India): Possibly not. If so, why should
there be this clause introduced, here by way of abundant caution?
CHAIRMAN: The Delegate for the United States.
MR. 0. RYDER (United States): Mr. Chairman, I just want to
remark that quotas are not the only methods that can be used to
deal with dumping. Much higher duties are necessary for the
anti-dumping duties defined in this paragraph. There is a great
danger of the mis-use of the various measures, to counteract
dumping, which may be termed anti-dumping, and that is the reason
for this provision.
CHAIRMAN: The Delegate of Cuba.
MR. R.L. FRESQUET (Cuba): Mr. Chairman, it seems to me that
we are not in a position yet to give an answer to that question,
because we still do not know what is going to be the final draft of
the Articles on quantitative restrictions.
CHAIRMAN: Speaking for myself and without having taken part
in the work of the sub-committee, I must say that I do not see any
danger in paragraph 6 - "No measures other than anti-dumping and
countervailing duties or charges shall be applied by any Member",
and so on. There are different possibilities, not only
quantitiative restrictions, of discriminating against a country, J. - 14 - E/PC/T/A/PV/24
and this is perhaps the most efficient weapon. So, I think that
paragraph 6, in its new wording, has some value.
Unless there are any futher remarks, I do not see any way
around our difficulties. We have now four delegates instead of
two opposing the new draft of paragraph 6, and I am afraid that we
shall have to maintain this note (a), altering the last two lines -
"and opposed by two delegations (China and India)" to "opposed by
four delegations (China, India, Cuba and Chile)". - 15 -
E/PC/T/A/PV/24
CHAIRMAN: The Delegate of Cuba.
Mr. FRESQUET (Cuba): Mr. Chairman, it seems to me that
may be it will be better just to stop any decision about this
Article until we definitely know what are going to be the texts
of Articles 15 and 25, and if we make any change at all in
Articles 15 and 25, then we will have to come back to this
Article and I do not see how we speed up the work of the Committee
in this manner.
CHAIRMAN: The Delegate of the Netherlands.
Mr. KORTEWEG (Netherlands): Mr. Chairman, I do not think
that the last proposal is a proposal that we agree to, for there
is a little possibility that if there are changes in Article 15
or another Article, that makes necessary a change of the 6th
paragraph of this Article also, we have to come back to it.
It is only a possibility, and if we are now deciding that the
whole thing is pending, then we have to come back to it.
So I do not think that this is a better way, to agree to
this new paragraph. And then, as to the comments, I should like
to say that as for myself I do not think it is necessary to
mention all the names of the countries in the Sub-Committee who
have supported the new paragraph. It is sufficient that only
the 6 who are against are named here, for I think in general
it is not necessary to name the Sub-Committee at all in comments
that are going from this commission to the Executive Committee.
CHAIRMAN: I would answer first the question whether we
should postpone further discussion until we know how Articles
15 and 25 and the following Articles have been dealt with.
I do not think it is necessary, and what we do here is
G G -16 - E/PC/T/A/PV/
24
always conditional upon on possible reconsideration in the
light of decisions taken on other Articles; so I think that we
can keep this paragraph 6 as it stands. But we then must have
the comment in Note(a), and I think it ought to read that the
Sub-Committee did not reach unanimous agreement on the addition
of a new paragraph. Its inclusion was supported by 12
delegations and opposed by 4, and the names of these delegations
are in the working paper here, but it will not go before the
Conference; and l would say in that connection that it has been
the practice of the Preparatory Committee never to include in
printed documents to be submitted to a further session of the
Conference any names concerning the attitude of individual
delegations - to say that delegations maintain or oppose and so
on.
I think that also should apply in this case.
Is that procedure agreed?
Agreed.
We pass on to Note (b)on page 13. "It is understood that the
obligations set forth in Article 17 could, as in the case of all
p
other obligations under Chater V, be subject to the provisions of
Article 34."
I have two comments to make on that. One is that it seems
to me to be superfluous as it is absolutely self-evident; and
the second one is that if it should be maintained, it ought rather
to come in the beginning of Article 17 than here at the end.
CHAIRMAN: The Delegate of Brazil.
Mr. RODRIGUES (Brazil): I am very sorry not to agree with
you. I believe this note is absolutely necessary, and I have an
idea that it was agreed in the last meeting of the Sub-Committee
to have the note, in order to show that some countries have G. - 17- E/PC/T/A/PV/24
accepted paragraph 6 because of this interpretation.
I should like to ask the question because you said
in the Saturday meeting that you were prepared to raise a
question about these explanatory notes, and I should like to know
if you will kindly tell us, because I think it is necessary
to have this comment, at least, sent to the next Conference,
otherwise countries like Brazil will not be in a position to
accept Article 17 as it now stands.
CHAIRMAN: I take it that in the Sub-Committee everybody
agreed to the statement under(b) and if that is the case, I fully
appreciate the point of view of the Brazilian Delegate, and, have
no objection, of course, to the note being maintained.
As to the general question of the form of dealing with all
these explanatory notes, I promised to bring it up at the Heads
of Delegations meeting. To-day we did not arrive as far as the
consideration of the Report of the Second Session, but I shall
not forget to bring it up as soon as I get an opportunity. V - 18 -
E/PC/T/A/PV/24
CHAIRMAN: The Delegate of Czechoslovakia.
M. B.J. BAYER (Czechoslovakia): Mr. Chairman, I do not
feel very strongly about these particular notes we are discussing.
I would not oppose the maintenance of them, and I would not object
to the deletion of them, either. But there is something else
which strikes me in this connection.
In the course of these afternoon meetings, we have gone
through two or three pages and what we have been very successful
in accomplishing is the deletion of three or four explanatory
notes, which were agreed upon unanimously. On the other hand,
we have not been so successful in getting rid of some of the
reservations, and I think I would like to say a few words in
defence of the explanatory notes.
In our opinion, they are not the obstacle we should fight
against; but it seems to us that if we preserve them in general
they might serve a good purpose to the other Delegates,
especially in the Plenary Session. We all know how much time
we spent before we arrived at the unanimous agreement upon the
particular question.
CHAIRMAN: I would like to ask the Delegate of Brazil
whether, in view of the fact that we are maintaining note (b),
we can strike out note (c).
M. E. L. RODRIQUES (Brazil): I agree.
CHAIRMAN: If there is no objection, then, we maintain
(b) and we omit (c).
The Delegate of Cuba.
Mr. R. L. FRESQUET (Cuba): Before going on to another
matter, we have no objection to that note in Article 17 (6). - 19 -
CHAIRMAN: Thank you. We pass on to Article 18.
The Delegate for Australia.
Mr. C.E. MORTON (Australia): Mr. Chairman, I must
inform you that today I received certain instructions from
my Government regarding Article 18 on which I am not entirely
prepared to act without further reference. I would crave
your indulgence, therefore, to have Article 18 dealt with
at the end of this Meeting, rather than in its normal turn now.
Alternatively, as my instructions refer to Article 18 (2) (a)
only, if in your wisdom you choose to discuss the rest of the
Article and reserve that paragraph only, I am content.
Mr. W.E.H. RHYDDERCH (United Kingdom): Mr. Chairman, we
in the United Kingdom, too, would probably have quite a lot to
say about paragraph 2(a), particularly the note which says:
"The Sub-Committee considered that the words 'between
independent buyer and seller' in (ii) might be deleted on the
understanding that the phrase 'under fully competitive conditions'
covers the same concept".
I agree with the Delegate of Australia that there would be
no harm in deferring consideration of this very contentious
matter, if the rest of the Delegates agree.
CHAIRMAN: The Delegate of the United States.
Mr. Oscar RYDER (United States): Mr. Chairman, I think
that in view of the remarks of the Delegates of Australia and
the United Kingdom, it would be as well to pass over the whole
of Article 18 for the present. I would like to have that done
particularly in view of the fact that some discussions concerning
paragraph 2(c) are still going on.
V.
E/PC/T/A/PV/24 - 20 -
CHAIRMAN: I take it that we all agree to pass by
Article 18, and I am thankful to the Delegate of Australia
for his optimism when he said "until the end of the Meeting
today".
Mr. C. E. MORTON (Australia): That was unintentionall
CHAIRMAN: The Delegate of Cuba.
M. R.L. FRESQUET (Cuba): I wonder if it would save your
time, Mr. Chairman, if we pass over a small drafting question
which arose when we were discussing Article 20, paragraph 5, in
the full Committee, where it reads "investigate and recommend".
The fall Committee agreed to change the wording, which occurs
also, in Article 18, paragraph 1, to read "may study and recommended
and not to investigate.
E/PC/T/A/PV/24
V. E/PC/T/A/PV/24
Mr. OSCAR RYDER (United States): Mr. Chairman, I have no
object on to the suggestion made by the Cuban Delegate. I think
it would be the best procedure if we passed over Article 18 and
came back to it when we can attend to that Article.
CHAIRMAN: I think this is right, and we could now start with
the examination of Article 19 on pages 22 and 23 of document T/103.
Article 19, paragraph 1. We have here a general comment on page
23 of document T/103: "Article 19 is shown opposite according to
the report ..." It simply is a historical explanation of how
the Sub-Committee dealt with the Article, because, in the Working
Party where we had this in the first reading, we had a long
discussion. Different suggestions were put forward and certain
texts were adopted in the first reading. The Sub-Committee has
considered itself entitled to re-examine the whole of the Article,
and the text before you is the result of this examination. That
is what is contained in the long comment on page 23, and I present
it for the consideration of the Members here.
You will see, first of all, that the Sub-Committee proposes
new title for Article 19. Instead of the New York text: "Customs
Formalities' they propose "Formalities connected with Importation
and Exportation". That was only discussed in the Working Party and
generally they agreed to it. I would like, in connection with such
a title for the Article, to mention once mere what I have said on the
previous occasion. We must not take these titles too seriously,
because it is quite possible that, at the Conference, when we have
all the Charter before us, we shall omit all these Article titles.
They are exceedingly helpful as working documents, but it is not the
ordinary thing in international treaties to try to give a nane to
each Article so I just warn you that you must not consider any question
of substance decided by the title, but must see to it that the text
- 21 - - 22 -
itself of the Article contains everything we want to express.
Mr. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
may I just comment very briefly on your remarks dealing with the
deletion of headings. It is true that it is not a custom in
international treaties to have any headings - the Chapters are
simply numbered and the question is left at that. But this Charter
is rather an unusual document. I gather that the Committee of the
Heads of Delegations is already discussing the possibility of having
customs areas. This is an unusual procedure and however this
particular problem is solved the point is that it shows how very
extraordinary the Charter is as far as documents go. L - 23 - E/PC/T/A/PV/24
Besides, international treaties are usually mostly concerned
with politics, whereas the Charter deals with international
trade, and Member-States will have to study it very closely
and use it for their daily work. Therefore, I believe that
not only are headings necessary, but that after the official
edition of the Charter is published it will be necessary to
provide for an annotated edition such as now exists for
Codes and people concerned with the law. I would ask you
not to press for the deletion of the headings, and also to
leave the door open for a further edition of the Charter with
footnotes and references.
CHAIRMAN (Interpretation): I am grateful to the Delegate
for Chile, and I certainly have no objection to anything that
he has said. As a matter of fact, I did not insist on the
of
omission/the titles, I warned the Committee against a misappre-
hension to try and interpret the substance of the Articles from
the titles. Even although it is possible that in the
signed and ratified copy of the Charter all titles may be
omitted from the Articles, there is nothing to prevent future
editions containing titles.
We pass on to paragraph 1. There is no comment and I
take it that as the alterations proposed by the Sub-committee
are only formal, we all agree.
(Agreed)
CHAIRMAN: Paragraph 2. There are no comments but I
should like to make a comment of my own. In Article 18,
Paragraph 1, the Sub-committee dealing with that Article proposes
to replace "is authorized to by "may" ;and here in Article 19,
Paragraph 2 another Sub-committee maintains the wording "is
authorized to". I do not went to make any suggestion - 24 -
but I feel that these matters should be referred to the Drafting
Committee.
I take it that you all agree to the draft presented by the
Sub-committee on Paragraph 2.
(Agreed)
CHAIRMAN: We pass on to Paragraph 3. There we have
some comments on Page 25.
"(a) The Delegate for China reserved his right to
request at the second reading of this paragraph the insertion
of the words "and upon due consideration by the Organization
of its merits" after "Member" in the fourth line."
Mr. F. Garcia OLDINI (Chile) (Interpretation): I
suppose the Delegate for China was prevented from attending
this afternoon, and in his behalf I would ask you to defer
the question until another session.
CHAIRMAN: I will ask the Secretariat to communicate
with the Delegate of China and find out whether he maintains
that reservation.
We will pass on to Comment b on Paragraph 3:
"(b) The question was raised by the Representative of the
International Monetary Fund if there was any provision in Article
19 which could be interpreted as prohibiting a Member from
employing multiple currency practices, or equivalent thereof,
for balance of payments purposes when the action of such member is
taken in accordance with the recommendations or approval of
the International Monetary Fund. It was pointed out that while
Article 19 does not cover the use of multiple rates of exchange
as such, paragraphs 1 and 5 would condemn the use of exchange
taxes or fees as a device for implementing multiple currency
practices; it was clear, however, that if a Member is using
multiple currency exchange taxes for balance of payments
E/PC/T/A/PV/24
L L E/PC/T/A/PV/24
- 25 -
reasons with the approval of the Fund, the provisions of
paragraph 3 would fully safeguard its position since that
paragraph merely requires that the taxes be eliminated at
the earliest practicable date."
That seems to me to be a sufficiently explanatory note.
Does the Commission agree that it should be retained in the
Document? P. - 26 - E/PC/T/A/PV/24
MR. OSCAR RYDER (U.S.A.): Mr. Chairman. I would just like
to make a remark about the next paragraph. I may be out of order
out you will probably agree. It seems to me that the next para-
graph is unnecessary in view of (b).
CHAIRMAN: Yes, I intended, to come to that. I agree that that
seems to be superfluous. If we maintain (b) we might omit (c) which
reads:-
(c) The Ad Hoc Sub-Committee recommends that an explan-
ation be included in the report of the Preparatory
Committee to the effect that sub-paragraph 5(d) is with-
out prejudice to the provisions of the Charter relating
to safeguarding balance of payments and to exchange con-
trol.
Are we all agreed that comment (b) covers the whole problem and
(c) may be omitted?
Agreed.
MR. E. STURC. (International Monetary Fund.): Mr. Chairman,
I should appreciate it very much if in this explanatory note you
could change the expression "taxes" in the last part of comment
(b) for "fees", the reason being that in the Article itself you
speak about fees and charges while in the explanatory note you
speak about taxes and there might be some misconception later on;
so maybe it would be better to change it to "fees".
CHAIRMAN: Where in (b) does that come?
MR. E. STURC (International Monetary Fund): In the latter part,
CHAIRMAN: "Fees" instead of "taxes"?
MR. E. STURC (International Monetary Fund): Yes: "...multiple
currency exchange taxes for balance of payments reasons...". It is
the fourth line from the end.
CHAIRMAN: Yes. Well, with that explanation given by the
representative of the International Monetary Fund, we all, of course,
accept his redraft and we will change our draft accordingly.
MR. E. STURC (International Monetary Fund): There are two places
in the line before the last and in the fourth line from the end.
MR. G.B. URQUHAT (GCnada): It occurs in three places. - 27 -
J. E/PC/T/A/PV/24
CHAIRMAN: In the middle of (b) you will find "would condemn
the use of exchange taxes or fees."
MR. E. STURC (International Mnetary Fund): That would not
bother me because that is a general statement. It is just the
second part.
CHAIRMAN: Then that is maintained. Thank you.
We now pass on to paragraph 4. You have seen that there is
a complete new draft by the sub-committee, and I think that it was
very thoroughly Discussed at the first reading and that it expresses
entirely the views which were common to all the Members of the
Commission. Is there any comment?
MR. E.L. RODRIGUES (Brazil): Mr. Chairman, because I was a
new Member of the sub-committee, I could not follow very thoroughly
paragraph 4 of this Article 19. However, I think the expression
"without fraudulent intent" - it is the third line from the end -
is not very clear. In my opinion - and I am speaking from
professional experience - it is not so easy to know when it is a
fraudulent intent, especially if you think that this matter will be
dealt with, in the first instance, by the administration without
much documentation, and without having time enough and material
enough to judge if it is, or is not, fraudulent intent. I think
it is a very hard matter to put this here as a general principle
for diminishing the penalty. I call your attention to this
because I have only the intention of helping, and by giving my
opinion about that, I am not opposing the drafting.
MR. W.E.H. RHYDDERCH (United Kingdom): In answer to the
Delegate of Brazil, I think it is probably the experience of all
the delegates here that the administration is quite competent J. -28 - E/PC/T/A/PV/24
after long experience to determine whether there is any
fraudulent intent or not from the documents. I think his fears
are quite unfounded.
MR. C.E. MORTON (Australia): Mr. Chairman, I agree with the
Delegate from Brazil that it is extremely difficult to distinguish
fraudulent intent in a transaction. I agree with the Delegate
of the United Kingdom that people who have to deal with those
transactions acquire a very great amount of facility in the matter,
but I draw your attention to the use of the word "obviously" in this
clause. Wherever it is "obviously made without fraudulent intent"
it is easy to distinguish, and in such cases only is action
required to be taken which should not be grater than necessary to
serve merely as a warning wherever there is the slightest doubt you
take what action you choose. - 29 -
CHAIRMAN: Well, I take it that after this discussion we
can pass paragraph 4 as it stands. It is obvious to me that
if the Customs Officer is in doubt, then the State concerned
will have under the ordinary rules of all our Criminal Courts
to prove that there was fraudulent intent. If the Government
concerned does not find it worthwhile to try to prove it, then
they should only impose a very slight penalty. I do not think
there is any danger.
The Delegate of Brazil.
Mr. RODRIGUES (Brazil): Mr. Chairman, D do not want to
spend time unnecessarily, because I did not take part in the
prior discussion; but I am convinced that I am quite in co-
operation with your interpretation.
CHAIRMAN: Well ther we agree to the draft of para. 4.
we pass on to paragraph 5, which gave rise to most of
the discussion, in the f, ;t reading. I hope the Recommendation
of the Sub-Committee will e accepted by you, and assume there
is no comment.
Agreed.
We pass on to Article 20. Marks of Origin. Paragraph 1.
No comment.
Agreed.
Paragraph 2. No co
Paragraph 3. The re
the United States maint
in the Drafting Com itt
of " should") I would'
States whether he mai
¾. Agreed.
ave a comment. "The Delegate of
provisionally his reservation made
vour of the word "shall" (instead
k the Delegate of the United
reservation.
E/PC/T/A/PV/24
G. G - 30 -
E/PC/T/A/PV/24
Mr. RYDER (United States): The U. S. Delegation feels
very strongly that it should be "shall" instead of "should";
Draft
but if that/is what the Delegates would agree to, we would not
make a new reservation.
CHAIRMAN: Is paragraph 3, then, accepted in the wording of
the Sub-Committee?
Agreed.
Paragraph 4, No comment. Agreed.
Paragraph 5. There is the following comment:
"While approving this paragraph with the slight change
involved in the substitution of the word "study" for "investigate",
the Working Party thought it desirable that the discussion of
this paragraph at its meetings, as w ll as at the Drafting
Committee and at the First Session c
should be considered by the Organis
problem of "the early elimination o-
to marks of origin" .
We also have a suggestion by t
would be desirable to add a referen
first reading of this article, when
us to the word "early" in this para
I. would suggest that we maint
omitting the first two lines, and
also wanted to underline the word
this paragraph".
CHAIRMAN (Interpretation):
French Delegation.
Mr. ROUX (France) (Inter
thank you.
the Preparatory Committee,
tion when studying the
unnecessary requirements as
Delegate of France that it
to what took place at our
che importance attached by
graph was emphasised.
this comment to Para, 5 by
add, "the Working Party
ly" in the beginning of
his meet the wishes of the
Yes quite, Mr. Chairman, E/PC/T/A/PV/24
CHAIRMAN: May I take it that we all agree to this
explanatory note?
(Agreed)
We pass on to Paragraph 6. The United States Delegation
made the same proposal with regard to "shall', instead of
"should" as in the earlier paragraph. May I ask the Delegate
of the United States whether he wishes to make any remarks?
Mr. Oscar RYDER (United States): I have the same remark
to make, Mr. Chairman, except that here the "shall" would be
even more desirable; but I will not press any reservation.
CHAIRMAN:- I take it that the sub-Committee being composed
of very many Members of this Commission, they maintain their view,
and we can only thank the United States Delegate for being willing
to forego this reservation. Is that agreed?
(Agreed)
Paragraph 7. We have. an entirely new draft on page 30
and we see, on page 31, "The Delegate for Chile reserved his
position as to the version of this paragraph recommended by the
Working Party". May I ask the Delegate of Chile whether he can
withdraw that reservation?
M. F. GARCIA OLDINI (Chile) (Interpretation): Mr.
Chairman, I am sorry to say that, at least for the time being,
I have to maintain my reservation.
CHAIRMAN: It might help us if we have some indication of
the main reason for the reservation.
M. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
this is hardly a matter for discussion here. The instructions
I have say that this is a technical problem which competent
V
- 31 - - 32 -
Organizations should deal with. Until I receive new
instructions, I will not be able to change my present position.
CHAIRMAN: Thank you. There is nothing for it, then,
but to maintain this reservation. (Following remarks made in
French, but not translated).
M. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
I wish I could substantiate your hopes, but for the ti e being
I am unable to do anything about it.
CHAIRMAN: I would like to say, concerning the text of
the new paragraph 7, it now appears as three paragraphs. I
wonder whether, in order to bring it into line with the rest of
the Charter, it would be necessary to amalgamate them into one
paragraph, or, if not, to c them (a) , (b) and (c). I think
we will leave that to the Legal Drafting Committee, but I just
wanted to mention it here.
I take it that we agree with the reservation of Chile to
the text of paragraph 7? (Agreed).
Article 21 - Publication and administration of trade regu-
lations, advance notice of restrictive regulations.
(Interpretation). We also have a suggestion from the
French Delegation proposing the insertion of a new commentary.
You will find it on page 2 of Document T/109.
"The Drafting Committee considered that the Organization
should be responsible for collecting, analysing and publishing
in the most accessible form all laws, regulations and decisions
concerning foreign trade and for the periodical collection, in
the form of detailed studies, of information concerning the
regulations of member States on a given point. This idea
was re-stated in an amendment proposed by the Delegations of
E/PC/T/A/PV/24
V. V. - 33 - E/PC/T/A/PV/24
France, Belgium, the Netherlands and Luxembourg. The Working
Party noted this suggestion but in view of the provisions of
sub-paragraph (a) of Article 61 considered it unnecessary to
include it in paragraph 1 of Article 21."
(In English) Does the Delegate of France......
(question completed in French, not translated).
M. ROUX (France) (Interpretation): Mr. Chairman, I
do not attach great importance to this note. I simply wanted
to draw the attention of the Commission to that point. If you
think a useful purpose might be served by inserting it, I
should be very pleased and see only advantages in it; but if
you decide against it, I will raise no objections.
CHAIRMAN: (Interpretation): You are laying a great
burden of responsibility on my shoulders. However, if I have
to be quite candid, I must say that I am striving at present
to bring the commentaries down to a minimum. Personally, I
would be against the insertion of this note. May I ask the
other Delegates whether they have any views on the subject?
Is there anybody who is very strongly in favour of this - 34 -
Mr. F. GARCIA, OLDINI (Chile) (Interpretation): Mr. Chairman,
I fully appreciate your point which strikes me as being the best
one. However, I have doubts on this point concerning whether the
insertion of this note will lead to subsequent discussions or
difficulties or whether it is the omission of this note which will
lead to difficulties.
CHAIRMAN (Interpretation): No, I meant the insertion of the
note might later on give rise to a misunderstanding of the real
meaning of the text, because we might be asked "Why did you feel
compelled to insect such an explanation? " and that would lead to
unnecessary discussions. Therefore, I think, unless you raise very
strong objections, that it would be better to omit it altogether.
I wish to thank the Delegates for France and Chile for their
agreement with us, and therefore we probably will adopt unanimously
the text of paragraph 1 of Article 21.
In paragraph 2 there is a comment on page 33: "This new
paragraph was proposed by an Ad Hoc Sub-Committee composed of
delegates for Czechoslovakia, France, the Netherlands, the Union of
South Africa, the United Kingdom and the United States. The
paragraph was adopted by the Working Party on the understanding
that the Members of the Sub-Committee might wish to propose
alterations in the wording when the Article is discussed in Executive
Session". If there is no Delegate who has any better suggestions
to make, then I would suggest that we adopt the recommendation of
the Ad Hoc Sub-Committee. You will remember that we discussed
this very thoroughly in the first reading. We really had a first,
second and third reading of it, and I do not think any different
purpose would be solved by continuing this discussion, so I submit
that we adopt paragraph 2 as it now stands. Paragraph 2 is then
approved? Agreed.
E/PC/T/A/PV/24 R E/PC/T/A/PV/24 Paragraph 3 on page 35. There you see a comment: "The text
of the new paragraph 3 shown opposite has not been approved by the
Working Party but is suggested by an Ad Hoc Sub-Committee composed
of Delegates for Canada, the Netherlands, the United Kingdom and
the United States." The fact that it was not approved by the
Working Party does in no way mean that we need not discuss it. We
should discuss it very thoroughly, and I consider that the draft
submitted by that Ad Hoc Sub-Committee really incorporates the
findings at which we arrived in the Working Party.
Mr. J.P.D. JOHNSON (New Zealand): Mr. Chairman, the position
only
with regard to paragraph 3/was that the final sentence was considered
by the Ad Hoc Sub-Committee. The first and second sentences were
considered by the Working Party only, and the two reservations at
the bottom of page 16 of the Drafting Committee Report will stand
New Zealand is fully in accord with the first sentence which
requires that laws, regulations and decisions shall be administered
in a uniform, impartial and reasonable manner. Subscription to
those principles has been a feature of customs administration in
New Zealand.
We are concerned, however, with the second sentence of this
paragraph which provides that Members shall maintain or institute
as soon as practicable, judicial, arbitral or administration
tribunals or procedures for the purpose, inter alia, of the prompt
review and correction of administrative action relating to customs
matters.
We understand that provision which enables appea to be made to
a Court conforms with this requirement. So far as valuation for
duty is concerned, there is provision in the New Zealand customs law
under which an importer may, if he so desires, appeal to the Minister
- 35 - ER
- 35 - E/PC/T/A/PV/24
of Customs against a valuation made by a Collector of Customs and
he also has access to the Court.
The matter which concerns us, however, is a provision in the
New Zealand law bestowing upon the Minister of Customs power to
interpret the meaning of certain words relating to classification
of goods under certain general headings of the tariff. This
provision reads as follows: "Where any dispute arises as to the
true meaning and application of any terms used in the tariff and
therein printed in italics, the Minister may determine such dispute
in such manner as appears to him just, and his decision thereon
shall be final". L E/PC/T/A/PV/24 Examples of the types of tariff terms to which this applies
are inorganic acids, insulin substitutes, braces and similar
articles, gloves, principally of leather, In the two latter
cases the words "similar" and "principally" are italicized
and are subject to interpretation by the Minister. This
provision was made to facilitate administration and has operated
most satisfactorily and in the interests of the importers.
In substatiation of this I quote, Mr. Chairman, the following
extract from the report made in 1934 by a Royal Commission
which investigated the tariff of New ZeaIand on the occasion
of its revision, and considered this particular provision.
This is how it reads:
"In our opinion the present law and, practice are in the
public interest, and should stand uneltered. It will be
appreciated that, with the multiplicity of tariff items, and the
infinitely greater multiplicity of commodities imported, the tasks
of classification are difficult and complex, demand a highly
technical knowledge of various commodities which can be acquired
only by considerable experience, and are not matters upon which
Supreme Court Judges are specially qualified by experience and
training to adjudicate, and upon which we are inclined to think
they would be unwilling to be asked to adjudicate. Most of the
questions over which real difficulty arises involve rather fine
distinctions, and for the purpose of satisfactory administration
require to be settled expeditiously: The Supreme Court, if
this class of case were forced upon it, would have no precedents
arising out of its own experience for its guidance, and would
presumably have to decide the issue on the basis of hearing
a number of witnesses on both sides. This would cause very
considerable delay, and possibly considerable trouble through
conflicting decisions by different judges, because the questions
at issue are in the main matters of fact and not of law.
- 37 - L - 38 - E/PC/T/A/PV/24
It might congest the work of the Supreme Court, cause considerable
uncertainty in customs administration and make the tariff
difficulty of consistent and expeditious administration.
Incidentally, especially if appeals on points of classification
went beyond the Supreme Court, the situation thus created
might in some instances be ridiculous. The present procedure
is likely to give a much more expeditious and satisfactory
decision on matters of Customs classification than the Law Courts
of the land. The suggestion that the Minister, in exercising
his discretion under the Act, is acting as judge in his own case
is a travesty of the situation. The Minister is not judging
his own case, but acting as arbiter between the community as
a whole and the importer, and, after taking the advice of his
responsible officers, is a much more competent arbiter for this
class of problem than any lay tribunal possibly could be."
I think it will be recognised from this report that the
procedure referred to is fully justified, and that there should
be no obligation to cahnge it, We could not, in fact, in the
face of that report, and of the situation as we know it which is
completely satisfactory to importers, contemplate any change.
I should make it clear that this procedure applies only
to terms printed in italics. An other cases the importer
may, if he so desires, appeal to the courts, but I have no
knowledge of any such appeals having been made.
Apart from the position which I have outlined, I have no
doubt that many instances exist, particularly in the case of
small or dependent territories where the procedures in force,
while not conforming strictly to the requirements of the Article
as at present drafted, nevertheless are completely satisfactory
in their operation. L. E/PC/T/A/PV/24
-39 -
I should be glad,therefore, if the Commission would consider
an amendment of the proposed paragraph so as to provide for the
continuance of existing procedures used by any country which
conforms fully to the principle and spirit of the Charter,
A suitable provision might be as follows:-
"Nothing in this paragraph shall require the elimination
or substitution of existing procedures which conform fully
to the principles of this paragraph".
I should be glad to consider any other provision that might
be suggested. I just put that up for the consideration
of the Commission. J. - 40 - E/PC/ T/A/PV/24
CHAIRMAN: I think we should thank the Delegate of
New Zealand for his constructive suggestion. In discussion in the
Working Party - speaking for myself, at any rate - we had the
feeling that we were up against an almost insoluble problem, but
of course we cannot take any decision on this question this
afternoon. Delegates must have time to think it over, but my
first impression is that it is certainly a proposal that may lead
to a unanimous decision on this paragraph.
I think we have worked enough today to be able to adjourn now.
We shall continue tomorrow - it was suggested to me by the Secretary
that we should start at 2.15, but I said "No, it must not be before
2.30. We cannot work without having a reasonable break", and I
am sure you all agree.
So, we will meet again at 2.30 tomorrow and begin by the
examination of the New Zealand proposal, and then go on with the
rest of our task, taking Article 18.
MR. C. E. MORTON (Australi): Can we arrange, Mr. Chairman,
to have at least one week before Article 18 is considered, starting,
say, today week, as it is necessary for Australia to consider the
instructions received from their Government?
CHAIRMAN: For my part, there is not the slightest objection
to passing by Article 18 f or a week if the Commission agrees. The
main thing is to arrive at a unanimous conclusion. I cannot think
that the rest of the Charter is held up because of these technical
Articles, and so we can satisfy, I think, the Australia Delegate.
The meeting is closed.
The meeting rose at 5.00 p.m. |
GATT Library | vh201jx7195 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty-Fourth Meeting of Commission "B" Held on Wednesday, 16th July, 1947 at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, July 16, 1947 | United Nations. Economic and Social Council | 16/07/1947 | official documents | E/PC/T/B/PV/24 and E/PC/T/B/PV/22-24 | https://exhibits.stanford.edu/gatt/catalog/vh201jx7195 | vh201jx7195_90250099.xml | GATT_155 | 9,406 | 56,042 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/B/PV/24.
16th July 1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
TWENTY-FOURTH MEETING OF COMMISSION "B" HELD ON
WEDNESDAY, 16TH JULY, 1947 AT 10.30 A.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).
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. 2-.
G E/PC/T/B/PV/22
CHAIRMAN: We will resume the discussion at the point
where we left off last night, and I wish to express the hope
that the discussion will be maintained at the same high level
of objectivity which has characterised the discussions up to
date.
The first speaker on my list is the Delegate of Caile. S - 3 - E/PC/T/B/PV/ 24
Mr. F. Garcia OLDINI (Chile) (Interpretation): Mr.
Chairman, I am afraid that I shall have to disappoint you,
because, in spite of all its efforts, the Chilean Delegation
may not be able to be completely objective in considering
this problem, because it is fairly difficult to achieve
perfect objectivity in the consideration of this problem,
In fact, for us, on the level at which we have to study the
problem, the objectivity would almost ,seem foreign to the
way of considering this problem, especially as we have to
look at it from two different angles and to consider the
interplay of two factors which, in fact, have to be considered
at the same time.
We have to consider this from the doctrinal point of view
and also from the direct observation of how this question of
voting will work within the framework of the Chartar where
the interests of the Great Powers are at stake.
If we take it from a doctrinal point of view we shall
see that it will be extremely difficult for us to be asked
to say that the doctrine in which we believe is not true and
is not a good one. In fact, it would be the same as asking
a believer to say that God did not exist.
If we look at the problem from a different angle and from
the point of view of the interests, we will see that within
the institution itself, in spite of the obvious purity of the
of the Members, and in spite or their desire to be
objective, in fact it will be the interest which will prevail.
If we therefore now consider our interests and the interests
of small countries - of undeveloped or under-developed countries
- we shall see that these interests can only be protected if
all have the same rights and an equal right. S -4- E/PC/T/B/PV/24
If we look at the Charter we will see that it provides
for giving and taking. It is based on the principle of
give and takes; those who have more will give more and those
who have less will give less. If a small country gives
five per cent of its wealth and abandons five per cent of
its freedom, then when a large country abandons and gives
away part of its wealth and freedom it is exactly the same
thing and the proportion is exactly the same. E/PC/T/B/PV/24
In fact, if we consider parts of the Charter we will see that,
in numerous parts of it, it will be indeed the interests of under-
developed countries which will especially have to be taken into
consideration, and these countries will have, in certain of these
parts, prevailing interests, and to ask a small country which may
have a very great potentiality of development - of industrial or
economic development - to ask such a country to restrict its
possibilities of development means far more to this country than it
would to a large country. In fact, asking such a thing, from a
small or undeveloped country is an essential thing for such a
country and we do not think that the small countries can accept that
this question could be solved by the large economic powers, which
will, of necessity, have, often, conflicting interests. Therefore,
we could not conceive that the more important powers, whether
economic, commercial or industrial, should have a preponderant
situation as regards to voting.
Now, if we consider this question again, from the angle of
doctrine, it is impossible for us to conceive that democracy should
be based on something else than equality, and it is impossible for
us to conceive that this system which has been proposed here should
be brought forward- a system which will bring along such striking
differences. If this system had been proposed in the years Just
following the Declaration of Human Rights, then at that time there
were no traditions in the way in which democracy was exercised and
practised, but now a century has elapsed since then and democracy
is so deeply rooted within ourselves that it has a real meaning for
us - it means equality - and this meaning is completely identified
with us. Therefore, how could we maintain that what is true in
the political sphere should not be held true in the economic sphere?
As the Czechoslovakian Delegate so rightly Pointed out yesterday, if
- 5 -
ER ER - 6 - E/PC/T/B/P V/24
we consider democracy in the national sphere, it is considered from
the point of view of the unit, and the unit is the individual, and
therefore one vote is given to a unit, and that is so whether the
individual is rich or poor, or big or small; but how Would we act
differently in an international sphere - and there the unit must
be the nation. If we want to be logical, therefore, we shall have
to grant one vote per unit, that means one vote per nation.
The British Delegate yesterday gave us some very striking
examples, but I do not think the examples he gave can resist a
thorough analysis, because these examples are too striking, if I
may say so. If the problems were one of abstract mathematics,
then the demonstration which the Delegate of Great Britain
out
carried/would, be correct, and it would be correct also if certain
factors were taken into consideration and were more or less isolated,
but the reality is more complex and in fact,the reality being more
complex, the picture presented by the British Delegate does not
hold true. As we can see here, the great powers do not always
act on account of the votes they will have, or of the votes they
will be given, but they act, in fact, through sheer weight of their
power and through their influence which plays alone without even,
at times,the will and knowledge of these great powers, And as we
have seen here already, and as we have seen in all the conferences
that have taken place in the past, one cannot calculate and foresee
in advance what is going to happen, and very often the different
factors on which provisions are made disintegrate,for the simple
reason that interests are attracted by other interests, and very
often, as was shown here, also smaller interests will have to be
bent on larger lines. Therefore, if we consider this problem from
the doctrinal Point of view, or from observation of real facts, or
furthermore from the angle of inter-play of interests, can we
abandon the principle of one vote per country? It would be - 7 -
extremely dangerous to try and abandon this principle. As we all
know, we here are all democrats, but as the French Delegate
pointed out yesterday, what do we mean exactly by the word
"democracy"? There seems to be a confusion as to the meaning and
interpretation of that word, and what will be tomorrow's democracy
we do not know, but those are factors which trouble our minds, and
I do not think that we should tip the scales by throwing a new
interpretations and a new manifestation of democracy. In fact, it
would be adding to the confusion which already exists now, and if
we adopt this principle, which is not completely based on equality,
we should have added to the confusion which exists today in the
minds of many people. I think it will be a fault with regard to
the great doctrines to which we are all attached here, and which we
want to
all/maintain, and which we all want to see maintained, in the future.
Mr. G.LAURENCE (New Zealand): Mr. Chairman, we find, it very
interesting to come into the debate at this stage, because we feel
we have Probably heard the case that can be made for what we prefer
to regard as the establishment of a system of inequality in respect
to the representatioin in the Organization. We think it is probably
unfortunate that the uae of the word "weighted vote" has thrown the
consideration somewhat out of balance because, as we see the
position, the United Kingdom proposal is designed to give equality.
The arguments against it are attempting to justify the reverse. The
Delegate for Cuba said yesterday that we were working here on the
equa-lity principle. We cannot bee that the proposal put forward by
that Delegate conforms to his express desire that that should be
incorporated, in the provisions related to voting. The Delegate for
Brazil said. that everybody knows that citizens in a country may
have quite different values, but nobody wants to give two votes to
a citizen because he has more political influence or more economic
influence than another. We would suggest that a much more appropriate
analogy would be whether a city of say half a million inhabitants or
electors was permitted to return to a country's parliament the same
number of representatives as a city of say ten thousand. J. - 8 - E/PC/T/B/PV/24
It was suggested by the Delegate for Cuba that the United
Kingdom proposal would change a minority into a pre-fabricated
majority. We cannot see that that is the case. After all, we
have to consider the possible praotioal effect in the operation of
the Organization of what we are now writing into the Charter. We
cannot see that, in the proposed system of weighting - and we prefer
to say the proposed system giving equality that the United Kingdom
proposal involves - this would be the case. We would regard it as
being much more important that important economic interests cannot
be outweighed by interests that do not have some equivalent degree
of importance .
The Delegate for Australia recognised that economic relationships
do make certain countries more important than others, and the
Delegate for Australia conceded that special weight should be
attached to the words and actions of those more important in the
economic sense. We regard it as being of great importance, if the
International Trade Organization is to function successfully, that
there is some practical way in which the special weight that the
Delegate for Australia concates should be recorded.
The Delegate for Brazil accepted the reasoning of the
Delegate for Australia that the most important economic countries
have a dominant position in the world, and he went on to say that
the Interntional Trada Organization would oo mean ingless without
those importent economic countries. He said further that the
influence of the larger economic powers is beyond the existence of
the International Trade Organization.
The Delegate for France devided countries into two categories,
one of which he regarded as economically important and he said
that if they withdrew from the Organization it would be the
Organization that would suffer. Now, the United Kingdom Delegate illustrated in a manner which we cannot afford to ignore the
possibilities in this respect.
The recognition of the importance of the countries which
Australia, Brazil and France had in mind brings us to the essential
point that weighs the scales with us in deciding that there should
be equality and not inequality in the expression of view in the
International Trade Organization, a by "equality" I mend the
equality in the manner which the United Kingdom proposal sets
out to give.
There is another point which I think underscores the importance
of this aspect, and it is provided by an interpretation of the
history of past efforts at international co-operation. We cannot
afford to ignore the fact that in the Organization which we are
attempting to set up some countries have a relatively more
important place than others. Considering the arguments against
the equality in the sense given by the United Kingdom proposal, we
find that one of the main obst cles is stated to be the difficulty
in determining suitable formulae. We agree that there is some
difficuIty, but we would suggest that if the same degree of immunity
is brought to bear in relation to that problem as has been brought
to bear in justifying a system of inequality of relationship, there
is no doubt as to the solution then.
It is said by the Delegate for Australia that, unlike a
financial institution where the risks which a person takes by
participation are proportionate to what he puts in, the
international Trade Organization would not provide a similar
criteria . V - 10 - B/PC/T/B/PV/24
It is not very long, Mr. Chairman, since we discussed in
this Commission paragraph 7 of Article 66 relating to the budget
of the Organization. We cannot, refrain from making the
observation that there was no suggestion, in the consideration
of that Article, regarding the apportionment of expenditure,
as, since we are all going into this Organization on equal
grounds, the question of apportionment does not arise, because,
of course, we will all be bearing equal shares. Now, the
Delegate of Australia was prepared to rely upon the natural
inevitable consciousness which all Members will have of the
economic strength or the nature of the obligations accepted in
particular situations, to ensure that Members will take into
account the significance attachable to the views of the
countries that are important. For the reasons already stated,
we would prefer-and we think it would be to the advantage of
the Organization - if that preference were recorded: that
recognition be given some tangible form in an attempt to get
equality.
We are somewhat disappointed that the speakers who have
concentrated their attention on preserving inequality should
have ignored the arguments put forward by the Delegate of Canada.
We felt those arguments were very good, and we subscribe to
them. We now have some experience of the so-called weighted
voting principle in practice. I refer to the International
Monetary Fund, and we have it on the authority of the Delegate
for Brazil, who stated yesterday that though the United States
has 27% of the votes, it has never crushed any country because
of this vote; and both in his oral statement and now seeing it
in the written word, I interpreted his reference to the voting
provisions of the International Monatary Fund to have his
complete support.
For the reason given, Mr. Chairmen, we hope that - and if
the objective approach we have heard so much about is retained,
we feel confident that - equality in the voice in the Organization
will be reflected in the provisions in the Charter. CHAIRMAN: The delegate of Lebanon.
MR. GEORGE HAKIK (Lebanon): The Delegation of Lebanon is
in favour of the principle of one nation, one vote. For us,
this is a matter of principle which would admit of no exceptions.
This does not mean that we do not recognise the importance of the
great commercial nations. The importance and influence of these
nations, will, in the nature of things, make themselves felt in
the organisation. They should not be ensured by such methods
as would introduce voting inequalities. On the other hand, we
are willing to agree to provisions for two-thirds majorities for
the important decisions of the Conference; such provisions would
that
be in line with the Charter of the United. Nations. Nothing/has
been said so far has convinced us that the principles regarding
voting contained in the Charter of the United. Nations are not
suitable for the Charter of the International Trade Organisation.
Our position is simple and-clear; we stand for the absolute
principle of one nation, one vote, and at the sane time accept
provisions for proper majorities for the important decisions of
the Conference.
CHAIRMAN: The Delegate of India.
MR. D.P. KARMARKAR (India): looked at from a purely'
national point of view, Mr. Chairman, it is obvious that India.-
by reason of its population, foreigh trade and other factors -
/more
is likely to gain by the arrangement now proposed by the United
Kingdom Delegation; but in spite of that, Mr. Chairman, the
Indian. Delegation strongly feels that if the objectives which the
proposed organisation sets itself to fulfil are to end in complete
success, the basis of the organisation ought to be of as universal
a nature as is possible in the circumstances, It is obvious, M : 12 E/PC/T/B/PV/24.
Mr. Chairman, that under the proposed new arrangement one section
of the organisation, namely, the highly industrialised countries
(or, to put it in other words, the countries of economic importance),
will have a distinct advantage. In an organisation of the kind
which we are sitting here to create, I consider it of the utmost
importance that there should be cooperation from all the States
concerned, without any reservation in their minds; and the Indian
Delegation strongly feels that such absence of mental reservation
would not exist if each Member representing his State were to feel
every minute that he was sitting in the Conference that, after all,
his vote would not be one integral vote but only a partial vote..
Further, if the smaller countries are likely to feel that their
votes, independently cast, are not likely to be of decisive signi-
fance in the decisions of the Conference, then it would be very
difficult for those smaller countries to resist the temptation of
aligning themselves with particular points of view, not because
they merit acceptance, but because ultimate agreement with them
mightlead to the advantage of their particular small countries,
If we are to maintain an absolutely impartial character for the
organisation in the sense that every opinion expressed will be an
unprejudiced opinion, then, in the view of the Indian Delegation,
this is a question which assumes very great importance. There was
something to be said for the view so ably expressed-and expressed
with such restraint in view of the importance of it to the respective
States - there was, I say, something to be said for the view which
the United Kingdom and Canadian Delegates put forward that in an
organisation whose decisions will certainly be of such great
importance to the highly industrialised countries (with a consequent
economic importance), such decisions may affect their M 13 E/PC/T/B/PV/24.
future, But, in my opinion, the stage is past in international
deliberations when countries with a very decisive economic impor-
tance in the comity of nations should think only of the preservation
of their own important position, In the interests of world
prosperity, which is certainly one of the principle objectives
of the proposed International Trade Association in the interests
of that larger view, I say, it is now time for the leading
countries in the economic field to think in terms rather of sacri-
fices than of the preservation of their own important position. G
It is only in that spirit - if we move in that spirit - that
the Indian Delegation humbly believes that the real world
prosperity which is our ideal will be achieved earlier than
otherwise.
Thirdly, Mr. Chairman, one practical point of view, and
that has already been expressed. during this Debate, so I will
not speak on it for very long, It is this - that the interests
of the undeveloped countries are at least as important to the
prosperity of the world as a whole as the interests of the
highly- industrialised countries; and it is natural, Mr. Chairman
that the undeveloped countries should feel a natural anxiety
that their interests will not in any manner be influenced. by
the weighted voting that is proposed to be given on the grounds
of either population or other aspects of economic importance;
on that ground,also, Mr. Chlairman, the Indian Delegation
naturally strongly feels that in order to see that the interests
of undeveloped countries suffer in no manner, the principle
"one State one vote" should. be maintained.
CHAIRMAN: The Delegate of China.
H.E. Mr. WUNSZ KING (China): Mr. Chairman, when I made the
suggestion yesterday that we might come to the discussion of
this question of voting after we had cleared. up other questions,
the question of the composition of the Board., for instance, I
anticipated., just as any other colleagues of mine have anticipated,
that there might emerge some fundaamntal divergences of view
in regard. to this question nf voting. Unfortunately, we are
now in this situat ion here to-day I have listened. to the speeches
of the various speakers with great interest and. attention, and
after having heard those statements I must confess that I still
14 E/PC/T/B/PV/23 E /PC/T/B/PV/24
remain open-minded. I hope you will excuse me when I say that
I am so open-minded that I cannot make up my mind. It seems to
me that there are merits and de-merits in one system as well
as in the other, and I think it is perhaps unfair simply to say
that the one system possesses all the virtues while the other
system possesses all the vices.
In this circumstance I wonder whether I could make another
concrete sugestion, that we might cut off the discussion of
this complicated question until we have tackled and settled
the other question - that is, the question of the composition of
the Board, Or else I might go a step further in suggesting that
this question of voting might be put off and left to be
decided by the forthcoming Conference in Cuba.
Having said so much, or rather having said so little, I
might be permitted to say that in so far as this second
question is concerned the Chinese Delegation is in favour of
accepting the United. Kingdom formula as set out on page 55 of
the Report of the Drafting Committee.
I will come to this question later again, when I have an
opportunity of further expressing my views.
15 S E/PC/T/B/PV/ 24
CHAIRMAN : The Dalegate. of China has proposed that the
further discussion of this subject should be deferred until
after we have considered the composition of the Executive
Board, or perhaps until the World. Conference. I take it,
however, that That the. Delegate of China wishes to propose is
that a decision on this question should be postponed until
after we have considered the question of the composition of
the Executive Board, I have other speakers on my list and
I am sure that the Delegate of China would not wish to
deprive these speakers of the opportunity of presenting their
views, I therefore propose to call upon the other speakers.
We should then consider the proposal of the Delegate of China
to postpone a decision on this question until after we have
considered the question of the composition of the Executive
Board.
The Delegate of Norway.
Mr. Erik COLBAN (Norway): Mr. Chairman, I have the
impression that in the discussion some of the speakers have not
really studied the British proposal, which, as you will find
on Page 55 of the New York Reoprt, is a very modest one. It
is not a proposal that would conoontrate the power in the hands
of some very few; great States. It simply underlines the
importance if certain big commercial Powers and underlines the
importance of their rull co-operation in all the activities of
the ITO. How modest these proposals are will appear when you
compare them with the Schedule of Votes under the internationall
Monetary Fund, which you will find on Page 58 of the New
York Report.
I just wanted to make this observation so as to bring.
the discussion back on to a footing of fects. It is not a
S 17
question of fundamental principles but is simply a question of
some possible arrangement so as to take into account, on the one
side, the equality of all the Members of the ITO and, on the
other side, the practical necessity for all the Members of the
ITO to secure, as well as they can, the co-operation of certain
important Members.
CHAIRMAN: The Dalegate of South Africa.
Dr. W.C.NAUDE (South Africa ): Mr. Chairman, ;when the
Chinese Deleget yesterday, suggested that perhaps we might tackle
the Executive Board composition first, I had a feeling that he
was right, because we have thought that if a compromise ware to
be found beween two schools of thought it might be found in the
composition of the Executive Board, But, in view of the fact
that the. Coommission has agreed to limit the discussion for the
time being to the matter of the vote, I think I should not weit
any longer to define, not necessarily .our position, but our
preference.
We heard yesterday a great deal of biblice.l wisdom and
perhaps I may be forgiven if I quotr another piece of biblical
wisdom, It is also stated there that one should "love thy
neighbour as thyself." I feel quito sure that if that thought
inspired all nations, all people, this discussion, which was
begun nine months ago in London, would never have taken place.
However, we live in a world of realities and therofore we have
to face the situation.
I feel, in regard to the proposal of the weighted vote, that
we can hardly add anything to the arguments that have, been put for-
ward by the Delegates of the United Kingdom, Canada and New Zeeland.
My own feeling is that more persuasive arguments cannot be
produced.
I will permit myself to maka only a very few remarks as
regards the question of one vote per country.
E/PC/T/B/PV/24
S 18.
It seems to us from the beginning that that would be very
appropriate, and it has been incorporated into the United Nations
Charter, but those who point to it as a sacrosanet example must not
overlook that the United Nations Charter does actually give weighted
votes. They have given five permanent seats on the Security
Council to five powers. More extreme weighting than that I cannot
imagine. To small countries, the principle of "one country, one
vote,"as appears in the United Nations Charter, is theoretically
quite ideal, but, as I say, in practice it does not work out that
way. Now, being .practical people, we look at the Charter from a
different angle, and I think that, perhaps, there is an advantage
in our expressing our view. We have had experience with the
International Monetary Fund and the Bank, where by common consent it
is agreed that those powers who made the largest contribution and
who therefore ran the largest risks and had the largest responsibility
should have more to say in those Organizations. The same thing
to
applies to the ITO, and it seems to us that/comrare the ITO with
the United Nations on the basis of "one vote, one country", is not
wholly appropriate. We therefore feel that the British formula
deserves a close study. Again the Norwegian Delegate has referred
to the modesty of the British proposal, I feel that I entirely
agree with Mr. Colban that, if one looked at it closely, and
especially if one examined the base vote column, one would see that
such a relatively large basic vote with smaller countries is not
a weighted voting scheme. I have attempted to state our position,
so that it might be on record.
ER
E/PC/T/B/PV/24 J .
M. S. MINOVSKY (Czechoslovakia) (Interpretation): Mr. Chairman,
I should only like to add a few words to what I said previously.
I think that as a general rule we must admit that it is extremely
unlikely that, in the work of the future Organization, the Member
States should. aggregate into two groupings in accordance with their
respective size, but rather the groupings will be formed according
to the ideas and proposals put forward, and if a good proposal is
put forward, certainly many countries, whether great or small, will
associate themselves with such a proposal. So, in any case, any
Member State may find itself being part of a majority or of a
minority on any given question.
Now, it was said here that the votes of the Member States
should. be determined in accordance with the number .of inhabitants.
We think that this would be a wrong approach to the problem.
In the life of a nation the community is composed of citizens; it
is the citizens who compose the national community, and they have
within that community equal rights and equal votes. If we pass
on to international life, we can see that it is the nations who
compose the international community, and within this international
community every nation must have equal rights and equal votes.
Therefore, we think that any attempt to apply the principle of
taking into consideration the number of inhabitants of a country
to determine its votes or its rights would lead to disastrous
effects .
I think that no comparison. should be mde with the
International Monetary Fund. There is an essential difference in
the nature of this Organization and the Trade organizat ion which
we are endeavouring to set up. The International Monetary Fund.
is the banking organization - every member brings a contribution
in money, and it is only naturul that his rights and votes should
E/PC;/ T/B/PV / 24.
19 J.
20
E/PC/T/B/PV/24
be in proportion to the contribution subscribed by him. But our
Organization bears no comparison with this institution. It is not
a banking organization that we are sotting up, nor are we setting up
a welfare organization - there is no similarity with UNRRA in that
respect. In our Organization, every Member will subscribe to
certain responsibilities and duties an no one will have special
privileges, except to limit, in certain respects, its freedom in
ordor to fulfil its obligations - only if this can be called. a
privilege can we speak of privileges. If, as I have stated before,
every Member State has the same obligations and bears the same
responsibilites, it is logical and natural that it should have the
same vote.
CHAIRMAN: The Delegate of the Netherlands.
Baron S.J. van TUYLL (Netherlands): Mr. Chairman, after what
I have said yesterday, I can now be more precise. I said, that
our natural inclination was for the system of one country, one vote.
after weighing all the argaments, we now feel that our natural.
inclination has not been shaken. We do think that only in very
acceptional circumstances should. we depart form the system, of one
country, one vote, which is applied. in nearly all communities,
private, public or intergovernmantal.
The South Arican Delegate has pointed. out that there is a
veto system, and he has mentioned the Security Council. I would.
like io point out that in the purely economic matters, which the
Economic ana Social Council deals with, there is no such veto.
I would. like-to add, Mr. Chairman, that we do not think that
one system is more democratic than the other. It has been said
that the system of the weighted vote is more in conformity with the
individual vote in a State. I think the argument works both ways
because we can also compare the Members of the future Organization, the International Trade Organization, with the citizens in state.
Citizens also represent families, and one citizen has a large
family and the other citizen may be a bachelor and will not have a
family.
In conclusion, Mr. Chairman, I wold. like to point out that the
Netherlards Delegation shares the views of those Delegates who wish
to adopt the system of one country, one vote.
CHAIRMAN: The Delegate of the United States.
MR. CLAIR WILCOX (United States): Mr. Chairman, I have
listened to this debate with a great deal of interest, I have been
keeping a box score, and as nearly as I can judge, eight Delegates
have expressed themeselves as being in favour of one country, one
vote, with varying degrees of emphasis, and five countries have
expressed themselves as being in favour of weighted voting, and
three are perched more or less precariously on the fence. If they
were to topple off on the side of weighted voting, we would have
a vote of eight to eight. On that assumption, the United States
then would be in a position of casting the deciding vote on this
issue, and everybody has always said that the vote of large powers,
in any case, will be decisive. As you know, the original
position of the United States, in our original proposals and in our
suggested Draft Charter that we have taken as the basis of
deliberations in London, was for one country, one vote, and I am
preparedI here and now to cast a decisive and emphation vote in
favour of the principle of one country, one vote - on one coudition,
namxely, that you go back to our original Draft.
E/PC/T/B/PV/24
J. V .
If, however, you are not prepared to go back to our original
draft, I shall have to re-open my mind. I think we must all
recognize that the Charter ..as been changed in character during
our two meetings, and as a result of that change, I do not feel
that we are any longer committed to our original proposal of
"one country, one vote". I cannot, however, tell you what our
position is on this matter, because I do not know.
We have heard a great deal here. about minds that have been
open, and I have noticed that some people; have not, been able to
bear the strain. for more than twenty-four hours. I hope that
we shall be able to keep our minds open on this subject for a
somewhat longer period.
I do not find it possible to work myself up to any great
pitch of enthusiasm over the issue of the United Kingdom
proposal for weighted voting versus "one country, one vote".
As I observe the United Kingdom proposal, it appears that under
that proposal the four smallest countries on earth, with.
one-tenth or one-hundredth per cent of the world's trade, with
a population which is smaller than that of a single borough of
New York City, could outvote the United States of America, and
I fail to see how we are going to dominate thel I.T.O. with such
a weight, and if it is domination that we are after, we have got
to have more votes than the United Kingdom would give us.
Personally, I would be.willing to flip a coin as between one
country, one vote" and the order of weighted voting which the
United' Kingdom proposal would afferd to the United States.
Now, I say that we cannot decide where we stand on this
matter. Why cannot we decide? Because we do not know what
we are voting on here yet We asked to have this question of
weighted voting postponed until we could see the character of
V V 23
the substantive provisions of the Charter. Now we do know what
the character of some of the substantive provisions of the
Charter is likely to be; but the most difficult issues are
postponed for the longest period, and some issues that we
regard as crucial are not yet finaIly resolved, and upon the
character of' their resolution will depend the character of the
decision that we should make on this question.
I can conceive of a Charter coming out of this meeting
which it would be possible for us to present in the United States
on a."one country, one vote" basis. I can conceive of a Charter
coming out of this meeting that we could not get accepted in
the United States unless we had a weight of 51%! Now, those
are the extremes. Well, that is exaggeration. I think it is
absolutely impossible - we would not expect it, we would not
ask it, to have a system of weighting under which the weight
given to the United States would be proportionate to its
absolute significance in productional trade. But depending upon
the character of the final document, I am inclined to think that
we should either prefer "one country, one vote" at the one
extreme, or a much heavier weight than the United Kingdom would
give us at the other extreme, and frankly, if we vote on this
issue and decide it in an affirmative way at the present time
we are signing a blank cheque. We do not know what is going
to be written in there, and that is the reason why it is difficult
for us to make up our mind - and we are not going to make up our
mind on the issue in the next twenty-four hours either. We
want to see.
Now, in the meantime, what do we do about this issue? Well,
I do not think we should sit on our hands. We have had issues
that have divided this Commission where the balance of' the.
division was much less even than it is on this issue: where we
23 24
have deliberately avoided forcing the issue to a vote although
we might conceivably have speeded up our work materially by
forcing a vote and getting on with our deliberations.
It seems to me that it would be unwise for us to make a
final decision on this question at this time. Now, that raises
the question as to when we should make a decision. Well, there
are two possibilities. One possibility is that we make a decision
at Geneva, and the other possibility is that we make a decision
at Havana, and in either case we shall have to lay before the
people who must arrive at a judgment on this matter the materials
with which they are to work, and I think that we as technicians
in this field have an obligation to provide them with those
materials. I believe, therefore , that the sub-Committee dealing
with this problem should be instructed to prepare drafts for
later consideration by this Commission which involve equal voting
and which involve weighted voting, according to one or more
formulas. Those draftsimust then be referred back to this
Commission, and we can decide whether we wish to adopt one or the
other of them at this meeting, or whether we wish to. refer all of
them to the Confereme at Havana. - We shall then have done our
duty in providing the raw materials for the decision. We shall
have done the duty of this Commission adid of its sub-Commission.
We shall have got on with the work, and I think we shall put
the voting issue up for- decision at a time when it is possible
for us to .see what its significance is, and that is when wa see
the character of the substantive previsions of the Charter that
call for I.T.O. determinations.
E/PC/T/B/PV/24.
V 25
If the I.T.O. does not have to decide anything very important, it
does not matter what your voting positions are. If the decisions
that you give to the I.T.O. are, however, crucial to the whole
structure that you are trying to build up, then the character of
your voting conditions becomes very important. My suggestion
therefore is that we can determine at a later time during this
meeting whether we are going to adopt one proposal or another, or
whether we are going to forward to the World Conference more than
one proposal. I should like to see the Draft of the Charter that
comes out of this meeting express the widest possible area of
agreement and I hope that on the substantive provisions of the
Charter we shall approach unanimity as closely as it is possible
to do so. Of all the provisions of the Charter, this is one on
which there is the least need, I think, for final agreement here
and now, It is not a predominantly substantive or technical
question; it is a matter that has important political aspects and
it may be that we shall not bring ourselves to decide it at this
meeting. But I think We should place ourselves in a position to
do so if we choose to do so.
E/PC/T/B/PV/24. E/PC/T/B/PV/24
CHAIRMAN: As the United States Delegate has just pointed.
out, there is a very close division of opinion in the Commission
on this subject.
I am sure that the Preparatory Committee would. not wish to
decide an important questions of this nature on a close vote.
I therefore do not think it necessary for us to question the
efficacv of the'score' which has just been given by the United.
States Delegate, and. therefore we do not need to decide whether
or not he is right in concluding that the United. States has a
casting vote on this question.
We are, however, faced with the question of our further
procedure. We have two proposals which have been submitted. during
the course of our discussion this morning. One proposal is that
of the Chinese Delegate, that we should defer decisions on this
question until after we have had a discussion on the composition
of the Executive Board.. The other proposal is that which has
just been made by the United States Delegate, which is that we
should set up a Sub-Committee to draft various alternatives for
submission to-the: Commission at a later stage.
In connection with the 'proposal of the Chinese Delegate, I
would point out that it will be necessary for us to have a
discussion on the question of the composition of the Executive
Board, and as this question is very closely related to that of
voting in this Conference, it may be necessary for us, after we
have had. the discussion on the composition of the Executive Board,
to also refer this question to the same ad hoc Sub-Committee which
we might set up to consider the various alternative schemes of voting
I would therefore propose that we first of all take a decision
on the proposal of the United States Delegate that this question
should be referred soon to an ad hoc Sub-Committee with instructions
that they should draft various alternative proposals to be
submitted to this Commission.
26 E/PC/T/B/PV/24
CHAIRMAN: The Delegate of China.
H.E. Mr. WUNSZ KING (China): Mr. Chairman, I feel very
grateful to you for having accurately interpreted my words in
saying that when I spoke about the question of that proposal
boing ultimately referred to the conference in Cuba, I
actually had in mind a decision on this matter.
As to that part of my suggestion that the question of
voting should be settled after we have settled the other question
of the composition of tha Board, I understand thet, having
reached this stage, there seems to be no question at all that
we are going, to take up the question of the composition of the
Exacutive Board.
Having heard the remarks made by the United States Delegate,
regarding his suggestion that we of the Preparatory Committee
should make another effort to solve the problem by setting up
and instructing a sub-committee further to study the question on
a technical level and be referred back to Commission B for
further study, and, if it is not possible for us to reach a
decision, then the question is to be referred to the Conference
in Cuba, I am entirely in agreement with him. Therefore, with
this understanding, the Chinese Delegation does not insist upon
its latest suggestion in regard to the matter of procedure.
S E/PC/T/B/PV/24
Mr. 0. PARANAGUA (Brazil): Mr. Chairman, I agree entirely
with the suggestions of the United States Delegate, that this
question can be postponed and, to a certain extent, subordinated
to the kind of Charter that we have. I think this is a very wise
precaution, and on the other hand I think, if we could have our
minds open twenty-four hours, we could have them open for another
three or four months. There is another little point that I would
like to mention, and that is the reference that after the statement
of the delegates here, the sense of the meeting was against the
United IKingdom proposal. That is a point of importance, and I
would like to emphasise that the sense of the meeting was against
the weighted vote.
Mr. F. GARCIA OLDINI (Chile) (Interpretation) Mr. Chairman,
I agree that the matter should be postponed, but not necessarily
until the Havana Conference. but only to give time to the Sub-
Committee to try and reconcile the various viewpoints. I agree on
this, although I have no great confidence and even if I am charged
for not having an open mind. The advantage would be that the Sub-
Committee would be in a position to discuss the matter in the light
of the discussion that will take place in this Commission regarding
the composition of the Executive Board, because tho two questions
are closely connected, and therefore they should be examined
together. E/PC/T/B/PV/24
I am not sure that the way which we have chosen is the best,
but since we have decided to go this way we cannot complain. While
we have been unable to prevent that method from being selected, I
thing that it would be very useful for the sub-committee not to
start its work until the Commission has had. a discussion regarding
the composition.of.the Executive Board.
CHAIRMAN: The Delegate of Australia.
MR. K.H. TANGE (Australia.): Mr. Chairman, as I raed the
score arising from the discussion on this Commission, it appears to
me that nine Members have spoken definitely in favour of the
principle of one vote per head, four or possibly five against, and
three are sitting on the fence.
If we decide to postpone a decision on this question, that
seems to me a classic case of deference to the views of the States
which have carried responsibility, are large in size, and bring
great responsibility to the Organization. We are quite agreeable
to defering a decision on this question until there has been
greater finality in the drafting of substantial parts of the Charter,
but I have some doubt about the value of setting up a sub-committee
at this stage.
I understood from .Mr. Wilcox's speech that the purpose of the
sub-committee would be to gather material on which the Commission
could. make a decision when we return to it at a later stage. Now,
I am not quite clear what its exact function would be. If it is
a question of collecting statistics relating to estimates of
national income, trade figures, and matters of that kind, I quite
agree that that would be a useful function - Which, perhaps, the
Secretariat could perform. If it is a question of a sub-committee
sitting down and endeavouring; to construct from that basic
J.
29 J . 30 E/PC/T/B/PV/24
material a series of alternative systems of weighted voting, I
wonder whether the sub-committee could., in fact, proceed on the basis
of the discussion which we have had so far.
The general sense of this meeting, as has been rightly said,
is against the principle of weighted voting. What position would
the sub-committee find itself in? It would have no guide as to
whether an elaboration of the Unit ed Kingdom system of weighted
voting would be likely to be acceptable to the Committee; it would
have no guite, as to whether or not it should provide for more
substantial weights or smaller weights
Under those circumstances, I doubt very much whether it is a
practical proposition to ask a sub-committee to produoe alternative
systems of weightad voting. I have no objection to a sub-committee
or the Secretariat producing more detailed basic statistics, which
we might use at a later stage when we are trying to make a
decision.
CHAIRMAN: I interpret the proposal of the United States
Delegation to be that we should set up a sub-Committee to examine
and to formulate various proposals for submission to the Commission
at a later date. These various alternative proposals would
include one comprising the principle of "one State, one vote",
and other alternatives would include the principle of weighted
voting; That is the issue which is now before the Commission.. 31
E/PC/T/B/PV/24.
DR. GUSTAVO GUTIERREZ (Cuba): The Cuban Delegation is of
opinion that the proposal made by the delegate of the United States
is a very practical one although we should modify it a little by
placing four nations in indecision, and not three. We could
probably increase the scope of the Sub-committee. We feel that
the Sub-committee should not be forced to submit alternative
drafts, but should be asked to find, if possible, a co-ordination
between the two views expressed here and, failing that, to present
alternative propositions. That could be done when all the Chapters
of the Charter have been completed.
CHAIRMAN: I am sure that if the Sub-committee should succeed
in working out a compromise combining the principles of both one
State, one vote, and weighted voting, there would be no need to
submit the various alternatives,
MR O. PARANAGUA (Brazil): I think the point about this
Sub-committee raised by the delegate of Australia is very important.
What kind of terms of reference will be given to the Sub-committee?
If we have the sense of the discussion here as being against
weighted voting, how can we ask the Sub-committee to study this
subject again ? I think it is a question of seeing how the
Charter will come out and if necessary of finding something else,
because, on this question of voting in the Conference, the sense
of this Commission is quite clear and I cannot see that point being
included in the terms of reference in the Sub-committee.
CHAIRMAN: The terms of reference of the Sub-committee as
proposed by the United States delegate are very restrictive; they
are that the Sub-committee should work out various alternative
proposals to be submitted to this Commission, for this Commission
to decide.
M 32 E/PC/T/B/PV/24.
Is the Commission agreed with the proposal of the United
States Delegation that we should set up a Sub-committee to work
out alternative proposals to be submitted to this Commission for
later decision ?
DR. GUSTAVO GUTIERREZ (Cuba)i We are not in a position to
vote on that form. Although we are in favour of one of the
systems presented here, the terms of reference would bring the
matter to an absolute decision between the two and I think we
should instruct the Sub-committee to try to reconcile and, if
possible, co-ordinate the two ideas. We have tried, as we have s
said before, to find a way to have a formula accepted by all here.
Any decision taken will come back to the Commission and I do not
see how the Members of the Commission can act differently from the
way they have done so far. This would inevitably lead to
failure. I think we should instruct the Commission to try first
to reconcile the different views and then to produce alternatives.
Nevertheless, if the opinion of the Commission is against this
suggestion, I will abide by the majority. E/PC/T/B/PV/24
Mr. CLAIR WILCOX (United States): Mr. Chairman, I am
glad to accept the amendment suggested by the Delegate of Cuba,
CHAIRMaN: The proposal now before the Commission is that
we should set up a Sub-Committee and this Sub-Committee should
endeavour to reconcile the various points of view expressed in
the Commission, and if it is not successful in reconciling these
points of view it should then submit various alternative
proposals to the Commission.
Is that propcosal approved.
Approved.
As it is important that the Sub-Committee should commence
its work at an early date, I propose to nominate the Members of
the Sub-Committee at this Session. I name the following
Deligations as Representatives to the Sub-Committee:-
Canada, China, Cuba., France, United Kingdom and United
States.
That is Sub-Committee no six Members; two of those
Members, Canada and the United Kingdom, have expressed themselves
in favour of weighted voting, two of those Delegations, Cuba
and France, have expressed themselves in favour of "one State
one vote", and two of the Delegations, China and the Unit ed
States, have not yet been able to make up their minds.
Therefore I think the Sub-Committee is a very well-
balanced one.
The Delegate of Brazil.
Mr. PARANAGUA (Brazil): May I remind you that we have
had proposals on the subject since London, and another proposal
at Lake Success; and also there is no other 'country' than the
United States representing the American Continent.
We ask to be included in this Sub-Committee - the Brazilian
Delegation - if the Commission agrees.
33
G E/PC/T/B/PV/24
CHAIRMAN: The Delegate of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): I would be very much
deloighted to resign the honour conferred on me on behalf of my
country in favour of the Brazilian Delegate.
CHAIRMAN: The Delegate of the Netherlands,
Baron S.J.van TUYLL (Netherlands): Mr. Chairman, I
understand that this Sub-committee will only work on the voting
issue and not on the question of the seats on the Executive Board.
Is that right?
CHAIRMAN: After we have had the discussion on the
question of the composition of the Executive Board, we shall then
have to decide to what sub-committee to refer that question.
Mr. F. Garcia OLDINI (Chile) (Interpretation): I suggested
a little while ago, Mr. Chairman, that this Sub-committee should
not start its work before we have discussed here the question
of the composition of the Executive Board, because the two
questions are closely connected.
CHAIRMAN: That will be done.
The Delegate of France.
Mr. Pierre DIETERLIN (France) (Interpretation): My
proposal is now without object, after the suggestion just made
by the Cuban representative , but I think I should still make it,
I was going to suggest increasing the number of members of
the Sub-committee from six to seven, by the addition of Brazil,
not only to meet the Brazilian request but also because, in
conformity with the various calculations made here, the
34
S E/PC/T/B/PV/ 24
majority opinion appears to be in favour of the principle
"One State, one vote". Therefore a membership of seven for
the Sub-committee would show a better proportion of the opinion
expressed here, but, nevertheless, after what has been suggested
by the Cuban representative, I do not insist.
CHAIRMAN: I wish to thank the French Delegate for his
remarks. I would like to point out that the standing rule
which has been laid down by the Charter Steering Committee is
to endeavour to confine sub-committees to six. I think it
is particularly important in this case, as the sub-committee
will have to study this question in connection with statistics
and other matters, and therefore I think that any number
more than six would not be a working number.
35
S ER
I wish to thank the Delegate of Cuba for having resigned his
seat in favour of the Delegate of Brazil, as it is very important
that Brazil should be on the Sub-Committee, and it is only that
the limitation of the number to six makes it difficult to decide
between Cuba and Brazil. Accordingly, the Sub-Committee will
consist of Brazil, Canada, China, France, United States and United
Kingdom.
The Secretariat will advise the Members of the Sub-Committee
when the first meeting will be held. It will only be held after
discussion has taken place on the composition of the Board. The
Sub-Committee will then elect their own Chairman.
Commission B will meet tomorrow to consider the question of
the composition of the Executive Board, at 2.30 p.m,
The meeting is adjourned.
The meeting rose at 1.25 p.m.
E/PC/T/B/PV/24 |
GATT Library | jd059mq1381 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty-Fourth Meeting of the Tariff Agreement Committee held on Friday, 19 September 1947 at 3.p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, September 19, 1947 | United Nations. Economic and Social Council | 19/09/1947 | official documents | E/PC/T/TAC/PV/24 and E/PC/T/TAC/PV/22-24 | https://exhibits.stanford.edu/gatt/catalog/jd059mq1381 | jd059mq1381_90260087.xml | GATT_155 | 16,943 | 101,750 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
SECOND SESSIO
UNITED NATIONS
NATIONS UNlES
CONSEIL RESTRICTED
E/PC/T/TAC/PV/24
ECONOMIQUE 19 September 1947
ET SOCIAL
N OF THE PREPARATORY COMMITTEE OF THE
CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
TWENTY-FOURTH MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON FRIDAY, 19 SEPTEMBER 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. -247).
Delegates are reminided 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.
t -' '': - 2 -
S.
E/PC/T/TAC/PV/24
CHAIRMAN: The Meeting is open.
The first item on our Agenda today is the Note be in-
serted as a Final Note in ex I to the General Agreement on
Tariffs and True. The revised United States Note is given in
Document W/SO, Revision 1.
I have now been requested by the Delegation of the United
Kingdom to circulate an alternative United Kingdom proposal,
which is given in this Write 2 ..er (indicating paper). I wish to
apologise to the Committee for the fact that there has not been
time for this tentative United Kingdom proposal to be translated
into Fr.nen but I hope the Committee will agree to consider it
just in the English text.
Dces any Mc:u. of the Committee wish to speak on this sub-
ject?
Mr. R. J. SHACKLE (United Kingdom) Mr. Chairman, I WouId
like to say a word or two about this proposal we have put forward.
W t .worries us about the earlier versions of the Note which
have been suggested - even in the revision - is that it does seem
to give the blank cheque you have talked about so often to the
authorities in the zones.
Our feeling is that the proper principle is to move towards
the application of the principles of the General Agreement in the
zones. with the necessary qualifications, and our idea of what
would be the immediate desirable step would be that the authorities
of the zones should apply that treatment to the commerce of the
contracting parties to the extent that those contracting parties
themselves apply treatment in accordance with the General Agreement
to the commerce of the zones themselves.
- - - - - - - - . . .
_ ._ E/PC/T/TAC/PV/24
That is not a new idea; its principles already exist in the
Italian peac Tranty too. That is the principle which we would
desire to see incorporated here and that it the scheme which is
written into this paper we have circulated.
CHAIRMAN are there any other speakers?
The Delegation of the United States.
Mr. J. M. LEDDY (United States) Mr. Chairman, I am, glad
this paper has been put forward by the Delegation of the United
Kingdom, because it provides us with an opportunity of making
it clear to this Committee .n;;t are in complete sympathy with
the objectives of this proposal and the principles on which it
is based. However, we are presented with what I consider to be
a purely practical difficulty; that at the moment we are, in
effect, three Governments. we have a Milatary Commander in
Japan; we have a Military Commander in Germany, and we have the
Government in Washington, and the Delegation here.
In order for us to agree with this particular form of words,
we would have to discuss it with all those parties. We are
entirely willing, and it is our intention, between now and the
time of the Havana Conference, to see what we can work out, par-
ticularly with the other Occupying Powers, on principles and
provisions along the lines of this draft, but at the moment we
are not in a position to be able to agree to put provisions of
this kind in the Trade Agreement or the Protocol of Provisional
Application.
If the Committee desires, we would be glad to have the act-
ing Chief of our Delegation provide the Committee with a written
statement as to the intentions, the ,general objectives, of our
Government. but I am afraid that, as to the inclusion of these
" L , -4--
S.
particular provisions in the Agreement itself, we should have
to have possibly several weeks before we would be able to say
what specific provisions we would be able to agree upon.
I therefore hope, that the Committee will be able to include
in theAgreement the provisions along the lines inserted in Docu-
ment E/PC/T/W/340, with this statement on behalf of my Delegation
as a part of the record of our discussions here.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. SHACKLE (United Kingdom) Mr. I would like to
thank the United States Delegate for his statement. I am wonder-
in whether the actual wording, suggested in this paper W/340,
Rev. 1 is not perhaps a rather unnecessary negative, ir. view
of what he has said. I have no very precise Elternative wording,
to suggest. The sort of thing I would think we might perhaps
wr-te in is as follows:-
"Pending further study of the question of the application
of the provisions of this Agreement in respect of the occupied
areas of Germany, Japan and Korea, those provisions will not
apply in respect of those zones. It is understood, however,
that such study will be undertaken as soon as possible.
And then we might possibly add this: "This object would be
facilitated by the attendance of representatives of the zones in
question at the World Conference on Trade and Employment, to which
they have been invited in the capacity of observers."
I do u : v know if something on those lines could be agreed
upon, but it seems to me it would not put such a negative com-
plexion on the matter as the present draft Note. - 5 -
S.
CHAIRMAN: The Delegate of Australia.
DR. COOMBS (Australia): Mr. Chairman, we have given a
good deal of thought to this question since the United States
Delegate explained the circumstances he wished to provide for in
putting forward this Note.
As a result of that thought, we have come to the same
conclusion as before; that is, that it is preferable not to have
any Note referring to this matter in the Agreement at all. Our
reasons for this are that we do believe. the determination of this
question is properly one for the Peace Treaties with the. countries
concerned, and, whilst we find ourselves in sympathy with the
purport, for instance, of the United Kingdom proposal: We recog
nize that it is not possible to ,adopt a principle of that sort
here. I believe it is a question which would be more properly
dealt with as part of the Peace Treaties settlement.
So far as the United States proposal itself is concerned.
it gives us some concern, because it would appear to give legal
sanction to any discriminatory practice which a contracting party
which is also an Occupying ? Power pleases to adopt in its trading
relations with the country which it occupies.
We are aware that a good many of the transactions conducted
between the Occupying Powers and the countries which they occupy
are of a relief character and we would not expect that trade would
be in any sense completely non-discriminatory, but there dces seem
to us to be a fairly important difference between recognizing the
realities of the situation in that way and, on the other hand,
setting up precisely an acceptance of the principle that the rules
of the Charter do not apply to them, and that is what this in
effect, does.
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discriminatory character of the sort of
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cannot conduct an occupation and trade wi
on the same sort of basis as with another
it seems to me that countries are not goi
about it unless they believe that what is
emergency character of the situation is b
does not seem to us to be unreasonable th
should be prepared to explain why and. in
are departing from the rules as la id down
are called upon to do so.
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it is clear that the agreement t does not
countries themselves, since they are not;
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imposes limitations on the contracting pa
Occpying Power.
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gations, in the interests of sensible admi
occupation, are not lilkely to be questioned,
hand, if there, is a major departure from non-
it is proper that they should be questio
be prepared to answer.
Therefore Mr. Chairman, we believe
is to make no reference to this question.
be settled in its proper place by the Peace
bring the occupied. country itself under the
E/PC/T/TAC/PV/24
is likely to question the
transactions which the
anybody knows that you
with an occupied country
another country. Therefore
going to raise difficulties
justified by the
being exceeded., and. it
that the Occupying Powers
vvhat circumstances they
in the Charter if they
reference to this at all,
apply to the occupied
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non-discriminatory rules,
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the best thing to do
That leaves it to
ce Treaties. It does not
es rules of the Agreement, -7-
E/PC/T/TAC/PV/24
and it leaves the contracting party at least subject to question-
ing and the obligation to explain, which I believe are proper
obligations for it to accept.
CHAIRMAN: Delegate of the United Kingdom.
MR. SHACKLE (United Kingdom):Mr. Chaiman, in regard to
Dr. Coombe' s statement, there is one observation I would like to
make and one question I should like to ask.
The observation is that we do not know how long it will be
before the Peace Treatment are concluded with Germany and Japan,
but I wouId apprechend it may be quite a long time.
The question I should like to ask is this: is it right to
assume that, because a, particular contracting part, which happens
to be an Occupying Power is a party to the General Agreement,
therefore any kind of obligation is incumbent on that party in
respect of the occupied zones? It seems to me that contracting
parties are parties in respect of their own territories and I
should have thought it.was an assumption of a ratner doubtful
character that any kind of obligation would extend to them, qua
Occupying power, in respect of the zones which they occupy, but
I should like to hear other views on that point.
DR. COOMBS (Australia): Mr. Chairman, in relation to the
two points which the United Kingdom Delegate has raised: his
first point was to express a doubt as to when the :Peace Treaties
will be concluded with these countries . It is clear that it is
at least doubtful when they will be concluded; because of that we
would not preclude a further study of this question and a possible
determination, of the principles which should be applied in the - 8 -
S. E/PC/T'/ TAC,/PV/24
interim at Havana, or elsewhere for that, matter. But that is not
the point we are dealing with.
What is proposed here is not a set of principles to cover
the relationships of Members who are also Occupying powers with
the countries which they occupy, but a statement that nothing
shall cover them. That is surely a very different point. To
have time to study and determine a set of rules to govern this
situation would be a different matter. That is not what we have
got. We have got a suggestion that it is understood there shall
be no obligations on contracting parties which are also Occupying
Powers.
The other point was whether a contracting party which is
also an Occupying power has any obligations because of partici-
pation in the Agreement It is clear that theu, obligations accepted
by participation in the Agreement are obligations towards other
contracting parties, but, as the United states Delegated pointed
out the other day, the function of being an Occupying power
apparently requires the contracting party concerned to engage
in State-trading activities, and also, because of the relief
character of a good many of their transactions, to discriminate
in those State-trading- activities at least in favour of the
country which they are occupying.
Clearly such discrimination in favour of one country means
discrimination against others; i.e., against other Members or
other contracting parties, and the nature of the Article dealing
with State-trading, I think, does preclude such diserimination,
or at least subjects it to control Therefore it does seem to me
it is possible, at any rate, for a contracting paty which is also
an occupying Power, to use that situation to the detriment of
the commercial interests of other contracting parties. - 9
S.
As I pointed out, however, We recognize that to some extent
that situation may be unavoidable. What we are reluctant to do,
however, is to give it the formal blessing of this Committee and
to place? the contracting party who is also an Occupying power in
the position of being beyond question in respect of such t: n-
aactions .
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E/PC/T/TAC/PV/24
CHAIRMAN: The Delegate of Norway.
MR. J. MELANDER (Norway) Mr. Chairman, this problem, is
of course, of a certain importance, not only to Norway but to
most other countries represented here, and it is clear, I thank,
that one might have some problems to solve as between those of the
contracting parties represented here which are Occupying Powers
and those which are not Ocupying Powers.
It seems to be that the principles underlying the United
Kingdom Draft ought to be the lines on which we ought to approach
this problem, and I very much appreciate the statement made by the
United States Delegate to the effect that the United States Dele-
gation would take steps to study this problem. On the other hand
I think that there is very much to be said for the Australian
standpoint: to accept now the text of the Note suggested. by the
United States in document W/340, Rev. I, should perhaps not be
quite suitable. That is rather too negative a solution.
In view of the fact that it seems to be improbable that
we shall be able to agree on a solution more or less on the lines
of the United Kingdom proposal, perhaps adjusted in view of the
studies made by the United States Delegation, I think, perhaps
that the best solution would be to drop this point and not to in-
clude any Note; here under this General Agreement, on the Under-
standing that in the meantime the parties to this General Agree-
ment, Particularly the United States Government, as mentioned
by the Unitd/States representative here would study the problem
further and that at a later date, perhaps at the Havana Conference,
one might consider what sort of a solution we ought to give to
this problem. - 11 -
P.E/PC/T/TAC/PV/24
I think it is a bit premature to try to Lay down any posi-
tive rules right now. The discussion which has taken place here
I think would make it clear that this Conference has not really
settled one way or Another these points and consequently I do not
think it ought to be to the prejudice of the interests of the United
States or other Occupying Powers that have nethin, in the Agree
ment on this subject.
CHAIRMAN: The Delegates of the United Kingdom.
MR. J. SHACKLE (United Kingdom): Mr. Chairman, my thought
has been moving on almost exactly the same lines as those Mr.
Melander has indicated. I am wondering if we really need have
any provision or statement to the effect that the provisions of
General agreement do not apply to these territories. On the
other hand, if we say anything - and it might be well to say
something - ight it not be to the effect that the Committee note
the statemente made on behalf of the Occupying Powers and hope
to give study to this question in the early future, adding,
possibly , with a view to its being brought up at the Havana
Conference. If we were to have a sentence of that kind, possibly
in the Final Note, I should think that it might meet the case.
I should not think that any serious position would arise in
regard to Article XXVI, the provisions regarding international
responsibility. I should not have thought that anyone would think
that those provisions were intended to apply to the position of
Occupying Powers in these Zones.
CHAIRMAN: The Delegats of Belgium,
M. Pierre :FORTHOMME: (Belgium): Mr. Chairman, as there seems
..' - 12 -
a considerable opinion here for having no mention whatever of this
question in this agreement , and as on the other hand we do realise
that some Delegations would like to have some mention made of' the
problem, I wonder if we should not remember that we are "con-
tracting parties". and contract the text of the american proposal
to its first sentence, dropping the second one "It is therefore
understood that until otherwise agreed.. "etc. and have the Final
"With regard to the status of areas under- military
occupation, it is anticipated that this question will
be given further study."
CHAIRMAN: The Delegate of the Netherlands,
M. G. A. LMSVELT (Netherlandas): Mr. Chairman, if you are
going to insert a Note as has been su,ggested by the Delegations
of the United Kingdom and the United States, my Delegation would
prefer the kind of positive statement which has been suggested
by Mr. Shackle. Its effect bust for the Netherlands, is that
in course of time the normal principles of trade would be applied
in the Occupied Zones. Trade with Germany has been of the greatest
importance always to the Netherlands. Befor the war, Germany and
the Netherlands were each other's best clients. So the fact that
trade has been abnormal now for over two years after the war is
of great detriment to the interests of the Netherlands,
But as it seems to be out of the question that a proposal
as suggested by the United Kingdom can be agreed to at this
momert by the Delegation of the United states, we have to fall
back on Mr. Leddy's suggestion: but if possible we would prefer
to have this note in a more positive forrm, not as negative as it - 13 -
P. E/PC/T/ TAC/PV/24
is in the form before us at the moment.
CHAIRMAN: The Delegate of China.
H. E. MR. WUNSZ KING (China): Mr. Chairrman, having listened
to so many statements, I seem to be able to agree with almost
all of those views,
To start with, as I :.i .. the other day, we have a good deal
of sympathy with the United States Delegation in regard to its
formula because I am personally incIined to the view - and I say
this is my personal view- that those Occupying Powers, having
assumed such heavy responsibilities, certainly expect to have a
certain amount of latitude, and freedom of action in handling
trade add other matters in so far as the occupied areas con-
cerned. But at the same time I am also incluned to think that
there is a very strong assumption in regard to this matter that.
in handling those matters Occupying Power also have the obli-
gation to -3 to it that the legitimate interests of other co
tries are not prejudiced thereby.
While it seems to me that we are more or less agreed that a
large number of aspects of these matters should be left to be
decided by the Peace Conference, it is also reasonable that there
should be some sort of interim arrangement; seeing that, as Mr.
Shackle has brightly pointed out, the holding of these Conferences
may still be a remove event. But I am wondering whether any of
my colleagues here have got the full powers from their Governments
to deal with those questions which are essentially questions of
peace settlement. I myself have not got the full. power in that
sense.
Of course it remains that there will be questions
:,:': -14 -
E/PC/T/TAC/PV/24
in regard to the handling of trade and economic matters in oc-
cupied areas and there must be some sort of a body for dealing
with those questions. Therefore, to answer one of the questions
put by the United Kingdom Delegate, I am wondering whether
the proper organ for the study and proper settlement of this
interim arrangement would not be, for instance, in the case of
Japan, the Far Eastern C ommission of Washintgton.
Well, I do not know what has been arranged or what is
being arranged in record to those matters as far as Germany is
concerned, but as for Japan I am quite sure that it is the Far
Eastern Commission in Washington that is the proper body to
deal with studying those questions political.
Even if there is no organ at all, there wold still be the
ordinary and normal diplomatic channel through which those ques-
tions can be dealt with.
I feel very strongly on this point, not, only because I my-
self have not got the full power to deal with those Questions,
but I feel sure there are those who are not represented here in
Geneva but who are interested in those questions. I do not have
to enumerate all those countries. I night mention, for instance,
Poland in the case of Germany, and the Republic of the Pilippines
in the case of Japan, and they are not represented here at all.
Of course they may have the position of observer here, but that is
not a fully authorized member.
And, after all, I am, wondering whether the Havana Conference
is the proper organ is some respects, because, in regard to this
matter, it is not only the economic aspects of the problems
which are important; there are also other considerations which
are very important considerations too. - 15 -
P. E/PC/'/TAC/PV/24
Well, as I say, I am not authorised to deal with them, but
since we are on the subject I might be permitted to mention only
one of those considerations: We all have symparthy with the
Occupying Powers, that they should be enabled to handle trade
matters in the occupie: areas in such a manner as to be able to
relieve some of the heavy burdens. Well we are all agreed on that
and we do not quarrel with any of the Occupying Powers on that
point, but it may also be that, that bein, so, they minght quite
unwittingly develop those ex-enemy Power in sich a way and to
such a point that they might in tne future, either the near
future or tne remote future, again constitute an economic menace
to all other countries. I am referring to this point only by
'way of illustration, because there are many otner considerations
which may be even more important than this particular point.
Now I am referring; to these points simply to illustrate
that we, all the Delegaions here, are n.ot authorisedr to deal with
these questions, and I am medering, whether when we go to Havana
we are authorised to do so or not. I have many doubts upon that
point So I think it would be better, in the opinion of the
Chinese Delegation, to have the whole matter drop.
As to the United Kingdom's tentative proposal, I have not
had timeto study it vary carefully, but a glance at it leads me
to believe that there is very much in it which is acceptable to
us, For instance, that the idea. of initiating procedure of con-
suitation is a helpful improvement on the United States text.
And there are other points which we Should like to have time
to examine more carefully. I am not at all sure whether, at the
time when Peace Treaties are drawn up, those countries which have
suffered in the hands of ex-enemies will or will not be prepared
to give reciprocal treatment to the goods coming from that direction - 16
E/PC/T/TAC/PV/24
I do not know, I have an open mind. But there are certainly
precedents in the past which suggest that , at least for a certain
number of years, the goods and merchandises of the origin of the
ex-enemy countries are not entitled to reciprocal treatment from
the ex-Allied Powers. I do not know. I have an open mind on that.
But we have to examine this point. And in view of the fact tnat
the United States Delegation needs considerable time to study the
United Kingdom proposal, I would suggest that the whole matter
be dropped.
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CHAIRMAN: The Delegate of Brazil .
Mr. E.L. RODRIGUES (Brazil): Mr. Chairman, the Brazilian
Delegation considers that the principles of the General Agreement
on Tariffs and Trade should be as far as possible applied to
the Occupied Zones. However, we feel that this question
deserves further consideration. Because of this we are in full
agreement with the final note suggested by the United States
Delegation
Mr.R.J. SHACKLE (United Kingdom) I wonder whether
possibly a statement for the record of this Committee would
suffice to cover the case. The statement I had in mind was
something like this: "This Committee recognised that the
question of applicability of the provisions of the General
Agreement in relation to the areas under military occupation
are outside its competence. It noted, however, that further study
was proposed to be given to this question and it welcomed that
statement",.
CHAIRMAN: Are there any comments on the most recent
proposal of Mr. Shackle?
The Delegate of the United States
Mr.J.M, LEDDY (United States): The principal difficulty
in regard to this tariff proposal is that it does not make clear
the point of the obligations the contracting party has with
respect to his trade with reas under military occupation.
That is, I think, probably the main problem at the moment. As I
made clear in my openin statement, we have welcomed the paper
put forward by the United Kin, ;,. we were sympathy with it
and we expected in the next weeks, between now and the Havana
Conferences to see what could be done about agreeing upon arrangement a
;
-' R.
in accordance with the principles of that Paper. We offored
to provide the Committee with - written statement alone that line
by the acting Heac. of the Delegation. As a Matter of fact, this
poblom is, not outside the competence of this Committee. It just
so happens, unfortunately, that we are not prepared at the moment
to commit the Government to a particular set of words because
of the time factor, and the time factor alone. We have to
to through three separate sets of administrative machinery, and
it is-not our inability to recommend a particular set of words to
the Government it is our inability to get reply in time to
enable us to sign the Agreement by October 15. That is
essentially the main difficulty. As I explained, we have a
Military Commander in Tokyo who is advised by a group of several
Governments, and we have a Military Commandor in Berlin who has
relations with other Occupied Zones, and it is partly a question
of red tape.. For that reason, We should prefer to have an
interpretative note in the Agreement. This is, after all, an
intepretative note which would indicate that the provisions did
not bind a contracting party in respect of its trade in such
areas, but I realise that this note itself has an excessively
nagative apppearance. Perhaps that might be changed in some way,
but we do feel that some sort of a note along these lines would
facilitate a solution of the problem.
Now Dr. Coombs has suggested that there should be no blanket
exception. I suggest there is no blanket exception in this
Agreement at aII. All the exceptions are subject to challenge
under the Nullification and Impairment procedure, and if a
country considers that the poliUies applied by the United State
in its trade with an occupied area are impairing or nullifying
the benefit of trade provisions must apply. E/PC/T/TAC /PV/24
19
Now, in order to make that clear, I would suggest that the
second sentence might read this way: "It is understood that,
until otherwise agreed, the provisions of this Agreement shall
not require its application to any area or any part thereof, etc.
etc."
CHAIRMAN: The Delegate of Australia,
Dr.H.C. COOMBS (Australia): Mr. Chairman, I feel that the
statement that the United States Delegate has made does not
establish the position he suggest. that it does. He says thetr is
nothing in this Note that would prevent a country exercising its
rights under the Complaint procedure, but in the face of such a
complaint it is pointed out that the complaining party has agreed
that it is understood that the provisions of this Agreement shall
not require tell application or shall not bind any contracting party
with respect to its trade, with such areas. That, surely, is a
serious weakness in any right of complaint? We would suggest
that to make the position quite clear - if the United States
Delegate thinks that it is impossible to drop this note or any
reference to it - if he does feel so strongly about it, that we,
add at the end further statement that any contrcting party
which is also an occupying authority will confer with any other
contracting party who believes that its interests are adversely
affected by any action taken by the contracting party who is also
an occupying power which he believes to be in conflict with the
obligations of that contracting party under this Agreement, with
a view to satisfactory agreement.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): We have tried for the
last six months to convinca the United States Delegation of the
-
, t-. R. E/PC/T/TAC/PV/24
20
difficulties which always arose, from having too rigid an attitude
and too rigid provisions, and therefore we are somewhat amused now
to see that the United States Delegation has been caught at its
own game and that now, in respect to its trade with its occupied
zone, it has, in fact, to go against the provisions of the Charter
and the provisions of the General Agreement it is difficult to
lay down too rigid provisions in the General Agreement to take caro
of all the situations which are now prevailing in the world.
Therefore, I think that we have to consider the case of the occupied
zone with the greatest modesty and just state that they cannot fit
in the general framework of the Charter and of the General Agreement.
As regards the French Delegation, we would like to a C that
France could not commit itself to the undertakings defined in the
United States proposal, and this is not from ill-will on the part
of the French Delegation, but is dues to the simple fact that we
are unable to state whether the commercial operations carried out
with our Zone are carried out in accordance with or against the
provisions of the Charter and of the General Agreement. Therefore,
it, seems to me that there are only two alternatives, either to
for
insert a note to explain that the words "territories/which they
have international responsibility do not apply to the military
Zones of Occupation, or to adopt the solution proposed by the United
States Delegation and say that this situation regarding the cas'e of
the military zones of occupation is outside the scope of this
Agreement for the time being.
Nevertheless, I think that regarding the notes presented by
Dr. Coombs should like to state that this "Agreement is only an
Agreement which will be ' applied provisionally, and that once we know
what has come out of the Charter at the Havana Conference we may be
able to study his question again; but it would be wrong for the
time being to comrnmit the Contracting Parties further than is necessary,
that is to say, that it would be wrong to commit them regarding
territories for which they are not supposed to have international
responsibility, and this would be prejudging this issue.
:
. . S. 21 E/PC/T/TAC/ PV/24
CHAIRMAN: The Delegate of Belgium
M. FORTHOMME (Belgium): Mr. Chairman, it seems to me that
we are getting nowhere on agreement at all on any kind of text
which really has even a shade of meaning. I would therefore
second the suggestion which the French Delegate made in the Last
part of his speech, which is somewhat on the lines of what I
suggested before: just to put in a note which will take up the
reason why the United States Delegation thinks the question should
not be treated here; that is, the time question, and simply say
the question is reserved for further study. Full . I think
that is the only thing we shall be able to agree upon.
CHAIRMAN: The Delegate of the United States.
MR. J.M.LEDDY (United States): Mr. Chairman, it is entirely
because of the softening influence of the French Delegation that
we have agreed to make a provision whereby France and other countries
which have balance-of-payments restrictions can discriminate against
any country for a period of years.
With respect to the suggestion of the Delegate of Australia,
that the nullification or impairment clause would not apply; in
the event that this Note were included in the Agreement, I should
like to read the clause aloud:-
"If any contracting party should consider that any benefit
accruing to it directly or indirectly' under this Agreement is
being nullified or impaired or any objective of the Agreement is
'being impeded as the result of the application by another contracting
party of any measure, whether or not it conflicts with the provisions
of this Agreement; or the existence of any other situation, the
contracting party may, with a view to the satisfactory adjustment
of the matter, make written representations or proposals to the
other contracting party or parties which it considers to be
concerned. Any contracting party thus approached shall give S. 22 E/PC/T/TAC/PV/24
sympathetic consideration to there resentations or proposals made
to it."
I think that certainly takes care of the consultation point.
It is not that we disagree in any way with the idea that the
principles of the Charter or the principles of this Agreement should
govern either the policies of the occupied areas or the policies of
the United States with respect to their trade with such areas. It
is simply a question of time as to the determination of the particular
from that particular obligation should take, and we have put our
proposal forward purely as a stop-gap proposal pending the settlement
the question.
The difficulty I have with the formula proposed here is that
it does not make clear that the trade regulations of the occupied
areas and the trade regulations of the Occupying Powers with respect
to those areas are, in fact, outside the binding obligations of the
Agreement. This does not, however, prejudice the generality of the
application of the nullification or impairment clause, except a
specific statement that the nullification and impairment clause
would not apply.
We are perfectly willing - in fact, we are anxious - to seek
some satisfactory arrangement of this question within the next
seven weeks, given the time to do so.
CHAIRMAN: The Delegate of China.
H.E. Mr WUNSZ KING (China) Mr. Chairman, whilst I still
firmly believe it would be wise to drop the whole thing, I would
support the views expressed by Dr. Coombs, that, in case the United
States Delegation is keen on the insertion of such a Note, a
specific provision should also be inserted by which the interests
of the other contracting parties would be amply safeguarded.. But
this connection I cannot over-emphasize the point that if any
interim arrangement of this matter is to be made at all, it should
be made, quite clear that this is to be done without prejudice
~~~~~~~~ ;~~~~~~~~~~~~~~~~~~~~~~~~~~~. S.
whatsoever to the attitude which all the contracting parties will
take at the time of the Peace settlements.
However, in view of the serious divergencies of views, and in
view of the fact that a number of tentative proposals have been and
are being made, it seems to me that Oriental wisdom would still
dictate that the whole thing might be dropped.
CHAIRMAN: The Delegate of Australia.
Dr. H.C. COOMBS (Australia): Mr. Chairman, I quite agree with
the United States Delegate that nothing can take away the rights of
complaint and consultation which are given to the contracting parties
in the clause which he read to the Meeting, but I would point out
to the United States Delegate that that clause, as it stands, would
give the United States the right to complain to Australia if, by
imposing quantitative restrictions during a period of acute balance-
of-payments problems, it adversely affected the interests of the
United States.
We would not question the right of the United States to make
such a complaint, nor our obligation to consult with them on it.
But it would appear to us to be a very significant factor in that
consultation point that what we were doing was specifically provided
for in the agreement. We would not say that would be the end of the
discussion. But if the United States made a complaint that we were
doing something which was inconsistent with the Charter, then we
believe that would be on quite a different plane.
Our objection there is that, instead of leaving this matter to
be dealt with by the right of complaint and consultation, as provided
for in the Agreement, when the Occupying Power could give such
explanation as justified the action it had taken, what is proposed is
to make specific provision excluding these things from the operation
of the Agreement. In such a situation, if we complain to the
United States that the Occupying Power in Japan or Germany is doing
something which is contrary to our interests, we are putting them in
. * ......A...5.A....6.. ... ... ...
- 94
- I_-.r -m -m r1 / 11 24 -
precisely the same position as we ourselves would be if we received
a complaint that something we had done to protect our balance-of-
payments, consistent with the Provisions of the Charter, was
detrimental to their interests. It does seem to me it substantially
changes the situation.
We would suggest, if the United Stages Delegate has so much
confidence in this complaint procedure, that he relies upon it, that
he relies upon his rights of explanation under it to deal with any
- problem which may arise between his country and any other country in
connection with the status of his country as an Occapying Power.
As he suggests it is only a question of weeks before we have this
thing settled, why is it necessary, for so short a time, so
specifically to cover possible departures from the terms of the
Agreement?
We would prefer, as I say, to leave the thing out altogether,
so that countries who feel themselves aggrieved have the right to
complain and the countriesagainst whom they feel they have a complaint
have an obligation to explain. However, we were prepared to make
what seemed to me a pretty substantial concession when we actually
put in a statement that this agreement will not apply to these
circumstances, but we want now specifically to refer to the right
of other people to complain and to have an explanation.
From our point of view, that is definitely better than to have
to rely upon the normal complaint procedure in the Agreement when
that right would be so substantially reduced by the existence of this
Note. If we put the consultation right in, together with the Note,
then, in our opinion, it does at least indicate that in the opinion
of the Committee the exemption of the Occupying Power from the
obligations which it accepts under this Agreement in this respect is
qualified by any obligation to listen to complaints and to offer
explanations.
I do not feel, Mr. Chairman, that I would be in a position
to agree to anything beyond that so far as my Government is
concerned.
E/PC/T/TAC/PV/24RX - 25 - E/PC/T/TAC/PV/24
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I have made
one further attempt to find a formula which would reconcile the
different views. It would run like this: "It is recognized that
in present circumstances the provisions of the General Agreement
are not capable of full application to the trade of the contracting
parties with the areas under military occupation. This question is
reserved for further study without prejudice to the applicability of
Articles XXII and XXIII in this matter." (Article XXII, of course,
is Consultation; Article XXIII is Nullification and Impairment).
I wonder if that might possibly meet the various views.
I would call attention to the point that"trade of the contracting
parties with the areas" would cover trade between the contracting
parties and, as we say, the occupied zone. The expression is
usually "the trade of the contracting parties with the zones."
CHAIRMAN: The Delegate of the United States.
Mr. J.M..LEDDY (United States): We would be willing to try
. out something like that on our people.
Dr. H.C. COOMBS (Australia): I would, too.
CHAIRMAN: Are there any other comments on the proposal of the
Delegate of the United Kingdom?
Dr. G.A LAMSVELT (Netherlands): Mr. Chairman, would you
perhaps read the text again.
CHAIRMAN: "It is recognized, in present circumstances, that
the provisions of the General Agreement on Tarifrs and Trade are not
capable of full application to the trade of the contracting parties
with the areas under military occupation. This question is reserved
for further study without prejudice to the application of Articles
XXII and XXIII in this matter."
The Delegate of China. - 26 -
H. E. Mr. WUNSZ KING (China) This formula is acceptable to
the Chinese Delegation on the assumption that "further study"
includes study and examination by the Peace Conference of peace
Conferences.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I should
have to consult our authorities in Paris before being able to
approve this text.
CHAIRMAN: The Secretariat will prepare this text and have it
distributed in mimeographed form during the course of this Meeting.
Then I propose we leave the matter in abeyance until the Delegations
which are most concerned let us know what the status of the proposal
is, in which case we could take the matter up again at a subsequent
meeting.
The next item on our Agenda consists of the Annexes to the
General Agreement on Tariffs and Trade. We have not yet been
through the Annexes. There are a number of points surrounded by
square brackets and it is important that we should give final
approval to these Annexes.
these Annexes. 6
The Annexes will be found on page 66 et seq. of document T/196.
Annex A - List of Territories referred to in paragraph 2 (a)
of Article I. Are there any comments on the List of Territories?
The Delegate of France.
M. ROYER (France (Interpretation): Mr. Chairman, I wonder if,
as we had envisaged it at one time, it would not be preferable,
instead of stating here in annex "India (as at 10 April 1947)"
to put "India and Pakistan." I would like to have the opinion of
the Indian Delegate on this subject.
CHIIR-fN: The Delegate of India.
MrA B.N. ADARK;R (Indii)m: Mr. Chalr.an, our object in insertin.
theas words: "(ap at 10 April 1947)" waseto setuon rooognibiur' fur
the preferences existing between the Unitedthengdo haon -'. one 'nd
and India and Pakistan on the other. Since India now has a
E/PC4T/TAC/. V/2-'
s . different meaning from India on the 10 April 1947, it seems
necessary to retain this expression "as at 10 April 1947."
Otherwise the preferences existing between the United kingdom and
pakistan may not be recognized.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J. SHACHLE (United Kingdom): Mr. Chairman, I do not
-Know that there is really any great substance in this point, but
I think it is more correct to refer to India as at 10 April 1947,
because this is a definition of an area preferential system
which existed at the date when these negotiations were undertaken.
As a definition of that area this is perfectly correct and I do
not think we need to take account of the subsequent changes. I
do not think that actually to write in "India and Pakistan" would
make any substantive difference, because all the areas set out in
this Annex would be covered in either case, I think.
I would consider the object of this Annex is to define the
area and I still feel that to refer to the position just as it was
at the start of the negotiations is perhaps the correct way.
CHAIRMAN: Does the Delegate of France maintain his suggestion?
M. ROYER (France): No, Mr. Chairman.
CHAIRMAN: Are there any other comments on the List of
Territories?
Are there any comments on the next paragraph?
Are there any comments on the third paragraph, on Page 66?
In the last paragraph but one, the words "and hams" are
n square brackets.
L~;n
E/PC/T/TAC/PV/24
9 28
P.
E/PC/T/TAC/PV/24
MR. R. J. SHACKLE (United Kingdom); I think before we can
take out our instruments and remove the square brackets we ahall
have to await the conclusion of the Tariff Negotiations as between
the United States and the United Kingdom. That is my impression
I think at the moment the square brackets should stand, but shall
be removed as soon as those negotiations are completed.
CHAIRMAN: So the Legal Drafting Committee will have to study
the square brackets. Any other comments on that paragraph?
The last paragraph of this Annex. There we have an alterna
tive text in square brackets. The Committee will have to decide
which of the two texts they wish to have for this sentence.
I am sorry: the square brackets should be removed if we agree
with this last sentence. Are there any objections to the removal
of the square brackets?
MR. J. P. D. JOHNSEN (New Zealand): Just one point, Mr.
Chairman. That reference to Article I may requre amendment.
CHAIRMAN: Yes. The Legal Drafting Committee will look
after these Article numbers.
Are there, any objections to the removal of the square brack
ets?
Agreed.
Annex B. Any comments?
Agreed.
Annex C. Any comments?
.Agreed.
Annex D. Any comments?
MR. J. M. LEDDY (United States) Mr. Chairman , this para-
graph allows the replacement of the inernal tax preference by a 29
P. E/PC/T/TAC/PV/24
tariff preference and, so far as we are concerned, we would be
able to do that when we accept the Afreement but not during its
provisional application. I do not quite know, what the legal
position of this paragraph is in the Agreement and we should just
like to take one more look at it before passing it finally.
CHAIRMAN: I hope the Delegation of the United States will
be able to accept this Annex on third reading.
M. ROYER (Freance) (Interpretation): Mr. Chairman, it seems
that there is a mistake in the French text. "(Territoires
douaniers)" in the French appears in the plural, but "(customs
territory)" in the Englizh text is in the singular.
. . CHAIRMAN: The singular, I take it, is correct.
Annex E. Any comments?
Agreed.
Annex F. Any comments?
Agreed .
Annex G. Here we have square brackets round the words
"Australia 15 October 1946". Can those square brackets be removed?
MR. C. E. MORTON (Australia): I have no opinion, Mr. Chair-
man, but I should hope to know a little later in the afternoon.
C HAIRMAN:Thank you. There are similar square brackets
round "Syro-Lebanese Customs Union 30 November, 1939". Would the
. Syro-Lebanese Delegates tell us if we can remove those square
brackets .
MR. J.MIKAOUI (Lebanon) (Interpretation) Mr. Chairman,
if you will allow, us, my Syrian colleague and myself will let you
know ,later on.,
. . . . . .' .
.
jt
[ 30
P.
E/P'C/T/TAC/P V/24
M. ROYER (France) (Interpretation) :Mr. Chairman, I would
like, to know how the Customs Union of S and Lebanon wished
to be referred to. In ne case it is referred to as Syro/Lebanese
Customs Union and in another case as Lebanon and Syria Customs Union.
In French the official name will be "l'Union Douaniere libano-
syrienne." That is Lebanese/Syrim Customs Union.
MR. J. MIKAOUI (Lebanon) - no interpretation.
CHAIRMAN: Is the Chairman of the Drafting Committee quite
clear on that?
M. ROYER (France) (Interpretation): Yes, I am quite clear.
CHAIRMAN: Then there are square brackets round "Southern
Rhodesia 1 May 1941".
M.R. J. SHACKLE (United Kingdom) Mr. Chairman, there
again I am afraid I must enquire, but I will do it as promptly
as possible.
CHAIRMAN: I therefore suggest that we take up Annex G later
on in the afternoon after the Delegates have made their enquiries.
Then the last thing is Annex H. Will the representative of
India tell us how we should divide the percentage 3.3 which is now
given to India. and Pakistan together, in order to show separate
percentages for those two countries in case one should accept the
Agreement before the other?
Mr B. N. ADARKAR ( India): Mr. Chairman, we are afraid it
will be practically impossible to provide information on this
point while we are here. If the Committee would agree we would
try to work out these percentages, but it seems very doubtful
...
::;
. 31
whether w
India, be
is very in
in a few,
will be to
E/PC/T/TAC/PV/24
e shall have the necessary material for the purpose even in
cause the record of the trade between India and Pakistan
complete indeed. Treir internal trade was recorded only
items. In the circumstances, all that will be possible
make an estimate, and I am afraid that will take time.
CHAIRMAN: I fully appreciate the difficulties involved, but
it will be necessary for us to establish two separate percentages
before the Final Act is signed. It is quite appreciated that
these two percentagies cannot be exact, but I would ask the Dele-
gate of India if his Delegation could not consult with the re-
presentatives of Pakistan with a view to dividing this percent age
of 3.3 in a manner which would roughly correspond to the actual
facts of the trade of the two countries and be acceptable both
to India and to Pakistan. That would enable us to put in this
table the two percentages which are necessary if we are to give
effect to the provision of the Agreement for its coming into force
Would that be possible?
MR.
best.
Annex H?
B. N. ADARKAR (India):Mr. Chairman, we shall do our
CHAIRMAN: Are there any other comments with regard to
M. ROYER (France) (Interpretation): Mr. Chairman, I would
like to make two comments. It seems that these figures have been
Calculated on the value of trade and not on the volurme of trade,
and therefore we ought to state it in the heading.
Secondly, I see that Benelux is referred to here as one
unit. I do not know if this is correct already regarding. the
Agreement and it is possible that these three countries might wish
P. P.
to ratify the Agreement separately. Therefore I wonder if it
would not be better to divide these three countries.
Furthermore I see that Frence is referred to as "France"
here and it would be best to refer to France. as "The French
Union" because the figures given here relate to the French Unich.
CHAIRMAN: The Delegate of Belgium.
M. Pierre FORTHOMME (Belgium): It is perfectly true that
Belgium the Netherlands, Luxemburg and emburg are not an economic union.
On the other hand, as this figure relates, not only to the trade
of Belgium, Luxemburg and the Netherlands, but also to the ever-
seas territories of those economic entities; I do not see any ad-
. vantage in splitting it up. Furthermore we should not split it
up because provisional application of this Agreement would coincide
with the putting into force of the Benelux Tariff and it will be
apparently necessary for all the members of Benelux to size the
Protocol of Provisional Application at the same time in order to
give effect to the obligation to put it into force provisionally,
Therefore I suggest we might change this wording simply to "'Belgium,
Netherlands, Luxemburg and overseas territories depending from
these countries or something like that.
CHAIRMAN: Overaces terrivories are covered by the Note which
appears at the and of this paper. That Note was put in in order to
avoid having to repeat "and dependent territories" in each case.
I am wondering if it perhaps might not be better in the case of
. Benelux to use the words "Customs Union" and say "Belgium, Nether-
lands and Luxemburg Custome Union".
DR. LAMSVELT (Netserlands): Mr. Chairman, overseas countries
are not members of the Customs Union. It is not yet in being.
s P.
It is going to develop into a Customs Union, and overseas terri-
tories are not in it.
CHAIRMAM: Then perhaps it would be simpler to say "Belgium,
Netherlands, Luxemburg." Is that agreed?
DR. LAMSVELT (Netherlands): I agree. Mr. Chairman,
CHAIRMAN: The Delegate of Czechoslovakia.
MR. C. COUFAL (Czechoslovakia): Mr. Chairman, I should like
to make two remarks on this Annex H.
I presume that in the headings reference should be made to
article XXVI and not to articlee XXIV.
Also with regard to the percentage given opposite the name of
Czechoslovakia, I should like to state that during 1938 a part of
Czechoslovakia was already accupied by Germany and consequently the
percentage would have been greater had it not been so. But we
will leave it at that.
C HAIRMAN:we are quite aware of the circumstances to which
the Delegate for Czechoslovakia has called attention, but I am
very glad that he has been able to accept the figure given here.
This table of course is for only one purpose, that is for giving
effect to the entry into force and to Article XXVI and therefore
these percentages have not such very great significance beyond
that.
MR.C. COUFAL (Czechoslovakia): We realise that, Mr. Chairman
CHAIRMAN: The Delegat of India.
MR. B. N.ADARKAR (India) Mr. Chairman, it would help us
considerably in working out these percentages if we could have it
agreed in this Committee provided it is acceptable to India and E/PC/T/TAC/PV/24
to Pakistan, that for the purpose of cal culating these percentages,
the regional trade between India and pakistan should be ignored;
because if the trade between India and Pakistan is to be taken
into account, that will affeet the total of world trade possibly
and it might make some fractional difference in the other per-
centages. So, if it is acceptable to India and to Pakistan, the
Committee might agree to ignore for this, limited purpose the
regional trade of India and Pakistan.
CHAIRMAN: It was of cource our understanding, that the trade
between India and Pakistan would not be taken into account be-
cause India and Pakistan wore not in existence in the periods on
which these figures were based. The only suggestion which the
Tariff Negotiations Working Party thought of in connection with
this percentage 3.3 is that it should not be in any way increased,
because that would upset the whole table, but that India and Pakis-
tan should agree amongat themselves on the basis of dividing this
percentage of 3.3 between the two territories, so that if one
country accepts The Agreement before the other, we will know which
.figure to use. So it is simply a case of deciding on what propor-
tion of the 3.3 should be allotted to India and what proportion
of the 3.3 should be allotted to Pakistan. Of necessity it will
have to be very rough, in the circumstances, but we think the
most competent persons to do this are the two countries concerned.
Are there any other comments?
MR. C. E. MORTON (Australia) Mr. Chairman, reverting to
Annex G. Australia is agreeable that the square brackets should be
removedd from the name of my country and the date 15 October 1946,
as in the event of Australia accepting this Agreement, that will
at t.cc bepti s
be the date operating as the~ basG- . tc .
P. 35
P. E/PC/T/TAC/PV/24
~~~~~~
A~ .Ihan: To: k ycu the S L4',6yri n ena' Lobzelega-l-;
tions also onfurm us dugin_e hE. cserof thIthe afternoon as to
thcir date?
We have aadyeex E:aednt Ar6i:.during h tie course of second
reading, sodo not think it necessary for us to go over Annex I
ie dctail.
The eelogate ofaBr-zil.
R. E. L. RODIGUES (Brazil)Mr. Chairman, we have re4to;........... rL-
corded a rhservat Article heparagraph __ , 7l-I. 5 (b),
n wt did not mai>tain Article Xvatparagn .1 IV ,,..-raph
5 ghb) becawse we thou.t, and ve still have the same opinion, that
the later ipricle would he sh ,rseded by tLn C arter as amended
n w we have in Annex on p ge - m2 . iXa 5t 67 of document
T/1w6, a reearenc" he pichi rc ds: hT referential arrangements
p referred to in ?AragraphX 5 are those icle lV ge t.oQ existin,
in the 1h Ael Kingdom on 10 -pril 1947, undee contractual agr,-
eents with tCanada, Austia of U.nlaNewu_ l lia& ard Zealand,
in resdect of cnilled anu frozen beef and veal, frozen mutton and
lamb, chiperk, and frozen .c lc and bacon." AI.feel that this _nnex
could Art stand if paea t-ticle XIV wogrdph 5 (u) ulC be super-
rterdedr ftedhe C UHa ir i in amvnna. i3 f I n rot correct,
then I have to maintain in the agreement the same reservation
which weemade on the C_artAc. tI wasthat ing ,oe -o do 2:. in ordor
to avoid difficulties for the Agreement, and b.cause I felt there
was ro gecessity for doin, so; but if Ahis reference in nnnex A
can chenge the situation, I feel I have to maintain the reservation
even to this .reement. P. E/PC/T/TAC/PV/24
CHAIRMAN: I thought the question of reservations had been
cleared up, and I intended to make a reference to it at the con-
clusion of this meeting. But I am wondering if the point just
mentioned by the Delegate of Brazil is not covered by the tenta-
tiva decision which we took yesterday, that Article I should now
be made a part of part II,which is the Part which will be super-
seded by the provisions of the Charter.Annex is referred to in
paragraph 2 ( a) of Article I and is therefore to be considered an
integral part of Article I and therefore if it is included in part
II of the Agreement it would be subject to the Supersession pre-
visions of the Agreement.
MR. E. L. RODRIGUES (Brazil): Mr. Chairman, this was, of
course, my interpretation, and because of this we had, not main-
tained our reservation to Article XIV paragraph 5 (b). But I
should like to be sure, and after your words I think I can take
it for granted that both references, the reference to Annex A in
paragraph 2 (a) of Article I and the reference to paragraph 5
(b) of Article XIV in Annex on page 67, will not mean that this
Annex A would be something which would not be affected by this
supersession by the Charter.
CHAIRMAM: Mr. Leddy.
MR. J. M. LEDDY (United States) Mr. Chairman, I think the
difficulty of the Delegate of Brazil is taken ; u.. rc, of, regardless
of the disposition of Article I in this Agreement, because if the
Charter should prohibit the preferential arrangements in question
they have to be dropped regardless of what is in the Agreement.
So I think it is quite clear that, wherever it goes, this provision
is fully safeguarded in respect of that provision in the Charter
which will come up for consideration by the Havana Conference. P. E/PC/T/TAC/PV/24
I do have a couple of small points on Annex H which I
l like to bring up. They are just small points:- the reference to
"the Territories of the Signatory Governments to the General
agreement on Tariffs and Trade" should be a reference to "the,
Governments Signatory to the Final Act" Secondly I think it would
be better if, instead of referring to the latest twelve months for
which figures are available, the Secretariat could irsert the
monthe concerned - I mean the particular, year. Would that be
Possible?
CHAIRMAN: Mr. Leddy is quite correct in pointing out that
"the General Agreement on Tariffs and Trade" should be replaced
by "the Final Act". I take it that is agreed by the Committee.
With regard to the other point, my information is that the
Secretariat have not always used the same twelve months in working
out these percentages. That is, they took the average of the
year1938, and the latest twelve; months for which they had figures
available, In the case of some countries the twelve months were
a more recent twelve months than in the case of others, because
later figures were available. So that it would be difficult to
. .
., E/PC /T/TAC /PV/24
CHAIRMAN: Are there any other comments on the text?
I think we should now take a final look at the Preamble to
the General Agreement of Tariffs and Trade, because there may
be points in the Preamble on which Members of the Committee wish
to make some changes.
Paragraph 1 of the Preamble - which is given on page 3
of Document E/PC/T/196.
Mr. R.J. SHACKLE (United Kingdom): There are the square
brackets.
CHAIRMAN: Naturally the square brackets around Burma,
Ceylon and Southern Rhodesia will be deleted.
Dr. G.A. LAMSVELT (Netherlands): Could we insert the
word "The" before- "Kingdom of the Netherlands".
CHAIRMAN: That has already been done. It was a typing
error.
Are there any other comments? paragraph 1 is agreed.
Paragraph 2. Are there any comments?
Agreed.
Paragraph 3. Are there any comments?
Agreed.
paragraph 4. Are there any comments?
Agreed.
We now come to the Report on the sub-Committee on the
relationship of specific duties to depreciated currencies. The
sub-Committee has prepared a draft text of a note in the appropriate
Schedules and also the text of a paragraph in article II for the
Committee if it is decided that such a provision should be
Incorporated in the Agreement. I will call upon Mr. Morton,
Chairman of the sub-Committee, to explain the proposals of the
:sub-Committee. E/PC /T/TAC/PV/24
Mr. C.E. MORTON (Australia): Mr. Chairman, as instructed
by the Tariff Agreement Committee at its Twenty-third Meeting,
the sub-Committee on Schedules met this morning to draft a text
of a model note which could be used in Schedules to cover any
adjustment of specific duties and charges rendered . ces ary
pursuant to a depreciation in a country's currency.
The Members of this sub-Committee were the representatives
of Australia, Belgium, Canada, Czechoslovakia, France, the
United Kingdom and the United States of America.
The Committee reached agreement on the text which has now
been circulated in document E/PC/T/208.
It will be noted that the Committee has not only drafted
a model note which might appear in individual Schedules in
those cases in which a contracting party considered it appropriate,
but has also drafted, along the same lines, a text which might
be incorporated in Article II if it were to be considered that
provisions relating to this matter should appear in the General
Agreement, rather than in individual Schedules. The sub-Committee
felt that it was for the Committee to determine Whether these
provisions should appear in one place or in the other. It
appeared that the choice between inclusion in the General Agreement
itself, and insertion in the individual Schedules could be .,.....
only when it was known whether such a provision was considered.
necessary in a few Schedules or in a considerable number. In
the latter event, the Tariff Agreement Committee might consider
it desirable to include the provision in the text of Article II
itself in order to generalise what might be considered to be a
concession or minor escape clause, The suggestion was made in the
sub-committee that, during the discussion of this matter this
af t e rnoon, an attempt might be made to ascertain how many Delegations
considered such a provision necessary in their Schedules, In the
- .
R .
39 40 E/PC/T/TAC/PV/24
light of this information, the Committee would be in a better
position to decide where a provision of this nature should be
located.
In connection with the text proposed for possible inclusion
in the appropriate Schedules, the question arose vihether the
text as now drafted covers satisfactorily the case of any country
participating in the present negetiations which is not a Member
of the International Monetary Fund, and which has, in its
Customs Tariff, a sufficient number of specific rates of duty
to warrant an interest on its part in such a provision It was
felt that the case of such a country would have to be covered in
some other manner than by the inclusion of the present note
and that a special provision would have to be made in each such
ease which would take account of the statue of that country's
. present and prospective exchange rate It is believed that
the number of such countries does not exceed one.
In connection with this model note, it will to noted that
the words '"Contracting Parties" are capitalied and that
accordingly the concurrence regarding adjustment which is envisaged
Would require a simple majority vote as indicated by Article XXV.
Concerning the text suggested for possiblc inclusion in
the General Agreement itself, in the event that provision of
this sort is considered necessary for a great number of Schedules,
necessary drafting modifications have been made to generalise
its application.,
a paragraph has beoen added to cover the position in which
Contracting parties not members of the International Monetary
Fund Would be placed after special exchange agreements have been
made. A similar provision was not required in the model note
since that note relates to the results of the present negotiations
Which will have been completed before any special exchange
agreements are negotiated. R. 41 E/PC/T/TAC/PV/24
CRAIRMAN: I want to thank Mr. Morton for the explanation
he has given of the recommendations of the sub-Committee. Before
opening the general discussion on these recommendations, I think
it would facilitate the discussion if we first of all acted on the
suggestion of Mr. Morton and ascertained which countries would
desire to have a note of this kind in their Schedule. I therefore
propose to call a roll call of the signatories to the Final Act,
and I would ask each country which desires to have a note of this
kind the Schedule to answer "yes" and these which do not desire
to have a note of this kind to answer "no".
Australia - Yes
Belgium, Luxemburg, Netherlands - Yes
Brazil - Yes
Burma, - Yes
- Canada _ Yes
Caylon - Not present
Chile - Yes
China- - No
Cuba , Abstain
Czechoslovakia Yes
France - Yes
Lebanon and Syria - Yes
India - Yes
Pakistan - probably yes
New Zealand - It would depend on what specific
items might be in our Schedule,
Probably no
South -Africa - No.
. United States - I was afraid of this, Mr.Chairman.
We have no interest in putting it
in Dur Schedule to protect the
incidenoe of the duties.
United Kingdom _ I think I had better say yes,
ad referendum.
.-'. . '- . '-- R. 4
CHAIRMAN: I think it is easier if I read out the
of the Delegations that said they did not require a note
name
of this
kind in their appropriate Schedule - China, New Zealand, subject
to reservation, South Africa and the United States.
The discussion is now open on the recommendation of the
sub-Committee.
CHAIRMAN: The Delegate of the United States.
Mr.J.M. LEDDY (United States): I think in view of this
that as every country seems to want a note to this Schedule,there
a is no point in repeating it. It most of the countries feel that
. . they must have the note, we must have it, of course.
Therefore, I think that we might just as well begin by
discussing the General Note for inclusion in the Agreement rather
than the model note for the Schedule. In view of the fact that
it will apply to every country we must have an opportunity to
discuss the question of their relation to the Schedule with each
of the negotiating teams. I do not think they will have much
difficulty in that.
CHAIRMAN: I think that the Committee is in accord with
the conclusions which Mr. Leddy has derived from the expression
of views of the Delegations as to whether or not they want a note
in their Schedule, and therefore we can take up the second part
of the proposal of the sub-Committee. It relates to a text for
a incorporation in the Agreement as part of Article II.
Are there any comments?
Mr. E.L. RODRIGUES (Brazil): Mr. Chairman I am prepared to
~~~~~~~~~~~~~~~~1 * e i
accept this list as a compromise, but I should like to suggest a
slight change in regard to the second line on page 2. Instead
o. "accepted" I should like the word "recommend"? It is understood
E/ C/T/Tlj.(V/94
42 43
E/PC /T/TAC/PV/24
that the specific duties and charges included in the Schedules
are expressed in the appropriate currency at par value as
recognised by the International Monetary Fund at the date of this
Agreement. The reason for that is that Brazil has not a
definitive par value, having a provisional one. Within a few
months perhaps we will have it, It will be the same because
the same rates have prevailed since 1938. It is a matter of
prudance to have or case covered by this text and I should like
to ask the Members of the Committee to be good enough to make
this slight change.
.-
R . S. ~~~~~~~44
S E/PC/T/TAC/PV/24.
CHAIRMN: The hes gate of Brazil ha.- proposed that the
word. "accepted" should be replaced by the word "recognised".
-Lr. there any objections?
Mr. LEDDY ( nited States): Mr.. Chairman, I would prefer
( leaving the word "accepted" "other than adding 'Yr provisionally
r cognised"gg I would also su([est that in the first two lines
f rhe next paragraph we should change the words "consistently
with" to "with the approval of the International Minetary Fund."
CHeIRMAN: Is the Delogate of Brazil in accord with that
suggestion?
Mr. RODRIGUES (Brazil): Yes, Mr. Chairman.
C IRMAN: My we add2 the wpted", fter "accejo'-d1',"or
provieionally recognisod." Is that agreed?
Mr. LEDDY (United States): Mr.. Chairman, I suppose it is
a fct that these specific duties in every country's Schedule
-r at the parity accepted by the Fund? I think that will
pro~akly have to be looked into.
CHAIRMAN: I will askeMre Martoe if hc can inswcr that
question.
Mr. C.E. MORTON aAustralia): Wh.t is the implication of
that question, Mr. Chaiee n? I do not sc._ how that could be
otherwise than expressed in the currency of the particular
countree It has now brcn stated that the rate applicable
to that country as tehe nis rate As rcogr Ied by the Fund.
The Schedule simply says ten shillings in the 4.
Mr. LEDDY (Unoted States): Y'ur Schedule ?
: Mr. MORAnN (Australia): Ly schedule. There are cases
wXen a certain country demands payment of a duty in the currency
o another country; for instance, a very sound currency, like
tha dollar :
. E/PC/T/TAC/PV/24
Mr. LEDDY (United States): There have been cases in the
past, Mr. Chairman, where specific duties have been expressed
not in the unit of currency which is the value of the commercial
transactions or the current par value; they have been more or
less arbitary specific duties. I think we had perhaps better
examine the Schedules closely to see that this language is
appropriate, that it does apply to all the Schedules concerned.
CHAIRMAN I think Mr. Leddy has raised a point that does
require looking into, but I doubt if we have facilities for it
now is the Chairman of the Sub-committee satisfied that the
wording of this proposed Article covers all such cases and
would not give rise to any difficulties?
M. FORTHOMME (Belgium): Mr. Chairman, it seems to me that
this draft would cover the situation, because if a specific duty
is expressed in some unit, such as a gold unit or any unit which
is an arbitary one which has no reference to any existing or
actual currency in use, these duties still have to be paid,
in the final resort, in some sort of currency which is in use.
Generally you find there is some kind of co-efficient established
by that country for the reduction of the specific duties expressed
either in gold units or in dollars of a hundred years ago.
You multiply that by 2,444 in order to get present day dollars,
and that co-efficient will express the value of the duties in .
the currency in use in the country imposing them.
If there is a devaluation of the currency of the country,.
that country will probably have recourse to the contracting
.parties in order to be able to modify the co-efficient it is
applying. Therefore I think this text would apply even in that
case.
.r . . 46
E/PC/T/TAC/PV/24
Mr. LEDDY (United States): Mr. Chairman, I agree with the
Delegate of Belgium that it certainly should apply. I merely
questioned whether there are any ceses of the kind I mentiened.
If there are any cases of that kind the language does apply,
because it says the duties are expressed in the currency at the
par value. I think perhaps we may need to change that.
. FORTHOME (Belgium): Would you say "are assessed"?
CHAIRMAN: The Delegate of India.
Mr. B.N. ADARKAR (India) Mr. Chairman, I am wondering
whether it is necessary at alltio have the first paragraph; it
does not seem to add anything to the meaning f, the subsequent
paragraphs, because in most cases the specific duties and charges
are expressed in a currency and what actually happens when the
value of that currency changes is that the value of the goods
which are essesscd changes and therefore the change in the par
value of the currency is really relevant to the second paragraph
and not to the first.
Therefore could we not say: "with regard to the specific
duties and charges included in the Schedules annexed to this
Agreement, it is agreed that in case the par value of the
currency in which the specific duties and charges are expressed
is reduced, with the approval of the International Monetary Fund,
by more than 20 per cent, such duties and charges may be adjusted
to take account of the reduction in the par value of the currency."
CHAIRMAN: The Dalegete of India has made what seems to be
a practical suggestion. It also has the advantage of saving
words by combining these two paragraphs.
Does anybody see any objection to the suggestion of the
Delegate of India?
. . .~~~ S. 47 E/PC/T/TAC/PV/ 24
Mr . FORTHOMME (Belgium): Mr. Chairman, it seems to me the
only thing is that it does not indicate what the initial par
is and that the initial par should be a par acceptable to or
recognized by the International Monetary Fund. I think this
is a very important provision, so important that we have added
the final paragraph, saying that similar provisions shall only
. be available to any contracting party not a member of the
International Monetary Fund except by special agreement.
Therefore I do recognize that the Indian Delegate's formula
seves words, but I am afraid it skips one of the most important
points.
CHAIRMAN: The Delegate of India.
Mr ADARKAR (India): Mr. Chairman, that point would be taken
care of by adding some words after "by more than 20 per cent."
- We could say: "the par value at the date of this Agreement."
CHAIRMAN: The Delegate of Belgium.
M. FORTHOMME (Belgium): Mr. Chairman, I do not wish to seem
obstinate, but now we have added that to the sentence are we not
going to have a very long and cumbrous sentence, which is
practically as long as the three sentences we have now? I think
we have the adventage of the first principle in the first paragraph,
the second principle andthe third principle in the same paragraph.
Mr. SHACKLE (United Kingdom): Mr. Chairman, if the last
paragraph is to be confined to any actual case, if there is any
actual case, then I am afraid the first paragraph may be a simple
untruth, may it not, because its currency cannot be expressed in a
par value approved by the International Monetary Fund.
CHAIRMAN: I think the Drafting Committee could cover that
and put in the word "similar". S. 48 E/PC/T/TAC/PV/24
Could we perhaps go back to M. Forthemme's suggestion
of the changing the word "expressed" to "assessed", or perhaps I
might make an alternative suggestion: that at the top of Page 2
we should change the words "in the appropriate currency" to "in an
aporopriste currency" I think either of these su gestions
might, get over the difficulty to which Mr. Leddy called attention.
The Delegate of Belgium.
M. FORTHOMME (Belgium): I wonder if it might not be better
to say:: "It is understood that the specific duties and changes....
are expressed directly or in the final analysis in the appropriate
currency at the par value......"
Mr. SHACKLE (United Kingdom): Mr. Chairman, it does seem to
me that the first paragraph as it stands will need so many alter-
ations and amendments that I am beginning to think it would be
better to adopt the suggestion of Mr. Adarkar.
CHAIRMAN Parhaps if I road over Mr. Adarkar's suggestion
again it may not sound so bad - or so long - it sounded at
first.
"with regard to the specific duties. and charges included ln
the Schedules, it is agreed that, in case the per value of a
currency in which the duty is expressed is reduced with the approval
of the International Menetary Fund by more than 20 per cent of the
parvalue recognized by the International Monetary Fund, the
specific duties and charges may be adjusted........"
M. FORTHOMME (Belgium): Mr. Chairman, I ind two things; first
of all, that draft drops the date at which this par value was
recognized, or the date when that par value was existing, the
second is that it does not meet M. Leddy's objection, which still
remains "expressed in the appropriate currency." I honestly think
the present text should covered any case, including the case in the
mind of Mr. Leddy. E/PC/T/TAC/PV/24
CHAIRMAN: Could M. Forthomme make any suggestions with
regard to the first paragraph? We will deal with this
paragrarh by paragraph.
M. FORTHOMME (Belgium): "It is understood that the specific
duties and charges included in the Schedules are related
(directly, perhaps) to the currency of the country concerned et
'the par value accepted."
CHAIRMAN The Delegate of the United States.
Mr. LEDDY (United States): I think, in order to meet Mr.
'Shackla's point, we might add this: "It is understood that
'the specific duties and charges included in the Schedules relating
to the contracting parties which are Members of the International
Monetary Fund are assessed in the appropriate currency at the
par value or provisionally recognized by the Fund at the date
of this Agreement. That covers all contracting parties which
are members of the Fund, and the second and third paragraphs
provide for a similar procedure for the Contracting Parties as
a whole.
Mr. MORTON (Australia): I do not like theuse of the word
"assessed" in relation to specific duties. The word "ayable"
would be better.
Mr. LEDDY (United States): "Livied" or "payable."
CHAIRMAN: Is that generally agreed?
Mr. JOHNSEN (New Zealand): I would like to hear that again,
Mr. Chairman.
CHAIRMAN: I will ask the Secretary to read it.
(Read by the Secretary): "It is understood that the specific
duties and, charges included in the Schedules relating to
contracting parties which are Members of the International Monetary
Fund are levied in the appropriate currency at the par value
- accepted or provisionally recognized by the Fund at the dateof
this Agreement."
S. .
. 49 50
E/PC/T/TAC/PV/24
M. ROYER (France) (interpretation): I do not agree with
the word "levied." The proper words here would be "expressed
in terms of."
CHAIRMAN: The Delegate of New Zealand.
Mr. .JOHNSEN (New Zealand): There is just one difficulty
I have, Mr. Chairman, in interpreting the proposel: that is,
the duty is actually payable in most cases, I think, in the
. currency of the importing , country. But I recognize that it is
necessary to establish some relationship between that currency
and other currencies and I think this paragraph should be clearly
appessed, to avoid any confusion in that respect.
CHAIRMAN: The Delegate of the :United Kingdom.
Mr. SHACKLE (United Kingdom): Mr. Chairman, this point
strikes me; I rather think "expressed" is the appropriate word.
It is clear that what we are dealing with is the unit of money
used to express the rates of the tariffs. Surely it is a
question of the currency in which the tariff rates are expressed.
"Expesssed" is the only right word.
; 4 . ' ,
N S. 51 E/PC/T/TACC/PV/2
Ifthere are any peculiar cases of duties which are
expressed in gold units, or somethingof that kind, I should
feel that would be a case so special that some special
arrangement would have to be devised, something to take care of
that special case.
Mr. .MORTON (Australia): Mr. Chairman, the paragraph as
itreads in the text is correct in all details and the word
"expreseed" is the correct word to use, provided that what we
say is understood to be the cese. As Mr. Shackle and Mr. Leddy
said, there may be cases in which what we understood to be the
case is not so; those cases must be taken care of specially,
in another Article.
; A:RMA CHLwou: I -;.Uld suggest that we therefore keep as closely
as posseble to thn text originally suggested by the Sub-committee.
~Taat gwould imply leevinr the word "expressed." I - onderingg
ir the CGs.)ttee would wish to add the words suggested by Mr.
Le ddy relating to contracting parties which are members of the
International Monetary FY-!"d.
Mr . SlUCICE (United Kingdom): Mr. Chairman, I should like to
'?Xp support the words suggested by Mr. Leddy. I think they are
neoessary inordcr to make the first paragraph consistent.
M. FORFAIOM. (Belaium): rhere would they come in?
Mr. SHACKLE (ieited Kinadom): After "Schedules."
CH1IRiiN:d Is it agreed that we adc those words after
"Schedules,"
reedree
T;e paragraph will now read: "It is understood that the
a specific duties and cherges included in the Schedules relating
o contracting parties which areamembers of the I::L..rn.tional
M.netary F, _re expressed in the appropriate currency at the
par value accepted or provisionundy recognized by the F;,. at the
g. ate o- this r i . ment"
. 52
S.
Is that agreed?
(Agreed )
We now come to the second paragraph. Before dealing with
this paragraph, I should like to ask the Chairman of the Sub-
-committee if it is, in fact, proposed that we should have three
paragraphs covering this particular provision. This provision
will be included in Article II, which already has, I think, seven
paragraphs, and I am wondering if we could not combine all these
into one paragraph.
Mr. MORTON (Australia): Certainly Paragraphs 1 and 2 can
run together, Mr . Chairman. There would certainly be some virtue
in retaining the third paragraph separately.
CHAIRMA: I azmwondering if'it would be desirable to have
a connecting word between the first and second paragraphs, such
as accordingly. "
Is the addition of the word "accordingly" .-rced?
(A.reed)
Thc next point we have to take up is the suggestion of Mr.
***-.i. -.-
Ldy to replace the words "consistentlyA with the aricles of
Aeement of the Internatieonal Mund"onctry Ft:he words:
wt te approval of the International Monetaury FTnd.
Mr. MORTOuN (Astralia): T--t change was made" to consiste"ntly
at thgge suestion of the United Stateees Dlgate, Mr. Chairman.
M. LEDDYnu (Utetad Sces): hinkI t.this is really more
accurate now, because ea Mmber may not change its par value by
asmuch as per20 cent - let alone more then pe20 r cent - except
with the approval of the InternationaoanlMetarundy Ft. Ihink
t haot wuld be strictly accurate.
I T:..
H U Is it agreed we should say: iw" ith thapproval
of the Internationalo Mnetary FG?
* ;.. , ,' ...*. S. 53 E/PC/T/TAC/PV/24
M. FORTHOMME (Belgium): Mr. Chairman, I think there is no
purpose in changing the present drafting, because, as Mr. Leddy
has just pointed out, you cannot depreciate your currency by
more than 10 per cent without the approval of the Fund, according
to the Articles of the Fund. When it is more than 20 per cent,
t he procedure for getting approval is considerably longer then
when it is less than 20 per cent. Therefore, whichever you put
in it is practically the same thing.
CHAIRMAN: Are there any other suggestions with regard to
Paragraph 2?
Mr. L.E. COUILLARD (Canada) (interpretation): Mr. Chairman,
in the French text there is a mistake; where it says "granted
in the Schedules" the word "'Schedules" has been translated in
the singular: "Liste."
M. ROYER (France) (interpretation): Mr. Chairman, I haves, we will leave that to the Legal Draftingret it in): Mr'. n.airrnan, I h.Ive
made no comment on the Fcch text, but I think this text will
have to be re-drafted comlatly.
IPkA: willea thait to the Leel D;'nfting
Cmlittee.
A^ there any other comments on P,rgraph 2?
(A ,c)
W,now;come to the third paragraD and I would ask Members
of the ,tit forany suggestiJons wich would enable this
iparagraph also to be combined 'th the two p±-e'5 :aragraphs,
so that we should have one paragraph covering this provision;
otherwise w should have difficulty, I think, inLputting this
into - 2.
M. FORTE :.lgium:Pt-rhaps ecould put the words:
.urther.aee d"
8. S.
54
E/PC/T/TAC/PV/ 24
Mr. SHACKLE (United Kingdom): Mr. Chairman, I would
venture to suggest that we should retain these two paragraphs
and treat them as sub-paragraphs () and (a).
I think it is desirable to keep the sub-paragraphs,
because the first case covers the case of members of the Inter-
national Monetary Fund and the second covers the case of non-
Members. I think we should preserve the distinction. Therefore
I think (a) and (b) ould cover the case.
fv
:_ '
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
I P. 55 E/PC/T/TAC/PV/24
CHAIRMAN: I think Mr. Shackle has found the right solution.
Are there any other comments on what is now paragraph (b)?
Mr. J.P.D. JOHNSEN (New Zealand): I should imagine that
would be necessary that in sub-paragraph (b) there should be some
provision for contracting parties which were not a member of the
Fund but might subsequently become a member. I presume that it
would be desired to cover such cases. I suggest that after the
words "contracting party" in line 4 we might put "becomes a
member of the Fund or enters into ........."
CHAIRMAN: The Delegate of New Zealand has suggested that
after the words "contracting party" in the fourth line the words
should be added: becomes a member of the Fund or ......
Is that agreed?
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, I think
that the word similar" might perhaps cover this slight difficulty.
It is evident that in the case of a contracting party which
becomes a member of the Fund after the date of this Agreement,
the par value will be accepted. So clearly to say "at the date
of this agreement" would not apply to this case. On the other
hand the word "similar" would probably allow that difference
without having to go to the bother of writing something in about
a mythical date.
(A ~~~~~~~~(.,f ter interpretation)
Mr. tChairman, on second thoughts I hink it must be so,
because exactly the same arises in the case of a country which
mako special exchange agreement. That would be subject to
those provisions in any case.
MR. J.P.Da. JOHNSEN (New Zealatand): I m not quite sure wh
Mr. Shackle's suggestion was.
t
e
s
ty.
te
t
at P. 56 E/PC/T/TAC/PV/24
MR. R.J. SHACKLE (United Kinigdom): I did not suggest anything.
I was only saying that I think the word "similar" would cover this
quesion of the different dates.
CHAIRMAN: I think Mr. Shackle is opposing your proposition.
Are the words suggested by the New Zealand Delegate approved?
M. ROYER (France)(Interpretation): "The above mentioned
provisions will apply mutatis mutandis" etc.
MR. J.P.D. JOHNSEN (New Zealand): I take it, Mr. Chairman,
that in any case Article XXVIII will apply. I would not wipe
out the case of the modification of Schedules on or after January
1951 by agreement with the other contracting parties.
CHAIRMAN: Are there any other comments regarding this
paragraph? Is this paragraph agreed with the addition of the
Words suggested by the New Zealand Delegate?
Agreed.
I would now like to ask the Chairman of the Sub-Committee
if they have considered in which part of Article II this new
Article should come.
MR. C.E. MORTON (As ralia): Mr. Cnharman, we were not
anfioc.ating htat it would proceed beyond the status of a note
tot he Schedule.
CHAhIM-A: Silal we leave it to the L.lega Drrating Cuomtitee
to find the proper place in >Aticle II?
M.P IERRE FORTHOEMM (Belgium): I suggest that it should come
±ater paragraph 2.
M. ROYER (Frence) (Itnerpretation) Pcragraph 7.
CHAIRMNA: I should think that after paragraph 7 would be the
bse t place, as suggested by M. Ryoer.
.!::
,
t
/.
i 57 E/PC/T/TAC/PV/24
Ater paragraph 6. Beiewen paragraphs 6 and 7.
Is ttat agreed?
We have now disposed of the question of depreciated currencies.
Teh Dele,,ate of France suggested yesterday that the French
Delegation may wish to propose a modification of the Piotocol of
Prvpisional pAplioation. I ,,uld like to ask the Dleegate of
Freonc if he w uld consider that any advantage would be derived
from dealing-with that now, or waiting until the third reading.
\I tak. tiL that it is a consequential change upon the tentative
decision reached yesterday to transfer lAticle I t oPart II.
M. ROYER (France) (Interpretation): Mr. Chiirman, the
amendment which I ;uol d have to propose to the Protocol of
. Provisional mlpica.ion would be a very simple one. It ;vlod
onsoist in changing in the tenth line of the English text on
page 83 of document T/196 the words "Parts I and II of the
General Arogement on T,ifrfs and Trald" re opcin. them there
by Pa"rt I . and Articl II of ;rPartII n aPdart I Iof the neeeral
Lgreement on Tariffs and Trade" and substitute in (b) "Articles
III to XXIII of Part II o tfhat iAaeeent".
is.w we said yesterday we re aready to accept the transfer of
riAcle I or Tw Mt ost Favourv Ne:-::atiuousea from P;r aI ToPtE.a II
because that would meet the desire and the wishes of those
Delegations which wisho teo see atiAcle I ii; Lin a place inuu ii, Wi1W
GAgeeemneral rent where it would be superseded by the corresponding
iroleof tharhere, C cr ce the Charter is aeddopt' a n Hc.va.
But nevertheless we will have to put into force the General
eroemc n Tar1.ri and Tr;adeand this can only be done if we
know that all the contracting parties will apply the principle
of the Most Favoured Nation clause not only to the items listed
in the Schedules but also to the whole of the exchange of goods
with us. And therefore the best solution would be to say that
they have made a decision to apply the principles of new Article II
__; E/PC/T/TAC/PV/24
here just in the same way as they have decided to apply the
rest of the Aticles.
hWen we started our discussions here hte Msot Favoured
NtAion clause was written, if I yma say so, in golden letters
and was the outstanding feature of the discussions, and
therefore it would seem somewhat curious if we were now to
depart from that principle and not apply it. sA NM. Wilcox
said, this Gneeral A.reement umst be an example for the whole
world, and therefore it seems that we have to follow the
principles which we have set out ourselves in the hChater and
insert it in the rAgeement. If we were not to apply the
principles of the Most Fi.uored NI-isn clause here, then we
would not be doing what we asked others to do and we would
just be applying the principle of "Do sa I say but don't do
as I do."
CHIARW;A : Ar ethere any comments on the proposal of the
Delegate of France?
MR. J.M. LEDDY (Unietd States): I od not want to cause
confusion in the ranks of the Lyeal Drafting Committee but I
have what I Ltink might be a simpler way of expressing what
the Delegate of t rnce has proopsed and that is; in the article
on Su.re sssi,o , Article XXIX, simply say "article I and Pert
IIof this gAreement shall be susnpeded and sueprsede b y the
corresponding provisions of the Charter". I ,thin that amounts
to the sam6 thin; as the proposal he has just made, leaving
rAtiole I w.her it is.
M. ROYER (France) (Itntrpretation): Mr. Chairman, if
LAitole. I remains where it stands now, I quite agree that
Mr. Leddy's suggestion amounts to the same thing as mine. E/PC/T/TAC/PV/24
CHAIRMAN: This is a very important point. I wonder if
members of the Committee have any views to express on the various
ways of accomplishing what M. Royer has in mind?
MR. J.M. LEDDY (United States): Mr. Chairman, I shoud sayi ~y
thats thi Proposal to mAoAverticle I to Parto IgI riinated with
us and was put forward on the assumption that it did not make
anysubstantive changes to its actual applicability to the
January.
CHAAaI ARN:re there any other comments?
DR.A G. IJMSLVEI (Netherlands) Mr. Chairman, my Delegation
would be very glad if Article I could stand in its place. So,
ifthSD eelgate otf he United States withdraws his suggestion,
ewould applaud.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ t
M. PIERRE FORTHO (Bclam): I vi~~~~ , 1 i
wuld be a proved as it keeps artcle I in Part I but at the Isam
time provides for its supersession in the sm way v.sar II
ouldbe superseded. I think it i-a ery neet wy o etn
..
t -la cas a. th rnhcswi ymc
our case too.
CL.MAN: Thseiroosal ju Xr. Leddy is very
simple one. The only change it would involve in the text is to
add in paragraph 2 of rticle XXIX the words "atcle I andm
toe. P7ro I, so that it would read: "Article I and Pa.rt I w
this Agreement shall be suspended and superseded by the
9rring provisions of the Chaurter.i t Threould not,
I u it, b e ny need to make any consequential changes in
rticle XXX de-lng with Amendments, because .itle. I ould
main in Part I . entherefore that provision would be covered,
Th 'elegate of the Lcbon.
, .. .: .: E/PC/T/TAC/PV/24
MR. J. MIKAOUI (Lebanon) (Interpretation): Mr. Chairman,
I would only point out that this new proposal of the United )
STatts eul te 9isZis s in thy te sadme wa, as his ormer
proposal.
CHAMN: ,.rehere any other views on thi s sggestion?
obj y vsctions?
Wellt, I hinkcan tentatively agree that Ar wcee I Vc that -`trielL I"
should be af Added inXZS pbeaorarthaph 2 orticlXIX fre e words
"Part II'. eThereno will, therefor be need for any
subsequential cchanfgPres ino althe ApplPcation.rotool o ovisin i
The wonly other m atter I ish to bring to the attention of
leCommitt0ee i sdocument T/2,Owehich, in accordancrvith the
decision taken aept our meeting of Stember 17, reproduces the text
of tLeddylhe remarks of Mr. on theas subject of resertions. I
t it thpat isethis clears uP hiifficult question and the course
nof the discussio in the Committee has shown that the view of the
Committee is that there neither crean be nor is the any need for
reservations.
Now weAnn will retuThe Serrn to ex eG. ian and Lbanese
Dele os informed us thrat they cean-emoe the square brackets
robanund Systomro-Lec-se Cuvvoz Uni1o3n 30 vmber l5"'
I wonnder iKf dfmgtDelegation can he Ulitsed ao tel u tht
the squee brackets can be removed which"Southern are round hcrn
Rhoiea I Yu 147".
HA KMR. R. J SCLngdomE: (Unitehairiad Ki)am sorry Mr. mn, I . ry
to say that in the absence ohf the Southern Rodesian representative,
I - na,hi.eq tso oanswer t.;n cuuccnand I ca.-nly send a wire to
Lndon asking for a re lyp as early as Lssible.
Chank Mr. Shackle n;r .- wJi; t.;k.ould hi him
notify the Secrehtary wens he ha received a. reply
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~,. ,...
"-'"'' . D~~~~~~~~~~~~~~~~~~~~~
P.
60 P 61 E/PC/T/TAC/PV/24
M. PIERRE FORTHOMME (Belgoum): .Mr. Chairman,sn,am LU not
quite sure if my memory is right or wrong, but it seems to me
that when we were discussing thAnnex, is tphe referential
arrangement between tShe yreonese-Lostoms Cuion and Trans- Un Tr.-
ordan dated from somewhere in 1940.
R. AJ. MIKeoa:UI (LInzon: (Lerpret:atiron)hairman, ifH L. C
ght take a minute of the Committee's time, I would like to I i-i,-i;iTeez : time, I would like to
speifpoy thiat the followin_ ates have to be ap ed Inthis case
tog preferential arrangements: Re,Mdin, he preferential
aLerrnesean ment bestotsween P2l.zt andthe Ioal eian Cu; umt
ferseUnin tahre gdaente i- 939 cndtAis ,re2el ran'emdrt
rAsatoithfiereferential d on ng3me0 Nvc,r1939. .,: I- aIfar4e a
betrawseen our Cu-ons uion and To s rdan, this was ratified On
the 10 Mr leb23and modified on the 27VFuuery1924 and this
arrran rent is still in fo-e.
Cother comments?HIM.: .er any oTneroomme
Tov. >4eto t at 10.3t0 -Report of the L;e considee 'HicpJrtv
e on Part III of Lhe Agreemert. ent' xomments?c,l ~rD-uftiTTa O."I;,t ,;euV5?
M. ROYMER (F" e) (Interpretation): Ai Chairman, we are
gQng to work all the evenira so as to try to give the Secretariat
the fin.l, document before midnight, The greater part of Part II
has already been handed over to the Secretariat and we certainly
shall do ourgbest this evening so as to dive the rest of the
rticleos s to the Secretariat. befQe midnight.
CH.IRMAN: I thank the Chairman of the Sub-Committee for the
ssiduity with which he and his Committee have 'applied themselves
to their task.
The meeting is adjourned.
(The Deing rose at 7 p.m.) |
GATT Library | gw213fx1969 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty-Ninth Meeting of Commission A. Held on Wednesday, 9th July, 1947, at 2.30 p.m. in the Palais Des Nations, Geneva | United Nations Economic and Social Council, July 9, 1947 | United Nations. Economic and Social Council | 09/07/1947 | official documents | E/PC/T/A/PV/29 and E/PC/T/A/PV.27-29 | https://exhibits.stanford.edu/gatt/catalog/gw213fx1969 | gw213fx1969_90240159.xml | GATT_155 | 13,471 | 82,858 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
CONSEIL
ECONOMIQU E
ET SOCIAL
RESTRICTED
E/PC/T/A/PV/29.
9th July, 1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
TWENTY-NINTH MEETING OF COMMISSION A.
HELD ON WEDNESDAY, 9TH JULY, 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).
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. G 2 E/PC/T/A/PV/29
CHAIRMAN (Interpretation): The Meeting is called to
order.
"We begin to-day the discussion of article 28 - Exceptions
to the Rule of Non-discrimination.
The United Kingdom Delegation has indicated their desire to
formulate certain observations on this Article, therefore I call
on the Delegate of the United Kingdom.
Mr. DE LIEDEKERXE (Balgium) (Interpretation): May I ask
the Representative of India whether they maintain their addition
to Article 26 (a)?
CHAIRMAN: (Interpretation) It is open to the Delegate
of India to answer if he wishes to do so, but as far as I am
informed, a Sub-Committee on Chapter IV has been instructed to
take into con sideration this proposal.
Mr. ADAKAR (India): That is precisely the position, Sir.
Mr. DE LIEDEKERKE (Belgium) (Interpretation): Mr. Chairman
we have certain objections to the Indian proposal, and this
proposal has not been discussed in this Committee since we
completed discussion on Article 26, but here we are faced with a
new. proposal for L:ticle 26 (a).
In these circumstances it will perhaps be advisable to
open a discussion on this proposed Article 26 (a) in this
Committee.
CHAIRMAN: The Delegate of India.
Mr. ADAKAR (India): Mr. Chairman, in the new article that
we have proposed, 26 (a), we have suggested a procedure whereby G E/PC/T/A/PV/29
the use of quantitative restrictions for protective purposes
would be permitted without prior approval.
The whole question of prior approval is now being
discussed. in the Sub-Committee on Chapter IV, and we agreed
that all Amendments relating to this subject might be referred
to that Sub-Committee, on the understanding that the qvestion
of prior approval was still open; and since that understanding
was generally accepted, we acquiesced in the proposal to refer
all Amendments on quantitative restrictions for protective
purposes to the Sub-Committee on Chapter IV. V - 4 - E/PC/T/A/PV/29
CHAIRMAN: The Delegate of the Netherlands.
Mr. L. GOTZEN ( Netherlands): Mr. Chairman, it is quite true
what the Delegate of India has said; but I am afraid these remarks
do not hit the mark, because there has not been any previous
discussion on general lines about this proposal.
CHAIRMAN (Interpretation): In these circumstances, may I ask
the Delegate of India whether, in his opinion, it would be advisable
to open now a discussion on the Indian proposal for the insertion
of a new Article 26A?
Mr. B.N. ADAKAR (India): Mr. Chairman, if Dr. Coombs wishes
to speak, I would be very happy to hear his remarks before I say
anything further.
CHAIRMAN: The Delegate of Australia.
Dr. H.C. COOMBS (Australia): Mr. Chairman, as I understand
the amendment, it does relate to the use of quantitative restrictions
for industrial development purposes, and that was specifically the
reason for referring it to the sub-Committee on Chapter IV.
I would point out that in so referring it, it was not
referred in the way a number of other matters have been referred
to sub-Committees, with a sort of general direction from the
Commission as to the way in which the sub-Committee should deal
with it; but it was referred for thorough investigation and a
clarification of the issues involved, so that, in effect, the
sub-Committee on Chapter IV has become a sort of "committee of
exploration", and it would be quite appropriate for the Belgian
views on the Indian amendment to be dealt with in the sub-Committee
on Chap-ter IV. Indeed, that sub-Committee has become almost as
large as the Commission itself in its attendance, and other E/PC/T/A/PV/29
countries who have views on this and related questions are putting
them forward there.
I may say, for the benefit of the Belgian Delegate, that as
Chairman of that sub-Committee I have assumed that it would be
necessary, before final decisions are reached in relation to this
and related matters, for the sub-Committee to report the result of
its explorations back to the Commission, so that it would not be
reaching final conclusions without the opportunity for everybody in
the Commission to express their views.
If I may express a personal view, I think it would be
regrettable to discuss this matter here, in view of the fact that
it will be discussed in precisely the same way with every Member
of the comission having the right to participate - in fact, is now in
the process of being discussed in that way - in the sub-Committee
on Chapter IV. I feel it could only lead to duplication and, I
believe, some irritation, if we dealt with it here also.
CHAIRMAN (Interpretation): May I ask the Delegate of Belgium
whether he considers that the position has been sufficiently
clarified?
M. F. de Liedekerke (Belgium) (Interpretation): In view of
the fact that the Belgian Delegation has substantial objections to
the proposal Article 26A, is it to be understood that this Article
has been referred to the sub-Committee on Chapter IV without any
general discussion in the Commission?
CHAIRMAN (Interpretation): It was indicated that no decision
would be taken by the sub-Committee before the question had been
reported to this Commission for full discussion.
V -6- I - . -I - I-,-_
we pass on, as pAreviously indicated, to Lticle 28. The
United Kingdom Delegation have notified their desire to speak
on that Lrticle and I will call upon the United Kingdom
representatives.
Mr. J.R.C.HELMOMr (United Kingdom): M-. Chairman, I
think everyone who was present at the London meeting of this
CommiAtee will remember that Lrticle 28 was among the most
troubbsome articles with which we had to deal. It consists
of a number of exceptions to the rule of non-discrimination, about
certain of which there are no proposals before this Commission
and on which I imagine that no difficulty or trouble will arise.
On one of the exceptions - on6 contained in the New York
Dr,ft, which relates to conditions attaching to exports, we
have alrea"y had a certain amount of discussion in connection with
an amendment put forwaed by the Czechoslovak D legtion to
Article 26. .t least, ifaI understand the point et which
the Czechoslovak amendment was aimed, their amendment and
1 (c) of the present Prticle 28 are directed to the same point.
I shall therefore not refer to that in my preliminary remarks
but confine myself to 1 (a), which relates to the possibility
of admitting exceptions to the rule of non-discrimination in
respect of imports when there is the opportunity of obtaining
additional imports above the maximum which a country could
afford in ths li-ht of ,rticle 26 if administered entirely
consistently with Lrticle 27.
I ehink everyone would agr-e that what the drafters of
this sub-paragraph wercattempting to secure was some
mitigation of the restriction of trade which would have
resulted if countries in balance of payments difficulties -
especially during the so-called transitional period, when one
S
E/PC/T/ /PVf29 S 7 - E/PC/T/A/PV/29
of the facts which we have to recognise is the existence of
many inconvertible currencies - were required to apply
article 27 in the administration of their balance of payments
restrictions according to the strict letter of Article 27.
So, Mr. Chairman, it seems to me that what we were aiming
at in London was producing a sub-paragraph which recognised
that if there are many inconvertible currencies in the world
a Member may easily run short of convertible currency which
can be used for buying imports from any source strictly
according to the principles laid down in Article 27. And
if a Member attempted to do that, that Member would find that
there was still available to it a quantity of currencies which it
could only buy from one source. Now if Article 27, which we
believe is drafted on the right lines, were to be applied
strictly, such a Member would find that, because it could not
buy from the generality of sources, it had to refrain from
buying from a particular source, the currency of which it had
available but could not use elsewhere as that currency
from
was only available from that source.
If I might explain that by means of a very obvious example,
I think it might well be that the United Kingdom would be in
possession of a large quantity of lire, which can be used only
for buying in Italy. It might equally well be that the United
Kingdom would be short of gold or dollers or other convertible
currencies which could be used for buying anywhere in the world,
and, operating under the general principles of Article 26, the
United Kingdom might decide that it must give priority to
tobacco or oranges and that, so to speak, all its last bit of
convertible currency was used up in the period in question in
buying tobacco. S -8 - E/PC/T/A/PV/29
The United Kingdom would than find itself in the position
that though it had lirc available to buy oranges it could not do
so because, according to the strict reading of Article 27, it
ought also to buy oranges in the United States, on the likely or
unlikely assumption that the United States, oranges were of equal
quality to ItaIian oranges, and, maybe, even slightly cheaper,
The view which no doubt the drafters of this paragraph took
would be that it would be an absurd position that the United King-
dom should not buy those oranges from Italy because of the
application of Article 27, because it ought also to buy them in
the United States. No good would be done to anybody; no
0ranges would, in fact, be bought in the United States, since the
money would not be there with which to buy them and, under the
strict application of Article 27, neither would they be bought
in Italy. So it seems to us that the Article attempted to provide
that, in suh circumstances, the oranges could be bought in Italy
without any detriment to the orange-growers in the United States,
since; no mater what happened, whether this Article were here
or net, the orange-grower in the United States - in the
circumstances I have described - could not soll his oranges
in the United Kingdom.
But, Mr. Chairnan, what worries us about this Article is
not the attempt to meet the general principle, which occurs
in the first four or five lines of the New York Draft - which
I think is the same as the London Draft - but the subsequent
sentence, beginning with (iiO 0nd going on with "Provided that... ". ER -9- E/PC/T/A/PV/29
Now, the London Report says: ".. the existence of some
provision to enable countries with convertible currency to apply
discriminatory restrictions in special circumstances, would encourage
countries with inconvertible currencies to take the risk of
accepting convertible currency at an earlier stage than it would be
prepared to do". Now, as I read the present 1(e), it gives a
great deal more freedom to a country with inconvertible currency to
import on the basis which departs from Article 27, than it does to
a country with convertible currency, and one can see why that view
is taken and why, therefore, in the light of the consideration that
I have just mentioned, the drarters inserted, notwithstanding that,
a proviso which still allows the country which can accept
convertibility to depart from Article 27, subject to the prior
approval of the Organization in agreement with the International
Monetary Fund.
We have been thinking this over, Mr. Chairman, and we do not
think that the result would be one which the London Report claimed
for this proviso. It seems to us that, by inserting more one rous
conditions on the country with convertible currency than on the
country with inconvertible currency, there is introduced straight
away a deterrent to countries which are, so to speak, hovering ou
the brink of convertibility. Once they see that, by becoming
convertible they are given an additional test, and one that, even
with Dr. Coombs looking hard at me, I will mention, a test prior
to approval, they would inevitably say "Well, we think we will put
off taking the risk for a little whiled and that we firmly believe
is contrary to the interests of international trade as a whole.
Any discouragement to countries which might accept the obligations
of convertibility is, it seems to us, a bad thing.
Secondly, Mr. Chairman, it seems to us that, if we understand
the passage beginning (ii.) correctly, there is a special freedom ER - 10 -/PV/29
given to those countries which operate import restrictions through
exchange restrictions. That again seems to us wrong. Of all the
things that are really damaging to world trade, and the
confidence of exporters and importers, it is that a current
transaction, once having taken place, the exchange should not be
allowed to pass, and that is why so many countries have adopted
the principle in defending their balance-of-payments -to ensure that
their exchange restrictions and trade restrictions march in step,
of saying "Once an import has been permitted, we guarantee that the
exchange will follow", and it seems to us that any encouragement
to do the reverse and to defend one's balance-of-payments solely by
exchange restrictions and by allowing, current transactions of goods
to take place without guarantee that currency would pass, is
entirely wrong. In fact, we would say that this sub-paragraph is
a direct invitation to countries to hold on to discriminatory
exchange restrictions, in which event they would, in fact, be
released almost entirely from the very desirable obligations of
Article 27.
And so, if I can sum up those two criticisms of the present
form of paragraph 1(e) together, I would say that they seem to us,
nicely calculated to
whatever the drafters may have meant, to be/penalise just the people
who are doing their best to restore world trade to a multi-lateral
basis even though they may be going beyond their exchange in doing
so. On the one hand, they penalise, by imposing additional
conditions, those who have accepted the obligation of convertibility,
and on the other hand, they offer an incentive to the maintenance of
discriminatory exchange restrictions.
Now, it seems, therefore, that the Preparatory Committee ought
to have established that :oint to think again about the general
design of this sub-paragraph, and we have been wondering whether the
basis on which it should be re-examined should not rather be this:
E/PC/T/A/PV/29 /Owrl ER - 11 - E/PC/T/A/PV/29
It is not a question so much of whether the country which wishes to
depart from the provisions of Article 27 has an inconvertible
currency; it is whether the country from which it wishes to buy,
after having departed from the provisions of Article 27, has an
inconvertible currency, and that leads me on to an even greater
difficulty. The type of discrimination that we have been talking
about, Mr. Chairman, is discrimination in favour of a country which
has inconvertible currency; to go back to my old example, the case
of the United Kingdom discrimination, as it is called., in favour
of Italy. I prefer to say departing from the provisions of
Article 27 to the extent necessary to buy from Italy something which
it could not buy from anywhere else. Now, if we provide that
discrimination can take place in favour of the country with
inconvertible currency, once again we are setting up an incentive
to remain inconvertible , which is another difficult point it seems
to me, that has got to be faced. - 12 -
J. E/PC/T/A/PV/29
There is yet a third type of dificulty. Let me take the
example of two countries - I mention the names solely f or the
purpose of making it clear - Sweden and the United Kingdom. The
United Kingdom has a convertible currency and Sweden may or not have
a convertible currency (it does riot matter from the point of view
of the argument . Let us assume, as might well be the case, that
the United Kingdom's balance-of-paymants difficulties are greater
than those of Sweden, though Sweden is, in fact, in balance-of-
payments difficulties.
Now, various things will happen as a result of that. Sweden
is bound to operate under Article 26 End to restrict imports, that
is to say, she will endeavour to earn more from her current trade
in order to meet the deficit in her currencies, and if the
United Kingdom has a convertible currency, obviously one of the
currencies where she would try to increase her current earnings is
that of the United Kingdom. In other words, by applying her
balance-of-payments restrictions on a non-discriminatory basis
against, let us say, both imports from the United States and the
United Kingdom, she will endeavour to increase from both her current
earnings or to decrease her current deficit and if, -, might Well
be the case, she were in deficit with the United States and in
surplus with the United Kingdom, she would use her current mornings
in the United Kingdom to pay off her deficit in the United States,
and from that would follow a drain on the United Kingdom reserve of
gold and convertible currencies. Now, it is well known that the
United Kingdom would not be in a position to stand such a drain,
and the obvious counter measure would be that the United Kingdom,
in turn, would restrict her imports from Sweden in order to defend
her balance-of-payments, as she would be quite entitled to do under
Article 26. In other words, on both sides of the count, both in - 13 - -I -
Sweden and the United Kingdom, thereecouldebe a d,.reasz in trade.
Therefore, it seems to us that some solution has got to be
found for this type of paoblemseto en&ble Swaden, in my example, to
importemore from tha Uniten Kingdom tha she would import under the
strict application of article 27, the reasone for ahat baing th_t
eif were nsea;nt vaea eot founwou th- trade vuld simply not take
plaoe either way,
We haveenot come her-, Mr. Chairman, with .ny draft to meet
theWe points. Vi did not think it righa to produce " draft which
would obviously be complicated, wit hout having explained first the
problem ehicheit is dasignod to meet.
I hope Iehave indicatod in as non-technical language as I can
menage the typos of cases which itmseems to ue eust be covurcd
under thns article, amd I want to conclude by eaying that wo see
one very great danger in meeting exactly theweoint which vi have
bean peessing on tha Commission, that isc that under Cover of any
latitude that might be devised there would grow up a system of
particular countries discriminaring eacfavoua of c_:h other, both
stwns .iy using the latitudes which I dIvandutlineG, uit a sort
of "under"the aogemenmri arr=neiat between two countries by which
eaechd would tak aditionalm importserro the oth-a. That, we would
say, would ea a vegy grart danderre oo the futueof international
tradea on - multiltaeral gbasis, nd miht lrs qeade to dangeuit
.sodomic eccnos,_c hfact, - omethingsvery lthe iezyalikO . m~y
have been happeniog in Eur.pe in th50late 1o30s. Si, ms it seecs
to us, tm e proble is two-foo d one t.) evroper het pzed,~ laitaes
and the other to edevise th ssafeguard to see ehaatituhecs, ln tds
are not abused.
PE/ T' ,:V
J. V - 14 - E/PC/T/A/PV/29
CHAIRMAN (Interpretation): Gentlemen, Mr. Helmore 's
statement dealt with paragraph 1(e) of Article 28. Another
amendment has been put in, dealing with the same passage, by the
Delegate of Australia. I shall therefore call on Dr. Coombs to
make a statement.
Dr. H.C. COOMBS (Australia): Mr. Chairman, I do not think
it is necessary for me to make a long statement, as it will have
been realized by those who have read the comments which we
submitted with our amendment here that we were concerned substantially
with the same type of problem as has been outlined by the United
Kingdom.
This is - as is obvious from listening to Mr. Helmore - one of
the most difficult problems with which we have to deal, and, if I
may say so, it is, furthermore, the one about which I believe the
least satisfactory thinking has been done. This is still, I
believe, an unresolved problem in a purely theoretical sense.
We have world over it now not only before the London meeting but
through the London meeting, and I must confess that for myself
I do not know what the answer is and I have no specific recommend-
ation to make.
It is for that reason that we have merely suggested the
deletion of the part of this Article which begins with the Roman
"II" to which Mr. Helmore has referred. I would like to make it
clear that we do not believe that the Article as a whole, with
that part deleted, is satisfactory. We merely wanted that
deleted in order that consideration should be given to what should
take its place.
In connection with trade, we have in this Charter two broad
objectives. One is the expansion of trade, and the other is the - 15
V E/PC/T/A/PV/29
elimination of discrimination. This is not the only case, I
believe, where those two objectives are not necessarily
harmonious. The choice of one may mean confict with the other,
and a reconciliation of them is by no means an easy task.
Beyond saying that, Mr. Chairman, I do not think I need to
add anything except to draw the attention of the sub-Committee to
our particular comments on this question, and to indicate that
we would be anxious to contribute whatever we can to a solution
of this problem. S E/PC/T/A/PV/29
CHAIRMAN: The Delegate of the United States.
Mr. George BRONZ (United. States): Mr. Chairman, I think
Dr. Coombs's observation, that this sub-paragraph suggests a
philosophical problem of whether these may not be a conflict
between the aim of the achievement of expansion of trade and
the aim of the achievement of non-discrimination, suggests
what may really be one of the fundamental backgrounds to the
discussion of this sub-paragraph.
I do not propose to go into the question at length, but
I simply want to say that the American D. lagation has come to
this Conference and has carried the same view throughout the
Conference, that our philosophy has been that the achievement
of expansion of trade and the achievment of non-discrimination
are the same thing, and we have always felt that an attempt to
secure more international trade by methods of discrimination
is an illusory pursuit, as the history of the years before the
recent war indicates, but, as I say, I do not want to get
too far afield from the precise question at issue.
The sub-paragraph in question, 1(c) of Article 28, a
drafted in London, would permit every one of the transactions
which Mr. Helmore has given in his examples. Some of those
transactions would required the prior approval of the Organization
and the Fund; others would not, but the paragraph clearly
contemplates the possibility of such transactions when they
are carried out by a country which is permitted exchange
restrictions under the Articles of Agreement with the
Monetary Fund. They could be Carried out by that country on
its own initiative, Where they are carried out by a country
which does not have exchange restrictions, or is not permitted
current exchange restrictions under the Articles of Agreement
with the Monetary Fund, prior approval would be required. S - 17 - E/PC/T/A/PV/29
Therefore it seems to me that while Mr. Helmore has not made
any specific proposal - since the provision in question would
permit every one of the transactions he has given in his
example - the only possible guess I can make on what the
United Kingdom's observations would lead to would be to
change the rules given in this sub-paragraph on prior approval
or on freedom of the. country to do that kind of discriminating
without prior approval.
Mr. Helmore makes a point of the different situation of
the country which has a convertible currency and the country
which does not have a convertible currency. It is true the
article does make that sharp distinction. The reason for
it is, of course, very simple. Under the Articles off Agreement
with the International Monetary Fund, countries which claim
the benefit of Article 14 - that is, the transitional period -
or those which obtain the permission of the Monetary Fund under
article 8 of those Articles, are permitted to discriminate in
exchange controls. Since they can discriminate in exchange
controls, freedom to discriminate in import controls is simply
a freedom to use one mechanism as against another mechanism,
but those countries already have the permission, under the
Bretton Woods Agreement, to have discriminatory exchange controls
applying to imports. However, countries which no longer
operste under Article 14 of the Agreement with the Monetary
Fund and which have not received permission from the Monetary
Fund to have exchange controls on current transactions are
therefore not permitted to discriminate in exchange operations,
since they cannot have restrictions at all. Therefore, in
the parallel provision of the I.T.O. Charter, you say you must
come and get the prior approval of the Oganization in agreement
with the Monetary Fund. So the so-called discrimination between S - 18 - E/PC/T/A/PV/29
two groups of countries is based upon the history of our
present international engagements, to which almost all of the
countries sitting around this table have become parties,
Now there are only two ways to eliminate so-called
discrimination: one would be to require prior approval
of the Organization and the Fund for all countries which want
to discriminate and that would be an illusory provision so
far as transitional periods are concerned, because those
countries could continue to discriminate through the
mechanism of exchange controls; or we could eliminate the
discrimination the other way, the so-called distinction in
treatment, by saying that all countries, whether or not they
are under the transitional period of the Fund, may discriminate
in their import controls. The latter provision would, of
course, ease the situation of those countries which are not
claiming the benefits of Article 14 ot the Monetary Fund
Agreement. But the dangers of having discriminatory import
controls, to which Mr. Helmore referred in the latter part
of his statement, are very great.
The precise examples which Mr. Relmore gave in his talk
a little while ago, it seems to me, are, obviously examples of
cases in which the International Trade Organization and the
Monetary Fund would give the permission if a country asked
for the permission. The danger in this field is the type of
transaction where the international organizations would not
give the approval but a country would nevertheless be free to
go ahead on its own initiative and not be required to seek the
approval. This is a field in which there are great dangers
and this is a field in which the United States has a tremendous
interest, because the United States is the favourite candidate.
when people suggest discrimination, for being discriminated S - 19 -
against, and the interest of the United States is obviously
to minimise the possibilities of discrimination in trade by
other countries, lest we be the principal, if not in many cases
the sole, sufferer from such 5iscrimination.
Mr. Wilcox made a speech about a week ago - in this
Commission, I believe - on the general question of certain
proposals, principally those of the New Zealand Delegation,
in which he said - and I may say he had in mind the question
we are now discussing as well as some of the other questions
before the meeting at the time - that quantitative restrictions
as such are almost necessarily discriminatory. Whatever
provisions you put in in an effort to make them non-discrimi-
natory can never be entirely successful and therefore it has
been one of the cornerstones of our policy to attempt to
minimise the use of quantitative restrictions and permit them
only where absolutely essential, but to go further and say
you may not only have quantitative restrictions - which are
subject to abuse - but you have permission in the basic
document of the Organization itself to discriminate in the
use of such quantitative restrictions and to discriminate
without first coming to the international organizations and
explaining the benevolent aims of the discrimination and
explaining that there are no bad consequences to the dis-
crimination.
That is quite another matter and that is a matter on which
I cannot see how the United States could agree to unfettered
discrimination in the application of import quotas under
conditions as they are in the world today.
E/PC/T/A/PV/29
S 20
S E/PC/T/A/PV/29
I may recall that in the Draft Charter submitted by the
American Delegation in London there was a specific provision
giving complete freedom of the use of inconvertible currencies
on hand as at a given date, but if that provision were stretched
to say that a country could go on ecquiring inconvertible
currencies in the future and then discriminate in order to use
up the inconvertible currency which it acquires in the future,
it is obvious that that kind of operation can result in long-
term discriminatory practices, and discriminatory practices,
when permitted to two countries, means that the two countries
can make an agreement to discriminate in favour of each other
and there you have the foundation of bilateral as distinguished
from multilateral trade. ER - 21 - E/PC/T/A/PV/29
The dangers of permitting widespread discriminatory application
of import quotas go to the very cornerstone of the whole policy of
multi-lateral trade which we are seeking to establish in this
Charter. The only way that seemed practical in the long discussions
for distinguishing those special transactions which may be
necessary in the next few years, because of the peculiar conditions
of the world today, and the transactions which will be bad for
multi-lateral trade, would be to come to the Organization in
collaboration with the Fund and get permission from both, and that
was the rule that was written into the London Charter. If we
weaken that administrative safeguard, we are weakening the
protection against a continuation and a tendency to make permanent
the kind of bilateralism that we are seeking to abolish in the
International Trade Organization.
Therefore, it seems to me that with the London Draft - I hold
no brief for it - we have had oriticisms from people at home that it
is incomprehensible, we have had criticism from other people at
home that it goes much too far, and that it opens the door much too
wide for discrimination against the United States by a large number
of countries that claim the benefits of Article 14 in agreement with
the Monetary Fund. Our answer to that has been that we have
already opened that door in agreeing to the Bretton Woods Agreement,
but to go any further than the Bretton Woods Agreement in permitting
discrimination against the exports from the United States - of
course that would be applicable to a lot of other exporting countries,
but we are the favourite candidate; we have some friends like
Canada who sometimes join us in being candidates for discrimination,
and we hope that we will have many other joining us soon - but to go
tany further would, I think, constitute what Mr. Wilcox referred to
in his talk the other day as carrying the Chartez beyond the point
at which it is aiming - towards multi-lateral trade and non-
discrimination- ,and turn it in the direction of perpetuating
discrimination and perpetuating bilaterism. -22 - E/PC/ T/A /PlV 29
CHAIRMAN (Interpretation): Geznlemen, who wishes to take part
in this very leanned discussion?
Monsieur Leikerke.
M. F. de ELIDERKEKE (Belgiu-): (Interpretation): Mr. Chairman,
we believe that on eof the essential principles of the Charter ,as
gar as international trade is concerned, is that of non-idscriimnation.
The Australiar amendment tends to suppress one of the principles
regulating non-ifscrimination us it appears in ,rtivve 26,
paragraph (1e). Now, it is bovious that soem discriimnations have
to be admitted, san particularly that mentioned by the Delegate for
the United Kindgo o- rsanees ofe tI.lina origin - btu ee do not
believe that it would be advisable to have too liberal a rdafting
of rAticle 26, paragraph (1e), which would open the door to too
many possibilities of accepting discrinmiations.
That is hwy wretnink that th esu-bcoimmttee dealing with this
part of th rChsatre should provifdr for os me possible discriminations,
but thould not have toow ide provisions which would enable too
many discriimantions.
CZARI.MN : Moniseur Baradu.c CHAIRMAN: The Delegat e of France.
Mr. BARADUC (France) (Interpretation): Mr. Chairman, I
wish to reassure you at once that I have no intention of
embarking on a long statement, the main reason for that being
that I am nota/financial expert, and I would be quite unable to
make any such statement.
I think all or us who are gathered here can say that we
all agree with the opinion expressed by the United States
Delegation, and with the idea which also permitted the promoters
of the Charter to challenge the actual principle of non-discrim
-ination, and we know the benefits to be derived from
international trade carried on on a multilateral basis.
However, it seems very obvious that this principle is not
entirely applicable for countries which have not yet found
the possibility of meeting the commitments of Article 8 of the
Bretton woods Agreement, and in this respect I would also agree
with Mr. Helmore when he said that even for countries which
are at present under alance of payments difficulties, the same
difficulty may arise against countries which have an inconvert-
ible currency. I think this was the thought of the experts
in London, and I also agree with Mr. Helmore that the provisions
of Article 28 do not entirely meet the concerns we had then.
If the French Delegation has put in no Amendments to
Article 28, this does not at all mean that she thinks this
Article is entirely satisfactory in its present form. We believe
that it will be very necessary to re-consider it and may be to
ask our experts to re-draft it in order to make it clearer
than it is now.
We fully appreciats the importance attached by the United G - 24 - E/PC/T/A/PV/2 9
States Delegation, as well as by the American Congress and
public opinion, to the principle of non-discrimination, and
we full- realise that the United States dislikes seeing the
policy pursued at present by some European countries, and
which may seem to be directed as discriminating against the
United States. However, I think everybody will agree that
the interest of exporters all over the world, and, of course,
American exporters, too, is to see a restoration of the
normal purchasing power of all countries. V - 25 - E/PC/T/A/PV/29
If I may cite an example taken from the policy of my own
country, with which I am most familiar, undoubtedly, in
respect of some of our European suppliers, such as Belgium,
the Netherlands and Switzerland, we have carried on a policy
and used methods which are prohibited by Article 27; but,
however, we have achieved favourable results - we have restored
our pre-War trade channels on an even more satisfactory basis
than before the War, and I submit that this would not have been
possible if we had kept strictly to the provisions a Article 27.
I would attempt now to raise a question which is of main
concern to my British and American friends - with due apologies
to them, of course, for raising a matter which pertains to them.
I think the experience of the past years has shown that the
obligations of the United Kingdom to act according to the
provisions of Article 27 has somewhat delayed the restoration
of Europe. This, however, is merely an example which I give
in order to induce us all to consider this matter more seriously,
and to see under what conditions exceptions to the general rule
of non-discrimination should be allowed when they can be
conducive to favourable results for international trade.
I am confident that whether we agree or not on prior
approval finally, we will find some satisfactory solution;
but with apologies to the representatives of the International
Monetary Fund and the International Bank, I wonder whether it
is quite adequate to approach the matter only from a purely
financial angle. I believe it would also be necessary to
consider it on an economic and even on a political level,
because if we have in mind the restoration of Europe - and
here again I must apologize to the representatives of
non-European countries, but, after all, they also are interested
in the restoration of the traditional old European market - - 26 -
nothing in the Charter should prevent this restoration, which is
now in its early stages which will perhaps be on a slightly
different basis from that which had been previously contemplated,
as a result of the very clever and welcome initiative taken by
Washington. However, if we endeavour to apply too rigidly and
broadly the non-discrimination principle during the transitory period,
this restoration might be very greatly prejudiced and delayed.
Mr. Chairman, I do not wish to enter into any technical details,
Because I believe that it is up to the sub- Committee to deal with
the matter exhaustively and on a technical level; but I believe it
is absolutely essential that we find a solution to this problem.
Maybe this will be achieved without any great alteration of the
text as it stands now, but the French Delegation believes that the
sub-Committee should deal with the matter in great detail and very
carefully.
CHAIRMAN (Interpretation): Does anybody else wish to speak ?
Gentlemen, the discussion on paragraph 1(e) of Article 28 is
closed; but before we pass on to the next paragraph, we have to
consider an amendment presented by the Cuban Delegation,
proposing the insertion of a new sub-paragraph (d) in this Article,
I call upon the Delegate of Cuba.
MR. HERBERT DORN (Cuba): Mr. Chairman, after having heard the
explanations of the Delegates of the United Kingdom, Australia,
United States and France, I think the Cuban amendment does not need
much explanation. It was proposed in the interests of the main
purpose of the Charter, to further the expansion of world trade,
taking into account the special difficulties, especially of the
transition period, which may arise in the case of the exporting
as well as the importing countries.
E/PV/T/A/PV/29.
V - 27 -
The existing difference of opinion as to the possible
exceptions from the equally important principle of
non-discrimination will make it necessary to re-examine
the exceptions given in Article 28 in the. light of the general
discussion today, as to whether all of them are necessary,
and if they are, whether some special counter-balancing
provisions are needed, especially for the time of reconstruction.
I think it will be especially useful to examine, at the
same time, whether Article 14 of the International Monetary
Fund agreement, which deals with the transitional period, will
not be helpful in the `4c- light of the views expressed by the
Delegate of the United States.
CHANIRMA (Interpretation): Does anybody else wish to
speak?
We pass on to paragraph 2. We find there an Australian
amendment. I call upon the DelegateA of ustralia to present
this amendment.
Mr. JG. PHILLIPS (Australia): Mr. Cmhairan, we suggest
that from this paragraph should be deleted the reference to
exchange restrictions on payments arndsfers tan in connection
with imports. This provision, as it stands in the draft at
present, in effect allows the Organization to disallow exchange
restrictiaons s well as direct import restrictions, and it
seems to us that this brings the Organization - or could bring
the Organization - into conflict wthith ee Intronatinal
Monetary Fund in a field which is mortre operly tohat f the
Fund.
As it stands, it wouldp bsde oible for ZOgth ranization
to disallow exchange restrictions which had bepecrfivcenially
,T/A//C//
V V -28 - E/PC/T/A/PV/29
approved by the Fund. It would also, of course, allow the
Organization to disallow restrictions which, although not
specificially approved by the Fund, were operated by a Member
in the terms of Article 14 of the Fund agreement.
It may be that such conflict is not very likely; but it
does not seem to us that it should be possible, and that, I think,
is brought out by the general attitude that Article 29 takes in
this matter, where it is clear that the Organization generally
would regard the Fund as the appropriate body to deal with exchange
restrictions, and would defer to the judgment of the Fund in these
matters.
It also produces, incidentally, it seems to us, a very
curious result, because in Article 29, paragraph 6, the
Organization is bound to seek and accept the opinion of the Fund
in relation to action by a Member who is not a Member of the Fund
but is acting under a special exchange agreement trade in terms of
Article 29(3).
It seems, therefore, that on the present wording of this
paragraph, it would be possible for the Organization to disallow
exchange restrictions which a Member of the Fund was operating
with the specific approval of the Fund; but it would not be
possible for the Organization to disallow exchange restrictions
operated by a country which was a Member of the Organization but
not a Member of the Fund. I do not feel that that result can
have been intended. S E/PC/T/A/PV/ 29
I might perhaps just add that it seems to me that our
view here has been rather supported by what theUnited States
Delegate said a little earlier about the reasons for the
inclusion of sub-paragraph (ii) and the proviso in Article 28,
Paragraph 1 (e). He said then, it I remember his words
correctly, that the reason for making a difference there
between the country which had convertible currency and the
country which had not was that, since a country with an
inconvertible currency already had the freedom to use
discriminatory exchange restrictions, therefore it was
not sensible to require quite the same difficulties in
allowing it to use discriminatory import restrictions,
which were more or less an alternative method of achieving the
same result.
On the other hand, he said that if a country was not
free under the Fund to use discriminatory restrictions,
then it should not be free to use quantitative restrictions
discriminatorily.
What we are doing here with the words in Article 28 (2)
is, in effect, taking away from a Member the freedom which
the articles of the Fund give him, and that seems to us
undesirable.
I may mention finally that the wording of the clause
in any case is rather inappropriate, because it speaks of
"If the Organization finds ... that exchange restrictions
are being applied by a Member in a discriminatory
manner inconsistent with the exceptions provided under
this Article. *
Well, there are no exceptions provided underhe t Article
relatingo t exchangre estrictni;os but only relating to import
restrictions. That is a minor pn,ot, I feel.
CHAIRMAN (Interpretation ):eeT Delegate of Belgi.um
E/PC/AT//PV/29
S E/PC/T/A/PV/29
Mr. F. de LIEDEKERKE (Belgium) (Interpretation): Mr. Chairman,
I regret to oppose the amendment of the Australian Delegate, but it
seems to me that the effect of that proposal, which is to delete
the mention of exchange restrictions on payments and transfer it in
connectionn with imports for the three beasons stated in the comment
included in the paper before us, would be to reduce the power of the
Organization to take measures against a Member who would not fulfil
the
his obligations under/Charter, and it seems to me that, if we
insert at the end of the paragraph before us, a sentence that in
no case shall the Organization enter into conflict with the
International Monetary Fund, such a sentence would bring in the
necessary safeguards which are desired by the Australian Delegate,
and would completely settle the difficulty. In these circumstances,
the deletion proposed by the Australian Delegate would become
unnecessary.
Mr. J. MELANDER (Norway): Mr. Chairman, the Norwegian
Delegation agrees in principle with the Australian proposal for
the reasons outlined here.
Mr. J.R.C. HELMORE (United Kingdom): Mr. Chairman, I am not
sure that I have got very definite views about this suggestion by
the Australian Delegate, although I agree that the questions that
have been raised in the note on that amendment should be cleared up.
I myself am beginning to be in an even more complete fog about the
whole thing than I was before the Australian Delegate spoke, because,
if one goes back to the beginning of Section C, Article 25, the
first words are: "Except as otherwise provided in this Charter, no
prohibition or restriction.... whether made effective through
quotas; import licenses or other measures shall be imposed or
maintained by any Member ...." So we have the words "other
measures" there. In Article 26 we are told that we may use these
ER
- 30 - ER 31 E/PC/T/A/PV/29
import restrictions to safeguard the balance-of-payments, and in
Article 27 we are told "... no prohibition or restriction (which I
take to include other measures) shall be applied..." except on a
non-discriminatory basis. Now, in Article 28, we come to the words
"... import restrictions or exchange restrictions on payments and
transfers in connection with imports ...." I would suggest that the
Sub-Committee endeavours to clear up exactly what it is we are
dealing with here. This is a point which was mentioned by the
United States Delegate when he replied to my first speech, and when
he said that, it is not right that in the United Kingdom the people
who defend their balance-of-payments through exchange restrictions
are allowed to discriminate, whereas those who defend their balance-
of-payments through import restrictions are not allowed to discriminate
because that is what is said in the International Monetary Fund
Agreement. I am not sure that this is right, and if it were, I do
not think I would agree with i After all, it has happened in the
history of mankind before, and I know very well that rights accorded
under the international agreements have been given out in the
substance of the international agreements in return for the benefits
received, and it seems to me that some principle ought to apply here.
In other words, what we ought to be aiming at in the Sub-Committee,
and that is the point I think I made in my first speech, is that the
same conditions ought to apply all round, whatever the instrument
for giving effect to them. Discrimination should be allowed, in
other words, not by the test of whether a country has convertible
currency or not, neither by the test of whether it happens to
exercise a defence of its balance-of-payments through import
restrictions or exchange restrictions, but according to the need it
has and the justification it has for discriminating, and I believe
that that is a point that lies behind the Australian dissatisfaction
with the wording of this paragraph. ER - 32 -E/PC/T/A/PV/29
Mr. GEORGE BRONZ (United States): Mr. Chairman, I find
myself in entire agreement with Mr. Helmore, in the observations
that we should not let discriminatory observations of whether a
provision is in one international organization or another deter
us from trying to reach the wisest solution to this problem. I
hope, hoever, that the objective we are aiming at is to narrow the
area of discrimination in international trade, and subject as
much as possible our necessary discriminations to scrutiny by an
international body in which all of us will be represented,rather
than to use the playing of one document against the other to the
end of increasing the field in which individual Members can
discriminate without review by the Organization. J. - 33 - E/PC/T/A/PV/29
CHAIRMAN (Interpretation): Does anybody elso wish to speak?
MR. F. GARCIA OLDINI (Chile):(Interpretation): Mr. Chairman,
I hope I shall be permitted to raise a question which is somewhat
beside the narrow problem now under consideration, and this is, I
think, one of the most complicated and dangerous points in this
Charter. It seems to me that we are in the presence of a
situation where the learned conclusions arrised at in London are
being somewhat disturhed by the no less learned conclusions which
spring from this debate.
We know that the present position of the world is that vital
interests of states may be involved in the problems dealt with in
the Charter. We all agree that in certain circumstances Member
States will actually apply restrictive measures which, in principle,
are condemned by the Charter. Now, we have in the paragraph
before us a provision that if a Member State applies such measures
and if the Organization, as a result of its consideration, comes to
the conclusion that these restrictions are being applied by
Members in a manner inconsistent with the exceptions provided
under this Article or in a manner which discriminates unnecessarily
against the trade of another Member , the Member shall within
sixty days remove the discrimination or modify it as specified by
the Organization, but it is imperative that the Organization
states that the Member has to apply to remove the discrimination
or to modify it. But, as I have mentioned previously, vital
interests of Member States my be involved and there may be
cases where the Member State concerned considers that it is not in
a position to comply with the Organizations injunctions. What
will happen in that case? It seems to me that two courses will
be open to that Member. It will be possible for it either to J . -34 - E/PC/T/A/PV/ 29
negotiate with the Organization, or to withdraw from it, but
nothing is said to that effect in the text of the Article itself,
and I submit that this problem should be studied by the
sub-committee.
CHAIRMAN (Interpretation): Dce anybody tesoewish to speak?
M R.J.G. PHIILLIPS (SAstralit): If I might just say a
word, rM. Chairman, it sersm to me that this amendment will
probably turn uot to be related to threothrr one that we have
(Srticle 28, paragraph 1()e)
discussed/, and the solution of this ma yvery well depend on the
solution we csae to on the other.
Secondly, I fully agree with the United Sttaes Delegate in
saying that nothing ooudl be omre undesirable than that Chambers
should be enoouraegd to play off one Organization against another.
CtJIMRIA (Interpretation): W epass on to paragraph 3. The
United States Delegtaion has proposed a ncw text for this
pargaraph.
I call upon the United States representative. G E/PC/T/A/PV/2 9
Mr. BRONZ (United States): We just propose the elimination
of the last phrase of the New York text of the paragraph, which
suggests that when the Organisation reviews the exceptions from
the rules of non-discrimination after some years of experience,
it should review them in the light of the general policy c'
non-discrimination. The wording at the end suggests the
possibility that the review might be directed to questioning
the policy of non-discrimination, and we feel that is directed
toward the general principles of non-discrimination and that
is at least what we had in mind for the general review a few
years hence.
CHAIRMAN'JI: The Delegate of the Unied. Kingdom.
MHELr. MORE (UnitKengd idomM): r. Chairman, like the Uenitd
States Delegation, we do not think these particularly good
words. On the other hand, the reasons which have been advanced
for their deletion make us feel it necessary to say that we
think some phrase will have to be discovered which lwil take
their place.
If the United States hads alro opopsed to delete the words
"in any event before 31st December 1",951 I think we could have
agreed that simple deletion. The paragraph would then have
read that when the obligations had been substantially accepted
throughtout the world, tmahe tter should be reviewed tas o
the oremval of alle thsesc dmiirinations, and it might well
be that would be hrigt; but for the countries advancing this
Charter to take it on themselves to say that by 31st Debcemer
1951 all discriamintions will bre wong, when we have admitted
that throughout 1948 - 1949 - 1950 some of them mbay e right,
seems to me to be attaching to ourselves altogether too much
importa.nce G - 36 - E/PC/T/A/PV/29
I would definitely like the Drafting Committee to look at
this again with a view to preserving the central sense of the
point of view we put forward; but certainly we quite agree
that the actual words themselves are perhaps somewhat
unfortunate.
CHAIRMAN: The Delegate of New Zealand.
Mr. WEBB (New Zealand): We would on the whole be against
the elimination of the words which the United States Amendment
proposes to delete.
We accept the principle of non-discrimination, and we
agree with the Delegate of the United States when he says bhat
by and large discrimination is harmful to world trade; but
I think from this discussion this afternoon . we have seen
that there are circumstances in which we have to choose between
applying the principle of non-discrimination in its complete
rigidity allowing certain peoples to get supplies of food
which they may very badly need; and it seems to us that in a
conflict like that there is no question as to what the real
objectives of the Charter are: The Charter is concerned with
economic welfare above everything.
For those reasons we feel that these words, or some
equivalent of these words, should stay where they are.
CHAIRMAN: The Delegate of the United States.
Mr. BRONZ (United States): Mr. Chairman, I just want to
explain the reference to December 31st, 1951 in the paragraph.
At least, what I had in mind (it is not always safe to report
on what a group of people had in mind) was that Article 14 of - 37 -
Section 4 of the articles of Agreement of the Monetary Fund
provides that five years after the date on which the Fund
begins operations the Fund will consult with each Member which
still has an inconvertible currency about the continuation
of its inconvertible status . Five years after the date on
which the Fund began operations will be approximately
April, 1952. At the time we had our meeting in London, the
Fund had not yet begun operations, and. it was impossible to
know the precise date.
I think what we had in mind was to get the same date
as the five-year late in Article 14 of the Fund, so that at
the end. of the five-year period, when the Fund is reviewing
with each Member the necessity for making transitional
arrangements, the Trade Organisation would join with the
Fund. in a general review of the situation, and. that is what
we had in mind in this paragraph, and that is why I feel that
probably the date should be changed to April, 1952, to
coincide with the Fund date in that respect.
E/PC/T/A/PV/29 - 38 - E/PC/T/A/PV/29
CHAIRMAN: The Delegate of Chile.
M. F. GARCIA-OLDINI (Chile) (Interpretation): What seems
to me to be grave in this question is not the date itself, but
that the United States Delegate says that at a given date all
discrimination must be abolished, not because it restricts the
expansion of world trade, but juat because it is discrimination.
As I have mentioned previously, we are in the presence of
a complicated situation, and our position is similar to that of
practitioners who try to diagnose the case and to find the best
remedies. Now, I think we should do this not only in accordance
with rules taught at the University, but also taking into account
the relative symptoms of the illness and trying to take full
advantage of any possibility of recovery. If we act in another
way, we shall simply be intellectuals or doctminaires trying to
apply our doctrines to reality.
As the New Zealand Delegate has rightly pointed out, the
aim laid down in the Charter is the well-being of the peoples of
the world, and one of the means of achieving that aim is the
expansion of world trade; and insofar as discrimination stands
in the way of that expansion, we must have regulations against
that discrimination. But it was also pointed out that there
are cases where discrimination is not necessarily a bad thing
from the point of view off international trade, and even cases
where trade expands through at least the temporary use of
discrimination. Therefore, I think we must not preclude such
possibilities, and that the words which the United States
Delegate proposes to delete should remain.
CHAIRMAN.: The Delegate of the United Kingdom.
Mr. J.R.C. HEIMORE (United Kingdom): Mr. Chairman, it is -~~~-- w | v
on so few occasions dursing thi series of debates - in fact, I
think I am right in saying on no noccasio here ine thi -s dbate
that we have given the Drafting Committee any lead at all, and
I venture to suggest a way in which the views of the United
DStates elegate and those which have been put forward on the
other side, could be reconciled.
It would be by drafting this paragraph on the following
lines, provided, first of all, that there shall be a review at
whatever the approdpriate ate is in the spring of 1952, at the
same time as the International MFuonetarynd is conducting its
revie but in that case, all the words after "rInteonaional
MonetFfaryund" should be left out, so that theore wuld be no
particular need for the Organization or Fthe und tok see to
eliminate discriminastion which were operating runde stlhi Article
in accordance with wheatevr rules anfd saeguards we devise.
And then we should go on to provide - because it sseem to me this
would be in accocrdane with the true facts -- that when
convertibility has been generally acceptable (those are the
words which occur at the beginning of the paragraph,s in lightly
different language) there should be a review with a view to
the earliest possible elimination of any discrimination.
I think, in that way, we should solve the probolfema
the dated review, which would simply be a review of the problem
in order to put an end to discrimination, once the cisrancescumt
that gave rise to it have been cured.
/TFAa/V/r299C
V CHAIRMAN (Interpretation): Does anybody else wish to
speak on this question?
We shall therefore conclude our discussion on Artlcle 28.
We will now pass on to Article 29 - Exchange Arrangements.
We have two amendments in connection with this Article, both
presented by the United States Delegation. The first of these
amendments pertains to Paragraph 1 of this Article. The
second amendment tends to insert a new Paragraph 7. I call
upon the United States Delegate.
Mr. G. BRONZ (United States): To reverse the order for
a moment, the proposal for a new Paragraph 7 I think we have
really discussed here on Monday in connection with the amendment
submitted by the Delegation of Czechoslovakia and I am content
to leave it to the sub-committee on the basis of the discussion
we have already had.
As to Paragraph 1, that activities itself into two parts:
the first simply comprises two drafting pl ages, the changing
of the word "competence" to "jurisdiction" in two places in
order to get what we feel would be a more accurate representation
of the meaning.
The substantial amendment consists of the addition to
Paragraph 1 of several sentences de4vng with the functions
of the International Monatery Fund when it is consulted by the
Trade Organization on questions in the general balance of payments
monetary reserve and financial field. You will note that
throughout Articles 26, 28 and 29 there are a great many
references to consultation with the International Monetary
Fund. In no place is there any indication of how the con-
sultation should be carried out and exactly what the respective
responsibilities shuold be of the two organizations. It seemed
better draftmanship to omit the multitudinous references to
the Fund and instead have one provision in which we would
E/PC /T/A/PV/ 29
S E/PC/T/A/PV/29
- 41-
attempt to clarify precisely what the responsibilities would
be.
Here it is our proposal that the International Monetary
Fund should have the final word on questions which are
essentially financial in nature and essentially within the
special field of the fund; particular questions of balance of
payments, questions of exchange control and restrictions,
questions of monetary reserves, which I think we probably
indicated specially in this language, and we may want to
re-examine the precise language we have submitted here.
But the important consideration involved here is that
these are questions of a highly technical nature. The
Monetary Fund has been organized for some time new and has
been scouring the world for personnel who are qualified to do
the sort of work involved here, and has not found it easy to
recruit all the extra personnel they would like to have for
these functions. If you had two organizations, each with
separate responsibilities for decision in this field and each
trying to recruit an adequate staff, you would have bad
administration, possible conflict between the two organizations,
possibly second-rate staffs in both cases, if there are not
as some people have suggested - enough experts in this field
to go round for one organization, let alone for two.
It seemed therefore the wisest course to set forth
precisely what fields in connection with these Articles are
considered to be within the special abilities of the Fund and
to accept the Fund's word as finel in these fields, so that
the Trade Organization will not feel itself responsible for
building up a staff of experts in these fields.
Incidentally, there are a considerable number of drafting
changes, which could be made if this amendment is adopted, in
cutting out references to the Monetary Fund in many other parts
of the Charter. - 42 - _ _ , ,
Mr. E.L. RODRIGUES (Brazil): Mr. Chullman, I am in fat1
agreement with the United States amendment, especially because I
see that we cannot have technical uniformity and at the same time we
cannot avoid a duplication of staff if we do not try to follow as
much as possible the orientation given by the American amendment in
the last two sentences. Because of this, I support the Uni ted
States amendment , and I should like to see it adopted.
Mr. L.C. WEBB (New Zealand): Mr. Chairman, we also are in
agreement with the purpose of this amendment. We think that it is
most desirable that there should not be any unnecessary duplication
of staff between the two Organizations, and if we have any doubts
about the amendment, it is rather as to whether actually it best
meets the objective of avoiding duplication of staff and generally
widening relations between the two Organizations.
I would, for instance, qjuestion whether "urisdiction" is, in
this context, a better word than "competence". Jurisdiction
implies that we only consult the Fund in mattersconnected with its
actual legal powers, whereas, it cseems to me that onsultation
really should, in certain circumstances, possibly go beyond that,
on to any matter on which the Fund has the capacity to advise.
in
For the same reason, I would think that, possibly,/the phrase
"in all cases in which the Organization is called upon to consider
ocvr deal with balae-of-payments problems", "balance-of-payments
problems" is too narrow. It may not cover such problems as we
have been discussing this afternoon, but I am unhappy about the
last part of the American amendment in which it is proposed that
the Organization should bind itseldef to "accept the termination of
the Fund as to all facts relating to exchange controls or
restrictions, ....,,,as to statistiand as to the analysis of
the balance-of-payments position". It seems to us that there are
three stages in this process. The first stage is the collection
/PC /T lkV /2 9
ER - 43 -
E/PC/T/A/PV/29
of facts. The second stage is the interpretation of those facts.
And the third stage is action based on interpretation. Now, we
think that unquestionably the assembling of the facts is the
function, undoubtedly, of the Monetary Fund, but when it comes to
the interpretation of facts, we think that it would be unwise there
to limit the interpretation to the Fund because, when you come to
interpret the statistics relating to balance-of-payments, it seems
there that you come to an area where you are dealing not only with
matters which are monetary; you are also dealing with matters
concerning trade, and it seems to us that that is the point really
on which the two bodies of experts come together - the experts of
the International Trade Organization and the experts of the Fund -
and we think that there should be a joint process of working out
the interpretation of the facts.
Finally, when it comes to action, I think we would also be
agreed that, as far as action is concerned, clearly it must be the
Organization which decides upon the action that is necessary. But
it seems to me that the formulation, in the United States amendment,
is not a happy one, because it is very difficult to decide what an
analysis of the balance-of-payments position may constitute, because,
after all, the mere presentation of statistics is really an act of
analysis. The analysis starts as soon as you begin to present
statistics. The next stage now in view is this process of an
interpretation, and as I say that must be a joint process. - 44 -
J. E/PC/ T/A/PV/ 29
CHAIRMAN: Mr. Bronz.
MR. G. BRONZ (United States): Mr. Chairman, I apologise,
but I neglected to cover one point in my original statement, and as
a matter of fact it relates to the last point made by the
Delegate for New Zealand.
The Monetary Fund is receiving from Governments detailed
information about their financial situations. A good deal of the
information, in the case of many Governments, is given to the
Fund on a confidential basis. The Fund has gone to elaborate
pains to protect the security of this sort of information, and the
Member Governments which have supplied such information, I
understand, have been very eager to be sure that the necessary
security- was preserved with respect to such information.
If the International Trade Organization is to have a
responsibility for making an independent analysis of a country's
balance-of-payments position, it would be impossible for it to do
so without having mde available to it all of the detailed and
confidential information which is now being supplied to the Fund.
It is obvious that if a second Organization with its staff
would have to have access to the same information, the security
would be much weaker than if it were restricted to one
Organization.
On the other hand, if the International Trade Organization
were not to have such information made available to it, it could
not make an intelligent judgment on the fundamental questions at
issue here. It would therefore seem, for this additional reason,
to be desirable that only one Organization be entrusted with the
responsibility and confidential information, which will be much
more secure than if it becomes necessary to have two Organizations J. -15 - E/PC/T/A/PV/29
having access to the same information.
CHAIRMAN (Interpretation): The Delegate of Cuba.
MR. H. DORN (Cuba): Mr. Chairman, as for the first question
whether
raised by the Delegate of New Zesland, the word "competence" or
"jurisdiction" should be prefered, I may call attention to the
fact that this problem comes up many times throughout the whole
Charter. I will only quote Article 81, entitled "Relations with
other Organizations". It says there in the first paragraph, third
sentence, "The agreement shall provide for effective co-operation
between the two Organizations in the pursuit of their common
purposes and at the same time shall recognise the competence of
the Organization within its jurisdiction as defined in this
Charter". You will also find in paragraph that the competence
of the Organization is mentioned there, and you will find the
same in paragraph 4.
I think, therefore, that the decision on this question should
be left to the Legal Drafting Committee, because it will have all
competence to make the necessary resolution;
CHAIRMAN (Interpretation): Mr. Helmore.
MR. J.R.C. HELMORE (United Kingdom): Mr. Chairman, I am not
sure that this question of whether we should say " competence" or
"jurisdiction" is within the competence of the 'committee of jurists'.
It seems to me that we have first to make up our minds whether
we do mean the wider conception or the narrower conception, and
when we have made up our minde what we are attempting to say; then
we can ask the Legal Drafting Committee to put it into the right
words. .J. _ 46 E/PC/T/A/PV/29P/
It seems to me that there is a real difference here between saying
t-.r:cwithin the jJuisdiction of the frun which relates, as I
understand it, strictly to the powers the Fund has, whereas
on
matters within the competence of the Fund are matters/which the
Fund, by reason of the subject matter which it deals with, is
competent to provide the facts or to express an opinion. As one
might say in a Government department at home, which has certain
legal powers in relation to a part of its field and no powers in
another, certain things are within the jurisdiction of that
Government department, but a great many more are within its
competence. - 47 - E/PC/T/A/PV/29
As regards the other drafting points on this Amendment
which have been raised, I think I would tend to agree with
Mr. Webb in his criticism of the use of the word "analysis",
though I rather gathered from the second speech by the
United" States Delegate that he did not mean more by analysis
than details of the facts. If that is what is meant, then
I think we should be careful to say so, because there is
another meaning we might give to "analysis", which is a
beginning to draw conclusions from the facts; and it seems to
me it would be highly dangerous in a trade matter for the final
word to be given to the International Monetary Fund, even on
the beginning of the drawing of the conclusions; and that
brings me to say that I am extremely sorry to see that after
three days on a subject which usually provokes the most
violent conflicts between the Treasuries and Ministries of
Commerce of our countries, we have at last fallen into the
error of provoking a conflict here, because as I understood
Mr. Bronz's speech, he implied that Governments would assume
that the International Trade Organisation would be as secure
as the Fund.
I think it is a great pity that has ever been raised.
It is a perpetual trouble at home, and. I hoped. that we would
escape it here. I do not myself believe that Ministries of
Commerce, and therefore the International Trade Organisation,
are any less able to keep secrets than Treasuries or Inter-
national Funds.
Subject to those remarks I entirely accept the idea
lying behind this .mendment, which I think is careful and
practical. It saves a lot of words in the Charter, and my
save a lot of overlapping between the Fund and the ITO when
both are working.
But I do suggest that the Drafting Committee should look
very carefully at the words in the light of the views that have
been Expressed this afternoon. V E/PC/T/A/PV/29
CHAIERMAN: The Delegate of Australia.
Mr. J.G. PHILLIPS (Australia): Mr. Chairman, the Australian
Delegate believes in the general principle of this amendment, which
we think is certainly an improvement on the previous drafting,
and contains the valuable suggestion that the Monetary Fund
should be primarily competent in matters of statistics and
exchange control and such things.
At the same time, we do share the doubts expressed by the
New Zealand and United Kingdom Delegations as to just how far
the last phrase of the amendment goes. We also would not like
to think that the Organization was bound to accept the opinion
of the Fund once the question of remedies or of analysis
that the New Zealand Delegate mentioned is in question.
Mr. Helmere is right in assuming that Mr. Bronz's
last statement meant that the analysis would be confined
primarily to facts - we think that is a valuable distinction.
I have wondered, however, whether it meant rather the
opposite - that the Organization would be in such a position
that it could not itself make an analysis, because it would
have inadequate information. If that were the suggestion, I
think we would certainly be opposed to it.
There is another point I would like to raise. I am not
quite sure whether this is the appropriate moment, Mr. Chairman,
but although it is a separate point, it is perhaps related to
what we have been discussing.
Article 63 of the Charter deals with Voting, and Article 66,
paragraph 5, deals with the procedure to be established in
making the determinations under these Articles that we have
been discussing, Articles 26 and 28, and also 34 and 35. I
-48 - - 49 -
V E/PC/T/A/PV/29
just want to place on record the fact that the Australian
Delegation does not regard these Articles 26, 28 and 29 as
closed until those other matters are alsodetermined: the
voting procedure and the procedure for making determinations
under these Articles. Any decisions that are made on those
might well have a fundamental effect on these Articles, and I
Just wish to make that point clear. S .E/PC/T/A/PV/ 29
CHAIRMAN (Interpretation): The Delegate of Cuba.
Mr. Herbert DORN (Cuba): I do not feel competent to
the
decide a question of/English language. Therefore I thought
it would be wise to have the advice of the legal drafting
committee.
If I understood the Delogate of the United Kingdom
correctly, he attributes to the word "competence" a larger
meaning, but I am not quite sure if up to now the Charter
follows this line, saying that agreement with another
organization shall recognize the competence of the Organization
within its jurisdiction as defined in the Charter. Here the
jurisdiction seems to determine the competence and it is only
in order to avoid there being a possible misunderstanding that
I make this point.
CHAIRMAN: M. Baraduc.
M. Pierre BARADUC (France) (Interpretation): The
best French translation for the English term "jurisdiction"
is precisely "competence."
CHAIRMAN: Mr . Holmore,
Mr. J.R.C.HELMORE (United Kingdom): Mr. Chairman, could
I close this discussion by saying that I consider the phrase
which the Cuban Delegate read out to us as a piece of
incompetent drafting. (Laughter).
Mr. G. BRONZ (United States): Mr. Chairman, I must
take another moment to assure Mr. Helmore that it is
unnecessary to rise to the defence of the Ministry of Commerce.
I chose my words carefully when I referred to the consideration
of secrecy. It is said that you never gain any secrecy by S - 51 - E/PC/T/A/PV/29
telling a secret to a second person. The secrecy consideration
is important in respect to analysis, and if the information is
only available to the Fund it is difficult to see how a second
organization could join in an intelligent analysis of the facts
if it does not have all the facts. I think this is a matter
which the sub-committee should take into consideration.
CHAIRMAN (Interpretation): Does anybody else wish to
speak? - 52 -
ER E/PC/T/A/PV/29
M. P. BARADUC (France) (Interpretation): Mr. Chairman, I
should like to add a few words on the substance of the United States
amendment. We all agree that the United States Delegation is right
in pointing out that the Monetary Fund is particularly competent,in
the first place,with regard to statistical data relevant to these
questions, and in the second place, particularly competent to
formulate advisers in these problems. I also agree that recourse
to advisers of the Monetary Fund will snare the Organization an
unnecessary expert staff which will duplicate the work of
the staff of the Monetary Fund. But the text of the American
amendment now before us, gives the impression that the Monetary Fund
should alone be competent to judge on matters relating to the
implementation of the provisions of Article 26. Now, it is true
that Article 26 deals with problems which have an important
financial aspect, but it is also true that the same problems have
an important economic side. I have had recently some conversations
with representatives of the Monetary Fund, and I was happy to see
that, on the whole, they have as wide a competence in economic
questions as in financial questions, but I do not think that it
should be our intention that the Organization should be precluded
from taking its own decisions on these questions, and should not
have the powers to consider any advice which may be given to it. E/PC/T/A/PV/29
I should like to recall, as a matter of comparison, that in the
practice of several national governments, as for instance in the
practice of the French Government,
the representative of the Finance Ministry should be consulted on
questions of common interest, but it does not mean that the advice
given by the Finance Miinistry should also be taken as the last
word and as the final decision. It seems to me that a similar
position will arise on the international plane and that the role
of the International Monetary Fund will be, in these cases,
similar to that of the Finance Ministry of a national government.
Therefore, I am convinced that this is in conformity with the
intention of the United States Delegation, and I am convinced that
with since slight amendments the text of the United States proposal
will be rendered acceptable by the sub-committee.
CHAIRMAN (Interpretation): Does anybody else wish to speak?
In the circumstances, Articles 28 ard 29 will be referred to
the sub-committee appointed yesterday .
We have a last question to settle, and that is the Chinese
proposal concerning a new article after article 29. I am
under the impression that this question has been discussed at the
special meetings of the Comission devoted to the problecm of
under-developed countries, but I should like to have the advice of
the representative of China on this question ot procedure.
- 53 - - 54 -
Mr. HSIEH (China): As time is getting on I have only a
few words to say in the way of explaining the reason for this
proposal on our part. It is, as you know, in line with the
great importance we always attach to the question of judicious
balance between the interests of the International Monetary
Fund and the under-developed countries.
If I have anything to add, it is that during the present
Session the result of Charter discussions seemed to us, in many
ways to represent a going back on the spirit of the London
Session, and also the sittings of the New York Drafting
Committee, by tipping the scales heavily against the under-
developed countries.
To that extent, of course, they represent a retrograde
tendency. There is therefore all the greater reason why this
particular proposal on our part should be referred to an
appropriate Committee, either the Sub-Committee for Article 29
or some other Committee, and that it should receive the due
Consideration that it deserves. Thank you, Mr. Chairman.
CHAIRMAN (Interpretation): I propose, Gentlemen, to refer
that proposal to the special Sub-Committee on Chapter IV.
Mr. HSIEH (China): Mr. Chairman, I agree to that
suggestion.
CHAIRMAN (Interpretation): The Meeting is adjourned.
The Meeting rose at 6.25 p.m.
E/PC/T/A/PV/29
G |
GATT Library | pz520kd7419 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty-Ninth Meeting of Commission "B" held on Saturday, 16 August 1947 at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, August 16, 1947 | United Nations. Economic and Social Council | 16/08/1947 | official documents | E/PC/T/B/PV/29 and E/PC/T/B/PV/26-30 | https://exhibits.stanford.edu/gatt/catalog/pz520kd7419 | pz520kd7419_90250108.xml | GATT_155 | 10,168 | 61,971 | UNITED NATIONS NATIONS UNIES
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL RESTRICTED
ECONOMIQUE E/PC/T/B/PV/29
16 August 1947
ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
TWENTY-NINTH MEETING OF COMMISSION "B"
HELD ON SATURDAY, 16 AUGUST 1947 AT 10.30 A.M.
IN THE
PALAIS DES NATIONS, GENEVA.
The Hon. L. D. WILGRESS (Chairman)
(Canada)
N.B. It was not possible to provide verbatim records of the
Twenty-seventh and Twenty-eighth Meetings of Commission "B"
(11 and 15 August). Please refer to Summary Records
E/PC/T/B/SR/27 and 28.
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 texws 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 P. -2- E/PC/T/B/PV/29
CHAIRMAN: The Meeting, is called to order.
This Meeting of Commission B is for the purpose of approving
the Reports of the sub-Committee or Chapters I, II and VIII.
The procedure I propose to be follow i. jir-t of all to call upon
the Chairman of the standing sub-Committee on Chapter I, II and
VIII to present :i> 1;vI@X4, then to take up Chapters I and II
and afterwares we will deal with Chapter VIII, commencing with
the first Article of that Chapter, and going on to what used
to be known as Article 64 "Voting", whereupon I will call upon
the Chairman of the ad hoc sub-Committee to present his Report
on Voting and Membership of the Executive Board, and after that
we will dispose of all the remaining Articles o Chapter VIII.
I should like to know if this procedure meets with the approval
of the Commission. Is the procedure agreed?
Approved.
As our Working Papera, we will find the Reports of the sub-
Committee on Chapters I, II and VIII in Document E/PC/T/139.
The Report of the Legal Drafting Committee on Chapters I, II and
VIII is given in Document E/PC/T/159, and the Report of the ad hoc
sub-Committee on Voting and Membership of the Executive Board
is given in Document E/PC/T/140. There r:.' l number
of other papere circulated with regard to this Report .ich I will
refer to when to come to deal with it.
I will now call upon Dr. Naudé of the South African Delegation,
the Chairman of our standing sub-Committee on Chaptere I, II and
VIII to present his Report.
Dr. W.C. NAUDÉ (South Africa): Mr. Chairman, I think I can
be very brief, in the first place because the Report has been
available for a considerable time, and , in the second place, because
I do not want to share any responsibility for a protracted discussion E/PC/T/B/PV/29
which might prevent some of Ui from attending the festivities of Geneva tonight.
The Report of the sub-Committee drew attention to a few
of the outstanding difficulties which were settled and I shall
not refer to them. I just tt to drew your attention to one.
or two of the other points that were setl1ee .
In Article 1 the link between what we might call economic
peace and military peace was established - to my mind a D-Ost
desirable principle to have incorporated in the Charter.
I minht also draw attention to a principle which was
established in the Committee, namely the establishment of the
Conference or the International Trade Organization as the
several on r, rf of the Organization. There had been some
doubt in the tsrzt _ it emerged from New York on that point,
but now it is clearly established in the new Article 71.
I might also mention that provision aw been ..W in
the Charter review within ten years. As you will know,
it ,, concept which was placed in the United Nations Charter
and it will ,.oW. be found reflected in the International Trade
P. 3 V - 4 - E/PC/T/B/PV/29
You will further recall that in the full Commission there
was some discussion on the problem of authentic or authoritative
languages. The solution found and incorporated in the Charter
is to have the original text of the Charter in all five official
Languages of the United Nations; but for the purpose of
interpretation English and French will be authoritative. It
is a happy solution which I hope will be accepted by the full
Commission.
The other matter to which I would like to address a few
remarks is mentioned in the Report of the Sub-Committee in the
covering commentary, and that is the matter of the settlement
of differences. You will observe that the Sub-Committee
pointed out, with some considerable emphasis, that it did not
have enough time to explore the whole problem thoroughly, and
to present a solution of which the Committee could feel proud.
The subject is quite a complicated one. The ramifications,
once you start talking about it, seem to have no end. But
the main problem that emerged was on the types of question
which could be referred for review to the International Court
of Justice. There you will find that Alternatives A and B
in Article 88 were put forward. Since then, some Members of
the Committee have been extremely active in attempting to find
an agreed version, doing away with the alternatives, and this
document was circulated this morning, document W/299. I take
it that the United States Delegation would expound the principle
incorporated there in due course.
While discussing the alternatives A and B, I might mention
that the preferences as reported in the Sub-Committee Report
were of a varying degree of firmness. A number of Delegates
expressed their preference for one or the other, but they did so
with a degree of timidity, because they felt that their E/PC/T/B/PV/29
Governments should have a further look at them.
At the same time, I should mention the proposal put forward
by the Belgian, French and Netherlands Delegations, which relates
to the possibility of incorporating in the Organization structure
some device which would be the equivalent of the Belgian Conseil
des Contentieux, and a formal proposal was put forward in which
the equivalent in the I.T.O. would be called "The Claims Board".
The proposal was carefully examined, and in the end, in an
effort to reach reconciliation, those Delegations were willing
to pursue the possibility of finding common ground on the
procedure of advisory opinions from an international court.
I think that we owo those three Delcgations our gratitude and
respect for their willingness to sacrifice their idea in the
hope of finding common ground.
While I am on the subject, I think it would be legitimate
to place before the Commission the view that any attempt today
to find an agreed version for the new Chapter VIII would lead
to discussion which quite certainly would never end today.
My recommendation would be that the work of the Sub-Committee
has brought out the main issues involved, and I should imagine
that a number of Delegations would like to have their lawyers
in their capitals look at the issues involved, and then, by
the time Havana meets, to have their Delegations fully
instructed on the subject.
There is one small point that I would like to mention
before I conclude, and that is the possibility of the settlement
of differences by arbitration. You will find that, on
Article 87(2), the Sub-Committee did not exhaustively discuss
that type of machinery. The idea, however, is incorporated
in the Charter, and I tale it that Governments would perhaps
like to leek at it a little further. One of the delegations.-
I think it was the Delegation that actually introduced the idea
of arbitration-itself reserved its position for further conside
ration.
- 5 -
V CHAIRMAN: I wish to thank Mr. Naude for the very able
manner in which he has submitted his Report. Also I hope
that his example will be followed by the other Members of the
Commission. We have to get through a very heavy programme
to-day, and I think it is desirable we should see at least
part of the Fetes de Genetve taking place to-day. I would
like to extend to Mr. Naued, and through him to the Sub-
Committee, congratulationsond the very interesting Rptort
which he has submitted.
The Sub-Committee on Chapters I,II and VIIE had assigned
to it more Articles than any other Sub-Committee at this
Conference, and yet, by working steadily and hard, they were
able to produce a Report in what really was a very remarkably
short spaceocf time, and I may say we are all, therefore, very
indebted for the work this Sub-Committee has done.
I hope the Members of the Commission will ect take too
seriously one of the suggestions of Mr. Naue4. I am a little
appalled at the prospect of Government lawyers in 17 countries
going over the Text of Chapters I, II and VIII and
thinking up Amendments which they might submit to the World
Conference. These 17 lawyers would not be fully cosaitousocf
the delicate balance of compromise necessary to obtain here,
in order to reach unanimous agreement, and therefore I trust
that all Delegatocns here will at Havana support fully the Text
upon which we have been able to reach unanimous agreement in
Geneva.
Before we take upA-rticle I, would any Members of the
Commission like to comment on the remarks of the Chairman of
the Sub-Committee?
We than pass directly to Chapter I Article I. Any
- 6 G - 7 - E/PC/T/B/PV/29
comments on Article I? Approved.
The Delegate of France.
Mr. ROYER (France) (Interpretation): Mr. Chairman, I would
like to submit a few remarks on the French Text. We have looked
at this French Text for twenty-four hours more than the Legal
Drafting Committee have done, and there are some points we want
to raise.
As pointed out by the Chairman of the Sub-Committee which
linked closely the economic and military peace, we would like
to point out that in the French Text, in the second line, we
have the word "paisible", and we would prefer the word "pacifique".
Now on Point 4, the French Text says "toute discrimination"
and we would prefer "les discriminations"; and at the end of the
French Text, "En consequence ils instituent par les presentos
L'Organisation Internationale du Commerce", instead of "grace a
laquelle".
CHAIRMAN: Any comments on the proposed modifications of the
French Text? S
E/PC/T/B/PV/29
M. THILTGES (Belgium) (Interpretation): Mr. Chairman, I
would like to draw the attention of the Commission to a word
which appears both in the English and the French text; that is
the word "balanced" in Paragraph 1 on Page 2 of Document
E/PC/T/159, a word which has its equivalent in French in the
word ''équilibre". These words have been included here to
replace the words of sub-paragraph (b) in the New York Draft,
which read: "To avoid excessive fluctuations in world trade
and contribute . . ."
The idea which is embodied in the word "balanced" its
extremely important. We have not changed the idea from New
York, which was incorporated in the New York text, but this
ides has great repercussions on the provisions of Chapter III
and also on Article 30 on Subsidies.
CHAIRMAN: Are there any objections to the proposed
modification to the French text moved by the Delegates of
France and Belgium?
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, is there
any amendment suggested by the Belgian Delegate?
CHAIRMAN: No, there is no change. He just drew
attention to the importance of the word.
Are there any objections to the proposal of the French
Delegate?
(Agreed)
Are there any other comments on Article 1?
Mr. Erik COLBAN (Norway): Mr. Chairman, I would
just like to mention the proposal we made to the Sub-committee
concerning the title of the Organization we are setting upo.
We suggested "International Trade and Employment Organization". E/PC/T/B/PV/29
That would be in conformity with the title used on all our
documents, but the Sub-committee, after having considered the
question, found that for practical reasons it was agreed to
retain the original title. I just wanted this to go into our
Minutes.
CHAIRMAN: Due note will be taken in the Minutes of the
Norwegian Delegate's remarks.
The Delegate of Czechoslovakia.
H.E. Mr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman,
we are in favour of the title "International Trade and Employment
Organization" because it is the title given to the Conference
by the Economic and Social Council.
CHAIRMAN: I take it the Czechoslovakian Delegate is not
making a proposal to that effect, but simply wishes to have
his view recorded?
Mr. AUGENTHALER (Czechoslovakia): No, Mr. Chairman, I
make it as a proposition.
CHAIRMAN: The Delegate of Czechoslovakia has proposed
that the title of the Organization be changed to "International
Trade and Employment Organization."
The Delegate of the Netherlands.
Mr. A. B. SPEEKENBRINK (Netherlands): Mr. Chairman, as
we have a formal proposal before us, I should like it very much
if we could now hear the reasons why the title "International
Trade Organization" was retained by the Sub-committee.
CHAIRMAN: Will the Chairman of the Sub-committee give
us an explanation?
- 9 -
S S -10 - E/PC/T/B/PV/29
Mr. W.C.NAUDE (South Africa): Mr. Chairman, I will do
my best to interpret the motives of the Sub-committee. They
were, first, that if employment were to be specified in the
title of the Organization it might equally well be argued that
commercial policy, cartels, economic development and a number
of other aspects of the ITO Charter should be covered in the
title, Moreover, if the word "employment" were to be used
in the title of the Organization it would give the impression
that all the employment activities of the Economic and Social
Council, through its various Commissions, would be lost and
be covered by the International Trade Organization. Those
were primarily the motives.
As regards the point just made by Mr. Augenthaler, it is
true that the Economic and Social Council decided to call it
the International Conference on Trade and Employment, but the
instruction of the resolution was not to draw up a Draft Charter
for the International Trade Organization; that is, it merely
quoted from the resolution itself.
CHAIRMAN: The Delegate of the United States.
Mr. Clair WILCOX (United States): Mr. Chairman, as I
recall the discussion in the Sub-committee, it was suggested
that a complete specification of the Conference of the Organization
in its title would require some such title as "International
Employment, Economic Development, Commercial Policy, Restrictive
Business Practices and Inter-governmental Commodity Arrangements
Organization," and it was concluded that, on balance, it would
be simpler to retain the title "International Trade Organization."
CHAIRMAN: Are there any other comments? S 11 - E/PC/T/B/PV/29
Mr. S.L.HOLMES (United Kingdom): Mr. Chairman, I find it
very difficult to follow the Delegate of Czechoslovakia, who
says that the title as determined by the Economic and Social
Council is ther "International Trade and Employment Organization."
Looking at the text of the Resolution regarding the calling
of an international conference, which is reproduced on Page 42
of the London Report, one will see that the Economic and
Social Council - I leave out some of the stuff at the beginning -
suggests, as a basis of discussion for the Preparatory Committee,
that the Agenda include the following topics: "(e) Establishment
of an international trade organization, as a specialized agency
of the United Nations . . .". ER - 12 - E/PC/T/B/PV/29
CHAIRMAN: Are there any other comments.
Dr. J. E. HOLLOWAY (South Africa): Mr. Chairman, I think
that if we want to put in more than just the word "Trade" , we
certainly should follow up the consequences of the discussions
at this Conference and make provision for the words "under developed
countries", and also, I would suggest, "for the protection of stud
rams."
Dr. H. C. COOMBS (Australia): Mr. Chairman, I thank the
delegate of South Africa for his desire that necessary action be
taken by Australia when it is faced with a critical shortage of
80,000,000 sheep. I can assure you that such a shortage will be
looked after by my Government. But on the proposition which has
been put forward, as the delegates are probably aware, the contents
of the Charter which relate to employment are of very great import-
ance to my delegation. At the same time we do not think that the
activity of the Organisation is likely to be affected one way or the
other. It would not be more or less effective in relation to
employment if there is a change in the title, and since we have been
accustomed to speaking of this prospective Organisation as the I.T.O.
I think it would be merely awkward at this stage to call it the
I.T. E.O., merely because I.T.E.O. is difficult to pronounce con-
secutively without confusion, and therefore I am content that the
Organisation should continue to be called "The International Trade
Organisation."
Dr. GUSTAVO GUTIERREZ (Cuba): Mr. Chairman, the Cuban delega-
tion is in great sympathy with the idea of the Czechoslovakian
delegate, but we find that from the Czechoslovak point of view there
is no consistency between the title when adding the word "Employment"
and the Charter as it is. The title of "Conference on Trade and E/PC/T/B/PV/29
Employment" has been one of the very nice flags that we have seen
in Geneva in these Fêtes de Genève, and as we are coming to the end
of this carnival we are correct, in my opinion, in throwing away
the mask that we have used.
CHAIRMAN: I take it that the Commission is not in favour of
the Czechoslovakian proposal. Does the Czechoslovakian delegate
agree that we pass on without formally putting his proposal to the
vote of the Commission.
Are there any other comments on Article I? Agreed.
Article 65 which takes the place of former Chapter II:
"Membership, Structure and Functions." We will take this Article
paragraph by paragraph commencing with paragraph 1. Are there any
comments on paragraph 1? I would call the attention of the
Commission to an amendment of the Czechoslovakian delegation which
consists of adding paragraphs 6 and 7 to this Article. This amend-
ment has been circulated both in English and in French to the
delegations. We will now deal with paragraph 1.
Dr. GUSTAVO GUTIERREZ (Cuba): Mr. Chairman, before going into
the examination of Article 65, paragraph 1, I only want to bring to
the attention of the Commission a small question which perhaps either
the Chairman or the Secretariat could answer. We have all seen
that Chapter II has been eliminated, and that there are new Articles
inserted in the new text. I would like to know if, before going to
the Plenary Session, we are going to have a full text with all the
re-arrangements of the Chapters/and of the Articles and what oppor-
tunity we would have of seeing it.
Mr. WYNDHAM-WHITE (Executive Secretary) Mr. Chairman, it is the
intention of the Secretariat to issue at least 48 hours before the
beginning of the Plenary Session a complete revised text of all the
chapters as they have emerged from the Commission with a complete
revision of the numbering and cross references. I might say that
that is one of the reasons why delegates are being asked to work late
into the night because the Secretariat needs about 24-hours to do this
Paper in order that it should be done by Tuesday next week.
- 13 -
ER J. - 14 - E/PC/T/B/P V/29
CHAIRMAN: Are there any comments on paragraph 1 of Article 65?
MR A. FAIVOVICH (Chile) (Interpretation): It is only detailed
information that I want to have, Mr. Chairman. We have decided
to approve the new title "International Trade Organization" and
we have suppressed the word "Employmen". Now, this word comes
in paragraph 1 and we should probably suppress it too.
CHAIRMAN: That is the name of the Conference set up in the
resolution of the Economic and Social Council. Therefore we have
to retain the word "Employment" here.
DR. W.C. MAUDE (South Africa): Mr. Chairman, I entirely
agree with what you have just said. It would, however, be of
interest to record that a decision has actually been taken here to
call the Havana Conference the United Nations Conference" and not
the "International Conference", although the Economic and Social
Council wishes it to be called the "International Conference".
Whether that has any significance I do not know, but I
merely wish to have it placed in the records.
CHAIRMAN: Thank you.
The Delegate for France.
(M. ROYER (France) made a remark which applied to the drafting
of the French text only).
MR. S.L. HOLMES (United Kingdom): Mr. Chairman, on the
question of the name of the Conference, I should like to recall a
certain discussion, which took place about a fortnight ago, that
the Economic Committee of the Economic and Sooial Council
directed to the title of the Conference. J.
- 15 -
It was claimed by some of the opponents to the according of
voting rights at the Conference to non-Members of the United
Nations that it was the United Nations Conference, and that had
some bearing on that issue. It was pointed out by others that, in
the Resolution of the Economic and Social Council, the Conference
was there described as an International Conference. In fact, the
point was made there corresponding to the point made by the
representative of South Africa who has just spoken.
I do not know whether a good deal of importance need be
attached to the name, that is, I do not know whether it very much
matters whether this is an International Conference for which the
United Nations have accepted responsibility, or whether it should
be called a United Nations Conference, but I should like to make
it quite clear that, in the view of the United Kingdom Delegation,
the description of the Conference, that is, the United Nations
Conference on Trade and Employment, has no bearing whatever on the
granting of rights of voting at that Conference to countries which
are not Members of the United Nations.
If it is felt that on that issue, on which I think all
Delegations here are agreed, we are on dangerous ground, let it
appear in the Draft Charter that we have adopted this name, and
then people may, perhaps, feel differention this point.
At any rate, the view of the United Kingdom is that, whatever
the name, it should not be allowed to affect the issue of voting
rights of non-Members of the United Nations.
CHAlRMAN: I understand that, in the recent Resolution of
the Economic and Social Council regarding the Havana Conference, the
term "United Nations Conference on Trade and Employment" has been
used. Therefore I think it is proper that in the Charter we should
use that title for the Conference, as that is the latest title used
by the Economic and Social Council.
E/PC/T/ /IV/29 V
- 16 -
~/PC/T/B/PV/29 - -, _ E - * I - -
CItdLN:The Delegate of France.
M. ROWER (Franca) (Interpretation): This question has
ccutainly been diseased several times in the Economic and
Social Council, buteI must say that there have boen two
different official dooameots. Ono has used the title uf
"United Nations Confereeoe" and the other has used thu title
"International Conferencee. Therefore, I wonder wheth%r
It would be simpler to say "Ceotference on Trade and Employmnt".
I would like also to add, Mr. Chairman, that in the French
text it is a little misleadi,g to put it the way it is now,
because it looks as if the Trade and Employment would only
apply to the United Nations and net to the other Governments.
CHLIRMPN: Are there any comments on the suggestion of
the Delegate of--rancc that the words "United Nations" be
deleted?
Baron P. do G;ITIER (Belgiui)(Interpretation): I would
propose that we say "Conferencd on Trade and Employment" anc
not "Trade and Employment Conference" as it is now put in the
French text.
CGRIRETa: The Delegate of the United States.
Kr. Clair WILCOX (United States): All that we are
doing in this Article is referring to the Conference. We
are not giving it its naee. The Conference is to bo named
by the Economic and Social Council. They will issue
invitations in the name of thelr latest resolutions, and al
that we have to do here is to raler to whatever name they c;Jl
it , in order to identify it. V
- 17-v IXv
CEL.RMUN: The Delegate of Belgium has suggested that
the words "seront admis" should come out, which gets over the
difficulty in the French text referred to by the Delegate of
France. I take it that is acceptable to the Delegate of France.
I do not think we need discuss further the relative English and
French texts. We can confine our remarks now to the substance
of the suggestion of the French Delegate that the words "United
Nations should bo omitted. I wonder ifrthe Delegate of Fiance
insists on that?
M. ROYER (France): No, I do not insist.
CH2IRMLN: The Delegate of Czechoslovakia.
H.E. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
am afraid that we cannot give a title to this Conference,
beoause we are not convoking the Conference but, as Mr. Wilcox
says, the Ecooomic and Social C-uncil is doing so. If we do
not know what title to give to the Conference, we can simply
say "the Conference convoked by the Economic and Social Council
under Resolution do-and-so". We co not know under what name
ohe Economic and Spcial Council will convoke this Conference.
eHAgMWT: Tan Dz-ee;te of Fri-ae does not insi t on
this suggestion. I think we can leave this matter by adopting
the latest title eieen to the Confcrmnce in a resolution of
the Ec nomic and SocialwCouncil, and we Vill also look up
the French text of the Economic and Social Council resolution,
and adopt that French text in describing the Conference in
this Article. I take it that will be satisfactory to
Members of the Commission?
Dr. J.E. HOLO'.- (Mouth Africa): la. Chairman, may I
P.Pt'? PPPR/29 raise a point of order? It has nothing to do with the
discussion which is just taking place. I must make that clear,
because there was no doubt a question of substance in the
discussion which has just taken place.
To save time, I want to suggest that a number of points such
as we have already had this morning, which involve purely
wording, should not go through the elaborate process of a speech
here, which is to be translated sometimes twice and then
decided on by eighteen Members. I think the Legal Drafting
Committee is very much more competent to deal with that, and I
would suggest that we agree that when it is purely a matter of
wording, it should not be raised here; but the Delegations
should raise it with the Legal Drafting Committee.
It is, of course, possible that when the matter comes
before the Legal Drafting Committee it may be found by them
to contain a point of substance, although the Delegation
considered it to be a point of form. In that case, of cousse,
they would refer it back. I think we would save quite a lot
of time that way.
CHAIREMAN: On a point of order raised by the South
African Delegate, I wish to thank you for having referred to
the lot of time taken up in purely verbal charges. We have,
however, the Report of the Legal Drafting Committee before us,
and it is formally for our approval.
I think the point raised by the South African Delegate
could be met if Delegates would draw the attention of the
Secretariat to what they consider to be verbal inconsistencies
not giving rise to a point of substance, and the Secretariat
could then discuss it with members of the legal Drafting Committee,
who have already disposer of this particular Chapter, and see if
we could get their consent to the changes. It would, at the
same time, be in order, during the course of the discussion,
for any Member of the Commission to raise a drafting point
which he thinks gives rise to some points of substance in a
divergence between the French and English texts.
E/PC/T/B/PV/29
V - 18 - E/PC/T/B/PV/29
G - 19 -
CHAIRMAN: Is that agreeable to the Members of the
Commission? Agreed.
Any other comments on paragraph 1? Approved.
Para. 2. Any comments? Adopted.
Para. 3. Any comments?
The Delegate of Belgium.
BARON DE GAIFFIER (Belgium) (Interpretation): I would
like, Mr. Chairman, here to clarify the position of the Belgian
Delegation concerning this paragraph.
We have very clearly before Commission "A" stated that
we are in favour of the inclusion of "customs territories,
though not responsible for the formal conduct of their diplomatic
relations", but we do not like here the sentence which follows,
"on such terms as may be determined".
We do not believe that some countries should be asked to
become Members accepting obligations "on such terms as may be
determined," and therefore we do think this question should
be studied further between now and the Havana Conference.
Mr. AUGENTHALER (Czechoslovakia): In the light of
discussions which took place in the Economic and Social Council,
I think we should change the wording of this Article may be in
this way. "The following separate customs territories, though
not responsible for the formal conduct of their diplomatic
relations, shall be or may be admitted to the work on the
Organisation on such terms as may be determined, after prior
consultation with the Economic and Social Council".
I think we would be introducing here a great improvement.
I went through all the Agencies and so on, and as there are G - 20 - E/PC/T/B/PV/29
actual dispositions for other territories in the International
Labour Charter - there are provisions to this effect - that
is why I think we should proceed in this way.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. HOLES (United Kingdom): Mr. Chairman, once again
what
I am not really clear as to/part of the discussions which took
place between 28th July and 1st August in New York at a place
called Lake Success the Delegate of Czechoslovakia is referring
to. The main question that was debated there was the question
of voting rights for countries which are not Members of the
United Nations at the Conference at Havana. Another
question was the .:. u . a. But
whether I am right or not, I would support the proposition which
is now being put forward. It seems to me that it is entirely
a matter for this Preparatory Committe to draw up the proposed
Charter in the form in which it considers it best to do so; and
the whole subject to which the Representative of Czechoslovakia
has now referred has been considered by the Preparatory Committee
on various occasions. I would feel that we are in perfect order
in drafting this part of the Charter as it is now drafted.
CHAIRMAN: The Delegate of the Netherlands.
Mr. SPEEKENBRINK (Netherlands): I also have objections to
raise against the proposal by the Delegate of Czechoslovakia.
For me it is not very clear whether the Economic and Social
Council can decide certain questions which are questions as
to whether they are States or whether they are autonomous in
that way. I think that in any case we should mention an
appropriate Body of the United Nations, but I do not think we
should. mention the Economic and Social Counuil here. E/PC/T/B/PV/29
THERE ls another question I should like to ask with
regard to Paragraph 3 (ii), if I may deal with it at the same
time. I see that a portion of the first sentence - "proposed
by the competent Member having responsibility for the formal
conduct of its diplomatic relations" has been deleted. Later
on we only speak of "which is prepared (I presume this word
should be 'proposed') by the competent Member." We speak there
only of "the competent Member." I should like to know the
reason why we have deleted the second part of that phrase which
I mentioned.
CHAIRMAN: The point just raised by the Netherlands
Delegate is, I think, quite clear. The phrase should be "which
is proposed by the competent Member" - the error will be
rectified.
The "competent Member" in this case could only be the
Member who has responsibility for the formal conduct of
diplomatic relations, and therefore I do not think any doubt
will arise on the way the text is at present drafted. I think
we should first of all endeavour to settle the proposal made by
the Czechoslovak Delegate, which is to change the word "shall"
in the opening paragraph to "may," and later on add the words,
after "Conference" in sub-paragraph (ii) , "after consultation
with the Economic and Social Council", and, add the words
"after consultation with the Economic and Social Council,"
in the opening paragraph, after the words "as may be determined".
The Delegate of Czechoslovakia.
S
21 S E/PC/T/B/PV/29
Mr. AUGENTHALER (Czechoslovakia): Mr. Chairman, I see
no difficulty in saying, instead of Economic and Social Council".
"United Nations Organization", because our decisions here may
be extremely prejudicial to all kinds of organizations and
agencies of the United Nations. That is why it can be quite
rightly said: "with the prior approval of the United Nations
Organization" instead of "Economic and Social Council."
I think Mr. Holmes appealed to me as to which discussion
in the Economic and Social Council I referred. It is, I
think, the declaration of Mr. Thorp of the United States,
when he said: "The first point in the statement of the represents
tive of the United Kingdom is an underlying assumption which
goes through his entire statement that somehow we can isolate
this problem and separate it from the general problems of the
United Nations; that this is a special case; that this is sui
generis and that we can deal with it only in consideration of
the International Trade Organization."
That is a promise with which I am forced to disagree very
substantially. I do not think we can actoon this matter in
this way and regard it as a final determination that we shall
deal with it as a separate problem. It is very difficult,
it seems to me, to argue in one body that a particular country,
for some reason, is qualified to be a Member of the United
Nations, and in another body, that it is not qualified to vote.
It is true that it is a question of words, but I think the
question of Membership is even more important than the question
of mere voting.
CHAIRMAN: I should like to point out that we have a great
number of Articles to deal with today and therefore we cannot
afford to spend too much time on one paragraph of a particular
Article, I would like to know if there are any other Members of
the Commission who support the proposal of the Czechoslovak
Delegation.
- 22 - ER - 23 - E/PC/T/B/PV/29 M. ANGEL FAIVOVICH (Chile) (Interpretation): When we dis-
cussed this question at the Chairman's meeting I expressed my
doubts and my lack of satisfaction regarding the inclusion of these
"territories." I gave my reason at the time and I will not repeat
it here, but I consider that after the discussion which took place
at the Economic and Social Council the Czechoslovakian proposal
seems to me to be the only one that can give me satisfaction.
DR. GUSTAVO GUTIERREZ (Cuba): Mr. Chairman, we second the
motion of the delegate of Czechoslovakia to change the word "shall'
we "may", and that the meeting be subjected to the approval of the
appropriate organs of the United Nations.
M. ROYER (France) (Interpretation): Mr. Chairman, we agree
with the idea which was expressed by the delegate of Czechoslovakia.
We are not going to insist on the draft of the final text as it may
be essential to change it and make it more precise. Therefore we
are not going to insist on the modification of the text.
M. ERIK COLBAN (Norway): Mr. Chairman, I am in favour of the
text as it stands and I will certainly not be able to agree to the
mention of the Social and Economic Council. As to the other organs
of the United Nations, I think their collaboration is covered by
paragraph 1 of Article 81. We shall make a formal agreement with
the United Nations concerning the relationship between our Organisa-
tion and the United Nations, and that should be sufficient.
M. ROYER (France) (Interpretation) : Just a word, Mr.
Chairman. I would like to say to the delegate of Norway that we
have discussed several days ago the question of agreement with
specialised agencies, but it would not be possible to include in
such agreements with specialised agencies a question of principle
as important as that which has been raised here by the delegate of
Czechoslovakia. CHAIRMAN: In order to make progress I think it would be
desirable that we obtain the sense of the Commission on the Czecho -
slovakian proposal by taking a vote.
I take it that the Czechoslovakian proposal is that the open-
ing paragraph should be made to read as follows. Commencing with
the present word "shall" which should be changed to "may", it
would read: "may be admitted to the work of the Organisation on
such terms as may be determined after consultation with the
appropriate organs of the United Nations". And then the same
change takes place in sub-paragraph(ii)after the words: "whose ad-
mission is approved by the Conference." The Czechoslovakian
delegation would propose the addition of the words: "after con-
sultation with the appropriate organs of the United Nations."
Mr. S.L. HOLMES (United Kingdom): I would just like to say,
before you take the vote, that it is only indifference to the Chair-
man that I do not propose an extensive remark in reply to some of
the points made. I have already made our position clear, and if
there were to be a full debate on this -the sort of debate that we
have already had in other bodies here - there is a great deal that
could be said.
Mr. D.Y. DAO (China): With your permission, Mr. Chairman, I
would request that the Czechoslovakian amendment be divided into
two parts. The first amendment is to change the word "shall" into
"may", and the second parts will consist of the addition of the words
"with prior consultation with appropriate organs of the United
Nations."
CHAIRMAN: The delegate of China has asked that the vote be
divided. I will therefore first of all put the first part of the
ER - 24 -
E/PC/T/B/PV/29 ER - 25 - E/PC/T/B/PV/29
Czechoslovakian proposal to change the word "shall" to"may" to the
vote.
Will all those in favour of this change please raise their
hands.
Those against?
The motion is carried by 9 to 6.
The United Kingdom delegation has asked for a roll call. - 26 -
J. E/PC/T/B/PV/29
BARON P. de GAIFFIER (Belgium) (Interpretation): Mr. Chairman.
I would like to be quite sure that the vote here for the
substitution of the word "may" for "shall" does not mean that, by
that fact, we accept the whole amendment. There is a little
clarification needed here, because I might not be opposed to the
whole of the amendment, but still be against this alteration, so
I want to be quite sure that, in voting on this first part it is
understood that we are not voting on the whole amendment.
CHAIRMAN: The Rules of Procedure provide that if any motion
is put, any Member may ask that that motion be divided into two
parts and a vote taken on the separate parts. The decision on
each part would depend on the votes as they are taken. There is
no necessity that Members voting on the first part should vote in
the same way on the second part.
BARON P. de GAIFFIER (Belgium) (Interpretation): Mr. Chairman
I am not quite clear and would like to know whether, if we vote now
for the substitution of the word "'may" for "shall", we vote on
"shall be admitted to the Organization on such terms as may be
determined", as the text is now, or whether it would be the text
of the second part of the amendment?
DR. E. COLBAN (Norway): Mr. Chairman, I would like to make
my position entirely clear. As far as I am concerned, "may" and
"shall" are of equal value as long as the text of the Legal
Drafting Committee is maintained, that is, I am prepared to vote
for the word "may", but on the understanding that the text of the
Legal Drafting Committee is maintained.
CHAIRMAN: The Delegate for Czechoslovakia. J. - 27 - E/PC/T/B/PV/29
H.E. DR. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
think we are involved hero in voting on something which may be a
question of the general policy of the United Nations, and I think
that the vest way would be to take advice on this matter from the
appropriate Organs of the United Nations and have no further
voting.
CHAIRMAN: I would like first to deal with a point of order
which has been raised. I would say that the only question before
the Commission at the present time is that of substituting the
word "may" for "shall" in the text presented by the Legal Drafting
Committee.
BARON P. de GAIFFIER (Belgium): Then, Mr. Chairman, I am in
favour of "shall".
CHAIRMAN: The United Kingdom Delegation has asked for a
roll-call in order that the voting shall be quite clear. I will
therefore ask the Executive Secretary to call the names of the
various Delegations. As their names are called, those Delegations.
who are in favour of the substitution of the word "may" for the
word "shall" shall answer "yes", and those against shall answer "no".
(A vote was then taken by roll-call)
AUSTRALIA No
BELGIUM AND
LUXEMBOURG No
BRAZIL Yes
CANADA No
CHILE Yes
CHINA Yes J. - 28 - E/PC/T/B/PV/29
CUBA Yes
CZECHOSLOVAKIA Yes
FRANCE Yes
LEBANON No
MR. D.P. .rX, I..lZ.2 (India): Mr. Chairman, just at the
moment I happen to represent both India and Pakistan, so I prefer to
be neutral on this point.
CHAIRMAN: The Delegate of India can say "yes", "no" or
"abstention".
INDIA Abstention
NETHERLANDS Yes
NORWAY Yes
NEW ZEALAND No
SOUTH AFRlCA No
UNITED STATES No
UNITED KINGDOM No
CHAIRMAN: The result of the vote is 8 for and 7 against,
with one abstention. *
We will now vote on the other part of the Czechoslovak
proposal, which is to change the last part of the paragraph to
read "to the work of the Organization on such terms as may be
determined after consultation with the appropriate Organs of the
United Nations", and to add, in sub-paragraph (ii), after the words
"approved by the Conference" the words "after consultation with
the appropriate Organs of the United Nations".
*See correction on page 29 E/PC/T/B/PV/29
Mr. S.L. HOLMES (United Kingdom): Mr. Chairman, some
question seems to have arisen as to whether the counting is
accurate.
Mr. WYNDHAM WHITE (Executive Secretary): We have had a
re-count, and the result is eight for, eight against, with one
abstention.
CHAIRMAN: I am sorry for the confusion over counting
the votes. As the voting is eight to eight, I am afraid we
will have to rule that the motion is lost.
H.E. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, a
point of order. Rule 56 of our Rules of Procedure states
that if the Preparatory Committee is equally divided on a
vote taken on a question, a second vote shall be taken at the
next meeting. If the Preparatory Committee is again equally
divided, the proposal is to be regarded as rejected.
CHAIRMAN: We will take another vote on this question
first thing this afternoon.
We shall now proceed to take a vote on the second part of
the Czechoslovak proposal. All those in favour of the Czech
proposal?
Mr. J. TOREES (Brazil): Mr. Chairman, I would just like
to say a word to clarify the position of Brazil in this matter.
In voting for the word "may", I did it for the sole reason
that it looks to me more logical to say "may", taking into
account the conditional manner in which this paragraph is
proposed.
CHAIRMAN: The Delegate of Czechoslovakia.
- 29 -
V E/PC/T/B/PV/29
H.E. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
would request that, if the Commission agrees, we should decide
first on the second proposition I made, that is, we should seek
the advice of the appropriate organ of the United Nations.
Mr. Clair WILCOX (United States): Mr. Chairman, what we
are doing here is recommending a draft of a Charter to a
Conference called by the United Nations, and we will get the advice
at that Conference.
CHAIRMAN: The second part of the Czechoslovak proposal is
before us now, and it will be necessary for us to arrive at some
decision on that part before dealing with the other part of the
Czechoslovak proposal, unless the Czechoslovak Delegate wishes
to withdraw the second part of his proposal.
H.E. Z. AUGENTHALER (Czechoslovakia); Mr. Chairman, in
the light of what has been said by Mr. Wilcox, that before the
Conference we willI have the opinion of the organ of the United
Nations, I withdraw my proposal.
Mr. Clair WILCOX (United States): Mr . Chairman, I am not
sure that the Delegate of Czechoslovakia correctly interpreted
my remark. I said that the proceedings of the World Conference
would constitute an expression of the opinion of the Members of
the United Nations, all of whom are invited to that Conference.
CHAIRMAN: Does the Czechoslovak Delegate wish to withdraw
the second part of his proposal?
H.E. Z. AUGENTHALER (Czechoslovakia): Yes, Mr. Chairman.
I do not insist on this amendment, because it could be interpreted
as a kind of unfriendly feeling on the part of Czechoslovakia for
the countries concerned. On the contrary, we would wish to
have them among us.
- 30 -
V E/PC/T/B/PV/29
Mr. S.L. HOLMES (United Kingdom): Mr. Chairman, may I just
say how very inspired I am to hear the remarks of the Czechoslovak
Delegate, and the friendly sentiments that he has expressed
towards the countries affected by this part of the draft Charter.
CHAIRMAN: Can we now approve -paragraph 3, subject
to a re-voting taken on the words "may" or "shall" first thing
at this afternoon's meeting?
Dr.J. HOLLOWAY (South Africa): Mr. Chairman, I would like
to make a statement about the South African Delegation on
paragraph 3- 1 t is as follows: "In accepting in Article 65(3)
the words "shall be admitted to the Organization on such terms
as may be determined" the South African Delegation does not
accept this phrase to mean that lesser rights in regard to a
representation or voting may be given to these territories than
to other Members. The South African delegation considers that
it is quite unrealistic to expect a territory to accept all
the obligations of the Charter while denying it certain rights".
It is purely a unilateral declaration on our part.
CHAIRMAN: The remarks of the South African Delegate
will be recorded in the Minutes of this Meeting.
Is paragraph 3 approved?
- 31 -
V G - 32 - E/PC/T/B/PV/29
CHAIRMAN: The Delegate of the Netherlands.
Mr. SPEEKENBRINK (Netherlands): I propose that we retain
the words of the Sub-Committee here regarding the change made by
the Drafting Committee in paragraph 3 (ii).
CHAIRMAN: The Netherlands Delegation has proposed that in
sub-paragraph (ii) the words in square brackets, "proposed by
the competent Member having responsibility for the formal conduct of
its diplomatic relations and" should be retained in place of the
words "which is proposed by the competent Member" as put by the
Drafting Committee.
The Delegate of France.
Mr. ROYER (France): I would simply like to second the
proposal made by the Delegate of the Netherlands.
CHAIRMAN: Are any Delegations opposed to the proposal of
the Netherlands Delegate? If not, the proposal of the Netherlands
Delegation is approved. Is paragraph 3 approved, with the changes
made by the adoption of the Netherlands proposal?
Agreed.
A vote on the word "shall" will be taken first thing this
afternoon.
We now come to the footnotes which are to be found on page 6
of the Report of the Drafting Committee. Are those notes
approved? Approved. Adopted.
Paragraph 4. Any comment? Approved.
Paragraph 5.
Mr. AUGENTHALER (Czechoslovakia) I am sorry, Mr. Chairman,
but I would like to say here that the question of mandatory
territorial means territories which are under some "tutor", and G -33- E/PC/T/B/PV/29
in the Conference we want conditions without asking a "tutor",
so I think there should be "after consultation with the
Trusteeship Council", or if there is no Trusteeship Council
say "the United Nations Organization".
CHAIRMAN: I take it the Czechoslovak Delegate is proposing
that the words after consultation with the Trusteeship Council
should be added in an appropriate place in this paragraph.
Mr. AUGENTHALER (Czechoslovakia): Yes.
CHAIRMAN: Those words will be inserted, "The Conference so
L ;ia- after consultation with the Trusteeship Council of the
United Nations, determine conditions", etc.
Any objections to the proposal of the Czechoslovak
Delegation.
Mr. HOLMES (United Kingdom): Would you read the whole of
the paragraph again, Mr. Chairman?
CHAIRMAN: If the Czechoslovak Amendment is adopted, the
paragraph would read as follows:- "The Conference shall, after
consultation with the Trusteeship Council of the United Nations,
determine the conditions upon which Membership rights and
obligations shall be extended to trust territories administered
by the United Nations, and to the free territory of Trieste".
After reading that over I notice that it cannot be
applied to the free territory of Trieste, because the
Trusteeship Council have no authority over that territory.
So that, if the Czechoslovak Amendment is adopted, I am afraid
the paragraph would have to be split into two parts.
Mr. AUGENTHALER (Czechoslovakia): Mr. Chairman, I have said E/PC/T/B/PV/39
that the Trusteeshin Council at this moment does not exist, so
that is why I think it would be better to say "after consultation
with the appropriate organ of the United Nations". That covers
the ease of Trieste.
Dr. COOMBS (Australia) Mr. Chairman, it does seem to me
to be somewhat unnecessary to seek to cover :_. points of this
kind in the text of the Charter.
There is specific provision in the Charter which makes it
mandatory on the International Trade Organisation to enter into
an agreement with the United Nations. It seems to me that
the most obvious thing that that agreement would cover would be
arrangements for consultation on matters within the competence of
the Organization which were to a greater or less extent the concern
of the United Nations and it would seem to me to be natural that
when that agreement comes into being the United Nations would ask
that the agreement should provide for consultation on matters
such as those if in their opinion their interests include or were
such as to make such consultations necessary; and while we have
provision for that - in fact while it is necessary for the
Organization to enter into such an agreement - it does not seem
to me necessary for us to anticipate the matters upon which such
consultation would be required by the United Nations.
CHAIRMAN: After the explanation given by the Australian
Delegate, does the Czechoslovak Delegate wish to have his
proposal formally put to the Commission?
Mr. AUGENTHALER (Czechoslovakia) Mr. Chairman, I do not
insist. I was only thinking that when we are consulting the
G - 34 - E/PC/T/B/PV/29
Economic and Social Council and appropriate Organizations on
all kinds of matters, for instance, technical help (and I do not
know what else) we should consult them also on matters of this
importance.
CHAIRMAN: I think we can be sure that the United Nations,
in negotiating agreement with the Internetional Trade Organization,
will take particular care to protect the interests of the
appropriate organs of the United Nations in matters covered by
the Charter. Therefore I hope it will be possible for the
Czechoslovak Delegate to withdrew his proposal.
Withdrawn? Thank you.
G - 35 - S - 36 - E/PC/T/B/PV/29
CHAIRMAN: Is Paragraph 5 approved?
(Agreed).
"We now come to the new paragraphs proposed by the
Czechoslovak Delegation. The text of this Czechoslovak
amendment has been circulated both in English and in French.
Paragraph 6 reads as follows: "Members of the Organization
which are suspended from the exercise of the rights and
privileges of Membership of the United Nations shall, upon
the request of the latter, be suspended from the rights and
privileges of this Organization."
Would the Czechoslovak Delegate like to speak on his
proposal?
H.E. Mr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman,
I would like to give a very brief explanation of the reason
why we proposed this amendment. (I will deal with both Para-
graph 6 and Paragraph 7 at the same time). It is that our
Charter has no provision for the expulsion of Members and we
may be faced with a situation where the Assembly of the
United Nations takes steps against some country end proceeds
to th expulsion of that country from the United Nations
Organization. We would have no means at all of dealing
with this matter.
I have taken for our amendment the wording as it is in
the Constitution of the United Nations Educational, Social and
Cultural Organization. That is Article 2, on Membership.
This Constitution was, as far as I know, a proved by the
United Nations, so it would only be putting in here something
which is already in the Constitution of another specialized
agency.
CHAIRMAN: The Delegate of Chile. -37 -
S E/PC/T/B/PV/ 29
Mr. Angel FAIVOVICH (Chile) (Interpretation): I would
like to ask for some explanation and clarification from the
Delegate of Czechoslovakia. We know that, in the United
Nations, if the Assembly pronounces the exclusion of a Member,
that Member is excluded, but in our future Organization we
shall have Members who will not be Members of the United
Nations and we shall, moreover, have customs territories which
cannot be considered as Members of the United Nations.
Therefore, in the event that we accept the Czechoslovak
proposal, what will be the exact situation of these non-Members
of the United Nations and of these customs territories?
CHAIRMAN: The Delegate of Australia.
Dr. H. C. COOMBS ( Australia): Mr. Chairman, this is a
fairly difficult question but personally I think the Australian
Delegation would be inclined to support the general idea
underlying the inclusion of these two paragraphs.
It does seem to me to be proper that it should not be
possible for the International Trade Organization to defeat the
purposes or intentions of the United Nations if they wish to
take action against a recalcitrant Member; therefore it would
appear to be reasonable that, upon the request of the United
Nations, we should suspend Membership and so on, from a Member.
At the same time, it does seem to me dangerous to suggest
that expulsion from the United Nations should automatically
International
requirs expulsion from the/Trade Organization. It may not be
unlikely that expulsion of a Member may be a sanction which would
operate more to the detriment of the ones remaining than to the
one excluded. For that reason, the United Nations, whilst wishing
itself to expel a Member, might not require that Member's expul-
sion from all the international organizations, and perhaps
the International Trade Organization might be one of the
possible exceptions. S - 38 - E/PC/T/B/PV/29
This is, as I say, Mr. Chairman, a fairly difficult question
and it is a matter about which my Delegation would like to
think a little more. I would suggest, therefore, that some time
might be given to Delegations to look at this more carefully
b fore a decision is made upon it.
In the meantime, I would like to draw attention to the point
I have raised: that at any rate we ought no t to precude the
possibility that the United Nations itself might wish to expel a
Member but not require its expulsion from the International Trade
Organization. That would, in any case, require an alteration in
the second paragraph of the Czechoslovak amendment; to delete
the word "automatically" and to insert some such words as the
Czechoslovak Delegation has used in the first paragraph:
"upon the request of", so that the second paragraph would then
read: "Members of the Organization, which are expelled from the
United Nations, shall upon the request of the latter, cease to
be Members of this Organization."
That does seem to me to be a minimum change, but, as I
say, Mr. Chairman, I would like time to think about the
implications of these two paragraphs before giving final
judgment upon the matter. - 39 -
ER . E/PC/T/B/PV/29
Mr. CLAIR WILCOX (United States: Mr. Chairman, I regret
that these points were not brought before us at an earlier stage
in our deliberations. I should not desire to take a position on
them without further reflection as to their implications, and per-
haps instructions from my Government on what may be involved. I
think that other delegates will find themselves in the same position
of not having sufficient time for adequate consideration of these
points. I wonder therefore if the situation might be met by the
insertion in the record of the meeting, perhaps in the footnote
appended to the Charter of these proposals, "for the consideration
of the Conference at Havana" without requiring us to take a vote on
them at this time.
CHAIRMAN: Does the suggestion of the United States delegate
meet with the approval of the Czechoslovakian delegate?
H.E Z.AUCENTHALER Czechoslovakia): Yes, Mr. Chairman. I
had no intention of delaying our discussion with this matter. I
agree with the proposal of Mr. Wilcox, and I think we should add
there that it is proposed also to study further the situation
of the States which are not Members of the United Nations in those
cases.
Mr. S.L. HOLMES (United Kingdom): I would only like to say,
Mr. Chairman, that in any case it would obviously be very difficult
for us to consider the two paragraphs here and r... , while we are
still in a state of uncertainty with regard to Article 36, The
Relationship with Non-Members Article which is not likely, I think,
to be put in a final form here, it is almost impossible to con-
sider with any degree of certainty that one is coming to the right
conclusion on these two new paragraphs without any relationship to
that other Article in whatever may be its final form. ER
- 40 -
E/PC/T/B/PV/29
(Interpretation):
M. ROYER (France): The French delegation, Mr. Chairman,
agrees with the spirit of this proposal, but it also agrees with
what has been said by the delegate of the United States that it is
not possible or such a delicate problem to express the position of
the French delegation. . I would just like to draw the attention
of the Commission to one fact: that . c. : provided
as has already been mentioned this morning between
the Economic and Social Council and the different specialised
agencies, and that there are a series of A.rticles which are in
existence concerning the relations between the Organisation and the
Security Council. One of them is that a special agency must en-
force and implement a decision taken by the Security Council. This
has given rise to quite a number of discussions, for instance, the
Health Organisation states that it does not think that it is always
in the interests of the United Nations to implement automatically
and enforce a decision taken by the Security Council, and one af the
arguments mentioned was that if the Security Council does enforce
a sanction, it is not in the interests of the United Nations to de-
prive those countries to which sanctions are applied, of information
on epide iology because that would spread epidemics in those countries.
Therefore I would like the Commission not to forget that even if
there are no special clauses in the Charter on this matter it is delt
with in Article 56.
CHAIRMAN: I propose that we adjourn now for the lunch inter-
val. The Secretariat will prepare a draft note covering this point
and will submit it to the Commission after we have taken the vote.
I would ask the Members to be back here at 2.30 sharp because it is
important that we should not lose any time.
(The Meeting rose at pm) |
GATT Library | qn667ky9808 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty-Second Meeting of Commission A Held on Tuesday, 1 July 1947 at 3.00 P.M. in the Palais Des Nations, Geneva | United Nations Economic and Social Council, July 1, 1947 | United Nations. Economic and Social Council | 01/07/1947 | official documents | E/PC/T/A/PV/22 and E/PC/T/A/PV.20-22 | https://exhibits.stanford.edu/gatt/catalog/qn667ky9808 | qn667ky9808_90240132.xml | GATT_155 | 12,145 | 73,173 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED,
E/PC/T/A/PV/22
1 July 1947
SECOND SESSION OF THE -PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
TWENTY-SECOND MEETING OF COMMISSION A
HELD ON TUESDAY, 1 JULY 1947 at 3.00 P.M. IN THE
PALAIS DES NATIONS, GENEVA
M. Erik COLBAN (Chairman) (Norway)
Delegates wishing to make corrections in their speeches-:should
address their communications to the Documents Clearance Oftice,
Room 220 (Tel. 2247) E/PC/T/A/PV/22
CHAIRMAN: The meeting is open. The reason why the
Chairman of Commission A is unable to preside this afternoon is
that he had a previous commitment for a Press Conference before
it was decided to call this meeting.
You were all present at the meeting yesterday and you know
exactly the position of the discussion when that meeting came to
an end and I do not think it is necessary for me to explain
anything. I will call upon the first speaker on my list, the
representative of Australia.
One second: the delegate of New Zealand wishes to say
something.
Mr. L.C.WEBB (New Zealand): Mr. Chairman, I was just
going to make the suggestion that, as this is in a sense a
continuation of a discussion which was started yesterday, would it
be possible, for the purposes of the record, that those who made
statements yesterday and did not wish to take up the time of
the Conference by repeating those statements, might put in a
record of their statements in order that a summary record of
yesterday's meeting may be prepared by the Secretariat. Other-
wise the record will be incomplete.
CHAIRMAN: In answer to that, I would mention that the
statements in the discussion yesterday are in the verbatim records
of yesterday's meeting, and I think it would be- quite sufficient,
to maintain continuity, that a delegate who wishes to say some-
thing today could refer to what he said yesterday.
The Delegate of New Zealand.
Mr. L.C.WEBB (New Zealand): I think, Sir, that you may
be under a misapprehension. I was not referring to yesterday's
meeting of the Commission but to yesterday's Joint Committee
Meeting of which this discussion is really a continuation, and I
P P.
E/PC /T/A/PV/22
3
do not think, subject to correction, that any record was taken of
that meeting. This meeting is, in other words, a continuation
of the Committee Meeting rather than the Commission Meeting.
CHAIRMAN: As a matter of fact there is in preparation a
record of the Joint Meeting of the Sub-Committees yesterday.
DR. GUTIERREZ (Cuba) : Mr. Chairman, the Cuban delegation
is of opinion that this is a Special Meeting of Commission A
which has been called to give especial consideration to the
problems arising on account, not only of the matter that was
taken up in the Mixed Committee on Article 15 and Chapter IV,
but also of the matters that were raised in the Meeting of
Commission A dealing with Article 25; and so this Special Meeting
of today is not actually a continuation of the Mixed Committee
Meeting but is a Meeting, of the whole in relation to matters
pertaining to the very peculiar conditions in which the under-
developed countries are facing the programme of a World Charter
not only in relation to their matters of quantitative measures
but also subsidies and all the other aspects of the problem
concerned. Is that so ?
CHAIRMAN: I think so. WelI, this point of order being
cleared away, I call upon the delegate of Australia:
DR. H.C: COOMBS (Australia): Mr. Chairman, I Should like
to commence by reminding delegates of the way in which t-,hni -
problem came before this Meeting of the Commission.
In the Sub-Committee which was deraling with Chapter lV
several amendments were put forward which proposed that, as part
of the provisions of Chapter IV for industrial development, -
should be included permission to Member-countries so use protect-
ive measures which were specifically excluded under Chapter V, 4 E/P//T/A/PV/22
the Chapter dealing with General Commercial Policy, without
seeking the prior approval of the Organization, whore it was
wished to use those for purposes of industrial development,
In some cases provision was made for such use to be subject to
subsequent approval; in other cases it was to be subject only
to tho right of other Members to complain as to the effects of
such use. it was clear that action of that kind, as part of
the work of the Sub-Committee dealing with Chapter IV, would have
a profound influence on the status of the specific Articles in
Chapter V which precluded the use of various protective noasures
except under circumstances specified in the Articles dealing with
them.
As Chairman of the Sub-Committee dealing with Chapter IV
I therefore suggested that it would be desirable for these pro-
posals to be discussed jointly by the Sub-Committee dealing with
Chapter IV and the Sub-Committees dealing with the corrresponding
Articles of Chapter V, and the first meeting of that Joint Sub-
Committee did take place this week and, as the New Zealand
delegate pointed out, some discussion has begun.
But in our meeting yesterday, which dealt specifically with
Article 25 which deals with quantitative restrictions, it was
clear that in relation to that Article and other Articles there
were amendments to the specific Articles themselves designed to
achieve much the same sort of purposes as those which had been
put forward in more general fashion in relation to Chapter A.'
It seemed; therefore, necessary to deal with all these things
together, since their general purport and general intention was
the same, and furthermore I felt that it was not proper for a
Sub-Committee, or even a combination of two Sub-Committee, to
deal with matters which were of such substance and did amount
to a substantial change in the content of the Chapter. P.
5 .
I therefore suggested to the Chairman of Commission A that
he should call a Special Meeting of the Commission to discuss
this question in view of its very great importance to the
Charter as a whole.
Having made that explanation, Mr. Chairman, I would like
to go on and express the views of the Australian delegation on
this question.
Delegates who were at the London Session of this Committee
will recall that the Australian delegation was very active in its
advocacy of the inclusion in the Draft Chapter of provisions
designed to enable under-developed countries to develop their
resources to the full. We did that for the following reasons:
First of all we ourselves are an under-developed country in
relation to the potential resources of our country and we did
anticipate therefore that we would need to call upon the facili-
ties provided as a result of the Charter and this Organization and
to take advantage of the rights embodied in the Charter for our
further economic development.
But, more important than that, we believed that the further
economic development of the counts oven less developed than
we are was perhaps the most important single factor capable of
contributing to a higher standard of productivity, a higher
standard of trade, a higher standard of living, and we believed
that a Chapter which claimed to deal with international trade
and employment which gave no adequate attention to the problem
of carrying out that development would be deficient in its most
important respect.
We therefore advanced in London a substantial number or
amendments and additions to the Draft we were considering at
that time, designed to bring about this result. Those proposals
were considered, along with proposals from a number of other
countries. I believe I have pointed out before that we were not P.
6 E/PC/T/A/PV/22
entirely satisfied by the results, but we did believe that
substantial progress was made. There was included in the Charter
a Chapter devoted entirely to the problem of industrial develop-
ment and that Chapter, I believe, included significant gains to
those countries interested in this subject, It included a clear
statement of their own obligation to carry out their industrial
and economic development: it included something to which they and
we attach a good deal. of significance - a clear statement of
their right to use protective instruments for that purpose where
justified: it included also something to which we and others attach
a great deal of weight - that was that the ITO, along with other
international agencies, should be empowered to provide positive
aids to countries carrying out developmental programs in order
that they should be able to make a positive contribution to this
task. We believe that that is important not merely because of
the aid which an international organization of this kind can give,
but we believe it to be fundamental to the success of the ITO
itself.
The ITO .>ill be considering a wide range of commercial policy
and will be called upon to sit in judgment, to conduct negotiations
concerned with these, measures of commercial policy, the prime
purpose of which, in many c..scs, is development, and it seemed to
us therefore fundamental, if they were going to have a proper
understanding of the task before them that they should function-
ally be brought into contact with the objectives which people
were pursuing in adopting certain measures of commercial policy.
In addition to the content of Chapter IV which I have
referred, there was added a very important further provision. In
Chapter V which deals with general Commercial Policy there were
preserved to countries certain measures of a protective character
which they were free to use with comparatively little limitation:
the use of subsidies, the use of tariffs and certain other measures P.
E/PC/T/A/PV/22
7
In narrowly defined circumstances. But now in Chapter IV Was
added a further proposal: that, despite the prohibitions embo-
died in Chapter V, it would be possible for countries to obtain
permission to use other measures, particularly where they could
demonstrate that the use of those measures was not merely more
effective from their own point of view but less restrictive of
international trade and less detrimental to the interests of
other countries than measures of protection which they were freely
and clearly entitled to employ.
I am sorry, Mr. Chairman, for going over this matter in such
detail, but I feel it very necessary, in making clear the atti-
tude of the Australian delegation, to do so.
We believed that those changes brought about in London were
substantial, were significant; they did not go as far as we
would have liked them to go but none the less we believed that they
represented an honest attempt on the part of countries who,
at the outset, had been less concerned with these matters, to
meet the needs of ourselves and other under-developed countries.
Furthermore there were other parts of the Chapter also
where we had sought to obtain concessions in the interests of
our own economy and the economies of other countries who were-
similarly dependent as ours is.:
We came to the conclusion, therefore, as a result of the
Conference in London, that, although we were by no means complete-
ly satisfied, we had reached a compromise which was a reasonable-
one in the light of the conflicting views and interests of The
countries which had concluded it. We believed it to be a
reasonable compromise because, despite its imperfections, we
believed that it did offer a positive opportunity for under-
developed countries to develop their resources; it did provide
means; and we believed that, with goodwill, the Chapter, as P.
8
E/PC/T/A/PV/22
drafted in London, was capable of becoming an instrument by
which the development of the worlds resources would become
more even and at a general higher standard.
Believing that, Mr. Chairman, we came to this Conference,
this Session of the Preparatory Committee, anxious to improve
the London/New York Draft in as many ways as we could, but
satisfied that the basic structure of it did represent a
compromise to which we could give our adherence.
I want to make it quite clear that the fact that we accept
that compromise is based upon the belief, first of all, that
the Charter can lead to industrial development and secondly
that all the countries who were party to that compromise regard
it as one which will be made effective: not merely that it is
a stating of concessions in words, but that it will be imple-
mented in action.
Whether this Charter does so operate depends not so much
upon the words in It as upon the will and capacity of the
countries who are Members of the Organizat ion and who have
signed the Charter.
I want to make it quite, quite clear, too, that we believe
that, unless the Industrial Development provisions of the
Charter are implemented in a way in which they do produce
results, effective results, then the life of the ITO will be
a short one. _9_
G E/PC/T/A/PV/22
However, whether that happens depends, as I have said,
not on the search for further changes in the words but upon
the implementation of the compromise which we have reached.
Now, Mr. Chairman, the Australian Delegation have been
a little disturbed at the tendency apparent here to seek to
extend still further the provisions for the use of protective
measures beyond what was provided for in the London compromise.
We do that, not because we doubt that the countries so
seeking would wish to abuse the further provisions, but because
we are satisfied that on the whole they are not necessary to
their effective development. We have a feeling that they are
tending to exaggerate the need for some on the measures which
they have put forward.
In one of the statements that were made yesterday,
attention was drawn to the difficulties which a country would
experience in putting up a proposal under article 13. It was
pointed out that, so to speak, a substantial part of the July
.which would set in judgment on its proposal would include
countries whose interests, perhaps, ran the other way.
I think one very important thing that needs to be
considered in relation to applications under Article 13 is, it
I am any judge as to how it will operate in practice, that the
jury will not be sitting in Judgment at all on the proposed
development for the industry it is intended to protect.
What it will be sitting in jugment on is the relative
merits of a method of protection for this particular industry
which is excluded under the Charter, and one which is freely open
to the country. if a country wishes to establish or expand a
new or existing industry and believes that protection is necessary
for that purpose, it has already within its rights under the
Charter a number of possible ways of going about it. - 10 -
E/PC/T/A/PV/22
Now I believe it may well be true in individual cases
that that protection will be more readily and. more cheaply
provided, and with less restriction on international trade, by
some of the measures which are precluded. Perhaps, for instance,
by quantitative restriction. I believe the number of these cases
are few, but I to believe they exist. Now, if a country
applying them wishes to bring one of these forward, what it is
in effect putting before the International Trade Organisation is
not that it is an industry which is a good industry to protect,
but here is an industry which it proposes to protect and.
suggests for the consideration of the ITO that the adoption of
a particular form of protection excluded under the Charter would.
be less restrictive of international trade than something it
could do anyway.
Now, I believe that that changes a good deal the conclusions
which one may draw from an examination of Article 13. It is a
question of a choice between methods generally. That, of course,
would not preclude the possibility of a country changing its mind.
as a result of the examination, but the fact remains, that so long
as methods nof protection are open to countries freely and. at their
own discretion, then the application for the ITO approval for a
particular device becomes one not of examination of the proposal
but of the relative merits of the form of protection proposed ,
from the point of view of the country concerned and of other
countries affected.
I give that illustration, Mr. Chairman, to suggest to those
countries who are concerned with industrial development that they
may be allowing their fears arising from the examination of an
individual case to distort their judgment a little.
Another point which I want to make from our own point of - 11 -
E/PC/T/A/PV/22
view; while we agree that the need for the economic development
of under-developed countries justifies much, to include in the
Charter /approval for action for those purposes is a very difficult
thing to do. If you do not extend. the approval of the particular
type of protection proposed to other forms of industry, it is
diifficult to itentify what is economic development or industrial
development, and we, for our part, were very gravely affected in
the war period. by the application of quantitative restrictions to
primary production exports from Australia to a number of other
industrialised countries, which sought to protect and extend their
own domestic agriculture for predominantly strategical reasons;
and we see along with this tendency in the Conference to seek
greater fredom of action in relation to industrial development, a
parallel, and to us, an equally distressing trend.; namely, to seek
to provide for already industrialised. countries freedom to protect
their domestic agriculture - and he again, I believe, we have in
the past reached a reasonable compromise.
We do not wish to suggest that a primary production industry
of already industrialised countries is not, in many cases, worthy
of protection; but generally the justification for its protection
is a different one. In very many cases it cannot ever be expected.
to reach the levels of productivity of the corresponding industries
in the major exporting countries.
Nevertheless, trade protection may well be justified for social
reasons rather than economic reasons, and we would. therefore wish
to see reasonable provision male for them; but we are afraid that
this competitive element, entering into the search for the
extension of means of protection, on theme hand by industrial
countries, on the other hand. by primary producing or under-developed.
countries seeking to become industrialised, may lead. to a situation G . - 12 - E/PC/T/A/PV/22
where the Charter ceases to have any guiding influence upon the
commercial and. developmental policies of the countries who are
Members of the Organisation at all.
This problem, Mr. Chairman, is a very difficult one for us.
We feel the strongest identity of interests with countries whose
major industrial development lies before them. I can assure them
that we would not have been prepare. to accept the main basis of
the London compromise (if I can call it that) if we had not been
satisfied that it did provide them with the opportunity which we
know they need, and which we are anxious for them to have.
There is, I think, Mr. Chairman, in this competitive element
a real danger to the Conference. Unless we are prepared to
approach this question as we did in London, basically, a one of
compromise, then there is real danger that our best work will
have been wasted.
For the Australian -Delegation I can only repeat that while
we want changes made, the broad lines of the London compromise are
what we are prepared to accept. - 13 -
E/PC/T/A/PV/22
Mr. CLAIR WILCOX (United States): Mr. Chairman, officially
this meeting is known as the meeting of the Preparatory Committee
of the International Conference on Trade and Employment. More
accurately, it should be described as the International Conference
on Quantitative Restrictions. No matter what door we are going
in - whether it be marked "Employment" or "Development of Commercial
Policy" or "Commodity Policy" - the door where we come out is
always marked "Q.R.". What we are talking about is protectionism,
protectionism in most extreme form. The fundamental issue that
faces this Conference is whether the future pattern of International
Trade is to be one in which the quantity and direction of all
exports and the quantity and sources of all imports is to be subject,
in all countries, to detailed administrative controls.
is one
The point/in which all trade between nations is to be the
subject of a continuous political negotiation, with the lion's share
of the benefits going to those countries that possess the greatest
economic strength. This is the issue and the time has come when
we must recognise it and face it. What we, in the United States,
should like to see is the complete outlawry of quantitative
restrictions. We have recognised, however, that in the present
economic situation in the world, this is unattainable. We have
accepted as second best the position that quantitative restrictions
should be subjected, by international agreement, to international
control. We have listened, over the past two years, with sympathy
and, I hope, with understanding, to the statements of the particular
needs of particular countries. We have displayed, I think you will
all admit, a willingness to compromise in an effort to reach an
agreement which would be acceptable to all and fair to all. We
have felt that we succeeded in reaching such an agreement in London.
In that agreement, Mr. Chairman, we went as far as we could go.
There comes a time when further concessions would involve the - 14 -
complete surrender of fundamental principles. When that time
comes, compromise is no longer possible. In our opinion that time
has come today. Let us take a look at the nature of the balance of
interest that, we reached in London. What are the obligations that
would be assumed by the United states and by other countries? We
have here, for the first time in international history, a recognition
that the domestic employment policies of individual countries is a
matter of legitimate concern to other countries. We have here, for
the first time in history, a commitment to take measures as designed
to maintain full employment, designed to maintain the adequacy of
markets for the goods of other countries. Secondly, we have agreed
to co-operate in the economic development of other countries and
specifically to impose no unreasonable impediments on the exportation
of capital materials, equipment and technology which are needed for
that development. There never was before, in the history of the
world, such a commitment. Thirdly, we have agreed to provide a
national Treatment of . internal taxation and regulation; and
fourthly, a Most-Favoured-ration treatment in all customs matters.
Fifthly, to reduce our tariffs substantially. Sixthly, to submit
to strict control on the use of import rules and export subsidies.
Seventhly, to submit to a procedure of international complaints,
concerning cartel
hearinms- and recommendations/ arrangements in which our own
powerful domestic corporations may be participants; and eighthly,
we have agreed to a code of conduct to control international and
intergovernmental commodity agreements; for. which I might say there
is only moderate enthusiasm in the United States.
Now, other nations have assumed such obligations too. But for
many there will be numerous and detailed provisions for escape. The
is
most important of these/in Article 26 which relates to nations in
balance-of-payments difficulties. We regret the necessity for this - 15 -
E/PC/T/A/PV/22
Article, but we recognise it and we are prepared to stand by it.
The matter which is now at issue before us is the freedom of the
so-called underdeveloped countries to take protective measures.
One might assume, to listen to some discussions, on this matter,
that the Charter provided no liberty at all in this regard. This
is not the case. Under the London and New york Drafts, an
undeveloped country is free first to use subsidies and second it
is free to impose a new tariff on any commodity which it has not
bound against the imposition of a tariff, or to raise a tariff on
any commodity which it has not bound against increase in the course
of a trade agreement. It must be recognised that a country that
reserves from an agreement a considerable number of commodities must
expect to get less in the way of concessions in return, but the way
is completely open for a country to do so. As Dr. Coombs has said,
the question at issue is not whether protection is to be provided,
but only how it may be provided. - 16 -
The only matters on which a country would be required to
seek the approval of the International Trade Organization are those
on which it sought a release from obligations which it voluntarily
assumed, that is, where it sought permission to impose a tariff
although it had bound free entry w protection in a trade agreement;
where it sought permission to raise a tariff here it had reduced
or bound against incresgo in a trade agreement; and finally, where
it sought to use quantitative restrictions.
These obligations would be assumed by the nation as a quid
ES quo for those assumed by other nations including the United
States, and as a quid. o quo for the tariff reductions made by
other nations including the United States, Even under these
circumstances the Charter, is drafted at the present time,
provides for a controlled release from such obligations That
provision it seems to me can be regarded only as one of extreme
generosity, There can be no case in econormics or in morality
for anything more, We are prepared to stand by this compromise
as Dr. Coombs has said the Government of Australia is prepared to
stand by this compromise. Now we find, however, that this provision
is to set up a procedure, under which we should return to certain
countries part of the price they were paying for the benefits con-
ferred upon them by the other nations of the world, is under
vigorous attack. This very considerable concession we are told
is not enough. What then is enough? What is desired it seems to
be clear is complete freedom at any time to impose on the imports
of any products any quantitative limits that a country may desire
There is only one way in which this proposal can be described;
it is a prescription for economic monarchy. Of all forms Of restriction
ism ever devised by the mind of men, Q.R. is the worst, Beside it
protective tariffs appears to be a liberal method of controlling
trade. In the case of a tariff the total volume of imports can
E/PC/T/A/PV/22 L.
-17 - E/PC/T/A/PV/22
expand with the expansion of trade. There is flexibility in the
volume of trade. Under a quota system the volume of trade is
rigidly restricted, and no matter how much more people may wish
to buy or consume, not one single more unit will be admitted than
the controlling authority thinks fit.
In the case of tariffs, the direction of trade and the
sources of import can shift with changes in quality and Cost and
price. Under a quota system th direction of trade and the sources
of imports is rigidly fixed by public authority without regard to
quality, oost or price, Under a tariff, equality of treatment of
all other states can be assured. Under a quota system; no: matter
how detailed our rules, no matter how carefully we police them,
must as
there/almost inevitably be discrimination/amongst other states, If
these rules were further to be relaxed, we should emerge from this
meeting with nothing more than a multilateral agreement to fasten
bilateralism on world trade.
Finally, Q.R. makes all international commerce a matter of
political negotiation - goods move , not on the basis of quality,
service and trade, but on the basis of deals completed country by
country, product by product, and day by day between public officials.
All economic relation between nations are moved into the area of
political conflict. If Q R. is to be fastened on the commerce of
the
the world without let or hindrance,/restrictionism of the Fifties
and the Sixties will make the restrictionism af the Thirties look
like absolute free trade. If this is to be the outcome of our
negotiations here, I say all our hopes for economic stability, for
economic development and for economic peace are doomed to failure.
We all know that the folly of the past brought us to tragedy. What
reason is there to suppose that even greater folly in the future
would bring us to a better fute ?
On this matter I want to repeat that we have gone as far as - 18 -E/PC/T/A/PV/22
we can go If we were to emerge from this meeting with a Charter
that was in its very terms a sanctification of autarchy, an
incitement to resume economic aggression, a guarantee of economic war,
there is not the remotest possibility that it would be accepted by
the Congress or the people of the United States. We should. not even
present it to them for their consideration.
In the trade negotiations it has been our hope that we should
achieve an agreement which would be to themutual advantage of the
participating states. We have been prepared to offer substantial
reduction in our tariffs, providing readier access to our markets
for all the other countries of the world. Now we are faced with
the proposal that the concessions that are made to us, the quid
pro quo for our concessions, may be withdrawn unilaterally, at any
time and to any extent that another party to the contract may choose.
That is the meaning of freedom - absolute and uncontrolled freedom -
to use Q.R. A trade agreement that affored so complete an escape of
one party the contratct would not be worth the paper on which it was
written. We cannot make tariff concessions on this basis. We will
not do so. - 19 -
I have always supposed, Mr. Chairman, that the future economic
policy of the United States is a matter of great importance to the
other nations of the world. I have been led to believe that a
reduction of American tariffs would be looked upon with considerable
favour by other states, and that an increase in our tariffs for the
import
general imposition of/quotas would be regarded as a serious blow
to their essential interests. If this is indeed the case, I must
ask some of my friends to consider for a moment the direction in
which they are asking us to go, and what the consequences are likely
to be.
If the trading, pattern now written into the Charter is
ultimately adopted, you will be able to sell more goods in the
United States. There will be no official limit on the total
qualltity you can sell; you will not be told that some part or all
of our market has been reserved for somebody else; you will not be
told that we will not take your goods because we do not like your
politics; you will not be told that we will not take you goods
unless you pledge yourself to take specific quantities of ours;
you will not find yourself excluded from other markets by the fact
that we have pre-empted them for ourselves.
Let us suppose that any one of a dozen amendments that are
now before us should be adopted and that all restraints on
Quantitative Restrictions are finally destroyed. Does anyone
suppose if the soarge of restrictions in its most viralent form
is to ;'r~ omr a large part of Europe that the rest of us or,
specifically, that the United. States would remain completely immune.
Suppose that we eventially succumb, what then? You may be told
when you approach us with your goods that you can sell to us but
only up to a certain limit regardless of quality. You may be
told that you cannot sell to us unless you agree to take specific
E/PC/T/A/PV/22 - 20 -
Quantities of specific goods - not harmonicas perhaps, but something
else in return; you may be told that our market is reserved for
someone el ; you may be told that you cannot sell to us until
you modify domestic policies we do not like; you may discover,
when you attempt to sell in other markets that we have been there
first to freeze you out.
I do not utter these words, Mr. Chairman, as a threat. I
want to make it perfectly clear that that is not the way we want to
do business, and unless we are drivers to it, it is not the way that
we shall do business, But If some of the proposals now before us
were adopted, it is the destination towards which we should be
asked to turn our feet.
I repeat, the fundamental issue is whether the future pattern
of international trade is to be one in which the quantity and
direction of all exports and. the quantity and sources of all
imports is to be subject in all countries to detaled administration
controls, in which all trade between nations is to be the subject
of continucus political negotiation with the lions share of the
benefits going to those countries that possess the greatest economic
strength. . When that issue and the possible effects of its long
solution are clearly understood, I shall have no doubt as to the
decision that this Committee will make.
E/PC/T/A/PV/22
J ER
- 21 - E/PC/T/A/PV/22
Kr, J.J. DEUTSCH (Canada): Mr. Chairman, the Canadian
delegation has, on various occasions, stated its attitude towards
the matter which was under discussion today. We do not wish to
repeat what has been said on other occasions. We do not wish to
repeat either,the considerations that have been stated so well by
the previous two speakers - considerations with which we are in
full agreement.
As we have said previously, we are prepared to accept the
London compromise. It is on that understanding and on the basis
of that compromise that we have engaged in the discussions here, and
it is on the basis of that compromise that we have agreed to
negotiate in respect of our tariff. Now, the amendments which have
been proposed in respect of the use of quantitative restrictions at
different races in the Charter to our mind would, if adopted,
constitute a fundamental change in the nature of the Charter as
it emerged from London. The amendments that are proposed are, on
the one hand, amendments which would, in fact, permit unlimited
freedom to countries to protect industrial production and that
freedom would be allowed, under the amendments as proposed., generally
and naturally to all the Members of the Organization. It is
suggested that these freedoms should only be allowed to one particular
type of economy - namely, an underdeveloped economy. I suggest,
however, that there are very few economies which can be said to be
fully developed, certainly ours is not.
On the other hand, we are confronted with amendments which would
enable the more highly developed countries to follow an almost
unlimited protection with respect to agriculture. If these
amendments are adopted with regard to both these respects, clearly
for us the basic rules of the Charter would become meaningless. Not
only meaningless, but would become exceedingly dangerous. We would 22 - E/PC/T/A/PV/22
have undertaken many important obligations and many concessions.
At the same time, possibilities for economic warfare in the world
around us would continue unabated. Clearly, the Charter that would
bring about such a situation or allow for such a situation is not
one which we could recommend to our government.
For these reasons, Mr. Chairman, we could not, having in mind
our own position and having in mind the general economic climate of
the world, and having in mind the effect upon real economic interest
in other countries, accept any substantial change in the fundamental
in the
rules of the Charter or/compromise that emerged from London - we
could not accept,or recommend to our governments to accept, this.
In that case, we would have to look to other ways of ordering our
affairs in the economic world. - 23 -
Dr. A.B. SPEEKENBRINK (Netherlands): After all that has
been said by previous speakers, there is no nerd for me to go
into lengthy detail. I would, however, only state that the
Netherlands delegation also accepted the London draft as a
reasonable compromise. We explained certain difficulties in
London that we had with our agricultural organization and to a
certain extent even with protection. We are still faced with
difficulties, but we hope we will be able to solve them here. In
any case, you can be assured that we will do his with our eyes
fully opened to the difficulties of other countries, and we will
try to find a solution wherever possible.
When we came to this confence my Government instructed our
delegation to work along the same lines as was done in London, and
when we explained certain of our difficulties here, as I have said
before we have acted in the same spirit of reasonable compromise -
which has been so well explained by Dr. Coombs - which governed our
Meetings in London and New York, and which should also govern
our meetings here.
With regard to the Netherlands, we are always open for
international consultation and control of ideas, and to enter into
obligations.
To come now to the issue before this Committee, that of
quantitative restrictions, I can state firmly that prior consul-
tation is entirely acceptable to us and the more so when we look
at the other stipulations of tha Charter, especially those in
Articles 34 end 35.
Sir RAGHAVAN PILLAI (India): As I understand the issue it
is whether the approval of the Organisation should be declared a
condition precedent to the adoption of protective measures by
Member countries. I doubt myself whether it is correct
E/PC/T/A/PV/22
L. L E/PC/T/A/PV/22
to present the fundamental principles involved in this form, and
I hope I may be forgiven if I cover a somewhat wider field, and
take. the opportunity now presented to submit the case of the
Indian amendment - the insertion of a new Article, Number 26 (a)
relating to quantitave restrictions for protective purposes,
an amendment which appears to me to raise issues not all com-
pressble within the narrow limits of the concept of prior approval.
In attempting to make out this case, I feel I am in the position,
not of an advocate defending an accused person, nor even of one
appearing on behalf of a prisoner already tried and sentenced,
but unhappily - and I say this after listening to the speech made
by Mr. Wilcox - of one pleading for a repríieve for a condemned man
upon whom sentence of death is about to be carried out.
I shall try and be as brief as possible consistent with the
importance of the subject, and shall only recall the major
arguments in support of our case
In the past, and especially in the last two decades, various
devices and innumerable protective measures, some direct and overt,
others concealed, have been employed. It has been the endeavour
if some of the distinguished delegations here in connection with the
discussioin if the so-called technical -Articles, to track down as
many as possible and it is proposed to put the more capricious
protective devices on a black list. With these, I shall not here
concern myself. I shall confine my remarks instead to the four
major protective instruments, tariffs, subsidies, > trading -
which last may cover a multitude of sins - and quantitative
restrictions. - 25 -
E/PC/T/A/PV/ 22
What is the attitude we have taken up in the Charter with
respect to each of these protective devices? On tariffs, we have
fixed no ceiling whatever, nor have we imposed any restriction on
a country's freedom of action in this respect except to the extent
determined by obligations which it has voluntarily undertaken. On
subsidies, too, we have not attempted to set any limit, and it is
of interest to note that, where a serious prejudice to the interest
of any Member is caused by subsidisation, the Charter provides for
no more than a discussion between the parties concerned.. When we
come to State Trading, our ,enerosity seems to know ko bounds - it
is almost staggering its lavishness.
Quite otherwise, Mr. Chairman, is our position with respect to
Quantitative Restrictions. Article 25 bans it altogether with
certain exceptions enumerated in later paragraphs of that article
and in Aarticle 26. But the use of Quuantitative Restrictions for
protection purposes is coverd by no exception, and a country
desiring to employ it in the interests of its program of economic
development is left to have recourse to the provisions of that
omnibus Article, Article 13. Mr. Chairman, I have looked at that
Article a number of times, both the New York version and the revised
draft currently under discussion in the appropriate sub-committee.
They are both masterly drafts, but masterly, mainly, some might say,
in the sense of preventing certain things without appearing to
prevent them. An uncharitable critic might oven say that certain
provisions appear perilously like elaborate circumlocution and the
net effect of it all an involved negative. I am myself reminded.
when reflecting on this Article of the story of the practical joker
whe sent a blind man into a dark room to search for a black cat
which was not there. W have an unpleasent feeling, Mr. Chairman,
that if we allowed. ourselves to be influenced by the superficial - 26 -
J . E/PC/T/A/PV/22
reasonableness of the procedure laid down in Article 13 we might
find, ourselves engaged on the same errand as that poor, unfortunate
blind man.
The truth is, Mr. Chairman, the Quantitative Restrictions has
become the object of deep distrust and suspicion, because it has
been unable to live down its past. We find that it has in the
past been greatly misused, though let me hasten to add, we are not
one of the guilty ones. We believe, however, that under proper
safeguards and subject to acceptable criteria, it can be made to
serve a constructive role under conditions of an expansionist world
economy.
What, let us ask, are the reasons which have been advanced in
of prior approval in the case of
favour/Quatitative Restrictions? These are:-
(1) Quantitative Restriction is a particularly arbitary form
of restriction and is likely to be abused in the absercs of prior
approval.
(2) the ban on Quantitative Restriction and the stipulation of
this rigid procedure are necessary for maintaining "the balance of
the Charter".
(3) If no prior approval is provide for, the Organization
may be placed in the unhappy position of having to ask for a
reversal of action already taken.
(4) Equity demands that the procedure for granting release
from a negotiated obligation, such as a tariff concession, should be
the same as that for autherising the use of Quantitative Restrictions
for protective purposes, as otherwise Quantitative Restrictions
might be used to, nullify the benefit of tariff concessions granted
by agreement.
Let me deal with these arguments and test their validity in the
light of the precise terms of the amendment 26% which we have -27-
J. E/PC/T/A/PV/22
proposed.
In the first place, is quantitative Restrictions more arbitrary
than the other forms of restrictions, the use of which is permitted
under the Charter without prior approval? Under the Charter, a
country is free to raise its unbound tariffs to any extent it
pleases, though the arbitrariness allowed in respect of tariffs can
be equally destructive of international trade. Nor does the Charter
require prior approval in the matter of subsidies or State Trading,
both of which can be manipulated by Governments as arbitrarily as
Quanitative Restrictions can be.
If a country wishes to institute a new state monopoly for the
importation of a particular product, it can do so under the Charter
without prior approval, and yet what is the difference in substance
or in effect, between Quantitative Restrictions and state monopoly?
Is the one really core arbitrary than the other? That is to say,
is a state Which is guided purely by considerations of the good of
the community likely to behave more arbitrarily than a state
enterprise which is guided by those considerations as well as by the
profit motive? It may be argued that state monopolies are subject
to negotiation, even though they can be instituted. without prior
approval. But equally, Quantitative Restrictions also might be
made subject to negotiation, if desired. 28 E/PC/T/A/PV/22
That mystic word. "balance", to which I referred a little
while ago, has been much used in the discussion of this problem.
But what is the alternative method which can be employed, if one
renounces the use of protective q.r. without prior approval?
Subsidies? State-trading? The balance, to our mind, is heavily
in favour of rich countries which can resort to subsidies and
which can increase the amount of their subsidy to match every
effort on the part of the foreign supplier to lower the price of
his product. Poverty, it is truly said, is no crime: but it is
twice as bad.
The third objection would have been valid if no procedure for
subsequent scrutiny had been laid down. The Amendment proposed
by us provides two safeguards against this difficulty. In the-
first place, it lays down certain criteria which each country
must apply before it can grant protection in the form of q.r.
I shall refer to the proviso of paragraph 1 itself, The
proviso runs as follows:
"Members agree that they will not impose new or intensify
existing quantitative restrictions on imports for protective
purposes except when such restrictions are nor more restrictive in
their effect than other forms of protection permissible under this
Charter. Provided that no such restrictions shall, except in
accordance with the provisions of paragraph 2 of Article 13, be
applied to any product in respect of which the importing Member
country has assumed an obligation through negotiations with any
other Member or Members pursuant to Chapter V."
If prior approval is considered unnecessary in the case af
q.r. for balance of payment reasons, because criteria have been
laid down in the latter case, we do not see why prior approval
should be insisted on in the case of protective q.r., even when
28
G E/PC/T/A/PV/22
29
definite criteria have been laid down. Q.r. imposed for
balance of paymentss reasons can be used for protective purposes
(and have, indeed, had that effect during the war) just as much
as protective q.r. It is easy to exaggerate the degree of urgency
involved in the case of balance of payments q.r.; surely,
balance of payment difficulties do not develop overnight.
Secondly, our Amendment lays down a definite procedure for
subsequent scrutiny. It provides that if the Urganisation
disapproves of q..r. imposed by a Member, th. Member must withdraw
them or face the penalties imposed by the Organisation. This
procedure would be written into the Charter, and any domestic
industry which secured protection in the form of q.r. would know
definitely that the protection given to it was subject to the
subsequent approval of the Organisation. No vested interest
could be created if protection were given subject to this definite
condition. If necessary, a procedure could be laid down requiring
every Member using protective q.r. to make this condition known
to the interests concerned, and that would " provide a complete
answer to the objection that q.r. without prior approval would
create vested interests.
:The fourt objection has been fully met by the proviso to
paragraph 1 of our amendment. Where is the equity in laying
town the same procedure for waiving a negotiated obligation and
for permisston to use a recognised Instrument of economic
development? As I have said already, Mr, Chairman, the Amendment
possesses two features which would restrict the use of q.r, without
prior approval to very narrow limits, and to really essential
cases, the two features being:
(1) The criterion laid down in paragraph 1, and its proviso;
and
(2) the procedure laid down in paragraphs 2 and 3. Let me
G G 30 E/PC/T/A/PV/22
instance a few cases where, in the light of the criterion laid
down, q.r, could be used. without prior approval.
(a) Where the domestic industry is able to supply only a small
proportion of domestic requirements. To put a tariff on the
whole of the requirements would be to impose an excessively heavy
burden on the consumer.
(b) Where, because of the smallness of the domestic output, no
representative figures of cost are available. The Tariff has to be
based on a comparison between domestic costs and import cost.
If the level of protective import Ic:iy were based on the necessarily
high and. therefore unrepresentative cost of domestic production,
it would. necessarily have to be a high 'duty.
(c) In certain cases the import prices might be extremely
unstable, and if protection could. be given only by means of
tariffs, the level of duty would have to be high enough to
provide against all contingencies. The burden on the consumer
and, on international trade would. in such a case be higher than if
q.r. were employed, because q.r. is essentially more flexible.
(d) In certain cases, again, a tariff, by raising the price,
would merely result in contraction of; trade. A case in point in
is sulphate of ammonia
my own country, for which the poverty-stricken agricultural
community provides the sole market. If, in such a case, it is
not practicable to give subsidies, a pooling arrangement will
-have to be introduced. to make supplies available to agricultur-
ists at a price which represents the average of the import
prices and domestic costs, and a pooling arrangement of this
sort cannot be operate without q.r.
(e) In the case of industries, the development of which is
absolutely essential in the interests of national security
(and it is not difficult, without much controversy, to categorize E/PC/T/A/PV/22
such industries, either here or in the Organisation), the rule
about limiting the quantum of protecting has to be modified.
somewhat. Q.r., because of its certainty, could be permitted to
be employed. in the case of such industries to a greater extent than
in other cases.
Having said this, Mr. Chairman, I should like to say that we
would be quite prepared, if prior approval is waived under the
limited. circumstances we have indicated.,
(a) to consider what amplification is possible in the criteria
which have been laid down; and.
(b). also to consider improvements in the procedure suggested
by us.
I have already indicated that in addition to the safeguards
already provided., q.r. could conceivably be made subject to
negotiation,
Also that categories of security industries could. be presented either
sooner or later; and that a Member granting a protection in the
fom of a q.r. could be required. to explain to the interests
concerned that its action was subject to the approval of the
Organisation, in. order that no plea of vested interests might be
preferred if the Organisation subsequently disapproved. of the
action.In addition, it is also possible to lay down that in making
any determination under para. 1 of our Amendment, the Member should
be guided by the findings of an independent national tribunal,
The Indian Delegation has presented only a few Amendments for
consideration by this Conference, and of those we have put in
my Delegation attaches the greatest importance to the one relating
to q.r. We come to you with clean hands. Only in one occasion
before the war did we find it necessary to impose quotas; that
was done against Japan, and by agreement. We are fully aware of
G
31 G. 32 E/PC/T/A/PV/2
the objections to q.r., and of the risk of its being misused.
None the less, we are convinced that if we are to carry out our
programme of economic development we must have a residuum of
power to impose q.r., under internationally accepted criteria in
certain conditions. We are fully prepared to discuss what these
criteria should be, and are anxious to be as accommodating as we
can; but we find it difficult to compromise with the principle
itself, and earnestly hope the Commission will take into
favourable consideration the Amendment we have proposed. ER
E/PC/T/A/PV/22
33
CHAIRMAN: I still have six more speakers on my list.
First of all, the representative of Belgium.
M. PIERRE FORTIHOMME (Belgium): Mr. Chairman, words have a
tendency to cover the most diverse things. For instance, the term
"'underdeveloped countries" lumps together countries which vary very
considerably in the size of their territory, the amount of resources,
developed or undeveloped, that they have at their disposal, and the
labour force on which they can draw for their development. In the
same way the term "industrial countries' covers very different
situations. There are some industrial countries which have large.
territories, great resources, and others which are not situated in
the same position. We have heard here the statement on the position
industrial
of some/countries which have large territories and large resources.
What I would say about that statement is that, when they did not
accept the proposition to establish the liberty of the jungle or say
"Well, let us have a test of strength and we will see who wins" -
when I see them, instead of that, striving earnestly for economic
law and order - I have the impression that they have a good
understanding of the best interests of us all, and I believe they have
given a proof of the sincerity of their will to co-operate -
sincerity.which the delegate of Australia says was an indispensable
pre-requisite for the successful functioning of the ITO.
The Belgian delegation represents an industrial country with a
small territory, a highly developed population, and. a complete
dependency on international trade for its very life. We have also
made the effort to understand the necessities of others, and I must
say that, in accepting the industrial development in the rest of the
world, we have to display a considerable amount of fortitude. We
have to be inveterate optimist s and we have to trust the others. We 34 E/PC/T/A/PV/22
have to trust them, first of all, when their development is drying
up gradually certain of our traditional trade channels; we have to
trust them really to develop their resources to create really a now
amount of wealth in the world. We also have to trust them to use
this newly created wealth to make better opportunities for all of
us for a wider exchange of goods and a better standard of living
generally. L E/PC/T/A/PV/22
Now in accepting this, we face the necessity if adapting
our own economy to the chances in other countries. We have to
develop new industries; we have to let old industries lapse;
end at a time like this when our country is faced with the
problems of reconstruction, we find that. having a lot of
industries which have been reduced or destroyed, we have every
day to make vary difficult choices as to whether we are going to
rebuild an industry that existed, or whether we are going to
consider that it has definitely passed its phase if usefulness,
and whether what available capital we still have should be invested
elsewhere.
Now I have listened very carefully to what the Delegate for
India said, and I have a slightly uncertain feeling that the first
part of his argument savoured somewhat of the school of thought
that two wrongs make a right. In the rest of his speech he,
may perhaps have made a case for the use of' quantitativerestrictions,
but I do not feel that he has made a case for the use. of quantitative
restrictions without prior approval.
On the other hand, we feel we must insist very strongly on
prior approval and this for a reason which/is very practical.
As I said before, the development of other countries imposes
changes in our industrial production and' the .whole set-up of
our economic life, Such changes have, to be gradual if they
are not going to provoke. the . greatest s;1 difficulties and
sometimes downright misary. If a number of countries which
are our markes are going to apply all kinds of quantitative
restrictions without any prior notice, without any prior
discussion as to some sort of adaptation of their policy to the
policies of other countries.We are going, to find that some
industries cannot continue to fucton normally, As an example, L E/PC/T/A/PV/22
we have found in our experence that countries in a state of
new development with no relation of their plans to the plans if
other people, are liable to take for a certain time such things
as Diesel engines; then suddenly they do not want them. Or
they may want machine tools, and shortly afterwards ask for
pumping equipment. Now it is very difficult for a man making
Diesel engines in a factory suddenly to turn out pumping
machinery, and then afterwards to turn out ploughs, and later on
something else, In fact, if we find that a number of undeveloped
countries are applying unrelated, uneio-ordinated development
schemes, the while of our industrial programs is going to be
completely wrecked, the whole if our industrial plant is going
to be of no value, we shall have to scrap it and start from the
beginning. We will, in our turn, have no resources and be
unable to cope with the situation.
For these reasons, and for the reasons which have already
been explained by other representatives of industrial countries,
we cannot admit that there should be any substantial departure
from what the Delegate for Australia called "the London
compromise". J. 37 E/PC/T/A/PV/22
CHAIRMAN: I call on the delegatee of Cuba.
As it is now 5.50, I would like to suggest that we continue up
to 6.30 so as to give the delegate of Cuba and other delegates
sufficient time to explain their position.
DR. G. GUTIERREZ (Cuba): I do not know, Mr. Chairman, if it
is wise to speak at this hourbecause, by a play of fate, it happens
that all the speakers who have taken our attention since 3 o'clock
until now have been nations, with one exception, that are satisfied
that
with the London Charter, and all other nations/are not so satisfied
are placed in the very embarrassing position of expressing, in less
than 30 minutes, their opinions against.
Of course, there is an old proverb that says that usually
reason is in inverse proportion to the length of time used to
express it, and we are going to try to be brief in order to say that
we believe that we have reason
We have here, like one of the other bad boys of this
Conference, dared to raise a voice against our elder brothers, and
have come into the room when that big civilisation, which we have
just heard laid out by the delegate of Belgium, where they use
typewriters and steno-type machines and electric lights, is drafting
the Charter of a new economic order. We will be very glad with
the liberty of the jungle if the kind of Charter which in going to
come out of this goes in the way that it is shaped at this moment,
because sometimes the liberty of the jungle is more healthy than
the very sophisticated and civilized world.
We are very much at a loss, because we had thought that we
were fighting for liberty, and we have been spanked the whole
afternoon because we were restricting business, when precisely the 38
thing that we want is to take away I do not know how many pages,
but at least 25 Articles, of restrictions inserted by the "wise
fathers" of this new "economic church". Yet, we have joined.
ourselves with that school of candid thought that made famous that
great American, Abraham Lincoln, and we are candid enough to come
here and say sincerely what we believe is wrong. Probably, we are
wrong ourselves, and we leave it, as the old Greeks used to do, on
the knees of these wise old men, to find the thins that the younger
nations have not seen along the lines of this Charter of a new
economic order.
First of all, experience has shown us that the se great leaders
of the old nations are not always right. When the first Dumbarton
Oaks proposals were presented for the consideration of the
peoples of the world, we had a discussion more or less like this
where we presented many remarks on the new Charter of the world,
and we heard more or less the same objections - "How do you dare to
try to make better what old experienced men have tone?", and we
answered the same thing that we are now saying - we probably are
wrong, but we are so young a nation that we still feel in our
environment the spell of the jungle, and we like that liberty so
much that we do not want to give it to anybody, because history
has shown. us that the ones that have brought war to the world and
misery to human mankind have never been the small nations, but
always the biggest experienced civilized nations. That is why
we are here contemplating one very simple problem in my opinion.
This Charter, no doubt is a wonderful valiant effort to
re-arrange the economic system of the world. If we do not do it
properly, our friends from the USSR are doing it in another form,
E/PC/T/A/PV/22
J. J.
and we think that the world is balancing between one and the other.
If we come to this Charter, do we find that Chapter V is full
of restrictions from the beginning to the end proposed by these
undeveloped countries - almost uncivilized countries? No, they
are proposed by the experienced nations.
If you take all of what has been said here so properly and
so well by the distinguished delegate of the United States, well,
none of those words were written by us. The Chapter that related
to Quantitative Restrictions says at the beginning 'Except as
otherwise provided in this Charter, no prohibitions or restrictions
other than duties, taxes or other charges, whether made effective
through quotas, import licenses or othor measures, shall be
instituted or maintained by any Member on the importation of any
product of any other Member country or on the exportation or sale
for export of any product destined for any other Member country".
E/PC/T/A/PV/22 E/PC/T/A/PV/22
40
There we should have stopped and then all of what we have
said would have received the absolute approval of everybody.
We would have taken away the quota system, because I cannot see
how the quota system may be good in one case and considered had
in other cases.
The principle is good., but then follow, I do not know -
about one and a half ages of except ions. So, if the highly
trained people have found. the necessity for inserting hare one and
a half pages of exceptions, we too would offer one little
exception. (Laughter) Just one more..
The exception where they say that if import restrictions
on any agricultural or fisheries products, imported in any
form, and so forth - we simply want to add one word, that is, to
include there, also, industrial production. And that is our big
crime; and for that we have received all sorts of admonit ions
to-day. We doubtless have been placed, in the position of one
of these rules of Debate in Parliaments - the rule of "Take it
or Leave it". Well, we do not find ourselves in the way of
deciting if we take it or we leave it, because it seems from the
actual state of the Debate that it is as bad to take it as to
leave it.
That is one of our Amendments.
The other Amendment comes in relation to subsidies.
Mr. Wilcox has spoken to-day, with great perspicacity, against.
protectionism, and he has said, with very sound reasons, that he
toes not want this Conference, that was called at the beginning
"The United Nations Conference on Trade and Employment", to
become the International Conferance on Quantative Restrictions.
Well, the subsidy is another form of restriction; so article 30
instead of recognising that the system of subsidies is an G. E/PC/T/A/PV/22
artificial way of producing, of trading - if we are so fond of
the liberty or commerce, we should have done with the subsidies the
same thin as I propose for the quotas: bear all the subsidies.
But it is a very strange thing that the subsidy is something
autonomous, It is something normal, correct, when it is used
by a strong financial nation to give money to a product that is
good for nothing, or that is raised by very artificial methods,
to compete with a product of at her nations that is produced in
a natural form, according to the benefits of sun and soil. So
that kind of subsidy, which is absolutely artificial and (as has
been said before this afternoon) immoral, is legal. It is
according to the Draft, but if one small nation that has not
yet developed itself in the capitalistic system to the estate
of the big banks and the big financing schemes takes away
from national production a certain interi or tax, that is a
crime. You take away that imperial tax on the production of
shoes - of typewriting machines, or of beer - because it is
discriminatory on the imports of the same or like product s
of other nations coming into the country.
So, if you have a big factory of textiles in a country
making the things that a human being needs when he starts to be
civilized - when a nation starts to manufacture clothes and
gives the industrial enterprises a certain amount of internal taxes,
the Charter says, No, you cannot do it. You have to admit the
goods coming from the more industrialised countries and pay the
same duty, because otherwise you are discriminating, and
discriminating i s a very bad word. Nobody wants to be called a
discriminater. In these modern times everybody wants to be a
Revolutionist; (Laughter) So I must admit we are very much at
a loss, and after many years, I Come to the conclusion that I 42 E/PC/T/A/PV/22
do not know where is good and where is evil.
Our Amendment has only tried to let these nations - those
under-developed, or "uncivilised" nations that have been
mentioned so elegantly - use the measures that they have at
their disposal - to- try to bring to reality the dreams made
famous by that great citizen of humanity, Franklin D. Roosevelt.
We must confess that we have come towards this Conference very
much under the spell of the wonderful ideas of the atlantic
Charter - although the Atlantic is very far away from Switzerland -
and that we are still living under the sacred thought of the
Four liberties - although those four Liberties may be considered
the Liberties of the Jungle.
What the United Nations said in their Charter, in
Article 55, with a view to the creation of conditions of
stability and wellbeing which are necessary for peaceful and
friendly relations among nations, based on respect for the
principle of equal rights and self-determinations, is that the
United Nations shall promote a higher standard of living, full
employment and conditions of economic and social justice and
development; and that is only what we are looking for.
We want higher standards of living, with full employment
and improved conditions of social justice and. development; but
economic development has become here some sort of wicked word
that is looked at with great apprehension by many Delegations,
when I am almost sure that everyone knows that if ever we can
have a world of fully developer economic countries, the amount of
purchase and. exchange of goods between all the nations would be
so high that their trade would increase to enormous figures.
And it is ar very big mistake to think that the efforts of the so-
called, under-developed nations to obtain the measures so that G 43 E/PC/T/A/PV/22
they can industrialise their nations is against the interests
of the highly developed countries.
On the contrary, it would be useless to show the statistic
about that, because they are very well-known to everybody here.
I am very much with the Hon. Delegate of Australia
in what he said., and I do not see how the London and New York
Draft is a substantial guarantee for certain countries. V. E/PC/T/A/PV/22
44
I must admit that I was under the impression that Australia
had not developed all the resources of that wonderful country.
It seems that they have done it, and, of course, that calls for
my congratulations. We, on the contrary, think that if the London
and the New York Drafts were to continue, we would be freezing the
actual economic status of the different countries of the world.
The agricultural countries would continue to be agricultural.
The monopoly countries would continue to be monopolies, and the
more developed countries would continue selling typewriters and
radios, etc. to those nations that were trying to produce the
primitive tools.
I do not talk about quotas and about import duties. We in
Cuba have had a very bad experience about that. During the
first World War we were asked to produce as much sugar as possible.
We almost grew cane in the private gardens. It was needed
for the war effort, We obtained a record of 5,000,000 tons.
A few years after, the import taxes were raised, and our country
was absolutely bankrupt, with the result that, in a country that
has no financial reserves, it ended in a political revolution.
In the second War, we were again asked to produce as much sugar
as possible, and we did it. We have just finished the 1948
crop with an amount of 6,000,000 tons.
We have, for example, according to that quota system, (but
I do not know what is good on the inside and what is bad on the
outside) sent to the U nited States 53% of the total consumption
and now they have given us a quota of some 28%. A quota -
believe it or not; the restrictive quantitative method that
has been talked about here so much today; so this shows that
there must be something wrong in this whole thing. I sincerely
believe that we are not trying at all to ask for the right to
assure protective measures of any kind without consultation. V. E/PC/T/A/PV/22
45
What we consider is that we should amend the quota system and
the subsidy system in such a form as to enable both the highly
industrialized countries and the so-called under-developed
countries to attain the goal at which we are all aiming, which
is: higher standard of living, full employment, and better
conditions of economic and social progress and development.
CHAIRMAN: Before the translation begins, I should like
to make some announcements, as I am afraid that, because of the
late hour, some of the Delegates may go.
The first announcement is that the Meeting tomorrow morning
of the sub-Committee on Article 36 has been postponed, due to
the Meeting of the Heads of Delegations. The second announcement
is that the Heads of Delegations Meeting is to be at 10.15 to-
morrow morning instead of 10.30, and my third announcement is
that Commission A should continue the discussion we have had
here today, at 11.30 tomorrow. 46
CHAIRMAN: As we still have a quorum, I have two small
announcements to make: one is, that the Joint Meeting of the
sub-committees on Chapter IV and Articles 15 and 24 will not
take place; I will also confess that I have taken it upon
myself to tell the Secretariat that I do not think it is
necessary to prepare a summary of the discussions here today
and those which will take place tomorrow. We shall have the
full verbatim reports, and I think these should be sufficient
for our needs,
Finally, I will announce that the first speech at tomorrow's
meeting at 11.30 a.m. will be that of the Delegate of Chile.
The Meeting is adjourned.
(The Meeting rose at 6.35 p.m;)
E/PC/T/A/PV/22
L |
GATT Library | dq198kq2125 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty-Second Meeting of Commission "B" Held on Monday, 14th July, 1947, at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, July 14, 1947 | United Nations. Economic and Social Council | 14/07/1947 | official documents | E/PC/T/B/PV/22 and E/PC/T/B/PV/20-22 | https://exhibits.stanford.edu/gatt/catalog/dq198kq2125 | dq198kq2125_90250094.xml | GATT_155 | 13,775 | 83,553 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSElL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/B/PV/22.
14th July, 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNlTED NATIONS CONFERENCE 0N TRADE AND EMPLOYMENT
VERBATIM REPORT.
TWENTY-SECOND MEETING OF COMMISSION "B" HELD
ON MONDAY, 14TH JULY, 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).
Delegates are remined that the texts of interpretations,
which do not pretend to be authentic translations, are
reproduced for general guidance only; corrigenda to the
texts of interpresations cannot, therefore, be accepted.
NATIONS UNIES 2
CHAIRMAN; The Meeting is now called to order.
The first item on our Agenda. for to-day is a matter which
I think the Members of the Commission will agree to without
prior notice. The Secretary of the Sub-Committee dealing with
Chapter VIII has requested me, as Chairman of Commission B, to
obtain the authority of Commission B for the Sub-Committee dealing
with Chapter VIII to consider Article 56, dealing with Settlement
o:f Disputes, and which is now numbered 57 in the new Draft
submitted by the Sub-Commission on Chapter VIII. This, of course, is
just in order that the Sub-Committee on Chapter VIII may consider
this Article along with Article 56, the main Article in the
Charter dealing with Settlement of Disputes.
Is there any objection to this authority being given to
the Sub-Committe e on Chapter VIII?
Approved.
I shall now call upon the Chairman of the Sub-Committee
on Article 30 to present the Report of the Sub-Committee which
is given in paper T/124.
Mr. George HaKIM (Lebanon (Chairman of the Sub-Committee
on Article 30): Mr. Chairman, the Sub-Committee completed its
work after eight meetings. There was a general spirit of
co-operation and conciliation, which made it possible to finish
the work in such a short time. The Sub-Committee accepted the
Netherlands proposal to divide Article 30 into five Articles.
The original Article 30 is very long, and deals with a number of
questions which could be divided up into several Articles
Aside from the matter of arrangement, the Sub-Committee agreed.
on all points of substance, except on one point which it left E/PC/T/B/PV/22
over for the Commission to decide. This point is contained
in article IV, and concerns the United States proposal to apply
the provision that no Member shall acquire for his exports a
greater share of world trade. This provision should apply to
all subsidies, and not only to export subsidies, as originally
in the New York Draft. This question would have to be decided
by a Commission.
I am going to give very briefly the most important points
on which agreement was reached.
The first one is with regard to export subsidies in
Article II. The original sub-paragraph (a) of paragraph 1 was
divided into two parts, so as to include in the second part the
provision with regard to the exemption from domestic taxes or
duties, and the remission of such taxes and duties. There is
no change of substance in the original Draft.
Paragraph 3 contained a time limit for the elimination of
existing export subsidies, and the Committee agree that two
years should be sufficient, instead of the original three years,
but leaves it to the Commission to decide whether to reduce this
period to one year.
In Article II, a new paragraph was added, paragraph 4, which.
contains the substance of the United Kingdom proposal that a
Member may use export subsidies against export subsidisation by
a non-Member.
In Article III on Subsidies as far as they affect primary
commodities, paragraph 1 deals with stabilisation schemes, and
this paragraph was modified. so as to provide for a determination
by the Organisation that the system of stabilisation has resulted
in the past in a higher export price than the domestic price, and
3 G 4 E/PC/T/B/PV/22
also that the system is so operated as not to stimulate exports
unduly, or otherwise seriously prejudice the interests of
other Members.
The proposal by the Australian Delegation, that this
provision should permit a scheme which starts in a period. of low
prices, with the domestic prices lower than the export prices,
was finally withdrawn, because it met with opposition by some
Members of the Sub-Committee.
The next point of importance is paragraph 3 of Article III,
which provides for the case where there is a burdensome surplus
in a primary commodity.
The original text allowed a Member to resort to subsidies
when it was determined that there was such a burdensome surplus,
and that there was no inter-Governmental Agreement possible
in order to deal with that burdensome surplus. S 5 E/PC/T/B/PV/22
The Canadian objection wss that a Member, immediately it
was found there was a burdensome surplus, could resort to
subsidies and it was necessary, according to the Canadian proposal,
that the Organization should permit such subsidies or should
determine that there is need for such subsidization, and that
it does not injure the interests of other Members. That is
why the original text was modified, so that the Organization
would determine that the subsidization would not be so operated
as to stimulate oxports unduly or otherwise seriously prejudice
the interests of other Members. The United States Delegate
reserved his position on this modification and related it
to his proposed amendment for Article IV.
Now we come to the point on which the Sub-committee could
not reach agreement; that is, Article IV, which contains an
undertaking regarding the stimulation of exports. The New
York text provided that a Member shall not grant any subsidy
on the exportation of any product which results in acquiring for
that Member a share of world trade in excess of the share which
that Member had during a previous representative period.
The New York text applied only to export subsidies. The
United States Delegate argued that this undertaking should apply
to all subsidies which stimulate exports. The United States
Delegate, as is explained in the Report, was willing to accept
the original New York text if the change made in Paragraph 3 of
Article III was withdrawn.
These are all the important points of substance which the
Sub-committee dealt with. There remains, however, one point
which the Sub-committee could not deal with, because it had
finished its business. That pint is contained in Document
E/PC/T.127. 6 E/PC/T/B/PV/22
The Sub-committee dealing with Article 15 tells us about
an objection raised by the South African Delegate on the matter
of discrimination in internal transportation charges as between
imported and nationally-produced commodities. The South
African Delegate asked whether there was any corresponding
provision with regard to stimulating exports by reduced charges
on transportation. As far as it would appear to me, the case is
covered in articles I and II of the newly-arranged Article 30.
Article I applies to any subsidy, including any form of income
or price support, that is, to any method or system which
"operates directly or indirectly to increase exports of any
product . ". So that if the sort of method or system used
to increase exports by means of lower charges for transportation
is resorted to, it would come under Article I.
If, on the other hand, in addition, that method or system
of reduced charges on transportation of exports resulted in the
export price being lower than the comparative price in the
domestic market, than the provisions of Article would apply
to the case which the South African Delegate had in mind.
That is all I need to say, Mr. Chairman. If any questions
arise in the course of the discussion, any Member of the
Sub-committee or myself will be glad to throw light on them. ER E/PC /T/B/PV/22
CHAIRMAN: I wish to thank Mr. Hakim for the very lucid
report he has just given us on the work of the Sub-Committee.
I also wish to take this opportunity of congratulating him on
the very excelleant report of the Sub-Committee, of which he was
Chairman. Mr. Hakim has indicated very clearly the task which
lies before Commission B this afternoon, and we will take up, in
due order, the various points which he has raised. It will be
our duty to approve the new text of Article 30, which involves
the rearrangement of the whole Article, and I think that the best
way this can be done is to take up the rearrangement of Article
30, article by article, and deal with the various points to which
the Chairman of the Sub-Committee has called attention, as we
come to them in the relevant Articles. Then, after we have
finally approved Article 30, we can direct our attention to the
note given in document T37 requesting the point raised by the
South African Delegate in the Sub--Committee on Article 15.
Before, however, proceeding to take up the new text of
Article 38, article by article, paragraph by paragraph, I would
like to know if any Member of the Commission would like to make
any general comments on the report of the Sub-Committee, or
whether there are any questions which they would like to direct
to the Chairman of the Sub-Committee at this time. J. E/PC/T/B/PV/22
There being no Members who wish to make any general comments
or to question the Chairman of the sub-committee, I therefore
propose that we commence the consideration of the new text Article
by Article
Article I Are there any comments?
The Delegate for Cuba.
DR. G . GUTIERREZ (Cuba): Mr. Chairman, I wish to reserve the
position of the Cuban Delegation in relation to Articles I and II,II,
because we presented an amendment in relation to the subsidization
for ecnomic developement, and the sub-committee understood that that
matter was more within the sphere of motion of the sub-committee
established to deal with Article 15 and others. That sub-committee
is working on that amendment an, we do not know if it might have a
connection with Article 30, so before knowing the final text of
Article 15, I am obliged to reserve the position of the Cuban
Delegation to these two Articles.
CHARIMANR: I take it that tho reservation of the Cuban
Delegation is contingent upon the outcome of the text of Article 15.
We are reaching a stage in our work when it is desirable that there
should be as few reservations as possible, so that I trust that
the Cuban Delegation will be able to inform the Proparatory
Committee when it is possible for them to withdraw this reservation.
Are there any other comments with regard to Article 19
Approved.
Paragraph 1 of Article II. Are there any comments?
Approved.
Paragraph 3 of Article II. Are there any comments?
Approved. 9
J. E/PC/T/B/PV/42
Paragraph 5 of Article II. Are there any comments?
I would draw the attention of Members of the Commission to the
Report of the sub-committee referring to the period of two years.
"The sub-committee tentatively agreed on a period. of two years,
leaving the matter to tha Commission to decide". Does the
Commission approve of the period of two years?
Approved.
Is paragraph 5 of Article II approved?
Approved.
New Paragraph 4 of Article II. Are there any comments?
Approved.
Article III, paragraph 1. Does the reservation of the
Australian Delegation still hold with regard to this paragraph?
MR. E. McCARTHY (Australia): Yes, Mr. Chairman.
CHAIRMAN: The reservation of the Australian Delegation being
dependent on the final outcome of the text of Article 17, if I
understand correctly?
Are there any other comments on paragraph 1?
Approved, subject to the reservation of the Austrllian
Delegation.
Article III, Paragraph 2. Are there any comments?
Approved.
Article III, Paragraph 5. Are there any comments?
MR. R.B. SCHWENGER (United States): As the Chairman of the
sub-committee reported, we have made a reservation on this third.
paragraph. As a matter of fact, the procedure of the sub-committee
was that there was an effort to reach agreement on the text of
this paragraph between the Delegate from Canada, who sat as a J. 10 E/PC/T/B/PV/22
Member of the Commission rather than as a member of the sub-committee.
and the representative of my Delegation. When it became evident
that it was going to be impossible for us at the same time to reach
an agreed text to the paragraph under consideration and the
related paragraph which following, the two were left, without final
determination, so that I am not sure that this text really has an
entirely different status from that of the paragraph which follows,
and I would like at an appropriate moment, Mr. Chairman, which I
will leave it to you to decide, to discuss oar reservation and
attitude towards the two paragraphs together. 11
V E/C/T/B/PV/22
CHAIRMAN: The United States Delegate has pointed out that
their reservation to paragraph 3 of Article IIl is connected with
their proposed United States amendment to Article IV, so that it
would be logical first of all to consider Article IV and then we
might return to paragraph 3 of Article III.
Mr. R.B. SCHWENGER (United States): To be exact, I was
suggesting that at a time we would name I should be glad to
discuss the two together as one problem.
CHAIRMAN: I think, then, we will proceed to consider those
two parts of the new text together, and therefore, at the same
time as we consider paragraph 3 of Article Ill, we will consider
Article IV for which there are two alternative texts: the text
submitted by the sub-Committee and the United States amendment
thereto.
Mr. R.B. SCHWENGER (United States): The position of my
Delegation on these two Articles can best be presented, I
believe, in terms of the kind of problem that they were - at
least in the first instance - drafted to deal with, and if I
may be permitted, I would like to discuss that question.
These paragraphs were drafted with primary commodities in
mind: primary commodities of a type that are characterized at
times by burdensome world surpluses. The Charter, at all of
its stages, recognized that such commodities required special
treatment, because they were affected by difticulties different
in character from those which affect other products.
I need hardly go into a description of these difficulties;
but the essential characteristic that creates the problem is
the tendency for the product to continue to be produced in
quantities scarcely, if at all, decreased, in spite of a depression 12
V E/PC/T/B/PV/22
of the price of the commodity.
Unlike manufactured products, these products continue to
appear in quantities scarcely at all reduced, in spite of the
fact that their price is not a remunerative price: they are
produced by small producers under conditions of cost and supply,
Under those circumstances, and because the producers represent a
large number of people, our Government, as a, general thing, has
been forced to step in to deal with the special situation that
that condition of production and supply has brought about, and
this has been clearly recognized in the Charter.
The new Chapter VII begins with this paragraph:
"The Members recognizes that the conditions under which
some primary products are produced, exchanged and consumed, are
such that international trade in these commodities may be
affected by special difficulties, such as the tendencey 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
consumers 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
intergovernmental agreement"
It is with this type of situation we are dealing, and I
apologize for describing it at such length to people who have
worked with it for such a long time; but I believe that in
the context of the Subsidies Articles there is a tendency for
this point to be overlooked. The New York text deals with
the way Governments shall handle the situation when, as I
pointed out, they are reqiuired by their own internal dynamics to 13
V E/PC/T/B/PV/22
step in,-differently according to different systems that have
become characteristic of the various exporting countries and
importing countries; and in the first place, provides that
Governments may help by direct subsidization to producers. The
Charter puts no limit on such subsidization and that point, I think,
is extremely important in view of the discussion as it took place
in the sub-Committee.
In the face of a burdensome surplus of a primary commodity,
there is no limit in law under the Charter - if you look upon it
as basic law - on the extent to which the importing countries can
use subsidies to maintain their own production, ever though the
market may have dwindled, as long as they do not export.
As concerns exporting countries, the treatment is different
according to different systems of subsidization. In the first
place, a direct export subsidy is barred, except as it may be
re-instituted under the provisions of the new Article III. However,
if such an export subsidy occurs as an adjunct, as it were, of a
stabilization scheme which holds the level of the price of the
commodity in a given country sometimes below and sometimes above
the world market, it is not barred. Such an export subsidy is
defined under the old paragraph 3 and new Article III, paragraph 1,
as not being an export subsidy under the terms of Airticle II which
bars export subsidies. 14
M 14 E/PC/T/B/PV/22.
In addition to this, if a country exports a treat bulk of the
commodity and is therefore able to maintain the subsidy on the
exporting part and on the proportion consumed at home without a
considerable increase in cost. It falls under the terms of
Article I, under which, as in the case of subsidies paid on imported
products, it is required merely that the matter be reported and
that the country be ready to consult. It puts no legal limitation
on the extent to which that subsidy on exportation may be used.
In the New York text the terms of Article IV put a limit on the
time during which a country which user the export subsidisation as
its characteristic type of export would have to refrain from using
such export subsidisation. That limit referred to the period during
which it was necessary to discover if the multilateral treatment of
the situation was not going to work under the terms of Chapter VII.
In other words, should there appear a serious depresssion in the
price of a major international primary commodity, say, ten years
after the Charter went into effect, there would be in the first
place an opportunity to deal with the matter by multilateral action
under Chapter VII, and it has been throughout the hope of our
Delegation that that was the way it would be dealt with. During the
effort to deal with the matter under the terms of Chapter VII, the
methods of subsidisation by which countries attempt to retain their
fair share of the export market could be used in all cases except
that of the countries which use export subsidization. Those
countries would have to wait until it had been determined that the
measures provided for in Chapter VIl had not succeeded or did not
promise to succeed within a reasonable time in removing the M 15 E/PC/T/B/PV/22.
development of a burdensome world surplus. All of us know that
that applies primarily to the kind of subsidization associated with
the characteristic method of agricultural prices at work in my
country, and this requirement, that we should refrain from our
Charasteristic type of action until a fair trial had been made to
reach International agreement, was a requirement to which we agreed.
Along with that agreement, we undertook, under the terms of paragraph
5 of the old Article (which is the new Article IV) not to use our
export subsidization after such determination of the failure of
Chapter VII was made, and not to take more than our fair share of
the market as measured by exports during a previous representative
period.
It is now proposed that we should add to the period during
which we refrain from using our export subsidization, an additional
period - not clearly determined but one to be determined - at the
end of the efforts to use the procedure of Chapter VII so that when
we did resort to the export subsidization, this would not be so
operated as to stimulate exports or seriously prejudice the
international market. In other words, it is proposed that the
words shall be so changed as not only to require us to undertake
not to expand our exports / the share of the world market we had
enjoyed under previous conditions, but to show whether in fact,
until. the period of substantial interest determined through the
organisation has expired, we are going to live up to our under-
taking; In other words, that we are not going to seriously pre-
judice the interests of other Members. Now this wait might take
place at a time when there was a serious glut on the market, when
other exporting countries were using their characteristic schemes 16
M E/PC/T/B/PV/22.
of maintaining their exports and perhaps expanding their share of
the world market. We asked in the Sub-committee whether it was
contemplated that, while we took on this additional delay, the
other countries were willing to undertake that they would not expand
their share of international trade in the product in excess of the
share which they had enjoyed during a previous representative period.
They told us that they could not take on such an undertaking. This,
it would seem, is the issue, and it seems to me, Mr. Chairman, that
the position as it was in the New York text represents a balance,
which, while somewhat against us, is one which we can accept, and
not
that it is/reasonable to ask that there be placed an additional
delay upon our commission to cease refraining from the use of
export subsidies, once it was determined that multilateral agreement
could not be reached. , It is our opinion that that might in fact
militate against multilateral action which we certainly feel - and
we think it has been widely agreed upon to the discussions - is the
desirable way of dealing with the kind of situation I have pictured.
I would like to suggest, therefore, that on these two paragraphs
a return to the New York text, in both cases, would maintain a
balance which would not in fact, I believe, be greatly different
from that which is suggested by the report. In its form and
expression it would then be acceptable to us, whereas, the text
proposed in Article III, paragraph 3, is one which I do not feel
we can accept. S E/PC/T/B/PV/ 22
CHAIRMAN: Do any Members of the Commission wish to speak?
The Delegate of Canada.
Mr. J.J.DEUTSCH (Canada): Mr. Chairman, the Delegate of the
United States has linked together Paragraph 3 of Article IIX and a
new Article IV, and he wishes those to be considered at the same
time, I believe he said it was only right that if there was a
limitation in Paragraph 3 on the right to grant export subsidies,
countries using the method of internal subsidy, or production
subsidy, should also be required to limit their subsidies in such
a way as not to increase their share of the world's trade.
As far as Canada is concerned, we would be prepared to accept
his amendment to Article IV, provided that amendment is made
consistent, that if production subsidies are to be brought under
any limitation, then all of them must be brought under limitation
in the same way. In other words, not only the production sub-
sidies of exporting countries but the production subsidies of
importing countries must be brought under the same limitation;
that is to say, importing countries should also be required not
to increase their share of the domestic market. That is only
logical. If exporters are not allowed to increase their export
trade, then importers should not be allowed to increase their
share of the trade. It seems to me that is the correct balance.
However, in all the discussions on the Charter, we have,
drawn a distinction between production subsidies, domestic
subsidies - that is, subsidization of the total output - and
export subsidies. We have drawn a distinction, throughout the
whole period of discussion of the Charter, between those two
things. We have said, time and again, that countries wishing
to use subsidies for the purpose or developing their economy are
free to do so, and we have said, particularly of under-developed
countries that wish to develop their economics, that they should
have that right to use internal subsidies as one method of
increasing their development.
1 7 Ss E/PC/T/B/PV/22
For that reason, whilst I personally am prepared to agree
with the United States amendment, provided it is extended in a
logical way to importers also, I do not think it is wise to press
that amendment at this time, in view of the discussions that have
already taken place and a particular discussion that has taken
place with respect to the development of under-developed
economies. I do not think we should draw back now on that
general understanding which has existed for so long. For that
reason I do not think it would be wise to press it. However,
whether or not the United Stats amendment is adopted, it seems
to me it does not basically affect the question that is raised
in Paragraph 3 of Article XII, I think that is a matter, never-
theless, that can be dealt with on its own merits.
We have in this Charter, as I have said, drawn a dis-
tinction between export subsidies and general subsidies. The
argument that has been used in the past, and has been maintained
in the past and up till now, is that export subsidies are a
particular arly bad form of subsidy, in that they give rise to
trade warfare of one kind or another which is undesirable.
I think, also, the reason has been given that export
subsidies would give n undue advantage to countries which are
well able to subsidize exports, because they are already rich
- they have a Iot of means in their Budget for subsidizing,
whereas poorer countries have not the same capacity - and it
often happens that the countries loss able to subsidize exports
are countries engaged in exporting primary commodities -
countries which depend very heavily on primary commodities. 1 9
ER E/PC/T/B/PV/22
Those countries are in many cases countries least able to
subsidise exports, and they would therefore be in disadvantage
compared to countries more able to subsidise. Furthermore, in the
case of export subsidies, where it is only a relatively small part of
the total production of exports, it is very easy to pay a very large
export subsidy on a small proportion of exports, but it is not so
easy to subsidise a total output. Therefore, that fact in itself is
a check on unlimited subsidisation, whereas, in the case of export
subsidies, that check may not operate because only a small part of
the total production goes in exports, and therefore the subsidy on
that part may not be a very serious deterrent, particularly for
countries which are able to budget. Therefore, the Charter has, in
the past,drawn a distinction between export subsidies and subsidies
in general. That may not always be logical, I admit. There are
borderline eases where the distinction is not entirely logical. In
certain cases, subsidies may be just as bad as export subsidies. I
do not wish to dispute that, but we have to enlarge and look at the
thing as a whole. It has been felt in the past that export
subsidies were the more dangerous weapons than subsidies in general.
Therefore, we singled them out and we have made a role in the
Charter stating that no system shall so operate as to result in the
sale of products in the export market at a price lower than that in
the domestic market.
Now, it is proposed that there should be certain exceptions to
that rule, and I know that, in Article IlI there is a special treatment
of primary commodities. There is one exception regarding
stabilisation schemes, and it is so stated that, if you have a scheme
which at times results in the sale of products abroad being Iower
than at home, and at other times higher than at home, then that shall
be regarded as a stabilisation scheme, and shall not come under the
ban of export subsidies. But you will note that, in this Article 20
ER E/PC/T/B/PV/22
on stabilisation schemes, it says that if it is "determined by the
Organization .... .... the system is so operated, either because of
the effective limitation or production or otherwise, as not to
unduly stimulate exports or otherwise seriously prejudice the
interest of other Members". In other words, there is a limited
right for other Members simply to carry out stabilisation schemes
in subsidies. It must be determined that the scheme is so
not
operated as/to stimulate export unduly or prejudice the interests of
other Members. It is not a complete escape, as you see.
Now, we come to paragraph 5, where another escape is suggested
following certain operations under Chapter VII, and it is stated
here in this Article - exactly the same idea is used - that the
subsidisation will not be so operated as to stimulate export unduly
or otherwise seriously prejudice the interests of other Members.
The Organization shall grant such exemption, in other words, if the
Organization is satisfied that there shall not be undue prejudice
on the other Members, then the exemption is granted. In other
words, it is exactly parallel to the conditions laid down in
stabilisation schemes.
I do not see, Mr. Chairman, why there should be a difference
between those two escape clauses in export subsidies. The same
principle is applied to each of those escape articles, that the
Organization shall determine that there will not be undue
stimulation of exports or undue harm done to other countries. That
seems to me a reasonable requirement. I hope it is not suggested
that this escape clause shall be allowed, even if there is undue
stimulation, or even if there is serious prejudice to other
countries. Surely, none of us wishes to suggest that we should
have rights under this Charter which allow us to do things which
would seriously prejudice the interests of other Members. Surely,
we are not going to this Organization with that in mind, and all
we are asking is that the Organization shall determine that there 21
ER E/PC/T/B/PV/22
shall not be serious prejudice for other Members. That does not
seem to me to be asking for very much, and it is in the spirit in
which we are setting up this Organization.
Now, it has been suggested that there is a delay involved in
having the Organization determine that there shall not be undue
prejudice or serious injury to other countries. We have insisted
in other parts of the Charter where the question of prior approval
has arisen - and it has arisen in a rather important connection -
it has been insisted by certain delegations that prior approval must
be obtained, and when it has been objected that there is delay and
so forth, and that we must trust the Organization about this prior
approval, the answers have always been "Yes, we must trust the
Organization that it will operate its affairs intelligently and with
reasonable despatch". If we cannot assume that, we are damning the
Organization before we start. We must assume that there will be
good faith and reasonable efficiency in the conduct of the affairs,
and that there will be a reasonable despatch in fulfilling its duties.
We must assume that, not only in one part of the Charter, but in any
part of the Charter. If we insist on that in one part of the
Charter, it is logical to apply the same criteria in other parts of
the Charter, and if we can feel that there is no unreasonable delay
where
in one part of the Charter or another, /there are escape clauses
to the undertaking about export subsidies, even those escape clauses
ought to be consistent with one another in the same section of the
Charter. All paragraph 3 says on the stabilisation of the market
is that in each case it is simply a question of whether or not there
will be a serious prejudice to the interests of other Members or
undue stimulation of exports. That seems to me entirely reasonable.
Surely, we do not want to do things that would not meet these tests,
and surely we are prepared to have an independent view on that, which
we are insisting shall be the case elsewhere. 22
ER E/PC/T/B/PV/22
Now, it has been said that primary commodities raise special
difficulties. We have set up an entire Chapter in our Charter
dealing with the special difficulties of primary commodities. We
have ruled out, in our Charter, non-primary commodities, because it
affects primary commodities. We have set up a whole series of
provisions for dealing with those special commodities and, in this
particular section, we have set up a special Article about the
treatment of primary commodities, both of them escape clauses to
some extent. I think the stabilisation scheme is not really an
escape clause. It carries out the general principle of the
subsidy rule, but nevertheless, these two cases are, in some measure,
an exception from the general rule. They both apply to commodities,
so we are giving consideration to those primary commodities, but we
mast. do that in an orderly and consistent way and in a way which
would not result in the creation of undue difficulties for other
Members of the Organization.
Therefore, Mr. Chairman, I would like very much to support the
report of the Sub-Committee with respect to Article III. It seems
to us it is logical, consistent and fair, in the whole conception of
this Charter. 23
J . E/PC/ T/B/PV/ 22
CHAIRMAN: The Delegate of Brazil.
MR. E.L. RODRIGUES (Brazil): Mr. Chairman, we always condemn
export subsidies, and the first time we discussed in London this
matter of subsidies, we also condemned product subsidies, because
we felt only the rich countries could use them. At this time we
already have accepted Article I which includes any form of income
or price support as subsidies. We have, in Brazil, used some forms
of income and price support to help the export of cotton, and if we
now accept the deletion of the words included in the last four lines
of paragraph 4, we will be in a very difficult position. Brazil
would be, perhaps, one of the most affected countries, especially
in regard to cotton.
I see no other way than to stron-ly support the views
expressed by the Delegate for Canada which, in my opinion, have
given to us a very broad conception of the damage that subsidies
can do, especially to smaller and less developed countries.
I should like the United States to reconsider their position
and to put this question on the same level as Chapter IV in regard
to prior approval. E/PC/T/B/PV/2 2
CHAIRMAN: The Delegate of India.
Mr. B.N. ADAKAR (India): Mr. Chairman, after listening
to the discussion which has taken place, I feel that it would, on
balance, be better, in view of the spirit existing throughout
the whole of the provisions on subsidies, if we could adopt the
United States amendment, as given in the second column on Page 8.
My reasons are briefly as follows. The United States
amendment proceeds on the assumption that export subsidies, that is,
subsidies which result in unduly stimulating exports, can cause
the same damage as subsidies given on exports only, and I believe
that assumption is valid.
If we accept the United States amendment, we reach a position
which is perfectly logical: we ban subsidies which are related
to exports only - that is quite reasonable. We allow a more
liberal and elastic position for production subsidies and
subsidies which affect exports as well as production.
I think the Delegate of Canada is not right in suggesting
that if the United States amendment were adopted, the distinction
between production subsidies and export subsidies would disappear.
There would still remain a distinction. Subsidies which are
related to exports only will be completely banned, subject to the
time limit which has been given in the Charter; but subsidies
which are related to production, but which result in stimulating
exports would be subject to more elastic provisions. They
would be subject to the procedure given in paragraph 1. However,
where such subsidies enable the country to capture a larger share
of the world market than the share it enjoyed in the previous
representative period, they are, in effect, as harmful as
subsidies which are given on the basis of exports only, because
the result is exactly the same. I would, therefore, for this 25
V . E/PC/T/B/PV/22
reason, favour the United States amendment. But if for any
reason that amendment is not adopted, then I would certainly
support the Delegate of Canada in his insistancethat the last
few words in paragraph 3 of Article III should be maintained.
They must be maintained in any case.
I would not support the United States Delegate in linking
up the consultation provision with their amendment under
Article IV: the principle of prior consultation and prior
approval should be maintained, and we should maintain the
provision that in the operation of any subsidies whatever,
the Member must have due regard to the interests of other
Members.
I would like to deal also with the suggestion that was
made by the Delegate of Canada - that if the United States
amendment were adopted,it would be necessary, for the sake of
consistency, to extend a similar obligation to subsidies in
importing countries. He suggested that, in order to be
consistent, we must impose an obligation on the importing
countries to so limit their subsidization as not to reduce
the proportion of their home market which is supplied by imports.
I do not agree with him on this point, because I do not
think consistency requires a similar obligation to be laid on
importers, because the effects are entirely different. When
a subsidy operates only to increase domestic production, it
does affect the competitive position of domestic producers
and foreign suppliers, but the effects are confined only to
the market where the subsidy operates. An export subsidy,
on the other hand, upsets the competitive position in the whole
of the outside world. The two cases are so entirely different: 26
V. E/PC/T/B/PV/22
in one case the disturbance takes place only in a small part
of the world, in the other case the disturbance transcends
national boundaries and upsets the conditions operating in
the world market.
In these circumstances, I believe an international
organization ought to take more serious notice of the measure
which affects the competitive position in the whole of the world
than the measure whose effects are limited to the national
market. The producers in every country have a prior claim
on their domestic market. They have no such prior claim
on the world market. 27
E/PC/T/B/PV/22.
Quite apart from the effects on the whole world trade, I think. we
should place more serious limitation on a subsidy which enables
a country to capture a larger share of the world market than on
one which enables it only to reserve a larger share of the domestic
market for its indigènes.
For these reasons I would support the United States Amendment
but would not recommend its extension to importing countries. If
it is not adopted, I will support the Canadian Delegate in asking
for the retention of the last few words in paragraph 3, of Article
III .
MR. G.D.L. WHITE (New Zealdnd): Almost everything I had in
mind to say on this subject has already been said, but very much
more ably by the Delegate of Canada, and I would associate myself
with the views he has expressed. I would like, however, to outline
the New Zealand position very briefly.
First of all, as regards Article IV, we find ourselves unable
to accept the United States amendment, for the reason that we think
it would entirely upset the balance of paragraph 1 of Article I of
the revised text. We think that if this obligation concerning
general production subsidies was to be extended to exporters it
would also have to be extended to general production subsidies of
importing countries. I am sorry that I cannot agree with the
Delegate for India on that point, for I think it would create an
unbalanced position as compared with paragraph 1 if we were to put
an obligation on exporters and not on importers. If you extend
this obligation regarding a Member's share in the world trade to
importers, it seems to me that there will be repercussions in the
Chapter on Industrial Development, where under-developed countries
have been told that they may not do certain things but they may use
. 28
M E/PC/T/B/PV/22.
subsidies, subject only to the procedure of Article I of the
section on subsidies. From our point of view it seems that we
cannot accept the United States amendment on Article IV, and that
it is a matter of looking back to Article III where the United
States - if I understand the position correctly - have suggested
the
that the present text of Article IV might be acceptable if/condition
at the end of Article III were removed. This condition says that
the subsidies will not be so operated as to stimulate exports unduly
or otherwise seriously prejudice the interests of other Members.
On that point I think we had considerable discussion in the Sub-
committee as to whether the reimposition of an export subsidy in
these circumstances should be subject to prior approval or not and
we arrived at some sort of a compromise text, submitted by the Sub-
on
committee, but/which the United States Delegation reserved their
position,
added
It seems to me that if that/condition to paragraph 3 of Article
III were deleted, I might feel tempted to enquire why the same
condition should not be deleted earlier in Article III from the
section on stabilisation schemes for primary commodities. 29
E/PC/T/B/PV/22
As the Delegate of Canada has said, what is good in one
case is good in another, in these circumstances; and on
the general question of prior approval, I think that there is
serious doubt as to whether a condition involving some measure
of organisation and approval should be deleted here, and not
deleted in Chapter IV.
The U. S. Delegate has raised one difficulty concerning
th delay which would be involved in this procedure, and it
seems to me that that time delay is not a serious one, because
asl envisage it, the determination would. be the same
determination. It seems to me that a Member would make an
application for an exemption regarding the re-imposition of
export subsidies, the determination would be made that the
burdensome surplus existed, and this other determination would
be made at the same time.
I should imagine that in submitting an application for a
re-imposition of an export subsidy, the applicant Member would
submit a case explaining how the re-impositinn would not act
in such a way as to seriously pre-judice the interests of other
Members; and if it was a good ease, well then, the determination
could be made without very much delay. Thank you.
CHAIRMAN: The Delegate of the United States.
Mr. SCHWENGER (United States): Mr. Chairman, I would
like if I may just to say a few words about some points that
I apparently did not entirely make clear in my first statement,
which may have given the impression of difference where I think
there was little, if any; and then on some points which I
would like to make clearer than I think they have been in the
discussion. 30
G E/PC/T/B/PV/22
In the first place, I would like to point out that
there is nothing in what we are proposing regarding any
limitation on the right of an importing country to subsidise,
further than the requirement to inform and consult which was
in paragraph 1 of the New York Draft, and is in article I
of the Sub-Committees' Report. I thought that I had made
that clear, and I gather that some Delegations had noticed
it, but some other Delegations had pointed out that such a
limitation on the right of importing countries would be
inconsistent with what has been agreed or implied in
connection with the discussion of other parts of the Charter;
and I want to make it quite clear that there is nothing in
anything I am proposing that would in any way limit, further
than is limited by Article I as it now stands, that right. S E/PC/T/B/PV/22
It has also been agreed that that is the method par excellence
and one of the purposes of this Charter as a whole, whereby
countries can reserve their economies.
In the second place it has been suggested that the
inclusion of the words in the latter part of Article III
regarding the stimulation of cxperts unduly or otherwise
seriously prejudicing the interests of other Members, would
meet the case dealt with in Paragraph 3 of Article III,
exactly the same as that dealt with in Paragraph 1 of Article III.
It must be clear, on second thoughts, that that is not the case.
Perhaps I have misunderstood the suggestion, but that was the
implication of the remarks. I think the general idea is that
what is seuce for the goose is sauce for the gander.'
I suggest that we would quite welcome the elimination of
those words in Paragraph 1 if it were proposed that the
schemes there described were to be withheld during the negotiation
of the commodity arrangement: in other words, if the Article
were to be so altered as to put what is now Paragraph 2
first and then re-write what is now Paragraph 1 in the
general terms. I do not think there is a serious suggestion
that they are the same case. The faot that the same words
happen to be used in regard to this particular aspect of the
two cases is, I believe, due to my perhaps ill-considered
efforts to assist in arriving at an agreement in the Sub-committee,
since I think I suggested that there might be a line of approach.
Since it was not only ill-considered but also abortive. I
do not feel that the use of the words has in any sense put
the two cases on all fours. If in the one case Paragraph 1
describes a scheme that would operate continuously, presumably
any finding regarding the scheme would be made, or could be made,
at any time in the course of the development of the scheme. If
it were not used, it would continue to have force. S E/PC/T/B/PV/ 22
32
The other case is, as I have pointed out, what happens if,
in ten years' time, you have a serious decline in the market for,
or a serious rise in the price of, a primary commodity. In-
connection with that point, however, there is one thing that
is of interest; that is, that the language under discussions
"that the subsidization will not be so oezraecdaAs to stimulate
exports udul1y" , and so forth - is apple-d to schemes under
Paragraph 1 - so-called stabilization schemes - whether or not
the words are included. The undertaking regarding limitation
of exports, unecr the New York text, applies to export subsidies
in terms of article IV, but it does not in any case apply to so-
called domestic subsidies, which are used for the purpose of
stimulating exports, and the countries which use that kind of
scheme in times of low prices or contemplate such an undertaking.
I do not se- that the argument asmDade by the Canadian
Delegate should run that way also.
On the question of the force of the determination that is
required in Paragraph 3 ofA.rticle III, as it appears in the
Report of the Sub-committee, I would like to point out that it
would take place after there had been a withholding of action
during the process of the negotiation - or efforts to negotiate
- of an international agreement to deal with the chaotic
primary product situation. I believe that is a point that has
been overlooked in some of the discussions.
We assume that this is to be started without any prior
condition of any kind wherever it suits us to apply it. I
think it is quite important, and it is only fair to us to
recognize that that is the case.
I believe there has also been some small confusion as to
just what it is that we would propose as a way f meeting this
conflicting view. In this connection we have considerdO - 33
S E/PC/T/B/PV/22
both in the Sub-committee and during the course of this discussion
- the various points of view that have been put forward, and it
seems to us that there is a balance in the New York text. We
are not suggesting the deletion of any part of this text; we
are suggesting that for the two paragraphs a balance is
achieved which takes care of both our proposal as regards
Article IV and the Sub-committee's text as regards Paragraph 3
of Article III.
There is a balance in the New York text and we suggest
returning to it for both Articles and writing them as they
originally stood, in the materials that we considered in
London, as succeeding paragraphs of one article so that
sub-paragraph 4 (b) of the New York text would be Paragraph 3
of article III and Paragraph 5 of the New York text would be
Paragraph 4 of Article III . The force of that would be to
limit the entire matter to primary commodities, which I
believe was the intention in drafting these things in the
first instance, and any extension of Paragraph 1 would be an
accident of re-arrangement rather than an intentional change
- at least it has never been put forward for discussion. 34
ER E/PC/T/B/PV/22
There has always been a primary commodity paragraph.
Then it would be abundently clear that Article IV, which would
then be a paragraph on the same level as paragraph 3 of Article III,
binds us in the use of our subsidisations never, to use them in
the way that has been suggested or implied in such discussions,
namely, that we might use them because of our wealth, to take more
than our fair share of the world's market on the objective basis of
the previous representative period. We would hold ourselves open,
as we have always done, but we would be obliged internationally, to
do it by all undertakings - obliged to discuss with any country
represented whether we were indeed being fair as regards that
undertaking in the selection of the basic period or in any way in
which we would be operating the subsidisation.
I believe that statement covers the point I had in mind, Mr.
Chairman. Thank you for letting me explain.
CHAIRMAN: Are there any other speakers?
Mr E. McCARTHY (Australia): Mr. Chairman, the view that we
take of this is very much like the one stated by the Canadian
representative. We agree to what he said, with perhaps a little
more emphasis on the distinction between export subsidies and
subsidies in exporting countries, and I would find myself more in
conflict with the representative of India than with the representative
of Canada. It has always seemed to us, in discussions that have
taken place, that the whole question in relation to primary products
is whether markets are glutted or whether they are not, and whether
they have got enough. One of the outstanding causes in world
markets on primary products, is the artificial support given to
producers, whether that support comes from a narrow margin of
imports by importing countries with an export subsidy, or a general
subsidy in an exporting country, whatever they are, they all have
the same result. 35
J. E/PC/T/B/PV/22
To our mind, he degree of subsidisation, whatever of those
three categories it is in, is the degree to which our gluts are
brought about.
However, since the earlier days of discussions, that question
has been discussed, and ultimately there were put into the Charter
clauses which made a distinction between general subsidies and
production subsidies, and the fact that importers can have export
subsidies also makes the distinction between general subsidies in
an importing country and general subsidies in an exporting country.
With that fact in mind: that a greater stress was laid upon
the influence of export subsidies in world markets, (they were
considered to do greater damage then general subsidies, without
having been written into the Charter) we have to be content. The
point then was whether the old 4(b), which is now Article III, was
sound or unsound. Our view was that, as it stood after the
London meeting, it was not sufficiently strong. It meant that, if
a country was paying subsidies, found that there was a burdensome
surplus, and then got together with other countries and could not
get an agreement, it could go back to subsidisation. It is to be
recognised that, notwithstanding all we hope for under Chapter VII,
by regulating the burdensome surplus of the few countries that are
interested, particularly the ones, perhaps, that want to resume a
subsidy, getting a complete agreement under Chaper VII might take
a long time, and for the introduction and re-introduction of subsidies
to be based upon the discussions in a proposed Monetary Agreement, to
our mind was too weak and 'too obvious an escape for us to subscribe
to. Therefore, we welcome the proposal to tighten up that clause
to the way it is now in Article III.
Cn this matter of Article IV, it did seem that it logically
followed upon the original distinction between export 36
J. E/PC/T/B/PV/22
subsidies and general subsidies - a distinction which we have always
disagreed with - but having regard to the major principle, we did
feel that we should agree to the old Article 5 as it was. Then,
when the United States representative wished to and to the export
subsidies general subsidies in importing countries, we then thought
that the original distinction was broken down, and if you are
going to break that down, it is logical to extend it to all
subsidies. I agree that the reasoning is weakened a little if you
do not believe that subsidies in exporting, countries are equal in
their effect on the world market to subsidies in importing countries.
I think the view of Mr. Adakar that one country is the only
one who is perhaps imposing general subsidies is hardly a complete
answer, because usually when one country starts to stop imports by
unduly stimulating its own production, it has that effect on others,
and the plain fact is - take wheat as an example - between the two
wars, the gluts were frequently caused not by excess of production
in the exporting countries, but by excess of over-stimulated
production in the importing countries. But, assuming as a precise
that gluts are caused by stimulas in importing as well as
exporting countries, then I thinl it is only logical to extend this
amendment as proposed by the United States to all subsidies -
export subsidies and general subsidies in importing and exporting
countries.
I feel we have got to recognise that we cannot really re-open
this whole question of import subsidies and export subsidies. I
would be very glad to do it if I thought there was any good in it,
but I felt that, speaking for Australia, we lost the fight a long
time ago on that, and I think to try to re-open it now is perhaps
expecting too much. I certainly would support any genuine move 37
J. E/PC/T/B/ PV/ 22
that was made to do it, but I have come to the conclusion, after
some consideration, that that would not be sound, and it is
resting the re-opening of it on, perhaps, too slender an amendment
to this particular Article, and re-opening it on an Article which
is not the central Article or central feature of the general
question of subsidies.
So, therefore I have got to put it as the Australian view that
we would press for the retention of Article III as it stands, but
we agree with the American proposal for Article IV, that is, that
the clause shall apply to the export subsidies and the general
subsidies in exporting countries. 38 E/PC/T/B/PV/22
CHAIRMAN: I have no other speakers on my list, so that I
should now like to obtain the sense of the Commission as to
in what manner we should proceed.
The sub-Committee indicate (if you will turn to page 5
of Document T/124) that having failed to reach agreement, and
in view of the fact that Article 4 was not included in its terms
of reference, they decided to submit the issue to the Commission,
summarising the main arguments put forward in the discussion as
well as the possible alternatives proposed. They then list the
possible alternatives - one, two, three and four.
It would be possible for us to put these alternatives to a
vote, and in that way obtain the views of the Commission regarding
these various alternatives. I take it that no Delegate would
request that alternative 4 be put to a vote, so that I would
assume that the three alternatives that would come into question
would be alternatives 1, 2 and 3.
The United States Delegate has suggested a variation of
Alternative 2, in that he has suggested Article IV should be made
the fourth paragraph of article III; but as that might be
considered in the nature of a drafting change it could be
considered., perhaps, after the principle of Alternative a had
been decided upon.
The question I would now like to put to the Commission is
whether or not it is desired that I should put to the vote
Alternatives 1, 2 and 3, or, if any Delegate so desires, also
Alternative 4.
Mr. S.L. HOlMES (United Kingdom): Mr. Chairman, I am not
sure that the procedure you propose would be entirely satisfactory.
I believe that the difficulty arises from the linking by the
United States representative of paragraph 3 of Article III with 39
V E/PC/T/B/PV/22
Article IV, and I had not thought it necessary to intervene
before because I wanted, if possible, to avoid re-opening
the general question of export subsidies versus general subsidies.
But if you look at the first two questions or alternatives
proposed by the sub-Committee, you will find, I think, that
it would be difficult for those who did not like the proposed
amendment to Article IV - that applies definitely to the
United Kingdom - to refrain from voting in favour of Alternative
1, whatever their views might be on Alternative 2. 40
M E/PC/T/B/PV/22.
CHAIRMAN: I am fully conscious of the difficulty just
mentioned by the United Kingdom Delegate, and it has been my
intention, if the committee decided to put these alternatives to
the vote, to abide by our Rules of Procedure and to take first the
proposal furthest away from the original proposal. In this case
I think we would have to take the proposal of the Sub-committee as
being the original proposal, that is alternative No.1, and if we
put these other alternatives to the vote, we would first of all
have to put alternative No.3, and if that were defeated, alternative
No.2. If there were two adverse votes we could then interpret the
result as a vote in favour of alternative No.1.
MR. R.B. SCHWENGER (United States): I have three things I
would like to say and the first is on this question of voting. I
think we - and particularly you, Sir, - are in a fairly difficult
position because, if I am correct, these four points were not pro-
posed in any particular order of preference. In the draf ting of
them in the f irst part of which I participated, it was agreed that
that was the case. The four points were mentioned during the
discussions of the Sub-Committee, and the question of order was not
protested, nor was the issue ever solved in the way that it seems
to be solved in the text which has been put before us. I think it
is probably my fault that this is the case, but I did not insist on
any particular order and it was agreed that the order was not a
prejudicial one.
My second point is that I would very much like the second
alternative to be in the form which I prefer - since it is my
alternative and was my alternative in the Sub-committee. There
would therefore be no particular point in having it in this form
rather than the one I suggested and if there is no objection I should 41
E/PC/T/B/PV/22.
be glad if that could be done.
At the risk of being a little out of order, I would like to
say that this matter of the wording of Article III, paragraph 3,
is a matter of extremely high importance for us. I may not have
indicated this sufficiently in my previous remarks. There is
the question of whether the text will successfully weather our
elaborate governmental processes in a modified form - I mean.
modified from the point of drafting. It is a sufficiently doubtful
point to make us as a Delegation quite concerned at the very highest
levels about what is done here. I do not say that in terms of an
argument or to influence anybody against his judgment, but, if there
should be any hesitation in the minds of any of us about the merits
of the arguments on the one side or the other, I would like it to
be known that this matter of drafting is of great importance to us.
If anything can be done to change this condition concerning the
waiting period before we can re-subsidize, it will be helpful to
us. 42
G E/PC/T/B/PV/22
CHAIRMAN: The Delegate of Canada,
Mr. DEUTSCH (Canada): Mr. Chairman, I would agree with
your suggestion that we should take up the alternatives set out
by the Sub-Committee in the order which we suggest in No. 3.
That is what we have before us. The Sub-Committees set down
the alternatives, and I think we should take them up in the
way the Sub-Committees set them down. We shall work on 3 and 2,
and if they are carried, No. 1 stands as before. Then I assume
also, if (1) remains, then IlI(3) remains as it is in the
Sub-Committees' Report. I did not gather the Sub-Committees
Report is approved as a whole, although I gather the United
States Delegate has said that is a matter of great importance.
I might say that in my country, likewise, it is a matter
of considerable importance; and for several reasons - partly
because it affects us, partly because we think it is a right
thing: It is consistent with what we have done elsewhere, and
enables us to maintain a consistant attitude to other questions
in the Charter, where similar questions arise; and it seems to
me that it will preserve the manner in which certain things are
being dealt with throughout the Charter.
CHAIRMAN: The Delegate of France.
Mr. LECUYER (France) (Interpretation): Mr. Chairman, if
I have the floor, it was not to speak on the question of voting,
but to ask for clarification.
I wonder whether the difficulties we are faced with do not
Originate to some extent from the fact that the Sub-Committee's
Report does not contain the last implication of the United States
proposal, namely, I understood that the U.S. Delegate proposed 43
E/PC/T/B/PV/22
that there should be no independent Article IV, and that the
contents of Article IV should become paragraph 4 of Article III.
In other words, that this text of what was so far Article IV
should apply to primary commodities only; and I should like
to hear whether I understood correctly the proposal of the
United States Delegate in that way.
CHAIRMAN: With regard to the point just raised by
the Delegate of France, I was going to ask the Commission if
they would be agreeable to the suggestion of the United States,
that instead of putting alternative 2 to the Commission in
the form it is in the Sub-Committees' Report, it should be
put in the form just given by the Delegate of France, and,
if I interpret it correctly, the proposal of the Unit ed States
Delegate is that the paragraph contained in Article IV should
be made the fourth paragraph of article III, and should apply
to export subsidies only; and that the new requirement for the
use of an export subsidy be deleted from paragraph 3 of
Article III. Is that correct?
Mr. SCHWENGER (United States): It could be accomplished
by a return to the New York text of 3, which is 4 (b).
It is a wording which did not contemplate these extra
words.
CHAIRMAN: I think the Chairman of the Sub-Commitee has
a solution which might immediately be acceptable to the Delegate
of the United States.
Mr. HAKIM (Lebanon) (Chairman of the Sub-Committee on
Article 30): Mr. Chairman, I suggest that alternative 2 should
read:- "That the undertaking contained in Article IV should 44
G E/PC/T/B/PV/22
apply to export subsidy on primary commodities" - substituting
for the word "only" the words "on primary commodities".
That is really the suggestion of substance that is made
by the U.S. Delegate.
As to the form which this provision would take, namely,
attaching it to Article III, that is a matter of drafting which
could easily be decided on later on; but the question of
substance is that this undertaking should apply to export
subsidy on primary commodities, and the alternative reads on as
it is in the present text of the Report. 45
S E/PC/T/B/PV/22.
CHAIRMAN: Is that acceptable to the United States Delegate?
Mr. R.B.SCHWENGER (United States): Mr. Chairman, I believe
that is the essential point, if it is understood that any
deletion that may be made under the second part of the alternative
will be without prejudice to the drafting and that appropriate
care will be taken of the opening which will thereby be left,
CHAIRMAN: We can always pick up the points of drafting
after we have decided the question of principle.
The Delegate of New Zealand.
Mr. G.D.L.WHITE (New Zealand): I think the last remark
covers what I was going to say. I was going to say we should vote
on the second part of alternative 2. Let us refer to it as a
deletion, because I think there have been some drafting amendments.
It would be better to do that than to go back to the existing
New York text.
CHAIRMAN: The Delegate of Belgium.
M. Pierre FORTHOMME (Belgium): If alternative 2 is formu-
lated as suggested by the Chairman of the Sub-committee, is there
any change to alternative 3?
CHAIRMAN: I do not believe so. The change in alternative 2
is to meet theproposal made by the United States Delegate, who
really had intended that this alternative 2 should apply to
primary products only.
Mr. R B .SCHWENGER (United States): Mr. Chairman, may I make
another remark. On this question there is a point that seems to be
raised by M.Forthomme's remark. The question whether Article IV,
in the proposed form, applies to export subsidies is a moot ones
To my mind, that is, without question, what is intended. It is 46
S E/PC/T/B/PV/22
not clear in the reference.
As a matter of evolution, it was drafted to deal with
Article V and therefore perhaps legislative history would
suggest that it did deal with primary products, and my
suggestion for making it deal with primary products in
alternative 2 was intended as a clarification. 47
ER E/PC/T/B/PV/22
It was originally a sub-paragraph (a) in Article III, and that
Article only dealt with primary products, and there has never been
any expressed intention at the meetings that I have been to that it
should be right. The rearrangements were made as a matter of
convenience or notion.
CHAIRMAN: Perhaps the Chairman of the Sub-Committee might
enlighten us on the point.
Mr. G. HAKIM (Chairman of the Sub-Committee): Mr. Chairman,
the original paragraph 5 of Article 30, as it was drafted in
London, referred only to primary products, but the Drafting
Committee in New York deleted the word "primary" so as to apply
this provision to all products. That appears on page 27 of the
Report of the Drafting Committee in New York, at the bottom of the
page, footnote (b) under paragraph 5.
CHAIRMAN: Article IV corresponds to paragraph 5 of the New
York text. There were no amendments to this Article proposed
before the paragraph was discussed in Commission B, and therefore,
there was no discussion on this Article. For the same reason, it
did not receive the consideration of the Sub-Committee, except in
connection with this amendment proposed by the United States
Delegation. I therefore think we shall have to put to the
Commission the alternative set forth in paragraph 3, in the form
that it is now in the Sub-Committee's report. 48
J. E/PC/T/B/PV/22
CHAIRMAN: I think we are now in a position to proceed to a
vote. The only point I wish to make before we vote is to repeat
the observation of the Delegate of Canada, that is, that the vote
on these three alternatives is simply to establish a question of
principle on a difficulty which arose in sub-committee. Regardless
of how that vote turns out, we will still have to return to
paragraph 3 of Article III and paragraph 4 and approve them in
Commission.
Alternative (3) reads as follows: "That the undertaking
contained in Article IV should apply to any form of subsidy which
had the effect of increasing a Member's share of world exports
(United States amendment)". 'will alll those in favour of this
alternative (3), please raise their hands.
MR. E. McCARTHY (Australia): Mr. Chairman, could I say
something at this stage?
CHAIRMAN: No, I am sorry.
Those against?
The alternative (3) is defeated by 3 votes to 8.
Now it will be in order for the Delegate of Australia to
speak.
MR. E. McCARTHY (Australia): I just wanted to be sure that,
if I voted for it, paragraph . of Article III stood.
CHAIRMAN: As I said in reply to the Canadian Delegate, we
are endeavouring to determine this question of principle with
regard to the difficulty which arose in sub-committee, and after
we have decided that first principle, we will have to put paragraph 3,
Article III, to the Commission along with paragraph 4. 49
J. E/PC/T/B/PV/22
Alternative (2): "That the undertaking contained in
Article IV should apply to export subsidies of primary commodities,
and that the new requirements for the use of an export subsidy be
deleted from paragraph 3 of Article IIl". All those in favour
please raise their hands.
Those against?
Alternative (2) is defeated.
I therefore interpret the vote on the two alternatives to
mean that the undertaking contained in Article IV should apply
to export subsidies only. 50
V E/PV/T/B/PV/22
Mr. R.B. SCHWENGER (United States): I would like to reserve
my position.
CHAIRMAN : It is now necessary to formally put paragraph 3
of Article III to the Commission. I understand that on that
Article the United States Delegate reserves his position.
Is paragraph 3 of Article III approved?
( Approed) .
Is the New York text of Article IV approved?
Mr. R.B. SCHWENGER (United States): I am not quite sure
that I see how the combined vote on 3 and 4 would be interpreted
as giving...
CHAIRMAN: It is quite open to any Member of the Commission
to ask for a vote on the Alternative 1 and if the United States
wishes, we will have it. My interpretation was that as
Alternatives 2 and 3 had been rejected, there was nothing else
but to accept Alternative 1.
Mr. R. B. SCHWENGER (United States): I believe that the
ruling is correct; but in the light of it, and in view of the
tremendous importance to us of paragraph 3 of Article III, I
would appreciate it if there could be a vote on the text of
paragraph 3 of Article III.
Mr. J.J. DEUTSCH (Canada): Mr. Chairman, I understand that on
paragraph 3 of Article III, the Report of the sub-Committee was a
unanimous Report, with the exception of one. However, if you
wish to take a vote, I would not oppose taking a vote.
Mr. R .B. SCHWENGER (United States): Mr. Chairman, I regret
that Mr. Deutsch has made that remark, because, as I have 51
V E/PC/T/B/PV/22
explained in the course of the meetings, the work of the
sub-Committee had an informal character which was such that
I did not, for my part - and I do not believe the other
Members of the sub-Committee did for their part - insist on
the exact observation of procedural forms, and the Report,
in fact, was drafted -informally by the sub-Committee. The
question that we had before us was never put to a vote in the
sub-Committee, I believe. I say it not in criticism: I
believe that the sub-Committee was extraordinarily well-conducted;
but I do believe that we must take cognizance, in view of the
differences that exist here, of that fact. 52
M E/PC/T/B/PV/22.
CHAIRMAN: The United States Delegate has asked for a vote
on paragraph 3 of Article III. He is quite within his rights to
ask for a vote and therefore I would request that we now proceed
to a vote. Will those in favour of paragraph 3, Article III,
please raise their hands.
(A vote was taken by a show of hands).
CHAIRMAN: Paragraph 3, Article III, is approved by-0votes
to 1.
On Article IV I understand that the Chairman of the Sub-committee
has an observation to make.
MR. GEORGE HAKIM (Lebanon): (Chairman of the Sub-Committee):
There is a correction to be made in the New York text of
Article IV. The text should read:. notwithstanding the provisions
of paragraphs 1, 2, and 3 "; that means by the addition of -
t2". The mistake occurred because paragraphs 1 and 2 were
originallj Joined in one paragraph, so the addition of paragraph 2
is necessary.
CHRIBMAN: Are there any comments on the proposed amendment
y.the Chairman of the Suc-oommittee ?
(No observations)
Is the New York text of Article IV, as amended by the Sub-
committee, approved ?
. . E. MCCARTHY (Australia): I understand that the United
States representative is reserving his position on paragraph 3 of
Article III. In these circumstances I will vote foN 11.J. Were
his reservation not there I would vote foNo. ),3.
THC OHRAIMAN: Does the Delegate of Australia wish to have a
vo e'on the New York text of Article IV ? E/PC/T/B/PV/22.
MR. E. McCARTHY (Australia): No.
CHAIRMAN: Is Article IV approved ?
MR. R.B. SCHWENGER (United States):
our reservation to the two Articles.
I would like to extend.
CHAIRMAN: Is Article IV, subject to the reservation of the
United States Delegate (who wishes to make a reservation applicable
to both Article III and Article IV), approved ?
(Approved).
M E/PC/T/B/PV/22
CHAIRMAN: Does Australia wish to add a vote on the New
York text? Is Article IV approved?
Mr. SCHWENGER (United States): I would like to extend
our reservation to two articles.
CHAIRMAN: Article IV has been approved, subject to the
reservation of the United States Delegate, who wishes to make
the reservation applicable to both paragraph (3) of Article III,
and Article IV.
Does the U.S. Delegate wish to form his reservation in
specific terms, or just to say paragraph (3) of Article III, and
Article IV?
Mr. SCHWENGER (United States): As the formulation of
my reservation is at some length, I would like permission to
submit it.
CHAIRMAN: I would ask the U.S. Delegate to submit his
reservation to the Secretary.
Article V. Any comments?
Approved.
Is the whole of the re-draft of Article 30, subject to the
reservations of the Cuban, Australian and U.S. Delegations,
approved?
Approved.
We now have to pass to the Note by the Chairman of the
Sub-Committee given in paper 127.
Does the Chairman of the Sub-Committee wish to add anything
to this paper?
Mr. HAKIM (Chairman of Sub-Committee): Mr. Chairman, I would
G 55
G E/PC/T/B/PV/22
like to know only whether the Commissinn agrees with the
internation I gave of Articles I and II of the Section
on Subsidies, and which is contained in the last paragraph
in Document 127.
CHAIRMAN: Is the interpretation given by the Chairman of
the Sub-Committee approved by the Commission?
The Delegate of France. 56
S E/PC/T/B/PV/ 22
CHAIRMAN: The Delegate of France.
M. LECUYER (France) (Interpretation): I wonder, Mr.
Chairman, if in current doctrine it is not admitted that any
reduction in the cost of transport of a product for export is
considered as an indirect subsidy. At any rate, the matter
has been settled it this sense in French law, namely, that a
reduction in the price of transport by rail or otherwise is
considered as a payment on exports. This does appear to
be the conclusion of the Report of the Chairman of the Sub-
committee.
CHAIRMAN: Mr. Hakim.
Mr. HAKIM: The conclusion in Document 127 is exactly
the same as that which was expressed by the French Delegate,
in so far as reductions on the transportation charges on
exports constitute an indirect subsidy or form of price support.
It is covered by Articles I and II of this section on subsidies.
My interpretation, as I give it in this paper, is in full
acoord with the interpretation of the Delegate of France.
CHAIRMAN: Does the Delegate of France agree?
M. LECUYER (France) (Interpretation): I agree.
CHAIRMAN: Is the Commission agreed that this interpretation
should go forward to the Sub-committee on Article 15?
(Agreed).
It is still necessary for Commission B to take Article 45
in Chapter VI. This Article was approved by the Sub-committee
on Chapter VI, subject to a reservation regarding the last part
of Article 45, in order to await the result of the establishment
of a text on Chapter VII by the Sub-committee dealing with that
Chapter. 57
S E/PC/T/B/PV/22
The parts of Article 45 which were reserved were Paragraph
1 (b) and Paragraph 2.
Mr. S.L.HOLMES (United Kingdom): Mr. Chairman, I am not
sure whether it falls to me to say anything on this; In my view,
subject to a very small amendment of wording in Paragraph 2, which
I will mention later, I would suggest that in the re-arrangement
of Article 59 - which has now become, I think, Article 61 -
there is nothing which would prevent us from simply removing
the brackets.
If I may, however, refer to the small amendment to Article
II, which I should like to propose, it is this: that before
the words "the effect" in the last line but one, we should
substitute "the harmful effects" in the plural. That would make
it uniform, I believe, with the rest of the text of the Chapter
and the only reason, I believe, why we did not do that was
because at that time we had brackets round the paragraph and
we failed to see what consequential and hypothetical amendment
would be required at that time. 58
ER E/PC/T/B/PV/22
CHAIRMAN: The United Kingdom Delegate has proposed that
Article 45 should stand as it was drafted in New York, but with the
addition of the word "harmful", and the word "effect" to be in the
plural, so that the last line would read "which may have the harmful
effects described in paragraph 1 of Article 39". Are there any
comments on the United Kingdom proposal?
Mr. R.B. SCHWENGER (United States): Mr. Chairman, as a matter
of information, did we not propose to eliminate the second sub-
paragraph of paragraph 1 of Article 45, accepting the report of the
Sub-Committee on Chapter I?
Mr. J.A. MUNOZ (Chile): Mr. Chairman, didn't the Sub-
Committee on Chapter VII suggest the deletion of sub-paragraph (b)?
CHAIRMAN: In view of the fact that it has already come out in
the new Article 61, they decided, I think, to delete sub-paragraph
(b) of Article 45.
Well, in view of the doubts that have been raised about
Article 45, I think we should not proceed with it this evening, but
should hold it up for another Meeting. 59
MR. S.L. HOMES (United Kingdom): Mr. Chairman, is it in
order for a Committee on another Chapter to decide anything in
relation to Chapter VI? It could propose.
MR. J.A. MUNOZ (Chile): Yes, it could suggest it.
CHAIRMAN: I think it is quite in order for the sub-committee
on Chapter VII to suggest to the Commission that this could be
deleted, It is a matter for the Commission to decide, but it is
clear that the Delegations have not had time to consider the
suggestion of the sub-committee on Chapter VII - I was not awjr~
of it myself. Therefore, I think the best course would be to
hold Article 45 over until after we have considered the question
of voting and the composition of the Executive Board. Is that
agreed?
Approved.
Commission B will meet tomorrow at 2.30 p.m. to consider the
question of voting and the composition of the Executive Board.
There being no further business, the meeting is adjourned.
The meeting rose at 6.45 p.m. |
GATT Library | sz689bm6056 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty-Second Meeting of the Tariff Agreement Committee held on Wednesday, 17 September 1947 at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, September 17, 1947 | United Nations. Economic and Social Council | 17/09/1947 | official documents | E/PC/T/TAC/PV/22 and E/PC/T/TAC/PV/21,22 | https://exhibits.stanford.edu/gatt/catalog/sz689bm6056 | sz689bm6056_90260079.xml | GATT_155 | 17,575 | 107,880 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL RESTRICTED
ECONOMIQUE E/PC/T/TAC/PV/ 22
ET SOCIAL 17 September 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AN EMPLOYMENT.
VERBATIM REPORT
TWENTY-SECOND MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON WEDNESDAY, 17 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
address their communications to the Documents Clearance
Room 220 (Te1. 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.
NATIONS UNIES E/PC/T/TAC/PV/ 22
CHAIRMAN: The Meeting is open.
The first item of business today will be the Report of the
Ad Hoc Sub-committee on the new paragraphs 6 and 7 of Article
XVIII. I will ask Mr. Adarkar of India, the Chairman of the
Sub-committee kindly to introduce the Report.
Mr. B.N. ADAPKAR (India): Mr. Chairman, the revised drafts
of Paragraphs 6 and 7 of Article XVIII which have been suggested
by the Sub-committee were unanimously adopted by the members of
the Sub-committee.
The Sub-committe had the advantage of having before it
two drafts, the one suggested by the United States Delegation,
which was already considered in the full Committee, and another
suggested by the United Kingdom Delegation, and these revised
drafts took into account the agreed features of both the drafts.
I would draw the attention of the Committee to the change
in the second line of Paragraph 6, the insertion of the words
"in force at 1 September 1947." This change has been made
to prevent the possibility of now measures being introduced
between now and the signature of the Agreement.
The other important feature of the draft is the insertion
of a definite date - 10 October 1947 - before which all
transitional measures for economic development will have to be
notified to all contracting parties.
In deciding to suggest a definite date, and one as early
as 10 October 1947, the Sub-committee took into account the
practical difficulties which Members may have in obtaining from
their Governments definite information about the measures at
present in force. The time allowed is certainly short. The
Sub-committee, however, considered that this is not a new
provision but one which is already in the Draft Charter.
Copies of the Draft Charter were already in the hands of
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2 S .3 E/PC/T/TAC/PV/22
Delegations and in this particular instance, of course, the
Secretariat also did its part by producing this document in a
remarkably short time and deserve to be thanked for that,
But far more important than any of these was the considera-
tion that many countries hove at present in force quantitative
restrictions and other measures imposed on grounds other than
economic development, quantitative restrictions are at present
in force on balance-of-payments grounds and it is not in all
countries that these measures have been specifically described
as imposed either on balance-of-payments or economic development
grounds. There is, therefore, a theoretical possibility that
some of the measures imposed on other grounds may come to be
described as measures imposed on grounds of economic development.
This might happen, either because of gonuius misunderstanding
on the part of the Delegations or because of the fact that measures
imposed on economic development grounds have a different status
from those irmposed on grounds of balance-of-payments. Economic
development measures, once approved by the Organization, will
acquire a permanent status. Even if they are not approved by
the Organization, the Organization has been authorized to allow
a period of grace for the removal of such measures. Therefore
it is most important for the Delegations present here to know
the position before they sign the Final Act. Once any provision
is made allowing transitional measures to be notified after the
Delegations have dispersed from Geneva, there will be no occasion
for discussing the matter here.
Since the problem presented by transitional measures is one
of very uncertain and unknown magnitude, it is most important
that discussion of those measures, if necessary, should take
place whilst the Delegations or still in Geneva. E/PC/T/TAC/PV/22
It was that consideration which led the Committee to suggest
that these transitional measures should be required to be notified
not later than 10 October 1947; that is, some time before the
signature of the Final Act. This date, as has been explained
in the covering note, was selected on the assumption that the
Final Act will be signed about the 15 October. If that
assumption is correct, then the Sub-committee was satisfied
that the last date for the notification of these restrictions
could not be placed later than 10 October 1947.
I would strongly urge that, in spite of the practical
inconvenience which the Delegations may find in obtaining the
necessary information from their Governments, they should
maintain this date of 10 October 1947 in their drafts, because
of the very important considerations which I stated just now
on behalf of the Sub-committee.
The Committee will notice that in notiying these measures
the Delegations will have to state the nature and purpose of
such measures. No detailed explanation need be given at this
stage in regard to the purposes which the measures are intended
to serve. By nature, all that is intended is that Governments
should state what the measure is; that is to say, they should
describe the measure, and the statement of purpose need not go
beyond stating whether the measure is intended for establishment,
development or reconstruction of a particular industry or a
particular branch of agriculture.
It will be noticed, further down, that there is a period
of 60 days prescribed within which the contracting party will
have to notify the Committee of the Contracting Parties of the
measure concerned and the considerations in support of its
maintenance, end the period for which it wishes to maintain the
measure.
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4 S 5 E/PC/T/TAC/PV/22
In the Draft Charter a period of 30 days only has been
stipulated. The Sub-committee thought a period of 30 days would
be too short and that 60 days would be reasonable.
These are all the comments I have to make on Paragraph 6.
As regards Paragraph 7, the Sub-committee considered
whether this paragraph covered the same ground as Paragraph 3
of Article XIV. They were satisfied that it covered exactly
the same ground. The shorter form of words suggested here
could not possibly have been used for Paragraph 3 of Article XIV,
.because there was no question of any Tariff Schedules. It was
for that reason that the matter had been spelled out in
Paragraph 3. Here we speak of Tariff Schedules which are
annexed to this Agreement, and all the contracting party reed
do is to avoid any measures relating to any product described
in the appropriate Schedule annexed to this Agreement, measures
which are already not permitted under the Charter.
I would only add two more comments, It is necessary to
know, for the purpose of clarification, that under this para-
graph no measure which is already permitted under the Charter
is required to be notified. If any quantitative restrictions
-have been imposed on balance-of-payments grounds, they need not
be notified. Similarly, existing mixing regulations which are
already allowed to be maintained subject to negotiations need
not be notified. Measures which come under Paragraph 7, that
is, those affecting a product described in the appropriate
Schedule, also need not be notified, because they are intended
automatically to be withdrawn when the Agreement comes into
effect.
There is one further point; that is, the treatment of
new countries. It might occur that by specifying this date E/PC/T/TAC/PV/ 22
of 10 October 1947 we have not adequately dealt with the question
as to how transitional measures in force in any country which
might subsequently accede to the Agreement would be dealt with.
In the Charter, in sub-paragraphs (b) and (c) of Article 14,
a Member which has not signed the General Agreement but signs the
Charter is required to notify such measures before the day on which
other Governments have signed the Charter.
It was not practicable to insert here a parallel provision,
because the time schedule regarding the signature of the Charter
is not known. The problems presented by the transitional measures
enforced by new countries may be different in nature and may
require different treatment.
0n the whole, the Sub-committee considered the problem could
best be solved under Article XXXIII, the Article about Accession,
which enables the other contracting parties to stipulate terms on
which new Members would be permitted to accede to the Agreement.
In fixing those terms, the other contracting parties could, if
necessary, indicate a date before which the new Members will have
to notify the restrictions in force in their countries.
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6 E/PC/T/TAC/PV/22
CHAIRMAN: I wish to thank Dr. Adarkar for the very
clear and complete exposition he has given of the report of
the Sub-Committee of which he was Chairman.
Any comments on the report of the Sub-Committee?
The Delegate of France.
M. ROYER (France) (Interpretation) Mr. Chainnan, I
wish to refer simply to a drafting point in paragraph 7 - and
incidentally the figure 7 was omitted in the French text -
where we speak about measures applicable to one of the con-
tracting parties. I wonder if it would be fitting to use the
same language as ih Article I.
CHAIRMAN: Are there any comments on the suggestion of
the French Delegate?
Mr. R. J. SHACKLE (United Kingdom) I am not entirely
clear as to what the suggestion of the French Delegate is.
I gather that he wishes to make this paragraph read something
as follows: "in respect of any product originating in any
other country" and not "any contracting party to any product".
Is that so?
M. ROYER (France) I am suggesting "in" or "destined
for" any other country.
Mr. R. J. SHACKLE (United Kingdom) I have rather the
feeling that one needs to refer to the contracting party
otherwise than by merely indicating the origin of the goods,
because it is for the contracting party to take action in
respect of modifying a measure and so on, if it is the proper
course for him to do so. Whereas here we are not merely
concerned with the rationality of the goods concerned; we
are also concerned to indicate if the particular contracting
party may or may not have something to do about this question.
I am not therefore entirely certain that it would be proper
- 7 - E /PC/T/ TAC /PV/22
to assimilate the word "originating on or destined for" as
in Article I.
CHAIRMAN: Are there any other comments on the suggestion
of the Delegate of France?
M. ROYER (France) (Interpretation): Mr. Chairman, it
was in order to provide an exact definition of this provision
that I suggested the somewhat more specific language for
the commitments. If this paragraph means that the provisions
do not apply to a product coming from the territory of a
contracting party or destined for the territory of a contracting
party, and if it also applies to export restrictions I do not
think that this language should be used.
R . E/PC,/T/TAC/PV/22
CHAIRMAN: Could the Delegate of France give us again the
text of this paragraph as he proposes to have it revised.
M. ROYER (France) (No Interpretation)
CHAIRMAN: Could you give that in English.
M. ROYER (France): Yes, "shall not apply to any product
originating in the territory of or destined to the other
contracting parties and described in the appropriate Schedule".
Mr. R.J. SHACKLE (United Kingdom): I assume that M. Royer
will keep the words "in respect of any contracting party" - "shall
not apply in respect of any contracting party to products
originating....." Is that so? You will keep the words "in
respect of any contracting party", M. Royer, and then go on "to
products originating ..."
Mr. J.M. LELDY (United States) I think that the Suggestion
of the Delegate of France may be and probably is unnecessary and
may produce a curious result. First, the applications of this
Agreement extend only to the contracting parties. Any country is
free to keep on any measure it wishes as far as this Agreement is
concerned in respect of a non-contracting party. Therefore we
do not have to discuss the point. We do not have to make any
reference to the fact that the product is the product of another
contracting party or is destined for another contracting party.
If we insert the language suggested by the Delegate of France, we
will imply that, with respect to products not in the Schedules,
countries would have to notify measures which they maintain not in
respect of contracting parties but in respect of countries which
are not contracting parties and I am sure that that is not the
intention. What we have here is only a notification of those
measures which will be maintained on non-scheduled products of the
contracting parties or destined for the contracting parties, and I
9 E/PC/T/TAC/PV/22
think the present language in its context means precisely that and
no more and no less.
M. ROYER (France) (Interpretation): Mr. Chairman, I must
apologise. I have been using the French text which is far from
clear on that point and which seems to say that the provisions
are not applicable to the products of one of the contracting
parties. Of course if it is understood that the contracting
party is the one who is applying the measures and not the party
against whom the measures are being applied, my point does not
arise; but the French text would have to be clarified in that
respect.
CHAIRMAN: Then I take it we can leave it to the Legal
Drafting Committee to bring the French text into conformity with
the English. Are there any other comments?
The Delegate of Brazil.
Mr. E.L. RODRIGUES (Brazil): Mr. Chairman, I am afraid I
raise a question of a juridical character. That perhaps will be
considered wrong, but I feel it is my duty to give my opinion. If
we will have no Agreement up to 15 October when we have signed the
Final Act, I do not see how you could have a provision stating
that any such contracting party shall have notified the other
contracting parties not later than the 10 October 1947. Up to
15 October no country discussing this matter here will be a
contracting party. Or, even if we take into consideration that
the Final Act will be signed on 15 October, it seems to me that it
is not proper to have in the Agreement, which does not exist, any
provision like that. I understand that we could take the same
commitment as a separate decision of this Committee and everybody
will follow this matter, but, without having a Law, I do not see
any way to impose that such a provision should be applied before
the existence of the law. It is only a formal and juridical
P.
10 E/PC/T/TAC/PV/22
matter. I understand, I repeat - and I have nothing to say against
the substance of this matter - that you could arrive at a
conclusion about this matter and have a decision taken by the
Committee; but not to put this in the Agreement which will not
exist before 10 October.
Later on I have to speak about the question of substance in
regard to the point of view of Brazil given in the last meeting.
CHAIRMAN: The Chairman of the Sub-Committee.
Mr. B.N. ADARKAR (India): Mr. Chairman, I do not think the
point raised by the Delegate of Brazil need cause any difficulty so
long as what is meant here is very well understood. What is me ant
really is that any country which expects to be a contracting party
shall notify the other countries which expect to be contracting
parties not later than 10 October 1947. This condition is actually
required only if all the countries which so exchange information
eventually become contracting parties. This is a requirement
which does not stand by itself. It is part of a provision which
.is laid down in the latter part of the Article. The condition
becomes relevant only if the countries concerned eventually become
contracting parties and have approached the Committee of the
contracting Parties for approval of these measures.
Mr. R.J. SHACKLE [United Kingdom): I really have little to
add to what Dr. Adarkar said. It seems to me this is simply a
provision laying down conditions for governing the operation of the
Agreement when it comes into force by reference to things which
happened before it came into force. I do not see anything
impossible about that, any more than in the case of an Old Age
Pension Act, which gives pensions to people over sixty. They were
born before the Law was passed, but nevertheless the Law operates
after they are born.
P
11 P.
CHAIRMAN: The Delegate of Belgium.
Baron P. de GAIFFIER (Belgium) (Interpretation): Mr. Chairman,
I think that we could meet the objection raised by the Brazilian
Delegate by inserting a few extra words to state "the contracting
parties signatory of the Agreement or of the Final Act".
Mr. B.N. ADARKAR (India): Mr. Chairman, would that not really
be unnecessary? Because even then the point raised by the Brazilian
Delegate would remain: even then we shall not be avoiding the use
of the term "contracting parties". I believe the explanation given
by Mr. Shackle was the right one - that this condition really only
operates when the parties concerned become contracting parties.
CHAIRMAN: Are there any other comments?
Mr. E.L. RODRIGUES (Brazil): And now I have to speak about
the substance of this matter. As I have explained in an earlier
meeting, we are in a position in which we cannot take any commitment,
if this Article means that a recent measure taken by my Government
exchange
in regard to/priorities ought not to be used after Brazil signs
the Agreement. In order to give you an exact idea of the matter
which is bothering me and is causing me a lot of difficulty in
accepting this proposal of this paragraph 6, I will read just four
or five lines of the Law put in force in Brazil. in order to avoid
misuse of the monetary reserves accumulated during the war. This
established certain priorities:-
1. Import of essential articles and those considered
necessary to meet national requirements.
2. Transfer of royalties, interest, profits, under conditions
stipulated in Articles 6 and 8 of Decree Law No. 9025 of
27 February 1946. 13
3. Living and travelling expenses and proceeds from sale
of passages.
4. Goods not considered in the first category.
5. Aid, donations and transfers for other ends, and those
beyond the percentages fixed in Decree Law No. 9025 for interest
and re-export of capital invested within the country.
This measure was taken, as I said before, not in order to
give any special protection to particular goods in Brazil, but in
order to avoid that a monetary fund, created with great sacrifice
for the country during six years while we could not buy machinery,
railroad materials and so on, could be misused in time of great
inflation in my country such as we are facing at present. Brazil
in such a case would lose her best opportunity, not to create a
new industry, but to got the material that during those years we
could not get because of the war. It is not a permanent measure,
it is a measure which has been used during one year. If this
kind of priorities, exchange priorities, is not forbidden in the
Charter, or in the Agreement, then I can accept this paragraph 6.
Otherwise Brazil has to reserve her position.
P.
E/PC/T/TAC/PV/22 14" ' wUv/"
CHAIRMAN: The Chairman of the Sub-Committee explained in
introducing his Report that paragraph 6 relates to quantitative
restrictions or similar methods which have been imposed for the
establishment, development or reconstruction of particular industries
or particular branches of agriculture and which is not otherwise
permitted by this Agreement. It does not relate to quantitative
restrictions or other methods which have been imposed for balance
of payments reasons. I am not quite sure as to the effect of the
regulations in force in Brazil, but I take it that it is a form of
exchange control. Therefore, it would not come under the provisions
of this particular paragraph. The Delegazilof Brai 1 will notice
that Article XVIII is headed: "Adjustments in Connection with
Economic Development", and this particular provision follows along
the lines of the corresponding Article in the Charter, Article 14.
M. CJ. SHAMKLE (United KingdoM). Bir Chairman, in
Article XII of this General Agreement, in paragraph 3(b) on page 27,
There are words which seem to come very close to the type of
situation which the Brazilian Delegate has described. It says there:
The contracting parties recognize that, as a result of domestic
policies directed t..... . the reconstruction or development of
indu trial and other economic resources and the raising of standards
of productivity, such a contracting party may experienceha hig% level
of'demand for imports. Accordingly," - and then we come to the
roverbial (ii) - "any contracting party applying import restrictions
under this Article may determine the incidence of the restrictions on
imports of different products or classes of product in such a way as
to give priority to the importation of those products which are more
T/TAC/PV/22/lt e
.1 J. E/PC/T/TAC/PV/22
essential in the light of such policies". That sounds to me
something very like the type of policy which the Delegate for Brazil
was describing.
CHAIRMAN: The Delegate of Brazil.
Mr. E.L. RODRIGUES (Brazil): Mr. Chairman, I raised this
questions because, as I have explained before, our monetary reserve
:has been treated as a abnormal surplus, not a current surplus, and
I was afraid that, because of this situation, we could not be covered
by this provision quoted by the Delegate of the United Kingdom. If
the Committee agrees with his point of view, I have nothing against
paragraph 6 and will be prepared to accept it.
CHAIRMAN: Are there any other comments?
We will now take up this paragraph by paragraph.
Are there any comments on paragraph 6?
The Delegate of New Zealand.
MR. J.P.D. JOHNSEN (New Zealand): Mr. Chairman, if I might
raise one point in connection with the date 10th October, I
understand that that was related to the possible signing of the Final
Act on the 15th October, but if that is not effectuated, will this
date remain the same?.
CHAIRMAN: I will invite the Chairman of the Sub-Committee to
explain the understanding of the Sub-Committee on this point.
Mr. B.N. ADARKAR (India): Mr. Chairman, the Sub-Committee
considered the question of relating this date to the date of Signature
of the Final Act, but apart from the uncertainty as to when the Final
....... E/PC/T/TAC/PV/22
Act may be signed, there is also the further consideration that if
these negotiations are unduly prolonged the Final Act may be signed
at a time when there may be, for all practical purposes, no opportunity
of discussing this matter between the various Delegations. For
example, most delegations will be leaving Geneva leaving only a small
technical staff for finalizing the Tariff Schedules attached to the
Agreement.
For that reason it was considered that no matter when the Final
Act was signed the 10th October, 1947 should be maintained as the
date for this purpose.
CHAIRMAN: Are there any other comments on paragraph 6?
Agreed.
Paragraph 7?
Monsieur Royer.
M. ROYER (France) (Interpretation): Mr. Chairman, on thinking
the matter over, I would like to propose a French draft which would
be clearer than the draft which appears here, and I propose that this
draft be examined by the Legal Drafting Committee.
The draft would be as follows: "No contracting party may have
resort to or claim the benefits of the provisions of paragraph 6 of
this Article for the products described in the appropriate Schedule
annexed to this Agreement".
CHAIRMAN: Are there any comments on the revised text proposed
by the Delegate of France? Are there any objections to this revised
text?
16 J. 17 E/PC/T/TAC/PV/22
Mr. B.N. ADARKAR (India): Mr. Chairman, since both drafts are
intended to convey the same thing, would it not be better to maintain
in the English text the text proposed by the Sub-Committee and adopt
in the French text the wording suggested by the Delegate of France,
if it is acceptable to the French speaking Delegations?
CHAIRMAN: I think there is a difference in emphasise here
which would make it difficult to adopt one for the French text and
the other for the English text. The French proposal reads in English:
"No contracting party may have resort to or claim the benefits of the
provisions of paragraph 6 of this Article for the products described
'in the appropriate Schedule annexed to this Agreement". I think
there is a change in emphasis there which would require the two texts
to correspond.
The Delegate of the United States.
Mr. J.M. LEDDY (United States): Mr. Chairman, I do not see
any difference in substance between the present text and the text
proposed by the French Delegate, and I think we can safely leave it
to the Drafting Committee to the draft the text in English and French
which will be acceptable.
CHAIRMAN: Is is agreed to leave this point to the Legal
Drafting Committee?
The Delegate of Cuba.
Dr. G. GUTIERREZ (C ba): Mr. Chairman, we consider that the
English text is the result of thorough discussion and compromise,
and we have no objection to putting the French text in accordance E/PC/T/TAC/PV/22
18
with the English text, but we would prefer very much not to have any
change made in the English text.
CHAIRMAN: It is possible that the Legal Drafting Committee,
by taking the English text as a basis and, perhaps, making minor
changes in its wording, could find two texts in the two languages
that correspond one with the other. S E/PC/T/TAC/PV/22
19
Are there any other Comments on Paragraph 7?
(Agreed)
We will now take up the Report of the Ad Hoc Sub-committee
on Paragraph 3 of Article XXIV. I will ask ,M. Royer, the
Chairman of the Sub-committee, to introduce the report of his
Committee.
M. ROYER (France) (interpretation): Mr. Chairman, the first
question the Sub-committee took up was whether Burma, Ceylon, and
Southern Rhodesia could be admitted as contracting parties to the
General Agreement.
We did not consider the question as to whether the present
state of negotiations for these countries was sufficient to allow
them to participate as contracting parties to the General
Agreement, because this question was beyond our terms of reference.
We asked the Delegation of the United Kingdom to throw light
upon the four questions which are mentioned on Page 1 of Document
T/198 and the United Kingdom Delegation save answers to those four
questions. These answers were confirmed in a letter sent on
September 15 by the Head of the United Kingdom Delegation to the
Executive Secretary to the Trade and Employment Conference.
In the light of the information which we obtained from the
united Kingdom Delegation, the Sub-committee decided to recommend
the admission of the three territories mentioned above, that is,
Ceylon, Burma and Southern Rhodesia, as full contracting parties
to the General Agreement.
Some consequential changes had to be made to the draft of the
Agreement, so that the provisions could fit into the framework of
the General Agreement. We thought the automatic reproduction of
the provisions of the Draft Charter did not correspond exactly to
the intentions of the authors of the draft of the General Agreement. E/PC/T/TAC/PV/ 22
After we considered the provisions in the Charter relating
to the adherence of separate customs territories, we could see
that the conditions are different from what they should be for
adherence to the General Agreement.
In the Charter there is nothing to prevent separate customs
territories from adhering to the Charter on the same. conditions as
the other States, but when we considered the General Agreement we
found that the separate customs territories would not have
negotiated here in Geneva. Therefore, if they were to adhere in
a kind of unilateral way to the General Agreement they would
acquire the benefits of the concessions made here without
negotiation.
Therefore the Sub-committee propose to delete sub-paragraph
(b) of Paragraph 3 of Article XXIV and replace it by a provision
which appears at the end of Article XXXI, new proposed Article
XXXIII, and which would read as follows: the first words would
remain as in Article XXXI - "A Government not party to this
Agreement . .", and the words added are: "or a Government acting
on behalf of a separate customs territory"; from there the words
proposed by the United Kingdom Delegation, which have been agreed
to, would be inserted: "possessing full autonomy in the conduct of
its external commercial relations and of the other matters provided
for by this Agreement."
Then the paragraph goes on as previously written: "may accede
to. this Agreement on its own behalf or on behalf of that territory
on terms to be agreed between such Government and the contracting
parties. "
The mechanism which is provided for here will mean that the
separate customs territories which will not have negotiated in
Geneva will not be able to become Members of the club; they will
S 21
have to adhere to the club of the General Agreement on the same
conditions as any non-negotiating- Government or any Government
which has not taken part in the negotiations in Geneva.
Furthermore, we thought that Paragraph 3 (a) should also be
modified. We therefore proposed a modification on the lines put
forward by the Delegate of the Netherlands, which now appears as
a second proviso in Paragraph 3 (a).
The Netherlands Delegation pointed out that if any separate
customs territory were included now in the list of the metropol-
itan territories at the time of the Signature of the Agreement,
and if such territory should acquire complete autonomy in the
future regarding the matters which now appear in the Agreement and
therefore become a separate customs territory, with full autonomy
an meant here, this should be provided for. If it happened
during the period of the application of the Agreement, it ought to
be provided for and the same treatment ought to be given to that
new separate territory as that which existed at the time of the
Agreement if that separate customs territory were included in the
list of the metropolitan territories.
This is the object of the second proviso appearing in
Paragraph 3 (s), stating that "Provided further that if any of the
customs territories on behalf of which a contracting 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," etc.
The Sub-committee further-thought that the provision
included in Paragraph 3 (a), stating that the separate customs
territories should be allowed to send representatives to the
Contracting Parties (with capital letters), was insufficient,
because it did not take into account the rights and obligations of
E/PC/T/TAC/PV/22
S E/PC/T/TAC/PV/22
22
these separate customs territories. We therefore changed the
drafting of this sub-paragraph and stated: Such territory shall
be deemed to be a contracting party." We said "be deemed to" and
not "become;" that was intentional, because the word "seem" implies
two possibilities: the first that these territories will act in
their full right as Burma, Ceylin and Southern Rhodesia are doing
now, or, on the other hand, these territories may have the same
advantages as the metropolitan territory - that is, the contracting
party which is acting on its behalf - if this contracting party
wishes still to act on its behalf and represent it.
You will see a further change here, which appears in the
inclusion of the words "upon sponsorship through a declaration by
the responsible contracting party. " We thought this was
necessary because it means that if the separate customs territory
is autonomous and requires to have extended to it - and asks to
have extended to it - the advantages and the benefits of the
concessions, then there must be a declaration of the contracting
party which was representing it vis-a-vis the other countries,
because the other contracting parties must have sufficient
information to be able to judge the legal ability of such separate
customs territory.
Before concluding a contract with such separate customs
territory, the other contracting parties must know that this
separate customs territory is able from a legal point of view;
this is the same as in the signature of any contract. We thought
that the legal ability of such territory was ill-defined here and
therefore one needed a declaration by the contracting party,
stating that the separate customs territory had the right de jure
and/or de facto to act on its own behalf and to fulfil the
obligations of the Charter.
Mr. Chairman, I think this is all I have to say.
I would like to add that the decisions which we reached in
the Sub-Committee were reached unanimously; therefore I propose that
the Report of the Sub-Committee should be adopted by the Committee. 23
CHAIRMAN: I thank M. Royer for the very complete
exposition he has given of the Report of the sub-Committee.
Are there any comments?
The Delegate of China.
H.E. Mr. Wunz King (China): Mr. Chairman, the Chinese
Delegation accepts the Report of the sub-Committee, and wishes
to take this oceasion to congratulate these three territories,
Burma, Ceylon and Southern Rhodesia upon their .admission
as contracting parties for the purposes of the present Agreement.
We wish also ts extend to them a warm welcome, all the more so
as we have concluded our tariff negotiations with Burma, while
those between Ceylon and China are also nearing completion.
CHAIRMAN: Are there any other comments?
Mr. R.J. SHACKLE (United Kingdom): I only wish to say that
in the absence of representation from Burma, Ceylon and Southern
Rhodesia , I will do my best to convey to them the kind congratulations
which the Delegate of China has expressed. I should like to
add two very minute points on the text. On page 4, third line
on the page, after the words "establishing the above-mentioned
fact" to insert a comma, and then in paragraph 3 immediately below,
comes the 'point to which M. Royer has quoted, namely that we
should insert in the third line of the inset passage, where the
asterisk occurs, the words "in the footnotes". I think it will
be obvious that it is essential to add those words. Think you.
CHAIRMAN: Are there any objections to these drafting
changes proposed by the United Kingdom Delegate? Agreed.
Are there any other comments on the Report of the sub-Committee?
The Delegate of the United States.
E/PC/T/TAC/PV/22
R. E/PC/T/TAC/PV/22
24
Mr. J.M. LEDDY (United States): I should just like to
second the remarks of the Delegate of China. We accept the
Report of the sub-Committee which establishes to our satisfaction
the fact that Burma, Ceylon and Southern Rhodesia are, in fact,
independent in commercial matters and are entitled to stand on
a footing of equality with the rest of us. We therefore wish
to welcome the addition of these territories to this Committee
to participate with the rest of us as potential contracting
parties on the basis of independence and equality.
CHAIRMAN: The Delegate of Canada.
Mr. L.E. COUILLARD (Canada): The Canadian Delegation
is happy to join in supporting the statement, originally made
by the Delegate of China, of congratulations and welcome to
these three countries as full contracting parties to the General
Agreement. We would also, of course, support Mr. Leddy in
his suggestion that if the Report is adopted these countries be
invited to sit with us as full contracting parties.
CHAIRMAN: Are there any other comments?
I therefore take it that the Committee accepts the recommend-
ations:of the sub-Committee and that Burma, Ceylon and Southern
Rhodesia, according to their status, de jure or de facto can be
admitted to participation as full contracting parties to the
General Agreement on Tariffs and Trade.
It is only necessary for us to give effect to the changes
General Agreement consequent upon the adoption of this
recommendation. The first will be the removal of the brackets
in the first paragraph of the Final Act and in the Preamble to
the General Agreement surrounding the words Burma, Ceylon and
Southern Rhodesia. Is that agreed? Agreed.
The next recommendation which we will take up will be the 25
delegation of sub-paragraph (d) and the, substitution of a new
paragraph for paragraph 3(a) which will now become paragraph 4.
The text of this is given at the bottom of page 3 and the
beginning of page 4 of the Report of the sub-Committee.
Are there any comments on this new paragraph 4? Agreed.
The next consequential change is in Article XXXIII,
formerly XXXI. The text this, with the amendment proposed
by the United Kingdom, is given on page 4 of the Report of the
sub-Committee. Are there any comments? (Agreed).
Mr.. R. J. SHACKLE (United Kingdom ): Believe we leave this
matter I would wish, on behalf the Delegation of the United
Kingdom, to express very sincere appreciation to the Committee
for their having agreed to this Report, and I am sure that I
shall not be misinterpreting the wishes of the representatives
of Burma, Ceylon and Southern Rhodesia who unfortunately are
absent, if I was eac that statement. I will
certainly convey to them the very kind expressions which Members
of the Committee have spoken on their account. Thank you.
CHARIMAN: The next item of the of business is the
Partial for the General Agreement on Tariffs and Trade regarding
relatiions with Germany, Japan and Korea while under military
operations. This is a proposal of the United States Delegation,
but this morning the United States Delegation also submitted a
proposal for a note to be attached to Article XXIV I take it
that this nots will be included in our Annex to the Interpretative
Notes, and although this note was only circulated this morning
I would ask the Committee if they would be preparsedl to consider it
now,.even though it has not been in the hands of Members of the
Committee for 24 hours.
The Delegate of Cuba
Dr. G. GUTIERREZ (Cuba):
I Should like to ask/the other
E/PC/T/TAC/PVI 2J r/2
T R. 26 E/PC/T/TAC/PV/22
Members of the Committee if they would be willing to agree that
we could change the order of the day and consider now the
question of Reservations tend afterwards take up this matter
of the Protocol in regard to occupied territories.
CHAIRMAN: I am entirely in the hands of the Committee as
to the order in which to take up these various items. There is one
point to which I would like to draw the attentionn of the Committee,
because I think it has some relation to the question of Reservations
which have been referred to by the Delegate of Cuba. We have
had circulated this morning the report of the ad hoc sub-Committee
on relations between the Protocol of Signature and the Protocol
of Provisional Application. This report has not yet been in
the hands of the Committee for 24 hours, but as a decision on the
report of this sub-Committee might well take the question of
Reservations, I would like to obtain the sense of the Committee
as to whether they would first of all like to deal with the
report of this sub-Committee or take up now the paragraph in the
Final Act which refers to Reservations.
I might say that the Report of the sub-Committee is contained
in Document E/PC/T/199.
Will the Committee be in accord with postponing consideration
of the Protocol dealing with relations with Germany, Japan and
Korea and taking up now the Report of the sub-Committee on the
Protocols? Is that agreed? Agreed.
I therefore call upon Mr. Melander, the Chairman of the
sub-Committee,to introduce his report.
Mr. J. MELANDER (Norway): The sub-Committee dealing with
these two Protocols have come to a unanimous conclusion which,
in short, amounts to the deletion completely of the Protocol of
Signature and the inclusion of the essential part thereto as I
R . 27 E/PC/T/A CPIV/22
partof the Geneal . Agreement itself. It would come into Article
XXIX of the General Agreement as a new first paragroph.
Therefore we have, practically speaking, not made any alteration
at all to the Protocol of Provisional Application, but only
minor drafting changes and there are a few consequential changes
in the General Agreement. Especially I would refer to Article
XXVI of the Draft Agreement where some changes have been made
in paragraph 1. The most important change there is is that the
General Agreement would be open for signature by any Government
signatory to the Final Act, but without any time limit. The
limit of June 30,1963 goes out. That of course is a change which
has been made in the light of the alteration of Article XXIX
which we made yesterday, and the change in Article XXVI made
yesterday. The essential point is that the General Agreement
will not enter definitively into force until it has been decided,
one way or another, what to do with the Havana Charter if that
comes into force, and what to do in the case of that Charter
not coming into force. . J
I think personally that tho solution of the sub-Committee
is rather a simple one and it would probably be the best way
of solving some of these diffioult-const tutional problem
whioh we dProtocols.hen we discussed these two toeol¢0 28 W / 1j L
I may also mention that there is one change in the substance
of the undertaking previously contained in the Draft Protocol of
Signature and that is that we now sap that the contracting :arties
undertake to observe to the fullest extent of their executive
authority the general principles of the Draft Charter. Now that
means that so long as the contracting parties accept the general
principles of the Draft Charter, and there has really been no
reservation on that at all, it will enable the contracting parties
to maintain their reservctions to specific Artioles in the Draft
Charter which are referred to in this formerly Protocol of
Signature, now the new paragraph 1 of Article XXIX. That should
in my view also simplify the problem relating to reservations
generally.
That, I think, covers the most important points.
CHAIRMN: I thank Mr. Melander for having presented the
Report of the Sub-Committee and for having given such a full
explanation for the reasons which led the Sub-Committee to adopt
these recommendations.
lre there any comments on the Report of the Sub-Committee?
May we then take up the recommendations of the Sub-Committee
which are given on pages 2 and 3 of the Report?
The fist recommendation is to delete the words in Article XXIII
tor its ".companying Protoool'. Are there any comments?
Agreed.
The next recommendacion rVlatesato Airtiole XXTI to &mend the
1itle and paragraphs I and 2. The title to read "Acceptance,
Entry into Force and Regif tration". The text o the new paragraph
is given on page 2.
Are there any comments? M. Royer.
m- /,D r, / m / i r / s> 9
13 E/PC/T/TAC/PV/22
29
M.(ROYER (France) (Interpretation): Mr. Chairman, I would
not like to delay the work of the Committee but there are a certain
number of modifications which should be inserted in the French text.
For instance the word "adhesion" which ought to be translated by
"adherence" is here translated by the word "acceptance". That of
course is not what we meant to be said.
CHAIRMAN: I believe we can leave that to the Legal Drafting
Committee to fix up.
Are there any comments on the chance of title?
That is agreed.
Are there any comments on paragraph 1 of Article XXVI?
Agreed.
Are there any comments on paragraph 2 of Article XXVI?
Agreed.
The next recommendation relates to Article XXIX, to amend the
title and insert a new paragraph 1, altering the numbers of the
present paragraphs accordingly. The new title would read
"Relation of this Agreement to the Charter of an International
Trade Organization". Are there any comments on the new title?
Agreed.
Are there any comments on the text of the new paragraph which
is given on page 3 of the Sub-Committee's Report?
Agreed.
The fourth recommendation relates to the Protocol of provisional
Application. The recommendation is to amend the second paragraph
to read as given on page 3 of the Report of the Sub-Committee.
Are there any comments?
Agreed.
The next recommendation is to delete the provision for
~ ~ ~ ~ h tex .Of
sXgnature following.after Article )XXIV at the end of the text of
the'Agreement, page 65 of document T/196. Are there any comments
on this recommendation?
Agreed. E/PC/T/TAC /PV/22
30
The final recommendation of the Sub-Committee is to dispense
with the separate Protocol of Signature. Are there any comments
on this recommendation of the Sub-Committee?
Agreed.
I wish to congratulate Mr.Melander and the Sub-Committee for
the way in which the Committee have accepted the Report of the
Sub-Committee.
The Delegate of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, we have yet to
discuss the question of reservations.
CHAIRMAN: Could I just interrupt you a moment? I was going
to propose now that we adjourn for our refreshment. We usually
take half an hour off at this time, so perhaps the Cuban Delegate
would wait until we return before we take up the question upon
which I think he was going to speak.
Dr. Gustavo GUTIERREZ (Cuba): I shall be very glad to
accept that proposal.
CHAIRMAN: We will adjourn now for half an hour and re-
assemble promptly at 5.10.
The meeting is adjourned.
(The meeting adjourned at 4.40 p.m. and resumed
at 5.15 p.m.)
CHAIRMAN: The meeting is called to order.
Mr. J.M. LEDDY (United States): Mr. Chairman, as a preface
to the discussion which we are about to take up on reservations,
I would like to comment on the Report to which we have just agreed
and the bearing which it has on the problem of reservations.
We have witnessed with some reluctance - I might say
considerable reluctance - the disappearance of the provision for
signature of the agreement, even though we have recognised all P. E/PC/T/TAC /PV/22
31
along that signature of the Trade Agreement did not legally commit
the signatory country to accent these provisions or apply them.
We fully believe that, in the circumstances, in view of the fact
that some of the delegations, some of the counties, present felt
unable to sign the Trade Agreement, even at the lime at which they
were willing to give provisional application to it, and in view of
the position of some of the countries with regard to reservations,
by and large it would be wise to dispense with the provision for
signature of the Agrement.
From the point of view of international law and procedure that,
of course, makes no legal difference. It is true now, as it has
always been, that the binding obligation between the contracting
parties take, affect only when the Agreement has been accepted by
countries making up 85% of the total number represented at this
meeting.
Now, I think before we get into the problem of reservations,
we should look very carefully at the way the Agreement stands now
and its effect upon the question of reservations.
First, there being no provision for signature of the Agreement,
there is, of course, no occasion for any country to reserve its
position upon signature. It would still be open to any country to
reserve its position upon acceptanace of the Agreement. I think
what Dr. Gutierrez stated the other day with regard to that matter
was quite correct: a country may accept the Agreement but with
reservation. In that event, of course; the acceptance, in order
.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ r i jbet
to be valid in i1.ter . Lial lew as I u ;e txr, it rcw be then
agree& to by the other countries which have also accepted the
Agreement. Bit I would au-gesl; that there probably i-ll not be
any occasion for a country to a',ach ea rsv,tion to its
acceptance of the =,reeient for thi2 reason: thab under he terms
of the Agre_.rirt i' may not onrer into force except that a
decisionn has been 'i.s regard to Lba, seaeraession of the 32 E/2C/T/TAC/PV/22
provisions of the Agreement by the Charter. That will give every
country who has a reservation to the Charter an opportunity to
uphold it in Havana, and if it prevails in Havana and if it should
be incorporated in the Charter coming out of Havana, then to
propose to the contracting parties under the Suspension and
Supersession provisions that those provisions of the Charter should
supersede the provisions of the agreement. But until a decision
is reached upon that, until agreement is reached upon that, the
Trade Agreement may not enter fully into force. 33 ,,, ,.
Now, there is one other point, that is, Signature of the
Protocol of Provisional Application. Signature of that instrument
commits the signatory Government, and it is on a par with the
acceptance of the Trade Agreement. Therefore, any reservationsto
the Signature of the Protocol of Provisional Application must be
accepted and agreed to by all other countries signing the Protocol
of Provisional Application, but here again I should think that it
i Uld not be necessary for any country to reserve its position with
respect to the Signature of that Protocol because, after all, it is
a Protocol ef Provisional Application. Part I of the Agreement,
that is the Tariff part, is to be applied provisionally, and Part II,
that is the general provisiIns, with respect to which J think
reservations in questions apply, is to be applied to the fullest
extent not inconsis tent with existing legislation.
The Protocol of Provisional Application is subject to withdrawal
by any country on sixty days'noticn, so that if a country is lot
.satisfied with what happens at Harana oo with regard to supezsessiun
it will be in a position to withdraw from the Agreement at short
notice.
Therefore, I suggest tham the Report of the Sub-Com.ittee with
nOtfeett to the Protocol of ig.naAure and the question o si-gning the
Agreement haretakea ions.of the problem of -oserv.to?;
CHAIRMAN: The Delegate of Cuba.
Dr. G. GUTIERREZ (Cuba): I must say, Mr. Chairman, that the
Report of the ad hoc Sub-Committee was so simple and so short that I
oould not find in its nd ression this very enlightert. explanation
E/PU/T/TAC/PV/22
J E/PC/T/TAC/PV/22
that Mr. Leddy has been good enough to give us. On checking the
words of the United States Delegate with the text, I find his
interpretation a very intelligent one and it gives an opportunity of
finding a solution to the problem that we have before us. Therefore,
I will ask if the Committee agree to have the words of the United
States Delegate printed in a separate paper in order to have this
legal interpretation which the Report in its desire to be concise,
has not given us.
Now, we understand that reservations made to the provisions of
the Charter which have been embodied in the General Agreement extend
to the Articles of the Agreement, to be disposed of according to
normal diplomatic practice, and as we have not to sign the Agreement
here but only to present the proper Instrument of Acceptance, and
Governments will decide afterwards what to do, and probably that will
be after the Havana Conference when we know exactly how the problem
of supersession has been solved, is then, the Governments will have
a better opportunity to decide, we hope that there will be no need
for reservations.
Therefore, we consider this matter, from the point of view of
the Cuban Delegation, quite finished according to the interpretation
given by Mr. Leddy.
CHAIRMAN: Are there any other comments?
The Delegate of Syria.
Mr. I. TRABOULSI (Syria) (Interpretation): Mr. Chairman, I
would like to raise a point which, I think, only interests the Syrian
Delegation.
J. 35
The reservations before us have a peculiar character - we were
not a Member of the Preparatory Committee which drafted the charter,
but we were invited to attend the Preparatory Committee because we
have entered into a Customs Union with Lebanon.
In the course of the discussion on the Charter the Delegations
of Syria and Lebanon made a certain number of reservations regarding
the Articles of the Charter, but only the name of Lebanon is
mentioned in the Draft Charter which will be submitted to the world
Conference at Havana. We have no objection to this procedure because
we were assured that we would have full freedom to discuss the
Charter at Havana the same as all the other countries which have not
been invited to attend the meeting of the Preparatory Committee.
But, regarding the General Agreemernt, the situation here is
somewhat different because Syria is considered as a contracting party
to that General Agreement and as such it has the right to formulate
reservations or the Articles taken from the Charter and put into the
General Agreement.
Therefore, I would like to point out here and now that Syria
considers as its own reservations all the reservations which have
been made to these Articles by the Lebanese Delegation.
CHARMAN: The Delegate of Chile..
Mr. A. FAIVOVICH (Chile) (Interpretation): Mr . Chairman, in
the course of the previous meetings we expressed our point of view on
this question of reservations made to the General Agreement, and we
take this opportunity to confirm what we have said with regard to
maintaining the reservations which we have made here regarding the
E/PC/T/TAC/PV/22
J. J. E/PC /T/TAC/PV/22
36
Articles of the Charter which are incorporated in the General
Agreement, and also with regard to other reservations which we might
have made to others Articles of this Agreement.
In spite of the explanation just given by the United States
Delegate stating that reservations could be authorised until the
ratification of the Agreement, nevertheless, we deem it necessary
once again to reiterate our point of view regarding this question
of reservations. E/PC/T/TAC/PV/22
CHAIRMAN: The Delegate of the Lebanon.
Mr. J. MIKAOUI (Lebanon) (Interpretation): Mr. Chairman,
I would like to state that the Lebanese and Syrian Delegations
agree wholeheartedly with the statement just made by the
Chilean Delegate. Nevertheless, in the light of the statement
which was made by the United States Delegate, we would like to
have more time - once this statement appears in print - to
study his explanation and to keep our Governments informed of
the new evolution of this problem, and to have more time to
define our final attitude towards this question.
CHAIRMAN: Are there any other comments?
The Delegate of Cuba proposed that the remarks which were
made by the Delegate of the United States should be circulated
as a Conference document. These remarks would, of course, in
the ordinary way, appear in the verbatim record. I take it
that what the Cuban Delegate has proposed is that there should
be a special paper issued, embodying the remarks of the United
States Delegate.
I would like to know if the Committee is in accord with
this proposal.
Are there any objections to the proposal of the Cuban
Delegate?
(Agreed)
I hope that after the other Delegations who have spoken
on this subject have had the opportunity of studying the
remarks of the United States Delegate it will be possible for
us to clarify this issue of reservations in respect of all
Delegations.
I think it is necessary now for us to return to the Final
Act and consider in what way it should be drafted in the light
of the discussion which has taken place since we last considered
the question of the Final Act.
37 S.
38
E/PC/T/TAC/PV/22
The text of the Final Act is given in Document W/315 and
the additional paragraph proposed by the Tariff Negotiations
Working Party is given in Document W/319.
I propose to take up this Final Act paragraph by paragraph
and therefore will first of all deal with Paragraph 1, which is
given in Document W/315.
There will, of course, be a consequential change in the
last line from the bottom, which will require the deletion
of the words "with accompanying Protocols."
The Secretary has just pointed out that the text of the
Final Act is also given in Document T/196, on Pages 1 and 2.
The words "with accompanying Protocols" will be deleted
from Paragraph 1.
The Delegate of France.
M. ROYER (France) (interpretation): Mr. Chairman, the
Protocol of Provisional Application, therefore, would not be
covered by the Final Act?
Mr. J. M. LEDDY (United States): Mr. Chairman, I think
the Final Act should authenticate the text of the Protocol of
Provisional Applicatinn, and if so, it would probably be
necessary to have this paragraph defining the Protocol.
Perhaps the best solution would be to strike "s" off" .Protocols".
CHAIRMAN: Yes, I think what M. ROYER and Mr. Leddy have
pointed out is quite correct. Therefore, if we take out the
"s" at the end of the word "Protocols" we shall have made it
clear.
M. ROYER (France) (interpretation): Mr. Chairman, I think
it would be better to insert the words "Protocol of Provisional
Application." The words '"attached Protocol" relate usually to
a subsidiary Protocol and therefore it would be better to
define by its proper name the Protocol to which we refer. E/PC/T/TAC/PV/22
CHAIRMAN: Would it then read: "with the framing of a
General Agreement on Tariffs and Trade and the Protocol of
Provisional publication" or "with the protocol of Provisional
Application"?
Dr. COOMBS (Australia): "A Protocol of Provisional
Application." The preceding lint says "a General Agreement."
CHAIRMAN: Your suggestion is to substitute the words
"with accompanying Protocol" by the words "and a Protocol of
Provisional Application."? Is that agreed?
(Agreed).
Are there any other comments on Paragraph 1?
The Delegate of Australia.
Dr. COOMBS (Australia): There are one or two minor points,
Mr. Chairman. Following the word "negotiations", about half
way down the first paragraph, where it refers to the Govern-
ments initiating negotiations, we would wish to insert "between
their representatives;"
CHAIRMAN: Are there any objections to the proposal of
the Australian Delegate?
Dr. COOMBS (Australia): We would also like to suggest
that we add, at the end of the paragraph, the words "these
texts will be submitted to the Governments concerned."
Mr. LED Y (United States): Of course, it is up to any
Delegation here to submit the text to any of the Governments
concerned at the time of signing the Final Act. It is hoped
that some of the Governments represented here will sign the
Protocol of Provisional Application, and the text, so far as
they are concerned, will have been submitted to their Govern-
ments. I wonder w..ether we really need anything of that sort.
I should say that if the United States should sign the
Protocol of Provisional Application we should not like to be
put in the position of having signed it before submitting it
to our Government.
S.
39 S. 40 E/PC/T/TAC/PV/22
Dr. COOMBS (Australia): The point I wanted to bring out,
Mr. Chairman, was that we say - quite properly, I think -
"These negotiations have terminated to-day and have resulted in
the framing of a General Agreement," etc. I would not like to
think that our activities had ceased at the stage of framing a
General Agreement. We thought it would. help, therefore, in
making the position quite clear if we made some reference in
this sentence to the fact that the next move is now with the
governments.
The same point would be made if we said: "These
negotiations have terminated to-day and have resulted in the
framing, for the consideration of the Governments concerned,
a General Agreement."
Mr. LEDDY (United States): Mr. Chairman, I think we have
gone a very long distance inded to take account of the
difficulties which were explained. to the Committee, and have
been explained to the Committee ,from time to time by the
Delegate of Australia, and I would, like to ask your indulgence
for our own sensibilities, in view of the fact that we had hoped.
we would be able to sign the Protocol of Provisional Application
on October 15, the same day on which we sign the Final Act.
Dr. COOMBS (Australia): I would be prepared to endorse
that suggestion, Mr. Chairman.
CHAIRMAN: Are there. any other comments on Paragraph1?.
We will now deal with Paragraph 2.
The Delegate of Australia.
Dr. COOMBS (Australia): Mr. Chairman, I have a suggestion
to make in relation to this paragraph. I suggest we delete the
reference to the reservations. At present the paragraph reads:
It is understood that the signature of this Final Act... . does
not in any way prejudice their freedom to uphold at the United.
Nations Conference on Trade and Employment the reservations
which they may have made.. .." E/PC/T/TAC/PV/22
It appears to me it would cover the point quite adequately,
without implying a freedom of the countries concerned in
relation to other matters, if we said: "This does not in
any way prejudice their freedom to uphold at the United Nations
Conference on Trade and Employment the reservations which they
may have made in relation to the provisions of the Draft Charter,"
etc.
CHAIRMAN: The Delegate of the United Kingdom
Mr. SHACKLE: (United. Kingdom): Mr. Chairman, I am wondering
whether, if we simply put a full stop after "Trade and
Employment" and leave out the rest of the paragraph, that would
cover the change which Dr. Coombs has suggested. I feel that
may be a.little better, because otherwise there may be an
appearance of inconsistency produced by the last words we have
agreed to say in Article XXIX about the principles of the
Charter.
There is one other point: that is, that we need to repeat,
both here and in the next paragraph, the modification we have
made in the first paragraph. I might add that "signature or"
should. come out.
CHAIRMAN: We can deal with these consequential and
drafting changes after we have dealt with the proposal of the
Australian Delegate. I would like to ask Dr. Coombs if he is
in accord with the suggestion just made by Mr. Shackle
Dr. COOMBS (Australia): It would meet our point, Mr.
Chairman.
CHAIRMAN: The proposal now before the Committee is that
the words "to uphold" would be deleted in the fourth and fifth
lines and that the paragraph would end at the words "Trade and
Employment."
S. 42
R.
E/PC/T/TAC/PV/22
M. ROYER (Finance) (Interpretation) Mr. Chairman, it would
be better to say in French "their freedom of action".
C1HARIMAN: The Delegate of Chile.
Mr. ANGEL FAIVOVICH (Chile) Mr. Chairman, we would prefer
to keep the present draft as it stands; but if Dr. Coombs'
proposal does not exclude the possibility of upholding reservations
at the Havana Conference, then this proposal would be acceptable
to us.
CHAIRMAN: Are there any other comments on the proposal
of Dr. Coombs?
The Delegate of China.
H.B. Mr. WUNZE KING (China). In order to meet the views of
both the Australian and Chilian Delegations, I would suggest that
we use the following wording: "does not in any prejudice their
freedom of action at the United Nations Conference on Trade and
Employment, in particular in respect of the reservations which
they may have made through the provisions of the draft Charter"
etc. etc.
Mr. J. M. LEDDY (United States). If there were freedom of
action at the Conference surely this would include freedom of
action to maintain the reservations as well as freedom of action
to change decisions taken before, in the light of those decisions
which were taken at the Havana Conference.
CHAIRMAN: Is the Committee agreed as to the words "freedom
of action"?
The Delegate of Brazil.
Mr. E. L. RODRIGUES (Brazil) I think everyone here has the
idea that you will have full freedom of action in the United
Nations Conference of Havana. Because of this I am supporting
what the Delegate of the United States has just said. I see R. 43 E/PC/ T/TAC/PV/22
no difficulty in using, this broader term because any other word,
like "reservation" would mean restriction that is inconsistent
with the full freedom of the action.
CHAIRMAN: The Delegate of Chile.
Mr. ANGEL FAIVOVICH (Chile) (Interpretation) With the tacit
approval of Dr. Coombs and following the statement just made by the
United states Delegate saying that complete freedom of action would
be granted to the contracting parties in the Havana Conference and
that this would include the right to take any action on the reserva-
tions previously made or to ulhold new reservations, we would have
no objection to this.
CHAIRMAN: We have now reached a large measure of agreement
that the last words of this paragraph would read as follows:
"does not in any prejudice their freedom of action at the United
Nations Conference on Trade and Employment". Is that agreed?
Agreed.
We have now to deal with the consequential changes pointed
out by Mr. Shackle in connection with the second line, that is to
delete the words "signature or".
M. ROYER (France) (Interpretation). I think that it would
be more in harmony with the decision which we have just made to
state simply in this paragraph. "It is understood that the signa-
tories to the Final Act or the application by any of the above
mentioned governments of the Protocol of Provisional Application
does not in any way .. ." etc., etc., because in any case the
eventual entry into force would occur before the Havana Conference.
CHAIRMAN: The Delegate of Syria.
Mr. I. TRABOULSI (Syria) (Interpretation). Mr. Chairman, I
would like to know if the drafting of the present paragraph covers
our special case, which I have just mentioned, because I would
43
n I 0 J-nt /no R.
44 E/PC/T/TAC/PV/22.
like to point out that the reservations which we have made have
not been registered regarding the Charter.
CHAIRMAN: It is proposed that this paragraph will read/now:
"that the signature of this Final Act or"as Mr. Royer suggests,
"the application of the Protocol of Provisional Application" -
"does not in any way prejudice the freedom of action at the
United Nations Conference on Trade and Employment". Accordingly
I think that would apply to the Delegate of Syria as well as to
any other delegates here. There will be complete freedom of
action at the Conference of Hanava.
Mr. J. M. LEDDY (United States) I think we should say" the
signature of the Protocol of Provisional Application, because the
application of the Protocol will not be until January 1, 1948.
Therefore I suggest the wording as follows: "It is understood
that the signature of the Protocol of Provisional Application
by any of the above mentioned Governments does not in any way
prejudice their freedom of action".
CHAIRMAN: Is Mr. Royer in agreement with that suggestion?
Mr. ROYER (France) (Interpretation) I accept.
CHAIRMAN: Are there any objections to the wording just
proposed by Mr. Leddy? Accordingly the paragraph will read as
follows:
"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 prejudice their freedom of
action at the United Nations Conference on Trade andEmployment."
Is that agreed?
M. ROYER (France) (Interpretation). We might ask the Legal
Drafting Committee whether the words "It is understood that" are
really necessary. R. 45 E/PC/T/TAC/PV/32
CHAIRMAN: With that understanding is the paragraph agreed?
Agreed .
Paragraph 3
Mr. R.J.SHACKLE (United Kingdom) I think it would be
advisable to change the words "its accompanying Protocols" to
"Protocol of Provisional Application".
CHAIRMAN: In accordance with Mr. Shackle's suggestion,
in the second line "its accompanying Protocols" should be changed
to "Protocol of Provisional application". Is that agreed?
Agreed.
M. ROYER (France) (Interpretation) Mr. Chairman, I referred
only to the French text. I would like to suggest in regard to
the last line but one of the paragraph, after the words "shall
have been signed" that the words "by that date" should follow.
CHAIRMAN: Are there any objections?
Agreed
We now come to the formula at the end.
Mr. J. M. LEDDY (United States). I believe that the. Protocol
of Provisional Application will be released for publication on
November 18, provided it shall have been signed by November 15
by all the Governments. Was it not agreed that we were going
to. leave two or three days between the f inal date of signature
and the publication date so that countries could be informed?
CHAIRMAN: I think that Mr. Leddy has pointed out a
difference here between our understanding of what should be in
the text. He would therefore proposal that the words "by that
date" should be replaced by the words "by November 15" . R.
M. ROYER (France) (Interpretation). Mr. Chairman, I would
like to draw the attention of the Committee to one small point.
If one of the key countries signs this Protocol on the 16th or
17th of November, there will be no provision for the publication
of these documents.
CHAIRMAN: The Delegate of Australia.
Dr. H. C. COOMBS (Australia) I think there would not be
much point in publication. Under the Protocols of the Provisional
Application as it stands, it provides that it will enter into
force on January 1, 1948, if all countries have signed by November
15, If some countries have not signed by November 15, I imagine
something will have to be done about re-arranging the Protocol.
If it is just a matter of a few days delay it might be handled
without any difficulty, I think, but the way it is set out
here you must have signature by November 15 before the Agreement
can come into force, and there is no point in publishing the
Agreement until we are certain it will go into force.
M. ROYER (France) (Interpretation) Mr. Chairman, I do not
press my point.
CHAIRMAN: Is the Committee agreed to change the words
"by that date" to "by November 15, 1947"?
The Delegate of Australia.
Dr. H. C. COOMBS ( Australia) Mr. Chairman, I think it is
relevant here to ask, just as a matter of information, whether
this means the publication of changes in the tariffs of other
countries who have not signed.
CHAIRMAN: I think the answer is yes, because each and
every Schedule is an integral part of the agreement and there-
fore the United Nations would have to publish the whole
Agreement, including the countries who did not sign on
46 R. 47 E/PC/T/TAC/PV/22
on November 15.
CHAIRMAN: The Delegate of New Zealand.
Mr. J. P.D. JOHNSEN (New Zealand). I do not know whether
it is necessary to make any special provision. I think it
is essential that on the 16th November the Secretary-General
should advise all signatories to the Final Act as to whether
or not there have been the requisite signatories to the Protocol
of Provisional Application to enable publication to be made,
because all the countries signatory to the Final Act will wish
to arrange for simultaneous publication. 43
CHAIRMAN: I think that it is understood that we shall have to
notify all countries who are signatories of the Final Act but whether
or not there should be a special provision for the notification in
the Final Act is a matter for the Committee to decide.
Shall we agree that the words "by that date" should be
replaced by the words "by November 15, 1947"?
Agreed.
Does the Delegate of New Zealand wish to pursue this point?
Mr. J.P.D. JOHNSEN (New Zealand) Yes. I would suggest,
Mr. Chairman, that in order that there should be no doubt about
it, we might include a suitable paragraph providing that provisional
application be given by signatories of the Final Act.
M. ROYER (France) (Interpretation): Mr. Chairman, I wonder
if it is really necessary to insert such a clause in the Final
Act? I think that is would be sufficient if the Chairman of the
Preparatory Committee could send a letter to the Secretariat of the
United Nations requesting that this procedure should be followed.
Mr. J.P.D.JOHNSEN (New Zealand): That would be satisfactory,
Mr. Chairman.
CHAIRMAN: I think that that might be done and that would
obviate the difficulty.
We now come to the formula. The same consequential change:
the words "with accompanying Protocols" to be changed to "and the
Protocol of Provisional. Application". Are there any other
comments on the formula?
Dr. H.C. COOMBS (Australia) Yes Mr. Chairman, I would
suggest that it would be a slight improvement to substitute the
words "-to authenticate for/have thereby authenticated" . The 49
E/PC/T/TAC/PV/22
structure of the sentence is such that you have two purposes of
signature, so to speak: one, as witness to what has gone before,
and the second, to authenticate the text.
CHAIRMAN: The Delegate of Australia has proposed that the
words "and have thereby authenticated" shall be substituted by the
words "to authenticate".
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I suppose
it is very meticulous of me, but I have a feeling that the present
wording is clearer, because surely this is a multiple purpose
signature in a sense. First it is in witness of what goes before,
a body of provisions including various dates and actions and
finally we have just action - to authenticate the text. I should
have thought that if we say "and have thereby" it is really clearer
than if we say "to authenticate", which seems to mix up the
different purposes. Of course I may be quite wrong ........
Dr. H.O. COOMBS (Australia): My objection is that the present
text does exactly that. Supposing we put, Mr. Chairman, "In
Witness Whereof, and to authenticate the text.. etc. ".... the
respective representatives have signed the present Act".
CHAIRMAN: Are there any comments on this suggestion of the
Delegate of Australia? Dr. Coombs proposes that the formula
should read as follows:- "In Witness Whereof and to authenticate
the text of the General Agreement on Tariffs and Trade and the
Protocol of Provisional Application annexed hereto, the respective
Representatives have signed the present Act".
The Delegate of China. E/PC/T/TAC/PV/22
H. E. Mr. WUNSZ KING (China): Mr. Chairman, I would support
the proposition made by Dr. Coombs, but in order to simplify the
text and to alter the provisional text as little as possible,
perhaps we might delete the words "and have" and just say "have
signed the present Act thereby authenticating the texts"; and the
words "text" should be "texts" I suppose.
Mr. R.J. SHACKLE (United Kingdom): Mr. chairman, I feel that
all the confusion arises over the use of the word "thereby". There
seems to be some difference of opinion as to what the word
"thereby" refers to. I read it as meaning, by the act of
signature." I would not mind saying so instead of "thereby".
Dr. H.C. COOMBS (Australia): I am sure that grammatically,
where set out as the language is at present written, "thereby" does
not mean by the act of signing it in witness of what has gone
before. That is, it is not related solely to signing - not clearly
at any rate - because it is preceded by "In Witness Whereof" which
relates back to the preceding part; and it is just because it is
not clear that "thereby" relates only to the signing that it does
seem to me simpler and clearer to make it quite obvious that this
signature has, as Mr. Shackle pointed out, two purposes:- one, as
evidence of the fact that you are witnessing to what has gone
before, and secondly to authenticate the text. It should be quite
simple to put those two things together and say: "In Witness
Whereof, and to authenticate the text, the respective Representives
have signed the present Act".
CHAIRMAN: Mr. Johnsen.
M r. J .P.D JOHNSEN (New Zealand): Mr. Chairman, I would
Support the view of the Delegate of Australia.
50 51
P. E/PC/T/TAC/PV/22
CHAIRMAN:-- Are there any other comments on the proposal of
the Delegate or Australia?-_-.__
The Delegate of India.
M.. A.NAADYRKIR (India): Mr. Chairman, we woso d alt support
the proposal made by the Delegate of Australia.
Mr. R.J. SHACKLE (UKited Xingdom): Mr. Chairman, I think the
best method of all really would be to take out all the words before
"the text of" and to make a separate sentence:- "the texts of the
GeneralAgreement on Tariffs and Trade and the Protocol of
ProvisionalcApplioation annexed hereto are hereby authenticated.
In witness whereo..." . Then the purpose will be clearly set
out before the words "in witness whereof".
AN:ARDIU^ Mr. Shackle has proposed a new version which seems
to meet with the approval of Dr. Coombs. Are there any objections
to the wording proposed.by Mr, Shackle? Could Mr. Shackle read it
to us again please.
ACKLEIUWiLE (United Kingdom): "The texts of the General
Agreement on Tariffs and Trade and the Protocol of Provisional
Application annexed hereto are hereby authenticated." I should
have inserted the word "of" before "Protocol of Provisional
Application") "....and of the Protocol of Provisional
Application".
CHLIRMAA: ond then it goes on "In witness whereof the
respective representatives have signed the present Act".
Mr. Leddy.
Mr. J.M. LEDDY (United States): I am sorry to make a further
proposal but I wonder if we could not simply say, at thof end K the
first sentence, "These texts are hereby authenticated". "These
negotiations have terminated todahere resulted ac3.tc in tme fraring
of a General Agreement on Tariffs and Tradofand g9 the Protocol
of Provisional Application, the texts of which are annexed hereto" - P. E/PC/T/TAC/PV/22
"These texts are hereby au thenticated!".
CHAIRMAN That will be to add to the first paragraph the
words "These texts are hereby authenticated. Is that agreed?
- Agreed.
Then the formula would read:- "In Witness Whereof the
respective Representatives have signed the present Act". Is that
agreed?
Are there any other comments on the Final Act?
Mr. R. J. SBACKLE (United Kingdom) I take it that the
square brackets will disappear from the list of countries.
CHAIRMAN: It is of course understood that the square brackets
disappear from the list of countries.
Agreed.
Can we now take up the protocol of the General Agreement on
Tariffs and Trade concerning relations with Germany, Japan and
Korea while under military occupation? This is given in document
W/311, and there was circulated this morning document W/340 giving
a Note to be included. in the Annex of Interpretative Notes.
Mr. J.W. EVANS (United States) Mr. Chairman, I regret that,
.because of the haste with which we formulated the later suggestion
in W/S40, we failed to state at the outset that it was intended to
serve as a substitute for the Protocol formerly proposed. I
assume however that that was probably clear to all the delegates.
Now, since the circulation of this document, a number of
delegates have objected to certain of the wording, and I should like
now to propose some chances in our own text which may save the time
- of various delegations. With those changes the text would read:
P. P., E/PC/T/TAC/PV/22
"With regard to the status of areas under military occupation, it
is anticipated that this question will be given further study."
Then the rest of the sentence will continue, Then delete the
words "unless and until further discussions result" and so forth.
Then we pick up the wording with "It is therefore understood that,
until otherwise agreed, the provisions of this Agreement shall not
bind any area ..... " and so forth.
There is one other change in the last line. The words
"signatory to this Agreemeant" should read "contracting party". J. 54 E/PC/T/TAC/PV/ 22
CHAIRMAN: The way this Protocol will now read after the
changes proposed by Mr. Evans is as follows: "With regard to the
status of areas under military occupation, it is anticipated that
this question will be given further study. It iso therefore
understood that the provisions of this Agreement .....".
Mr. J.W. EVANS (United States): May I interupt,Mrk Chairman,
it now reads "....understood that until otherwise agreed the
provisions.....".
CHAIRMAN: Yes, "It is therefore understood that until
otherwise agreed the provisions of this Agreement shall not bind any
area or part thereof under present military occupation, nor any
occupying authority therein, nor any contracting party to this
Agreement with respect to trade in either direction with such area".
I am sorry. the last lineswill read: "nor any contracting
party with respect to trade in either direction with such area".
Dr. HC. COOMBS (Australia): Mr. Chairman, we cannot see Why
this Note is necessary. So far as we can see, there is nothing in
the Agreement to indicate that the provisions of the Agreement would
.-apply to the occupied territories, and therefore it is no more
necessary to say that it shall not apply to them whan it is to say
that it will not apply to some country which is not a Member of this
Committee.
The question of territories covered by the Agreement is dealt
with in Article XXIV, 'Territorial Application", where it says:
"The rights and obligations arising under this Agreement shall be
deemed to be in force between each and every territory, which is a 55 J. E/PC/T/TAC/PV/22
separate customs territory and in respect of which this Agreement has
been accepted under Article XXVI or is being provisionally applied".
Well, it seems to me that no part of that description applies to the
occupied territories, and that therefore it is not necessary to make
any reference to this matter at alI
So far as the substance of the question is concerned, it is the
view of my Government that these questions are ones which can
properly be dealt with in the peace treaties with the countries
concerned, and we believe that there is a precedent for that dealt
with in the Peace Preaty with Italy, where there is some provision for
trade relationships between Italy and Members of the United Nations,
and we believe that that is the proper place for this matter to be
dealt with.
Since, therefore, it is not proposed - nor, in our opinion, is
it desirable - to include anything in this Agreement to apply the
provisions of this Agreement either in whole or in part to the
are
territories which/under military occupation, we see no need to make
reference to them at all.
CHAIRMAN: Mr. Evans.
Mr. J. W. EVANS (United States): Mr. Chairman, I think that
Dr. Coombs may have over-looked one or two of the reasons which
caused us to submit this Note. (Incidently, it would not be a
Protocol, it would simply be a Note in the Protocol of Notes).
In the first place, while it is not, I think, at all clear that
the Agreement would or could apply to the occupied areas, there is
at least room for some ambiguity In Article XXVI, which says: "Each
government accepting this Agreement does so in respect of its 56
J. E/PC/T/TAC/PV/22
metropolitan territory and of the other territories for which it has
international responsibility". Now, I agree that that ruling might
be read, or it might not be read, to include the occupied areas.
There is a much more important consideration, however, which
brought us to propose a wording of this sort. During the period of
early occupation, the United States Government - and, I believe, the
other Governments responsible for the occupying of the various areas
of Japan and Korea - found it necessary, in view of the extremely
upsetting conditions in those countries, to carry out what amounted
to relief factors. Those relief factors, however, were often
inconsistent with what could quite properly be called State Trading.
For example, a United States commercial company purchased in the
' : United States and sold in Germany food and other essentials of life,
but there could be no question of that corporation making over those
goods on equal terms to other countries, and in its operations I feel
^ quite sure that it was literally violating the Chartor as written,
unless we appeal under such exceptions, perhaps, as Balance of
Payments Exceptions, and when you begin to wonder whether you could
apply those Balance of Payments Exceptions, you set a difficult
problem of the interpretation of Aghe General Greement.
We have discussAm with the Lrerican authorities in Germany the
ofossibility OI their undertaking both the obligations and receiving
the benefits of the Charter and of the General Agreement. I think
.. that the general feeling theae is that they ere very rapidly, as
rapidly as they can, getting to a position where they could do
, precisely that. In the meantime, however, you will not 'obtain any
definite agreement that the operation of the United States Commercial
Company, for example, wouli be continued, and, if _t operated in the 57
J. E/PC/T/TAC/PV/22
form it operated before, the United States Government would be said
to, be in conflict with this General Agreement if you simply considered
the occupied areas as if they were other non-Members.
The purpose of this Note, therefore, is to neutralize completely
for the time being these territories until this has been more
definitely settled, treating them neither as Members nor as Non-
Members.
May I just add one remark. Dr. Coombs quite properly referred
o: Artile XXIV sined we have labellet Ghissaa a Note to Article
XXIV, but that is another error in the draft circulated - it should
be NotAr utlicje XXVI. It is that section of Article XXVI which
I read to which we particularly wanted this Draft attached.
.. S. 58 E/PC/T/TAC/PV/22
CHAIRMAN: Are there any other comments?
The Delegate of France.
M. ROYER (France) (interpretation): Mr. Chairman, I think
we all agree on the substance of this question; that is to say,
that the provisions of the General. Agreement should not be
extended to Occupied Territories, but the question is how to
translate our words into a text, and h re I suport the
observations made by Dr. Coombs.
Mr. Evans referred us to Paragraph 4 of Article XXVI, but
it was always our understanding that the provisions of Paragraph
4 of Article XXVI did not apply to the Occupied Territories
and that the territories for which a Government has international
responsibility did not cover the Occupied Territories.
Furthermore, we have also here a Resolution passed by the
Economic and Social Council on 1 iiugust 1947, stating that
there is a distinction between the military authorities of the
Occupying Powers and the Powers invited to the Conference.
They would not be invited to the Conference in the same capacity
as the other Powers invited to the Conference. Therefore it
seems to me there is no legal difficulty here.
I would have no objection to the Note presented by the
United States Delegation, but nevertheless it seems that this
Note has a different character from the Interpretative Notes
-which we are annexing to theAagreement, from a legal point of view.
^; I wondee if ws could kot ma-e it simpler and have a Note
stating that the sxpres-ion in Paragraph 4, "other territories
for which it has international responsibility" does not apply
to the territories which are at the present time occupied. by
. the military authorities.
CILIRT;.: Are there any other comments?
The Delegate of the United States.
'" S. 59 E/PC/T/TAC/PV/22
Mr. J.W. EVANS (United States): Mr. Chairman, M. Royer's
.
suggestion would, of course, be a simple way of taking care of
the problem if the only question involved were the possible
misinterpretation of Article XXVI. The point I tried before
to make clear - I am afraid I did not make a very good job
of it - is that, at least until recently, and possibly still,
the United States Government has engaged in certain commercial
operations with the areas which it is occupying which were,
in fact, discriminatory in favour of those areas and would be
ruled out by the Charter, even if those areas were considered
non-Members.
Now if it were not for the extreme complication of getting
the necessary information, in view of the awkward/character
of the Occupying Authorities in some of these zones, it is quite
possible we could have resolved that question and have
determined here in Geneva that those activities are no longer
continuing, and it is perfectly all right to make no allowance
for them. The complications are such, however - particularly
when you consider the remoteness of two of the occupied areas -
Japan and Korea - that it has not been possible to make that
determination, and unless and until we can do that we must
reserve the right, at least for the moment, to discriminate
in favour of the territories we occupy. Our feeling is that
simply to remove any impression that the occupied areas may
have the status of Members does not cover the entire problem.
CHAIRMAN: Are there any other comments?
The Delegate of the United Kingdom.
Mr. SHACKLE (United Kingdom): Mr. Chairman, on the under-
standing that this Note, which clearly bears in this text, is
intended as a temporary solution, I do not think at this stage
I would wish to raise any objection to it. At the same time. 60
S. E/PC/T/TAC/PV/22
it is of course a text which has only just appeared and which
my authorities in London do not know of. I anticipate there
will be a final look at this text before it is adopted. If
that is so, in that short interval I will communicate the text
to London. Subject to what is received from London as a result
of that, I woud. not at this stage wish to raise an objection.
CHAIRAMAN: The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I
acknowledge that the formula which I had proposed does not cover
all the aspects of this question and therefore I am ready to
withdraw the proposal. But I would like to ask the United States
Delegate whether he would be ready to delete the mention of the
Note to Article XXVI and replace it by the words "Final Act."
If the heading were to be "Note to article XXVI" one could draw
the conclusion that the separate customs territories which are
referred to in article XXVI - the territories which are at present
occupied by the military authorities of the contracting parties -
could also be covered by these words.
I would like to refer here to Article 68 of the Charter.
lhen Article 68 of the Charter was discussed, the French
Delegation made a reservation stating that the provisions of this
Larticle could not be applied to part of Germany or an occupation
zone in Germany and therefore the provisios.of Article 68 could
not be applied to the Occupied Territories.
It seems to me that, as the United States Delegate has pointed
- o.ut that the main difficulty does not derive from the obligation
of Article XXVI, but from otheneprovisions of the Gk;aral
Agreement as they relate to the trade which is carried on between
the United States and the Occupied Territory, the United States
Delegate could agree to tha substitution which I heve just proposed. S. 61 E/PC/T/TAC/PV/22
Mr. EVANS (United States): Mr. Chairman, I will very
gladly agree; I think it is an improvement.
CHAIRMAN: The Delegete of China.
H. E. Mr. WUNSZ KING (China): Mr. Chairman, so far as the
Chinese Delegation is concerned, we understand and appreciate
the reasons why the United States Delegation has attached some
importance to this question. However, we are also inclined to
think that the questions relating to the status of areas under
military occupation should fall solely within the competence and
province of the future Peace Conference or Conferences in regard
to Germany and Japan. At the same time, we would like to
have the opportunity of examining more closely the text which
has been put forward by the United States Delegation.
We do feel it would be unwise for the moment to call on
contracting parties, which must also become the participating
Powers in the Peace Conferences in the future, to commit themselves
to anything definite at this moment with regard to these questions.
And in view of the divergence of views so for expressed, I am
wondering whether the United States Delegation would be kind
enough to consider the possibility of entering a reservation
with regard to Article XXIV so far as this particular point
is concerned.
CHAIRMAN: The Delegate of the United States.
Mr. EVANS (United States): Mr. Chairman, after the recent
decision not to have reservations, I cannot enter a reservation.
I believe that perhaps the difficulty is created more by the
Note we circulated than the one I read at the beginning of this meeting.
I should like to call the attention of the Delegate of China
to the present proposed wording, which simply says it is
anticipated the question will be given further study, and later
says "until otherwise agreed." S. 62 E/PC/T/TAC/PV/
One of the purposes of that change was to leave entirely
open the question as to where and when the final determination
as to the status of these areas would be taken and also to
provide for the possibility that the signatories to this Agree-
ment who were also signaltories to the Peace Treaties will have
agreed among themselves to some specific provisions covering
these areas, in which case it would presumably be necessary for
them to amend the General Agreement or to take care of the
matter in the Charter and to see that that supersedes this
portion of the General Agreement.
I do no thinkc there is any prejudice whatever, in the
latest draft of the wording, to future action on the Peace
Treaties, nor is there any positive obligation with respect to
the occupied areas in the wording as now drafted.
CHAIRMAN: I would suggest that part of the difficulty
arises from the fact that the Delegates have not had the revised
text- before them very long. I suggest the United States
Delegation should re-issue this Proposal in the form of a new
text, adopting the suggestion of the Delegate of France that this
should be appended as a final note to the Intexpretative Notes
rather than connected with any one Article, and that we take it
up again when the Members of the Committee have had more time to
study the text.
If possible, I would suggest the United States Delegation
should get the revised note in to the Secretariat this evening;
it could then be circulated to-morrow morning and we might be
able to take it up again on Friday or Saturday.
22 R. 63 E/PC/T/TAC/PV/22
Mr. John W. EVANS (United States) I agree to that.
Dr. H. C. COOMBS (Australia) There is just one other point.
When the United States Delegate is making changes, he might
consider whether the word "bind" is the most appropriate word to
use, because it seems to me it would be better if it read:
"shall not apply in any area, nor to any occupying authority,
nor to any contracting party". I do not think you could bind
an area.
Mr. R. J. SHACKLE (Great Britain): I wonder if it would not
be better if, instead of saying "bind any area" it would not be
better to say "bind in respect to any area".
CHAIRMAN: The Delegate of the United States.
Mr. John W. EVANS (United States) I should not object to
the change, which I think is grammatical and which is more
elegant. There was a reason for using the word "bind". We
wanted to get away from the implication that the principles
would not necessarily be followed in any case, so the word "bind"
was used. There was no obligation to apply them, but no request
as to whether or not they would be applied. I do not think it
is important. Unless anyone else on the Committee would object
we have no objection to changing it to "apply" and I should be
glad to make the change.
CHAIRMAN: Does Dr. Coombs want to make any observations
about the remarks of Mr. Shackle?
Dr. H. C. COOMBS (Australia). I am not quite sure what
"in respect of" means in that way. It seems to me it might mean
anything which affects that area. It may not have the same sense
that Mr. Evans means it to have. However, I do not feel very
strongly about it, Mr. Chairman. E/PC/T/TAC/PV/22
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation) . Mr. Chairman, if the
United States Delegate has decided to review his text, I would
like to ask a question. I am referring to the last words of
this note which reads: "in respect to trade in other countries
with such areas". I would like to know if this applies only to
the contracting party or to the preceding words, that is "terri-
tory or any occupying authority therein", and to all the preceding
words. I do not think that is the correct interpretation, but
if the first interpretation which I have given is correct, then
this applies only to the contracting party.
Then I wonder if we could not make the text clearer than it
is now, because, especially in the English text which states
"with respect to trade in either direction with such area". One
cannot say that this means trade with the contracting party, and
therefore I wonder if we could not state simply "in respect of its
trade in such areas".
Mr. John W. EVANS (United States) The interpretation
intended was that my phrase only applied to any signatory or
contracting party. It seems unnecessary to affect the sense of
the two earlier phrases. I do not think that we would object
to changing to M. Roger's suggestion.
CHAIRMAN: Are there any other comments on the text?
Dr. G. A. LAMSVELT (Netherlands) I would prefer to retain
the word "bind" for the reasons given by Mr. Evans. If I under-
stand him aright, he means by this word that the areas in ques-
tion are not under any obligation, but could eventually apply
the provisions in the Agreement. It goes without saying that this
is of great importance to the Netherlands.
R.
64 R. 65 E/PC/T/TAC/PV/22
CHAIRMAN: In view of the remarks of the Netherlands
Delegate, are the members of the Committee agreeable to retaining
the word "bind"?
Dr. H. C. COOMBS (Australia). Mr. Chairman, I dislike the
word. It does not seem to me to be clear. I think the point
the United States Delegate has in mind would be covered by saying
"It is understood that the provisions of this Agreement shall not
require any occupying authority", or that "the occupying authority
nor any signatory to this Agreement shall not be required to
observe the provisions of this Agreement in respect of their trade
with such areas", or some words to that effect, or you could put
it round the other way.
Mr. John W. EVANS (United States) May I suggest just one
other change. Suppose we say "shall not apply to any area or
territory or obligate any occupying authority therein"? It does
not completely meet the point we had in mind when we used the
word "bind", but I think the succeeding phrase would somewhat
take the curse off the first one.
Dr. H. C. COOMBS (Australia) It would only be binding on an
occupying authority.
Mr. R. J SHACKLE (United Kingdom). I think that is all
right Mr. Chairman. The only point is provided you put in
"shall not apply in any area". I suggest that instead of
saying "applying in" we should say "applying to".
Dr. C . A . LAMVE.RT (Netherlands) Mr. Chairman, I prefer
to wait until I see the new text before me.
CHAIRMf.N rAe there any other comments on the text?
UThe nited States Delegate will take into aeconut the remarks that
are made here and endeavour to work out a text which will meet
the objetcion swhich have been raised. R. 66 E/PC/T/TAC/PV/22
We can then leave this matter for the present. I propose
to-morrow morning first to take up the Recommendation of the
Tariff Negotiations Working Party regarding India and Pakistan
'which is given in Document/229; then the amendment to Article
I which the Australian Delegation proposed on September 2,
1947, and which is contained in Document W/227. The Australian
Delegation have circulated this for the convenience of members of
the Committee though it is some time ago since it was introduced
verbally in the Committee.
After that I propose to take up the Report of the Sub-Committee
on the Schedules, which I believe will be circulated to-morrow
morning. I think that will give us a full day's work and enable
us to take up the third reading on Friday and Saturday if that is
necessary.
Mr. J. M. LEDDY (United States). I wonder whether, if we
complete our work to-morrow, we should not wait until the
Drafting Committee has reported, before we have the third reduing.
I do not see much point in going over again what we have agreed
to in substance. I do not see much point in going over it again
before the Legal Drafting Committee has finished its work.
CHAIRMAN: Does that proposal meet with the approval of
the Committee ?
M. ROYER (France ) (Interpretation) Mr. Chairman, as a
representative of the Legal Drafting Committee I would like to
add that we are ready to present a draft to this Committee, but
I am not certain that the Committee has come to a decision on all
parts of the Annexes. There are still square brackets around
certain provisions, and I would mention "and ham" in one of the
Annexes. R. 67 E/PC/T/TAC/PV/22
CHAIRMAN: I thought we had dealt with all the square
brackets, but it is true we have not dealt with the Annexes
either at the first or the second reading. Therefore it is quite
true we should deal with the Annexes after we have dealt with
the other matters which we have to dispose of, it being understood
that we will deal with the Annexes. Is the Committee agreed
that we put off the third reading until we get the report of the
Legal Drafting Committee?
Mr. R. J. SHACKLE (United Kingdom): Mr. Chairman, would
it the possible to make any forceast as to when the Legal Drafting
Committee will have the text ready?
CHAlRMAN: Would the Chairman of the Legal Drafting
Committee please reply. P. 68 E/PC/T/TAC/PV/22
M. ROYER (France) (Interpretation): Mr. Chairman, taking
in to account the Articles of Part I and Part III which have not
been finally adopted by the Committee, I can state that tomorrow
morning we will terminate our work on Part I and Part III of the
Agreement. I do not suppose that the examination of Part II
will take us much time, but certainly our work would be
facilitated if the Secretariat were to send us tomorrow morning
the decisions of the Committee on the points which have been
referred to the Legal Drafting Committee for examination.
CHAIRMAN: The Secretariat will circulate tomorrow morning
clean texts of Articles XXVI, XXIX and XXIII, which are the
Articles which have been subject to most change since we had
this revised text circulated last week, and also a new text of
the Final Act and the Protocol of Provisional Application. I
trust that will be sufficient for the purposes of the Legal
Drafting Committee.
M. ROYER (France) (Interpretation): We should also like a
list of the points which have been referred to the Legal Drafting
Committee.
CHAIRMAN: The Secretariat will do their best to give that
to you.
I take it, then, that the Committee is agreeable to
dispense with a third reading until we have the Report of the
Legal Drafting Committee.
Dr. H. C. COOMBS (Australia): Shall we have the continued
services of our technical assistants, Mr. Chairman? P 69 E/PC/T/TAC/PV/22
CHAIRMAN: I apologise to the Committee for having kept
them in the dark about this very important matter, but a
telegram was sent to New York following the last meeting of
the Tariff Negotiations Working Party in which we recommended
that the interpreters should be kept here, and we have had a
reply today saying that they will be available until
September 27, after which they should go to New York by the
quickest possible route.
We will therefore deal with the work which has been
outlined, including the Annexes, and after that we wilI wait
for a third reading until the Report of the Legal Drafting
Committee is submitted.
The meeting is adjourned.
(The meeting rose at 7.45 p.m.) |
GATT Library | gt268ds4371 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty-Seventh Meeting of Commission A. Held on Monday, 7th July, 1947, at 4.55 p.m. in the Palais Des Nations Geneva | United Nations Economic and Social Council, July 7, 1947 | United Nations. Economic and Social Council | 07/07/1947 | official documents | E/PC/T/A/PV/27 and E/PC/T/A/PV.25-27 | https://exhibits.stanford.edu/gatt/catalog/gt268ds4371 | gt268ds4371_90240151.xml | GATT_155 | 5,495 | 34,082 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQU E
ET SOCIAL
RESTRICTED
E/PC/T/A/PV/27.
7th July 1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
TWENTY-SEVENTH MEETING OF COMMISSION A.
HELD ON MONDAY, 7th JULY, 1947, AT 4.55 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 G 2 E/PC/T/A/PV/27
CHAIRMAN: Gentlemen, we have before us to-day Article 26:
the
Restrictions to Safeguard./Balance of Payments, This is a highly
technical Article, which involves extremely delicate points.
May I remind you of the rule we have adopted, namely, that
we will limit ourselves to substantive statements, leaving
to a Sub-Committee which we will appoint the task of reconoiling
the views, re-drafting the Amendments and setting all minor points,
Gentlemen, the following amendments to this Article have
been presented by Czechoslovakia, Astralia, U.S.A., France,
China and the United Kingdom.
I will call on the authors of the different Amendments in
turn, beginning with the Delegate for Czechoslovakia.
Mr. BAYER (Czechoslovakia): I do not want to make a long
statement on the subject of the Amendment; with regard to
Article 26, We think it is self-explanatory.
I shall therefore add only a few words to our written
comment. First of all, I would like to make it clear that
the suggested Amendment refers to the whole of Article 26.
However, no matter how substantial it may seem at first sight,
it does not intend to bring about a new idea which would not
conform with the main idea contained in Article 26.
We all know the structure of Section (E) of Chapter V,
dealing with Quantitative Restrictions. There is Article 25,
which more or less says that quantitative restrictions are gen-
erally undesirable and therefore are to be abolished. Now, in
the Article which immediate y follows, in Article 26 which we
are discussing now, the idea underlying this Article throws a
somewhat different light on the question of quantitative restric
-tions as a whole. G 3 E/PC/T/A/PV/27
According to this Article they are consdered as legitimate
means for countries with difficulties in their balance of
payments, and other countries with low monetary reserves.
Countries under such circumstances are, in accordonce with
Article 26, permitted to apply quantitative restrictions in
order merely to survive - I would say, in orer merely to survive
economically and financially. Now, having in mind the main
objective, which is to bring about the necessary relief of
countries with balance of payments difficulties, and with low
nr:; t= ,,r,-: * : :.; :we have so for paid insufficient attention
to the possibilities of restricting the imports of such
countries.
However, there are two ways in which the international
payments are being mande. First in gold, or in freely
convertible 2nt ezc cs; secondly, in inconvertible currencies.
We have, therefore, practically, also two ways to safeguard
the baoIance of payments, and to protect Iow monetary reserves.
First to restrict imports from countries which should be
paid for in convertible currencies, and which would therefore
un2'avourably affect the low monetary reserves. Secondly, to
restrict, under the circumstances, the exorts as well to
countries which should be paid for in inconvertible currencies.
By doing so, the country concerned is able to prevent frozen
accounts Cc^r- >tLvin: and difficulties increasing.
The restrictions on exports, in the conditions as they
are to-day, and as they ! r,. probably will prevail for some time
to come, are the appropriate means to be used for the same purpos
To cover up this point we have suggested amending
Article 25 and including the ;. is "or exports" wherever the G 4 E/PC/T/A/PV/27
word "import" is mentioned in connection with restrictions.
I dare say, "Mr. Chairman, that we need not be very much
disturbed aboat the prospective effect of such a provision in
the future. It is logical to say that the country will always
desire to export as much as it will be in a position to export,
and therefore would not avail itself of such a provision unless
this would be absolutely necessary.
On the other side, of course, should it not be possible,
according, to the Charter, to restrict the exports at all, we
may envisage for the future that the quantitative restrictions
on imports of goons to be paid for in convertible currencies
will be perhaps more numerous, more urgent, and as the natural
consequence of the accumulated frozen accounts, will necessarily
cover a field. much larger than otherwise.
That is why we have submitted our Amendment. Thank you. S
CHAIRMAN: (Interpretation): The Delegate of Australia.
Mr. J.G.PHILLIPS (Australia): Mr. Chairman, our amendment is
not a very substantial one. I do not need to say much about it,
I think, as the comment adequately covers the point. It is merely
to ensure that the provision of Paragraph 1 of this Article could
not be takan as over-riding in any sense the requirements set out
in Paragraph 2. We feel that the wording as it stands does give
some possibility that the words "insofar as this is necessary"
might be interproted to mean that every other expedient must be tried
first before import restrictions are permitted. We assume that that
was not the intention, but the suggestion is to make that clear.
CHAIRMAN (Interpretation): The Delegate of the United States.
Mr. George BRONZ (United States): The amendments proposed by
the United States to Paragraph 1 involve two points. The use
of the words "The Members" at the beginning of the Article gives
the impression that quantitative restrictions for balance-of-payments
reasons are expected to be the normal procedure. We did not
think that was the intention of the Article and we felt it could be
clarified by using the words "some Members", with appropriate
other changes in the text. There are other possible ways of
meeting the same difficulty. You could say " A Member may need
to use import restrictions" and have the entire paragraph
changed accordingly.
The second suggestion is to introduce the word "temporarily",
again to emphesise the fact which we felt was clearly understood
though lmperfectly expressed in the paragraph, that quantitative
restrictions are not to be used as a permanent procedure for
permanent balance-of-payments difficulties, o', at least that we did S - 6- E/PC/T/A/PV/27
not foresee balence-of-payments difficulties necessitating
quantitative restrictions or the continuing use of quantitative
restrictions, but they are designed as a temporary expedient to
meet difficult problems which a country may encounter for a
temporary period.
CHAIRMAN (Interpretation): The Delegate of France. M. BARADUC (France) (Interpretation): Mr. Chairman, in
conformity with the suggestion you made at the beginning of our
discussion, I shall not develop my technical arguments here in
order to defend the amendment presented by the French Delegation.
I shall simply attempt to define our general attitude ooncerning
Article 26. I think all of us who are hero agree that Article 26
is one of the most important Articles in the Charter, and in
believing that, the meet &.: 'c *.- . '..delicate questions arises.
I think you were very wise Mr. Chairman. to suggest that we
should avoid all technical discussions here and refer them to a
sub-committee. It is doubtless that it is the disequilibrium of
the balance-of-patyments which is, in most cases, the origin of
quantitative restrictions established in a general form. It is
also doubtless tliat such restrictions have harnful repercussions
on the volume and distribution of international trade. The
history of the years between 1930 and the war shows it clearly.
But inversely, it is nevertheless unquestionable in our mind that
there will be eliminnations of existing restrctions before the
differences which give rise to them are found a remedy to, and
would be very seriously jeapordised by the financial position of
considered countries, and would entail within a more or less near
future resorting to restricting practices more severe even than
the first ones, and, would consequently have a more harmful
influence on international exchanges.
In this field there are two factors which may appear to be
contradictory. One is to limit to specific cases the use of
quantitative restrictions, and to provide for the elimination of
those restrictions as soon as circumstances enable countries to do
so. The second tendency is to enable, all the same, any nations
which may meet serious difficulties to resort to restrictions until
- 7 -
E/PC/T/A/PV/27 - 8 -
E/PC/T/A/PV/27
those difficulties have been put an end to.
The French Delegation intends to contribute in finding a
solution to this problem and my intervention here today in
confirming the will of co-operation is to make the stand-point of
France clear in this respect. I wish to stress first of all that
France has already evinced several times the interest which she
attaches to the restoration of normal relations in the financial
international field. During the war and at a time when our
country was still occupied by our enemies it participated in the
Bretton Woods Agreement, adhered to the Intenational Monetary Fund
and to the Interinational Bank on Reconstruction and Rohabilitation.
However, the French Government could not envisage adopting it at the
begining, and as far as the convertibility of our own currency was
concerned, the committments provided for the normal periods of
application of the Bretton Woods agreement. V 9 E/PC/T/A/PV/27
Therefore, it made it known that it would invoke the
provisions of Article 14 of the statute of the International
Monetary Fund, thus meanin? that it intended to maintain during
the transi tory period the restrictions on payments and transfers
which it had been compelled to introduce at the outbreak of
hostilities.
As far as the International Monetary Fund is concerned, the
position of France can be defined as follows. First of all,
France desires the restoration of normal monetary and financial
relationships in the international field, and consequently
feels it desirable that the restrictions established during the
War should be progressively abolished.
Secondly, France is compelle. temporarily to maintain the
exchange and quantitative restrictions in commercial matters
which are their consequence, until the economic reconstruction
of the country has been brought to its termination.
France has been considerably impoverished and considerably
shaken by the War. It has to reconstruct and to repair the
destruction caused to it by the enemy. It must also complete
and modernise its equipment and also modernise its economy in
order to enable it to occupy its due rank in the international
field.
To achieve these purposes, it is necessary that the small
supplies of currency which are at its disposal be reserved to pay
only essential imports which are needed for the achievement of
this plan. It is also necessary that a choice be made as far
as imports are concerned, and that essential goods have
preference and come before purely utility goods or purely
luxury goods.
These are the purposes which have been assigned to themselves
by the authors of what is now known as the Monnet Plan. V
- 10 -
E/PC/T/A/PV/27
In doing this, France is not simply seeking, to achieve
selfish purposes. Of course, her aim is, first of all, to
achieve equilibrium of her balance of payments and, therefore,
has to take into consideration the fact that exports must
henceforth supersede, in the assets of her balance, the
incomes which she derived formerly from her holdings abroad.
But she also has the intention, in achieving the plan she has
set herself, to produce in greater quantities equipment and
goods which are necessary to the development of less industrial-
ized countries, and, therefore, to co-operate in the efforts
which would enable these nations to reach a better economic
position and to open her own markets to international
competition.
The position which has just been defined is that which
was adopte' by the French Delegation in respect of Article 26
of the Charter. However, I wish to make it clear right
away that the French Delegation has no intention of disputing
the principles included in the London compromise, the purpose
being the restoration of balance of payments on a sound and
durable basis. Therefore, quantitative restrictions can
only be admitted inasfar as these restrictions are necessary
to achieve such a restoration. Our purpose must be to strive
to eliminate, progressively and rationally, quantitative
restrictions: which means that in the conception we have of
Article 26, quantitative restrictions should never be
considered except as purely transitory measures. G . E/PC/T/./PV/27
We must therefore abide by the principles set town in
London, but this should not deter us from bringing some
alterations to the text prepared in December 1946, since we
believe that some alterations are absolutely essential - on
some points the Lnndon text is either ambiguous or not clear
enough. We should therefore try to make it both more precise
and clearer.
This is the purpose whi ch the French Delegation has set
itself in presenting a number of Amenlments. I wish to say at
once that these Amenidments are not, as we see them, intangible
at all, they are merely suggestions, and might prove a useful
basis for discussing work which we will have to carry on here.
They also mention the points on which we believe that the
London text should be amended; and the only thing left for me
is to give you a few indications in that respect.
Equilibrium of balance of payments an a sound and durable
basis. This means, in our view, that there should be a purely
statistical equilibrium which may be accidental or occasional
between the incoming and outgoing currency; but that this
equilibrium should findits stability in the currency, or at
least in the resources of the currency.
This also means that this equilibrium can only be achieved
if it is the exact expression of the actual position of
international exchanges attained, by the involved country. This
position may be achieved, in the exceptional but at the present the
frequent instance where the interests of reconstruction of
countries which have been devastated by war necessitate a resort
to exterior special credits. We do not believe that this is
necessarily so. The loan asked for by the involved country
temporarily procures to this country the means of meeting 12 E/P C/T/A/PV/2 7
considerable deficiencies in its external payments; but it is
impossible in such a case to speak of a sound. and durable
equilibrium of balance of payments. There can only be real
equilibrium if the balance of payments of a country could support
itself without being supported by any external credits. We
believe that this is one o: the points on which the text of the
London compromise should be made clear.
If a country has to resort to external credits, and would
have at the same time to give up quantitative restrictions
which it had to institute formerly, its position would soon
become even worse than before. Those credits would very soon
be exhausted., and would have to be renewed, if quantitative
restrictions were immediately abolished, The Member who would
avail himself of special external credits must adjust in a
reasonable way such restrictions as it will maintain, and also
agree to discuss the question with the Organisation itself.
But the principle and, necessity of these restrictions cannot
be questioned, and the right of utilisation of the special
credits for the effective reconstruction of a country should
not be questioned either.
There is a second point on which we believe that the
provisions of Article 26 should be elaborated. A on a country
wishes to suppress quantitative restrictions, we believe that
this abolition should be done progressively, otherwise the
too sudden return to freedom may increase the imports of goods
into a country and new crises in the external financial position
of the said country will occur.
Finally, there is a last point on which we believe that the
London Draft should be improved. It is in establishing the G. E/PC/T/A/PV/27
13
relationships between a Member State using quantitative
restrictions and the Oranisation itself. The respective powers
of the Organisation and other competent institutions with a
Member should be, to our mind, more clearly defined than at
present,
This other suggestion, I thought, was necessary to be
put before the Commission.
Nothing in the remarks I have made seems to me to be
against the general principles on which we agreed in London,
and I express the hope that they may contribute to our work and
help us to implement the principles which are common to all of us S E/PC/T/. .§t/PV/27
CHAIRMAN (Interpretation): The Delegate of Canade.
Mr. J.J. DEUTSCH (Canada): Mr. Chairman, I think the French
Delegation has made a very helpful statement as, as far as the
Canadian Delegation is concerned we agree with him that the points
he has raised are within the general intentions of the London
Draft and that such changes as may be necessary of a verbal
character, or re-arrangements of wording in language to bring
out these intentions more clearly should be made.
With respect to the other amendments that have been proposed,
we are generally in agreement with the amendment proposed, by the
Delegation of Australia to Article 26(1) - at Ieast we are in
agreemernt wiht the intention of those drafting alterations and we
believe they can easily be done to meet the purpose of the
Australian suggestion. Similarly we are in agreement with the
intention of the amendments proposed by the Delegation of the
United States.
With respect to the amendment proposed by the Czechoslovak
Delegation, we feel that the main purposes of the Czechoslolvak
amendments are already covered in another Article of this
balance-of-payments section, Article 28, Paragraph 1(c), we
believed, would meet the intention of the Czechoslovak amendment and
we feel that the point which they are trying to cover should be
covered in Paragraph 1 (c) of Article 28, or an Article similar to
that. If I understand it com. cc9y they are mainly concerned
with ensuring that countries which are exporting should not be
required to accumulate uncoveraible currency. That is the
intention of sub-paragraph l(c) and I believe that could be done
in that paragraph rather then by an amendment to Article 26. E/PC/T/A/PV/27
CHAIRMAN: Mr. Helmore .
Mr. R.J.HELMORE (United Kingdom): I am very glad, Mr.
Chairman, that you interrupted the series of speeches moving
amendments, so that Members of the Commission can put forward
their views on them before they are sent to the Sub-committee,
and I would like to refer briefly to each of the amendments
we have had. If in so doing I seem to be stressing any points
of drafting, that is because we believe that this is an
Article of fundamental importence and that quite small changes
in drafting may make a very noticeable change in the real
meaning of the Article,
S
- 15 - I V
If I might take the amendments in turn, I would agree with
what the Delegate of Canada has said about the proposal by the
Czechoslovak Delegation, and if my Czechoslovak colleague will
forgive me, I do not believe that his amendment would, in this
place, have the effect he intends, since Article 26 has to be
administered in the light of Article 27, which refers to non-
discrimination. In other words, it refers to the total amount
of imports that are to be admitted and not to the type of currency
in which they are paid for. A similar thing would happen in the
case of exports, and I, therefore, entirely agree with the
suggestion that they should be looked at in relation to Article 28
or it might be, perhaps, worth considering, since it is a matter
which relates to exchange arrangements, that is to say a difference
between importing and exporting inconvertible and convertible
currencies in Article 29.
I would only say, on the Australian amendment, that we too
accept the idea behind the revised draft, and think it can probably
be quite easily taken account of.
As regards the Unite: States amendment, there is only one word
to which it refers especially. That is, the use of the word.
"temporary". I must say I should find great difficulty in
accepting the insertion of that word there. Of course, Mr.
Chairman, I would not, on the other hand, expect my United States
colleague to accept the insertion of the word "permanent", and it
seems to me that it is much wiser of the Preparatory Committee not
to attempt to praphecy the exact length of time, the nature of the
period,during which restrictions on balance-of-payments will be
needed.
We deal, in paragraphs (a) and (b) with the conditions which
would justify the imposition of such restrictions, and we attempt
to lay down a rather carefully drawn criteria which says when the 17 E/PC/T/A/PV/27
restrictions are to be relaxed or withdrawn.. I should have
thought it would have been much wiser to stick to that, rather
than to put in a vague word like "temporary" which might cause a
great deal of trouble and dispute about its interpretation later
on. It is possible to conceive a country which has gone on with
some sort of balance-of-payments restrictions for three-and-a-
quarter years, and we should then have a dispute in the Organization
as to whether "temporary" could possibly be longer than three years.
And finally, if I may relate ,on this subject remark which comes
from the recesses of Whitehall, with relation to a complaint of
mine when I had a very nice job and I had only been appointed to
it temporarily. I complained to one of my betters about this, and
he said "My boy, don't you worry, there is nothing more permanent
than a temporary arrangement".
Mr. Chairman, if I can say a word about one suggestion by the
French Delegation, it is the use of the word "'normal" in an
early part of their amendment. Again, I would say that, using
the word "normal" there to convey all the meaning which has just
been explained to us, is likewise dangerous. We dealt with the
point about how to take into account loans or credits in London,
and we put the words at the end of paragraph 2 "and to any special
credits or other resources which may be available to protect its
reserve". 18
I would be very ready to believe that those words are not
correctly expressed, but I feel sure that a much better solution of
the difficulties on which the French Delegation have expressed
themselves would be to re-write those words rather than to insert
the words "normal" where they now propose it.
CHAIRMAN (Interpretation): The Delegate of Brazil.
MR. E.L. RODRI-.:ES (Brazil): Mr. Chairman, I agree with the
comments made by the representative of Canada in regard to the
amendments of Australia and Czechoslovakia.
In regard to this amendment presented by the United. States,
I am in full agreement with the representative of the United
Kingdom, but in regard to the amendment presented by France, I
should like to ask the representative of France to give us some
explanation in regard to the fall implication of the words "normal",
and if the French representative does not think it advisable to
listen to the representative of the International Monetary Fund
on-this subject?
E/PC/T/A/PV/27
J. E/PC/T/A/PV/27
19
CHAIRMAN: The Delegate of France.
M. BARADUC (France) (Interpretation): Mr. Chairman, in
my previous general statement I stressed that the amendments
put forward by the French Delegation were in no way intangible,
I think my statement showey.. our position with enough clarity
and precision, and my sole object in making that statement was
to raise a number of questions. I think we shall be able to
deal with them satisfactorily in the sub-Committee which we will
appoint.
CHAIRMAN (Interpretation): Does any other Delegate wish
to speak? The Delegate of Czechoslovakia.
Mr. B. J. BAYER (Czechoslovakia): Mr. Chairman, I wish
to thank the Delegate of the United Kingdom and. the Delegate of
Canada for reminding me that the point I raised here at the
beginning of the Meeting was, according to their views, fully
covered under Article 28 (1) (c). I do not want to go into
any details; I merely wish to say that we have studied the
amendment, and the reason that we submitted the amendment was
that we were not fully persuaded that the point was covered in
this Section (c) of Chapter V.
In our view, Article 28 represents a later stage in the
process of restricting. The first stage is the general rule
not to restrict at all - that is Article 25. Then there is
Article 26, which contains the exceptions to this general rule,
namely, in order to safeguard the balance of payments. That
is where we talk about the possibilities for restricting imports
in order to safeguard the balance of payments. Now, there is
a third stage - Article 28, which contains the exceptions to the
rule of non-discrimination. It seems to me. that a possibility
of restricting exports should be mentioned in Article 26, because
Article 28 deals with the later stage when the non-discrimination
could be made. 20
CHIAIRMAN The Delegate of the United States.
Mr. BRONZ (United States); Mr. Chairman, with reference
to the last point of the Delegate of Czechoslovakia, we were
aware of the inconsistency of having a provision in Article 28,
which Article has its exceptions from the rule of non-
discrimination, and which in effect constitutes either an
exception or an explanation of a restriction that would be
an exception to the entire section; and it was for that reason
that we propose: that the provision be moved from Article 28
to Article 29 and be clearly worded as an exchange provision,
rather than as being tied to the quantitative restrictions on
imports. Our amendment in this regard is contained. in the
Agenda as Note 59. It was our opinion that provision was
really not necessary at all; that the restriction is purely
an exchange restriction requiring exporters to take -.only
specific currencies, and. not to permit exports for any kind. of
exchange which you might not want to accept. But in order to
remove any ambiguity we had in London, we now suggest it would
be made even clearer by removing it to Article 29.
I think that will meet the problem that the Czechoslovak
Delegate has in mind.
I fear that the language proposed by Czechoslovakia in
Article 26 would have very much broader implications. and might
possibly open an entirely new field of quantitative restrictions
which would seriously as a result change the character of these
provisions.
With respect to the other Amendments proposed, as to the
French Amendment we join with many other Delegations in spring G 21 E/PC/T/A/PV/2U
that we think the language of Section 2 (a) could possibly
be more clarified. to meet the objective of the French
Delegation, and. without undertaking to support the present
words submitted by the French Delegation we think that language
can be worked. out in sub-Committee.
Likewise we feel that the Australlian propose in general
is acceptable, subject to possible rewording of the language,
I am a little disturbed by Mr. Helmore's objections to
my Proposal to include the word 'temporarily". Mr. Helmore has
told you that in the United Kingdom two world "temporarily"
does not necessarily have a very critical effect, and I might
testify that on the other side of the ocean the word has been
sometimes extended too .For example, I myself have worked for
14 years in the service of the Government, and. have only held
"tempoary" positi-ons during that time. But we have always
looked. at paragraph 1 of Article 26 as in effect the preamble
to the remainder of the Article.
It sets forth the general principles and purposes of the
remaining language of the Article; but the precise texts are
included. in paragraph 2 and. in the following paragraphs. E/PC/A/T/PV/27
22 -
If we felt that the language of Paragraph 1 were a precise
test on which to justify quantitative restrictions we would
have considerable doubt about the breadth of the language itself,
If we take the word "temporarily" - a word looking the
other way, it would not necessarily mean that that word is to
be taken into account in interpreting the precise terms of
Paragraph 2(a), except to indicate it in a general sort of way
in working out the meaning of the much more precise language
in Paragraph 2(a), and we feel it is quite important in this
Article, in setting forth the general principles, that we should
emphasize the notion which we felt was implicit in the London
Draft, that quantitative restrictions are not regarded in this
Charter as a permissible permanent policy of a Government,
that the general prohibition in Article 25 has been generally agreed
to, that Article 26 provides an exception for balance-of-payments
difficulties, and that we hope that no Government proposes as a
permanent policy to remain in balance of payments difficulties
for ever. It would therefore seem to be entirely in keeping
with the spirit of this portion of the Charter to use the word
"temoparily" without intending that that word should cover a
period of one year, two years or three years, or any other
precise time; that is, that restrictions of that character
should be temporary and their duration should be measured by
the duration of the need for them, as set forth in Paragraph
2(a) and elsewhere in the Article.
S E/PC/T/A/PV/27
23
CHAIRMAN (Interpretation): Do any other delegates wish to
speak?
Mr. L.C. WEBB (New Zealand): Mr. Chairman, it seems to us that
the Czechoslovak Delegation has raised a very important question with
the amendment it has moved, and we were, at first, inclined to think
- having looked very carefully at Article 28, 1(c) and got very little
out of that except a sense of confusion - that probably the
Czechoslovak Delegation was right in making the type of amendment
which it has put forward. Having heard the discussion, I am still,
I think, in a state of some uncertainty. I am impressed by Mr.
Helmore's point that, in fact, for very good reasons it may be that
the reference to exports in Article 26 has, at any rate, certain
difficulties, but at the same time I find some difficulty in
accepting the contention, as I understood it, of the United States
Delegate who was rightly arguing that this could be satisfactorily
met merely by dealing in terms of the exchange situation. I am
not at all convinced that that is the case, and I feel that, on
balance, it is probably preferable to deal with the problem in
Article 26, but I think it might be agreed that at any rate the
question is not, at the moment, satisfactorily and clearly dealt
with in the Charter,
The only other amendment I wish to refer to is the amendment
moved by the Delegate of the United States. As to the proposal to
substitute "Members" for "the Members", we have no particular views
on that point except that we think that the second suggestion of the
United States Delegate - that is, instead of saying "some Members"
or "the Members" we say "a Member" - is the better one. We agree
with what Mr. Helmore has said about the word "temporary". E/PC/T/A/PV/27
24
The United States Delegate has said that this part of
Article 26 is a sort of preamble. Well, I think that we can be
reasonably thankful that there are no preambles in the Charter,
because preambles are very dangerous things. It is agreed, I
think, that the meaning of Article 26 is clear, and therefore I
think that we might also agree that it is not wise in drafting to
start to throw in words which we know are not necessary to make
meanings which are in the text and perhaps implicit, more explicit.
I think that that is a rather dangerous step to take in
drafting, and it seems to me that, in some other parts of the
Charter, in the Committees work we have run into difficulties
Just because these has, at some stages, been a tendency to put in
words which, strictly speaking were not necessary and which have
only, in that event, been a source of confusion.
CHAIRMAN (Interprétation): Gentlemen, as it is getting
late, I would like to know whether any other Delegates wish to
speak on Article 26.
The Delegate of the United Kingdom.
Mr. J.R.S. HELMORE (United Kingdom): Mr. Chairman, I
think you meant to say, Article 26, paragraph 1.
CHAIRMAN (Interpretation): I think the discussion has
been rather more general than just on paragraph 1. We will
resume our discussion tomorrow.
The Meeting is adjourned.
The Meeting rose at 6.20 p.m.
J. |
GATT Library | ph032zg0541 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty-Seventh Meeting of the Tariff Agreement Committee held on Wednesday, 24 Septeber 1947 at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, September 24, 1947 | United Nations. Economic and Social Council | 24/09/1947 | official documents | E/PC/T/TAC/PV/27 and E/PC/T/TAC/PV/26-28 | https://exhibits.stanford.edu/gatt/catalog/ph032zg0541 | ph032zg0541_90260100.xml | GATT_155 | 10,087 | 63,128 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
C ONSEIL RESTRICTED
E/PC/T/TAC/PV/27
ECONOMIQUE 24 September 1947
ET SOCIAL
SECOND SESSION OF THE PREPREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT .
TWENTY-SEVENTH MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON. WEDNESDAY, 24 SEPTEBER 1947 AT 10.30 A.M. IN
THE P 'LAIS 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.
NATIONS UNIES
? P. -2- E/PC/T/TAC/PV/27
CHAIRMAN: The Meeting is called to order.
The first item we shall take up will be the question which
was referred to the Legal Drafting Committee concerning sub-
paragraphs 1 (b) and 1 (c) of article II. I will call upon
the Chairman of the Legal Drafting Committee to explain the
decision of the Commnittee regarding this point.
M. ROYER (France) (Interpretation): Mr. Chairman, the
; egal Drafting Committee has exhausted its agenda, and may I say
that the agenda hasecxhauseod teo Lgeal Drafting Committee. WVe
examined thepboint onAr.ticle II which was referred to us for
examiaetion. In this we were helped by Mr. leltcher of the
~AstrealeaegDolz;ation,RMr. Xodrigues of theBraazi,,.n Delegation,
Dm. ~arsvelt of the NetherlandegDeloeation, and er. Lcddy of the
United Statee Del-gation, and we reached the following unanimous
' conclusion: - that it was better not to alter the text of this
Article as it stands now eutet. lcavo it in its present form.
CXILIFit: Are therm any cormenes on thG conclusion of the
a Iegal DrEfting Committee.
DDY J.M. ILE,) (United States): Mr. Chairman, I have a small
Point on thepairst sub-:;ragraph of Article II.
Sub-paragraph (a) says that aEach contrccting party shall
accord to the comeerceeof tho othor contracting parties treatment
noF lcss avourablepthan that )rovided for in the appropriate
SchodWle. Iese, of courts, somegcontractinE parties will
receive more favourable treatment than others; that is, where
there is a Part I and a Part II of the Schedule. But this, in
*erms, would entitle all countries to the preferential rates set
ut in Part II which, of course, is not the intent. I think it can be easily fixed by inserting "in the appropriate part of the ile
appropriate Schedulereat"ti -iment nofavourable oraal] thln a*.t
provired fos inptrp arpeoripa rteoappropriate Schehrletchedu1c
annexed Ao teie i."e m nt"
NH.IRre there any 'a $ctions to the proposal of ;im ,, Of
x. Ieddy? Then d the ll ad.co sub-words tp -b*-par,,rayh (a)
of pggegreph 1 Mr.Leddydand the text of r.i :arat api subipfctgr~ehs
(b) and (c) will reeain as theupwore agreed aoon yesterday.
ARD Tanada): Mr. Chairman, while we arelo viwe are
on Artiuld like to call the attention of the ttio ot te e'gal
mrafe ing Coat I think is a divergened betweenm VI): b 't:e the
FrenEnglish textTrn-paragraph i(a): the last sentences s; (n) r..
It mayphie th.t thes roodnt has becn I dostuied, but not think
the rrectly translates the tglish. The Englishl:. ;. Th
readp: "in resleclike thmestic product or in respect of n r:S>luetf
an article fromimported product has bcv hmans b7.ereed Lnufactod
or produced in whole or inereas the French text tLIw lJ'uh eXt speaks
of "une mtrchandiàelayproduction oyu àrla fabri- f abri-
cation"ggest what instead of marchandise aa nf maro!:arise ayait
servmarchandise etant entrée on teut ou en partie en teut cu en Ittie"
M. RpYER. (France) (interoretation): Mr. Chairman, the
French text here has been taken ov r fromI a clause of -the
French/United States Treaty Englimrmerce has The !,-lish text
ver form the same :re - , . d -Ic sa.T:aty anQ thought that
we were acting wise y in reproducingzatho French text tlse. It
seems :tpre the -French ex[sessyon "marchaàdlto aeant servi . 1a
produ tion" hos the same meaning as "an respect of an rticle
from which" because I do notaquice see how an crti le could serve
.the production and at ntersame time composition 1he eulnrosik--:io
.. - P * ~~~ ~ ~~~~~4- E/PC/ T/ TAC/PV/27
of the final product.
Mr. L. E. COUILL.ARD (Canada) (Interpretation): Mr. Chairman,
if instead of merchandisee" here, the product were to be a machine
or a catalytic element, then the meaning might not be quite the
same, and M. Royer's interpretation might not perhaps be quite
correct.
(M. Royer (France) suggested that he should look over the
French text together with Mr. Couillard).
;HA AN.M'IRM2T: We can leave this point to be dealt wienh betwe(
the Canadian Delegation and the Chairman of the Legal Drafting
Committee.
There being no further points with regard to article II, I
propose that we leave this Article and now take up Part II of the
Generae Agreemrnt which is contained in the Report of the Legal
Drafting Committee given in document T/212. At our Meeting
yesterday we had covered up to Article VI, so we will now start
V at Article VII commencing on page 16 of the English text.
Article VII. Valuation for Customs Purposes.
?Paragraph 1. Are there any comments?
'greeC .
Paragraph 2 (a) Any comments?
.- . 2, (b) Any comments?
2 (c)
Paragraph 2 is approved.
Paragraph 3.
Approved.
Paragraph 4 (a).
M. ROYER (France) (Interpretation): There is an omission
in the French draft of paragraph 4 (a). The words in the fifth
line "du present article" have been omitted.
- X
- - - -5- E/PC/T/TAC/PV/2,
CHAIRMAN: Paragraph 4 (b)
Paragraph 4 (c)
Paragraph 4 (d)
Paragraph 4 is approved._
Paragraph 5. Are there any comments?
Approved.
Article VIII. Formalities connected with Importation
and Exportation.
Paragraph 1.
Mr. R.J. SHACKLE (United Kingdom): In line 6, there should
be a comma after exportationn".
Mr. J. M. LEDDY (United States): And a comma after "duties"
in line 3.
-CHAIRMAN : These commas will be inserted after "duties"
. -and "exportation".
Are there any other observations on paragraph 1?
Approved.
Paragraph 2.
pAproved.
Paragraph 3 Are teoeo any comments?
p2proved.
ARTICLE.; aPrgEraph 4. Approved.
RTI LIE . X. Ma<rks of Origin.
' Paragraph 1.
Mr. R.J. HACKLES (United Kingdom): In the third line the
rd "each" shouldpProbably go out. The text originally read "each
t her contracting party". This has now been altered to the
. .plural "other contracting parties",aend I think, in consequence,
that the word "each" should disappear.
_,__.' ,PV/2U
InterpreROYiiCR (PMr. e) (rtan, our i~on ~au~ C~haizKm :i, iuV
eustoms eape ts h:ve -ointsd oFteth!t ;the words in the or;nch
text "rreleimrtts relatifs" would be clearer than the words
"enditio:s r wla t.vs" whith ve have taken over from he Charter.
CILare hI: e I take et 1h.t we o agre that tho word
'each" is a mat the ommittee also thla ,h. Cc.irq.ittoe has no
obJection to the modification of the French text in accordance
with the last remarks oL the Chairman of the Legal Drafting
Comaittee.
arongPierre de GCA.IFFI17R (Bel ium) (Interpretation) Mr.Chairman
if thgregis no orjection to chaniinj the wiod "conditions" to the
word lreglementationsll I woul ask if there would be any' objection
to c angin"maquage". d1uargues"r to y.:2rtiarquafr, I have consulted
my Delelegation this poiofernd my De-loPatiun would prcier the
s relatifs au marquage" nts rela~t~ifs alU mue-n -e'Tl in the singular.
For the "marquageolegation the word I.l.rouaS" has a wider scope
2 than the word "narqoes".
oreIRM,: It is agrmed th-xifreo to use the word "rarquage".
Are there any1ohtlv.r com:ints on paragraph i?
trpr oe
Paragraph 2.
, .rovcd.
Paragraph ~
?aravraph 4,
AP roved.
Paragraph 5.
tionO: Mr. Chairman, on paragraph) . 1h i. rnanI on p. raph
~~~~u -I Paorrp k.
5 mof thois Article it seems that >he SUb-''m' V Comissin A
and the Execuzve Comn!tee c.-red. on two -;e; ts in their French and
English versions which were iot abc;ltoly ticaI. It seems
E/PC/T/L1C/2V/27
-6-
P. -7-.
P.
that their agreement was reached by a misunderstanding, and
when I showed these tex s ur representative of our AgOUc 'ruraltUav'
Department he was very surprised and shat tl!;.as w'V;s the French
text which had becn acoe ted.o I Se T rEally do not know what we
are going to do there.
. . HA.J.ESLLCKL: (Kingdom1minIJnonder , nii) lMirm Chai .an,
whether there reaaly is -ny substantference rerncx.. The wording
looks differagree. vrWhere Ye rereh., Frunch sayjeau su~ot d'abus"
we gay "ng.ardit- the appl cationhe of tie unde takings set forth";
if the undeg tak n, is -to co-operate en pravonting the use of trade
namas in suh rimnnrepresent the true origin of ari&'in of a
pooduct, I dO notetiink thee; Ls afe rcal difiirencee and wheth)r
one usea the pejor.tivly does realy :loto omatter 4io rtoter very
much.
CHAIR'iI: Is bhere any otlEatiog tu Ledvinr; the two texts
as they stand, in spitparent e ap e.-;te inconsis tncy?
There being no objectioherefore t..te. _, tak it that the
Coinitteefapproves o xthe two te-,s remaining as they are.
Are thore amy other co0ments?
Mr, C.E. MORTON (Austr.lia): Mr Chairman, before you
leave that I should like a statement from the Chairman of the
Legal Drafting Committee thpt io his oriniOn the French text
does not provide mir any comritme t glis the EnLi1ih text does not
M. ROYER (France) (Interpretatron): M,. Chairman; I
certainly caanot say thot these two temts are symietrical regarding
the.,ommitments. but the difference does not arise so much from
the use o"athe word l;bus" in the French as from the fact that in
E/tC/T/T_C/PV/27
. P. -8- E/PC/T/TAC/PV/27
the English text the commitment seemsonly to be taken if the marks
of origin have been communicated in advance by one contracting
party to the other contracting party. whereas ti French text is
vaguer and this commiitmert 's not specified that way.
Mr. J.M.DLEIDY (Unettod States): Mr. Chairman, it seems to
me, looking at it, that the French text is broader in this sense:-
.that the French text speaks of giving sympathetic consideration
to representations on the subject of abuses "such as those mentioned
above" whereas the English text is confined only to the earlier.
Dart of the paragraph. W 1ould it be possible to amend the French
text slightly to make it more in conformity with the English
instead of extending to "the abuses such as mentioned above".
0:, ''' S E/PC/T/TAC/PV/27
~~~~~~~~~~~~~
e. ROYER (In'crrretation): M>. Chairman, I think there is a
way out if we modify slightly the end ff theaFrenc dreamt so es to
insert the condition which appears in the English draft relating
to the communication to thn other contractirg parties of the marks
of origin.
ar. MORTON (Aaormalia):aMr.eCh-ilvin, I om vcry certain that
agreement was geached on the En-lish text on the marks of origin
so far as it relates to communication, and we were very, careful
regarding the commitment undertaken. In such circumstances I
think it is well within the aegaities of the Lrcal Drafting
Committee to produce an identical thing which will correspond to
the Ernlish text.
. -
CHAIRMAN: I think the suggestioharima made by the Cnt-ir;n of
tmm L¢--l Drztting Cothe tee would bmine biro two texts roro
,closely in harmony with one another.
Mr.I am N (Australie)' L :1lnguae M. Royorls biliivualism will
enable him to make them identical rather than more closely in
harmony.
iuron P. DE GAIFFIER (Bolfurm) (Interpretation): Mr. Chairman,
we all have no doubt as to the effecient qualities of M. Royvr,
especially his bilingual qualities, but the difficulty which faces
us now is on which text shall we agree and which is the authorit-
ative texts is it the eEnh sh text or is it the FrrnL text?
wertain D-ecgations aelt it las the Fr:ich text ind that it was
-therefore the English text which had to be brought nearer to the
Frcnch tcxt, and not vice yerse.
'i
.. S
10
Mr. SHACKLE (Unit-: Kingdom): I was Chairman of the Sub-
Committee which fixed up this text. The history of it, I think,
was this: that the last sentence . the Englislh text was proposed
by the Unitcd States Delegation, We discussed it on the basis of
that text with the Delegate of the United States and I feel no
doubt in my own mind that it was the English text on which we
agreed The French text was only settled later. I am not sure
whether Mr. Leddy was on that Sub-committee if so, perhaps .a
can confirm my recollection. I am not quite sure, but I thibk
it wtas the United States text or which this was based, it was, I
believe, adopted practically verbatim.
M, ROYER (Interpretation): Mr. . Chairman, I think we do not
want to open a controversy on this point, but, nevertheless, our
experts of our Department of Agriculture, who do not speak English,
have assured me that the discussion was carried on on the French
text and that the Sub-Committees and the Commission adopted the
..French text. It seems, therefore, it is an insoluble problem.
".But, with the addition which I have. proposed, it seems to me
'we could give satisfaction both to Mr. Morztzw1 6n1:. to Mr, Shackle.
'Our Delegates who are experts on the matter have now left
Geneva with the French text, which is the text of the Charter and
which they think has been adopted. As those experts are not
bilingual and do not speak English, they are under the impression
that It was the French text which was adopted,
CHAIRMAN I think the text proposed by M. Royer has gone a
long way towards bringing the two texts irto harmony. Th.: :r-.Tter
is really not of such vital imnortance, because this Article is
a. .. .. d i --r n:
contained in Part II n h xef~ro uill be superseded by the
Charter at s,;-.o latar date. No d-,ubt th1;e re will be an opiortuaity
at Hav-.nE to brin- the two texts ;rtrs clbsly into harmony with
one another.
t,^l ..
E /PC,/T/TAC/PV/27 S 11 E/PC/T/TAC/PV/27
I should like to add that I now think, in substance. the
4"tw :texts are exactly the same.
' t Mr. MORTON (Austrheia: On tlic advica om te Chciruian, that
no commitment is incorporated in the French text which does not
anpear in the English text, I have no objection whatever to any
form of language which might be adopted.
CHAIMAN: I therefore take it the Committee is agreeable to
adding the words proposed by M. Royer to the French text.
. ,; ,
Mr. SHACKI (United Kingdom): Could we have those words once
i egain, Mr. Chairman?
: M. ROYER (Interpretation): The translation of the words in
the -Fronch text would read: "to names of products which have been
communicated to it by the other contracting parties."
CHAIRMAN: Is that agreed?
(Agreed).
Are there any other commaeagnts on Prraph 5?
V . g - (A-reed).
Article X - PublicatiAomn and dinistration of Trade
Regulations: Paragranh 1.
Mr. SHACKLE (United Kingdom): Mr. Chairman, I think the comma
after "enforcement", in the third line of the English text, on
Page 29, might well come out.
CHAIRMI: The Comma will be deleted,
Are there any other comments on Paragraph 1?
M9 ROYER (Interpretation).: In the 15th line of the French text
'jon Page 29, the word "ou' should be deleted.
~ ~ .7.,. ,:. S 12 E/PC/T/TAC/PV/27
,.CHAIARMN:A ,re there any other comments on Par a-rph 1?
(Ageead).
P ragraph 2: are there any remarks?
Paregraph 3 (a)a 'ny comments?
g,.re)d!
Paragraph 3 (b): any comments?
g e ~~~~~~~(A;read).
ParagrRph 3 (c): are there zny comments?
Mrh LEDDY,(Uniteote ofes): Mr, Ciairman. the nr to)f the
Legal Draft ng CommitteB which appears onr Page 32 proposes the
deletion ofethe clause reading: "and thoso of sub-paragraph (b)
0of ths PArticle." That appears at the end of the sub-paragraph.
I think the difficulty there is that it should be sub-paragraph (a)
'nd that there is ae error in the text. I think p:rhaps the
Delegate of New Zoaland can confirm that it is the pr-vision which
'he proposed.
Mr. JOHNSEN (Now Zoaland): It should be sub-paragraph(a),
:Mr. Chairman.
CHAIRMAN: Is there any objection to changing this to sub-
paragraph (a), although the Charter now refers to sub-paragraph (b)?
M. ROYER (InterpretatiDn): MT. Chairman, I do not think we
can maintain the mention 'f sub-paragraph (b) here, because then
the wording would be inconsistent with the previous paragraph and
it is impossible for the conditions and the requirements laid dawn
in sub-paragraph (c) to conform to the requirements laid down in
sub-paragraph (b).
In sub-paragraph (c) there is . requirement of procedures
entirely independent of the administrative authorities but,
nevertheless; giving certain guarantees of impartiality. S. 13 E/PC/T/TAC/PV/27
.;he n t',G othe, hundpslbg)ara,-b (rer- ) vquires that these
' proceures slhall be comepletelinfdep tnmidentoiy'adrrinistrative
authoriore Therefror- eherc nould ba an izfonsistency iI the
words "sub-parareama (C)"ned iaintaii icd here.
(United CLE (Im): itEd mangdo)air. Chair, n, I am not
entirely satisfged that it is ri:ht to substitute (a) for (b),
Cecause (a) fs a mommiteeet oi a .nost gzn"sal character - TIhall
administer in a uniform, imparleal aner..........."annr."
It had occtrred -o me wread E r*zi this that possibly what one
aas~is: "and to the applicable requirements aire .Jt otf sub-paragraph
(b)Article."i:rticl;.
raph x- ae. h (b) more precise provision in1)voviaorn in
regard to adiinistrative action. That comes at the beginning
of sua), ragraten towards the end one has certainone hu;s certir
pr ispeal and review.l -he wording I have ;oggdine. I h_.v su~estd
.woeld be auplerable even) ardc th._ eltrenative procadulr which
is enviparabgrpder suand i'am during ;f I :i . '. uu .i' the
wopplicable requirements of eua gr Lrit of Sub-p airaLph (b)
l;dnot do what we wanted-Uid not 2 o v'hat latvar, tcd.
iC.H' o. . t' .
e lDele ::' tet :jI ti.r U'...I1 St'atos..
Mr* LEDDY (UJIi d S:s): I-rA. C 0. i r . . sre. the
considerations of' substance which have bere put :orward by
. -Mr *S -A l, I thim. the fact is thatthis is just a simple
error. T2`Jtu il'tertion uf 'l-ommitteiewas to refe 'to
suO -paragraph (a). Wa have no objection to dclEitirL' th
j~~~oarisior entirely. I do not think it adds very much, but I
a. quite clear in ;ny own mind that thL understanding was that
it would refer to sol'-0ragraph (a). I think ve would get
in to a confusing situation if wc made any refcrc;':co to sub-
- paragraph (b).
EAI~MU: Tr,. D L - e oi BeL iuni.
. ~ _ v ... . . . . . .
.b E/PC/T/TAC/PV/27
Baron de GAIFFIER (Belgium) (Interpretation) : Mr. Chairman ,
the divisions of paragraph 3 into three separate subatq Eb-para~graphs
waa due to an amendment which was proposed by the Belgaian
Delgation and which was ated elftetra1'sultation tuticn with the
Ni.M Zlaegation. l '.tineddy was qui u&y .rect ito cor.cmct- whn he i ade
his statement that thasintentfer vw tourepaI-g to shb- .raLraph (a)
Sub-paragraph c) provides "fexception to the tiorj to `Ghb
provionsgo1' s(a-parazraph (:) . M6 !:c-s Johnsoni Mr.
ew L N Zealgressand this, we would gave an objection to the t(:o t!il
proposed by Mr. Shackle.. ed' r ' .L ........i;.
Cew Iealand.RMAN: Tue Dle I te J N Z
) : Mr. Chairman(I N1-' Zegree I Mhe C : r i u,mt axe wi th t
Vew 2 : Ir I cdsl, t't il ;I-:- ' t - '- -J-- ' - pt. fut' forward
,. 5, ,-some confusion..'-thinkoe cuh'n Ui there is no
that it was purely an error that (b) was put itr that (') .w. ir
irous that thtat provision shopuld retained and C be *tiedand
st, therefore, that the letter (a) to be laced by thee. ri;t
lat,er bring it into conformity with the original intenti
!I-M("k HACKLE Ui t e KiCgo i: Tx M. Chairman, I sho
; tr;.prepared to accept the substitution of (a) or (bn)o.ld only
point out that it is at the ex rpose n. 0 .1 " dittll
i1lCi Cllogicality. I do not like; I am prepared to see (a) substted
J (b).
M N .. i. .2
etationR: Mr. Chairman, I would like to ,I ;y9c iii
tatement just if we by Mr. Shackle.irrom i.legalFig a 1s Il
w 1i' viem e v it se,-s quite illogical t lay down ai, rule without
limitations ndnother paragraph, in the case of in the casef' another
rule . first rule and say that the second rule has e ,;econd r. le has to
..
: .. -.
e
14
S S 15 E/PC/T/TAC/PV/27
be in harmony with the first one. If we want to refer to sub-
-paragraph (a), we have to suppress the clause which appears at
the end of sub-paragraph (c) On the other hand, if we want to
refer to sub-paragraph (b), I think we should draft the text in
the following manner: "The Contracting Parties will determine
if the procedures set out here offer the same guarantees as the
procedures provided for in sub-paragraph (b)."1 I think this is
. the only way of doing it.
CHAIRMAN: The Delegate of Belgium.
Baron DE GAIFFIER (Belgium) (Interpretation): Mr. Chairman,
I think the arguments put forward by Mr, Shackle and 'supported by
* the French Delegation are very valid ones. In the first statement
I made I only wanted to show what was our original intention and
,- - what we intended when we corrected the original text by paragraph 3
and proposed to divide it into three sub-paragraphs. But, as I
have previously stated, we are quite ready to accept Mr. Shackle's
suggestion and adopt the drafting which ho has proposed.
Mr. SHACKLE (United Kingdom): I think that of M. Royer
would be better. It would read, if I remember it rightly:
" to determine whether such procedures conform to the requirements
i of this sub-paragraph and offer the same guarantees as those
provided for in sub-paragraph (b) of this Article." I think
that is very much clearer and better.
CHAIRMAN: Are there any objections to the latest proposal
for re-drafting the last lines of this paragraph?
Mr. JOHNSEN (New Zealand): Mr. Chairman, I am not quite
: so happy about that proposal First of all, I think there might
*-, be some confusion as to what are the guarantees referred to in
sub-paragraph (b) and I would prefer that the Legal Drafting
Committee's suggestion be adopted rather than that proposal be put
in. S 16 E/PC/T/TAC/PV/27
Mr. SHACKLE (United Kingdom): Mr. Chairman, I have one
: alternative sL sb'leuggestion - - I dnriot lekc it very much - to
ared:a"end, mutatis mutandis, to tso:o Yf subaragaeraph (b)fo)
ih-s Article."
CHRIAMLN: We erc overwhelmed with sgestionjns.
Mr. HOINNE- (New Zeand±r): Mr. Chairman,si9 there any reason
tpadeo~rt from, the oragic.l ine;ntion oe thm C::mettec, which was
e ref sr tpub-;rrpgxaah (tve eVGn though, as alreedplcxilained,
thcre is no necessity for it? At least it does not detract from
the intentions of the Commettec.
1-,. LEDDY (United States): Mr. Chairman, I think the Delegate
of New Zcaland is quite right. It wasi never intended by Cosmiscion
, or sny zubmcomeettoa ao lcy down ang euugostion thaa me'sures
n tkeka u-nderasub-pprangrah (c) mnform Doflm t) the requirements of
sub-paragraph db) an6 I thirk the oeleticn of the reference to sub-
paragraph (a) does not alter the substance of the text at all.
There is stillm a comitment in sugb-parararh (a), an independent
,enhitmort teatontracting parties .rtis must administer their laws
andareonsitn .s niformr impartial eranal r.d reasomannable ner, so
-I do nmt see ,uch valueern ref:rringagain ep i;,nd ere a; I wonder
if a seletion al6tior would not satisfe tga Dule: te of .elgium
A-iIRIhN: Thega Deletee ofmBlgiur.
BaroA FDE G0IFIER (Belgium) (IntaerprettiMon): ha rman,irir-n
.po pur pses of clargar re-A din g both the discussioesanero t.d the
hext wnica we h:vdoto autpt, I thino it biuld Le bettQeave lavs
tafting Sin6 of teis toxt t) ege LGcal Dreftimg Coreittec, provided
that we gie eg, L11al Dngftimmigteiittfe suunicieht instructions
0t erable it to draft ext i.nct a.mato w~ke cenar oaough the views
ef thL NalandC gaelen tiori on qhestionautio, because, if I
" E/PC/T/TAC/PV/27
remember rightly, this text was adopted o£llowigE mendment,
proposed by the New Zealan 3 Delagatior, that certain pocecdures are
-<not completely independeot )f the administrative authority but
nevertheless offer similgr >uarantees to those provided for in sub-
pgararaph (b). If these procedures are what we are aiming at
eerG, and if this is alsoethc intention ofethU mom0ettLe, it would
be verymsiLple, it seemo tD me, to draft a proper text.
Mr.HAFLCKIE (United Kingdom)M Ir. Chairman, rather than have
the delay of eef rring this text back to thegLe;al Drafting
mi.,ittee, I would suggest wd a>oMr.Yr.dLe6dy'sgsuLgestion and
pimily eelcte the words "and thosf o! sub-paragraph (b) of this
-' Article". I eo eot boli6ve this is going to make any serious
difference. We already have in sub-parcgraph (o) a provision
regarding information, and we de not necd to repeat it. fI ehere:orc
w ssupgest We oimnly put a ful'stop after the womes "requieincnts of
this sub-paragraph" and delete the rest.
CHAIRM?N: I mope the Comrittee caneagree on thc suggestion
just made by Mr. Shackle, which has been suppomted by a nufber of
Delegates, because there will be greater difficulties if we refer
this beck to the Lcgal miafting Comimittee. The Legal Drafting
Commitaee itself hAt expressed :he opinien that thesc words should
¢,
ba deleted at the end of this sub-paragraph, soimplhink the sij.mest
thing to -do would be togadoptn he sugFestiorjMjuStemkle by 1r.3hac1;l
and delete, the woods "and to thDse of sub-paragraph (b) of this
Article-g Is that aireed?
2.red
Acommente any other 3-am.~cs on paragraph 3?
lv- . ROYER (Interaretation): My rem,rks only refer to the
French text, Mr. Chairman.
Rlere commentsre any )thcr coim-nnts on paragraph 6?
(A. o. -. , - j l, ' l gree Gd )
17
S S 18 E/PC/T/TAC/PV/27
Article XI - General Elimination of Quantitative Restrictions
Paragraph 1.
Mr. SHACKLE (United Kingdom): Mr. Chairman, there is a type-
graphical error on Page 33; the words " effect we through quotas,
import" shoul be deleted.
Mr. LEDDY (United States): If you delete the last line on
Page 32 it will read correctly.
CHAIRMAN: Either the last line on Page 32 or the firt line
on Page 33 should be deleted.
Are there any other comments on paragraph 1?
(A e . ~~~~~~(lgreod ).
~~~~~~~~~~~~~~~e ..
Paragbaph 2, egb-pc. .-Srh Co): ( we hav6 a note ty the Lac l
Drafting Committee.
:r. LEDDY (k ited Statcs): Mr. Ch.ir~nn, I do not thinrc there
woeldand lyebAgreementflict between the Chartcr eijd tho irecinr.et
if the sgrce n should continue t-, stan as it iS. I rather think
itg ould bo unwise to envisaea the contractin,: parties as being in a,
p-siteon toegxaaiions,rketin, standards and agre; on r. ul t
;'and hat soprt of thin;r. I think that wouldi be apropriate for the
ounternatiohe srad COrganizatim., which w)uld have tllc :-.ff of
sexmertsoneceomarye ade.do rn)t think itz oLissiin fr.i thi TrCK.
;A~greee nt need causE us anyD.ifficulty.
CH-IRI3.: jre thera any )ther comr:nts?
The Dele-ate .f Syria.
Mr. I. TR:BOmanI (Syria) (Intcrpretation): Mr. Chairi,^, on
~~~~~~ .r S .l orlcdb
- ge33 of the French text the small (c) should be re:l Gc, by ah
.mall (b)
CIiIRi:*: Thank .ou.
M. 110QER (IntCr-re;ttitn) Mr. Chair. , the intvntin .:,f thc
:egal Drafting Committec; was just tD 1raw the attcntior £f the
V S - E P 19 A P r/rC/T/T ~C/I'V/27 .
. Committee to this point: I thinkoit would be useful to pr)vide here
for~the contractinLsparties to deal with thiZ matter, but, we could
~inSart a few errds stating that the rescxvation of decisions will
beem age on that point by thE OrEITOzation, because if the .O
,-;q edecides, for-instance, to rerucst one of the contracting parties to
-odify certain o3 its rules in this matter, then the contracting
party concerned riiht alw-ms answer that it has no commitrents vis-
_ -vis the other c itractin(: parties.in relation to this Agreements
Therefore there miiht be two different sets of commitments which
might conflict with oach oth.r.
Mr. SILCKLE (United Kinzdor)s Mr. Chairman, I feel there iS a
., ceraie.ediffieulty in introducing a ref.rfnce hcre to the
.~-.: Organizatiopg Ie h-ve noDt dorc it before, and it mizht conceivably
be, thatem thcmere was no Orcanization. It does ser to that on the
whole probab y thghetext should e loft as it is.. One .f tiid things
will h-ppn; either this ovision will be superseded by the
corresponding Qrovisi.n of thE Cherter, in which case everything
l'be caear,0r ifeit is n1t superseded, in th.t case tho Contra'ctig
t-rgiep will. hve to reconsider this paraeralh and decide whither
thinA corres rngg toeParagraph 2 (b) of .rticle 20 of tha
~.<W'Cbr ziustbLe written ian. I feel that on the whole we can leve
matters as tho arc.
CHLI?eYL: Is that agreed? I take it the Committee is in
.., accord that the tet LihDuld rom in as it is.
Sub.)aragreaph (c): are therc ny ents?
; ROY:R (Interpr3t t .n): Mr. Chairman, in sub-paragYaph (c)(i)
words "of tho like dome tic product" should be in square brackets.
e ' ;S:rL' CK'L;(tUn~iltc.J iiJedL3): Otherwiso be omitted, becaue;;
; they are 'a repetition in typin-.
CYLpThYN: .re there any other comments on sub-paragraoh (c)?
~~~~~~~(hg.rG'zl). S 20 E/PC/T/TAC/PV/27
.; ROYER (Ineurpretation): Mr. Chairman, some words acve to be
added to sub-paragapIh (c) (i) n . teo French eoxt; four lines from
tei end of (c)(i) the words "eului d p_roduit naionala" should be
,added.
CHMAN2YU: Are teero any comments on the last part of
Paragraph 2?
Paragraph 3: any remarks?
~~~~~~~~~~~~(AEgrseed ).
- II - Restctions to Safeguard the Balance of Payments.
]ragraph 1.
Mr. LEDDY (United Statos): There should be a comma after the
word "party" in the third line of the English text.
IR*W The cozimwieell be inserted. 2Ar therQay other
amment ?.
Paragraph 2 (a); are there any comments?
Mr. SEACILE (United Kingdom): Mr. Chairman, in the last line
of the English text, on Page 38. e do not really see thl point of
ja'stituting. a fulistop for a semi-cglon; you would then ,et the
following sentence without any verb in it. I prefer to go back to
the old arrangement,mi-amely, 'to have a sei-colon and a small "d"
:for "duc-
oM. ROYE2(Interpreatatin) : I Mr. Chairrml, the.oint raised by
l. mShackle is due to a istake in the lay-out. In fact, the text
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~7
Nsh-uld read: "necessary (i) to forestall....reserves, or (ii). in
hocase of#....". There should be a fullstop after the word
"re"erves", and then another paragraph, beginning: "Due' regard shall
be paid", not "due regard being paid T.hs reason we have made the
changee is that in the Charter tluL reward being paid" only applied
ta sub-paragraph (2), but hore "due regard shall be p.id" must bear 21 E/PC/T/TAC/PV/27
upon the two sub-paragraphs (1) and (2). We must provide here
for the two cases.
Mr. SHACKLE (United Kingdom): Yes, Mr. Chairman, M. Royer has
;2 resolved e h6 question by introducing the verb.
AIRMANIJ: The Chairman of the Legal Drafting Committee points
out that thii Is really a mistake in the Charter a d3 there should
-be a new paragraph beginning with "Due regard shall be paid."
Is that aerEed?
:('i', z (Agreed)
In sub-paragraph (a) there will be an indentation after the
word "necusery", in both the English and French texts.
Sub-paragraph (b)ommentsany cmant?
(A gre
phragrali 3 (a):o any c6mments?
, *, ' : (igroed ).
raraph m3(b): any comrnts?
IeOYER (Interp otati n): I . the .Frere : text' theirs is a
jomm~'onuna which should be deleted fromgthe 15th line on Pace 41, after
rS~th~word "politique'".
C-;: CIL:c there any other oommnts?
' - a d. ) .
raerahA (): any comments?
4r . LEDDY (United Statcs): In the Past line but one on rage 42,
should read "procedures".
%Ccel.IR: Th word nprocyduPe" at-the bottom of rage 42
,%shtild be in the plural.
.re there any other comments on sub-paragraph (c)?
Paragraph 4 (a) any comments?.
. (greed) S 22 E/PC/T/TAC/PV/27
Paragraph 4 (b): the Legal Drafting Comrnittee has a note at
the end of Page 44.
Mr. LEDDY (United States): Mr. Chairman, I propose we insert
-the date of January 1, 1950, which will be two years from the date
on which this Agreement enters into force.
CHAIRMAN: The United States Delegate has proposed that we
should insert the words "January 1, 1950" in place of the words "two
years from the day on which this Agreement enters into force."
are there any objections?
M. ROYER (Interpretation): Mr. Chairman, I should prefer to
. say January 1, 1951, because we have a similar provision in the
Charter and the time limit which is provided for in the Charter will
. nly expire approximately in the middle of 1951. Therefore, if
we adopt 1950 here, there would be some inconsistency between the
two provisions. Ir M.!embers of the Organization had only until
July 1951, for instance, to apply these provisions, and, on the
.other hand, in regard to the other. contracting parties, if they had
make new arrangements after January 1, 1950, these two provisions
would seem to be inconsistent.
Mr. SHACKLE (United Kingdom): Mr. Chairman, I would like to
support M. Royer's arguments. Looking at the world as it is today,
it does seem to me rather. optimistic to envisage that by January 1,
1951, tho balance of payments difficulties would everywhere have
been solved. In any Case, this merely says "not later than" and
if the Contrecting Parties thought it opportune to make an earlier
review they could always do so. I would like to support the
suggestion of January 1, 1951.
,. HAIRMANsIRAN: fire here rany objections tdthe Clate of
M., a , t a
1 January 1951?
er. J.A. LEDDY (United Stc.ts) Mr. Chairman, it seems to
me that if thes:? erovisions are in the Chartur, presumably the
pharter will supersede any Provisions to the contrary which may
be in the Agreement. So that will takc care of that point.
On thedother hand, if w 1)ut the sate of 1 January.1951, I think
that rather assumes that the Charter will not enter into force
until 1949, whereas it would be our uhought that the Charter woald
come into force before 1949, somn time in 1948. This is rot a
particular specific obligation. It is simply a provision for
review by the Contractin: parties, and if there is no hope for
elimpressing thos restrictionsg, Paor sumably the Contractin rties
will imereldoreview the situation and (l nothing, about it. We
do attach some imrprtance to this provision because it does seem
that fuantitat$ve f ricmions, ior balance o ; ;payients reasons,
neal some sort of internation 1~ scrutiny, and we would prefer to
have it two years f om the date on which this lAgreement enters
nlto fore., which would be 1 January 1950.
, -CX'IRK ,DJ M . IRyer.
M. ROYER (France) (Interpretation): Mr. Chairman, I would
''ke to take u.: Mr. Leddy's arguments one by one because I think
that we can draw a conclusion which is exactly the opposite to
A, the one which he ats drawn from his arguments, and therefore I
thinp that his arguments may tend to .rove that the solution which
proposed was the only sound one.
Firat of all, if the Charter suierseLes the provisions of
Whts irtiele, Mr. Leddy said there would be no interest in inserting
tge Gate of 1951 because we woula Set satisfaction anyhow.
E/PC/T/TiC/!V/27
23
'' ,E ,, P I/PC/T/T'AC/i V/2,7
Neverthemess it seems to ie that if we insert here 1951, and if
the provisions of thperssedcle are suered by the provisions
of t e Chdrter, then 'the fate of 1951 will be, i. - last resort,
twoeyears after the :ntry into force of the Charter, and Mr.Leddy
will be satisfied, anyhow, because he will have two years after
the entry into force of the Charter.
Secondly, Mr. Leddy says it was two years from the date of
.. Antry into forWe of the .greement. '!ell, the entry into force
of placegreement will take lA91e once the ratifications have been
s sent, and it seems tht the ratifications will nz a-ll be sent
on the 1 January 19A8gbut only, let us say, in uutust or even
in October e948, and therefore the propar date should not be 1950
but 1951.
Thirdly, Mr. Leddy said that I was very pessimistic in
inserting the date of, 1951 and not 1g50 because that was assumin-
ohat "he Charter would not cume into force before 1949. But I
think that Mr. Ledy is being over-optimisti. if he thinks that the
Charter will come into force on 1 January 1948.
Furathermore, Mr. Leddy said tht his Delegation attached great
importance to that clause and to such , date, but may I state that
,we attach even greater importance to such a date and this for
kBohlogical reasons. F You areac quite aware that lPnce att ,s
great importance to the question of quantitative restrictions
Pidhare closely linkod to the development of Dur so-called
~plan Xon ert -dere' he dere to insorut h-r ti, ate of January 1950,
wven ifethd date were to be del.te(. in a few months, then it is
Possible that we snooud he faced with tremerd-as difficulty regarding
the political and parliamentary implications of such a date, and
that this might even jeopardise our intentions of carrying out the
krovisional appl.cation of this AgreementJ Therefore, looking
Pt gle questiowofrom thix anj:le, this v.uld be e,tremely unfavourable.
,D0: P. 25 E/PC/T/TAC/PV/27
On the other hand, if the date of 1951 were inserted instead
of the date 1950, we would have solid arguments with which to face
our public opinion and our parliamentary circles in favour of
.the provisional applicatiohe Agre ment. entf
Therciorepsfor ncgiholo6,cal reasons more than for reasons
of substance, I think that it would be wisn totiLserl the date
here of 1951. May I say furthermore that this date ofis951 i.
a very familiar one and thapeit aipears elsewhere in the Charter
ANAIR' A: ere th-ce hny ot-er comments?
MM. J) t,1 LEDDY (United States) Mr . Chairman, without
; . completely g.eeing' wreaseM Royes 2.- ionirng, I do not feel as
stronglyuas he does abolt this point and, subject to clearance
by *my.Delegatioight think we mlfAt be willing to accept January 1
1951, bearing in mind that this is, after all, a finial date within
which acten, and be takol, .a_'d recognising chat the Contraoting
; Parties may at any time re.iew the situation,
CHL tIVWe ore aglewe n hercfc9 c.;r e or. the date of.January
1 1951 on the understanding that the United States Delegation
may wish to raisb the matter later on if they find that they
cannot accept this date? Is that agreed?
A. eed
Are there any other comments on sub-paragraph (b)?
In the six"h line the word 1 It" shoultd b" replaced by "ney'.
Subagparagraph (b) is zreed .
. : xSub-paragraph (c). Are there any comments?
Sub-paragraph (d). 'e there any comments?
In the second line from the bot"om" n page 46 the word roffr
should be replaced by the word "or'!:- "or 3 of this Article or
wlth those of Lrtiele XIII ".
Are, thparagraph .mrnts on sub-;,a.rai-a) (d)?
Cr ed. E/PC/T/TAC/PV/27
Sub-paragraph (e) ?
Paragraph 4 is approved.
Paragraph 5. Are there any comments?
Agreed.
Article XIII. Non-discriminatory Adminstration of
Quantitative Restrictions.
Paragraph 1.
Agreed.
Paragraph 2.
Sub-paragraph (a)
Sub-paragraph (b)
Sub-paragraph (c)
Sub-paragraph (d)
Paragraph 2 is approved.
Paragraph 3 (a).
M. ROYETR (France) (Interpretation): In the French text
,., there is a modification which has not been reproduced in the text.
It "séoulbe Ttd6voiler le nppr" and esu.res tho words "de
renseignments au sujet du".
CHIRMIPM Are there any other comments on paragraph 3 (a).
Agreed.
Paragraph 3 (b):
M, ROYER (France) (Interpretation): To be quite correct,
; the first line of the French text on page 54 sh"oéuld rée àadrddoua.&
lyrr'ée' de lr6trànger ou a la'sortisôdrentrep~t".
.
CHAIRMW&: Are th re any other comments on paragraph 3 (b)?
MA.KL.J. SH&CX1E (gnited Kinedom): Mr. Chairman, may I return
to paragraph 2? On page 51 in the third lire of sub-paragraph (d)
.....-.
P. .
. pf, : 27 E/AC/P/ 2/1'V/°7
the. words "contractini part-es" should be "contracting party"' in
e ~a i. ngula
I alsko thin; that the comgmas, aain, have gone.wrongs Ten
lioes frem the bottom of the page the comma after "proportions"
: shoild be omitted; and it should. be inserted after the word
". partils"e two iints fur.her down,
hEDDY J.M0itedD)])Ye(U:Itod Satu's) I think the text recommended
bg the Draftii- Committer ;s clear, Mv. Chairman.
CKLE (United Kingdom) : I am prepared toarn. T, . irpared tn leave
the co.mos ns they werm: . dO £Jot really Lindd
- CE.JRHMU: ommittee e it that the Cc.-itee is.:geeed that in
g "parth"th -~dz-e the ur d p arty hould be substituted for -the word
<'ZlSr: " pa bt thast the rest of sub- agrapha(d. will remain as
..t t e,
ow,vwe have passed paragraph 3(a) and:3(b). Paragraph 3(a)?
Paragraph 4. -e there an! mments?
Approved
tParagrah 5. W. have a 'Atere of the Legal Drafting
Committee0
rpretation) oc;) .rrea;ation) Mr, Ch:.irman, tis is
oomewhat bscure strr . I':, seems that. in the course of printing,
he reieicatecnare occurred ncd o -o ercirrod an. therefore the
i ~gel Drofth Coin.teec thr.ugb.t it recussary to draw the attention
sth the full CotmittIe to this giin . 1 will now (,ve to the
e'emmena4ttee a11 the aluamle.sw.hc:h are aV.ila e
, n gthe rRetort oCf hie ,Leal Dafting ommttee was examined
in fhaull-Cordm ithtee lt S9cse mace l.following remarks:
ishg: uco d12. s..s);
concerning the a erence C.I; nco;3i t re frterur ce to paragraphs 3 and 4
..' E/PC/T/TAC/PV/27
of Article XV. The final form of Article XV is not entirely
settled, so those numbers had better be left blank or put in
square brackets. The numbers 3 and 4 for those paragraphs may
,trn out oc be thevwrog c numbers we-n te3 final form of Article XV
is establishd. I therefore sggeest that we omit the numbers
of the paagrraphs, replacing tehm by dots, orput them in square
brackets.
(Continued in French): It seems now that the Secretariat
has re-inserted the numbers which we had not decided but which
we thought it ecstto rplace by dots. I would ikle to add also
that a further reference toAarticle XIX was also deleted.
HAIRMANU: Probably the simplest way of dealige with this
.matter would be to insert the words "3 an4 -1" in the last line so
that it would read "under paragraphs 2, 3 and 4f A' rticlI _II".
The reason the Seerotariat originally did not put in a reference
tto paragraphs 3 and 4 was that they considered tme terexrsV aS
. covered by the reference tg pprae..oh 0 Therebeene cross-e 05-
references in paragraphs 34and - tagraph 2.h <,
Mr. Leddy.
r' J.ED LWTDY (United States) : Mr. Chairmane tho Most-
Favoured-Nn ior: treatment for matters referted uo in paragraph 2
is provided fo in. paragraph 1 of Article I. The ittenTian wCs
that the principles that we set out here to apply the Most-Faeour~d-
on principle to import and export products dhouro uu is shouldalso appoly to
internal v.itlaatinve regualtrs,and paragraphs 3 and 4, I think,
are the pgoverning rovisions with respect to internal quantitative
reguThereons. Oherfore, I propose that we delete the reference to
paragraph 2 and simply insert "under paragraphs 3 and 4 III".ticle [I".
ACKMrO oJ C SCKingdomnitcMd Mirjdom): Lr. Chairman, I think P. 29 E/PC/T/TAC/PV/27
actually the same mistake occurs in the Charter on page 24, the
last line of paragraph 5 of Article 22, where it says "under
paragraph 2 of Article 18". It should be "under paragraphs 3
and 4".
CHAIRMAN: It was due to the mistake in the Charter text
that this has been carried over into the Agreement. This mistake
in the Charter text is no doubt due to the confusion to which
M. Royer has drawn attention. Would there be any objection to
the proposal of Mr. Leddy to replace the words "paragraph 2" in
paragraph 5 of Article XIII by the words "paragraphs 3 and 4".
No objections?
Agreed.
M. ROYER (France) (Interpretation): The French text should
read, of course, "Article III" and not "Article XIII" in the last
line.
CHAIRMAN: Are there any other comments on paragraph 5?
Paragraph 5 is approved with the changes we have made.
ARTICLE XIV. - Exceptions to the Rule of Non-discrimination.
Paragraph 1 (a) Approved
Paragraph 1 (b) Are there any comments?
Approved.
Paragraph 1 (c).
Mr. R.J. SHACKLE (United Kingdom): There should be a comma,
I think, after the word "sub-paragraph" in the second line on
page: 60. There is also a superfluous letter "a" at the end of the
sixth line. It should simply be "that the requirements of that
sub-Paragraph are fulfilled ......"
CHAIRMAN: Does the Committee agree to insert a comma after
the word "sub-paragraph" at the top of page 60?
Ag.'.d." ' ,i Free'2i.
,''0''y' "."' E/PC/T/TAC/PV/27
Sub-paragraph (d) of paragraph 1.
A~p~~ Dro ved.
Paragraph 2.
M. ROYER (France) (Interpretation): I would ask for the
deletion of the wordp"dis-on"blesi in the second line of the
Franch texpagn 6:se"G1; 'u"ilesr is quite enough.
HA CI-IRMAN: Is that agreed?
-reed.
Paragraph 2 pp a1.roved.
garaCraph 3 (a).
BaPon Rieree do GAIFFIER (Belgium): There i" a mT" iigsinZ
in the first "RANTXaCTPANG -RTIES", Mr. Chairman.
CILIRMANA Ire there any other comments on paragraph 3?(a)
- Approved.
Paragraph 3 (b) . Are there any comments?
Approved.
Paragraph 3 (c)A eqro there any comments?
: proved .
Pgrapranh 4.
Sub-paragraph (a)
Spb- grapra,h (b).
Paragraph 4 is approved.
Pgra~raph 5. Are there any memc;nts?
Approved.
Pgrapra.h 6 (a) pp A roved .
Pgrapra-h 6 (b) Approved.
hA ROYER aFronce) (enpce!r-tation): M Ir. Chairman, before
going on toArticle XV I would like to make a remark on the first
paragraph, spb-naragraph (a) of Article XIV, on the last words of
30
P. E/PC/T/TAC/PV/27
the French text "de no pas gêner la reprise des échanges
multilateraux", corresponding to the English words "so as not
to handicap achievement of multilateral international trade."
Well, we have not been able to find track of the original French
words, neither in Document T/180 nor in the text of the Charter
itself. There is no mention of the original French text which,
if I remember rightly, was proposed by M. Suetens himself.
Therefore, the French text here is the translation of the English
words which appear in the right hand column, and therefore also
the text of the Charter will have to be modified accordingly.
CHAIRMAN: Are there any comments on the remarks of the
Chairman of the Legal Drafting Committee?
Then I take it that the Committee is in accord with the
French text of paragraph 1 (a) of Article XIV.
Article XV - Exchange Arrangements.
Paragraph 1.
Appro ved .
Paragraph 2.
Baron Pierre de ChIFFIER (Belgium) (Interpretation): Mr.Chairman,
iths is only a typographical point: at the end of the twelfth
line -of the French text there is"a "d" and the word "ordret begins
the thirteenth line. The lay-out of the text would be better if
the word "ordre"t were laced on the twelfth line after the -d'.
M. ROYrR (FranMr. Chairmanetanion): By'e - , i" the
sixth line of "he French text the word rles" must also be enclosed
"n 1he square brackets - tles Parties contractantes".
., ..
C IL I R: Paragraph 2 is ap roved with the changes made in
the French text.
Paragraph 3. Lkprove6.
Paragraph 4. approved.
3.
A, 32 E/PC/T/TAC/PV/27
Paragraph 5. Approved.
,
Paragraph 6. Are ther y comim.:ents?
Baron Pierre de GAIFFIER (Belgium) (Interpretation): I should
like to know if M. Royer agrees to the draft as it stands now -
"aPrds consultation du Fonds"?
Ml ROYER (France) (Interpretation): Mr. Chairman, it
wo)Ld be better in tee French text at the ,nd of paragraph 5
state "elles adresseronà au Fonds un rapport ace sujet . ." as
the words "Mon~taireeenternppional" have b.-n d.olved.
CILIRMAA: Is that agreed? ire there any other comments
onparagraph 6?
aron Pierre de GAIFFIER (Belgioum): (Comment on typQraphical
error in the French text).
CHiI &S1hese little typographical errors will be
checked by the Secretariat.
Is ararh 6 £!ppoved?
Approved.
Paragraph 7 (a) Approved.
Paragraph 7 (b).
M. ROYER (France) (Interpretation): It is proposed in the
French à/xt on page 73 to bring the words "<4ses membres" up two
lines to follow the word "impos-es".
C IWidIA: Are there any other comments on paragraph 7 (b)?
kpproved.
Paragraph 8.
M. ROYER (France) (Interpretation): We suggest replacing the
first word of this paragraph "Une" by the word "Toute".
CHEIRMjN: Paragraph 8 is approved. 33 E/PC/T/TAC/PV/27
Paragraph 9.
M. ROYER (France) (Interpretation): In the first line of
the French text on page 74 the word "a" before "des restrictions"
has disappeared; and it would be better to add, before "conformes"
in the second line, the words "qui seraient" "en matière de
change qui seraient conformes ...."
CHAIRMAN: Is that approved?
Sub-paragraph (a) is approved.
Sub-paragraph (b). Are there any comments?
M.ROYER (France) (Interpretation): In the French text
It would be better to insert the conditional and say "serait de
rendre efficaces" in the fourth line before the end.
CHAIRMAN: Are there any objections?
Paragraph 9 is approved.
ARTICLE XVI - Subsidies.
Are there any comments?
M. ROYER (France) (Interpretation): Mr. Chairman, in the
fifth line of the French text on page 75 it would be better to
have "ou de réduire les importations" instead of "ou d'en réduire
les importations". The word "Partie" in the next line should
not have a capital "P". Then, three lines before the end, there
is a comma after the word "intéressées". This is only an English
comma, not a French one, and should be deleted.
CHAIRMAN: Are there any other comments on Article XVI?
Article XVI is approved.
8
I. E/PC/T/TAC/PV/27
ARTICLE XVII - Non-discriminatory Treatment on the Part
of State-Trading Enterprises.
CHAIRMAN: Paragraph 1 (a).
Baron Pierre de GAIFFIER (Belgium) (interpretation): In the
French text the word "present" is to be replaced by "prescrit", and
the word "par" in the line following by "pour"
M. ROYER (France) (Interpretation): Mr. Chairman, I think
that the French text would be more elegant if it read: "Chaque
parties contractante . ...." then delete "si elle" and substitute
"qui" - "....... qui fonde ou maintient une entreprise d'Etat
ou qui accorde .............". And the word "présent" in the sixth line
from the end is to be placed by "prescrit", and the word "par"
in the following line is to be replaced by the word "pour".
CHAIRMAN: Are there any objections to these modifications
in the French text?
Is paragraph 1 (a) approved?
Approved.
Paragraph 1 (b).
M. ROYER (France) (Interpretation): In the French text, at
the end of this paragraph, the last words have been left out. It
should read "participer à/ces ventes ou à ces achats, conformément
aux usages commerciaux ordinaires. " I do not want to take up
the time of this Committee with a few commas which are missing.
CHAIRMAN: Paragraph 1 (b) is approved.
M. Angel FAIVOVICH (Chile) (Interipretation): Mr. Chairman,
in the ench text I would like to know why the words possibilitiés
P .
34 E/PC/T/TAC/PV/27
de vente" have been replaced by the words "qualités marchandes".
Is the same idea conveyed by the words "qualités marchandes"
as by the words "possibilités de vente"?
M. ROYER (France) (Interpretation): Mr. Chairman, we
had a very arduous task in trying to translate into French the
word "marketability" and we thought that the words possibilités
de vente" did not give a good translation but that the phrase
qualitiess marchandes" was nearer.
M. Angel FAIVOVICH (Chile) (Interpretation): Mr. Chairman,
I agree, with this interpretation .
M. ROYER (France) (Interpretation): Mr. Chairman, I have
just found in paragraph 1 (c) the words which I said had been
omitted from 1 )b) . The words which I gave were only a rough
draft, and the correct phrase is: "dans des conditions de libre
concurrence et conformément aux usages commerciaux ordinaires".
Those words have to be inserted at the end of paragraph 1 (b)
and of course they have to be deleted from paragraph 1 (c).
CHAIRMAN: Are there any other comments on paragraph 1 (b).
Paragraph 1 (b) is approved.
Paragraph 1 (c).
n Pierre de GAIFFIER (Belgium)
RMAN:
graph 2.
(Not Interpreted).
Paragraph 1 (c) is approved.
Mr. R.J. SHACKLE (United Kingdom): Will someone explain to
me what is the meaning of the word "otherwise" in the sixth line?
I never have understood it. Perhaps I am introducing this at a
rather late stage of the proceedings, but I have never heard an
explanation of what it is supposed to mean.
Baron
CHAI
Para
35 P. 36 E/PC/T/TAC/PV/27
CHAIRMAN: Is the introducer of this word present?
Mr. J. W. EVANS (United States) If Mr. Shackle insists
on an explanation I shall be glad to give it, but if he would
prefer to take me out for a drink I could explain it then.
Mr. R.J. SHACKLE (United Kingdom): I accept that proposition.
M. ROYER (France) (Interpretation): Mr. Chairman, it seems
that from a juridical point of view the words "not otherwise for
re-sale or for use in the production of goods for sale" and the
corresponding words in the French text are completely superfluous.
We have laid down the principle; then we have laid down an
exception to that principle; now we are laying down an exception
to the exception, which, in fact, returns to the general rule.
Therefore, the words are quite superfluous.
Mr. R.J. SHACKLE (United Kingdom): I think the object of
having those words was to clear the ambiguity which resides in the
word governmental"; because governments nowadays do things which
they used not to do in the past, so that we could not be sure of
the meaning attaching to the word "governmental".
'
.'' 'i' ' S 37 E /PC/T/TAC/PV/27.
thInterord
,: ;.t lI.(Iaterprctati)n): But, Mr. Chairman, these words
, s
,otherwise, etc." are not related t) the words "in governmental use"
but to the words "ultimate consumatim' 2nc theref'rc, whatever the
authority of a Government nowadays, the cj, no, zat remains the same.
CJIb'IRh: I take it that as the French DelegatiDn h s accepted
this Anglo-Saxon illoJiclity i the Charter they will accept it in
the Agreement.
Are there any other comnents on Iaragraph 2?
M. ROER (Interpretation) The;last line of the French text
will road: "accordera un tra temt 6 uita.iea commerce des c. etre
r pY .ttarties.
CHAIRjAN: Is Paragraph 2 approved? (Agreedj
We now pase to Article XVIII, which will be found in the
ntinusation of Documnnt T/212, Page 79.
articlele XV II -Adjustments in Connection with Economic
, evelopment. ?ara raoh 1 arc there any com-Gnts? (Agreed)
paragraph 2 (a): any cormcnts?
RO'MR (Inter-rrelttat jn: Mr Chairm-nanthe Legc1l Drfting
¾Oo mjteW&S C~mp~llr to -r.7.' mcf'y tusly the text which wae
wanteto it, because the text of the draft of the Charter was
taken over automatically, without taking- ictD account thpt the scope
of the General Agreeomnt was of a diff cnt n t're .
In the text of the Ch,ter i' as stated that the obligations
we undertaken under the provisions of this text, or that the
obligations would occur thrDurh ).oti ..tis, whi-st the Pegotiations
ma.;th negotiations of thr .Aracic. Thercjire we bad to modify
6htext accordingly and h- r w;, -iak of obligations under Article II,
or under thd genarjl provisiors of this A~recmenb. We reversed
the~ order which appeared ir the oririnal drF;t and spoke first of the
5bligations under the ne'-tiatiins, that is to say, under Article II, E/PC/T/TAC/PV/27
and then only of the other obligations of a general nature, and
text now reads: "If a contracting party ..... considers it
desirable to adopt any non- discriminatory measure which would
conflict with any obligation which it has assumed under article
or with any other provision of this Agreement."
There are two small typographical errors in the French tex
The word "serait" at the top of page 80 must be read in the plural
and, of course, "aux termes de l'article I" should read. "aux te
de l'article II."
CHAIRMAN: Are there any other comments?
Mr. SHACKLE (United Kingdom): Mr. Chairman, I think there
should be a comma after the underlined words "provision of this
Agreement" in the eighth line of Page 80.
CHAIRMAN: Yes. A're there any other comments on paragraph?
the
II,
t.
ral
rmes
2(a)?
Agree,d) .
1argrapah 2(b) any coment
Mr. LEDDY (United States) : There should be a comma at the end
of the third line of t;h BnElish text.
_1CHAIRMAN: A
M. ROYER (Interpretation): In the fifth line of sub-paragraph
) in the Frenc(bh text i"estimée" e 110stimalc enstead of "astimera."
CH-IRMLU Are there any other comments?
Fara6raph 2 (mmen any co rotts?
lara~grrh 3mma) any cornents?
(Agreed).
(Agreed)
Me ROYER (Intqrpretation): Two words have been left out of the
line of thc Frencgetext on Paec 81. Between the words "ou"
ltondv thelwerds "si e lu" should be inserted.
CI.'tIMZ iAre there any other comments?
(.*^Xgr) . S 39 E/PC/T/TAC/PV/27.
Paragraph 3 (b): any comments?
M. ROYER (Interpretation): Mr. Chairman, I would like to point
out here that we have at last settled the problem of translating into
French the words "obtaining substantial agreement." We thought it
would be quite clear if we put "d'arriver à un accord suffisant."
CHAIRMAN: Are there any objections? Are there any other
comments on Paragraph 3(b)?
M. ROYER (Interpretation): Mr. Chairman, in the French text of
paragraph 3 (b), although we did not want to modify the text of the
Draft Charter, nevertheless "dans les delais" is not very elegant in
French; it would be better to make it read: "notifier".
CHAIRMAN: Are there any objections to this change in the
French text? (Agreed)
Paragraph 3(c): any comments? (Agreed).
Paragraph 4(a): any comments? (Agreed).
Paragraph 4(b): any comments? (Agreed).
Paragraph 4(c): any comments? (Agreed) .
Paragraph 5(a): any comments? (Agreed).
Paragraph 5(b): any comments? (Agreed).
Paragraph 6: we have a note by the Legal Drafting Committee.
Are there any comments? I take it then that the Committee is in
accord with the change made by the Legal Drafting Committee. Are
there any other comments on Paragraph 6? (Agreed).
Paragraph 7 any comments? (Agreed).
Mr. SHACKLE (United Kingdom) There should be a comma after
"contracting party" in the third line, I think.
CHAIRMAN: Are there any objections? (Agreed) .
M. ROYER (Interpretation): Mr. Chairman, I apologise for
reverting to Paragraph 5, but the words "Contracting Parties" must
be in capital letters in the French text.
t E/PC/T/TAC/PV/27
CHAIRMAN: Are there any other comments
therefore agreed.
:.
It is caler we shallon.t finish our tiv:
.
.greement. Therefore I think we should are
anf aSter lunch eako Ap article XIX.
.
T he meeting of the Tariff NegotiatiWns
{ '
ps eontgonsd until efter wc have concuuded o
Committee.
' '.
Ths Mowtadj iS ed 2dJourn7deand will bt
:<
,
(The Meeting rose at :
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ak off now for lunch
Working arty will
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resumed at 2.30 p.m.
L10 p m. )
S
10 |
GATT Library | cc447bj0192 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty-Sixth Meeting of Commission A held on Saturday, 5 July 1947 at 10.30 a.m. in the Palais Des Nations, Geneva | United Nations Economic and Social Council, July 5, 1947 | United Nations. Economic and Social Council | 05/07/1947 | official documents | E/PC/T/A/PV/26 and E/PC/T/A/PV.25-27 | https://exhibits.stanford.edu/gatt/catalog/cc447bj0192 | cc447bj0192_90240147.xml | GATT_155 | 10,710 | 65,551 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
RESTRICTED
ECONOMIQUE E/PC/T/A/PV/26
ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VEKSATIM REPORT
TWENTY-SIXTH MEETING OF COMMISSION A
HELD ON SATURDAY, 5 JULY 1947 AT 10.30 A.M. IN THE
PALAIS DES NATIONS, GENEVA
Dr. E. COLBAN
(Chairman)
Delegates wishing to make corrections in their speeches
should address their communications to the Documents
Clearance Office, Room 220 (Tel. 2247).
5th July 1947
(Norway)
NATIONS UNIES E/PC/T/A/PV/26
CHAIRMAN: The Meeting is called to order.
Before we continue our discussion on the problem that has
kept us busy in two or three previous Meetings, I would like to
read a letter which I have received from the Bhairman of
Commission B. It is dated 2nd July, and states:-
"I wish to draw your attention to a resolution adopted by
Commission B on the 2nd July. The Commission, after discussing
Article 86 of the Draft Charter, and amendments thereto presented
by the Delegations of Cuba and the United Kingdom, and the memo-
randum on arbitration submitted at the First Session by the
Delegates of Belgium, France and the Netherlands, resolved: that
further discussion of this Article be referred to the Standing
sub-Committee on Chapter VIII.
It was also resolved that in view of the close connection
between Article 35 (2) and Article 86, this further discussion
should take place at a joint Meeting of the sub-Committee on
Chapter VIII and of the sub-Committee of Commission A on Article
35. Such a joint Meeting does not appear to present any
practical difficulty, as only ten Delegations will be repre-
sented, five Delegations being Members of ad hoc sub-Committees.
It would be appreciated if you would bring this resolution
of Commission B to the notice of Commission A in order that the
necessary authority to participate in the joint Meeting should
be transmitted to the sub-Committee on Article 35".
Unless any Delegate has a contrary opinion, I suggest that we
ask the Secretariat to kindly communicate to the sub-Committee on
Article 35 that Commission A agrees to a joint meeting with the
sub-Committee on Chapter VIII.
Is that agreed? ( Agreed).
We now continue our discussion from previous days. The first
sneaker is, as I announced at the end of the last meeting, the
V.
-2- V. E/PC/T/A/PV/26
Delegate of the Lebanon.
Mr. George HAKlM; (Lebanon): Mr. Chairman, the Draft Charter
proclaims as one of its fundamental aims "to encourage and assist the
industrial and general economic development of Member countries,
particularly of those still in the early stages of economic
development. Chapter IV is designed to give definite expression
to this fundamental purpose. On the other hand, the Charter
limits, and in some cases prohibits, the use of tne means necessary
to the achievement of that purpose. To be sure, it does so in
the interests of other purposes, among which is the reduction of
tariffs and other trade barriers. In this way, it attempts to
establish a balance in the achievement of its various purposes.
Where there is conflict in the means for the attainment of
these different ends, the Charter thus attempts to strike a proper
balance between them. I am not going to evaluate here the measure
of success of this attempt in the persent Draft of the Charter.
I would only say that, in at least one of those aspects, the
balance is definitely weighted in favour of the industrialized
countries.
It is evident that there is, throughout the Charter, a
conflict, at least, a temporary conflict, in the means for
achieving two of its purposes, namely (1) the purpose of the
removal of trade barriers, and (2) the purpose of the promotion
of the industrial development of the undeveloped countries.
But it is worth noting that to achieve the first purpose strict
and definite obligations are placed upon the Members, which
restrict their liberty of action in the achievement of the
second purpose. On the other hand, the Charter does not
provide for equally strict and definite obligations to give
positive assistance for economic development. E/PC/T/A/PV/ 26
While the underindustrialized countries are deprived of the use
of the most effective means for achieving their own development by
their own efforts, they are not assured of receiving assistance by
definite positive international action. To put it rather crudely;
they are told "You can buy the machines to build factories, but you
are not allowed to use effective means to keep these machines
running". There will always be sellers of machines just as there
will always be sellers of raw materials, but that is not enough.
The Charter seems to me to be lacking in its provisions for the
implementation of one of its main purposes.
There is real danger that the industrial development of the
under-industrialized countries will be sacrificed at the altar of
free trade. It is no consilation to say that any limitation to
the industrial development of under-industrialized countries is
made only in the interests of the expansion of trade from which
these countries will benefit.
The expansion of trade will benefit all nations, but more
particularly the industrialized nations. And what will freedom
for the expansion of trade mean to the under-developed countries. If
they cannot develop the productive power which is the basis of all
trade? For those countries, economic development must
necessarily be their primary aim. They cannot agree to any
limitation on such development made in the interests of the
industrialized countries . International economic co-operation
cannot be .' on the subordination of the interests of the under-
industrialized countries to those of the industrialized.
The Charter as it is developing is in danger of ignnring this
fundamental principle. There is a tendency to give priority to
some of its purposes over others, and so to favour one group of
nations over the other. This tendency must be stopped, for the
J . - 4 - J.
world oan ill afford to be divided against itself into these two
groups of nations.
In the case of quantitative restrictions, which we are now
considering, Article 25 takes away from the under-developed Members
what is recognised to be the most effective means for the protection
of their national industries.
It is true that there are other protective measures allowed by
the Charter, namely tariffs and subsidies, but our Indian colleague
has, to My mind, argued rightly - first, that quantitative
restrictions need not be more restrictive than tariffs and subsidies
and second, that they may be, in certain cases, not only more
effective but more rational measures for industrial protection. It
may here be objected that the use of quantitative restrictions is
not altogether excluded, for there is a possibility of their being
used under the so called compromise of Article 13 subject to the
prior approval of the Organization. I would say in passing that
it is wrong to desciibed Article 13 es a compromise for it was
never accepted by many delegations. But aside from the complexities
and difficulties of the procedure of Article 15, this so called
compromise means that the under-industrialized Members should give
up their freedom of action completely and submit to the decision
of the Organization. Will this decision be impartial and not
subject to the pressure of economio interests? Will it be based
on economic criteria, or will it be the result of political
bargaining where the strong have their way? Will the industrialized
countries who will inevitably have to make the necessary readjustment
not be able to resist effectively the legitimate desire of the
under-industrialized countries to develop their industries in order
to raise the standard of life of their peoples?
E/PC/ T/A/PV/26 - 6 -
J. E/PC/T/A/PV/26
The International Trade Organization is is not and cannot be
in the nature of the case a Supreme Court rendering justice to all
its Members on an equal and equitable basis. When the under-
developed countries give up their liberty to help themselves, what
assurence to they have that the purpose of the Organization to
encourage and assist the industrial and general
of its Members will not become a pious and forlorn hope? Is all
they get in exchange for the sacrifice of their liberty of action
a promise that their applications for release from their obligations
under Article 25 will be given due and oareful consideration?
The under-developed countries are not asking to have complete
freedom to use quantitative restrictions whenever they like. The
issue before us is whether they should be allowed to use this means
for industrial development, subject to subsequent control by the
Organization. The Lebanese Delegation believes that they should
be given this limited freedom of action, rather than be subjected
to the prior approval of the Organization. Let there be all the
necessary safeguards so that the right of members to adopt
quantitative restrictions in the first place would not be abused
and would not cause undue harm to the interests of other Members, or
hamper the realization of the purposes of the Charter. Let these
safeguards be as effective and as strict as possible. Let the
Organization order the withdrawal of the measure where other
members can show, and the experts of the Organization can prove,
that the restrictions adopted do in practice more harm than good
and that they are not justified after due consideration of all the
factors in the situation.
Let the Organization oven expel the Member who refuses to
abide by its decision, after making sure that this decision is
based on sound economic grounds, rather than on power and influence. J. - 7 - E/PC/T/A/PV/26
We feel that with all these safeguards the judgment of the
Organization is likely to be more just when it is rendered after
the measure is adopted than when it is rendered on an application
made by a weak under-developed Member who has been deprived by the
Charter of his liberty of action.
We in Lebanan do not use quantitative restrictions, and I hope
we will not find it necessary to use them. But we cannot but
stand on the side of the under-developed countries to which we
belong together with the other Arab and Middle Eastern countries. G - 8 - E/PC/T/A/PV/26
We cannot but strive in solidarity with them to redress
a balance which already weigh heavily in favour of the
industrialized countries.
I repeat, what we are asking for is not complete freedom
to impose quantitative restrictions. It is freedom subject to
international control, in order to prevent its abuse. We are
confident that the Members can be trusted not to abuse the right
to impose quantitative restrictions in the first place, and that
if they make mistakes the control of the Organisation will be
sufficient to correct them. I will conclude; Mr. Chairman, by
saying that quantitative restrictions are only a means to an end,
that they should not be judged in themselves, but only in relation
to the end which they serve to achieve.
That end is the economic developmenrt of the under-
developed countries for raising the standard of living of their
peoples. We conceive this to be one of the primary tasks of the
International Trade Organisation. The Charter of the United
Nations proclaims it in eloquent words - "higher standards of
living full employment and conditions of economic and social
process and development.
We sincerely hope that these words have not been written
in vain. E/PC/T/A/PV/26
Mr. J. TORRES (Brazil): Mr. Chairman, the Brazilian
Delegation has kept a long alience since London on the question of
the application of quantitative restrictions for protective purposes.
We would maintain this attitude of abstention were it not for the
fact that delegations have been asked to state their views, and for
our desire to collaborate in the search for a solution capable of
the
promoting agreement between/two sides. The issue is one which
threatens to divide our Conference into two clearly separated
groups) possibly with disastrous consequences for the strenuous
work which we have all put in as we tried, since October of last
year, to concretise our hopes of an international economic order.
You will have noticed Mr.Chairman that the Brazilian proposals
for amendments of the Draft Charter have been conspicuous by their
absence here in Geneva. This does not mean that the Charter as
evolved from London and New York was entirely satisfactory to us.
We had a number of reservations on Articles of major importance to
Brazil, and we have always been ready to insist on what we have
deemed to be absolutely essential to our interests, which are also
those of other countries here represented or not. We have always
been willing, however, to consider the points of view of other
and
Nations/have shown in a number of points a spirit of understanding
and self-denial when, after considering opposite arguments, we
abandoned positions taken before. In doing so, we believed we
of
were contributing, with our share/sacrifice, for the benefit of all.
Whether these sacrifices have been recognised or not, we do not wish
to examine here. It is enough for us to realise the fact and to keep
within our tradition of a people who, despite their short history,
have always shown a tendency for compromise and conciliation, rather
than for extreme position or imposed solutions.
_ 9 _ - 10 -
E/PC/T/A/PV/26
It is in this spirit, Mr. Chairman, that the Brazilian
Delegation would like to intervene in this debate. We have the
impression that there is, on the part of some countries still
undeveloped, a psychological tendency to have a certain distrust of
the Charter. It is., however, highly desirable that this lack of
confidence should disappear. It is possible that it may have
resulted not only from the difficulties met during our work, but
also from fears, whether expressed or not, as to the solution that
will be given to the vote subject and related problems.
To some it may, perhaps, seem that the Charter, when applied,
will deliberately or not result in an instrument for the
maintenance of the status quo, thus perpetuating the unfavourable
situation of the less developed countries. We believe that a
certain vehemence, which has been apparent in the debates on the
particularr point that engages our attention, is nothing else than
a reflection of such preoccupations which, if founded, would be
justified and worthy of all concern. Brazil herself, a country
presently in the process of economic expansion, would share such
fears should she. agree that they have reason to exist. We too
have our problems of development and our attitude throughout this
Conference has shown that we consider the industrialization of our
country as a matter of exceptional importance.
The truth of the matter is, however, that Brazil is confident.
We believe that the Charter represents an honest effort, made in
good faith and on a large scale, to bring about an improvement of
world conditions in general and of those of each country in
particular, in view of the inter-relation that exists among
international economic problems. To us, all who came to this
Conference have an open mind without mental reservations or selfish
interests. Among them we include ourselves. L - 11 -- E/PC/T/A/PV/26
We accept as enough of a guarantee that given to countries
in a period of early development in formal statements, made in
this Conference on other occasions, by those entitled to
speak in the name of nations which at this time are the most
powerful economically on which the other countries depend for
material assistance. Besides, in more than one provision the
Charter already incorporates principles tantamount to commit-
ments the fulfillment of which by all Members should not consti-
tute a matter of doubt.
This is all the more reason why Brazil at this moment most
sincerely wishes that a formula should be found to settle this
difference of views.
We do not intend to enter into a theoretical discussion on
the problem of protectionism nor on that of the merits of free
trade. In: relation to this subject all the arguments have been
properly dealt with in books, and their repetition here would be
quite useless. But we are of the opinion that the non-submission
of all Member countries to the terms of the Charter on an equal
footing, is equivalent to the nullification more or less complete
of its efficacy. We cannot see, therefore, how measures
contrary to the spirit of the Charter we are now perfecting, can
be left outside the jurisdiction of the Organization and to the
discretion of each country.
Thus, we would not oppose that the provision in question be
maintained. We should make every possible effort, however, to
find a harmonious solution to the problem. To this end we would
like to suggest that the proper way to deal with this matter is
to gather all the amendments that have been put forward in
connection with the several articles, and since they all relate
to protective measures, refer them to the Sub-committee on L E/PC/T/A/PV/ 26
Chapter IV to be considered in the framework of Article 13.
Should the principle of prior approval be accepted, we think
it would be in order to instruct that Sub-committee to study the
possibility of drafting the pertinent provision of Article 13 so
as to allow the ITO to authorise the continuation, for a limited
period of time, of certain quantitative restrictions for pro-
tective purposes which, after examination, upon a country joining
the Organization, are found to be in conflict with the Charter.
This would give that particular now Member the necessary chance
to change its legislation accordingly without serious damage to
its economy. The period might be stipulated in Article 13, as
has been done elsewhere in the Charter, or it might be left for
the ITO to determine its duration on the merits of each case and
the circumstances surrounding it.
We put forward this suggestion, Mr. Chairman, in the spirit
of understanding and conciliation which we said inspired the
Brazilian Delegation, and in the hope that it might serve as a
basis for a formula equally satisfactory to every country con-
cerned.
-. 12 -
L V. -- 13 -- E/PC/T/A/PV/26
Mr. C. L. TUNG (China): Mr. Chairman, the case for the
under-developed counties has been so ably expounded by the
Delegates of Cuba, India, Chile and the Lebanon, that I feel
we have very little to add; but I wish to supplement and support
their view by the following brief statement:
We are assembled. here to work cut a scheme for the expansion
of world trade and for full employment. We have been persuaded
that there will be a Trade Charter to lay down rules of fair
play and that by sacrificing some freedom of each, we will gain
a large. measure of freedom for all.
Now the problem of trade exp nsion ma.y be tackled simult-
anously by two ways of approach. The first approach is to
open up would markets and keep them open by providing, in the
proposed Charter and multilaberal agreements, an elaberate set
cf legal restrainte against the so-called trade barriers. The
second approach is to find ways and means to develop these world
markets by affording then substantial assistance and a reasonable
amout of protection. We all low that the greatest potential
world market is not to be foud in New York, London, Calcutta
or Shanghad, but in the great masses of people in India, China,
South America, Australia and many other parts of the world.
It is these under-developed countries that need a chance to
station on their own feet through a progressive development of
their economic resources and purchasing power; which in the last
analysie would bo:~t>_ effective demand and contribute to the
genercal expansion of world trade.
Taking these considerations as your yardstick, we cannot
but feel that the provisions of the present draft Charter fall
far short of the prefessed aim. They surround the interests
of the advanced with every safeguard, while they pay V - 14 -
mere lip service to the needs of the under-developed countries.
Take, for instance, the substance of the Charter. Of the 89
Articles presented by the Drafting Committee, probably more then
two--thirds are devoted to the protection of the producing,
manufacturing, financing and trading interests of the highly
developed countries. It is largely for them that reduction of
tariffs, curtailing, of State trading, removal of quantitative
restrictions and other trade barriers have been provided. It is
largely for them, again, that almost unlimited national treatment
in internal taxes and regulations have been insisted upon.
Likewise, it is largely in favour of the producers of certain
primary commodities that inter-governmental arrangements have been
envisaged with little consoderation for the masses of the
consuming public, especially in y tn the undereovcedops no-u'tries.
In a word, tfhest ir approach heeas berdn ovone.
What, then, out ab secotheappcnd roach? Wee hav often
heard the manmrguut orpart fwatd th tono may cosncesions havenm be
made to thunder-developede countrieesaes,a pcilly econnction
with tuhet qanitative restrictions. Nnmothg is farther from
truth. In fact, the provisions of the Charter, while containing
vague promises of assistance" to thesue coentris, place serious
obstacles ien th way of their economic development. Article 13,
fr exampleequiwe, rc such aunim cry, before it -n enforce or
adopt protective measures, tnoe etnmr ptoe rionr lcsutation with
the IaTdOMembers likely too t e affected by hosegb mueasres.
This will seriouslly imitt isee fedom tok taeomp prndt a
effective actions tof gusaearhedlegi; mtttiae intersest. Again,
as providend iArticle any Me25er co ntrymbu p aplgyin quantitative
rrecsioptins onp rtedimagoicultrral pro uctr wdlls i have to apply
similaer rstrictsion toend hes omtic outpuft oh te same products
and epacct iae fxd ratio weenbet the tgroupwo s oommfd tmoiies.
V - 15 -
Is this not a subtle way to perpetuate its dependence on
unpredictable foreign supplies and expose it to the serious
dangers of price disturbance and economic dislocation?
With these restraints placed upon a country like China, it
amounts to saying that if the Chinese people want to consume a
bowl of native rice, they have to get the permission of their
Siamese neighbours. If they want to buy a pair of home-made
shoes, they have to get the consent of the leather manufacturers
and merchants in Argentina. And, if they advise their ladies
not to waste China 's meagre foreign exchange on imported
perfumes, there is bound to be an outery of cosmetic producers
all over the world against such a counsel. Under these and many
other crippling conditions, what chances are there that an
under-developed country can achieve a minimum amount of economic
stability and industrialisation?
In short, Mr. Chairman, the Charter in its present draft
merely seeks to acquire and maintain for the advanced nations
a series of markets which they either have no intention at all
to develop or seem anxious even to prevent from developing.
The results of such a short-sighted policy are too obvious
to need explanation. For the sake of illustration, let us
look at China's commercial history. China has opened up her
Treaty ports to foreign trade for more than a century. Twenty
years ago her import tariff average not more than 5% ad valorem;
even to-day it averages only about 15% which is one of the
lowest schedules in the world. She had never adopted any
quantitative restrictions or exchange control before the war;
neither had she resorted to any subsidy system or to import
and export State trading. She has consistently abided by the
so-called "Open Door" policy. Yet her share in the world trade
has never exceeded 3% in volume. Why? China ' s door has
been thrown wide open for the salesman; the salesman has
E/PC/T/A/PV/26
V V. - 16 - E/PC/T/A/PV/26
grand ideas about effective sales of a wide range of commodities
ready for delivery. But the Mistress of the House simply cannot
afford to pay for them and the deal is off. This shows how
futile it is to devote over two-thirds of the draft Charter
to devise schemes for keeping a market open, while overlooking
the very important problem as to how to develop the purchasing
power within that open market.
We were overjoyed at first to learn from the London and
New York Reports that a Chapter on "Economic Development" had
been added to the Draft Charter. On closer study, however,
we have found to our dismay that while this chapter holds out
high-sounding promises of financial and technical assistance
to the under-developed countries, it seems to aim at doing away
with every possible protective measure essential to their develop-
ment, and binding their economic destiny with a set of water-
tight legal restraints. Such a one-sided policy simply will
not work.
In conclusion, Mr. Chairman, I want to emphasise that the
success of the proposes Charter depends entirely on a harmonized
world economy. This harmony can never be built upon a number
of cripples and harnessed national economies, which the present
draft tends, consciously or unconsciously to create. It is
up to all Delegations here in Geneva, as it was in London and
New York, to exercise their wisdom to work out a judicious
balance between the interests of hoth the under-developed and
the advanced counties, in order to attain that economic harmony
among all nations. Thank you. L - 17 - E /PC/T/A/PV/26
CHAIRMAN: The Delegate of France.
M.LECUYER (France) (Interpretation): After the interesting
and useful statements we have heard, the French Delegation would
only like to add a few remarks. Nobody will be surprised if the
French Delegation recalls that it was among the first to recog-
nise the necessity for special measures to be taken in favour
of young countries. It is almost unnecessary to repeat again
that the progress of industrialization in the world, whilst
raising the standard of living in general of the people, allows
at the same time the improvement of international exchanges.
These are ideas which were put forward at the opening of the
present Session of the Preparatory Committee by the Chairman
of the French Delegation, M. Andre Philip.
We are convinced that it is nobody's intention here to
admit that the Charter should become a rigid instrument, the
provisions of which would tend merely to regularise international
competition and to provide guarantees for acquired positions.
We must, on the contrary, strive that this Charter should be
an instrument of economic and social progress. The French
Delegation is highly interested in the attainment of this aim,
but if the aim is clear its achievement is not easy, and
particular importance must be attached to the methods which will
be used, and it is necessary to measure the immediate and later
consequences.
The French Delegation is convinced that so far the
Preparatory Committee has moved in the right direction and that
the provisions adopted by it are in conformity with the aim
which it strives to achieve. Chapter IV is in this respect
a solemn affirmation of the positive measures which are laid
down in the Charter in favour of countries insufficiently L - 18 - E/PC/T/A/PV/26
industrialized which seem to be equitable and efficient. In
particular, the Charter in its present form, leaves really a
great measure of freedom to Member States for the adoption of
protective measures which may be necessary for their economic
development; it is almost entire liberty as far as tariffs
are concerned.
It did not, however, escape my attention, - at least
basing myself on the statements which were made here in the
course of the last few days - that the young countries have
a tendency to draw a comparison between the conditions for the
establishment of customs tariffs, and the provisions of
Section O of Chapter V concerning quantitative restrictions
which is the subject if the present discussion. Mr. Wilcox
explained his views in this respect in a most happy and
striking fashion when he said that in substance he could
not conceive a Trade Charter which would allow the maintenance
of quantitative restrictions." In fact what are these
quantitative restrictions now? Nothing else than the
consequences of the war and the monetary troubles which have
accompanied and followed the war. Their persistence beyond
a transitory period cannot be conceived otherwise than as a
temporary means of avoiding the prolongation of grave dangers
which unfavourable balances of payments bring to world trade.
We must not forget that one of the essential aims of Section
C is precisely the progressive elimination of quantitative
restrictions. Nobody is more in favour of their complete
disappearance than the French Delegation. Their temporary
maintenance within the conditions laid down in Article 26
does not correspond, and must not correspond, to the idea
of a more or less disguised system of protection. They are
only the application on the economic plans of the monetary
system laid down in the Bretton Woods Agreement. L - 19 - E/PC/T/A/PV/26
I am inclined to think, and I think that this idea should
be acceptable to all, that customs tariffs are the only means
which should be used in order to give protection to their
economy by the States which are prepared to subscribe to this
contract based on good faith which is our idea of this Charter.
It was said that quantitative restrictions are the most
practical means and the least dangerous means, of achieving
protection, with regard to national markets. I must confess
is
that certain French circles share this idea, but this/not the
opinion of the French Government, which can invoke in this
respect the experience acquired over a period of ten years,
and I feel personally entitled to speak on this question,
since I was in charge of the application of these measures,
and we could in this way observe the fact that such a system,
and in particular in the form of quotas, tended to a limitation
of international exchanges, and in the opinion of the French
Government is not the best means of achieving the contemplated
aim. V.
- 20 -
I also Kknow that so,e were supprised, in comparing Articles
13 and 26 to see that it was possible to have recourse to
restrictions without previous consultation with the Organization,
while this consultation is required for protective measures
tending to facilitate economic development; but the two
possibilities are very different.
As far as Article 26 is concerned, the aim is to protect
balance of payments which is in danger. There is urgency,
and any delay may bring about a catastrophe. On the other
hand, the creation of a new industry cannot be conceived
without previous studies of all kinds, and these studies may
be carried on while the procedure laid down in Article 13 is
applied .
In addition, I do not hesitate to say that in such a case
the creation of an industry before consultation with the Organ-
ization would be a danger even for the State concerned. Can
we imagine what would happen if, this industry being already
created, the Organization should decide that this creation is
not justified? This would represent considerable losses in
capital and in manpower, and if, in order to avoid such
consequences, the Organization should be tempted to approve
the protective measure already taken, in that case there would
be prejudice in respect of one or several other States. In
one case, as in the other, international relations would certainly
not be improved.
The French Delegation is thus inclined to think that, in the
last analysis, Section C. should be maintained without any
substantial alteration. It is not because we think that this
Section is entirely satisfactory to the demands of industrialised
countries which have an unfavourable balance-of-payments,in
conformity with Article 26. But we must emphasize once more that
E/PC/T/A/PV26 - 21 -
the whole of this text constitutes a transaction - a transaction
which is far from being perfect, but which we have accepted in
London because it was the best we could achieve.
I am afraid that if we try to modify the provisions of this
Section, the whole of the five Articles will be again under
discussion, and, if I can base myself on the statement of the
Delegate of the United States, the whole Charter may also come
under discussion again.
It was also said this morning that the Charter tennis to
favour industrialised countries. It seems that it was the
Delegate of the Lebanon who expressed that view, but I hope he
will allow me to say that I cannot share this opinion.
Chapter IV and Chapter VII of the Charter, for example, are
not designed to favour industrialised countries; but there is also
another side to the question. A failure to achieve this Charter
would have deplorable effects for the whole world, but certainly
those effects would be graver for the young countries than for
old and industrialized counties: the latter would still have their
resources to fall back upon.
The French Delegation considers that any improvement in that
respect must be sought - and I suggest this view to other
Delegations - not in an amendment of Section C. but rather in a
revision of the provisions of Chapter IV.
CHAIRMAN: The Delegate of New Zealand.
Mr. L.C . WEBB (New Zealand): Mr. Chairman, I confess that
I regard this debate as one of the most unfortunate and unfruitful
that we have had in the course of this Conference. It has been
held in three organs of the Conference; it has been presided
over by three Chairman, and many of those who are now participating
did not hear its beginning. It seems to me that from the moment
V - 22 -
it oaren into this Commission, it became a matter of wide and, I
am afraid, somewhat provocative generalities and lost its
direction and its purpose.
I would like to make it plain, Mr. Chairman, that as far as
my Delegation is concerned, in raising this issue we are not
seeking to give free rein to protectionism. Indeed, there are
some respects in which we think that protectionism is given too
free a rein in this Charter.
We are raising certain precise issues in connection with
Article 13 - issues which we think deserve rather careful and
precise and minute discussion. The provision in Article 13 for
prior approval for certain measures of industrial protectionism
raises in our minds two questions. The first question is: Is
this provision consistent with what we have agreed to call here
the balance of obligations in the Charter? The second question
is: Is this provision for prior approval, as we have it in
Article 13, administratively practicable?
Now, if we take first the question of the balance of
obligations in the Charter, there are, it seems to me, two
difficulties. The first difficulty is that there are greater
opportunities in the Charter for agricultural protectionism
than for industrial protectionism. I think that is a matter
of fact. I think that some of those who have taken a very
different line in this discussion from what the New Zealand
Delegation has taken, are disposed to admit that, and that
is a very difficult fact for those countries which depend
mainly on their agricultural industries and are, at the same
time, attempting some sort of industrial development to give
a better economic balance.
E/PC/T/A/PV/26
V - 23 -
The second difficulty we encounter when we consider this
matter of balance of obligations is that if we look carefully at
Article 13 and if we follow the implications through the Charter we
find that its effect is, in fact, a curiously unbalanced effect.
Article 13 means this: It means that for countries which prefer
the method of subsidization of industrial protection there are no
effective restrictions in the Charter, and there is certainly no
question of prior approval. For those who prefer the method of
tariffs as long as the tariff concerned is unbound, there is no
effective restriction on protections anywhere in the Charter, and
I suspect that when we come to consider this issue of internal
taxes as a protective measure, we are going to find that, for
reasons which I will not go into now, there is no option but also
to exempt internal takes for protective purposes from this
procedure of prior approval because, in effect, when you analyse it
down, a protective tax is a subsidy in another guise, cr can be
made to appear so.
Now, what then is the justification for placing quantitative
regulations as protective device in a different category from any
other protective device in the Charter? Now, Mr. Wilcox, who at
one stage in this debate decended. upon us in wrath rather like an
angel of th e Lord, told. us that the reason was that quantitative
restrictions is, of all devieen, the most vicious. lt vwas if I
remember some of his phrase, a sanctification of autarchy, an
incitementr. to economic warfare. We were told. that it destroyed
competition, that it reant that goods were imported without regard
to quality or price, and. that it meant that every commercial
transaction was the subject of a political bargain. Now of course
that admittedly is a serious matter, but I suspect that Mr. Wilcox
J.
E/PC/T/A/PV/26 E/PC/ T/A/PV/26
a
was using/familiar controvershal device and oreating a monster in his
own imagination and then slaying it, Because,after all, practically
all the countries which are now represented at this table are, at
this moment, employing the device of quantitative regulation,
and is it going to be said tha they are all applying it, or even
that most of them are applying it, in the manner suggested by
Mr. Wilcox? I do not think that that is the case. I can say
from experience that competition functions under the
system of quantitative regulation; I can say that quality and price
have their due place, and I can say that it is no more true than it
is of tariffs that every commercial transaction is the subject of a
political bargain. But even supposing that we admit that
quantitative regulation is in some circumstances a word device,
from the point of view of world trade generally speaking, than
subsidies and tariffs and internal taxes, it does not got us beyond
one point which is the core of this difficulty.
I would say, and I think that most fair-minded people. .
agree with me, that in certain cumcirnsetacsd an certain economies
the method of quantitative regulation is a better method of
pvctoton than any of the othrez ethods we have beecntalking about--
and I say 'bette" "rmeaning better in teh interests of the country
concerned and better in the interests of world trade.
It semes to me that thosec ountreis which find themselves in
the position of being accustomed to use quantitative restrictionsa s
a protectiev device nad o f finding it the best device for their own
economies are placed in a very ufonrtunate position by articlee 13,
because here, for the first tmei in the Charter, we have a dierct
impingement / severenigty. Itm eans that smoe countries under
rticle 13 must go to the Organization and submit major issues
affecting their eoonomic welfare to the determination of an
international institution. Now, if we are all prepared to do that
- 24 -
J. 25 E/PC/T/A/PV/26f,-
on equal mters, well and good, but I might argue here - and I think
I might getm soe support for it - that, for instance, the devioce f
subsidies, particularly export subsidies, is a device which has
wrought ae grat deal ofrmham in this world, and I might propose
that we should accept the principle of prior approval for subsidies,
particularly
for export subsidies. I know that that proposition would
not be accepted, and trehe ason why it would not be accepted is
just this: that the countries who use those subsidiknlesow that
they cannot accept a Charter which would involve mthnego ig in to
the Organization and allowinge th Organization dto ecide issues of
really major importance. That is the real reason why dwe o not
require prior approval in those cases.
I would ask those whoe ar pressing this issue of prior
approval now to consider the position of esom countries who are
placed in this position by article 13.
E/PCA/T/ /PV/ 26
J . G 26 E/PC/T/A/PV/26
Now I come to the second point which was raised in
the early part of this discussion and which unfortunately has never
once been touched on in the course of this Debate, and that is
the question of whtether Article 13 as it stands now is an
administratively practicable Article. Remember the procedure
under that Article. The Organisation is required, among other
things, to judge the application of a Member for the right to set
up a given industry under quantitative restrictions by certain
criteria or productivity and by certain other tests. Now it is
obvious to me that if that procedure is to have a chance of
functioning, it must mean that the International Trade Organisation
must come into existence immediately, with a staff of experts
who are fully capable of taking hold of an application from a
given country, examining it, establishing criteria of
productivity and saying this proposal for an industry does or
does not measure to those criteria; and the Organisation must
be able to do that at once, because as soon as the Charter comes
into force it would appear that all countries who use quantitative
restrictions now for protective purposes, or who seek to set up
some new industry, must come to the Organisation and get approval,
and. that means a flood of applications.
I do not believe that any international organisation is
capable of doing those things immediately, or, indeed, until
some years have elapsed - until a staff has been built up, until
experience has been gathered, and until data has been collected.
I just cannot imagine that prior approval would work in
those circumstances. Furthermore, how after all is it possible
to decide whether a given industry, a given project, is justified
by these objective standards.
There are many great industrial States represented here, G 27 E/PC/T/A/PV/26
and I wonder how many of them would be great industrial States
now, if every industry which they started by the method of
protection had first been required to justify itself by certain
objective standards of productivity. I do not think that we
should seek the responsibility of prior approval for the
International Trade Organisation. I do not think it can
conceivably work, for administrative reasons. I think that it
will immediately produce what we do not want to have, and that
is a split between the under-developed. and the developed countries.
I think the jury is an unsuitable jury.
It seems so me that if we are going to look at this issue
realistically there is in this Charter one safeguard. against
cases of protectionism - all forms of protectionism - and that is
Article 35; and. if the procedure in Article 35 works, then you
have your safeguard, and if the procedure in Article 35
does not work, then the whole Charter does not work and you might
as well forget about it.
Mr. Chairman, I feel, as I have said at the beginning, that
this Debate has been unsatisfactory, because we have not really
got dowan to the real issue, and. I perhaps doubt whether
this Commission is the right place to get down to it, and I
would unhesitatingly support the suggestion of the Delegate for
Brazil, that this matter should go back to the Sub-Committee
which is dealing with Chapter IV.
We might agree, what so far has not been agreed, that this
question is mere appropriately dealt with in Chapter IV than
in other parts of the Charter; and I feel that, late as it is in
our discussions, it is better that the Committee should immediately
face the question as to whether Article 13 in its present form
does or does not present a practicable administrative procedure. ER
28 E/PC/T/A/PV/26
CHAIRMAN: We have still two more speakers on the list, and
although the time is late I hope you will agree to terminate the
discussion today. The first speaker is the Delegate of the United
Kingdom.
Mr. J.R.C. HELMORE (United Kingdom): Mr. Chairman, I want at
any rate to begin by agreeing with part of what the Delegate of New
Zealand has just said. He has, I think, brought this debate back
to the real issue which we have here discussed. I agree with him
that it is unfortunate that there has been an attempt to high-light
not
this issue as one/to achieve an objective but as a definite division
between two classes of countries sitting round this table. I
believe that is a totally unreal distinction between those two
classes, and I am certain that, if we go on considering like that,
not only shall we get nowhere, which may seem very unfortunate to us,
but the consequences for world trade will be absolutely disastrous.
I can put my point very shortly. It is this, that unless we
solve this problem, there will be every prospect that the world will
fail to reach both these objectives, objectives at which it expects us
to arrive. Those two objectives are: expansion of trade, and
expansion of production and I am absolutely convinced that you
cannot. have one without the other. If we divide ourselves into
those who say "Expansion of trade is the only thing that matters",
and those who say "Expansion of eroduction is the only thing that
matters", ad still more if those two classes say "The expansion of
our trade is the only thing that matters", and "The expansion of our e
production is the only thing that matters", then the worn forld is i
a very serious, trouble indeed.
take up there a point made by the DelegaLte of Tbanon.H E
said quite rightly that there wwaouldalys be sellers of capital
equipment for industrial development. The question I think he E/PC/T/A/PV/26 should also ask himself in whether there will always be buyers,
because,if we reduce the volume of international trade by piling up
restrictions of various kinds to a point at which countries wishing
to acquire capital goods cannot acquire the exchange in which to
pay for them, then all that will be quite useless and. it will be
very had for everyone. But we have get to look at it in an entirely
different way. That is how can we see that the volume of
international trade so increases as to enable industrial development
and how can we see that industrial development takes place so that
trade can expand.
Having said that, Mr. Chairman, I come back to the issue of
protection for . undertakings in the countries which wish
to establish them. How is that to be done, and what are the tools
that can be used, and what are the Iimitations which we should agree
should apply to the use of those tools? I think, Mr. Chairman,
that everybody must agree that compIete freedom to use quantitative
regulations. an easy amendment for which would be the de b.i tiie ;LIetlon of
ence tfher filrs2t raouldt9 incI d C5nN1- bob-y 'y god. Nobody
wepouldd obsegn rarecatrtijtthee Gao r, ouevtybdy w.d be free to
us pwhatteal;anmdvernomicoliw*engeneco. sdtr>he ha( to look after
hielf. The underpdevcountreesl~le eO ,nd, ountries selling
primary pr,.oduct wonuld fid tehatindostrim ith ualsed countries would
use their strtengoth o fwrce edon ctsh prie were obtained for
othce prduts trehey wioe soelng rtd maa wo.I rketdo It es not
hvapypmuen nomer chw tsollerr m,rkleatbuh aey t;y tnbod who thinks
tehseat rs'f aeket is gogoing iso ;ast for long, , d sd Diua g
elf. Therindustraliseds'.,rt Awo ld find, Wn-r ,urn once
they had started, and there would always be something start the
process, that they were driven to restrict their imports and so we
should find ourselves in a descending apiral. So,t $;o, ifor my Part, I
haSLUrlaetiheno question of the use of quantitativestr as ath s . '
or less, without mrntioning Uhat inn he>;harter<-.< ....:j- 30
We are driven to say to ourselves there must be some check on
quantitative restrictions. Mr. Webb has just told us that he
believes in a balance of sacrifice for a balance of advantage
and that that is the way quantitative restrictions are clearly
dealt with. He mentioned other devices where there is no
infringement of national sovereignty, because the Organization
has no power. I do not believe it. In Article 24, in
Paragraph 3 of the New York Draft we read:-
"The Organization if it finds that a Member has, without
sufficient justification, having regard to the provisions of
the Charter as a whole, failed to negotiate with such complaining
Member in accordance with the requirements of Paragraph 1 of
this Article, may determine that the complaining Member, or
in exceptional cases the Members of the Organization generally,
shall .. ... be entitled to withhold 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 ......." and then the Member
complained against can leave the Organization. That seems to
me to be a pretty definite and clear sanction in connection
with tariff negotiations.
Take the case of subsidies, whenever one mentions the
possibility of using subsidies for development or protection,
one finds there are only two classes of countries; one which
cannot possibly a#Ivi. new sub :L.cij and those whose budget is so
small that they cannot pay a subsidy anyway, but in that case
there is still the sanction of Article 35.
Now we are asked why should the position of applying
quantitative restrictions be slightly different? In other
words, why should we have prior approval rather than the
challenge of complaint, and so forth?
L
E/PC/T/A/PV/26 L - 31 - E/PC/T/A/PV/26
Here I am going to resort to the bad habit which I have
cought from my neighbours; I will quote an example. There
are certain drugs which are extremely valuable when used under
proper control, but they are not generally on sale, and one has
to obtain the prior approval of the doctor before using them.
That seams to be exactly the case of quantitative restrictions.
It has been said that quantitative restrictions are a very
effective method, and to the extent that they are effective they
oan be dangerous, and because we recognize the danger to
international trade and to the true interests of all of us, we
say that quantitative restrictions must have a tighter system
of control than less dangerous methods. That is why we feel
that the present broad scheme of Article 13 was right and that
prior approval should be sought.
In support of prior approval, I would like very much to
express agreement with what the Delegate of France has said,
Who is going to risk his capital and his time in setting up
an industry on the basis that he will get protection by means
of quantitative restrictions - and it may be perfectly right
that he should - if he knows that the use of that quantitative
restriction oan subsequently be complained against, and is
liable to be withdrawn? Obviously, it is necessary for
people who are going to set up new undertakings to know
the conditions under which they will operate during the
early years of their existence, and to know beforehand. If
there is any virtue at all in some form of approval by the
Organization, it means approval by the Organization beforehand.
We have had various arguments against prior approval, the
first of which - and I think the real argument - is the danger
of forestalment. If the United Kingdom, for instance, wishes
to develop the manufacture of china dogs and puts in a claim L - 32 - E/PC/T/A/PV/ 26
to the Organization for leave to apply quantitative restrictions
in the earliest days of the manufacture of china dogs, it is
highly probably the news would get about even if it got
no further than our near neighbours Norway, Belgium, France,
and probably Czechoslovakia - and it is possible there might
be a rather dangerous increase in the imports of china dogs
into the United Kingdom while that application was under
consideration. I do not believe it is beyond the wit of the
Sub-committee in considering this question to offer a solution
now; I think it is a thing which would be much better worked
out in the sub-committee.
The second argument is that of the transition from the
period of no Charter to that of a Charter with prior approval.
What is to happen to the cases where this is being used. at the
time the Charter comes into force? Obviously, it is absurd
to suppose that the Charter can come into force at midday on
Sunday and by Sunday next all the applications will have come
in and by Monday there will be approval or disapproval. That
again is a point which the Sub-Committee will have to solve.
The last argument against prior approval was the administra-
tive argument; generally that this will mean too much work for the
Organization. It seems to me that that argument applies equally
against subsequent approval. If there are a lot of these
applications and prior approval cannot be got in time, or cannot
be got through the Organization, or will choke Organization;
then equally in there are a lot of people who can apply, later;
subsequent approval will r '- the Organization. That
again is a practical problem for the sub-Committee to o z we;.k out, L - 33 - E/PC/T/A/PV/26
For my own part I believe they have got to work it out on
the basis of prior approval. I do not believe there is any
other real solution to this problem. In saying this, I do
not in the least fail to recognize the horrors from an adminis,
trative policy point of view, of the problems I suggest we should
set the Sub-committee. I notice the Sub-committee is liking
gloomier and gloomier as I go along, but I have a good deal of
confidence in that Sub-committee. Therefore, I join with
the Delegate of Brazil,who made a very statesmanlike speech on
this subject, and with the Delegate of New Zealand, in saying
this should go back to the Sub-committee with instructions to
work it out on the basis of Article 13. E/PC/T/A/PV/ 26
34
CHAIRMAN: The Delegate of Australia.
DR. H.C. COOMBS (Australia): Mr. Chairman, I do not want to
say a great deal. First of all, I would say that listening to the
debate this morning I have been grateful for two things. Firstly,
I am grateful to the Delegate for China, who so kindly restored
Australia's status as an under-developed country. Secondly, I am
grateful for the descent from the ex capita doctrinal level to a
more pedestrian level, on which I feel that most of our best work
has been done.
If I may say, so as Chairman of the Committee on Chapter IV,
I think the suggestion put forward first of all by the
Brazilian Delegate and supported. by the New Zealand. and United
Kingdom Delegates that the work on this quite difficult problem
should be concentrated in the work of Chapter IV is an excellent
one; It would enable the various sub-committees an Chapter V to
get ahead with their work and, like Mr. Helmore, I have great faith
in the human ingenuity at this conference, and I do not doubt that
a way will be found around these problems.
CHAIRMAN: I consider the debate is closed. To sum up in a
very few words, the position seems to me to be that we have had
two lines of thought expressed during the debate. One, that the
integrity of obligations to be undertaken in the clauses of
Chapter V must be preserved; the other, that means should be
provided whereby certain countries may make use of protective
measures for their economic development. G E/PC/T/A/PV/26
35
The issue tends to centre on the question of prior approval
of the Organisation, and the opinion of the majority appears
to be that the solution should be sought which will harmonise
this principle of prior approval with the need of the countries
concerned for further economic development.
I now propose that we adopt the suggestion made by the
Brazilian Delegate and supported by the Delegates of New Zealand
and the United Kingdom, and accepted by the Chairman of the Sub-
Committee on Chapter IV, that the further study of the problem
of economic development be concentrated in the Sub-Committee
dealing with Chapter IV, in particular Article 13, and that that
Sub-Committee should endeavour to arrive at constructive and
practical proposals that might be acceptable to all of us.
CHAIRMAN: Thc Delegate of Cuba.
Mr. GUTIERREZ (Cuba): Mr. Chairman, the suggestion to pass
this matter to the Sub-Committee on Chapter IV puts the Cuban
Delegation in a very, very embrrassing position, because we have
been very careful not to take a stand in relation to Article be
We at this moment have not decided if we are in favour of
prior consultation or subsequent consultation, because we
approached the solution of the problem in a different way by
means of Amendments to Articles 25, 30 and 15 - Amendments to
co-ordinate the different views expressed here. If these Articles
van be properly amended then we would not have any nesitation in
accepting prior consultation; but if they are not amended we
cannot accept prior consultation. So we consider it would be
preferable having regard to the views expressed in the Sub-Committee
on Chapter IV, to have a special Sub-Committee of this Commission A 36
to deal with the issue of Article 13 and the special
connnection of this Article with Articles 25, 30 and 15.
If it is not possible, then t authorise the Committee
on Chapter IV to deal with these aspects of the relation of
Article 13 with Articles 25, 30 and 15; and if that is not yet
possible, I would wish to express my formal reservation to
Articles 13, 25 and 15.
CHAIRMAN: I think the Cuban Delegate felt satisfaction in
repeating the words of my proposal that the problem of economic
development be concentrated in the Sub-Committee for the further
study of the whole problem; so the Sub-Committee on Chapter IV
will be invited to take into consideration the application of
the problem all through the Charter.
The Delegate of China.
Mr. TUNG (China): The Chinese Delegation have no authority
to go back to the Committee on Chapter IV to study and report
again, but I understand there was appointed a sub-Committee to
study Article 25 under the Chairmanship of Mr. Suetens. Is it
understood that Article 25 is going to go to that Sub-Committee
on Chapter IV, or not?
CHAIRMAN: My intention is to follow the line aready
adopted by Mr. Suetens in the previous meeting to appoint a
separate Sub-Committee dealing with Articles 25 and 27.
But obviously such Amendments to those two Articles as relate
to the question of economic development will go through the
Sub-Committee presided over by Dr. Coombs.
The Delegate of India. E/PC/T/A/PV/26
37
Mr. PILLAI (India): Mr. Chairman, I should like, if I may,
to ask a question. Does the proposal put from the Chair mean
that a decision has been taken on the question of prior approval?
CHAIRMAN: I have done it in this way, that I have
given a personal resume of the discussion, and have said that it
appeared to be the opinion of the majority that a solution should
be sought which should harmonise prior approval with the needs of
the countries for economic development; but it did not include
that in the Draft Resolution I submitted to this Meeting. I thought
that was entirely unnecessary. It is for everybody who reads the
Amendments of the last three Sessions to make a list of those
who are in favour of prior approval, and those who have their
doubts. E/PC/T/A/PV/26
38
Sir RAGHAVAN PILLAI (India): Mr. Chairman, our position
briefly is this. If the question of prior approval is left as an
open issue, we have no objection whatever to the matter being left
to the Sub-Committee. If it is not so, we cannot possibly agree.
CHAIRMAN: The position in the Preparatory Committee is that
we are aiming at unanimous decisions. Until we have arrived
at those, the questions are always open issues, but I will say that
the minutes of this discussion will show that there was a considerable
majority in favour of prior consultation. But the question has not
been decided yet, and I would very strongly object to any decision
being taken in such issue, because, I repeat it again, we are
aiming at unanimity.
Dr. A.B. SPEEKENBRINK (Netherlands): Mr. Chairman, you just
mentioned the Sub-Committee on Articles 25 and 27. I remember
that, at the last meeting, the question was still open because it
was left to the Chair to appoint the Sub-Committee.
Mr. F. GARCIA OLDINI (Chile) (Interpretation) Mr. Chairman,
it was said that Article 15 would also go to the Sub-Committee. Is
it your view that Article 15, insofar as it deals with under-
developed countries, should also fall within the competence of the
Sub-Committee on Chapter IV?
CHAIRMAN: Yes. May I take it now that we all approve the
formal proposal I made to refer the whole problem of economic
development to Dr. Coombs' Sub-Committee? Agreed.
I have still to establish the Sub-Committee on Articles 25 and
27.. As Mr. Speekenbrink has said, it was left to the Chair to
decide, but I find, in the minutes of the last meeting presided over
by Mr. Suetens, that India made a proposal, and I do not think I
can do any better than repeat what he then said. He proposed that ER
E/PC/T/A/PV/26
39
the Sub-Committee on Articles 25 and 27 should be composed of the
representatives of China, Czechoslovakia, United States, the
Netherlands, United Kingdom and Norway, and on the proposal of the
Delegate of Canada, the name of Brazil was added. As it was left
to the Chairman to appoint the Sub-Committee, I do not have to ask
whether you agree, but nevertheless, I would feel more happy if I
could take it that you really all agree.
Mr. C.L. TUNG (China): Mr. Chairman, in the previous meeting,
the Chinese Delegation proposed to add the Indian Delegation into
the Sub-Committee, but this proposal was declined by the Indian
Delegate. I propose today to add the representative of Cuba to
take the Indian Delegate's place in that Sub-Committee.
CHAIRMAN: There is a difficulty. You know quite well that
I would welcome the delegate of Cuba, but we already have seven
Members on the Sub-Committee.
Dr. GUSTAVO GUTIERREZ (Cuba): Mr. Chairman, allow me to thank
my Chinese colleague very much, but we prefer not to go on the Sub-
Committee because we have too much work as it is, and secondly as
there is a great majority of nations in favour of the elimination
of quantitative restrictions, we propose that our Brazilian Delegate,
who has come into the ranks of the developed countries, should take
care of us.
Mr. J.G. TORRES (Brazil): Mr. Chairman, I would just like to
say that, in spite of what the Delegate of Cuba has just said, we
would be very happy to take care of the needs of the non-developed
countries. ER
E/PC /T/A/PV/26
40
CHAIRMAN: Thank you. That terminates our work today, but
I will make an announcement. All this has put a very heavy burden
on the Sub-Committee on Chapter IV, and I have received information
that we shall get more time to prepare, as the meeting scheduled
for Monday has been cancelled, and the Sub-Committee on Chapter IV
will meet on Wednesday at 10.30 in the morning.
The meeting is adjourned.
The meeting rose at 1.50 p.m. |
GATT Library | hf216vx6577 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty-Sixth Meeting of Commission "B" Held on Friday, 18th July, 1947, at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, July 18, 1947 | United Nations. Economic and Social Council | 18/07/1947 | official documents | E/PC/T/B/PV/26 and E/PC/T/B/PV/24-26 | https://exhibits.stanford.edu/gatt/catalog/hf216vx6577 | hf216vx6577_90250104.xml | GATT_155 | 13,434 | 80,061 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/B/PV/26.
18th July 1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
TWENTY-SIXTH MEETING OF COMMISSION "B" HELD
ON FRIDAY, 18TH JULY, 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).
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. G. 2 E/PC/T/B/PV/26.
CHAIRMAN: The Meeting is called to order.
We shall resume the discussion on the composition of the
Executive Board at the point where we left off last night.
The next speaker on my list is the Delegate of Canada.
Mr. COUILLARD (Canada): Mr. Chairman, I feel that most
of the substantive aspects of this question have already been
dealt with. We find ourselves in agreement with quite a few
Points which have been brought up by most of the Delegations,
so that, speaking on generalities, I think it might serve a
useful purpose, if the Commission is agreeable, that I should
discuss, as briefly as I possibly can, the specific Canadian
proposal on Article 68 as contained in page .60 of the Drafting
Committee's report.
Our impression is that this proposal (which is at the
top of page 60) meets a good number of the views of most
Delegations as they were expressed yesterday.
Firstly, paragraph 1, on the number of Members of the
Executive Board, We do not consider this a question of
principle. It is rather technical problem, I think, which
should be solved on technical grounds, and we are agreed on
that point with most Delegations. Our proposal, you will
notice, provides for fifteen Members, and in this figure we
Agree with the Delegates of Norway and France, and other
Delegates who spoke yesterday in favour of the figure fifteen.
The reasons we have in mind are very much those which
Mr. Colban advanced yesterday - possibly first and foremost
the question of manouvreability - of the danger of a larger
Body preventing the efficient functioning of this Board.
We envisage the Board as being a businesslike organisation E/PC/T/B/PV/26
concerned with day to day problems, and in that sense it should
be executive and not a sounding board, or a debating society,
as Mr. Colban mentioned.
It should be borne in mind also that the Board will
very rarely be limited to fifteen Members. There will be, for
example, the Director-General, the Chairmen of various other
Commissions, and representatives of specialised agencies.
Now those people, with their advisers, coupled with the basic
fifteen Members and their advisers, already present us with an
appreciable number of people around the table. Our views, as
I say, are not fixed on this point. We might consent to provide
for expansion in the number of Members to the Board, although
we would favour a ratio between the number of Members on the
Board and the number of Members of the Organisation of something
like one in four.
The second point which comes up in our proposal is the
question of permanent seats. You will notice that obviously
our proposal favours the allocation of permanent seats on the
basis of economic importance and functional importance, as well
as geographical distribution. Our attitude in this respect is
consistent with the views we have expressed in previous Meetings
in connection with voting in the Conference.
We recognise that the economic importance of Members of the
Organisation should be reflected, and that those Members should be
allocated, a seat on the Board. In this respect, we agree with
the Delegates of Brazil and the United Kingdom, Cuba, Czecho-
slovakia, China, France and Australia - Australia, in
spite of the fact that they recognise that obviously there are
economically and functionally important Members that it
should not be necessary to allocate seats.
G
3 E/PC/T/B/PV/26
Indeed, we have gene further then the straight allocation
of permanent seats, and in this respect we meet the Balgian
view of yesterday, by naming the countries which we think should
be allocated permanent seats on the Board. This is, I think, a
practical attitude to this problem. If, as many speakers
yesterday have recognised, we cannot take an objective view in
regard to setting up a formula for determine the allocation
of permanent seats, if we agree that this formula should be
based on this or that functional principle, then I think we
should decide now and get down to brass tacks, as the Belgian
Delegate suggested.
The countries we show are chosen on a purely matter of fact
principle - on an empirical basis - the United States, United
Kingdom, France, Canada - on a basis of international trade;
India and China because of the vast potentialities of those
countries in the realm of the ITO. Therefore we think that the
point of representativeness, which was made by the Australian
Delegate yesterday, is met. It will provide for representation.
of the functionally important countries, and even under 1 (a)
we maintain that we meet the request for representativeness on a
geographical distribution basis.
This brings me to 1 (b) on our proposal, which is put
forward specifically to meet the geographical distribution
argument which was advanced here yesterday, and particularly well
expounded, I thought, by the Cuban Delegate. We provide for one
seat for either Australia or New Zealand, one seat in Europe
for Benelux, and two Latin-American countries. The remaining
five Members, under 1 (c), would complete the representativeness
of the Board both geographically and economically.
4 5~~~
S E P /C/T/B/PV/26
On the questiofon majority, we ehao n) strovgews.S.
.e would ratherelcave itot3 eh. Coef-rcnoe to determine it by
a two-thirds majority of its Members, although on this point -
-n the poinof:o majorityge er nally speaking - I think we
uw-ld be quitwe illing to meet eth wish of the majority of
theo Cmmission.
-lh, Mr. Chairman, briefly this is ourpPo -osal. Radaing
over the vew's expeosed, e-seoraey, do feell that the
proposal eeets - partially, at any aste -antlecast one, or
ineeda twoorr thres, in certaincaases,off the vew s dvvanced
by various Members.
* are ready, of course, to-discuss this proposal in
detail, and indeed it might be preferable to do so elsewhere,
but I would point out, in conclusion, that our proposal
provides for what we think is a workable number of Members. It
provides for permanencies, which the majority of speakers
yesterday at least thought desirable. It also provides for the
important Australian point of representativeness on a
geographical distribution basis, and an economic deficiency
basis.
CHAIRMAN: The Delegate for South Africa.
Dr. W.C. NAUDE (South Africa): Mr. Chairman, in order
to establish the very fine set of principles on which I work
and talk, I would like my colleagues to turn to Page 60,
the first column, ten lines from the bottom. You will find
that the Brazilian Delegate proposes that the Executive
Board should have two Members from South Africa. That is at
least one more Member than we expected at any time on the
Executive Board. (Laughter). S 6 E/PC/T/B/PV/26
The way we would like to look at this problem, as Mr.
Colban said yesterday, is to find what would be the most
acceptable formula, or the most acceptable composition. We all
have our pet children, but we must recognize that, in order to
get some sort of agreement, we must produce something on a
pretty broad basis.
Having said that, I recognize that there are very simple
solutions for this problem. We had them in London, we had
them in New York, and they re-appear in this document, but we
feel that simplicity in this case will not necessarily lead
us to a compromise for a solution.
In the discussion yesterday, one or two of my colleagues
had some trouble about the designation of permanent seats. I
might mention that we can overcome that by talking about
scheduled seats, or appointed seats, if the t is any help to
people who do not like the word permanent, As regards the
total number of the Executive Board, we have always felt that
a small number is prefereble. ER 7 E/PC/T/B/PV/26
The issue now is the total number of Members in the Executive
Board. We have always favoured the number of 15 for the reasons
which have been expounded so very well; at the same time, however,
we are very conscious of the arguments that have been made that you
cannot adequately take care of the various economies at various
stages of development throughout the world - various geographical
concentrations - in a body as small as 15. We would have preferred
15, but it seems to us that we will probably have a maximum of 18.
The British formula, which appeals to us a very great deal, has
a very substantial weakness in a number of proposals, which is that
they do not recognise the possibility of changing conditions. We
have heard a great deal about the potentiality of countries that
should be recognised. Any rigid formula makes it impossible to
take care of changing conditions. That, incidentally, is a weakness
in the Canadian proposal, and that is the advantage of having some
such as that
sort of objective pseudo-scientific formulae,/which was developed
in New York. They, at least,suggest some sort of objective
criteria which must be specified, and we would take care of the
changing conditions of development in our economies. We feel
that the British formula is something in the right direction, and,
in fact, it could be found, at the outcome of the very trying
labours of the Drafting Committee in New York, that they developed
one or two other formulae which come very close to the British one;
insofar as the elements taken into consideration are very similar,
except for one or two, and that is why we have some degree of
favour for the formulae that you could find between the British
it,
formula and alternatives A and B. That, I take/will be called a
technical matter , and probably experts would find a solution to it.
The alternatives A and B, that I referred to, are on pages 54
and 55. What we favour especially throughout alternative B is
that it must be recognised once and for all that you have not only E/PC/T/B/PV/26
countries of chief economic importance end small fry, but also
some thing in the middle. There is a middle group that should be
taken care of, in our view, and that possibility is brought out
in alternative B. The possibility of incorporating a so-called
middle group has another advent ago in that the middle group will
comprise a number of countries that are, at the present time, in
what might be called a very active process of development, so that
you would always be sure that the Executive Board would have
adequate representation of that type of economy. In fact, under
any system of having permanent seats, you will also find that, in
the first category, you will have countries undergoing development.
Possibly, countries in category A would all be highly industrialised
opuntries, who would look at the problems of the world from their
own point of view. You would notice that, in most schemes you
and
have a permanent point of class,/countries that are quite proud
of saying that they are under-developed will be in the top category
in any case. I gather that even the United Kingdom consider that
they are an under-developed country, and that they will also
represent the point of view of under-developed countries, so that
the argument that under-developed countries are not taken care of
by not having permanent,and semi-permanent seats, to my mind falls
to the ground.
I should think that the question of the division in the Executive
Board between the appointed seat and the semi-permanent seats
and other seats, is linked up with what Mr. Colban said yesterday
that we ought to give some thought to the total number once we
start dividing it into classes, and that it would be of some -
significance how many coues we iwe went to consipermanentPERM
and hanw mny semi-permanent and in that regard, I kKthi alaterntive
B balances this problem. I believe sit i something like 7
apernent seats, 5 semi-permanent and 6 other se,ats'making up a
total of1 8.
ER 9
ER E/PC/T/B/PV/26
In what I have said I was attempting really to bring out our
preference for something like alternative B on page 55.
If I may be allowed to make one more observation in relation
to what my Canadian colleague has just mentioned, and attempted to
justify in his proposal - it is a very ingenious proposal - I might
mention that, in the minds of some of us who are not good geographical
experts, there is a bit of doubt about whether one capital is north
or south of the equator, or whether it is on the equator - but I
believe that it is ten miles south of it: Well, what I do have in
mind is that one tremendous country has completely disappeared from
the globe in the Canadian proposal. I am not speaking about South
Africa itself, which is a very small portion of a large continent,
but there is no representation at all in this allocation proposed.
by the Canadian Delegation.
I think that there are many continents in the world that are
capable of vast development, and I feel I must guard against
in
ignoring the existence of that continent. It is/a very early
stage of development and I hope that it will undergo vast
development, so by that idea I would like to suggest that, if by
any chance the Canadian proposal is to receive much favour here,
we ought to give some thought to take care of the interests of the
hundreds of millions of people in the continent of Africa. 10
E/PC/T/B/PV/26
CHAIRMAN: The Delegate of the Netherlands.
Baron S.J. van TUYLL (Netherlands): Mr. Chairman, we believe
that the question of the Executive Board can be settled in two
different ways. One way is a very simple one and that is to
accept Article 68 as it is now drafted in the Report of the
Drafting Committee, that is to say, the original United States Draft,
which leaves the whole question of deciding which countries must
be represented in the Executive Board to the Conference to decide.
We de feel that it is much better to settle the question here
because the Conference, if, in the First session of the International
Trade Organization, it has to decide on what countries shall be
represented in the Executive Board, will certainly spend many days
and maybe even weeks before they cone to a decision. We therefore, I
believe, with most of the Delegates who have spoken on this matter,
favour the system of deciding here and now how the Executive Board
should be constituted.
Now, firstly about the number of Members, Mr. Chairman. I do
indeed believe that a maximum should be decided on, and I think
that the right number would be something between fifteen or
eighteen, according to the system which is adopted.
On the other hand, I have also been very much interested by
what the Brazilian Delegate explained yesterday: that in the
Banking Fund they have seen that they could not work without -- or perhaps
they could work, but they wanted more Members on the Board. I
therefore suggest that, if we do adopt a maximum to be stated in
the Charter, it should not be made impossible to increase that
number without an amendment to the Charter. 11
J. E/PC/T/B/PV/26
Perhaps we could adopt the following system:- to give the
Conference the power to increase the maximum number, with the same
qualified majority as that with which an amendment to the Charter
can be introduced, that is to say, two-thirds of the Members of
the Organization. I would prefer that system to an amendment of
the Charter, because I do not think that that would be a very
elegant way of increasing the number of Members of the Executive
Board, if that should prove to be necessary. 12 E/PC/T/B/PV/26
Now, as to the Members to be represented on the Executive.
Board: I think that here is the place to look after the
interests of the most important trading nations, as I explained
when we were discussing voting. The second principle should
be, in our opinion, that it should not be made possible for any
country not to be represented at some time on the Executive Board.
There should be, for all countries, a system of rotation, and
if we look at the system which the South African Delegate has
discussed, the alternative B, I think that that is a very happy
solution. There indeed the most important trading nations are
represented on the Executive Board in the permanent seats. The
other countries will take seats on the Executive Board in
rotation, and a third category is provided for - that is, the
medium category, which would lead to a semi-permanent system.
I think that is a very good suggestion, and if we study the
matter further and work out additional methods, I feel that we
should not overlook the alternative B and that it should be
considered very seriously.
Now, other Delegates have suggested a system of
appointing straightaway the Members who should take a
permanent seat on the Executive Board, without deciding on
any criteria. The Belgian and Canadian Delegates have
favoured that system.
I would like to ask two questions with regard to that.
First, should the names appear in the Charter? I do not
think that would be a very elegant way, because it would
make it extremely rigid. On the other hand, if it was
not put in the Charter, how, technically, would the Canadian
and the Belgian Delegates want to work that out? Should it
be decided in a protocol - in an annex - to the Charter?
Also, if it were decided at this Session or at the World
V 13
V.
Conference to name the countries, should not there be a system
according to which, after a certain period, for instance, three
years or five years, this composition should be reviewed?
Then lastly, there is the question, to you think, from the
technical point of view, it is a good thins to present to the
World Conference a list of countries which should be represented
on the Executive Board? How do we know what countries are
going to be Members? When you drew up this list of Members
of the I.T.O. to be represented on the Executive Board, did
you envisage that nearly all United Nations Members should
adhere to the I.T.O.? What about countries which, after all,
decide not to sign the I.T.O. Charter, and which refrain from
adhering to the I.T.O.? Those are all questions which arise
in connection with the suggestion put forward by the Canadian
and Belgian Delegates.
I would like to and one thing, Mr. Chairman. The Netherlands
Delegation is prepared to consider the system whereby a seat on
the Executive Board is given either to Belgium or to Luxembourg
or to the Netherlands. We do think there is an advantage in that
system. For one thing, it would probably make it possible for
there to be larger representation of economic regions on the
Executive Board than would be possible otherwise; and also it would
mean one worry less for the Conference in deciding, if they had
to choose, which one should be represented. Our three countries
have agreed on so many points that I think, between ourselves, we
could very well settle this question and also agree on the
representation on the Executive Board.
I would like to say, however, that if that system were
accepted, we do think it should not be a precedent, because for
various obvious reasons it might hamper other countries - to form
larger economic regions, and also if at any time the Economic
Union between Belgium, Luxembourg and the Netherlands were to be
extended to other countries, then probably we would have to look
at this question from a different point of view.
E/PC/T/B/PV/26 14
CHAIRMAN: The Delegate of India.
MR. D.P. KARMARKAR (India): Mr. Chairman, the Indian
Delegation has seriously considered the different proposals sub-
mitted and I myself have listened carefully to the very interesting
arguments presented here. I should like, if I may, to outline
the position of the Indian Delegation on the questions before us,
which, as I have already indicated, is based on a consideration
of what we think would be reasonable.
Firstly, regarding the number of members, it is the consi-
dered opinion of the Indian Delegation that, in view of the
necessity to give sufficient consideration to the various countries
with different types of economies, the number should not be less
than eighteen.
As regards the reservation of seats, the Indian Delegation
feels that, in the interest of the stability of the Organisation,
there should be a definite number of seats - not more than half -
allotted to countries of economic importance. I go further and
say that the question of economic importance should not be judged
only on such criteria as foreign trade or national income, but also
on the potentialities of a country s importance, as has been rightly
suggested by the Brazilian and Canadian Delegates. In our opinion,
Mr. Chairman, in assessing the relative importance, the questions
of economic potentialities and of population are important factors.
The Indian Delegation would therefore like to suggest that, just as
it is necessary, in the interest of the stability of the Organisation
and in order to see that the Organisation functions well, to re-
serve some seats for countries of economic importance, in the same
way, in order to see that those countries which are in the primary
stages of industrial development do find a definite and certain
representation, it is necessary to reserve a definite minimum
E/PC/T/B/PV/26.
M M 15 E/PC/T/B/PV/26.
number of seats for the countries which are in the primary stages
of economic development and which require, according to the
general principles of the Charter, attention and consideration at
the hands of the International Trade Organisation.
CHAIRMAN: The Delegate of Chile. 16
Mr. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
in principle we are in favour of equality among the Members
within the Executive Board. We think that there should be
no preferential treatment. As we have said in the previous
Debate, we were of the opinion that no preferential treatment
should be adopted in the choice of the voting system, and
similarly we think that there should be no differential treatment
in the allocation of seats on the Executive Board; and the same
reasons which were developed in support of our first argument
are valid in this second case now before us. At the same time
we think that the Executive Board must be as widely representative
as possible, and consequently, of all the figures put forward
here we favour the largest one - that is, eighteen Members.
We think that these eighteen Members of the Executive Board
should be allocated taking into consideration the existing
economic categeries and also the various economic regions, so that
the Executive Board should be, so to say, a geographical
synthesis of the economic regions of the world, as well as
ensure adequate representation of the various economic categories
of development.
Notwithstanding the preceding arguments, we are prepared
to accept a formula whereby a certain number of seats would be
permanent, but we think that they should not be allocated by
name to certain countries; they should be made permanent in a
conditional sense. They should be conditional and subject to
review. They should be conditioned by date on economic
importance submitted by the Member States themselves, and if
we are prepared to accept that certain seats should be permanent,
we attach to this another condition, which is very important in
our eyes - that there should be absolute voting equality among
the Members. 17
If the weighted voting system should be adopted, we would
be against any system providing for permanent seats; and if we
are prepared. to adept the principle of permanent seats, we are
against the principle of weighted voting, because we consider
that there should not be two preferential systems superimposed
each one on the other.
We cannot accept that certain Members who would. benefit
by the adoption of the weighted voting system should a second
time be favourably treated by the allocation of permanent seats.With
regard the election provisions for the Members of the Executive
Board, we do not think that it is necessary to adopt the two-
thirds majority provision: we think that a simple majority should
suffice, according to the basic rules of democracy, which
should be considered satisfactory in this case, as they are
generally speaking.
CHAIRMAN: The Delegate of Norway.
Mr. COLBAN (Norway): Mr. Chairman, I have had a feeling
yesterday and to-day of being back some twenty years in the old
League of Nations.
I have not heard., I think, any new idea or new argument
brought forward., than those when we discussed the composition
of the League of Nations; and my experience from that time
brings me to say that an elastic organisation can quite well
work. When the League decided to go in for one of the
different proposals here to-day - namely, to group the Members
in three categories - that simply resulted in the second inter-
mediate category becoming, in fact, permanent; and the third
category, the elected Members, not being able to be immediately
re-elected. That did not satisfy the Members of the League, and G 18 E/PC/T/B/PV/26
the result was an increased number of the Membership on the
Council.
So I do not think a scheme with these categories in practice
is advisable. Well then, is there no scheme we can find from
the different proposals before us which would be practical and
workable? It was said by the Netherlands Delegate (I think it
was) that it was necessary to little here who should be Members
of the Executive Board, without mentioning names of States, of
course.
But let me not refer back to the old story of theLeague of
Nations, but to the new story of United Nations. E/PC/T/B/PV/26
It was not impossible to elect the judges, in spite of the fact
that there we has to combine election in the General Assembly with
election in the Security Council. It was not impossible for the
General Assembly to proceed to a very reasonable composition of
the Economic and Social Council.
I said in London that I considered it en error that the
Charter of the United Nations did not explicitly lay down the rule
that the leading economic Powers should be reserved a certain
number of seats. But my fears were entirely superfluous, because
in practice it will always turn out in this way, that the leading
economic Powers will be, must be, members of the Economic and
Social Council.
I think that exactly the same forces will operate in order
to secure them places on the Excutive Board of the ITO. What
we must do in order to make that possible - and at the same time
to make certain of a reasonable rotation - is simply to decide
that a certain number of the total members of the Executive Board
shall be immediately re-eligible on the expiration of their
mandate, and others shall not, Then we will avoid the difficulty
of permanent seats, and we will be able to meet changing conditions.
The Organization will, I think, at the expiration of every
three-year period in the future, when everything is running
regularly, be able to say that this or that country is now really
of very great importance to the continued work and ought to be
given a chance to continue. Another country which has been
chosen for re-election may perhaps drop out - we cannot tell.
In order to cover the unforeseen difficulties, I would
slightly amend the suggestion I made in London, namely, that five
out of the 15 members should be immediately re-eligible.
19
S E/PC/T/B/PV/26
I would say it might be six, or even seven. I would not go further
than a little less than half of the members, because it we went
further we would lessen the opportunity of all the other members
of getting on in their turn as members of the Executive Board.
Then the question has been put in some of the schemes,
whether we should not provids for group representation. The
same problem came up in the League every year, and it solved
itself. Taking all the countries, it was agreed from the
outset: today, you; tomorrow, I; and after tomorrow, the third
one, and so on. We even not larger groups working together.
We know we should get the necessary support in the Assembly
and coupling of seats, and I take it that the community of
interest in the ITO will bring together such countries as may
feel that one of them will be able to represent them all.
Then we have the question of how to make it possible
to secure that all the members of the Executive Board really
enjoy the full confidence of the Organization. It was said
just now by the Chilean Delegate that the democratic rule would
render inapplicable a qualified majority. I venture to be of
the opposite view. I think that, in order to make it quite
clear to the members of the Executive Board themselves and to
those of the Conference who are not elected to the Board, it
would be desirable to send out as their Delegates the members
of the Executive Board with the backing of, if possible, two-
thirds of the full Conference; of course, of the members
present and voting in the Conference.
I cannot continue very much longer, but I think that
experience from the League and experience from the United
Nations, and our desire to satisfy everybody and to give
expression to our wish on what we call permanent seats - but
Which, in fact, are only seats at the disposal of the Conference
S
20 21
S E/PC/T/B/PV/ 26
- should be to re-appoint, without waiting an intermediate time,
certain important countries.
On the other hane, in order to guarantee to all the members
of the Organization a reasonabIe opportunity of getting on in their
turn, I think that I could modify my proposal from last year and
say something like this: that the Executive Board shall consist
of representatives of not more than - here I accept the New
Zealand amendment - 15 members of the Organization elected by
a two-thirds majority of the members present and Voting. Last
year I said five, but we could easily go to six, or even seven
that would be for the sub-committee later on to consider.
Members of the Board would be immediately re-elected on the
expiration of their term of mandate. ER 22
M. STANISLAV MINOVSKY (Czechoslovakia) (Interpretation): Mr.
Chairmen, I think that it would be useful to mention the names of
the States who are going to have permanent seats on the Executive
Board, and when I read the Canadian proposal I am rather surprised
at one omission - the Soviet Union. We all hope that the Soviet
Union will be a Member of the International Trade Organization,
and therefore must not be neglected among those who are going to
have permanent seats. Nevertheless, I think that it would be
far bettor to avoid this rather touchy problem, and not to assume
from the start that the USSR will not be a Member of our
Organization. Of course, there is a footnote to the Canadian
Member,
proposal stating that, if the USSR becomes a / Canada feels that
it should be accorded a permanent seat on the Executive Board.
This footnote itself tends to give the feeling that we are not
certain, and that we are, in fact, assuming that the USSR is not
going to become a Member of the Organization, and this would, in
itself, give a wrong impression because, as I have stated previously,
we ought to suppose that the USSR is going to become a Member, and
that this is a thing which we all hope. I would like, here, to
refer to our proposal which reads as follows: "In the opinion of
the Czechoslovak Delegate the question of the membership of the
Executive Board should not be materially . R;- I until all
countries which are likely to become Members of the Organization
have had ample opportunity to present their views on the matter".
E/PC/T/B/PV/26 J. 23 E/PC/T/B/PV/26
CHAIRMAN: The Delegate of Canada.
MR. L.E. COUILLARD (Canada): Mr. Chairman, my remarks will
be more in the nature of an explanation rather than a repetition.
Firstly, the Delegate for South Africa raised the rather
technical question, I think, of which is north and which is south
of the Equator, but I think we might very well leave that problem
to the geographical experts. On the question of the continent
which the South African Delegate had in mind (I can very well assure
him, incidently, that I have not forgotten the African Continent -
I have been staring at it on the wall behind the Chairman for
hours) I would like to point out that, if it were covered under (b),
obviously the reading would have to be "South Africa". For that
reason, it is not specifically mentioned, but, presumably, it would
decidedly come under (c) as one of the five remaining Members of
the Executive Board.
The Netherlands Delegate asked a question as to whether the
Members of the Board should be named. I think that would be a
question which might very well be discussed in sub-committee; it
might be a question of tactics or procedure or, indeed, of etiquette.
We, in our proposal, actually name the countries in Article 68.
There are precedents for that, of course, of which we are all aware.
One possibility might be an Annex to the Charter, or our Legal
experts might devise some other ways.
As to the question of which countries are specifically
allocated permanent seats, undoubtedly. the Charter would be subject
to periodic revision every five or ten years, or, indeed, a
provision could be inserted. in Article 68 for such a revision.
As to what countries were considered in the preparation of
this Canadian proposal, I would say that all countries were
considered, all the countries who might be Members of the International 24
E/PC/T/B/PV/26
Trade Organization. The last speaker, the Delegate of Czechoslovakia,
referred to the omission of the USSR from our paragraph 1( a).
Naturally, if the USSR became a Member of the International Trade
Organization she would, by virtue of her economic importance, be
entitled to a permanent seat. This could be decided when the
Charter is signed. As the Czechoslovakian Delegate pointed out,
the Canadian proposal provided for that in Footnote 2 at the
bottom of page 60.
CHAIRMAN: The Delegate of New Zealand.
MR. G. LAURENCE (New Zealand): Mr. Chairman; I would like to
speak briefly, first of all, on the point of the New Zealand
amendment to paragraph 1 of Article 68, that is, to introduce the
words "not more than" before the word "fifteen" in relation to the
number of Members.
There were two reasons why we suggested the amendment. One is
that, if you refer to paragraph 3 of Article 88, about half way
through the paragraph we have the proviso that if the Charter
shall not have entered into force by blank date, any of the
Governments which may have made effective the General Agreement on
Tariffs together with any other Governments represented at the
United Nations Conferene on Trade and Employment, my agree to bring
this Charter into force. That suggested two possibilities, one,
that if that proviso were acted upon there may, in the first
instance, be no more members than were provided for in the
membership of the Executive Board, or alternatively, the number of
Members who may subscribe under that provision may be only a few
more than the number which is ultimately fixed for the Membership
of the board. So, having in mind that, it would be undesirable to
have the relationship of the number of Members of the Board to the
number of Members of the Organization too close, we thought that
it would be worth while introducing the "not more than". concept. V 25 E/PC/T/B/PV/26
On the question of the number of Members that should be
appointed to the Board, we have no set ideas. We would not be
particularly concerne whether it is fifteen or eighteen or some
number round about those that I have named.
On the other point - the question of whether or not there
should be permanent seats on the Board, we find it somewhat
difficult to separate this consideration from the consideration
which occupied this Commission earlier in the week, that is, the
proposal for weighted voting in the Conference. It is our opinion
that if equality can be given in the Conference by giving some
Members more votes then others, it becomes unnecessary to provide
for permanent seats; and it would be our view that it would be
desirable to reconcile here this proposition of the voting in the
Conference, and if those who have spoken in favour of "one State,
one vote" can see the light, or what we regard as being the
light, then it would be our view that the equality reached there
should be retained, and that membership of the Executive Board
could then rest on such election schemes as may be resolved without
the provision for allocating permanent seats.
CHAIRMAN: The Delegate of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, I have made
up my mind to speak as briefly as possible, and that is why of
all the statements made in this debate, the shortest one of all
has been mine! But as we are dealing with the intricacies of
this peculiar system of election, I think I would like to make
our position clear, because it is apparent that we are more or
less in agreement as to the composition of the Executive Board.
but we differ as to the way to climb up the ladder. I think 26 E/PC/T/B/PV/26
that we could stay here all today or tomorrow or next week
discussing these peculiarities and. we would never come to an
agreement as to how to go up the ladder.
For example, there is an almost unanimous idea that the
Executive Board should be a body of no less than fifteen nor more
than eighteen, with a reference to a percentage number related
to the total membership of I.T.O. That is the principle -
fifteen to eighteen according to circumstances which may vary.
There is another things on which most of the Delegates seem
to be in accord - a very peculiar reluctance about names. It
seems that we have all forgotten the historic words in English
literature: "What's in a name? A rose by any other name would
smell as sweet".
We all agree that a certain part of the Executive Board
wants: a third or half, depending also on circumstances over which
we have no control. Why do they not want to call the seats
permanent after so many years of permanent seats in all the
organizations of the world? We have found out a word - very hard
for me to pronounce - an English word: "non-religibility" seats.
There we have another basis of agreement. M 27 E/PC/T/B/PV/26.
One half of the members of the Executive Board shall be re-
elected, or have permanent seats (or "stay put" as the man-in-
the-street would say). In other words, we want the United
Kingdom, the United States, France, China, and India, and perhaps
others to be there always. We want their experience more than
their economic force and the only task is to find an elegant form
or saying that. The only way I see of doing it is to give their
names in the Charter. On the underlying principle I think we are
all agreed.
Then there is the question of the form of election and there
again, that ingenious method of the weighted vote creates many
troubles. If we were to say quite simply that permanency would be
given to the nations with the higher values of foreign trade, that
would be a very simple definition; foreign trade is a very simple
thing as everybody knows, and we are here establishing an
International Organisation for foreign trade. If, on the other
hand, we start to add technicalities to that very simple thing
called "foreign trade", then the trouble begins. I have learned
many things from my Chinese friends and I would now simply repeat
what they have said in Document W/210-Rev.1; "From a technical
point of view, no matter what formula for weighted voting may
be suggested, the factors selected would be such as not to reflect
the accuracy of a Members' economic importance; for instance,
foreign trade, national income, percentage of trade in relation
to national income, foreign trade per capita of population would,
if there is combination of any of these factors, add more
weight to the industrialized countries than is appropriate". 28 E/PC/T/B/PV/26
I have almost come to the conclusion that the thing to admire
most is not to see a man expressing a reasonable matter simply,
but to see an intelligent man trying to make intelligent something
that is not reasonable. We have here an excellent example of
that kind of intelligence.
On the question of the allocation of permanent seats to the
most important nations of the world, I am sure that if we were to
give a piece of paper to every one of the delegates here and ask
him - as an ordinary man in the street - to write dorm the names
of the countries, the election would be immediately unanimous.
For the rest, I think we need have only one consideration -
the economic divisions of the world. We are talking about
realism and I think there is nothing more real than the geographical
economic divisions of the world. They must be represented. In
what way ? By the election. If we are to elect a member for a
certain zone, I do not know that is the African Continent or
whether certain countries consider themselves in Africa or not.
That is beyond my knowledge. But, we have a certain idea of what
is the economic region of the African Continent. Although I do
not care for the division by continents, because there are nations
that go far beyond the continents, we could simply state the
geographical position, and then from there, if we were to allocate
to a certain geographic region 4, 2, or 1 seat, the election
will be based on selection of members from that part of the world
and will be fair.
If you take the wording of these technicalities devised by
experts in order to measure the economic importance of a nation,
you will do harm to some nations who can thus never be elected
as members of the Executive Board whereas, by other means, they E/PC/T/B/PV/26.
could be.
Finally, Mr, Chairman, I have found, with great surprise,
that I am almost in agreement with the United Kingdom proposal -
except where they use the United Kingdom formula of weighted
voting. All the considerations I have just mentioned are more or
less there in the United Kingdom formula, except that thing Which
I can never understand. - weighted voting. If we could substitute
something else for that, I think we should have a very good basis
on which to start, and. if we send the rest, after the delegates
have expressed. their opinions, to the Sub-committee, we shall
give. them a very nice Trojan horse for - them to put all the
pieces together.
29.
M 30
CHAIRMAN: The Delegate of the Lebanon.
Mr. HAKlM (Lebanon): Mr. Chairman, I agree with the
Delegate of Australia, that even if we do not provide for s.-called
"permanent" Members, the great nations will always be elected
to the Membership of the Board. In fact, as Dr. Coombs painted
out, if the Organisation is to function properly, it is incon-
ceivable that the great trading nations will not be freely
elected by the other nations to become Members of the Executive
Board.
In the same way, although the Charter of the United Nations
does not provide for permanent seats on the Economic and Social
Council, it is inconceivable that the Big Five will not be re-
elected to the Council, whenever the term of Membership comes to
an end.
I was present at the time of the election of the eight
functional commissions of the Economic and Social Council, and
it was agreed without question that the Big Five should be elected
to all the eight Commissions.
Nevertheless there is much force in the argument of the
United Kingdom Delegate that, if such.will be the case, why not
say it in the Charter? There is also anther reason why we
are willing to support the provision for permanent Members.
That is the fact that we do not know Definitely which are the
States - and how many they are - which qualify for permanent
Membership, especially if we take e long view of the future.
In feet we should consider the future in terms not of ten or
twenty years, but of forty or fifty years. History teaches us
that it is possible for a nation to grewrapidly to a position
of greet economic power in a period. of fifty years. It is
E/PC/T/B/PV/26 31
therefore not possible to determine the permanent remembers of the
Board.
Moreover, that is why a certain formula is needed to determine
What nation qualify for permanent Membership of the Board.
Again, in the economic field there is greater scope for greatness
to be achieved. than in the political field. It is therefore
likely that the great trading nations will be greater than five
in number; but whatever number we fix for them there is always.
on the margin one or more nations who come very near to
qualifying for permanent Membership of the Board, and may so
qualify within a certain number of years.
As for total Membership of the Executive Board, I agree with
Dr. Coombs that it is necessary to provide representation for
various types of economy, taking into account various factors
for the determination of these types.
Finally, the Membership of the Board should be large enough
to ensure that, once we decide on the number of permanent Members,
this latter would not form the majority of the world. That is,
perhaps, a safe enough rule to follow.
Mr. Chairman, all these considerations lead me to the
following conclusions, First, the Membership of the Board should
be eighteen, rather than less; second, the number of permanent
Members should be fixed at eight, rather than less; and. third,
a carefully worke out formula should Determine the eight most
important trading nations, and such Determination should be
revised. from time to time. 32
CHAIRMAN: The Delegate of France.
M.KOJEVE (France) (Interpretation) - Mr. Chairman, I
should like to add a few words to what I said yesterday,
I agree that it would be a good thing and a useful thing
to have permanent seats, but, like the Delegate of Cuba, I feel
rather ill at case when I am confronted with so-called objective
criteria which claim to have an almost mathematical scouracy.
Let me take an example; in Appendix X on Page 62 of the
New York Report, there is a formula for rating economic
importance. This is a table drawn up by the Secretariat,
probably on very strict calculations, and the table seems to
be properly drawn up. In the last column we have the total
number of points. As you can see, France has a very honourable
place, since she comes third in the list, but I find that
Metropolitan France has a total of 65. points, whilst the
French Union, that is, including her overseas territories -
has only 58 points, which would mean that the fact of having
overseas territories is a real disaster from an economic point
of view.
I admit that certain countries have claimed that the
possession of overseas territories is a burden for them, which
they only bear on account of their well known altruism, but,
although I am prepared to admit that they are sincere, I think
that they are wrong. At any rate, I am rather surprised
to find in this total that the French Union weighs less than
Metropolitan France, generally speaking.
I should also like to know what is the moaning of a
difference of one point. For instance, I see in the same table
S S E/PC/T/B/PV/26
that Italy has a total of 35 points, whilst China has 34.
Does this mean that Italy is more entitled to a permanent
seat than China?
I think that these figures are rather fer from roality.
I prefer a less complicated formula, perhaps less satisfactory
from the point of view of Latin logic, but ne~ !rer to the good
old Anglo-Samon commonsense. I hope that the sub-committee
will find a formula to that cffect. ER 34 E/PC/T/B/PV/26
Mr, E.H. KELLOGG (United States): Mr. Chairman, this
discussion has been based upon two problems. First, the problem
of size, and second, the problem of permanent seats. As to the
first problem - size - we are very much impressed by what
Ambassador Colban has said. He has stated, I believe, that a
large body risks becoming a debating society. I believe that his
experience in various international bodies has already proved the
truth of his statement.
The Delegate of Canada has also pointed out that, in addition
to the regular of the Executive Board, there will be
various other people in attendance, participating in this work. He
has mentioned, for example, the Director-General and the Chairmen of
Commissions. I might add that, under Article 70, in paragraph 4,
there will be other people - the representatives of countries
concerned with the problems under discussion - so even if we keep
it as small as 15, the body will actually be considerably larger.
We would, therefore, agree with Mr. Colban's suggestion that it
should not be larger than 15, at least at first. We might, of
as
course, provide for an expansion up to 18/suggested by the French
Delegate. Also, the New Zealand Delegate has suggested that, at
the beginning, there may be less than 20 Members in the Organization.
In that case, it would be desirable to a dopt some such solution as
be has suggested, and provide for less than 15 at the beginning of
the Organization's work.
On the issue of permanent seats, we are not opposed to the idea
in principle. We green with what Mr. Holmes said yesterday, that,
since this will occur in any case, there is no harm in admitting
the truth. We also note that a large majority of the delegations
here - i think all but two - have come out with some kind of
permanent seat. The United States will accept any formuls for
arriving at permanent seats, which is generally acceptable, but ER E/PC/T/B/PV/26
after hearing this discussion, we suspect that that generally
acceptable formula is not going to be easy to find.
There is a lot to be said for the so-called alternative B of
the New York Committee, and there is a lot to be said, I think, for
what the Canadian Delegate has suggested, but the latter appears a
but
little bit rigid. If, then, we cannot agree here,/I suspect we
probably can, upon a generally acceptable formula, I am tempted to
support a suggestion of Mr. Colban. He has brought to this group
his usual great wisdom and experience, and given us a great deal
of background which, I think, is very valuable. He has suggested
that we set up a Board of 15 Members, of which up to 7 may be
eligible for re-election, and the rest will, I suppose, rotate.
This suggestion, does seem to me to answer most of the points which
have been raised. I believe that the Delegate of Cuba has
suggested that he might favour such a plan. This also, has the
advantage of averting that unpleasant word "permanent seat".
I believe, when somebody yesterday said that the word was
invidious, the remark was punctuated by a clap of thunder. I
suspect that the Creator of that thunder will agree with him. J.
H.E. Dr. WUNSZ KING (China): Mr. Chairman, first of all I
must confess that I am gotting a little more open-minded than I
was yesterday. You know, the representative of a country
sometimes feels proud and perhaps shy when he hears the name of his
country mentioned, but at the same time the representative in
question would like to express his thanks to the Delegate who
mentioned the name of his country as one of the principle candidates
to be represented. permanently on the Executive Board.
Now, I am a little bit appalied at the use of the word
"permanent". In this sense, I would also like to support the
Czechoslovak and Canadian proposals, if they are acceptable to the
other Delegations.
I am very much struck too by the formula suggested by
Ambassador Dr. Colban and endorsed by the United States Delegate.
I like it because it is simple, but at the same time, I must also
point out that the weakness, if I may say so, of the formula lies
in its simplicity, because in this formula there are no criteria to
guide the elections when elections take place. I, personally, am
inclined to think that when elections actually take place the
Delegation taking part in the election will have to have some
support or guiding, principles, whether they are written in the
Charter, in the formula, or simply written in their minds.
Now, speaking of the criteria or formula, I am very much
impressed by the remarks made by the French Delegate. He pointed
out some of the absurdities in this Appendix X on page 62 of the
New York Draft, and I am glad to hear that one of the most absurd
absurdities is the possible competition of Italy with China on the
Board. But I think there is another absurdity which is this:
that the table, undoubtedly worked out on the basis of the direction
of the Administrative sub-committee in New York, seems to overlook
E/PC/T/B/PV/26 E/PC/T/B/PV/26
the democratic factor of population. In this connection, I Agree
entirelywith the remarks made by the Indian Delegate: that in
any formula for the purpose of the election of the Board, it is not
only foreign trade and national income which should enter into the
scheme . There are also factors of potentialities and populations.
I am very glad that he has mentioned this factor of population,
indeed, the purpose of the future International Trade Organization
is not only for the expansion of world trade - it is also for the
purpose of the promotion of employment; it is also for the purpose
of the achievement of raising standards of living; it is also for
the
the purpose of fostering/economic development of all the Member
States. Therefore, in any formula which is to be applied for the
purpose of the election of the Members of the Board, population
should, above all, be one of the elements. Now, this is the reason
why not only the Appendix X is iosurd, cat also the two alternatives
(a) and (b) as set out in the Administrative sub-committee's Report,
and it is objectionable and unacceptable to the Chinese Delegation.
Again, it was pointed out on page 53 of the New York Draft
that the sub-committee felt that population should not be given
direct weight as such, in an International Trade Organization, on the
grounds that the factor of population has already been reflected in
the national income. Well, that might be true, I do not know as
I am not an expert, but if we should push this argument to its
logical conclusion, then we might just as well drop foreign trade
altogether because foreign/must also have been reflected in the
national income. Now, is that reasonable? I would like to leave
it to my colleagues to decide. After all, I can very well
inagine that when we set up our future International Trade
Organization and the Executive Board, there will be decisions on-
a number of important questions, and I am inclined to think that
37 38
no decision or no determination of the future International Trade
Organization which will affect the livelihood and well-being of the
masses of populations in the world can work smoothly and
satisfactorily without the general consent of the passes concerned,
and the best way to secure and insure this general consent is to
have the country or countries having the largest populations
adequately represented on one of the most important Organs of the
International Trade Organization, that is, the Executive Board, and
nothing short of a permanent (I lay stress on the word "permanent"
instead of the other more difficult word of..... what? he-eligible?
Re-scheduled?) representation on this most important organ could be
regarded as being adequate. V 39 E/PC/T/B/PV/26
CHAIRMAN: We have now had a very long and full discussion
of this problem of the composition of the Executive Board.
This discussion has lasted over two sessions of the Commission.
We have heard from each one of the seventeen Delegations
represented on the Preparatory Committee, and have listened to a
total of twenty-three speeches. I think we have had a very full
expression of views on what the various Delegations think should
be the number of Members of the Executive Board.
We have also had a good indication as to what the views of
the Members of the Commission are regarding the question of
permanent seats versus no permanent seats; but there is one
question upon which I regret to say there has not been a great
deal of guidance given, if we find it necessary to refer this
problem to a sub-committee - and in view of the fact that it is
unlikely that we shall reach unanimity in the Commission I think
it will be necessary for us to refer this problem to a sub-committee.
The question about which we have had very little guidance is
whether or not the Members of the Executive Board should be
elected by a simple or a two-thirds or other majority. The
Delegates of Australia and Chile have expressed very clearly
their preference for a simple majority. The Delegates of Norway
and Brazil have indicated that they would favour a two-thirds
majority. The Delegate of Canada mentioned that the Canadian
Delegation no very strong views on this problem; but the
other Delegations did not refer to this particular question.
I will, in view of the desirability of giving more guidance
to the sub-committee, adopt unusual tactics on the part of
the Chairman and suggest that we allow a few minutes more to
the discussion of this particular problem, if there are any
other Members of the Commission who wish to speak on this aspect
of the problem. E/PC/T/B/PV/26.
There may also be some members of the Commission who may wish to
comment on the proposal put forward by the Delegate of Norway and
supported by the Delegate of the United States. The Norwegian
Delegate was fifteenth on my list of speakers and therefore he
spoke after a number of the other delegations had expressed their
views. If there are any other delegations who wish to speak I
would ask them to confine themselves to two points; (1) Whether
the members of the Executive Board should be elected by a simple
or two-thirds majority, and (2) any comments they may wish to make
on the Norwegian proposal.
I wish to make a correction to the remarks I have just made.
I find,on consulting the Verbatim Record, that the Australian
Delegate also favoured a two-thirds majority and not a simple
majority for the election of the members of the Executive Board.
The Delegate of Brazil.
MR. O. PARANAGUA (Brazil): I think the question of the
elections for the Executive Board by a simple or two-thirds
majority is related to the question of the appointed members, whom
we call here "permanent". I say "appointed" because they would be
appointed by their Governments and not elected. There is the
question of whether the governments appointing the members would be
entitled to take part in the election or not. That is a point of
certain importance.
Then there is another question, that of voting power for the
elections. We did not decide about that. We do not know if the
elections will be on the system of one nation, one vote, or of
special voting powers granted to some countries. For this reason,
I cannot express an opinion on the subject, but I think it is more
regular to have an election by a two-thirds majority, provided that
40 E/PC/T/B/PV/26.
each nation has one vote and that the countries entitled to
appoint a director participate in this election.
CHAIRMAN: Do any other members of the Commission wish to
speak ?
The Delegate of the Netherlands.
BARON S.J. Van TUYLL(Netherlands): On the question of the
voting which should be required for the election of the members
of the Executive Board, I favour the system of one country, one
vote, as it is the system I also favoured for the voting in the
Conference, and other matters. I therefore also think that in
this case there should be one country one vote.
I do feel inclined to decide in favour of the qualified
majority for the election of the members of the Executive Board.
I believe that it is right to take into consideration the qualifying
majority of two-thirds of the members present.
I would also line to say something on the interesting pro-
posal put forward by the Norwegian Delegate. I think that the
Norwegian Delegate is indeed right when he says that very much
trouble will be spared to the members of this Commission if we
decide to leave the decision on the numbers of the Executive
Board to the first meeting of the Conference of the I.T.O. I
do think that all the criteria we may have thought of will be
applied in that first meeting not because it has been decided on
as a general rule, but because every member of the Conference, at
that first meeting of the I.T.O. will apply the criteria which he
thinks are the right ones. So you will get a general criterion
which will probably be the same as a mixture of all the criteria
which have been set out in the different proposals here.
I therefore think that the Norwegain proposal must be taken
into very serious cosideration and I think that is one of the
solutions which should be adopted, if there is not a large majority
of the Commission in favour of any other system of choosing the
members of the Executive Board. 42
CHAIRMAN: The Delegate of Chile.
Mr. GARCIA OLDINI (Chile): (Interpretation): I have nothing
to add to what I have said already regarding the vote.
As for the proposal made by the Norwegian Delegate, I suggest
that this should be referred to the Sub-Committee as one of the
proposals submitted here - I think it would be a satisfactory
basis for discussion, but I also think that it is likely to be
improved. I do not think it is necessary to establish a relation-
ship as between the vote for election-membership in the Executive
Board and the possibility for a qualified vote which has already
been suggested. We think that the Commission has already come
to some decision on this point, and according to the general
tendency here in the Commission it is very likely that the Sub-
Committee will make a proposal along the line of "one State one
vote".
At the same time this formula bears some connection with
the problem of permanent seats. Considering that the Sub-
Committee will have to ratify the general trend, of the Commission,
for my part I could only accept a condition of unvariable balance
in the Executive Board.
There is a general tendency to refer certain delicate and
difficult matters to the future World Conference; but I think
that the whole of our work will be taken up again by the
Conference, and we must face the possibility of having the whole
of our work again reviewed and probably modified by the Conference.
Therefore, I think that we must assume our responsibilities
and choose a certain system of vote, take a decision in favour of
a certain composition of the Executive Board, and leave it to the
Conference to accept or reject our proposals.
E/PC/T/B/PV/26 43 E/PC/T/B/PV/26
CHAIRMAN: The Delegate of Czechoslivakia.
Mr. MINOVSKY (Czechoslovakia) (Interpretation): Mr. Chairman,
as regards the election of Members to the Executive Board, we are
in favour of a majority of two-thirds being applied, and of the
principle of "one State one vote"; and we favour the proposal
which was put forward by Ambassador Colban.
CHAIRMAN: Any other Delegates who wish to speak.
The Delegate of the Lebanon.
Mr. HAKIM (Lebanon): Mr. Chairman, we favour the two-thirds
majority for the election ef the non-permanent Members of the
Executive Board. However, there may be some difficulty in
certain cases in arriving at such a majority. There may, in fact,
be a dealock in the way in which a two--thirds majority can be
secured for some of the seats. This situation did, in fact,
develop in the election of two Members of the Economic and social
Council during the Session of the General assembly last autumn.
Some provision would need to be devised to deal with such a
deadlock, when it takes place.
CHAIRMAN: The Delegate of France.
Mr. KOJEVE (France) (Interpretation): I simply wanted to
say, Mr. Chairman, that I share the views of the Lebanon
Representative. 44
S E/PC/T/B/PV/26
CHAIRMAN: The Delegate of India.
Mr. D.P. KARMARKAR (India): Mr. Chairman, regarding the
matter of voting. I would respectfully hold to the original
view I had - one country, one vote. Regarding the requirement
of a two-thirds majority in the case of Members to be
elected, I do not exactly follow the intention behind that. If
my interpretation is right, it gives power to one-third of the
members - that is, less than half the members - to hold up the
election of any candidate, though the majority of the Conference
may want it.
I am not sure, Mr. Chairman, whether that has exactly
brought us towards any conclusion. In consequence, I should
much prefer to leave the matter to the normal ways of election,
which gets the necessary number of votes, and not by this
qualified majority of two-thirds, which, in certain circumstances a
and in very deserving cases, may act as an unnecessary obstacle.
CHAIRMAN: Does any other Member of the Commission wish to
speak?
I think this further discussion has been useful in bringing
out the points of view of certain Delegations regarding both the
method of election of members of the Executive Board and the
proposal of the Norvegian Delegats.
O"!rl -g~ . .:i
: thonk ael members Ofwthi Comeession Vill agr;. with
the Deo=gaal of the D-leslte hf Chile, that tne sub-committee
Should Consider the pelposal of the D .alate withorway clong vlt1
tle wother peopesagswhieh adc bzin refdrre to t.e sub-committeee
I also eak; it as the m se'oftthe Comrission ehat this
qeeseien edould be rof rrc to th' sub- committee for further
study, ie an effort to rcach a solution wisfcc will be satlfaotory
to all msmabers of the Prep.atory Commirtce I therefoJe SE/PC/T/B/PV/ 26
propose that Articles 68 and 69 be referred to the special
ad hoc sub-committee, which we set up to consider the question
of voting, and that they should be, instructed to reach a
solution which will be satisfactory to all members of the
Preparatory Committee; taking into consideration the various
proposals which are set forth in our working paper, in the
Drafting Committee's report, and which have been elaborated
in the course of our discussion.
Does the Delegate of Cuba wish to speak?
Dr. Gustavo GUTIERREZ (Cuba): After this matter has been
disposed of. I am entirely in agreement with the proposal of
the Chair.
CHAIRMAN: Is the proposal approved?
(Approved)
The Delegate of Cuba.
Dr. GUTIERREZ (Cuba): Mr. Chairman, when we started the
discussion of the voting system of the Organization I mentioned
a problem which occurred to me during the study of this matter,
and on which my Delegation has not any fixed ideas. It is the
problem of the vote of representation of the economic unions
or the customs unions. We have no special views on that. The
actual customs unions are few and are composed of a certain
number of States, but if they are moved they are more than the
usual number and their membership is enlarged.
For this reason I wish to put to the Commission the
advisability of instructing the sub-committee to study the problem
and report back if necessary. I am not asking for a specific
answer. The point is this: an economic union might have one,
45
S S 46 E/PC/T/B/PV/26
two, three or more nations connected, but when you have to
negotiate a treaty, it is only one person. When they come to
vote, they have three, four or five votes. It might arise
as a problem between a single nation and one economic unit as to
the interpretation of any of the provisions of the treaty. When
it comes to a question of voting, the single nation will have
one vote and the others will have three, four or five votes. That
is a new thing in international economy.
I really do not knowv if it is of any importance, but we
are here to establish a Draft Charter for en International Trade
Organization. There, is a Constitution, and I ,now by experience
that Constitutions are very difficult to amend afterwards.
There is a trend towards economic unions. If that trend
increases, there are going to be problems. If we can solve
them by establishing certain provisions here, it might be a good
thing.
We are not afraid of customs unions. As a matter of fact,
we sympathise very much with them. We could establish one
ourselves. I only put this question as a matter of technicality,
to be considered if it is worth while. If it is not worth
while, I am glad just to leave a trade on the records. 47
- ER E/PC /T/B/PV/26
Baron S.J. van TUYLL (Netherlands): Mr. Chairman, I am
veryglad that the Cuban Delegate raised this question, and I am
also glad to hear that he has no pre-fixed ideas on the matter.
That makes it easier for me, Mr. Chairman, to say that I did have
pre-fixed ideas on the matter. In my opinion the question is very
simple. Members of the Organization will be independent States who
would independently sign the Charter, and, if some of those
independent States who have signed the Charter agree among them-
selves either to make a Customs Union or to go further and make an
Economic Union, I think it will be all to the advantage of the
Organization. The more Members of the Organization will agree,
the better for the Organization, and if all the Members did agree
there would be no trouble, and the Organization would just simply
be one Economic Union.
I am interested in the question of the Sub-Committee. I do
not know if the Commission thinks there is a problem.. I myself
an inclined to think there is no problem, but if the Commission
-decides there is a problem to be studied, then I would suggest
that there should be a special Sub-Committee where at least one or
more of the countries who have Customs Unions, are represented. 48 E/PC/ T/B/PV/26
CHAIRMAN: The Delegate of Belgium.
Baron P. de GIFFIER (Belgium) (Interpretation): Mr. Chairman,
like the representative of the Netherlands, I should like to
associate myself warmly with the proposal made by the representative
of Cuba. As I said, during the discussions on the voting system, I
had an open mind on that problem, and I may assure you that I am
still today in the possession of this open mind, but as I urderstand
the Cuban proposal contemplates the possibility of a plural vote to
be attributed to Members of the Customs or Economic Unions, and if
the result of the Cuban proposal is that the Miembers of the
Belgian-Netherlalnds-Luxembourg Customs Union should have six or nine
votes in the future Organization, I would gladly accept that, and
this would make it easier for me to accept eventually the weighted
voting principles.
CHAIRMAN: The Delegate of Frances
M. KOJEVE (France) (Interpretation): I just wanted to say,
Mr. Chairman, that if this Commission decides not to set up a
special sub-committee to deal with this question, the French
Delegation will defend with all its means, though it may only have
weak means at its disposal, the stand which was taken by the
Netherlands Delegate, but I must state that it might be hard for us
to defend the stand which was just taken by the Belgian representative.
CHAIRMAN: The Delegate of Chile. V 49 E/PCC/T/B/PV/26
Mr. Garcia OLDINI (Chile) (Interpretation): Mr. Chairman,
it is both interesting and symptomatic that the Cuban proposal
should have received such a hearty and smiling welcome, but I do
think that it should be considered seriously. I do not know
whether it would be possible to come to a decision on this new
problem; but it would be wise, at any rate, not to close our eyes
to a problem which is new but which may assume greater importance.
If we have in this Commission minds as clever as those which
have found the formula of the weighted vote, perhaps these minds
could also find some system, not similar to the one suggested by
our Belgian colleague, but perhaps exactly the reverse that is to
say, whereby countries forming a customs or economic union (say,
three or four countries) would have only one vote.
CHAIRMAN: The Delegate of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, I think that I
have obtained what I intended to have. I spoke very open-
mindedly. Nevertheless, as I always am very fond of smiling, and
my remarks have been received in a very smiling mood, I think it
is good to foster Economic Unions with a view to reaching the final
economic Utopia of haing all the nations in one big Economic Union.
Some Delegates have the impression that I have made a proposition
which I have not. I think it is all right to leave it there,
although we know the tendency of Economic Unions to increase things,
having seen their last consolidated customs tariff.
I did not have any specific Union in mind, but the problem
that is beginning to arise in different countries. If the
Commission has not seen it, it is all right. Then we will again
take up this matter, and probably we will not then be so angelic
as we have been today. However, as we did not have any specific
idea to arrive anywhere, but just to consider the position of the
Members of this Committee as to the matter, I would prefer very
much, Mr. Chairman, that we should stay in this smiling angelic
world in which we have found ourselves this afternoon. M
50
E/PC/T/B/PV/26.
CHAIRMAN: The Delegate of the Netherlands,
BARON S.J. Van TUYLL (Netherlands): I only wanted to add
to the remarks I have just made, Mr. Chairman, to say that I was
very much impressed by the remark of the Cuban Delegate which tends
to presume that, in voting, the members of the Customs or Economic
Union will always have identical views. I should like to think
so, but I do not think they will always have identical views and
I wish to assure the Cuban Delegate that, for example in the
case of the Customs Union of the Netherlands, Belgium and
the
Luxemburg,/Netherlands and Belgium are represented there, not
only in order to have two votes, but also because they have dif-
ferent interests to defend.
On the other hand, I am very thankful to the Cuban Delegate
for his genial attitude, even though it be provisional.
CHAIRMAN: I take it from what the Cuban Delegate has said
that he has not made any formal proposal and that he simply made
a suggestion for the other members of the Commission to express
their views on the subject. I take it we can leave it where it
is now.
DR. GUTIERREZ (Cuba): Yes.
CHAIRMAN: Before we adjourn it will be necessary to come to
some formal decisions regarding the allocation of the matters re-
ferred to us at the previous session of the Commission B. when they
were considering Chapter VIII in regard to these various Articles.
Members of the Commission will recall that it was decided to defer
discussion of Article 64., paragraph (5) of Article 6, paragraphs
(3) and (4) of Article 67, Article 68, and Article 69. We have
at our meetings this week decided to refer Articles 64, 68 and 69
to the ad hoc Sub-committee of six which we set up at our meeting
on, I think it was, Tuesday. We still have to decide what dis-
position should be made of Paragraph (5) of Article 66, and M 51 E/PC/T/B/PV/26.
paragraphs (3) and (4) of Article 67. I would propose that
paragraph (5) of Article 66 should be referred to the standing
Sub-committee of eight members on Chapter VIII. There are no
proposals in relation to this paragraph; the only suggestion we
have in our working paper is the one of the Secretariat regarding
drafting and as the Drafting Sub-committee are considering the
whole Article, I think it is only proper that we should refer
paragraph (5) of Article 66 to the Standing Sub-committee. 52
CHAIRMAN: Is that proposal approved?
Agreed.
We now have to decide on the disposition to be made of
paragraphs3 and 4 of Article 37.
I would propose that paragraph 3 of Article 67 should be
referred to the ad hoc Special Sub-Committee of six Members
which is considering .Articles 64, 68 and 69.
Is the Commission in accord with that proposal?
Approved.
We now have finally to dispose of paragraph 4 of Article 67.
I find it difficult to decide to which of our two Sub-Committees
we should allot this paragraph, but it seems to me that it has
aspects in it which are concerned with voting; but no
proposals were made in regard to this particular paragraph
other than the proposal of the United Kingdom which depended upon
the decision taken about the voting. If Members are in accord,
we may also therefore refer this paragraph to the ad hoc Special
Sub-Committee of six Members which is considering articles 64,
68 and 69.
I wish to apologise to the Commission. The proposal of
the United Kingdom was more of a drafting change than one of
substance. S E/PC/T/B/PV/26
Mr. S. L. HOLMES (United Kingdom): Mr. Chairman, I
think there was a question of substance. It looks like
drafting, but that is our well-known modesty.
CHAIRMAN: My first impression was correct and therefore
I take it that the Commission is agreed that we should refer
this to the special ad hoc sub-committee of six members,
Is that agreed?
(Agreed)
There will be no further business.
The Meeting is adjourned.
(The Meeting rose at 6.30 p.m) |
GATT Library | yy010ry5730 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty-Sixth Meeting of the Tariff Agreement Committee held on Tuesday, 23 September 1947 at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, September 23, 1947 | United Nations. Economic and Social Council | 23/09/1947 | official documents | E/PC/T/TAC/PV/26 and E/PC/T/TAC/PV/24-26 | https://exhibits.stanford.edu/gatt/catalog/yy010ry5730 | yy010ry5730_90260096.xml | GATT_155 | 8,959 | 55,574 | UNITED NATIONS NATIONS UNIES
ECONOMIC CONSEIL RESTRICTED
AND ECONOMIQUE E/PC/T/TAC/PV/26
SOCIAL COUNCIL ET SOCIAL 23 September 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRDE AND EMPLOYMENT.
VERBATIM REPORT
TWENTY-SIXTH MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON TUESDAY, 23 SEPTEMBER 1947 at 10.30 A.M. IN
THE PALAIS DES NATIONS, GENEVA.
Hon, L.D. WILGRESS (Chairmen) (Canada)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room (Tel. 2247).
Delegates are reminded that the texts of interpretations, which do
no pretend to be aulhentic translations, are reproduced for
general guidance only; corrigenda to the texts of, interpretations
cannot, therefore, be accepted.
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E/PC/T/TAC/PV/26
CHAIRMAN: We have had circulated this morning the Report of
the Legal Drafting Committee on the Final Act, Preamble and
Part r of the :..: ...;. This is given in Document T/211.
We have also had circulated this morning the Reports of the
Legal Drafting Committee on the Protocol of Provisional
Application of the General Agreement on Tariffs and Trade, which
is given in Document T/2130
The Legal Drafting Committee have also been able to finish
most of Part II, u to Article XVII. This is given in
Document T/212.
I will call upon the Chairman of the Legal Drafting Committee
to explain why it has not been possible for the Legal Drafting
Committee to complete all its work 'in time. for today':meeting.
M. ROYER (France) (Interpretation): Mr. Chairman, the Legal
Drafting Committee had a much heavier task to perform than was
anticipated. In fact., when we examined these texts we found
that the draft of the Charter contained a certain number of errors
and a lock of concordance. Therefore it was not possible to
translate the Articles of the Draft Charcter into the Agreement
without altering slightly some of the Articles.
That Legal Drafting Committee worked late into the night to
enable it to complete its work on the text of Part II. Last
night we completed the draft Articles of Part II, but we, still
have to examine the Annexes and the Protocol, including the
Interpretative Notes.
I third the wisest plan would be to enable the Legal
Drafting Committee to meet this afternoon and complete its work
on Part II, so that the Committee could take up the examination
of Part II tomorrow morning; that would mean that the whole of
Part II could be examined tomorrow morning.
-, ".,
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The work performed by the Secretariat was considerable,
owing to the difficulties rising from the fact that the two
texts, French and English, had to appear on the same page, and
of course the brackets and amendments had to be shown clearly in
the draft which is now before the Committee. The Secretariat
worked during the night and therefore it is possible that a
certain number of material errors may have slipped into the draft
which you now have.
These are the general comments I wanted to make and in the
course of the discussion and examination of thIs draft I.shall be
ready ,o answer any questions.
CHAIRMAN: I am sure we are all very much indebted to the
Legal Drafting Committee and the Secretariat for the Herculean
efforts they put forth in order to produce a text for us to
consider this morning, and it is no fault of theirs that they
have not completely succeeded in their task.
I think we might proceed this morning with the consideration
of ..the documents we have before us and perhaps when the time
comes to adjourn for lunch we oan -consider whether or not it
would be worth while to meet this afternoon or to leave the
entire, afternoon free for the Legal Drafting Committee to complete
its work.
If that procedure is agreed, I propose we take up first the
Report of the Legal Drafting Committee which is given in
Document T/211. This concerns the Final Act, Preamble .and.
Part I of the General. Agreement.
is that agreed?
We will take up first the Final Act. which is given on
Page 2 of Document T/211.
The first paragraph of the Final Act,
S E/PC/T/TAC/PV/26
Th. Chairma.n of the LegaI Drafting Committee.
M. ROYER (France) (Interpretation) Mr. Chairman, before we
examine, the various paragraphs of the Final Act; I would like to
state that the Legal Drafting Committee examined the question of
knowing whether two distinct copies of the Final Act- that is to
say, one French copy and one English copy - should be established
or whether it would be possible to establish only one bilingual
draft.
As the Agreement and the Annexes will not be signed but will
appear only as annexes to the Final Act, the Legal Drafting
Committee was of the opinion, finally, that one document.would
be sufficient - if possible, a printed document - and in that
document the English and French texts would face each other.
We therefore proceeded on the assumption that only one bilingual
document would be established; that is the document which appears
before you now us Document T/2110
CHIARMAN: Are there any comments on the form in which the
Legal Drafting Committee have prepared the Final Act?
I wake it, therefore, that the Committee is agreed on
preparing the Final Act in this form.
Are there any comments on the first paragraph of the Final
Act?
Mr. E. McGAPTHY (Australia): Can you tell me, Mr. Chairman,
why the words " between their representatives: have been trans:-
as "through their representatives"?
M. ROYER (France) (Interpretation): Mr. Chairman, the reason
why the Legal Drafting Committee made that modification in the
text was to avoid a wrong interpretation which might have been
construed from the text adopted by the Committee. In fact, the
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words "between their representatives", coming before the words
"at Geneva", the interpretation might have been given that the
text referred to the permanent representatives of the Powers at
Geneva. ;
ORMIMLAN. Are there any other comments on Paragra1h l?
Mr. McCARTHY (Australia): I should like to say another word
of explanation on that, Mr. Chairman. I think it was at our
instance that the introduction of representatives at that stage
t'll was made. The point whic h-w we'r really trying to
convey upon instructions - was that the representatives actually
framed the Agreement for consideration by theGCovernments. That
was really our point all along; that the point of this Final cot
was; to establish the text and then subsequently to submit it to
the Governments.
The word "through" rather suggests that the Governments
are actually establishing the text, not the representatives.
It could be read that way, I think, and it seems to me at any
rate to be a substantial change in substituting the word "through."
CHAIRMAN: The Delegate of the United States.
M. Winthrop G. BROWN (United States): Mr. Chairman, could
the point of the Legal Drafting omm;ittee and the Delegate of
Australia be met by simply transposing the words "at Geneva" nrd
saying: "A tGeneva on April 10, 1947,- initiated negotiations
hpough their representatives"l
CHAIRMAN: The Chairman of the Legal Drafting Committee.
M. ROYER (France) (Interpretation): May I ask where you would
put the words "through their representatives"?
, . l ,; S - 6 - E/PC/T/TAC/PV/26
Mr. BROWN (United States): I would suggest: "Having
initiated negotiations at Geneva on 10th April, 1947, between
their representatives, directed to . ."
CHAIRMAN: Or "initiated at Geneva."
Mr. BROWN (United States): I would suggest we put a comma
after the word "representatives."
CHAIRMAN: The Delegate of Belgium.
Baron P. DE GAIFFIER (Belgium): We had the same problem;
it looked as if it were the representatives who were directed to
the substantial reduction of tariffs.
CHAIRMAN: The latest suggestion of Mr. Brown is to have
the paragraph read as follows: "initiated negotiations between
their representatives, (comma) at Geneva . . .". Would that meet
the point of the Delegate of Australia? I think it would meet
the objections of than Legal Drafting Committee. Is that agreed?
Are there any other comments on the first paragraph?
(Agreed).
Are there any comments on the second paragraph?
(Agreed).
Are there any comments on the third paragraph?
The formula: are there any comments?
M. ROYER (France) (Interpretation): Would it not be better,
in the English text, to say: "DONE at Geneva in a single copy."? S 7 . E/PC/T/TAC/PV/26
Mr. R.J. SHACKLE (United Kingdom): I see no objection, Mr.
Chairman.
CHAIRMAN: Are there any objections? The English text will
then road: "DONE .:t Geneva in a single copy."
The Delegate of the United States.
Mr. BROWN (United States): Mr. Chairman, if this is to be
a single document, I notice that the French and English texts
differ; the names of the countries do not always appear in the
same place. P. . 8 E/PC/T/TAC/PV/26
M. ROYER, (France) (Interpretation): Mr. Chairman, this
is due to a mistake when this document was roneographed, It
-is extremely difficult to have the two names appear on the same
line in the document which is now before us, but what we want
is that the names of the countries in French and in English
face each other, and that the signature should appear in between
and underneath the two names. For example:
For the Commonwealth Pour le Commonwealth
of Australia d'Australie
and in between, and underneath, the signture.
CHAIRMAN: In other words, the English order of the
alphabet would be followed and the names of the country in the
respective languages would appear one against the other.
Are there any other comments?
Agreed.
That disposes of the Final Act.
Part I.
"e can now take up Part I of the General Agreement which
com;ences onTna11.7 of document '/!J.
Preamble.
Paragraph 1 of.the Preamble.
Are there any comments?
Agreed.
Paragraph 2 of the Preamble.
Are there any comments?
Agreed.
Paragraph 3 of the Preamble.
Are there any comments?
Agreed.
The formula in the Preamble.
Agreed.
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. .
Article I.eGen ral Most-Favoured-Nation Treatments
. ROYER (Feanco) (Interpretation): Mr. Chairman, we are
now starting the examination of Part I, that is to say, the
Articles which have been taken over completely from the Charter.
Acting on instructions, the Legal Drafting Committee did not wish
to make any modification in the form of the draft Articles of the
Charter. Nevertheless, on certain points we proposed that it would
be necessary to re-word the texts in a slightly different form.
This is for the reason that at times the drafting of the Charter
was obscure or was not consistent with our purp.ses4
RMAN CIUIUMrN: The Delegate of the United States.
Mr. Winthrop BROWN (United States): Mr. Chairman, the United
States Delegation circulated t/is morning paper wV343 with a
suggestion for the addition of an interpretative Note in Annex I.
That Note refers to this Article and I would like to be permitted
to explain the reasons why we suggese it to this Conferunce.
You all recall that early in the deliberations of this Committee
we suggested that,since there were~aertain preferrntie. internal
taxes in certain countries, we having one particularly on coconut
oil, Article I should include a reference to preferential internal
taxes specifically, making them subject to negotiations in the
same manner as tariff preferences. The feeling of the sub-Committee
on Article XIV was that, since that situation was probably limited
and that ther were not many taxes of that kind, it would be preferable
if possible to take care of them specifically as individual cases
in the different Annexes, and eelested ns were roque,,;,- to advise
the Committee of any such taxes that they have, and Delegations did
so.
The-United States Delegation notified the Committee of the
- P. E/PC/T/TAC/PV/26
existence of its preferential tax on coconut oil and of our desire
and willingness to transform that into a tariff preference and.
make it subject to negotiation. The possibility to do that is
taken care of under the decision of the Committee by a comment
in Annex A which enables us to change that tax into a tariff
preference without violating the rule here: and makes it subject
to negotiation. However, it will require legislation for us
to do that. By the drafting of Article I, wherein it refers
to Most-Favoured-Nation treatment with respect to all matters
referred to in paragraphs 1 and 2 of Article III it would require
us to take that legislative action immediately because of the
'position of Article I in the General Agreement. We could not take
that legislative action until we give definitive effect to the
Agreement and therefore we have suggested this Interpretative
Note in W/343 which would make it clear that our obligation
to correct that situation would be on the same basis as all other
obligations in Part II. I believe this is quite consistent
with the decisionis of the Committee, but we wanted to make it
quite clear, and therefore we have suggested. this Note.
CHAIRMAN: Are there any comments' on the .proposal. of the
United States Delegation?
Are there any objections to the inclusion of this Interpretative
Note in the Annex?
This Note will then be the first Note in the Annex of
Interpretative Notes which is Annex I.
M. ROYER (France) (Interpretation): Mr. Chairman, I think
'this note only refers to paragraph I of Article I, therefore the
referencene should be inserted. to paragraph 1 of Article I. ,P 11 E/PC/T/TAC/PV/26
CHAIRMAN: Are there any objections to the reference to
paragraph 1 of Article I?
We will let the reference be to paragraph 1 of Article I,
unless the Legal Drafting Committee ascertains that it should have
a broader reference.
Are there any other comments on paragraph 1?
Paragraph 2.
Mr. T J. SHACKLE (United Kingdom): Mr. Chairman, I notice
a typing mistake. The word "description" in the fourth line on
page 10 should be "descriptions" in the plural.
CHAIRMAN: "Descriptions" should be in the plural, as
Mr Shackle points out.
Are there any other comments on paragraph 2?
Paragraph 3 ?
Mr . Winthrop BROWN (United States) : Mr. Chairman, a small
technical point. I think it might be clearer if the word "but"
replaced the words "and which" X "and which" might be interpreted
as referring back to the product rather than the margin of preference.
CHAIRMAN: The United States Delegation proposes that, after
-the word "Article" the word "but" should be substituted for the
word "and Which", Is that agreed?
Mr. Winthrop BROWN (United States): Mr. Chairman, in sub-
paragraph (a) we suggest that the first line should read "in respect
of duties or charges on any product described in. " and so forth,
the reason for that being that later on it says "if no preferential
rate is provided for" and that might be interpreted to apply only to
a preferential rate on a customs.duty. Now, in certain of the cases
K ..'''.-'' E/PC/T/TAC/PV/26
in the Schedules you will have only primage referred to, or you
will have surtax only referred to, or you will only have the
ordinary custom duty referred to, and the way it is now drawn up
might conceivably be interpreted that if no preferential rate with
respect to any one of those items were classified, the others
would not be bound. Therefore, if you said "in respect of duties
or charges on any product" it would make it clear that anything
not referred to was bound. And, as a consequential change, the
same thing should appear in the first line of sub-paragraph (b).
CHAIRMAN: The United States :Delegation proposes that she
first line of sub-paragraph (a) and the first line of sub-paragraph
(b) should read: "in respect of duties or charges on any product".
M. ROYER (France) (not interpreted)
CHAIRMAN: Are there any objections to this proposal?
Are there any other Comments on paragraph 3?
Mr. Winthrop BROWN (United States): It is quite clear that
it does involve the same change in the first line of sub-paragraph
(b)?
CHAIRMAN: Yes, I have made that clear. Are there any other
comments on paragraph 3?
Paragraph 3 is agreed.
Article II - Schedules of Concessions.
M. M. ROYER (France) (Interpretation) r. haim-n,;toev hlad l:.
modify somewhat the text of Article II and our reasons for doing so
are she followi:
-~~V
.c saw that it was advantageous to take up again a few lines
of krticle II which had been adopted. by theecammission. bC, use
P . E/PC/T/TAC/PV/26.
whatever the skill of the Committee which drafted this article,
nevertheless it did not appear certain that all the obligations
were covered, in fact, by the provisions of Article II; therefore
we took over the general formula which appeared in the original
draft of Article II and we added some paragraphs to cover certain
points to make these points more specific.
W. Furthermore, the Legal Drafting Committee examined the
relations between the two following sub-paragraphs, the first
relating to the treatment under the Most-Favoured-Nation clause
and the second relating to the treatment under Preferential .Rates.
The Committee had inserted, to link up those ideas, the following
words: "Except as provided in paragraph 2 of this Artic..."
etc. The Legal Drafting Committee did not consider this link-up
quite appropriate and preferred to make a distinction between the
two categories of commitment, and in the first sub-paragraph the
commitments relating to the first part of the Schedule are Mentioned,
and in the second sub-paragraph the commitments relating to the
second part of the Schedule are mentioned. Someone might say
that with such a disposition a duplication might occur, a duplication
relating to countries having the advantage of preferential rates
that that country would have two sorts of advantages; but, in
fact, that country has this double advantage because it, benefits
in the treatment under the Most-Favoured-Nation clause and on the
other hand such a country benefits also from preferential rates and
the advantages deriving from the second part of the Schedules.
That was the second point.
Now, as to the third point, we changed the clause relating to
special conditions and special clauses described in the Schedules.
We thought it was necessary to make such a change because in fact
under this Article, if the ordinary customs duties had to be
consolidated, the consolidation of the additional taxes did not
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P. P. 14 E/PC/T/TAC/PV/26
appear quite clearly, and it was necessary to bring about such a
change to make it quite clear.
Are there any comments on the general remarks
of the Legal Drafting Committee?
We will then take up, .Article II sub-paragraph by sub-paragraph.
Paragraph 1 (a). Are there any comments?
Approved.
Paragraph 1 (b).
Mr. Winthrop BROWN (United States) Mr. Chairman, it is
simply a question of clarification. I understand that some
countries will not have a Part I and Part II Schedule as they have
no preferential arramgement; so would it not be referable
simply to say "Subject to the provisions of sub-paragraph (c) of
this paragraph the products described in the Schedule of any
contracting party....." and so forth. Because in the case of
countries which have no preferential arrangement they will not have
any Part I and Part II.
CHAIRMAN: I think in that ease the difficulty could be got
over by each Schedule putting in the words "Part I" even if there
is only PartI, and the fact that there is no Part II to that Schedule.
would indicate, that sub-paragraph (c) does not apply. Do you think
that would get over the difficulty? In that case I think that
we should ask the Secretariat and the Delegations concerned to see
always that if they have only Part I to their Schedule it should be
described as Part I.
Mr. R.J.. SHACKLE (United Kingdom) Mr. Chairman, might it not
possible to meet this point in another way? -To say "the
products described in the Schedule, or in Part I in cases where there
is also a Part II,". That would avoid putting Part I at the head. 15 E/PC/T/TAC/PV/26
of a whole lot of Schedules with no Part II.
M. ROYER (France) (Interpretation) Mr. Chairman, I think
that from a practical point of view it would be better to have the
same title in every Schedule and to have Part I and Part II and
if there is no Part II just put the word "Nil", after Part II.
Otherwise we shall have a vary cumbersome mechanism if we have
only Part I in certain Schedules and two Parts in other Schedules
and sub-titles with (a) (b) (c) for overseas territories.
CHAIRMAN: Are there any other comments?
Baro, Pierre de GIFFIER (Belgium) ) These remarks
applied only
to the
M. ROYER (France) ) French text
CHAIRMAN: The Delegate of Norway.
Mr. J. MELANDER (Norway): Mr. Chairman, just one point
regarding this Schedule. We have already completed our Schedule
and we have not indicated either Part I or Part II because we have
only had Part I, but, of course, I have no objection to indicating
Part I and then Part II Nil. But I think we ought to have the
same system as a uniform rule for all purposes of this Agreement:
so I take it that it will be understood that other parties will do
the same, and the Secretariat will arrange that we have the same
system.
CHAIRMAN: The Delegate of the United States.
Mr. Winthrop BROWN (United Sta-es): One point on sub-paragraph
at the top of page 14. The paragraph provides that products
in. Schedules should be exempt from all other duties or chases of
any kind beyond certain levels. Here again there are certain
products which will be in certain Schedules where the only thing
intended, to be dealt with is primage or a.particular charge to which
the article is subject. Under the language as now drafted, the
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1 P E/PC/T/TAC/PV/26
effect would be to combine customs duties and every other charge
on such products. So I think it should be made clear that the
binding here only applies to products in which a customs duty
has bean bound. That could be accomplished by adding, after the
words "Such products" the phrase "in respect of which a maximum
rate of ordinary customs duty is provided for in the respective
Schedules".
CHAIRMAN: Are there any objections to the proposal of the
United States Delegation?
M. ROYER (France) (Interpretation): Mr. Chairman, I wonder
if the solution which Mr. Brown has just proposed is a good solution
for this case. Let us takes the case of two items, first haberdashery
and, on the other hand, the case of/optical glasses which will appear
in the list. For the first case, f items such as haberdashery,
appearing in the list of these goods a consolidation of the customs
duty and of the primage duty will be achieved. For the other case,
the optical glasses, there will be no consolidation of the customs
duty but only of the primage duty.. Now it seems to me that under
the solution just proposed by Mr. Brown there would be a juridical
distinction between these items, haberdashery on the one hand, and
optical glasses on the other. Therefore, it seems that optical
glasses would be excluded from this sentence here, and I wonder if,
in the one case, consolidation of the primage duty would be provided
for by this sentence, that is for the haberdashery goods. It seems
to me that the solution which had been adopted by the Legal Drafting
Committee, and referring to.sub-paragraph (a) to cover all the
points not mentioned in paragraph (b), is. the best solution and it
seems to me that the text proposed by Mr. Brown would make a
distinction between two oases between which there ought to be no
distinction. E/PC/T/TAC/PV/26
Mr. Winthrop BROWN (United States); Mr Chairman, I
-really should not be arguing this point, because we would be
perfectly prepared to see it in the way it is, because it would
get us more than we had bargained for in the negotiations. But
the fact is that in a case where a country has simply bound 'the
rate of primage, that is all they have bound, whereas if they have
bound the customs duty they have also bound the other charges and
I think the two matters are quite distinct and should be differently
treated.
M. ROYAL (France) (Interpretation): Mr. Chairman, I would
like to know if Mr. Brown does not interpret in the second sentence
the words "other duties" as meaning that if a primage duty is
consolidated then the customs duty has to be consolidated also .
Mr. Winthrop BROWN (United States): That is precisely the
way I do interpret it and that is why I think it is wrong.
M. ROYER (France) (Interpretation): It seems to me the
''words "other duties" mean duties other than the ordinary customs
duty.
Mr. Winthrop BROWN (United States): ,As I say, Mr. Chairman,
we gratefully receive the bonus.
Mr. R.J. SRA.CKLE (United Kingdom): Mr. Chairman, it seems
to me that Mr. Brown's drafting is the correct one, because surely
where only, for example, the primage duty is consolidated, the
intention and the purpose was not, in this case, as an incidental
result to consolidate the ordinary customs duty, and if we are not
to have that automatic result I think that for reasons of clarity
Mr. Brown's phrasing is desirable.
17 P. E/PC/T/TAC/PV/26
CHAIRMAN: I cannot help feeling that there is a let in what
M. Royer says, that the phrase "other duties" refers to duties
other than ordinary customs duties.
Mr. Winthrop BROWN (United States): In that case, Mr.
Chairman, we should be binding also other charges. But if that
is the intention, we are very happy.
Mr. C.E. MORTON (Australia): Mr. Chairman, we have bound
in a number of cases the primage duty only, and we were aware of
the doubt as to the interpretation which was going to be given
to this particular paragraph. If it is not entirely clear that
what we are going in such cases is the binding only of the primage
duty, we want to have time to have some further thought.
We think that Mr. Brown's amendment does make the point clear
as far as we are concerned. My only thought was that by the
addition of his words he might be taking away from other goods
the right of primage.
M. ROYER (France) (Interpretation) Mr. Chairman, I do not have
to defend this text as the Report of the Legal Drafting Committee,
because, in fact, we did not alter this text at all but took it in
the way it was sent to us by the Committee, which had adopted it.
Nevertheless, I think that, looking at this sentence from a
juridical angle, it seems to me that the words "other duties"
exclude the ordinary customs duty, and that if the primage duty
is consolidated this does not mean that the ordinary customs duty
will also be consolidated. But nevertheless, there is a substantial
question at issue here and in the case of commitments which have
been taken in the Schedules, not concerning customs duty but
accessory duties (and I do not refer here specifically to duties
such as primage but to duties which could be monopoly duties, for
instance) we ought to determine whether we wish to maintain all
. 19
P E/PC/T/TAC/PV/26
those accessory duties or not, and I think the Committee ought to
make a decision on this point. It must be decided whether the
Committee thinks fit to maintain these accessory duties at their
present level and whether it would not be an advantage to write
something in concerning those duties making it perfectly clear.
CHAIRMAN: Are there any other comments? Is the Committee
agreed now to adopt the wording suggested by Mr. Brown or would the
Committee wish to have this subject studied further by the Legal
Drafting Committee with a view to submitting a revised text'
Mr. E.L. RODRIGUES (Brazil): Would Mr. Brown be good enough
to read out again the text of his amendment?
CHAIRMAN: Mr. Brown has proposed that after the words
"Such provisions" in the fourth line of the English text on page 14
the following words should be inserted: "..... in respect of which
A., a maximum rate of ordinary customs duty is provided for in the
respective Schedule."
Dr. G..A. LAMSWELT (Netherlands): Mr. Chairman, I would
prefer to have some more time to study the implications of the
suggestion just made.
CHAIRMAN: May we then leave it to the Legal Drafting Committee
to study the question further and submit to us a Proposal at our
Meeting tomorrowv.
M. ROYER (France) (Interpretation): Mr. Chairman, I think
it would be useful if the Legal Drafting Committee could add to its
numbers for this examination a certain number of experts.
Mr. R.J. SHECKLE (United Kingdom): I wonder, before we leave
this matter for the Legal Drafting Committee to tackle, .Mr.Chairman, P. E/PC/T/TAC/PV/26
whether it might be as well to attempt to define how I, at any
rate, see it.
I gather it is the intention that, where a maximum rate of
ordinary customs duty is bound, as a natural consequence the
subsidiary charges will also be bound. In cases where only some
particular subsidiary charge has been bound, such as primage,
there is no need to make any specific mention here because that
will be taken care of in the particular Schedule.
That is the way in which the matter appears to me, and it
might be useful perhaps to study it in order to get the position
clear before the Legal Drafting Committee once more tackles this
question.
CHAIRMAN: Do any other Members of the Committee wish to
make any comments before this matter is referred to the Legal
Drafting Committee? Mr. Brown.
Mr. Winthrop BROWN (United States): I would like to call
attention to the, fact that the same problem comes up at the bottom
of page 15.
CHAIRMAN: The Committee is fully agreed that this subject
should be referred to the Leal Drafting Committee for further study
and, in accordance with the request of the Chairman of the Legal
Drafting Committee, I propose that .we add, in the capacity of experts,
Mr. Morton and .Mr. Rodrigues to consult with the Legal Drafting
Committee when dealing with this question. Is that agreed?
.Agreed.
Before I having sub-paragraph (b) I would like to revert to the
.question which was raised by Mr. Melander. I think the Committee is
agreed that in the case of every Schedule the words Part I should
appear. The Chairman of the Legal Drafting Committee has also
proposed that in the case of those Schedules which have no Part II
the words Part II should also appear with the word "Nil". I should
like to know if that also meets with the approval of the Committee.
Is that agreed?
A afigreed.
d ..,
''1 S 21 E/PC/T/TAC/PV/25
Are there any other comments on sub-paragraph (b)?
Mr. J.P.D. JOHNSEN (New Zealand): Mr. Chairman, there is a
small typographical adjustment needed, in the seventh line on Page
14. The word "on" should be inserted after the word "imposed."
CHAIRMAN: Yes; the word "on" should come after the word
"imposed" in line 7.
Are there any other comments on sub-paragraph (b)?
(Agreed).
Sub-paragraph (c): the same question arises in connection
with the last part of this sub-paragraph. That also will be
studied by the Legal Drafting Committee.
Are there any other comments on sub-paragraph (c)?
(Agreed).
Paragraph 2: the heading; sub-paragraph (a).
M. ROYER (France) (Interpretation): Mr. Chairman, as regards
sub-paragraph (c), the Legal Drafting Committee did not change the
draft, although it thought it was not perfect. The, Legal Drafting
Committee agreed to the following interpretation; that the word
"equivalent" here means that if a duty is imposed on an article
because a duty is imposed on part of the content of this article,
then the duty should only be imposed regarding the particular
content of this article. For example, if a duty is imposed on
perfume because it contains alcohol, the duty to be imposed must
take into consideration the value of the alcohol and not the value
of the perfume; that is to say, the value of the content and not
the value of the whole.
CHAIRMAN: Are there any other comments? Is Paragraph
2 (a) agreed?
(Agreed). E/PC/T/TAC/PV/26
Sub-paragraph (b): ( Agreed).
Sub-paragraph (c): (Agreed).
Paragraph 3:
M. ROYER (France) (Interpretation): Mr. Chairman, regarding
the French text of paragraph 3; the brackets which are placed
around the word "sa" are badly placed; they should be placed around
the word "ses".
CHAIRMAN: Are there any other comments?
Paragraph 3 is therefore agreed.
Paragraph 4: Are there any comments?
(Agreed).
Paragraph 5.
Mr. SHACKLE (United Kingdom): Mr. Chairman, in the fourth
line of the English text on Page 19 the comma should come out
immediately after the square brackets: "under paragraph 1 of this
CHAIRMAN: This comma will. be omitted.
M. Royer.
M. ROYER (France) (Interpretation): Mr. Chairman, I would
like to say that the Legal Drafting Committee would prefer to
mention the concessions hero in relation to the Schedules them-
selves and not in relation to paragraph 1 of this Article, which
only refers indirectly to the Concessions. We would prefer to
refer directly to the concessions.
We made some modifications in the draft itself; some are
purely formal modifications but others have a wider scope. First
of all, on Page 19, eleven lines from the bottom, we replaced the
word "proper" by the word competent" - "other competent authority
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_ 22 _ - 23 - E/PC/T/TC/P/26
~~~ ~~~ ~~~ ~~~ ~~~ ~~~ ~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
W thought it was wise to make that change because we thought this
.. .
decision onld not be made by a lower Lcministrative officiAl: let
us say, for instance, that a decision could not be made by a
junior customs controller, and threff)e we made that change.
We added, in the following line, the words "to the effect"
after the Words "-,s ruled", because in certain cases decisions
can be made which apply only to particular instances. We wanted
to provide here for the possibility of applying these decisions to
other cases and we thought this provision should have a wider scope.
The other changes which we made in the draft are purely
formal changes.
CHAIRMAN: lre there any other comments?
Mr. C.E. MORTON (Australia): E,cept in regard to the w)rd
/competent", Mr. htiirman. Thc customs controller might be the
really competent autthority but not the proper one.
CHUIRMWU: Des M. M-rton raise any objeQtion to the use of
te word competentll
Mr. MORTON (ustra'a): Tlw word properr" s better.
CHAIRMAN: Is there any objection to the use of the word
proper" instead of "competent."?
Mr. RODRIGUES (Brazil): Is it the same thing, Mr. Chairman?
. NYUN (Burma): M; ChGirman, I suggest we should use the
'ords ''ther proper and competent authority."
Mr. SHACKLE (United Kingdom): Mr. Chairman, I t:: not think
here Is the slightest difference between the use of the word
' roper" snd the 6rd competentt t S - 24 - T/PC/T/TAC/PV/26
CHAIRMAN: The Australian Delegate has suggested, as I
proposed, that we should use the word "proper." The representative
of Burma has suggests that we should use both words. Perhaps the
safest thing would be to return to the original text and just use
the word "proper" Is that agreed?
M. ROYER (France) (Interpretation): There are a few typo-
graphical errors in the French text. In the middle of Page 19 the
word "elle" should be dropped, after the words "était prévu", which
are underlined. Two lines further down the "e" in "parce que"
should be deleted and replacee by an apostrophre. The words "il est"
should also be in brackets; therefore the part of the brackets after
the word "dont" and before the word "reconnu" should come out, so
that the words "dont il est reconnu ou' il a été envisaué au moment
de la signature du" are in brackets.
CHAIRMAN: Are there any other comments on Paragraph 5?
(Agreed).
Paragraph 6 (a):
The Delegate of the United States.
Mr. BROWN (United States): Mr. Chairman, I think the word
"Schedule" in the fourth line should be "Schedules."
CHAIRMAN: Wc will add an "s" to the word "Schedule" in the
fourth line.
M. ROYER (France) (Interpretation): Mr. Chairman, the first
time the Contracting Parties were mentioned in capital letters was
in Article VI, but now you will see that in Paragraph 6 (a) the
Contracting Parties appear for the first time in capital letters.
I think this is the proper place to insert the brackets which now
appear on Page 14 of Document T/212, where it says: "THE CONTRACTING
PARTIES" acting jointly as provided for in Article XXV." S
wovrds?
- 25 -
E/PC/T/TAC/PV/ 26
CHAIRMAN: Is there any objection to the addition of these
(Agreed )
Are there any other comments with regard to Paragraph 6 (a)?
(Agreed) .
Paragraph 6 f Are there any comments?
(Agreed).
Paragraph 7: Are there any comments?
(Agreed).
We can now take up the Protocol of Provisional Application,
as given in Document T/213.
Paragraph 1: There is a Note by the Legal Drafting Committee
on Page 3.
Mr. SHACKLE (United Kingdom): Mr. Chairman, as regards
that note, I think on the whole we would prefer to keep in this
text "not inconsistent with existing legislation." These words
have a more direct relevance, I think, to the matter in hand here.
The words "to the fullest extent of their executive authority"
were more appropriate in relation to the principles, of the Charter.
CHAIRMAN: Are there any other comments.
I take it then that the Committee is in agreement with
leaving the existing wording of sub-paragraph (b).
Are there any other comments on Paragraph 1?
(~~~~(Agreed).
Pap~r2eE ?e Ar; there any comments?
MHA KHVCXLE (Ud ti gK1n-dom): Four lines from thec end, the
word "for" in "for such applicatisn" zhouldrbe zeplaced by the word
of "
CMANRWlIhe T.- worod "wr" -ill be replaced by the wood.""uf. S - 26 - E/PC/T/TAC/PV/26
S Paragraph 2 agreed?
(Agreed).
Paragraph 3: (Agreed)
Paragraph 4:
M. ROYER (France) (Interpretation): Mr. Chairman. I would
like to draw he Committee's attention to the changes we have made
in the draft of this paragraph. It seemed there was a contradiction
between the draft of former Paragraph 4 and the draft of Paragraph.
1. The former Paragraph 4 stated that the Protocol would remain
open for signature until June 30, 1948 to all Governments which
would not have signed the Protocol in Geneva. This was not quit.
accurate, because in fact the key countries had the right only to
sign the Protocol until the 15 November; their right to sign the
Protocol expired on that date, We therefore thought it best to
distinguish between the three following cases: first, signature in
Geneva by key countries or other countries; secondly, signature by
key countries not in Geneva, but only until 15 November 1947; and
then the right of all other countries to sign the Protocol until 30
June 1948. For this reason the Legal Drafting Committee proposed
the text which is now before you.
CHAIRMAN: Are there any comments? Is Paragraph 4 approved?
(Agreed).
Paragraph 5: Are there any comments?
M. ROYER (Interpretation): The Legal Drafting Committee
proposed another draft for the French text which would. be more
elegant then the one which appears now.
CHAIRMAN: Are there any other comments on Paragraph 5?
gr (A.;:ceed).
P,.a ah. S - 27 - E/PC/T/TAC/PV/226
The formula: Are there any comments?
M. ROYER (Interpretation): Mr. Chairman, the way the
document is arranged and the placing of the signatures is not what
we asked for. The words "For" in the English text and "Pour" in
the French text should appear at the beginning of the line; the
signatures should appear under these words and the date of
signature should appear in every case facing the signature itself,
on the same line.
CHAIRMAN; The Delegate of the United States.
Mr. BROWN (United States ): Should it not be "DONE at Geneva
in a single copy", in the same way as before?
CHAIRMAN: Yes; the wording will now read: "DONE at Geneva
in 'a single copy. "
Are there any other comments?
The formula is agreed.
Mr. BROWN (United States): Mr. Chairman, I assume that the
date would be 1947, without a comma after it.
CHAIRMAN: We have now finished with the Protocol of
Provisional Application. In the time left to us before lunch, I
would like to clear up some matters which are still outstanding
>^> .with regard toAnhe r.nvxes.
W: have had circulated this morning a UnitegdKinimom proposed
t xt of the Finel Not-, dealing with areas under military occu.ation,
e 7ondcr if the Committee would be agreeable to take this up now, in
order that che Lozal DgaftmnC Conmittee can include it in their
text of the Interpretative Notes when it is submitted to us
tomorrow.
' . .
; . , I am now informed that there is a new text of this Final
Note. I have sufficient copies in the English language, but the
translation has not yet been made into Franch. Therefore I think
it would be better to leave this matter until tomorrow.
We have some other questions in connection with the Annexes.
The first arises in connection with Annex A. The words "and hams"
are still in square brackets.
Mr. SHACKLE (United Kingdom): Mr. Chairman, as regards those
words, I think for the moment they must stay there in their square
brackets, because their fate is dependent on negotiations which are
still going on.
CHAIRMAN: The words "and hams" will continue to make us
hungry every time we look at them. They Will remain in square
brackets.
The United States Delegation have a reservation on the Note
to Annex.D. May!we ky .,e now whether that draft reservation still
,' stands?
Mr. BROWN (United States.): Mr. Chairman, that point has
been taken care of by the'suggestion made this morning on the
interpretative Notes.
CHAIRM;N: I takA it that hnnex D is approved.
The words "Southern Rhodesia, 1 May, 1941" in Annex G still
have square brackets, May those square erackets bo removed?
Mr. SHACKLCE (United Kingdom): Yes, Mr. Chairman, they may.
CHIIRYLG: Annex 0 is therefore now complete.
We still have Ghe question of separate percentages for India
and Pakistan, in Annex H.
The Deleeate of India.
~ _ _ __ _
S
E/PC/T/TAC/PV/-6 S 29 E/PC/T/TAC/PV/26
Mr. S. RANGANATHAN (India): Mr. Chairman, I have not had
time to consult the reprsentative of Pakistan, who happens to be
in London, but I do not see any very serious difficulty and I
' suggest that provisionally ge firzures may be put ato2.8 fir India
and 0.5 for Pakistan. Thgseefi-urcs euseebmed:oerm, to be only
provisiod l ann- ie thera? is eny further disnussiva or -rriation
aft-,weidSer cithr wgah re-,rIndia or aa.rrta:kiI'snall ,hll
comatr wirti;e'h Sacrat and yourselursAlf.
MANI,!.:t I lhank ehegaoeourtc of India aor g:vine mad
thea,poro. swl. -hicunderstanct-.d is subjeot tnfirmafr :tion by
Pakils.an ou w--herfore ofr-proposa thntiweeLns rt, these
en-pgeta es nnex II!7. wiqh seuara betsktos r-5pd 1tFromm e th.
gateltfaIndia hd has heard froe tepresentati :lve akis-e-3tan,
if he wkil 1indly inform the Secretriat, we wiale h-v.we those square
bracketmose revd.
s^'e ill st e1 omektime iii,- left before lwech,gvG maket tlk,
e ofot).w `helertic:Lartn PRru gI, beginnih: rti' Ai-tcl III,
Aheie es t:els arc iR phe Perort ofeghe Loaal Dr ftimg Ceeiittco
which is coetanncdcumentDur;!a T/212.
PfrtrtI: AiTicle III - National TreotmenInternal;rl
ationi.nda gRlat3.nion - oatgioe 2.e W' have a note frometho
aegelaDrsftino C-mmittee.
R . M, nterp( Iatorret .tion): Mr. Chaieman, th, Legal Drafting
Conmittee hnly wiijnto po n out the differencetiogf drafin which
-appasain P r1oaaph a rgd P ra raph 3 (b)eIt see-s that the
cases, iu net qaitamehe seiT, alaa.imiaFr, afhe dr.at of P:ragraph
y..3"No) sa'sa IN.gcotrr.ctinr party shall, formally or in affect,
;. .'reStrit thoe mixing, proceuse of a p[r or use oa p-..oduct of which there
is no substantdial dom"eestic prAouction, tc. s this draft is
f * h
di~fir.,t from the -raft ofL -'.r- ph 1, we wanted to poin. out the
differenc ,
. .-
V S - 30 E/PC/T/TAC/PV/26
CHAIRMAN: The Delegate of the United States.
Mr. BROWN (United States): My understanding was that the
word "domestic" was left out here advisedly, just to take care of
the case in which the internal tax might be used to give a
preferential advantage. Therefore the present text should be
retained.
CHAIRMAN: Are thereany other comments?
I take it then that the Committee is in accord with
retaining the present wording.
Are there any other comments on Parargraph 1?
(Agreed)
Paragraph 2: Are there any comments?
Paragraph 3: Are there any comments?
(.'.<.:.-- ~~(Agreed).
; Paragraph 4: Are thore any comments?
Mr. heACYL? (United ;ingdom): TM-re is one very small
mttor of taste, Mr. Chaarm'n. I should like a comm. after "1947"
in the last line )n Paoe 4.
CHAIRMAN: WA will add 2 comma there. Are there any other
comments on Paragraph 4?
Mr. 5HNSTN (New Zealand)a There should also be a comme
aftero"1939" in the last line but -ne.
ORCHAIRN: I takewit the New Zealand Delegate %ill not
Is Paragraph 4 appr-ved?
~ hr . . (A~grezed).
arph5
i .. S - 31 - E/PC/T/TAC/PV/26
. :; M. ROYER (Interpretotioke: TaeaRc compGrnsation for the
comma asked for by Mr. Shackle, I am ready to drop a comma in the
French text after the word "achats,"
CILMIWIagraph Pagaraph 5 a9reed.
(Agreed).
ArticlecIa Speoiel Provisions oelating tj Cinematograph
"' Films.aThe aeaging endP: ravraph 1.
Mr. 0. COUF.L (Czechoslovakia): Mr. Chairman, I think this
Artione hts only -no paragraph; therefore ths figure "1" thould
c.meout.
I. CHRIN: Y.s. The heading is agree(.
Sub-paraaraph (a): Are there any comments?
Sub-par graph (b): Any comments?
(A-reed).
Suc-paraeraeh (o): Aca there any Oomments?
(;reo d).
Sub-parngrcph e;): Ary oommnnts?
(,'reed)
Mr. SdhOKLE (Unite; Kingdom): Mr. Chairman, before we leave
this Artiole I would like to say I have submitted to London the
auestions which led to our putting in reservation to this Article.
1ahday oithin o.:> r two I shall receive 3 reply which will
enable that reservitionawn be wlthdr!vm, but at the moment I am not
in E, p. stion to do anything.
CHAIRMAN: Silee thisaArtic is pErt of Part II, and the
.mnso ofethe Cowmiittao has been thet there is no need for
KreservLtions, I take it the United Kingdom Delegate will let us
know in the course of the next few days if this reservation can be E/PC/T/TC/PV/26
withdrawn.
Article V - Freedom of Transit. Paragraph 1.
Mr. SHACKLE (United Kingdom): In the third line on Page 8
there should be, a comma after "territory" - across such territory."-.
CAHIRMAN: Are there any other comments? Is paragraph 1
approved?
gA!reed).
Pcragraph 2: Ag1.rd) .
Pagazraph 3: Agree--d).
Pagraprah 4: Ag-ireed)
Paragraph 5: erc there anc oomments?
M. XOY
printed in ehE
- . ~ Th~
~~~al iP
': Paragre
\: Paraare
ArtiolE
Paragraph I wE
Mr. SR
the point of t
words "or ch:.i
there will be
paragraphs. I
lines from the
of Paragraph 5
...
7R (Itcrpretation): The final "af has not been
eord "accordera" in the fourth line of Pragraph 5.
.f\ Is P ra.raph 5 aoDroved?
(' ,;rd ) .
ph 6: Are there any comments?
(.red).
aph 7: Any comments?
( .,fj.
gI - Anti-Dur.in. and C'untervailinp Duties.
have a note by the Legal Drafting Committee.
On
CKLE (Urited Kingdom): Mr. Ciairman, I should think
he Legal Dreftine Committee could be met by adding the
rge" aetor "'N- anti-dumping duty". If wo do that
fewer consoquentiol alterations in subsequent
tawauld occur in the sixth line of Peregraph 3, two
and of Praegrapng4, -nd two lines from the beginnizr
I should think we might make that addition.
S
- 3 2 - S - E/PC/T/TAC/PV/26
CHAIRMAN: The Delegate of the United States.
Mr. BROWN (United States): Mr. Chairman) I frankly hold my
hand on this subject, but I understand that this Article has been
most carefully considered during the deliberations which led to
its drafting in connection with the Charter and that the words
*'h hich it is suggested should be added were left out advisedly.
I think we should adhere to the text of the Charter and not get
ont. a technical discussion of whether or not the addition of the
words "or chargi" Js an important modification or an unimportant
one. eTezro i long)oP history to it and I thine wa ought to
adhere to the present t.xt,
.f
Mr.KLHACIME (United Kingdor): Me. Chairman, I should be
prepared to drop my suggestion. I think the point is actually
coveredaby Papagreph 7.
., M. ROYER (Interpretation); Mr. Chairman, I do not think we
can keep the text of the Charter, because in the text of the
Charter there is a difference between the Enelish and Fronch texts
and we have to make a decision one way or the other.
Mr. MORTON (Australia): Mr. Chairman, the decision arrived at
inmthe Sub-comzittee, the Tariff Negotiations Working Party and
this Committee was that this Article referred solely to a dumping
dty., No measures or other charges should be taken into consider-
~' nation in it aad actually what an hnti-dumping duty is, is spelt out.
There shouldabe no reference to nnti-dumping or other charges.
CHAIMAN: Can I take it then that the English text will be
±mt inthined as it is in the Ciarter and that the French text will
. f rm to the English text'?
(Agreed).
~ ,''
' ; S
- 34 -
E/PC/T/TAC/PV/26
M. ROYER (Interpretation): The French text has already been
amended, because the words "ni à des droits" already appear in
square brackets.
Mr. SHACKLE (United Kingdom): Mr. Chairman, before we leave
this paragraph I have a microscopic point. In the second line the
words "the territory" should, I think, be "a territory." The
reason is that there are certain contracting parties which have more
than one territory. If we do that, the same change should be made
in the fourth line of Paragraph 5, on Page 13, and we should say:
"any product of a territory of another contracting party."
Mr. Brown calls my attention to the fact that the same change
should be made in the fourth line of Paragraph 1: "imported into a
territory of any contracting party."
M. ROYER (Interpretation): I am afraid, Mrha C!armln, that we
would have to change the draft of all the Articles. In fact, the
text of theaCh'rter was amended et Mra Fmwcett's request awd ee
adopted these words as meaning the collective territories of a
contracting party; not one of its territories but the whole of its
: territories.
Mr.LSHACKIE (United Kingdom): I cannot quesrionaM-. F.scett'3
opinion, but I must say we have had this procedure in all our
treaties.
CENAIREMt: I think it is wise that this AIticle should not
; deviate from the Charter text; therefore I am glad that Mre h"ackla
has dropped his suggestion.
are there any other comments on Paragraph 1?
- S. E/PC/T/TAC/PV/26
a gra~~~P7.rac~raph 2: there any comments?
(Arced
Raragraph3: any comments?
~~~~~~~~~(Azreed).
Para.pre 4: any common-,s?
Pt 5. Wi shall dleta hire the reference to
Contracting Parties acting jointly. Tlese words will appear now
in Article 11, where the words "CONTPACTING PARTIES" first appear
Ar2 there any other comments on Paragraph 5?
Pare ah6
M. Roy an, the French text of
Papagraph 6 is not very olemant, Although uD to date we have
''
made only uhe bare ninmura of chanies, so as to keep this text in
harmony with the Draft Clarter, nevertheless wonder if it would
not be wise to take a little more liberty with the Draft Charter
i so to got a more ele;nt text here. This, of course, applies
to the French text.
4 CHAIRMAN: Iz the Committee in accord with the request of
>the Chairmen of the L;,el Drafting Committee to take more liberties
ith the French text of the i :it more in
conformity with the English text?
(-red).
Arathere any other comments on ParaCraph 8?
l . 0 ( ~~~A,-reed)
.W. . 36~~~~~~~~~~~~,
s 3 A E/3C/T/T,C/PV/2v
A:eagraph 7:y-rc there anr comments?
(Apreed).
I think it is now a convenient time for us to terminate our
session this morning, in order to give sufficient time for the
Legal Drafting Committee to work this afternoon and take up with
us tomorrow morning all the other matters which they wish to have
dealt with.
Tle Committee will therefore adjourn a.m.l 10.30 . tomorrow
and the meeaing of the Tsriff Negotiations Working Party which was
arranged for tomorrow morning will be postponed until tomorrow
afternoon.
The Le-al Drafting Committee will meet this afternoon at
3 o'clock. o Will Mr. Murton and Mr. Rodrigues kindly also make
themselves available.
The Meeting is adjourned.
The M'eting rose at one o'cbck.
.
' ,
.;
' . ' |
GATT Library | qb274jc3743 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty-Third Meeting of Commission A Held on Wednesday, 2 July 1947 at 11.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, July 2, 1947 | United Nations. Economic and Social Council | 02/07/1947 | official documents | E/PC/T/A/PV/23 and E/PC/T/A/PV.22-25 | https://exhibits.stanford.edu/gatt/catalog/qb274jc3743 | qb274jc3743_90240139.xml | GATT_155 | 4,232 | 25,867 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
RESTRICTED
ECONOMIQUE E/PC/T/A/PV/23
ET SOCIAL 2 Ju y 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
TWENTY-THIRD MEETING OF COMMISSION A
HELD ON WEDNESDAY, 2 JUIY 1947 at 11.30 A.M. IN THE
PALAIS DES NATIONS, GENEVA
M. 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)
NATIONS UNIES G 2 E/PC/T/A/PV/23.
CHAIRMAN: I apologise for being late. I come from the
Chairmen's Committee, and we have had a complicated matter
to deal with.
Mr. Suetens also apologises for not being able to preside
to-day, as he is leaving for Brussels in an hour,
Now we continue the discussion of yesterday. The first
speaker is the Delegate of Chile. ER
Mr. F. GARCIA OLDINI (Chile) (Interpretation): Me.. Chairman,
in the discussions that we are having here it was absolutely
unavoidable that the question of underdeveloped countries became the
centre of the debates. This has happened before, and in the course
of the Geneva Conference every time that there was a tension we
always found,in the centre, the problem of underdeveloped countries.
Unfortunately, I believe that when the first and second texts of the
Charter were drafted, maybe insurfficient consideration was given to
the fact that, if one wants to set down general rules in order to
organize international trade, it is necessary in the first place to
consider the real position of each of the countries called on to
contribute to this Organization of International Trade.
After the debate, which was caused by the speech and by the
remarks of my colleague from Belgium. a few days ago, we find with
brutal clarity that this Conference is divided into two sets of
countries. First, strongly industrialised countries which retain
practically all. of their economic power, and second, countries which
do not enjoy such a power but which have great possibilities of
developing their resources in the future. There may be even a third
group of countries: those which are already industrialised but
whose markets are not sufficient as yet. I think their problem is
very much the same as that of the countries belonging to the second
group. This .Position has not been considered sufficiently at the
cutset of our work here. This is why the problem keeps cropping up
in our discussions. Now, the question is whether the provisions
which have been adopted here safeguard the interests of the three
groups of countries, and I do not believe this is so. This is why
our country, which belongs to the group of underdeveloped countries,
has constantly been compelled to ask questions, to formulate
reservations, to propose amendments and changes to the text of the
Charter. L E/PC/T/A/PV/23
by but
Sometimes the question has not been asked/us/by the representative
of another group, but as I said before always in the centre and
at the core of this discussion was the same problem of under-
developed countries.
The question we are discussing here was raised after we
found out that the London text granted very favourable conditions
to developed countries, who were desirous of protecting their
agriculture owing to its weakness or its inability to support
itself, At that time we claimed thatadvantages granted to
powerful countries who wanted to protect their agriculture
should also be extended to industrial products. However,
those considerations were not given due attention. Mr.
Wilcox, raising the matter yesterday, said that it was necessary
to allow the under-developed countries theright to avail them-
selves of protective measures, I think this definition
given by Mr. Wilcox is not objective enough; in faot, the
question is to extend to under-developed countries the
advantages already granted to sufficiently developed countries.
If we look at the question as it has stood since the
beginning of our discussion, we find the first stage was what
was called the London compromise. Now this London compromise
granted advantages to industrial countries - those countries
which were already highly developed - and enabled them to
impose the necessary restrictive measures, but the right was
given to them and not to under-developed countries, as Mr.
Wilcox said yesterday,
Now the countries who were granted this right were still
dissatisfied and suggested amendments extending the London
provisions. Afterwards, the group of under-developed. countries
made proposals tending to grant us the same right; in fact - 5 -
L. E/PC/T/A/PV/23
our proposals tended to grant us equality of treatment with the
sufficiently developed countries,
Now this claim brought forth very strong resistance which
had not appeared during the discussion, either on the London
Draft or on the subsequent amendment. The under-developed
countries caused great discontent here which had not been
evident before when the developed countries put forward their
claims and requests. I. wonder why there is such an attitude
against us, and why there has been taken here a series of
decisions, which, as they stand at present, tend to prevent us
from looking into the future with any confidence which would
enable us to develop our resources.
The Delegate for New Zealand said it was not correct to
speak of under-developed countries, because there might be
near
great opportunities in that field in the/future. He
particularly said the centre of gravity of economic power
may very well shift in the next fifty years from the countries
which are the centre of gravit; now to countries which are
at present under-developed.
If I was not directly interested in the matter, if I was
simply an observer or a newpaper-man who might interpret the
discussions as he liked, I would wonder whether the possibility
of representing within fifty years from now the Centre of
gravity of economic power is actually given to those under-
developed countries. If the Charter is maintained as it now
stands, and if it does not make allowances for the needs of these
countries, I do not think that possibility will exist, Supposing
I were a newspaperman, I Would wonder whether these provisions
which are such a hindrance to us, are not determined - of course
without the other delegates consciously wanting this to be so -
by some fear they may have of giving opportunities to new L E/PC/T/A/PV/ 23
competitors in international trade.
In order to avoid this speculation becoming a fact, we
suggest that the London compromise be changed in order to meet
the needs and interests of the countries which at present are
ed
under-developed and for that purpose we simply suggest/that the
present provisions be extended to cover industrial products
We were answored on that - you do not seem to see the difference
which exists between agricultural and industrial products,
Now I wish to make it clear that we already knew this difference
when we were in grammar schoolls, but vwc ars very grateful to
those countries who have thought it necessary to refresh our
memories.
It has been said there is a considerable difference between
agricultural and industrial products, . and particularly our
attention was drawn to the seasonal ahd weathor elements which
operate for agricultural products; but in fact the question,
here deals only with a particular type of agriculture and not
with all types of agricultural producte. Agricultural producers
are not pleased with the London compromise, which. as the name
indicates, is only a compromise end therefore not completely
satisfactory.
If we read the Charter, we see that agriculture, and
particularly the type of insifficiently developed agriculture
is largely provided for and given possibilities of protecting
itself. It enjoys the same treatment as. industrial products.
It can avail itself of tariffs; which are constantly quoted
heae; and subsidies - here I want to stress, incidentally;
that under-developed countries are absolutely unable to avai
themselves of subsstes; our only means of protection would
be the one suggested by my colleagu of Cuba which has met
with such strong resistance here. Furthermore, can
L L E/PC/T/A/PV/23
avail itself of the provisions included in commodity
agreements which also apply to industry. Agriculture
also is very substantially protected against the competition
of under-developed countries which are not at all protected,
since, as I said before, the production of under-developed
countries can only avail itself of tariff protection and no
other type of protection
The Delegate for the United States commended the advantages
afforded by customs tariffs which are a means of defence against
any abusive protective measures, However, against all these
stands the text of the London compromise which we contemplate
extending, The amendments suggested by countries who
want restrictions applied to agricultural products show the
problem is very different from the standpoint of powerfully
developed countries and the standpoint of under-developed
countries. Here I will quote one example only to make my
meaning clear. - 8- E/PC/T/A/PV/23
In Article 15 there is a tendency to seek means of
preventing an under-developed country from protecting its now-
born industry. The delegation of the United States has proposed
an amendment which has met with strong resistance from us, and
I believe from some other delegates, tending to prevent a country
from protecting a product from similar or competitive products.
Now we find one of the amendments to Article 25, using the very
same words, actually tends to achieve the contrary effect and
to protect competitive products.
Therefore you see, Mr. Chairman, that even from a psycho-
logical standpoint it is always the same thing - the problem is
seen and interpreted very differently by the different types of
countries and there has been here a very strong resistance against
the needs and the claims of under-developed countries and a certain
willingness always to agree to the demands of sufficiently
developed countries.
Therefore I ask you, Mr. Chairman, the circumstances being
so unequal, what prospects have we got?
I wish to refer myself to the statement made by the Delegate
for Cuba when we were discussing the question as it arose on
Article 25. I am sorry to say, Mr. Chairman, that this statement
did not enjoy all the consideration and all the attention it
deserved, because I believe that it raised the question of the
Conference. The Delegate for Cuba said approximately that they
had met with sufficient goodwill here among the Members of the
Conference and goodwill too from the principal importer but that,
in spite of those apparently favourable dispositions, at the end
of the Geneva Conference they would not be able to export one
dollar more than they dit in the past.
And furthermore, Mr. Chairman, what advantage do we get to
offset the provisions of the Charter which bind our hands and
prevent us from taking measures which may be necessary to our
economy? Mr. Chairman, I put it here that we do not derive any P.
E/PC/T/A/PV/23
advantagess . The Delegate for Cuba asked the Conference to consid r
these realities end to draw the necessary conclusions. On my
part I wish to press the point because not only Cuba is involved
here, and the situation is vury much the same for all countries
enjoying the same circumstances.
In order to prevent these unfavourable consequences, what are
we doing here? The representatives of industrial countries have
very strongly opposed. anything that may be done for us, but,
Mr. Chairman, I think we have a remedy here because Article 25
gives you all opportunity here to consider the position and make
all necessary adjustments and allowances, I think the only solu-
tion we could adopt here would be to extent the provisions of the
London compromise to industrial products, making of course all
necessary adjustments in order to restore the equilibrium which
might be destroyed by this article .
I think a practical means of doing this would be to use the
text of the London compromise as a basis and add to it first the
amendment presented by my colleague for Belgium and furthermore
the amendment presented. by the Delegate of Cuba. Of course we
should not necessarily have to use these texts as they now stand,
but I think they should be the basis of a new compromise and may-
be in the long run it would be much better for all parties con-
cerned to have a Geneva compromise just as we have at present a
London compromise.
Mr. Wilcox in his speech yesterday said. very strongly that
the United States had a Congress and it had a public opinion and.
if the Charter did not satisfy the United States Delegation here
it would not dare submit it for the acpproval of Congress and public
opinion. Mr. Chairman, we also have a Congress and we have a
public opinion and if we derive from the Geneva text only disadvan-
tages and a lack of prospects for the future we will not dare,
either, to submit the text for the approvel of our Congress and.
of our public opinion. J. - l 0 -
CHAIRMAN: The Delegate of South Africa.
DR. J. E. HOLLWAY (South Africa): Mr. Chairman, this
Conference is degenerating into a clash between what is generally
known as the flullydeveloped countries and the under-developed
countries. I use the word "degenerating" advisedly. If we go on
like this we will reach nowhere at all. Mr. Chairman, I am a
man of peace, I prefer to see people try and find points of
agreement rather than what we have been doing for sometime now -
trying to find points of difference, and I would devote just a few
words to the question of whether we cannot concentrate rather more
on recovering those paths towards the measure of agreement which
will be necessary, because let there be no mistake on that - if we
do not get that measure of agreement, 11 those other things that
we get on the siue will be entirely worthless, whether we are
under-developed countries or fullydeveloped countries.
It has not been clear to me, since this Conference started,
where the line has actually been drawn between the two, but as
Dr. Coombs yesterday described Australia as an under-developed
country and as, industrially and agriculturally, Australia has done
things in its development which we have not yet dreamed of in
South Africa, I may perhaps presume that I can also speak as a
representative of an under-developed country to other under-
developed countries.
I would like to say this in regard to a number of the proposals
now before
/: the Conference, on this subject of more scope
for underdeveloped countries, that it would no doubt be a very
pleasant state of affairs if one could run with the hare and hant
with the hounds, particularly if the hare can turn itself into a
hound as soon as the hounds are likely to catch it. -11 - E/PC/T/A/PV/23.
If we under-developed countries can get all the benefits that
we can out of the Charter, and retain the freedom which everybody
had during the tragic years before the last war to shoot up the
their
trade of other countries whenever it suited own particular
interests, it will no doubt be a very comfortable position for
those who can do it, provided the others go on allowing them to
shoot up their trade like that. But obviously that is not going
to happen. Obviously, unless we can get that common ground, we
are all going to be worse off. Now, where cen we get the
boundaries of the common ground? The Draft Charter recognises
fully a very important restriction in international trade - the
right of every country to protect its own industries. It sets
out by making that recognition, although you will all be aware that
at one stage it was thought that it might even be feasible to
impose a ceiling to protectionalist tariffs. That was given up.
It was perhaps the first concession to under-developed countries,
but it was given up because it was quite impracticable to carry out.
how, we have an array of tools available for protecting our
industries, an array of tools varying in usefulness. The position
was not always so. There was a time when the magic words "most-
favoured-nation treatment" were looked upon as more or less adequate
to describe the limitations within Which countries might work, and
while, no doubt, in those distant days there was sufficient
original sin in the world to enable countries to break away at the
edges from the clear application of the most-favoured-nation
treatment rule, still, on the whole, it worked, Well then,
whether there was an increase in original sin, or merely an increase
in technical ability, I do not know, but we all started finding
ways round the most-favoured-nation rules, started finding new ways - 12 - E/PC/ T/A/PV/ 23
of discrimination which bowed in obeisance to the most-favoured-
nation rule and then proceeded to break it. We also foundnew
devices which were the result of technical development which our
grand parents never dreamed of. We went up that path, and we
got into such an appalling bog that we all found we had to get out
Of it. G
Well, there were two main things necessary to get out of
it. We have agreed to restriction on international trade, which
is represented by protection. But outside the boundaries of that
restriction there are two things which are essential, We are not
going to be worse off by having the powers which we have than
we woull be without them. The first is equal treatment for
everybody outside the protective realm - non-discrimination is
the main corner-stone of the Charter. The second is the removal
of unnecessary restrictions.
The first is essential. We are having international treaties
because human beings and States being what they are, as soon as
you start knocking at them they have an unfortunate tendency
to knock back. You get consequence on consequence, and in that
pool you drop a stone and the ripples go to the extreme
boundaries of the pool.
Secondly, we must remove unnecessary restrictions. Now,
the Tariff has been accepted as a tool which can be used.
generally. The suggestion now is that certain ther tools should
be used on exactly the same footing as the Tariff.
I want to indicate that technically they are on an entirely
different footing. The Tariff has a big advantage, a big
advantage for getting these two objectives which I have
indicated. as necessary for our working with each other, because
by the wise disposition of Providience we are all able to count,
and the Tariff is generally put in such a way that you can count,
and if we could go back to a simple way like that we would not
have these lengthy discussions about discrination; but
actually, we have found that, being in the bog into which we
landed, we have got to use some other tools, None of these have
the efficacy for harmonising protection with non-discrimination
- 13 - G 14 E/PC/T/A/PV/23
and with the removal of unnecessary restrictions which the
Tariff has; but we must use them, and, again, speaking as a
representative of a not-fully-developed country, I want to
point out that all those other concessions are concessions to
the not-fully-developed countries.
All those other methods that we have used in the Charter
subsidies, quantitative restrictions, State-trading, State
monopolies - all-have this one feature in common, that they
do not automatically indicate where you are giving to other
countries fair and equal treatment - that fair and equal
Treatment which is essential for international co-operation;
nor do they automatically indicate that there is not
unnecessary restriction.
Therefore, two very simple rules follow, two very simple
rules by which this Conference must test, pretty well, every
Amendment that deals with quantitative restrictions, State-
trading, State monopolies or any other method of protection
other than Tariffs. The first is that it is essential that you
must circumscribe those things because they do not circumscribe
themselves automatically; and the second is that that
limitation must be adequate to bring: about that non-discrimination,
that limitation on unnecessary protection, which are two of the
main things which we must have. You must have. rules . You cannot
go without rules, and those rules must be adequate.
Now we are drafting some of these rules, as I shall try and
indicate presently. A number of them conflict with- these very
simple propositions which are essential; but the Charter is
not satisfied. with going only that distance. The Charter admits
that you might have to go further when you are dealing with -15- E/PC/T/A/PV/23
these matters. That we all know something about - that you can
lay down certain rules, and having made those rules, you have
given everybody a franchise to act inside the limitation of
those rules.
The Draft Charter says further, that there are exceedingly
likely to be circumstances for which you can make no general
rules, but which can yet be admitted, and in that case you have
just got to treat each subject on its merits; therefore, you
come back to Article 13, which says, if none of those other
rules will suit you, we will still see what we can do to meet
you.
Now, I feel, Mr. Chairrman, that our attempt to get out
of this bog - both fully develope. countries and under-
developed countries - Can perfectly safely go quite a long way
to meet each others difficulties. I would go further, and say
that in the present state of the world's trade, they ought to
go quite a long way to inset each other's difficulties.
we are not in a position in which the patient is healthy.
We have to put up with a large number of things which normally
we would not like to countenance; or if I may change my
metaphor, we are learning to swim, and we jolly well still have
to get into the water, even if we do not like getting into the
water at the particular spot where it is necessary to get in
to learn to swim. We are learning to make rules for the
proper conduct of international affairs, but, again, there is a
limitation - again there is a limitation, and, that limitation
is that we must not in any of these rules and concessions that
we make for each other go to such an extent that we break down
the main thing that we are trying to do; and. I suggest to you
from both sides - not only the under-developed. countries, but
- 15 -
G - 16 - E/PC/T/A/PV/23
alsO the fully developed countries - that there is a tendency
here to forget that we are trying to do what we can under
present circumstances, a tendency to write absolute rules in
vacuo, saying that everything else is in. We are not facing
that situation.
We want to meet each other, but we want to co-operate.
think if you will look at some of the Amendments which have
come nominally on behalf of under-developed countries, it is
perfectly clear that they mean running with the hare and
hunting with the hounds, and. that a proposal like that - a
proposal which gives a country the right to do what it likes
with its own trade, while at the Same time taking the full
benefit which can be given by other countries which are not
allowed to use that right - that sort of proposal breaks down
the central character or the Charter; and I suggest that
not
that rule should/be applied.
I want to refer also to some proposals that have come
from the more fully-developed countries. V. - 17 - E/PC/T/A/PV/23
I want to quote Just one example: I have observed a great
deal of damage which has been done by a proposal which was badly
formulated, and which I think has given everybody the impression
that it means a great deal more than it actually does mean and that
I am convinced the countries proposing it meant by it - that is,
the so-called mixing regulations.
Everybody has thought, "Here is some devilish scheme to knock
up potential industries by not allowing them to use methods which
are in daily use all over the world". I. think it is a pity that
that happened, because I do not think it was intended (though the
mixing regulations have certainly created that impression) that the
fully developed countries were trying to peg a claim inside
under-developed countries, so that the under-developed countries
could not develop their industries.
I would suggest, Mr. Chairman, that we test our amendments by
this simple test: whether, in fact, if the same rules were applied
- were actually carried out - by every other country here
represented, there would be any room for us to co-operate. I
suggest that if you apply that rule, you can drop quite a number
of amendments into the wastepaper basket straight away. L - 8 - E/PC/T/A/PV/23.
CHAIRMAN: We have still six speakers on the list. We
cannot go on now, and I propose that we should meet again on
Saturday morning at 10.30 a.m. and then the first speaker will
be the Delegate of the Lebanon; the second speaker will be
the Delegate of New Zealand.
The Meeting is adjourned.
(The Meeting rose at 1.15 p.m.) |
GATT Library | tn816jh9889 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Twenty-Third Meeting of the Tariff Agreement Committee held on Thursday, 18 September 1947 at 2.30 p.m in the Palais des Nations, Geneva | United Nations Economic and Social Council, September 18, 1947 | United Nations. Economic and Social Council | 18/09/1947 | official documents | E/PC/T/TAC/PV/23 and E/PC/T/TAC/PV/22-24 | https://exhibits.stanford.edu/gatt/catalog/tn816jh9889 | tn816jh9889_90260085.xml | GATT_155 | 16,194 | 98,007 | UNITED NATIONS NATIONS UNIES
RESTRICTED
ECONOMIC CONSEIL E/PC/T/TAC/PV/23
AND ECONOMIQUE 18 September 1947
S 0 $OCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATOMY COvMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE APLD EENMLOYMT.
TIM ~~~~~~~VER3A~Tlg REPORT
TWENTY-THIED MEETING OF THE TARIFF AGREEMENT COMMITTEE
w...
HtLD ON TP.R.DAY, 18 SEPTEMBER 1cA7 a 2.30 )~M IN THE
PALAIS DES NATIONS, GEEA
tj':
Hon. L D. WILGRESS (Chair: n) (Cunada)
c-iesates sheaches smo~decorr'otions :a thuir -tChxus ':h.tld
,,otirc s a ance Off , to "he Dacumentu Cle'roe O' ice
Tel .27 .
ations, which d!re reminac-cG ths,-t t ttcxtif fJ~O
r~~end to be authentic translations, are reproduced for
-en l'guidance only; corrigenda to the texts of interpretations
cario,2therefore, be accepted.
METGFRE.&RFA2:ME ODTE S. E/ PC /TTA'C/PV/23
CHAANMiT: The Meeting is open.
The first item on ougeAGenda today is the recommendation
of the Tariff Negotiations Working Party concerning india and
Pakistan. This isgiven incDooument W/339 of 17 September.
I might state, in explanation of this recommendation,
that a week or two ago Sir Raghavan Pilla i of India aMd Ir. Rahim-
tula of Pakistan met the Tariff Negotiations Working Party
and explained to them the special circumstances surrounding the
mutual trade relations between India and Pakistan.
MeERsmbers of the Committee will be aware, India and
Pakantax kt the present time constitute a customs union. They
have constituted one economic unit for several centuries and
now, that thedinCependence of these two countries has been estab-
lished there is a difference in their relationship, the exact
urn aueof which it is impossible to foresee at the present time;
in fact, it will take somo years before the situation is entirely
clear.
~~In these circumstances, the representatives of India and
Pak is tan wishethat som- special arrangements should be, made to
goentheir mutual trade relations. Accordingly, the Tariff
Negotiations Working Party gave very careful study to this situa-
tion and as areeesult hy submietee tmmercaornmndetions which are
given in this papere Thamm reeoiaendations take the form of a
proposed new Paragraph 5 to AXXIVcle g(V,etoGethar with an
interpretative note.
*. Tariff Negotiations Wirking Party felt that, by making
.this recommendation, they weree not caatiir aey paecodent, because
the circumstances connected woth India and Pakistan are of such
an exceptional naaure th;t ehey arc not likely t o recur for many
years. - 3 -
S. E/PC/T/TAC/PV/23
Are there any comments on this proposal?
Mr. SHACKLE (United kingdom): Mr. Chairman, my Delegation
regards this as a suitable, solution to this problem.
CHAIRMAN: Are there any other comments?
May we then take up the Paragraph 5 of Article XXIV,
the text of which is given in this paper. Are there any
---,c s ?
nre there aiy objections to tais new parQgraph?
IrHJJE..D. JO~eSMN (New Moaland):m nr. Chair;a , I have
jlst oin srail po s. There iz alrgady a Para~raph 5 in
eh ;t Artighl this ouhtgto be ParaGraph 6.
O~,U.Pd-LN~~: hat is cor-rect.
r. Ite MDDY haniman Stht.s): l.. CheirLn, I think
thehantention here was t it this paragraph should replace the
present Paragraph 5, whgch would become ParaGraph 6.
- .I. A : Mr.Loddy has pointed out that this Paragraph
ragraphd replacee, ar thgph. 5 as givn on PaGe 56 of Document
T/196, and th5teouldi epescnt Parag7~ph wbcome.Par-graph 6.
Lo hmme a-iyothor onz;.ss?
The Dtlogate of China.
Mr.D.MY.LDiO(China): ire Cheirman, I prcsumo thnt when
ngementcial c?t e oise eneneIcd inandbotwen £ndia md
Pakistan the Contracting Parfiesewill be insormud of this fact?
-'Z resont C arI j Theag ap noorovision inthais parfGrr?,h f
thesContracting Parties, but, to i i da has pointed our n I Pa'sb ,sas
mbernow, une5r theurArtica of7 theChotor, M56 ors f7 tho
Int/rg9eionaormrade Organization are expoctd to .iv6 inf 6ration
-' reding their .r,de ro~ations with various othor countries,
.re there any othor c?.?:Ots?
Is the paragraph ao Crd?
(.;reod).
e informatiDnCia: ..CeisaIpcu o
y;pca ~aEe;~n scltrdit ttonid;
tntoCnr8 tn ~rie z1 Doifrfo fti at S.
We now take up the interpretative note to Paragraph 5 of
Article XXIV. Are there any comments? Is it agreed?
(Agreed) .
The Dalegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman , there
are some ambiguous words there; the words in the French text
which are translated into the English text as "once they have
been agreed upon". It could mean that they have boon agreed
upon by India and Pakistan.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R. J. SHACKLE (United Kingdom): I would assume, Mr.
Chairman, that this referred to an agreement between India
and Pakistan. This is surely a counterpart of the scheme
for the formation of the customs union: it is a scheme agreed
between the parties. Surely that must be the intention here.
Mr. LEDDY (United States): Mr. Chairman, that is also my
understanding.
CHAIRMAN: I think that is clearly the understanding.
Is there my difficulty about putting that into French?
M. ROYER (France) (Interpretation): Mr. Chairman,
nevertheless I think the text is ambiguous. If the words "once
they have bean agreed upon" mean that the measures have to
be agreed upon between India and Pakistan, it seems to me
that these words are not indispensable. On the other hand,
if we want to refer here to the procedure for approval by
the Contracting Parties (with capital letters), in the case
when a customs union is formed, then it ought to be specified.
CHAIRMAN: The Delegate of the United States.
Mr. LEDDY (United States): Mr. Chairman, I find no
difficulty with the English text at all; I think it is quite
clear.
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S. E/PC/T/TAC/PV/23
Mr. SHACKLE (United Kingdom): I should say the same, Mr.
Chairman.
CHAIRMAN: Is M. Royer satisfied?
M. ROYER (France) (Interpretation): I have no objection.
The French text means exactly the contrary, but it does not
matter.
CHAIRMAN: Is it possible for the Legal Drafting Committee
to make the French text mean the same?
Are there any other comments on the interpretative noto?
The note is agreed.
SIR RAGHAVAN PILLAI (India): Mr. Chairman, before we
proceed further I should like to express the thanks of the
Indian Delegation for the very helpful and constructive atti-
tude taken up by the Tariff Negotiations Working Party and by
this Committee on this question, end particularly also for the
attitude taken by Mr. Leddy, whose country has a system which
is much superior to our own. I would like to thank you also,
Mr. Chairman, for the sympathy and understanding shown in
handling a matter of such vital concern to us.
CHAIRMAN: I thank Sir Raghavan. Pillai for his remarks and
I am very glad we were able to find a solution of this question
which has met with the unanimous approval of the Committee.
Before p BThfore proceeding to the next item of business, I Wish
to raise question which I have been asked by the Secretariat.
Owipgetion ofdelaff, h stoaf toe Secretariat are finding
difficulty in phovimmng bott su=eary records, and verbatim
records-of these, meetings, I therefore take it that it will
be in order meeif for this tinug,e uand aney sbsqent metings
wCry veI onerl thme vor~ba reord is provid ed andnot the'
sumary record. E/PC/T/TAC/PV/23
CHAIRMAN: Are there any objections?
The next item on our agenda is the amendment to Article I
which the Australian Delegation proposed at our meeting on
September 2 last. This is given in document W/337.
The Delegate of Australia.
Dr. H. C. COOMBS (Australia): Mr. Chairman, I do not
wish to cover the ground of our preoccupation with this Article
again. It has been listened to patiently by this Committee
on several occasions and I do not want to burden them with it
again.
The substance of our position is that we believe that
this Article in its present form requires a concession on the
part of our country - my country - that is not necessary to
protect the tariff concessions embodied in the Schedules, and
which constitutes a change in our commercial policy which we
consider should be acceptable only as part of the general
statements covering commercial policy which were contemplated
in the Charter.
We do not object to the principle embodied in the Article.
We think it is a desirable principle in a setting such as that
contemplated by the Charter. We do not raise an objection
to its inclusion there. But we do believe that its incorpora-
tion in the General Agreerment requires a unilateral concession
in that it obtains a binding of a large number of preferential
margins in the absence of corresponding concessions which
would make that an acceptable procedure.
Mr. Chairman, however, we have been advised that an Agree-
mont which does not include the Most Favoured Nation clause
in the form in which it at present appears would not be accept-
able to certain of the Delegations whose participation is
really essential to the establishment of the General Agreement.
My purpose, therefore, in requiring that the Committee should
P.
6 P. E/PC/T/TAC/PV/23
give attention to this amendment is merely to make the posi-
tion quite clear that the Australian Government does not
consider the present text of the Article a satisfactory one
and considers furthermore that its incorporation in the General
Agreement involves a unilateral concession and that therefore
we believe its proper place in this form is in the Draft Charter
Since it is clear, however, that, if the attitude of
the Delegations which was expressed when we discussed this
matter previously is still as it was then, we cannot expect to
have the drafting of the Article varied, we would wish to be
understood, therefore, that the position we are placed in is
that, since we have been told that the Article in its present
form is a necessary requirement in the General Agreement for
the participation of those countries, it will be necessary for
the Government of my country to decide whether the inclusion
of this Article does in fact leave the General Agreement in a
form in which it is acceptable to them.
In reaching such a decision of Course they will take a
wide range of factors into account, including the, other benefits
and concessions which they may be expected to receive and to
make in the negotiations as a whole.
CHAIRMAN: Are there any other comments?
~~E DDY (U J St to
Me. T. M. LihDY mUnit^ St-tcs); Mr. C;airYan, I am
a bit troublDelegatee statesent o, the naJ.2.to of Au3tralial
because, aa we geheve n~r drafted this -rranmcnt, Australia
is one of the key countries, ed if it should fail to sign the
Proaoconmof Provisional Applcauseol I think that would CJ.U8
a very serious difficulty indeed.e It would, because of tho
inter-relationships, I think, require a fresh negotiation.
* ;
P.
7 P. 8 E/PC/T/TAC/PV/23
As I understand it, the position of the Australian
Government is essentially that they regard the Most Favoured
Nation clause as being closely related to the Charter.
We regard the Most Favoured Nation clause as being not only
necessary to safeguard tariff concessions which we negotiate
on particular items, but also to provide a part of the general
quid pre quo for any normal trade agreement.
Now, I hesitate to make this suggestion, I am reluctant
to do it, but I think that we would be willing to consider
the transfer of article I from Part I of the Agreement to Part
it
II, which would put/in the same category as other Articles
drawn from the Charter in the light of the Article now agreed
upon with respect to supersession, it being our understanding
that this would not change the substantive position as to what
would in fact take effect on January 1 1948; that is to say,
if countries are prepared to give provisional application
to Article I under Part I they would be able to make that
application effective even though it were in Part II, which
carries with it the qualification that countries will give
effect to Part II to the fullest extent not inconsistent with
existing legislation.
If that were done, would that help to meet the position
outlined by the Delegat of australia?
DR. H. C. COOMBS (Australia): Well, Mr. Chairman, the
suggestion that the United States Delegation has put forward
is, we appreciate, a significant concession on their part in an
attempt to meet our difficulties. It does not, of course,
entirely remove those difficulties, but it would ease our
p problem to a considerable extent. The most that I could say
it this stegc is, Mr.haL:mafln, that wa are gratefulofOr the
. .... ,--9G is L :n !' ie suggestion, and I would like an opportunity to consult my
Government about it.
CHAIRMAN: In these circumstances, I think the best thing
to do would be to hold over a decision on this matter of the
transfer of Article I to Part II of the Agreement as proposed
by the Delegate of the United States until a subsequent meeting.
I do not know at what time we could take this matter up; we
are coming to the; end of our labours; but perhaps if we took
it up at the beginning of next week it would be sufficient.
M. ROYER (France) (Interpretation: Mr. Chairman, this is
only a practical question I could like to raise I adhere
wholeheartedly to Mr. Leddy's proposal which ought to give a
satisfactory solution to this problem, and furthermore it
would give satisfaction to a certain number of points which had
bean raised by other Delegations, including the Delegations of
Chile, the Lebanon and Syria. But from a practical angle,
and taking into account the fact that the Legal Drafting
Committee has to submit to this omimittee a draft, nld that this
draft is urgently requested by this Cmmmittee, I would like to
know if we could transfer this text as tu tiands now from Part
I to Part II and pa ce it in square brackets.
.' ; CHAIRMAN: I think it would probably materially facili-
tand our work amd enable ue to have a RBport from the Legal
Draeeting Csrnitee eorlier thcn weuld otherwiso be the case.
I should think, however, teat would givG rise to other problems
suh cs the particular place in which Article II should appear.
.Ie would seoe to ma that, if Article I would be transferred to
Part II, there would be no noed then to have three Parts to
thih AgAoement Ind tnat _eticle TI could be placed at the be-
ginning of Part III before the present Article XXIV.
^:.
P.
9 10 E/PC/T/TAC/P2/e3
T-eel-Legate of Belgium.
X. Pieeru FOHOMME eB3lgium): rMv.hairmr an, I was
wondering if we could not solve the problem in this way:
decide now to invert Articles I and Article II, then, from the
point of view of the Legal Drafting Committee the only thing
would be to decide, wneh the question ibeSjing taken up again
with the Ausar~ai.n Delogation, if the words aPPrt II' would
be written after Article II, which is eA-.rticle I, or before
Article II. That would bavfiery small change and could be
done quite easily withoua :ny difficulty.
Now, as to whether the present Article II should stay in
Part I by itself or be removed to Part III and there be no Part
I, I do think it would be logical to start thia -greemant by
the stipulationhaort warer going to give treatment to each
other's products in accordance with the Schedules, the whole
of the rest of the Agreement being dependent on that first
agreement which is that the Sehodelas have been establishea end
are going to be accorded to each other. Allhtie rest are the
conditions in which the initiaa :nd fundamental agreement is
going to be applied, consequentlw Ve should start by those
conditions.
Therefore I think we should eecp Part I with only one
Article in it.
CHAIRMAN: Monsieur Royer.
M. ROYER(France) nIrterprat-tion)M ar. Chairman, I was
under the same impression as M. Forthomme, and thLuink that we
must keep a Part I in the agreement. There is one reason, that
is that Part I can only beampintaencd following the unanimous
consent of all the contracting parties.
w P. 11 ~~~C~~E/Po/T/TAC/PV/23
a~~Now,as reg-.rds the place oA the present ,rticle I, it
seems o me that the best place would be to place it immediately
after what will bccome Article I, ehII Ns Articlt !I ow,
and that we should not insert the present Article I in Part
IIrt ocase teaAticlts of Pert III aintann o ifnly be mnaiedi
exn follows tho rule ma two-thirds i.jority. And, if I under-
sMood eidhtly, Kr. Ladayas intenAion w-s that ,rticle I, if
trahsarrl~d into Part II, should be supersedee by the, corr,s-
ponding arhicle of the C.arter.
J J.ni IL. LEDeY (U:dd. hatamat, I wass: Mr -irn'
thineking somwheroaleong the lin of what youiproposed, that
~ere.would juast be two p,ts of the Trade Agreemrnt, Part I~
v aiin~ al of the e Article3s ramwn froha te C-Lartrtinstar A5ag
off with the Most Favoured Nticles, als nd Part II,
co taining-allAof the -rticles relatieg to thu Scaedules end
' the geneatal appli2tiAn of theLkgreement , which cannot be
amended except through the Aomeeure orndmentprcd, in respect
'~o Whitis present Articae eI, by agroement .mong all con-
actieg pcrticis
I tmink it iakes for a simpmer docurent to have it in two
parts thre in there.
. I would also suggesA thnt th wayaPrticle.II st::rts off,
that i to say-in the draft approved by 'hhis Commattee tn
other day: p- "Except ps agraded in Parnrgrph 2 of this Article"
knmks a vory awkward beginning for an Agreement. But I do not
0
to press this question. I think the Legal Drafting
romittae-could look into it anesdebate the quE~tion of style.
and pres tnt us with wha they think is the best solution.
1 /C//TaCPI2 E/PC/T/TAC/PV/23
CHAIRMAN: The Delegate of the Lebanon.
Mr. J. MIKAOUI (Lebanon) (Interpretation): Mr. Chairman,
I would like to thank first of all the United States Delegate
and aIso the Delegate of France for this proposal to transfer
Article I from Part I to Part II of the Agreement. This
solution would give us complete satisfaction and. I hope that
the Committee will be able to adopt this suggestion.
CHAIRMAN: Are there any other comments?
The Delegate of India.
Mr. B. N. ADARKAR (India): Mr. Chairman, I only wanted to
say that we would support the proposal to transfer Article I
to Part II in view of the fact that it would give satisfaction
to the Delegation of Australia as well as those of Chile, Leba-
non and Syria.
CHAIRMA: Are there any other comments?
Is the Committee then agrEeable to leavin. it to thc
Legal Drafting Cormittee to decidE the best way in vhich to
arrange this change, at the same tire, putting in their Report
a note to the effect that a definite decision ha~f ot yet been
reached with regard to the disposition of article I? Is that
agreed?
M. Pierre FORT"OMM. (Belgium): Mr.C hadrman, does this
moan then that present -tricls II will become part of Part III
and. there wilfl b no Part I?
CHAIRJMN: yr. Leddy said that he .ould) e satisfied to
leave to the Legal Drafting Committ e e to decide where Article
II should go: ;hether it should go at the beginning as Part I
or in some other place. I think that was the sense of Mr.
Ledd'ys roopoasl: that we do not decide that here but leave it
P.
12 P. 13 E/PC/T/TAC/PV/23
to the Legal Drafting Committee to work out the best way of
arranging the disposition of present Article II.
Is that agreed?
M: ROYER (France) (Interpretation): Mr. Chairman, I
would like to be perfectly clear on what is intended. If I
understood rightly, Article I would be superseded by the
corresponding Articles of the Charter, but the present Article
II of the Agreement could only be modified unanimously by
the contracting parties. I want to be quite clear on this
point - that we do not intend to make a change in the substance
of this Article.
Now, as regards Part III, Part III could not be super-
seded by the Charter and Part III of the General Agreement
could only be amended following a decision taken by two-thirds
of the contracting parties.
CHAIRMAN: The understanding of Mr. Royer regarding the
substance is quite correct. If the Legal Drafting Committee
should decide to adopt the suggestion that instead of three
parts there should only be two parts, then it would require
a consequential change in Article XXX, Amendments, to provide
that Article II could only be amended with the consent of all
the contracting parties; I think the Legal Drafting Committee
could make those changes if they decided that, from the point
of view of presentation that was a better way to proceed.
On the other hand, if they decided that Article II should re-
main at the commencement of the Agreement, the Agreement would
then consist of three parts: Part I would be just the present
Article II. The important thing they have to take into con-
sideration is the point suggested by Mr. Leddy as to whether
it is a good thing to commence an Agreement with the words "Ex-
cept as provided in paragraph 2 of this Article", or whatever
will be adopted with regard to Article II when we come to deal
with it in the Report of the Committee. R.
R.
14
E/PC/T/TAC/PV/23
Mr. R. J. SHACKLE (United Kingdom) I would just make
one remark, that if the question of presentation is going to
affect to place of Article II, it would be easy to alter the
beginning of Paragraph 1 or Article II so as to remove the
proviso to a place lower down. A very simple way of drafting
that occurs to me is to delete the words : "provided in paragraph
2 of this Article," etc., at the beginning, and they would than
be transferred to the end of the sentence, so that the whole
conditions
thing would read something like this: "(a) subject to the terms, /or
qualifications, set forth therein and (b) to the provisions of
paragraph 2 of this Article". That would avoid that presenta-
tional difficulty. It would be easy to get-over the difficulty
in some such way as that.
CHAIRMAN: Are there any other comments?
The Legal Drafting Committee can take into consideration
the suggestions just made by Mr. Shackle. We can also be dealing
with it when we come to consider the report of the Sub-committee
on Article II.
Are there any other comments?
The proposal therefore to refer the question of the re-
arrangement of these Articles in accordance with the tentative
decision we have reached, has been referred to the Legal Drafting
Committee and they will append a Note to the report to the effect
that a definitive decision on this change will be taken later.
Before taking up the Report of the Committee on Schedules
and the new text of Article II, I would have liked to clear the
decks of one outstanding matter in relation to Article XXIV.
When we were dealing with Article XXIV, we agreed to defer con-
sideration of the Australian proposal that the first paragraph
of this Article should be transferred to Part II. A note to R. - 15 - E/PC/T/TAC/PV/23.
this effect is given at the bottom of page 55 of Document T/196.
In view of the fact that Dr. Coombs is not present,
we will hold this matter over and deal with it later.
We now have to consider the Report of the Sub-Committee
on Schedules of the Tariff Agreement Committee. This report
is given in Document T/201, and I will call upon Mr. Morton of
Australia, the Chairman of the Sub-committee, to present this
report.
Mr. C. E. MORTON (Australia). Mr. President. In intro-
ducing the report of the ad hoc Sub-Committee which met on
Wednesday, 17th September, to consider: (a) the preface to the
Schedules of Tariff Concessions set out in Document T/153;
(b) an amendment to paragraph 2 of Article II (Document W/287)
which to a degree related to similar matters; and (c) a proposal
emanating initially from the Czechoslovakian Delegation for
adjusting specific rates of duty in the event of a serious.
depreciation in the par rate of the currency of a country being
a contracting party.
I desire to state that agreement was reached on the
advisability of making the Schedules an integral portion of
Part I of the Agreement, removing all prefatory notes from the
Schedules as far as possible, and incorporating in Article II
of the Agreement itself the content of such prefatory notes as
it had hitherto been considered desirable to have in the
Schedules.
The text of Article II, as the Sub-committee recommends
it to this Committee, will be found in Document T.201, pages
3 - 5. I suggest it contains no departures in substance from
texts agreed upon in Charter discussions.
It was felt that the previous reference to "other E/PC/T/TAC/PV/23.
duties or charges" which, after the date of signature of this
agreement, were required to be imposed under an importing
country's laws in force on the day of signature, might be open
to an undesirable degree of misinterpretation, and the reference
has been amended to except only such other duties and charges
as are directly and mandatorily required to be imposed by
legislation in force on that date.
A desirable provision in regard to a country's right
to maintain existing requirements as to eligibility for prefer-
ence has also been incorporated as the final sentence of para-
graph 2 of Article II. This of course only affects countries
members of a preferential group and the provision is in accord-
ance with the principles stated in paragraph 6 of Article XXXII
of the draft Charter. On consideration, this Committee may see
an advantage in making this sentence a separate paragraph, which
would have the effect of relating its incidence to paragraph 1
as well as to paragraph 2 of the Articles as at present.
The suggested French amendment to paragraph 2 of
Article II (which was set forth in W.287) was withdrawn in view
of the amended form of the Article proposed in the Sub-committ's
report.
Without comment the Sub-committee desires to have the
Legal Drafting Committee consider a suggestion for a cross-
reference in paragraph 3 (a) of Article I, which suggestion will
be found in the second paragraph on page 2 of this Document.
As regards the third matter with which the Sub-committee
was requested to deal, I regret to report that opinion was too
sharply divided for unanimity to be arrived at.
I note from Document W/341, received this day (18/9/47),
that the Belgium/Luxemburg Delegation has presented a proposal
for the inclusion of a note concerning adjustment of specific
R.
-16 - R. - 17 - E/PC/T/TAC/PV/23.
duties pursuant to appreciation or depreciation of a country's
currency under permitted circumstances. I therefore consider
the matter to be still sub judice and feel that my comments on
the Sub-committee's discussion should not be such as to
prejudice any further discussion on the matter in this Committee.
It was agreed that a substantial variation in the par
value of a country currency could render necessary an adjust-
-ment of that country's specific rates of duty in its Customs
Tariff in certain circumstances. The difficulty of stating
criteria which would determine when such circumstances in fact
existed was appreciated. It was felt that an attempt to
propound such criteria was not desirable as the problem
affecting any single country was such as would require it to
be studied in isolation.
The principal area of disagreement revealed in the
Sub-committee's discussion centred on the question as to whether
a country making an adjustment to its specific duties should
have the right to do so unilaterally and without consultation
with contracting parties to the Agreement at least in respect
of particular items covered by its schedule. In this regard
four members of the Sub-committee favoured consultation and
three were opposed to it.
The Sub-committee was in agreement that it was
pertinent for a country having a particular interest in possible
changes in the par value of its currency to approach contract-
ing parties bilaterally with a view to securing agreement to
the inclusion of a specific provision in the Schedules of that
particular country. S. 18 E/PC/T/TAC/PV/23
CHAIRMAN: I thank Mr. Morton for the very able manner
in which he has presented the Report of the Sub-Committee.
For the convenience of our discussion, I think we should first
of all take up the proposed new Article II, leaving over for
the present any discussion with regard to the relationship
of a depreciation of currency to specific rates of duty.
Before taking up Article II paragraph by paragraph, are
there any Members of the Committee who wish to make any general
observations on this Report of the Sub-Committee?
Can we then take up Paragraph 1 of Article II. Are
there any comments?
The Delegate of France.
M. ROYER (France) (interpretation): Mr. Chairman, I
only have formal comments to make on the text of this paragraph.
First of all, referring to the English text I see we say
"products described". I think the word which is usually
employed in the customs schedules in the Anglo-Saxon countries
is "enumerated."
Secondly, I see here, in the third line, "which are the
products of the other contracting parties." I think it would
be best to revert to the expression used in Article 1; that is,
"originating from another country."
Thirdly, I think the words "ordinary customs duties" in
the fifth line of this paragraph are somewhat ambiguous, because
if there were any extraordinary customs duties they would be dealt
with in the second sentence of this paragraph.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. SHACKLE (United Kingdom): Mr. Chairman, as regards the
phrase "enumerated and described," I do not think one could
agree that should be reduced to "enumerated."
M. ROYER (interpolation): "and described." S. 19 E/PC/T/TAC/OV/23
Mr. SHACKLE (continued): The words "and described" should
certainly be retained.
M. ROYER (France) (interpretation): My intention was to
maintain the words '"and described."
Mr. SHACKLE (United Kingdom): I should not mind that so
much. I fancy the expression "enumerated and described" is
a rather common one in trade agreements. Certainly I think
we should retain the words "and described."
As regards the second phrase: "products of the other
contracting parties" is definitely wrong, because a contracting
party is a Government and the products of a Government consist
of papers, etc. , not consumable goods. So it should certainly
read: "which are the products of the territories......."
CHAIRMAN: Can we deal with these suggestions one at a
time?
The suggestion of M. Royer, I think, is to take out either
the word "enumerated" or the word "described."
M. ROYER (France) (interpretation): No, Mr. Chairman.
suggestion is to put in every case "products described"; in
French, "produits repris."
CHAIRMAN: Are there any objections to deleting the word
"enumerated"? Is the Committee agreed on the deletion of the
words "enumerated and"?
(Agreed)
The next suggestion of M. Royer is in the third line of
the English text. His suggestion was that it should read:
"which are the products originating from the other contracting
parties." Mr. Shackle, I think, suggested, instead of that:
"which are the products of the territories of the other contracting
parties." S. 20 E/PC/T/TAC/PV/23
Mr. LEDDY (United States): Mr. Chairman, Mr. Shackle's
suggestion would be acceptable to us. If it is adopted, I
think the Legal Drafting Committee should look at the other
Articles of the Agreement. It is my impression that we have
talked about "the products of the contracting parties" throughout
the Agreement.
M. ROYER (France) (interpretation): In every place in the
Charter the words used are "products originating from the
contracting parties."
Mr. LEDDY (United States): Mr. Chairman, I think that is
a point in the Most-Favoured-Nation clause only. Throughout the
rest of the Charter the expression is used: "the product of any
Member country. " The reason it is different in the Most-Favoured-
Nation clause is that there you are covering both imports and
exports: it was just a more convenient phrase to use in that
particular clause. By and large, in all the other cases in the
Agreement I think the term is: "Products of Member countries or the
territories of Member countries.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (interpretation): Mr. Chairman; I would
not like to deliver a long lecture on the difference between the
oeigin of goods and the country from which those goods are sent,
but we have had a long discussion already on this point when we
discussed the Article relating to the Most-Favoured-Nation clause.
If we want to have here an expression covering both oases, we have
to say it formally. But I would like to give my own opinion and
say that we are heading towards conflicts and difficulties if
we do.
If here we want to cover both the origin of the goods and
the countries from which these goods are sent, we have to
consider if we really want to insert such a provision. S. 21 E/PC/T/TAC/PV/23
CHAIRMAN: Would it meet both points of view if we said:
"which are the products originating in the territories of the
other contracting parties"?
Mr. C.E. MORTON (Australia): I would support that suggestion,
Mr. Chairman. It is more correct to say "products originating
from other countries in the territory of the contracting parties."
Mr. LEDDY (United States): Mr. Chairman, what is the substance
of the difference between what we have here and what the French
Delegate proposes?
CHAIRMAN: The Delegate of France.
Mr. ROYER (France) (interpretation): Mr. Chairman, I would
like to give a practical example. If a motor car is sent from
the United States to France via Spain, and if the tariff which
is applied to goode imported into France from Spain is different
from the tariff which is applied to United States goods, then if
we applied the principle of the origin of the goods the duties on
the United States car will be applied under the tariff granted to
the United States under the provisions of this Agreement.
On the other hand, if the duties which are applied take into
consideration, not the origin of the goods but the place from which
they are sent, then, as Spain might not benefit from the same
advantages as the United States would derive from this Agreement,
the customs duty applied on the United States car in transit
through Spain might be three or four times higher than the duties
which a United States car would normally pay.
Therefore, if we say here: "products of the territories of
the contracting parties", the customs officials will have the choice,
perhaps, of applying the principle of the origin of the goods or
the principle of where the goods are sent from, or even of applying
both principles at the same time. S. 22 E/PC/T/TAC/PV/23
Mr. MORTON (Australia): Mr. Chairman, the matter of origin
and provenance is also a separate question and for that reason
countries have their own laws, which set out how these matters
shall be dealt with.
Having given consideration to the fact that a country may
wish to operate those laws in regard to Most Favoured foreign
nation countries, and its general tariff, it has been suggested
in my report that it may be made a spearate paragraph, so that
it would have application to Paragraph 1 and 2.
There are very few instances where countries do distinguish
between general tariff and Most-Favoured-Nation rates, to the
benefit of Most-Favoured-Nation rates. But for the practical
purposes of this Article it does not matter a great deal if the
wording in Paragraph 1 is: "which are the products of the territories
of the contracting parties" or "which are the products originating
in the territories of the contracting parties."
CHAIRMAN; "The Delegate of the United States.
Mr. LEDDY (United States): Mr. Chairman, I think the answer
is that there is no difference between the products of the
territories of the other contracting parties and products originating
in the territories. In other words, so long as the product is
produced, grown or manufactured in the territory of another
contracting party it gets the treatment from whatever place it
arrives in.
I do not care whether we say "products of the territories" or
"products originating in the territories." All I am saying is
that we should use a consistent form throughout the Agreement, so
that there would be no question of differentiation. Whichever
one we decide to use here, I suggest the Legal Drafting Committee
should examine the whole text and make sure it is consistent.
CHAIRMAN: The Delegate of the United Kingdom. S. 23 E/PC/T/TAC/PV/23
Mr. SHACKLE (United Kingdom): Mr. Chairman, I agree with
the observation of Mr. Leddy and I would add that I think if one
says "the products of the territories of the contracting parties"
there can be no ambiguity. In our own United Kingdom commercial
treaties it is usual to say: "The articles, produce or manufacture
of the territories." Surely an article which is the product of
a territory must be the same thing as an article produced in that
territory. The question of acquiring the nationality of some other
territory through which it passes in transit cannot change the fact
that the product is the product of the territory where it was produced.
That being so, it seems to me we do not need to elaborate or
longthen it by introducing the words "originating from."
CHAIRMAN: Can we agrees with Mr. Leddy's proposal to have this
phrase read: "which are the products of the territories of the other
contracting parties. "?
Mr. JOHNSEN (New Zealand): Mr. Chairman, I would agree with
that proposal, but I just want to clear up what might be a point of
misunderstanding on the meaning of this paragraph.
If I understand its meaning, it is that good's would be entitled
to entry at the rates in the Schedules, irrespective of the country
from which they were imported. If they enter an intermediate
country merely by way of transit, there is no doubt about it; that is
covered by Article V of the Agreement, but where they have entered
into the commerce of some third country it is a different matter
entirely. In a case like that, they would be covered by the laws
of the country providing for such a position. I think Paragraph
6 of Article V makes that quite clear.
CHAIRMAN: This is, I think, a customary way of describing
products produced, grown or manufactured when you are dealing with them
in reference to a Schedule. There are various forms used by different
countries, so I do not think we are deviating from established
practice when we say "which are the products of the territories of
the other contracting parties." I hope, therefore, we shell be
._,.. . S.
able to agree on this phrase.
Is that agreed?
24
E/PC/T/TAC/PV/23
The next proposal of M. Royer is to delete the word "ordinary"
before "customs duties" in the fifth line of paragraph 1. Are
there any objections to this proposal?
Mr. LEDDY (United States): Yes, Mr. Chairman. We have two
types of charges which we are dealing with in the Schedule. One
is the rates of regular tariffs shown in the columns and the other
consists of the various supplementary duties and charges which many
countries impose on importation. I think it is necessary to
provide a distinction between these two types. That is the reason
why the words "ordinary customs duties" are used in the first
sentence. If we delete the word "ordinary", presumably the
products concerned would be exampt from all customs duties other
than those shown in the Schedule.
There are charges on importations which are clearly customs
duties, but they are not ordinary ones; that is, they do not
form part of the regular tariff. This is not an unusual clause
at all; it appears, for example, in the Trade Agreement between
France and the United States, on both sides.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (interpretation): Mr. Chairman, I am not
in agreement with the interpretation given by Mr. Leddy, of this
sentence, and I think the conclusion he has drawn could be drawn
from the present text. I would like to give an example.
Australia and France have negotiated to reduce the surtax
levied by the Australian Government, which is a primage duty. The
rate of this primage duty is now 10 per cent and we have negotiated
to reduce it to five per cent. But, if we read this first sentence
in its present form, although Australia has negotiated with us to
reduce this primage duty to five per cent, under the terms of this
sentence Australia could still apply a primage duty of 10 per cent
because the primage duty would not be included in the words of this S. 25. E/PC/T/TAC/PV/23
first sentence, and this case would only be referred to in the
second sentence.
Mr. LEDDY (United States): Mr. Chairman, the text of this
should be considered in relation to the model Schedule which was
prepared by the Tariff Negotiations Working Party and circulated.
In a case of that kind, where no ordinary customs duty is
shown, provision was made specifically, saying that primage should
not be more than five per cent. The idea was that the column at
the rate should show the regular tariff. The omission of an item
from that column would show that the regular tariff was not bound.
You would then have to put a note regarding the products which you
want to bind. That is covered, here in this particular Paragraph 1
by the subject clause: "Subject to the terms, conditions or
qualifications set forth therein."
Mr. MORTON (Australia): Mr. Chairman, the words. "ordinary
customs duties" did appear in the United States proposal. We
did not like it much then, but we did realise that it did have
value and distinction, because it established a distinction between
the ordinary customs duties and the regular taxes such as primage
duty.
CHAIRMAN: The point to which Mr. Morton has just called
attention is, I think, relevant. This word "ordinary" has appeared
in the New York Draft, in the Draft of the Tariff Negotiations
Working Party, and again appears in the Draft of the Sub-Committee,
so it has been accepted by us right along, and I wonder if we could
not continue to accept it now.
The Delegate of France.
M. ROYER (Franca) (interpretation): Mr. Chairman I would
have no objection if the word "ordinary" were translated into
French by "douane proprement."
CHAIRMAN : Is there any objection to that proposal?
(Agreed) E/PC/T/TAC/PV/23
Are there any other comments on Paragraph 1?
The Delegate of Brazil.
Mr. E.L. RODRIGUES (Brazil): Mr. Chairman, I should like
the Committee to examine the last part of Paragraph 1, which
reads: "Such products shall also be exempt from all other duties
and charges of any kind imposed on or in connection with
importation in excess of those imposed on the date of this Agree-
ment.
Besides the ordinary customs duties, we have been imposing
also, for several years, two other general charges of the same
nature as the customs duties and collected in the same way as
included in the document. The first is called "Additional tax
of 10 per cent on duties collected" and the other is "Ad valorem
duty of two per cent for social security purposes."
S.
26 P. 27 E/PC/T/TAC/PV/23
They were collected in this way because of the difficulty of
showing the rates, and they have indeed the same nature, they
are of the same kind, as ordinary customs duties. But in the
light of the discussion which we have had here, I believe they
will be considered "other duties and cleaves of any kind" and they
will be, if I understand, consolidated in this position. Becauae
of this I could not understand well the argument of the United
States Delegate when he said that if a country wants to bind these
other duties and charges they should put a Note. I should like to
have some explanation from him about what he said just a few moments
ago.
(continuedd after interpretation)
I should like to have some explanation on those remarks of the
United States Delegate. The United States Delegation as well as the
French Delegation have said they will consider it that they were not
"other duties and charges."
CHAIRMAN: The Delegate of the United States.
Mr. J.M. LEDDY (U.S.A.): Mr. Chairman, I think that this means
simply this; that if the regular tariff is bound against increase -
suppose it is shown in the Schedule in the right hand column, for
example, that the duty is 10 cruzeiros per kilo, that is the ordinary
tariff - then all other duties and charges on importation on that
product are also bound against increase. Thus if the surtax on duty
in this case were 10% ad valorem, in addition to the ordinary custom
duty, if this Agreement enters into force, that tax could not be
increased to, say, 15%; it would have to remain at 10% ad valorem
in respect of that product.
CHAIRMAN: Are there any other comments on paragraph 1?
Mr. R.J. SHACKLE (U.K.): Mr. Chairman, we have amended the
concluding words of this paragraph so as to read: "or directly or
mandatorily required to be imposed thereafter by legislation in
force in the importing territory on that date." That compares with
words which appear in the original text in the Working Party's Report P . 28 E/PC/T/TAC/P V/23
reading: "or to be required or imposed thereafter under
laws in force on that date." The object of those changes is,
I gather, to eliminate the case where the rate may be varied
by some kind of administrative order under a law in force and
to make it necessary that it shall be a direct requirement of
the law that that charge shall be made.
Now it seems to me that the logical completion, perhaps
necessary completion, of that idea is to say "at specified
fixed rates" and I think that those words "at specified fixed
rates.'. should come after the words "required to be imposed
thereafter." Otherwise we should have come back to us the
possibility that the rates may be varied by some kind of
Administrative action under a Law. I see of course that in
the case of anti-dumping and countervailing duties there will
have to be variable rates, but anti-dumping and countervailing
duties are taken care of in a separate paragraph, that is to
say (u) of paragraph 3, and I therefore feel it would be
desirable to add these words "at specific fixed rates" after
the words "required to be imposed thereafter."
Mr. J.M. LEDDY (U.S.): Mr. Chairman, I think the suggestion
of the Delegate of the United Kingdom, if we accept it, would really
make this provision meaningless. It was esigned to deal with
measures such as anti-dumping, duties and countervailing duties
and, for example, marketing duties or penalty duties, with the
effect that it would simply require the administration to impose
a penalty which may vary, you see, if certain violations take
place. I am not quite sure that the clause is essential, but I
think if it were deleted several of the countries would have to
make rather careful examination of all of the legislation to be
sure that the duties were provided for in the Schedule. I am
rather reluctant to suggest that course, but I An, in_ it would be
better than to adopt the proposal of the Delegate of the United
Kingdom. P. 29 E/PC/T/TAC/PV/23
Mr. R.J. SHACKLE (U.K.): Mr. Chairman, in view of Mr.Leddy's
explanation I do not wish to press this suggestion.
CHAIRMAN: I thank Mr. Shackle for not pressing his suggestion.
Are there any other comments?
Is paragraph 1 agreed?
Paragraph 2: are there any comments? Mr. Johnsen.
MR. J.P.D. JOHNSEN (New Zealand) Mr. Chairman, Mr. Morton in
his Report suggested that the final sentence of paragraph 2 should
be made a separate paragraph in which case it would qualify both
paragraphs 1 and 2. I would support that proposal. I think it is
necessary, because there are cases where countries do set our
requirements before goods can qualify for entry at preferential
rates, whether they come from a Most Favoured Nation country or a
country with a preferential system like a British country. I know
in our own particular case, under Agreements which we have made with
certain countries outside the Empire, we have given substantial
concessions in duty and we have laid down a condition to be complied
with to enable the goods imported from such countries to be entered
tt the specified rates. It would not be right, for instance, if
a country outside those countries which enjoy Most Favoured Nation
treatment should send goods to a Most Favoured Nation country merely
having them shipped from there and admitted at the Most Favoured
Nation rates. Therefore I think it desirable that a provision such
as that in the last sentence should qualify both paragraphs 1 and 2
and I would support the suggestion made by Mr. Morton in that respect.
CHAIRMAN: The Delegate of New Zealand has proposed that the
last sentence of this paragraph 2 should be made a separate paragraph.
Are there any objections to this proposal? Mr. Leddy.
Mr. J.M. LEDDY (U.S.): Mr. Chairman, the last sentence talks
about preferential rates of duty; it does not talk about Most
Favoured Nation rates. I understand, then, that making this a
separate paragraph does not represent any qualification whatever P.
of the Most Favoured Nation clause or the application of Most
Favoured Nation duties. It does not imply, for example, any
direct shipment requirements, which do apply in the case of
preferential duties. If that is the understanding, I have no
objection to making this a separate paragraph, but I fail to see,
in that case, its application to paragraph 1.
MR. C.E. MORTON (Australia): Mr Chairman, I would suggest
that the Delegate of the United States and all other contracting
parties to this Agreement should value the Club of which they are
members. There will still be non-members outside this Club, those
goods will be, in certain countries, subjected to higher rates of
duty. It is valuable that the concessions you have bought should
be maintained and it should not be too easy for the products of
those non-member-countries to obtain access to the territories
party to this Agreement at the rates of duty which are supposed
to be reserved for those members of the Club. For example,
Spanish goods may be shipped into France and re-packed there and
shipped to Article. You would not, I take it, like to extend to
Spain the benefits of the rates which America has granted to
members of the Club. And if you have already requirements in
existence on the date of this Agreement, as is specified in the
last sentence there, it is fitting that you should be able to
apply those requirements on goods coming contrary to the way in
which you specify that they must come. Although it refers to
entry at preferential rates of duty, that word "preferential"
must be considered as concessional; there is a preference also
between the rates accorded to members of the Club and those
accorded to non-members.
E/PC/T/TAC/PV/23
30 Mr.J.M. LEDDY (United States): Mr. Chairman, during our
five weeks in London and six weeks in New York and our five
months in Geneva, this Member has been raised, I think, at
least ten times on ten different occassions. It has been
debated fully and eash time the Committee has reached precisely
the ..ame conclusion - that there is nothing in the Charter and
nothing in this Agreement to prevent any country from satisfying
itself that goods do, in fact, originate in a particular other
country. Therefore, I think we need u 4a nothing to this Article.
at all. Countries are permitted to apply the tests they think
necessary to assure themselves that a product of France
originates from France and is not something which has originated
from Spain and merely been repacked in France. But if we have
some such provision as is suggested by the Delegate of New Zealand,
I think we shall be implying much more than we mean. We shall
be implying that countries may attach direct shipping requirements
to the Most Favoured Nation rate of duty as they do in the case
of preferential rate of duty. That point was also fully debated
and it has been agreed that direct shipping requirements would
not be permitted.
CHAIRMAN: Mr. Johnsen.
Mr.J.P.D. JOHNSEN (New Zealand): Mr. Chairman, I am in full
agreement with what Mr. Leddy said regarding this subject having
been considered previously. I do not doubt his conclusion that
each country is permitted to determine for itself whether goods
do originate in a particular territory. And, quoting from paper
T/174, which is the Report to Commission by the sub-Committe on
Articles 14, 15 and 24, it says "In connection with paragraph 1'
(that is, paragraph 1 of Article 14) "the sub-Committee considers
it to be clear that it is within the province or each importing
31
E/PC/T/TAC/PV/23
P. P. 32 E/PC/T/TAC/PV/23
member country to determine, in accordance with the provisions
of its law, for the purposes of applying the Most Favoured Nation
provision, whether goods do, in fact, originate in a particular
country". Now I would feel quite happy if, in place of this
sentence, another sentence were put in conveying the sense of
that Report.
Mr.J.M. LEDDY (United States): Mr. Chairman, I had not
intended to say anything which would prolong the discussion, but
the countries sitting around this table, when they sat as
Commission A, thought it was clear, and I do not see any reason
why, sitting round the same table in the Tariff Agreement Committee,
they do not think it is clearer!
CHAIRMAN: Now is the time that we usually adjourn for half
an hour. As we are not making progress at a very rapid rate,
and we may do better after we have had some refreshment, I suggest
that we now adjourn and return at 5.25.
(The Meeting adjourned at 4.55 p.m. and
reassembled at 5.35 p.m.) E/PC/T/TAC/PV/23
CHAIRMAN: The Meeting is called to order.
When we broke up we were considering the proposal of the
New Zealand Delegation to make a seperate paragraph of the
last sentence in paragraph 2. I do not see in what way this
proposal could have very much effect on the substance of the
last sentence of paragraph 2, but I do see certain objections
to the proposal from the point of view of form.
We already have seven paragraphs to this Article, which is
a large number of paragraphs for an Article of this kind, and
paragraph starts off with the words: "Nothing in this Article"
and this particular sentence starts off with the words "Nothing
in this Article" so it would not give a very good appearance
if we made a separate paragraph of this particular sentence.
think this particular sentence hardly justifies a separate
paragraph It says something which is very generally agreed upon
that any contracting party may maintain its requirements existing
on the date of this Agreement as to the eligibility of goods for
entry at preferential rates of duty. That is not a matter upon
which there is any great Measure of controversy, and therefore
to put this sentence in a separate paragraph would be giving it,
in my opinion, perhaps an importance that is hardly justified.
But I do think the objections on the grounds of form are pertinent,
and therefore I trust that the proposal will not be proceeded with.
Mr .J.P.D. JOHNSEN (New Zealand): In view of the clear
understanding of the Committee, Mr. Chairman, that it is within
the province of each country to determine, according to the provisions
of its law, whether the goods do or do not originate from that
country, I would not suggest any modification.
CHAlRMAN: I thank the New Zealand Delegate for not insisting
on this proposal.
With regard to the first line I think it would be neceassary
to delete the words "enumerated and" in order to conform with the
R.
33 34 E/PC/T/TAC/PV/23 changes made in paragraph
Is Paragraph 2 agreed?
Paragraph 3. Are
1. Are there a
Agreed.
there any comments?
ny other comments?
M. ROYER (France) (Interpretation): Mr. Chairman, I
should like, first of all, to apologise for making a few remarks
on this paragraph.
The remarks I want to make refer to the note of sub-paragraph
a) and to the words "in respect of an article from which the
imported product has been manufactured or produced in whole or
in part". I think it would be better if we adopted a draft
which could be copied on the draft of Article 3 of the Agreement
stating that the importing country could collect at anytime on the
import a charge equivalent to the internal taxes levied on
similar domestic products under the definition appearing in the
General Agreement. It seems to me that the present draft is
dangerous.
Take, for example, a country to which we import sweets from
Ruritania. You import sweets, the value of which is $15, and
there is a 10% on sugar. Let us assume that you have $5 sugar
in the $15 sweets. Now if these sweets were produced in Ruritania
the tax would be 10% of $5 which is 50 cents. According to the
present draft they would be entitled to levy a 10% tax on the
sweets or the candies, that would be $1.50. Moreover, if in
Ruritania a tariff is also levied on imported goods, because this
was in the tariff of that country, then Ruritania would be entitled
to levy, first of all, a tariff of 50 cents on the sugar contained
in the sweets, plus 10% on the sweets themselves - $1.50 - in all
$2.
Mr C. E. MORTOo1 A.ustrala): If youi were to take the ease
of say, white spirit, which carries a high rate of duty, and
consider the duty on perfume, you would have a rate of duty on
the perfume of 10 la;nd an additional duty on the white spirit
contained in that perfume, which would be the equivalent to the R. 35 E/PC/T/TAC/PV/23.
tax which Ruritania charged, so the illustration regarding
sugar is perfectly correct.
Mr.J.M. LEDDY (United States): I wonder whether this
rather technical and complicated subject could not be better
discussed by the Legal Drafting Committee.
I should like to read from the provision of law - it is a
provision of an agreement, in a case in which we had a similar
article to this, and it was turned over to the Legal Drafting
Committee at that time, and they came out with this result:-
"For the purposes of Paragraphs 1 and 2 of Article IV, any
material used in the production of an article, shall be considered
as having been used in the production of an article subsequently
produced, which is the product of a chain of production in the
course of which an article, which .s the product of one stage of
the chain, is used by its producer or another person, in a
subsequent stage of the chain, as a material in the production
of another article".
That was the attempt of trying to reach a decision, and
that is the sort of result we might get if we tried to make this
absolutely precise.
CHAIRMAN: Mr. Leddy' proposes that this matter be referred
to the Legal Drafting Committee and then gives an illustration
which seems to indicate that it should not, be referred to the
Legal Drafting Committee. Do any other Members feel the same
way that this Article is not precise enough?
Mr. C .E. MORTON (Australia): I sugges that M. Royer
was merely afraid of the implications which he read into it and
which were correct.
CHAIRMAN: Are there any other comment? Is paragraph 3
agreed subject to any drafting changes being made by the Legal
Drafting Committee? Agreed. R.
36 E/PC/T/TA IP/ 3
Paragraph 4. rc three any comments? !Agree.
2Pr agrph 5.
M. ROYER (Franca) (Interpretation): Mr. Chcirman, this
drafting regarding this paragraph has already been adopted by the
Committee. They have 'can rEproduced here, but they have not
been altered by the sub-Committee.
CFHIRM:AN W& -ilL thcref.re take these paragraphs 4, 5
and 6, and &dea with paragraph 7 whic'h is a new pprzgraph4
Are th.re any c omunts Do paragraph 7? greed.
We will n_w pass to that part of thG sub-Committee's report
which deals with the relationship of depreciation of currency
to specific duties. In this connection we have e paper which
was circulated this morning by the Belgium/LuXemburg D6legation,
which is given in Dcoumtnt E/!C/T/V/'4l. I will call upon
M. Forthomme to expl in the, Bel~ian rroposal.
M. Pierrc FORTHODME (Belgium): Mr. Chairman. this DPcument
is not exactly a proper proposal ior now rAticle, or vun for
a Not;e it is reth6r an £ttempt to explain what circumstances
should be taken into -ccount if we decide either to draft an
Article or to draft a typioal note to be included at the head
of the Schodules.
The aim of what is explained hore is to protect a country
against the e6fects fo - depreciation in the currency, which
alters, in an important fashion, the basis on whi~h that country
negotiated coneGssions in order to become 2 oontr.ating party to
the Agreement. 'e have tried to take aceuont of the different
circumstances attending the depreciation, in older to give countries
protection against some of the disastrous effects of a depreciation
without given them sn excessive right to readjust rates of duty E/PC/T/TAC/PV/23
to their currencies when that would not be necessary, but in order
to maintain a reasonable approximation to the basis on which they
negotiated in the first instance. The idea is that the
depreciation of currency shows that there is a lack of adjustment,
the
a lack of alignment, between/price structure of a country and
the general price structures in the world. It can be said that
a country by adjusting specific duties, runs the risk of the
incidence of those duties falling with a fluctuation lr prices,
but that is the case where, as long as it is the fluctuation in
price, in a general fashion all countries are affected in the
same way and over a period of years. Fluctuation of prices
are both up and down, and so there is an automatic adjustment
over a period. When you get a depreciation, it means that the
f luctuations of price have only taken place in one country, in
the country having the depreciation, and therefore, it is out of
alignment with the general fluctuation of prices. You could
even say that the country will then have two sets of fluctations
of price, the world fluctation and its own particular private ones,
so at the moment of depreciation the private fluctuation is made
permanent.
37
R. E/PC/T/TAC/PV/23
There is no chance of going back to the primitive state of
affairs. That country has gone up - or rather gone down - a
notch and its prices from that day on will continue to fluctuate
in accordance with the general fluctuation of world prices, but
at a level expressed in its own currency, which will be 50 or
70 or 100 per cent - whatever you wish - higher than the previous
fluctuation was.
Therefore we think there is a case for giving a country,
in the event of depreciation of its currency, a right which we
do not think should be applicable just in case of general
fluctuation of prices; that is, to adjust the duties to the
new rate of currency, to the new level of prices, after deprec-
iation. So we have put down these different clauses here: (a)
if the depreciation exceeds 10 per cent; that is in case, first
of all, the depreciation should be important; and, secondly,
because any depreciation of more than 10 per cent needs to be
approved according to the stated terms of the Articles of Agreement
of the International Monetry Fund.
Therefore you have already one element of unilateralism
removed by the fact that the depreciation has to be approved
internationally.
We have introduced (b) because there are cases where a
depreciation of a currency does not affect the price level,
because the price level remains exactly the same as before the
depreciation. For instance, before the war the depreciation
was in order to return to a price level which existed some years
previously.
Therefore we have put in the provision, and we found, after
objections had been made to us, that the index of wholesale prices
was too fragile an element on which to base depreciation. We
came to the general incidence of specific rates of duties immediately
after depreciation, as compared with the general incidence of
S.
38 S. 39 E/PC/T/TAC/PV/23
specific duties at the time the party acceded to this Agreement
or signed this Agreement.
We put a limit of 20 per cent in order that adjustment of
duties should not occur when the difference in the incidence was
not important. And we put in (c) because, in certain cases,
the difference between the two incidences - probably resulting
from the two incidences - might be lower than the amount of
the depreciation, in which case , according to our reasoning, the
right of the country does not extend to the full extent of the
depreciation but only to the amount by which the incidence of the
duties has been reduced by the depreciation.
Then the second part: in case of appreciation, we put "may
adjust." We see no objection to having it turned into "shall
adjust."
I would like to add, Mr. Chairman, that since putting out
this Note we have had further objections and our attention has
been drawn to the unsatisfactory aspect for certain Delegations
of unilateral action. Therefore we have considered the possibility
of introducing constulation into this idea of re-adaption to
depreciation and we found that we might go on those lines; that it
should be recognized that depreciation in the conditions expressed
in our Note here gives a right to the countries to re-adept their
duties as a consequence of depreciation, but that the manner in which
that right is to be exercised should be the subject of consultation
in order to avoid difficulties in international trade.
In view of that, I have drawn up here a tentative draft of
what could be a Note which the different Delegations could introduce
the head of their Schedules if they desired to protect their
concessions against monetary depreciation. It would be a Note which
would read something like this: "It is understood that specific
duties and charges included in this Schedule are expressed in, let
us say, .Czech crowns, of the paper value accepted by the International
Monetary Fund at the date of this agreement. It is agreed that in S. 40 E/PC/T/TAC/PV/23
case this currency is depreciated in accordance with the Articles
of Association of the International Monetary Fund by at least
20 per cent the specific duties and charges may be adjusted in
proportion to the depreciation of the currency or in proportion
to the decrease in protective incidence as compared with such
incidence at the date of this Agreement, whichever is lower.
The contracting parties primarily concerned shall enter forthwith
into consultation on such adjustments at the request of the ("as
an example, I have given the Czechoslovak Government).............
Government"; that is to say, that when a Government has dupreciated
its currency and wishes to exercise its right of re-adapting its
rates of duty it shall ask the countries with which those rates of
duty have been negotiated to enter into consultation immediately,
in order to determine how such a re-adaption may be made in the best
interests of both parties.
CHAIRMAN: Does any Member of the Committee wish to speak
on this subject?
Mr. O. COUFAL .(Czechoslovakia): Mr. Chairman, on behalf of
Czechoslovakia, I should like to support the original proposal put
forward here by M. Forthomme and reproduced in Document W/341.
As wes clearly stated by M. Forthomme, the thing we want is
the possibility, should we be obliged through the force of economic
circumstances to depreciate our money, the foreign exchange of our
currency, of having the right adequately to adjust the duties. We
have been doing that in the past. I have here before me the texts
of our French Agreement and of our Belgian Agreement, which conte in
clauses like that. On the basis of these clauses we have had the
right to adjust the rates of our duties when the rate of the
Czechoslovak currency has changed by more than 10 per cent. E/PC/T/TAC/PV/23
41
S.
I was a little disappointed when I read the report of the
Sub-committee of which Mr. Morton was Chairman, because I had the
impression that not sufficient understanding was shown for the
needs of the countries which have specific duties, I think it
must be realized that there is a fundamental difference between
specific duties and ad valorem duties. With ad valorem duties
there is a constant change of the actual duty, according to the
prices, whilst with specific duties there is a stability of the
actual duty levied by a country which has specific duties.
Therefore we. thought we would find understanding of our needs
and that no difficulties would be encountered when we put forward
or when the Belgo-Luxembourg Union puts forward - this proposal,
by which there would be embodied somewhere in the Charter or in
the General Agreement - or, if that is not acceptable, at least
in the lists attached to the General Agreement - a provision where-
by we would have the right to adjust the rates of our duties should
we be forced to depreciate our currency.
I think I do not like so much the proposal put forward later
on in his statement by M. Forthomme, which, as he said, was made
after his discussion with the representatives of other countries.
If we would have to accept a clause whereby we would be forced,
before such a change, to discuss or to fight for our right for an
alteration of the rates of our duties with several countries, I am
very much afraid it would sometimes take a very long time before
we would reach agreement on this matter.
Imagine, Mr. Chairman, say, if ten countries said "No", or
asked us to negotiate with them, it might be a year before we
couId reach agreement. That is why we would like to have the right,
and I would make a strong appeal to alltime Delegates of other na-
us
tions to find understanding for this and relieve/of the difficulties
at this stage. S. 42 E/PC/T/TAC/PV/23
I think that any country which has any fear - any country wit
specific duties which would take advantage of these clauses which
I am advocating here - that she would be losing something for
which she was negotiating here, can have recourse to Article
XXIII of the General agreement, which gives any contracting party
the right to come to us and negotiate if she feels she has lost
something because of the adjustment of the duties.
I think that is all I wanted to say, Mr. Chairman.
CHAIRMAN: The Delegate of the Netherlands.
DR. G. A. LAMSVELT (Netherlands); Mr. Chairman, with re-
ference to this case of specific duties, my Delegation has not yet
a specific opinion.
On the one hand it seems natural that a country which has
depreciated its currency would be entitled to adjust the specific
duties, which would become too low. On the other hand, as the
report of the Sub-committee shows, there were seven members pre-
sent, of which apparently four who may be important members are
against the insertion of the Note which has been discussed.
Therefore our Delegation would prefer to await the outcme of the
discussions.
CHAIRMAN: The Delegate of Brazil.
Mr. E. L. RODRIGUES (Brazil): Mr. Chairman, after listening
to the remarked made by the Delegates for Belgium and Czechoslovakia,
I have very little to say. But I would like to state at this
stage that in order to understand well the position of the country
with substantial specific duties we should take into consideration
that there are two orders of countries in regard to economic ma-
turity. There are countries which can afford and can maintain a
high degree of monetary stability and, in consequence, stability
of prices, and there are other countries with a so-called
h S. 43 E/PC/T/TAC/PV/23
inflexible economy, like my country, which are always extremely
effected by the economic effects caused by other countries, es-
pecially in the field of prices, because, as everyone here knows,
there are countries which have more responsibility in this matter
of price policy.
We have had a very sad experience in this matter and some
other countries, as well as Brazil, have a falling currency. In
our case, in less than 20 years the value of the dollar, which
was eight cruzeiros, fell to 19 cruzeiros.
To understand our position well, it is only necessary to
examine the effects of such depreciation. If we are dealing here
with an agreement which will be in force for a long period, I do
not see any reason for avoiding a provision on the lines suggested
by the Belgian Delegate, if, in order to get this change in the
Schedule, we are in the condition established in that suggestion,
especially in regard to the International Monetary Fund. I be-
live, if that condition occurred, is could injure the interests
of the other contracting Parties.
Because of this, I strongly support the first draft of the
Belgian Delegate and I Declare myself in full agreement with the
statements made by the Belgian and Czechoslovak Delegates. P.
CHAIRMAN: The Delegate of Norway.
MR. J. MELANDER (Norway): Mr . Chairman, I am in general
agreement with the oriinal Belgian proposal and with the state-
ment made by the Delegate of Czechoslovakia. I would not have
excluded the possibility of reaching a compromise on the solution
suggested by the Belgian Delegate in his second statement. I
think the main point there is to be able to lay down the rules
which will allow countries to make adjustments in time: in other
words that these negotiations shall not hold up any adjustment for
a year or two. It might be that one could perhaps proceed more
or less on the lines suggested in Article 13 of the Charter
through which the parties concerned could take measures, make ad-
justments, pending the outcome of negotiations. I think there is
a Possibility of reaching a solution on those lines.
Secondly, I would, however, say that I do not think it would
be right to include a Note like this in the Schedule, especially
as the Sub-Committee dealing with the Schedules has suggested that
we take out as much as possible of the Schedules and include it
in the General Agreement as such. I think this is a general rule
and that it consequently ought to be incorporated in one of the
Articles of the General Agreement.
The Delegate of France.
M. ROYER (France ) (Interpretation): Mr. Chairman, we are
not interested directly by this question because we have few spe-
cific duties in our tariffs, but we adhere whole heartedly to the
statement which was made by the Czechoslovakian Delegate and it
is for reasons of simple equity. If the draft of the Agreement
were to be maintained here without any modification, then we would
44
E/PC/T/TAC/PV/23 P. 45 E/PC/T/TAC/PV/23
reach a situation which would be completely unbalanced between
those countries which have ad valorem duties, which will rise
when the prices rise, and between those countries which apply
specific duties, the incidence of those duties decreasing when
the prices increase. I i . if we were to maintain such a pro-
vision, or the lack of such a provision, here, we would compel
the countries which apply specific duties to modify those duties
and to transform them into ad valorem duties, and I do not think
it is to our interest to compel those countries to such action.
This is not a result which we should be seeking.
We accept the first 2 points of the Belgium/Luxemburg
proposal, but, regarding, the incidence, the Belgian DeIegation
modified its original proposal following some comments we had
made, stating that the rate of readjustment should not be greater
than the rate of monetary depreciation, even if this were to be
done in a period of price increases.
I would nevertheless ask the Belgian Delegation to make a
clo! er calculation, a more thorough and more accurate calculation,
of the percentage which they desire to apply, because the manner
in which these percentages should be calculated now would lead to
a most unsuspected result, depending on the way in which they are
calculated.
As to the last proposal I would not agree completely to this
proposal because it seems to me somewhat ambiguous, and now it
could be read as meaning that, in case of readjustments of the
duties, negotiations would take, place, and then free concessions
might have to be made on the part of those countries wishing to
readjust their specific duty. I think a better procedure ought
to be followed: that is that the question should be examined, by
the Committee of the Contracting Parties and that the Committee 46
P. E/PC/T/TAC/PV/23
should only assure itself that that adjustment has taken place
according to the rules laid down in the agreement , and that no
new concessions could be asked from the party readjusting its
specific duties if the Committee sees that this readjustment has
been honestly carried out and in conformity with the rules.
CHAIRMAN: are there any other speakers?
MR. R. J. SHACKLE (United Kingdom): Mr. Chairman, I think
that the second Belgian type of proposal is more attractive than
the first proposal, because I think that the first proposal
assumes a degree of almost automatic application which I think
in practice does not exist. The earliest forms of the proposal
put before us seemed to assume an almost mathematical automatism
about these prices, that if you depreciate your money by a certain
proportion automatically prices follow in the same proportion and
automatically it would be possible to adjust your duty in the same
proportion. That I think is not correct and some practical cases
have been cited to us to show that it is not correct.
But it does seem to me that, in spite of the qualifications
which have been introduced into the first Belgian proposal, that
still does assume a certain degree of automatic operation which
in practice could not be realised. There would be so many variable
and uncertain elements which would come in and there would always
be differences of opinion as to how the true; results would work
out. So I think in fact such a rule would never operate auto-
matically; there would always have to be consultation.
Moreover, if you have a General rule of this kind, by seek-
ing to assume this possibility of automatic action, it might serve
as an encouragement to countries sometimes to take action when in
fact there was not a justification for taking action. For that 47p. E/PC/A/TLC/PV/23
reason I feel that to deal with tme fatter in the form of a Note
I . to a particular Scheduee is tho preferable way. I gather that
Mr Forthomme's second proposition acs in eot fol-a mode! head-
ing to goeinto tho schedules. I think it is ehe prefErable way
of dealing with this mIttean iI' .n y specific provision on this
subject beyond theaConsuAt-tion ,rticle which already stands
nowAgn tme i.reeoent is desirhble. Tiat is my general opinion;
ntries h'',h' . at --whiciL would dual with this matter should deal
oimhoitNoy EL fOr OfS10te ie their 6 cheded betweeneagrel
the various countrhes,gen xierol. fzrbn-to-s*e-on ome such lines
as K. Forthomme suggested.
AN.IRheL:eTe,a D lg te gf B.lIium.
*. IOAM.OMNP PiergT;0rUE (BelSium) Mr. Chulrman, I wo-ad like
o say two rsings: lli tt of a11 *1hat I would be willing to fol-
i 1 6ow the suggestion of the French Delegate as to the modification
c t the end of our second proposition that instead of consultation,
there would be reference to tae ientraoting Pcrt1Cs (with capital
lheters.) at to tli applicdzion of readjustment.
On the athMr qSestion, ts 1I. 5.accle said, it is perfectly
oorrect that the second suggestion of ours would be for Notes to
bo at thSchIead of the -z,edules for countries which did protect
their concessions in this way; but I zhinik that it cannot be left
weengreement betv:^' ghe countries no,otiating as to whe ther these
Notes are goith tocbe putsin T.e S:hedulec- or not. There should
beh agreement in tLis Committee as to whethero this type of Nute is
acceptable by 6he whole of es and whether w( authorise any country
desirous of putting a Note like that to put it into the Schedule,
and this beceus_ of the multilateral character of the negotiations
here.,
;, ,.., :-
* 48
P. E/PC/X/TAC/PV/23
If we take an example: I am negotiating with The principle
supplier of stuffed owls and I give him a concession on specific
duty, on condition that I can put at the head of my Schedule
a Note that this specific duty is bound in this matter, and is
subject to readaptation in vieov of depreciation of the currency.
Then another producer of stuffed owls says, "We get this conces-
sion indirectly but we do not admit that it can be subject to re-
adaptation in the face of currency depreciation" and the whole
thing therefore falls through.
Therefore we have to have a general principle here whether
we can accept this Note as permissible at the head of any Sche-
dule containing specific duties or whether we do not accept this
Note as permissible.
CHAIRMAN: Are .there any other speakers? The Delegate of
Czechoslovakia.
MR. O. COUFAL (Czechoslovakia): Mr. Chairman, I am in
agreement with Mr . Ferthomme when he says that in the list there
should be a general agreement rather than to leave it to the
countries wishing to insert such a clause in their Schedules.
With regard to the remarks of Mr. Shackle, when he expressed
the opinion that some country might make such a use of that
.~clause as to increase the incidence of the duties, I believe
that we are all about to sign a GenerAgree±-i-ment and tha C: rter
here by which we will solemnly declare that we shall not increase
the duties, that we will rather lower them. thI - ink every country
would h ve -to think twice before doingha giin, which could be
proved against that country - that it had used that clause in order
to raise the dutieshe Ti:refortha ci.nk it is not necesstry uhat
cny Countries should distrust our attetpt ao hbve this clause
inserted. . P, :;.,; ;. , 49 E/PC/T/TAC/PV/23
here anMO ther spealers ?u; ty ot"'11r d};ikr
Tnateelegate f the Uri Cd Statesh
ted States): Mr. Chairman, we do
.qarrel with th iee.: a at some countries, particularly those
whiol che tariffs which are largely or completely spGcieio ic
nature; and particularly those countries which have some reason
to believe that they may depreciate their currencies, may want
to L.inude a provision in the Schedules relati-Sngo their
i ;co ceene@ssions which envisages the possibility of an upward adjustment
' of the specific duties because ofeprice incroases consequent upon
depreciation of the currency. But we do agree most heartily
a: with Mr. Shzckle that thi, circumstcnees 'n whichin'r3Xa3es in
^ .specific duties would be warranted, ane the extent of thoso
inereases,canrot be rEduced to a prisceo formula. It i fLr th a t
reason that we feel that the inclusioncin any country's S hedule
of a provision iich wlule allmit -It uni2at;rx.jy to increase
its specific duties in connecteon with price approciation would
have the effectess sungtanti lly lcuzeni±, the .worth of that,
Schedule to us.
. Now it is not a questeon as to whether wa trust any other
Government around this table: we do ooernmetrust the, GuvVcl.xnt
- t anroh leev2ki.' or -.y othvr Government, but you need reasonably
frm ag.: rnm, 3 between Goveints which trust each other. If
that were not true wee woulmpnin be her attei.tAug to draft and
write down in terms the bchaviour which ea of us shall follow
With.respect to the Agothees in this reemcnt. We do think that
0 the only aoetable selution lies in thG direction of consultation
eand negotiatcon among thc partesconuceurned, We think that
, Forthomme's hecond draft .oints in tbat direction6
We should like to suggest that a draft' along the following
lines; which represents an amendment to his second and third
: 50 E/PC/T/TAC/PV/23
paragraphs, might be considered by the countries concerned.
The draft is as follows:-
In case this currency is substantially depreciated
consistent with the Articles of Agreement of the
International Monetary Fund the contracting parties
shall, upon the request of, say, Czechoslovakia, promptly
enter into and carry out with Czechoslovakia negotiations
directed to such adjustment of specific duties in the
Schedule relating to Czechoslovakia as may be warranted
by such depreciation in the circumstances.
That recognises the principle; it points the way: it
precludes an attempt to obtain unilateral concessions.
With regard to whether "contracting parties" should be
in capital letters or not, I have not considered that thoroughly,
but I think we should be prepared to accept that. That would
mean that we would not have to have the unanimous agreement
of all countries, but the Contracting Parties on the basis of
voting now set up in the Agreement.
I offer this purely as my personal suggestion. I would
have to clear it with my Delegation. But I believe it is just
about as far as we are prepared to go.
With regard to the suggestion of a typical headnote, if
agreement is reached, I think that procedure can be as follows:
that, having agreed upon a typical headnote, those countries
which wish to insert such a headnote in their Schedules should
notify the Secretariat; the Secretariat will list those on
a piece of paper and we shall have a meeting to consider the list. R. 51 E/PC/T/TAC/PV/23
M. Pierre FORTHOMME (Belgium). Could we ask Mr. Leddy
to give us his text slowly so that we could take it down?
CHAIRMAN: Perhaps, after I have made a suggestion, it
will not be necessary to take the text down now, because the
hour is getting late.
It seems to me that there is still a large measure of d;'s-
agreement in the Committee on this subject, and I do not think
We can reach agreement this evening. The sense of the Committee
appears to be that this question should be covered by a note to
appear in the appropriate Schedule of those countries who are
mostly concerned, that is, those countries who have specific
duties for a large number of their tariff items and who expect
that their currencies may be depreciated in the near future,
The only Delegate who spoke in favour of excluding an
Article covering this question was the Delegate of Norway, and
therefore I think if we can proceed on the basis that the majority
of the Committee favour a note in the appropriate Schedules.
There is also a substantial measure of agreement that we should
arrive at the text of a model note which covers the multilateral
nature of these negotiations.
I would like therefore to make the suggestion that Mr.
Morton call together his Sub-committee again and that they meet
tomorrow morning and endeavour to work out a model note which
can be presented to us at our meeting tomorrow afternoon, because,
with the best will in the world, I do not think we will conclude
all our work to-day anqd I am uite sure members of the Committee
do not wish to meet tonight, aend theefore it will be necessary
for us to meet tomorrow afternoon.
If the Sub-committee could produce a draft by 1 o'clock
the Secretariat could see that it is circulated in time for
. ;:, . R. 52 E/PC/T/TAC/PV/23
our meeting. We could then agree upon the text of the model
note and we could then give consideration to the suggestions
for future procedure such as that suggested by Mr. Leddy, or
some other suitable procedure which the Sub-committee may decide.
Does the proposal meet with the approval of the Committee?
Agreed
In order that members composing the Sub-committee should
have time to consider the suggestion of Mr. Leddy, I will read
to them very slowly the text which he proposed.
M. Pierre FORTHOMME (Belgium). I do not remember
exactly what was the composition of Mr. Morton's Sub-committee.
CHAIRMAN: Australia, Belgium; Canada, Czechoslovakia,
France, the United Kingdom and the United States.
Would it assist if I read out the proposed text suggested
by Mr. Leddy? I think it is to take the place of the second and
third paragraphs of M . Forthomme's second proposal.
Mr. C. E. MORTON (Australia). In that case it might be
,
possible to have a sufficient number of copies brought to the
meeting in regard both to Mr. Leddy's and to M. Forthomme's
proposal.
CHAIRMAN: The Secretariat will see that sufficient
copies are available for the rest of the Sub-committee, but in
case some members would wish to consider Mr. Leddy's proposal
I will read it slowly:
"In case this currency is substantially depreciated consis-
tently with the Articles of Agreement of the International
Monetary Fund, the contracting parties shall, upon the request
of Czechoslovakia, promptly enter into and carry out with
Czechoslovakia negotiations directed to such adjustment of
specific duties in the Schedule relating to Czechoslovakia as
may be warranted by such depreciation in the circumstances." R. 53 E/PC/T/TAC/PV/23
The Secretariat will circulate this to members of the Sub-
committee in the morning.
We now have a few minutes left, and I wonder if we might
dispose of the 'item I introduced earlier in our meeting,which
relates to paragraph 2 of Article XXIV. Members of the Committee
will note on page 55 of Document T/196, that we had reserved a
decision as to whether paragraph 1 of this Article should be
transferred to Part II or retained in this Article. The
Australian Delegation have proposed that the paragraph should be
included in Part II.
Dr. COOMBS (Australia) We are prepared to withdraw the
suggestion, Mr. Chairman.
CHAIRMAN: The other question to be decided is about the
square brackets around the last words of this. paragraph in the
Protocol of Provisional Application. I take it that these can be
removed. Is that agreed?
Agreed.
I think we have now done sufficient 'for to-day. To-morrow
we will take, up the Note regarding Germany, Japan and Korea which
is given in Document W/340, Revision 1, this being a revised text
submitted by the Delegation of the United States We will also
deal with the Annexes.
Since we have not got' very much to do to-morrow, I suggest
that we only meet at 3 o'clock and carry through until we finish.
Mr. J. MELANDER (Norway). Mr. Chairman, before we dispose
of our work to-day I would like to raise a question concerning
the remaining work of this Committee. As you all know, not only
the Norwegian Delegation, but also other Delegations, would very
much like to liquidate their obligations here as quickly as
possible, and I may say that I myself have been instructed to
leave on Saturday in order to advise the Commission which the E/PC/T/TAC/PV/23
Government has established to consider the draft for the Charter.
Now the point is that we have practically settled all the
texts here, and as far as I can gather it is only really the point
which was raised by the Australian Delegation to-day about the
switching over from Part I to Part II of Article 1, and these two
points which remain for to-morrow, which are still outstanding,
apart from the Sub-committee dealing with the Schedules
I should think all that could be covered by Saturday, or
at any rate Monday, and the question is then, whether it would be
possible to start dealing with the Legal Drafting Committee's work
immediately or whether it would be possible to let the Legal
Drafting Committee prepare its work completely and then take it
up. In that case I would suggest that the Legal Drafting
Committee's report was finished and circulated to Delegates and
that it was taken up at a later date, say round the 10th October,
for final approval by the Committee here, so that everything was
in order until the signature of the Final Act. If that is not
considered a practical solution, I would suggest that we at any
rate start dealing with the Legal Drafting Committee's report
as quickly as possible and even, if necessary, in bits and pieces.
CHAIRMAN; I do not think it would be a very practical
suggestion to hold over the consideration of the Legal Drafting
Committee's report until the 10th October, because by that time
practically all the delegations would be liquidated down to a few
experts on tariff schedules; but I do believe it might be possible,
and I shall ask the Chairman of the Legal Drafting Committee to
inform us, to take up part of the Report of the Legal Drafting
Committee on Saturday morning. If we do not finish Saturday
morning, we will continue on Saturday afternoon; but I do not
think it is perhaps asking too much of the Legal Drafting
54
R. R. 55 E/PC/T/TAC/PV/23
Committee to submit the whole of their Report by Saturday.
Probably it would be necessary to have a meeting one day next
week to consider that part of the Agreement which they may not
produce by Saturday. I will ask the Chairman of the Legal
Drafting Committee what he thinks of this suggestion.
M. ROYER (France) (Interpretation). Mr. Chairman, I think
that the Legal Drafting Committee could terminate to-morrow its
work on Part III of the Agreement, and that Part III of the
Agreement can be circulated so that it can be taken up for
examination on Saturday morning.
Taking into consideration the fact that. Legal Drafting
Committee which dealt with the Charter and the present Legal
Drafting Committee is composed of almost the same members, oui
would have liked to have an opportunity of reviewing
the whole of the Agreement, but of course, if that is not
., tt !I
possible, Part III will be ready for discussion on Saturday
morning.
ReferringLto Mr. leddy's proposal to transfer Article 1
rom Part I to Part II of the Agrecment, I think that it would
be useful and, anyhow, the French Delegation will make a proposal
. . ...
in that sense, that provisions should be inserted in the Protocol
of Provisional Application stating clearly that the governments
will be able to apply provisionally the provisions of Article 1.
This might delay, of course, the examination of the Protocol of
Provisional Application. That is the only point outstanding.
CHAIRMAN: That point will have to be taken up when we
come to-the definitive decision with regard to the transfer of
Article 2 to Part II.
I propose that we meet to-morrow at 3 o'clock and finish
up the remainder of our work, and then on Saturday morning take
up the report of the Legal Drafting Committee on Part III, or
such text as they have been able to submit. Is that agreed?
The meeting is adjourned.
The meeting rose at 7.30 p.m. |
GATT Library | pf257jq3078 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Visas for Cuba | United Nations Economic and Social Council, October 22, 1947 | United Nations. Economic and Social Council | 22/10/1947 | official documents | E/PC/T/262 and E/PC/T/228-267 | https://exhibits.stanford.edu/gatt/catalog/pf257jq3078 | pf257jq3078_92290338.xml | GATT_155 | 189 | 1,340 | RESTRICTED
ECONOMIC CONSEIL E/PC/T/262
AND ECONOMIQUE 22 0ctober 1947
SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NTATIONS CONFERENCE ON TRADE AND EMPLOYMENT
Visas for CUBA
The Secretariat has received the following letter
from the. Chairman of the Cuban Delegation:
"To: The Secretariat
From: The Cuban Delegation.
From are pleased to inform you that the Cuban Government.,
through its Minister of State, has arranged to authorize
the Cuban Consul here i.n Geneva to visa all ordinary or
di)lom:xtic passports of the varicus Delogates, including
1:Le ;.]trs of thoir families as well as thoir respective
,'overnesses or nurses 3 and staff members of the Delegatiins
w;.o plan to attend the World Conferonce in Habana next morith.
The n:Ln6 of t1he Cuoan Consul is Mr. Luis Valdes-Roig.
.-';ss of the Cuban Consul is:
Ave-nue Pictet-de-Rochemont 27.
PhD:!i number is: 4-74_45
This privilege will eliminate the delay and bother
of hcinl to submit passports to Barne for Ouban visa.
W!e would appreciate your relecasing this information for
the benefit of all interested.
Signed: Sergio I. Clark.
Chairman of the Cube
Delegation.
NATIONS UNIES
UNITED NATIONSON'S |
GATT Library | jt148kr8844 | Second session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Working group on "Technical," Articles | United Nations Economic and Social Council, May 14, 1947 | United Nations. Economic and Social Council | 14/05/1947 | official documents | E/PC/T/W.67 and E/PC/T/W/23-81 | https://exhibits.stanford.edu/gatt/catalog/jt148kr8844 | jt148kr8844_90050198.xml | GATT_155 | 452 | 3,306 | UNITED NATIONS NATIONS UNIES RESTRICTED
ECONOMIC CONSEIL E/PC/T/W.67
AND ECONOMIQUE May 14, 1947
SOCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
WORKING GROUP ON "TECHNICAL,"ARTICLES.
The United States delegation suggests the following
wording of
Article 19.
Alternative titles : (a) Formalities relating to Imports
and Exports
(b) Customs Formalities,
1. The Members recognize /the principle that subsidiary
fees and charges imposed on or in connection with importation
or exportation should be limited in amount to the approximate
cost of services rendered and should not represent an indirect
protection to domestic products or a taxation of imports or
exports for fiscal purposes. They also recognize the need for
reducing the number and diversity of such subsidiary fees and
charges, for minimizing the incidence and complexity of import
and export formalities, and for decreasing and simiplifying
import and export documentation requirements.
2. Members shall give effect to the principles and objectives
of paragraph 1 of this Article at the earliest practicable date,
Moreover, they shall, upon request by another Member, review the
operation of any of their[customs] laws and regulations in
the light of these principles. The Organization is authorized
to request from Members resorts on stops taken by them in pur-
suance of the provisions of this paragraph.
3. The Organization is authorized to study and recommend to
Members specific measures for the simplification and standard-
ization of customs formalities and techniques and for the
elimination of unnecessary customs requirements.
4.* Members shall not collect or otherwise enforce substantial
penalities for minor breaches of customs regulations or pro-
cedural requirements. In particular, no penalty in respect of
any omission or mistake in customs documentation which is easily
rectifiable and obviously made without fraudulent intent or gross
negligence shall be greater-than necessary to serve merely as a
warning.
* This paragraph is suggested to replace paragraph 3 in the
version of the D.C. Report (Page 15).
.
ATIONS UNIES E/PC/T/W.67
Page 2.
5. The provisions of this Article shall extend to [public]
Alternative A : subsidiary fees, charges, formalities and
requirements imposed by Members on or in con-
nection with importation or exportation,
including those relating to :
Alternative B : subsidiary fees, charges, formalities and
requirements reIating to all matters concern-
ing importation or exportation, Including:
Alternative C : subsidiary fees, charges, formalities and
requirements relating to all customs matters,
lncluding:
(a) Consular transactions, such as consular invoices
and certificates;
(b) Quantitative restrictions;
(c) Licensing;
(d) [Alternatives :
(a) Foreign exchange transactions relating to
imports or exports
(b) Foreign exchange transactions]
(e) Statistical services;
(f) Documents, documentation and certification;
(g) Analysis and inspection; and
(h) Quarantine, sanitation and fumigation.
(i) Port facilities |
GATT Library | hs089hk9364 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Working Group on "Technical" Articles. Summary Record of Meeting of the Ad Hoc Sub-Committee Appointed for the Discussion of Article 16, Paragraphs 5 and 6 (19 May 1947, 3.00 p.m.) | United Nations Economic and Social Council, May 10, 1947 | United Nations. Economic and Social Council | 10/05/1947 | official documents | E/PC/T/WP1/AC1/SR/1, E/PC/T/WP.1/SR.1-11, and E/PC/T/WP.1/AC/SR.1-3 | https://exhibits.stanford.edu/gatt/catalog/hs089hk9364 | hs089hk9364_90260212.xml | GATT_155 | 1,334 | 8,806 | UNITED NATIONS
ECONOMIC CONSEIL
AND ECONOMIQUE RESTRICTED
E/PC/T/WR1/AC1/SR/1
SOCIAL COUNCIL ET SOCIAL 10 May 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
WORKING GROUP ON "TECHNICAL" ARTICLES
Summary Record of Meeting of the
AD HOC SUB-COMMITTEE
APPOINTED FOR THE DISCUSSION OF ARTICLE 16, PARAGRAPHS 5 and 6
(19 May 1947, 3.00 p.m.)
Chairman: Mr. SHACKLE
Present for Article 16, paragraph 5: the delegates for
Belgium, Czechoslovakia, United Kingdom, United
States, Canada, New Zealand, South Africa also
attending;
for Article 16, paragraph 6; the former with the addition of
Australia and France.
After an exchange of views on paragraph 5 of Article
16, the Czechoslovak delegate provisionally approved the
version as it appeared in the Report of the Drafting
Committee. It was decided that the following note should
be included in the Report to the Working Party on "Technical"
Articles:
"With regard to transport charges it would be under-
stood that the principle of paragraph 5 refers to like products
being transported on the same route under like conditions."
In the debate on paragraph 6, the delegate for France
stressed the necessity of changing the present text in view
of the fact that the French ports will not be fully usable
for some years to come. Several amendments suggested during
the meeting to solve the difficulty did not meet with
unanimous approval. Mr. LEDDY (United States) urged the
Committee either to include paragraph 6 in its present form
or to delete it from Article 16, and discuss this point in
connection with Article 14. No agreement could be reached
but it appeared that the majority favoured the retention of
paragraph 6 in its present form. The delegate for FRANCE
declared his reservation against the inclusion of the second
sentence of the paragraph.
It was decided to submit the following Report of the
Ad hoc Sub-Committee to the Working Group on "Technical"
Articles with regard to Article 16, paragraph 6:
"The Sub-Committee were in favour of the retention of
this paragraph in the New York text, subject to a reservation
by the French delegate who will raise this matter when
Article 14 will be discussed."
NATIONS UNIES UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL.
CONSEIL RESTRICTED
ECONOMIQUE E/PC/T/WP.I/AC1/SR/1.Corr.1.
ET SOCIAL 19 May 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
WORKING GROUP ON "TECHNICAL" ARTICLES
Summary Record of Meeting of the
AD HOC SUB-COMMITTEE
APPOINTED FOR THE DISCUSSION OF ARTICLE 16, PARAGRAPHS 5 and 6
(19 May 1947, 3.00 p.m.)
Paragraph 3, re-word first sentence as follows:
"In the debate on paragraph 6, the delegate for
France stressed the necessity of changing the present
text in view of the fact that the requirement of direct
consignment had to be maintained by his country pending
the reconstruction of the French ports, which had been
severely damaged during the war".
NATIONS UNIES UNITED NATIONS NATIONS UNIES RESTRICTED
E/PC/T/WP1/AC/SR/2
ECONOMIC CONSEIL 20 May 1947
AND ECONOMIQUE
SOCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
WORKING GROUP ON "TECHNICAL ARTICLES".
Summary Record
of the Meeting of the ad hoc Sub-Committee appointed
for the discussion of
Article 21, paragraph 3.
(20th May 1947, 12 noon).
Chairman: Mr. Shackle.
Members of the Sub-Committee: The delegates of Czechoslovakia,
France, the Netherlands, the Union of South Africa, the United
Kingdom and the United States.
The Chairman, referring to the "Comments by the Legal
Officer upon Article 21 and the amendment thereto by the Deleg-
ation of Czechoslovakia", stated that in his view the fundamental
object of this paragraph was to enable the importer to know at
the time of importation to what rates of duties the imported mer-
chandise is subject; regardless of the question whether the app-
licable laws and regulations are provisional or definitive, the
importer should be in a position objectively to determine the
amount of duty.
The Delegate of the United States proposed an amendment to
alternative No. 2 in the "Comments by the Legal Officer upon
Article 21" (the clause on page 2 of these "Comments") , substit-
uting the word "measures" for "laws, regulations, judicial decis-
ions or administrative rulings".
In the ensuing discussion, the Committee debated the various
meanings of the term "publication of laws". The Delegate of The
Union of South Africa suggested the deletion of paragraph 3, but
subsequently withdrew this suggestion.
The Committee reached the following decisions:
1. The following new paragraph should be inserted as Para-
graph 2: "No measure of general application taken by any member
effecting an advance in a rate of import duty or other charge
under an established and uniform practice or imposing a new or
more burdensome requirement, restriction or prohibition on imports,
or on the transfer of the payments therefor, shall be enforced
before such measure has been legally published".
2. Paragraph 2 in the New York version, as amended by the
Working Group in its 4th meeting, should be re-numbered paragraph
3, and paragraph 3 of the New York version should be deleted.
The Sub-Committee wished it to be understood that the adoption
of the new paragraph 2 is of a provisional nature and does not
prevent the Members of the Sub-Committee from proposing changes at
the time Article 21 will be debated for final adoption by the
Preparatory Committee. UNITED NATIONS NATIONS UNIES RESTRICTED
E/PC/T/WP.1/AC/SR/3
22 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.
WORKING GROUP ON "TECHNICAL ARTICLES".
Summary Record
of the Meeting of the ad hoc Sub-Committee appointed
for the discussion of
Article 21, paragraph 2
(22 May 1947, 9.30 a.m.
Chairman: Mr. Shackle.
Members of the Sub-Committee: The Delegates for Canada, the
Netherlands, the United Kingdom and the United States.
Also present the Delegates of France and New Zealand.
At the invitation of the Chairman, the delegate of the
United States explained the purpose of the United States amend-
ment (cf. E/PC/T/W/24 add. 1). In the United States, he pointed
out, it is extremely difficult and rare to introduce legislation
to correct a judicial decision in customs matters, which is not
in line with intended policy, and therefore the central authority
must have the right to test such a decision in new cases, a
right which equally applies to importers. The implementation
of any final decision in the specific case to which it refers
remains, however, unaffected.
In the ensuing discussion several delegates made it clear
that the practice in their respective countries was similar.
The United Kingdom delegate stated that in his country customs
authorities are bound by court decisions for all like cases,
and corrections could be achieved only by new legislation which
was not always easy.
Several delegates raised doubts regarding the meaning of
the word "agency" in the American proposal, contending that
remedial action should only lie with a superior authority. The
delegate of the United States then proposed the following changes
in his amendment:
To add the words "the central administration of" before
"such agency";
P.T.O. E/PC/T/WP.1/AC/SR/3.
page 2.
To delete the words "any" and "necessary" in the
first line; and
To substitute in line 3 "if" for "in cases in which".
The Sub-Committee adopted the Canadian amendment (cf.
E/PC/T/W 24) and the United States amendment (cf. E/PC/T/W 24
add. 1) with the proposed changes and accordingly recommends
to the Executive Committee in its Report the following addition
to Article 21, paragraph 2:
"And their decision shall be implemented by and shall
govern. the practice of such agencies unless an appeal is lodged
with a court or tribunal of superior jurisdiction within the
time prescribed for appeals to be lodged by importers, provided,
that the central administration of such agency may take steps
to obtain a review of the matter in another proceeding if there
is good cause to believe that the decision is inconsistent with
established principles of law or the actual facts". |
GATT Library | ws766rn5342 | Second session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Working paper for Sub-Committee on Article 18. Composite Redraft of Article 18 (2a) and of amendments proposed by Canada, France, Benelux and South Africa | United Nations Economic and Social Council, May 22, 1947 | United Nations. Economic and Social Council | 22/05/1947 | official documents | E/PC/T/W/104 and E/PC/T/W/82-124 | https://exhibits.stanford.edu/gatt/catalog/ws766rn5342 | ws766rn5342_90050237.xml | GATT_155 | 401 | 2,557 | UNITED NATIONS NATIONS UNIES
ECONOMIC CONSEIL RESTRICTED
AND ECONOMIQUE E/PC/T/W/104
SOCIAL COUNCIL ET SOCIAL 22 May 1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
ORKING PAPER FOR SUB-COMMITTEE ON ARTICLE 18
COMPOSITE REDRAFT OF ARTICLE 18 (2a) AND OF
AMENDMENTS PROPOSED BY CANADA, FRANCE, BENELUX
AND SOUTH AFRICA.
3. The value for duty purposes of imported merchandise
should be based on the actual value of the imported merchan-
dise on which duty is assessed, and should not be based on
the value of merchandise of national origin or on arbitrary
or fictitious values.
4. In determining actual value" for the purpose of
Article 18(3) a member should adopt one of the following
bases to the exclusion of the other:
BASIS A: Actual value shall be based on the price at
which at a time and place determined by the legislation of the
country of importation, and in the ordinary course of trade
between independent buyer and seller, such or like imported
merchandise in comparable quantities and under similar
conditions of sale is sold or offered for sale with price
as the sole consideration.
BASIS B: Actual value shall be based on the price at
which at a time and place determined by the legislation of
the country of importation, and in the ordinary course of
trade between independent buyer and seller, such or like
imported merchandise in fair average wholesale quantities
and under similar conditions of sale is sold or offered for
sale with price as the sole consideration.
(NOTE: The words underlined represent tho only difference
between the two bases).
. E/PC/T/W/104
page 2
5. Notwithstanding the provisions of paragraph 4 of this
Article a member may in any individual transaction levy duty
on the actuel price paid or to be paid by the importer for
the goods plus the amount of -
(a) any charges incurred subsequent to the purchase
of the goods
and
(b) any special discount or allowance or any other
special deduction accruing to the importer
which the legislation of the country of importation may
prescribe and minus
the amount of taxes end duties levied in the country
of importation if those are included in the price.
6. If "actual value" is not ascertainable on the basis of
tho proceding paragraphs, then the value for duty purposes
should be based on the nearest ascertainable equivalent of
such value. |
GATT Library | pb575fm5089 | Second session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Working Paper on Chapter VIII of the Charter regarding Settlement of Dis- putes , submitted by this delegations of Belgium, France and the Netherlands. Article 62 | United Nations Economic and Social Council, July 17, 1947 | United Nations. Economic and Social Council | 17/07/1947 | official documents | E/PC/T/W/248 and E/PC/T/W/236-260 | https://exhibits.stanford.edu/gatt/catalog/pb575fm5089 | pb575fm5089_90050398.xml | GATT_155 | 735 | 4,640 | UNTED NATIONS NATIONS UNIES
RESTRICTED
ECONOMIC CONSEIL E/PC/T/W/248
AND ECONOMIQUE 17 July 1947
SOCIAL COUNCIL ET SOCIAL ORIGIINAL: FRENCH
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFSRENCE ON TRADIE AND EMPLOYMENT
Working Paper on Chapter VIII of the
Charter regarding Settlement of Dis-
putes , submitted by this delegations of
Belgium, France and the Netherlands.
Article 62.
1) The principal organs of the International Trade Organization.
shall be: a Conference, an Executive Board, a Committee on
Customs Tariffs, Commissions established in accordance with
Article 72, and a Secretariat.
2) A Claims Board shall also be established to assist ln the
settlement of disputes.
Section B (a): Claims Board
Article 66 (a) (new)
Composition and Rules of Procedure
1) There shall be established a Claims Board consisting of ...
members, chosen by the Conference in accordance with the rules it
shall establish with a view to ensuring the appointment of persons
qualified by their traing and experience, as regards both impar-
tiality and competence, to carry out the duties devolving on them.
2) The Members shall be appointed for a period of ... years.
Retiring members shall be eligible for re-election;
3) The Claims Board shall elect its Chairman and adopt its rules
of Procedure. E/PC/ T/w/248
page 2
4) The Claims Board shall decide its own headquarters.
Article 66 (b) (new)
The Claims Board shall have the f following functions:
a) to give reasoned decisions on all disputes submitted to it
by the Conference And the Executive Board.
The Cleims Board shall request and receive from the Organiza-
tion and the parties, for this purpose, all relevant documents and
information. Representatives of the Claims Board may also attend
all meetings of the Executive Board and of the Conference, at which
disputes are discussed.
b) to act as a Court of Arbitration in all cases where the parties
invite it to act in that capacity.
Article 74
Delete the phrase "including such functions as the Executive
Board may deem appropriate in connection with the settlement of
disputes." (lines 3-6).
Article 86
The wording of Article 35, as may be adopted by Commission A.
Article 87 (new)
(1) Any dispute, which it has not been possible to settle by means
of the procedure provided under Article 86, may be brought before
the Executive Board by any Member party to the dispute.
The Executive Board may ask for the reasoned opinion of the
Cleains Board before taking a decision.
(2) Any decision of the Executive Board, taken in virtue of
paragraph 1 of this Article, may, at the request of any Member
party to the dispute, be revised by the Conference. The reasoned
decision of the Conference shall be founded. on the opinion of the
Claims Board. If the Claims Board has already given an opinion E,PC/T/W/248
page 33
regarding the dispute to th Executive Board, it shall reconsider its
opinion in the night of the latest evidence before sumitting it to
the Conference.
Any decision of the Conference which modifies or cancels a
decision of the Executive Board, taken in virtue of paragraph 1 of
this Article, shall be taken by a majority of the Members of the
Conference.
3) By agreement between the parties, a dispute may at any time be
referred to arbitration, either by the International Court of Justice,
or the Claima Board, or any other body or person.
The arbiter's decision shall be final and without appeal.
Any other procedure shall in this case be suspended..
4) If a dispute concern the interpretation of the Charter, the
Conference may ask the International Court of Justice for an advisory
opinion on the subject. In this case, the power of the Conf erence
to revise the decision of the Executive shall be suspended until
the Court has pronounced its opinion. The advisory opinion of the
Court shall be binding on the Conference.
5) Any decision of the Conference, taken in virtue of paragraph 2.
of this Article, may, if it concern a legal dispute falling under
one of the categorien of disputes referred to in Article 36,
paragraph 2, of the Statute of the International Court of Justice,
be referred to the International Court of Justice by any party to the
dispute for the pronouncement of a final decision.
The Members of the Organization shall mutually acknowledge
the right of each to intervene before and present a case to the
International. Court. |
GATT Library | wt566pq6242 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Working Party on Technical Articles | United Nations Economic and Social Council, June 19, 1947 | United Nations. Economic and Social Council | 19/06/1947 | official documents | E/PC/T/103 and E/PC/T/92-105 | https://exhibits.stanford.edu/gatt/catalog/wt566pq6242 | wt566pq6242_92290122.xml | GATT_155 | 7,301 | 47,235 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/103
19 June 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
WORKING PARTY ON TECHNICAL ARTICLES
(Chairman: H.E. Erik Colban)
RECORD OF WORK PERFORMED
The Working Party did not dicuss Article 15 and the
siuggested new Article 15A (cf.E/PC/T/WP.1/SR/11 and
E/PC/T/78). The present record accordingly covers only
Articles 16 3 (inclusive) and 3 .
The left hand pages show the text of the Articles.
Square brackets indicate deletions from, and underlining
additions to, the text adopted by the Drafting Committee in
New York.
Comment and reservations are set out on the right-
hand pages, opposite to the relevant Charter text.
In the case of the following Articles and paragraph,
the text set out were not adopted by the Working Party as
a whole but by Ad Hoc Sub-Committees the reported of which
were referred to the Executive Committee for consideration:
Article, paragraphs
Article 17
1-
Article 18
Article 19
Article 21,
paragraph 3.
Ad-hoc committee composed of delegates
for
Australia, Belgium,-Luxemburg, Cuba,
France, India, Lebanon-Syria, the
Netherlands, the United Kingdom, the
United States.
(Chairman: M. Massart; later Mr. Shackle)
Australia, Canada, China, France,
the Netherlands, the Union of South
Africa, the United Kingdom, the United
States.
(Chairman: Mr. Holloway)
Australia, France, New Zealand, the
Union of South Africa, the United Kingdom,
the United States:
(Chairman: Mr. Shackle)
Canada, the Netherlands, the United
Kingdom, the United States.
(Chairman: Mr. Shackle).
NATIONS UNIES E/PC/T/103
page 2.
C H A R T E R
ARTICLE 16
FREEDOM OF TRANSIT.
1. Goods (including baggage), and also vessels and other
means of transport, shall be deemed to be in transit across
the territory or a Member when the passage across such
territory with or without transhipment, warehousing, breaking
bulk, or change in the mode of transport, is only a portion
of a complete journey, beginning and terminating beyond the
frontier of the Member across whose territory the traffic
passes. Traffic of this nature is termed in this Article
"traffic in transit". The provisions of this Article shall
not apply to the operation of aircraft in transit, but shall
apply to air transit of goods and baggage.
2. There shall be freedom of transit through the Member
countries via the routes most convenions. for international
transit for traffic in transit from other Member
countries. No distinction shall made which is based on
[the nationality of persons,] the .lag of vessels, the place
or origin, departure, entry, exit or destination, or on any
circumstances relating to the ownership of goods, or vessels
or other means of transport.
3. Any Member may require that traffic in transit through
its territory be entered at the proper customs house, but,
except in cases of failure to comply with applicable customs
laws and regulations, such traffic coming from or going to
other Momber countries shall not be subject to any unnecessary
delays or restrictions and shall be exempt from customs duties
and from all transit duties.or other charges imposed in
respect of transit, except charges for transportation or
those commensurate with administrative expenses entailed by
transit or with the cost of services rendered.
4. All charges and regulations imposed by Members on
traffic in transit to or from other Member countries shall
be reasonable, having regard to the conditions of the
traffic. E/PC/T/183
page 3.
COMMENTS.
16 : 1 (a) The.Delegate for Chile declared that he maintained,
for the time being, the view expressedd by the
Chilean delegation to the Drafting Committee) that
Article 16 should be confined to good only, in
which case the words "and also vessels and other
means of transport" in paragraph 1 should be
deleted. The Delegate for Canada. associating
himself with that for Chile, declared that he
might wish to raise this point when this Article
was to be discussed.
16 :. 2
16 : 3
(b) The Working Party agreed that the wording of'
paragraph .1 covered transit from one point to
another in a given country across the territory
of' another country.
.................. .. i. .............
.. .......*.. !.* ....*. ....@
16 : 4
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... . . ... . .... . . . . . .. . . . . . E/PC/T/103
page 4.
CHARTER.
5. With respect to all charges, [rules] regulations,
and formalities in connection with transit, each Member
shall accord to traffic in transit to or from any other
Member country treatment no less favourable than the
treatment accorded to traffic in transit to or from any
third country.
6. Each Member shall accord to products which have been
in transitthrough any others Member country treatment no
less favourable than that which would have been accorded
to such products had they been.transported from their place
of origin to their destination without going through such
other Member country. Any Member shall, however, be free
to maintain its requirements of direct consignment
expédition directe) existing on the day of the signature
of this Charter, in respect of any goods in regard to
which such direct consignment is a requisite condition of
eligibility for entry of the goods at preferential rates
of duty, or has relation to the country's prescribed method
of valuation for duty purposes. E/PC/T/103
page 5.
COMMENTS.
16 : 5 With regard to transport charges, the Working
Party understood that the principle of paragraph 5
refers to like products being transported on the
same route under like conditions.
16 6 The Working Party was in favour of the retention
of this paragraph as adopted by the Drafting
Committee, subject to a reservation by the French
delegate who will raise this matter when
Article 14 is discussed. E/PC/T/103
page 6
C H A R T E R
ARTICLE 17.
ANTI-DUMPING AND COUNTERVAILING DUTIES. E/PC/T/103
page 7
COMMENTS.
General Comments.
Article 17 is shown opposite according to the Report
of an ad hoc sub-committee, consisting of delegates for
AUSTRALIA, BELGIUM-LUXEMBOURG, CUBA, FRANCE, INDIA, LEBANON-
SYRIA, the NETHERLANDS, the UNITED KINGDOM and the UNITED
STATES (Chairman of the first three meetings; M. MASSART;
of subsequent meetings: Mr. SHACKLE) also attended by the
Delegates for BRAZIl, CANADA, CHINA, CZECHOSLOVAKIA, NEW
ZEALAND and the UNION OF SOUTH AFRICA.
; (a.) The Delegates for AUSTRALIA, LEANON-SYRIA, NEW
ZEALAND and the UNION OF SOUTH AFRICA May wish to reconsider
Article 17 in so far as it bears on the question of rates of
excharige in the light of what may be agreed under Article 18,
paragraph '(c) and Article 29.
(b) The Delegate for CUBA criticised the way of
approach to the problem of dumping by Article 17 which confines
itself to restricting the rights of Members affected by
dumping, whilst not condemning those practising it. He would
have wished to introduce it by on express statement of condemna-
tion. Page 8
CHARTER.
1. No anti-dumping duty or charge shall be /impopsed]
levied 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 purposed of this Article, .the margin of dumping shall
be understod to mean the amount by while the price of the
product exported from one country to another is less than (a)
the comparable price; in the ordinary course of commerce, for
the like product [to the buyers in the domestic market of]
when destined for consumption in the exporting country, or, in
the absence of such domestic price , is less than eithur (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 is the country of origin us a reasonable addition
for selling cost and profit, with due allowance in each case
for differences in conditions and terms of sale, for differences
in taxation and for other differences affecting. price comparability.
2. No contravailing duty shalli be [imposed] levied on any
product of any Member country imported inlto another Member
country in excess of an amount equal to the estimated bounty
or subsidy determined to have been granted, directly or
indirectly, on the manufacture, production or export of such
product in the country of origin or exportation, including
any special subsidy the transportation of a particular
product. The term countervailing duty" shall be understood
to mean [an addtional] a special duty [imposed] levied
for the purpose of offsetting any bounty or subsidy bestowed,
directly or indirectly, upon the manufacture, production
or exportation of any merchandise. E/PC/T/103
page 9
COMMENTS.
17 : 1 (a) The majority of the Sub-Committee is or the
opinion that hidden dumping by associated houses (that is,
the sale by the importers at a price below that
oorresponding to the price invoiced by the exporter with
which the importer is associated, and also below the
price in the exporting country) would constitute a form
of price dumping.
(b) The Sub-Committee considers that in accordance
with Article 35 the obligation to justify the imposition
of anti-dumping and countervailing duties, if challenged
by another Member, lies in the first place with the
Member applying this measure.
17 2 It is the understanding of the Sub-Committee that
multiple currency rates may in certain circumstances
constitute a subsidy to exports which could be met by
countervailing duties under paragraph 2 of this Article. E/PC/T/103
page 10
CHARTER.
3. No product o any Member country importod into any other
Member country shall be subject to anti-dumping or counter-
vailing duty by reason of the exemption of such product from
duties or taxes imposed in the country of origin or exportation
upon] borne by the like product when consumed .domestically]
in the country of origin or exportation, or by reason of the
refund of such duties or taxes.
4. No product of any Member country imported into any other
Member country shall be subject to both anti-dumping and counter-
vailing duties to compensate tor the same situation or dumping
or export subsidization.
5. No Member shall [impose] levy any anti-dumping or counter-
vailing duty or charge on the importation of any product of [other
Member countries/ another Member country unless it determines that
the effect of the dumping or subsidization, as the case may be, is
such as [materially to injure or threaten to injure] to cause or
threaten material injury to an established domestic industry, or
is such as to prevent or materially retard the establishment of a
domestic industry. The Organization is authorised to waive the
requirements of this paragraph so as to permit a Member to levy an
anti-dumping duty or countervailing duty on the importation of any
Product for the purpose of offsetting dumping or subsidization
which causes or throatens material injury to an industry in
another Member country exporting the product concerned to the
importing Member country. It is recognized that the importation
of products exported under a stabilization system determined to
have conformed to the conditions prescribed in paragraph 3 or
Article 30 would not result in material injury under the terms
of this Paragraph. E/PC/T/ 103
page 11
COMMENTS
17 : 3 ----- -----------------_____________________
1'7 :4 -------------_-------------_________________________
17 : 5 (a) The Delegations of Belgium, France, Luxembourg
and the Netherlands expressed the fear that abuses might
be committed under cover of the provisions of paragraph
5 regarding the threat of injury, of which a State might
take advantage on the pretext that it intended to
establish some new domestic industry in the more or less
distant future. The Committee, considered that, if such
abuses were committed, the general provisions of the
Charter would be adequate to deal with them.
(b) The same delegations maintained that there could,
in practice, be no material injury if the price charged by
the exporting country was not less than that of the
importing country or than the world price.
The Sub-Committee felt, however, that this did not
provide a valid test of injury.
(c) In cases of dumping in third markets of a
serious character such as might not be adequately covered
by the new second sentence of paragraph 5, the matter could,
in the view of the Sub-Committee, be taken by an aggrieved
Member to the Organization under Article 35 with a view to
ootaining an appropriate release from its obligations
towards the offending Member.
(d) The reference to paragraph 3 of Article 30 was
adopted provisionally pending the final wording of that
provision as well as of paragraph 4 of Article 63. E/PC/T/103
page 12
CHARTER
[6. Nothing in this Article shall preclude Members, parties
to a regulatory commodity agreement conforming to the principles
of Chapter VII, from incorporating in such agreement provisions
prohibiting, as between themselves, the use of anti-dumping
duties in cases in which dumping, within the meaning of para-
graph 1 of this Article, may be permitted under the terms of
such an agreement.]
6. No measures other than anti-dumping and countervailing
duties or charges shall be applied by any Member for the purpose
of offsetting dumping, or subsidization. E/PC/T/103
page 13
COMMENTS
17 6 (new) (a) The Sub-Committee did not reach unanimous
agreement on the addition of the new paragraph. Its
inclusion was supported by twelve delegations (Australia,
Belgium, Brazil, Canada, Czechoslovakia, France,
Lebanon-Syria, the Netherlands, New Zealand, the Union
of South Africa, the United Kingdom and the United
States) and opposed by two delegations (China and India).
The Delegate for Cuba was not present at this dis-
cussion.
(b) It is understood that the obligations set
forth in Article 17 could, as in the case of all other
obligations under Chapter V, be subject to the provisions
of Article 34.
(c) The Delegate for BRAZIL wished to make it
clear that the reservations made by his country in the
D.C. Report concerning Article 17 were withdrawn in view
of the interpretation contained in the preceding note. E/PC/T/103
page 14
CHARTER
Article 18
[ Tariff Valuation] Valuation for Customs Purposes.
1. The Members [ undertake to] shall work toward the
standardization, in so far as practicable, of definitions
of value and of procedures for determining the value of
products subject to customs duties or other charges or
restrictions based upon or regulated in any manner by value.
With a view to furthering such co-operation, the Organization
[is authorized to] may investigate and recommend to Members
such bases and methods for determining the value of products
as would appear best suited to the needs of commerce and most
capable of general adoption.
2. The Members recognize the validity of the general
principles of tariff? valuation set forth in the following sub-
paragraphe, and they undertake to give effect to such principles,
in respect of all products subject to duties, charges or
restrictions on importation and exportation based upon or
regulated in any manner by value, et the earliest practicable
date. Moreover, they [undertake] shall, upon a request by
another Member, [to] review the operation of any of their
laws of regulations relating to value for duty purposes in the
light of these principles. The Organization is authorized
to request from Members reports on steps taken by them in
pursuance of the provisions of this paragraph. E/PC/T/103
page 15
COMMENTS
Article 18 is shown opposite according to the Report
or an ad hoo sub-committee, consisting or delegates
for Australia, Canada, China, France, the Netherlands,
the Union of South Africa, the United Kingdom, and
the United States. (Chairman : Mr. Holloway).
18 : 1
18 : 2 The Sub-Committee deoided to report that it had
considered the desirability of replacing the words
"at the earliest practicable date" by a definite
date or, alternatively, by a provision-for a
specified limited period to be fixed later. After
considering the difficulties in which the various
countries would be placed by a fixed date, it was
decided to retain the paragraph as it stands, leaving
it to the Organization to draw the attention of
Members, if necessary, to the desirability of
bringing their legislation into line with the
Article as speedily as possible.
18 :1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E/PC/T/103
page 16
CHARTER
(a) (i) The value for duty purposes of imported
merchandise should be based on the actual value of the imported
merohandise on which duty is assessed or of like merchandise,
and should not be based on the value of merchandise ot national
origin or on arbitrary or fictitious values.
(ji) "Actual value" should be the price at which, at a
time and place determined by the legislation of the country of
importation and in the ordinary course of trade between
independent buyer and seller, such or like merchandise is
sold or offered for sale under fully competitive conditions.
To the extent to which the price of such or like merchandise
is governed by the quantity in a particular transaction, the
price to be oonsidered should uniformly be related to either
comparable quantities or quantities not less favourable
to importers than those in which the greater volume of -the
merchandise is sold in the trade between the countries of
exportation and importation..
(iii) When the actual value is not ascertainable in
accordance with (a) (ii). the value for duty purposes should
be based on the nearest ascertainable equivalent of such
value. E/PC/T/103
Page 17
COMMENTS
18 : 2(a) The alternatives A, B and C, contained in the
Report of the Drafting Committee have been omitted.
The Sub-Committee considered that it would be in
conformity with Article 18 to presume that "actual
value" may be represented by the invoice price, plus
any non-included charges for legitimate costs which
are proper elements of actuall value" and plus any
abnormal discount or other reduction from the ordinary
competitive price.
The Sub-Committee oonsidered that the words
"between independent buyer and seller" in (ii) might
be deleted on the understanding that the phrase "under
fully competitive conditions" covers the same concept.
Further, the Sub-Committee considered that the
prescribed standard or fully competitive conditions"
would meet the contention of the South African
Delegation that countries should not be requited to
consider distributors' pricos which involve special
discounts limited to exclusive agents. E/PC/T/103
page 18
CHARTER
(b) The value for duty purposes of any imported product
should not include the amount of any [ coustoms duty or]
internal tax [,] applicable within the country of origin or
export, from which the imported product has been or will be
relieved [or made exempt] by means of refund or made exempt.
(c) [ In converting the value of any imported product
from one currency to another for the purpose of assessing duty,
the rate of exchange to be used should be fixed in acoordance
with prescribed standards to reflect effectively the current
value of each ourrency in commercial transactions. ]
(j) Except as otherwise Provided in sub-paragraph (o),
where it is necessary for the Purposes of sub-paragraph (a)
for a Member to convert into its own currency a price
expressed in the currency of another country, the conversion
rate of exchange to be used should be based on the par values
of the currencies involved as established pursuant to the
Articles of Agreement of the International Monetary Fund or
by special exchange agreements entered into pursuant to
Article 29 of the Charter.
(ii) Where no such par value has been established,
the conversion rate shal. reflect effectively the current value
of such currency in commercial transactions.
(iii) Any Member may establish for any foreign currency
in respect of which multiple ourrency practices are maintained
consistently with the Articles of Agreement of the International
Monetary Fund. a single rate designed to reflect effectively
the current value of such currency in commercial transactions.
(iv) Nothing in sub-paragraph (c) shell be construed to
require any Member to alter the method of converting currencies
for Customs purposes which is applicable in its territory on the
day of the signature of this Charter in such a manner as to
increase generally the amounts of duty payable. E/PC/T/103
page 19
COMMENTS
18 : 2(b) ..............................................
18 : 2(c)
The majority of the Sub-Committee accepted (i)
and (ii) but wished to delete (iii).
The Delegate for the United States stated that
(i) and (ii) were acceptable only if (iii) were
retained.
The Delegate for Canada did not oppose the
retention of (iii)
The Delegate for New Zealand wished further
to consider the matter.
The Sub-Committee decided that the following
sentence should appear as a note in its Report as
a comment on (iv): "The appreciation of a currency
which is recognised by a change in its established
per value shall not be considered a change in the
method of converting currencies." E/PC/T/103
page 20
CHARTER
3. [d] The bases and methods for determining the
value of products subject to duties [,] or other
charges or restrictions based upon or regulated in any
manner by value should be stable and should be given
sufficient publicity to enable traders to estimate,
with a reasonable degree of certainty, the [amount of
duty likely to be imposed ] value for customs purposes. E/PC/T/103
page 21
COMENTS
18 : 3...... . .. .E/PC/T/103
pae 22.
CHARTER
ARTICLE 19
CUSTOMS FORMALITIES, CONNECTED WITH lMPORTATION AND
EXPORTATION
1. The Members recognize the prinoiple that jsubsidiary/
fees and oharges. other than duties, imposed by governmental
authorities on or in connection with importation or exportation
should be limited in amount to the approximate oost of services
rendered and should not represent an indirect protection to
domestic products or a taxation of imports or exports for
fiscal purposes. They also recognize the need for reduoing
the number and diversity of such rsubsidiaryjfees and
charges, for minimizing the incidence and complexity of
import and export formalities, and for decreasing and
simplifying import and export documentation requirements. E/PC/T/103
page 23.
COMMENTS
GENERAL COMMENT
Article 19 is shown opposite according to the report
(E/PC/T.W/103) of an ad hoc sub-committee, consisting of
delegates for Australia, Canada, France, the Netherlands,
New Zealand, the Union of South Africa, the United Kingdom,
and the United States, (Chairman: Mr. Shackle), attended
also by the Observers of the International MonLtltvry Fund
and the International Bank for Reconstruction and Develop-
ment The sub-committee, originally established to
consider the text of paragraph 5 (old paragraph 4), found
itself called upon to suggest the following changes of the
preoeding paragraphs, as provisionally adopted by the
Working Party (E/PC/T/'/r.1)
Reading: "Formalities Connected with Importation and
Exportation" substituted for "Customs
Formalities";
Paragraph 1: The word subsidiary" deleted (twice) before
"fees and charges";
The phrase "and oharges imposed" extended to
"and charges, other then duties, Imposed by
governmental authorities";
Paragraph 3: The word "customs' deleted before "laws and
regulations ";
Paragraph 4 The phrase "collect or otherwise enforce"
substituted for "impose";
"customs regulations or procedural require_
mental" substituted for "customs -rocedure or
regula tions"-;
"shall" (towards the end of the paragraph)
substituted for "should".
SPECIFIC COMMENTS E/PC/T/103
page 24. CHAPTER
2. The Organization is authorised to study and recommend to
Members specific measures for the simplification and standardiza-
tion of oustoms formalities and techniques and for the elimination
of unnecessary oustoms requirements.
4r. Except in cases of serious negligence, greater than nominal
penalties over and above the duty properly payable should not be
imposed by any Member in connexion with the importation of any
product of any other Member country because of errors in
documentation which are obviously clerical in origin or with
regard to which good faith oan be established
._2 3. Members Fundertake to shall give effect to the
principles and objectives of paragraph 1 of this Article at
the earliest practicable date. Moreover, they £undertakej
shall, upon request by another Member, to review the
operation of any of their £.customsj laws and regulations in
the light of these principles. The Organization is authorised
to request from Members reports on steps taken by them in
pursuance of the provisions of this paragraph.
4. Members shall not collect or otherwise enforce substantial
penalties for minor breaches of customs regulations or procedural
requirements. In Particular, no penalty in respect of any ,
comission or mistake in customs documentation which is easily
rectifiable and obviously made without fraudulent intent or
gross negligence shall be greater than necessary to serve merely
as a warning. E/PC/T/103
page 25
COMMENTS
l9 : 2 ........................................................
19 3(old) The omitted (old) paragraph 3 is roplacod by the
new paragraph 4.
19 3 (a) The Dclegate'for China rossrved his right to request
at the second reading of this paragraph the insertion
of the words "and upon due consideration by the
Organization of its merits' aftcr "Momber" in thc-
fourth lino.
(b) thequestion was raised by tht2Reprpscntativa of the
International Monetary Fund if thcre was any provision
in Article 19 vhich could be interpreted as prohibiting
a Member from employing multiple currency practices,
or equivalent threof, for balance of payments purposes
when the action of such member is takcn in accordance
with the recommendations or approval of the International
Lonetary Fund. It was pointed out that whilc Article
19 doos not cover the-use of multiple rates of exchange
as such, paragraphs 1 and 5 would condemn the use of
exchange taxes or fecs as a devicc for implementing
multiple currency practices; it ras clcar, however,
that if a Member is using multiple currency exchange
taxes for balance of payments reasons with the approval
of the Fund, the provisions of paragraph 3 woula fully
safguard its position since that paragraph merely
requires that the taxes be eliminated at the earliest
practicable date;.
(c) The Ad Hoc Sub-Committco recommends that an
explanation be included in th- report of tho
Pre paratory Committuu to thc affect that sub-paragraph
5(d) is without prejudice to thc provisions of the
Charter relating to safeguarding balance of payments
and to *xchange control.
19 : 4.......................................................... E/PC/T/103
page 26
CHARTER
SJ 5. The provisions of this Article shall extend to
fees, charges, formalities and requirement relating
to all customs matters including: imposed by
governmental authorities in connection with importation
and exportation. including those relating to:
(a) Consular transactions, such as consular
invoices and certificates;
(b) Quantitative restrictions;
(c) Licensing;
(d) Exchange reguletions control;
(e) Statistical services;
(f) Documents, documentation and certification;
(g) Analysis and inspection; and
(h) Quarantine, sanitation and fumigation. E/P C/T/103
page 27
COMMENT
19 5 . . . . . .. . . . . . . . . E/PC/ 103
C H A R T E R
ARTICLE 20
MARKS OF ORIGIN.
1. The Members agree that in adopting and implementing
laws and regulations relating t, marks of origin, the
difficulties and inconveniences which such measures may
cause to the commerce and industry of exporting coutries
should be reduced to a minimum.
2. Each Member shall accord. to the products of each
other Member country treatment with regard to marking re-
quirements no less favourable than the treatment accorded
to like products of any third country.
3. Whenever administratively practicable, Members
should permit required marks of origin to be imposed at
the time of importation.
4. The laws and regulations of Members relating to the
marking of imported products shall be such as to permit
compliance without seriously damaging the products, or
materially reducing thoir value, or unreasonably increasing
their cost.
5. Members agree to work in co-operation through the
organization towards the early elimination of unnecessary
requirements as to marks of origin. The Organization is
authorized to investigate study and recommend to Members
measures directed to this ond, including the adoption of
schedules of general categories of products in respect of
which marking requirements operate to restrict trade in a
degree disproportionate to any proper purpose to be
served, and which shall not in any case be required to
be marked to indicate their origin. E/PC/T/103
page 29.
COMMENTS.
.. .......O , 0 ,.
20 ; 3. The Delegatc for tho UrJted States maintained
provisionally his reservation made in the Drafting
Com.ittee in favour of the word "shall" instead
of tshould" ).
20 : 4.
. .......... . .
20 5. While approving this paragraph with the slight
change involved in the substitution of the word
"study" for "investigate", the Working Party thought
it desirable that tne discussion of this paragraph
at its meetings, as well as at the Drafting
Committee ar.d at the First Session of. the
Prepprptory Committec, should b. cor.adered by the
Organization when studying tha problem of' "the early
elimination of uriecessary requirements as to marks
of origin".
20 : 1.
20 : 2. E/PC/T 103
page 30.
CHARTER.
6. As a general rule no special duty or penalty should
be imposed by any Member for failure to comply with marking
requirements prior to importation unless corrective marking
has been is unreasonably delayed or doceptivo marks have
been affixed or the required marking has been intentionally
omitted.
7. The interest of Membcrs in protecting tho regional
and geographical marks of origin of their distinctive product
is recogrnized and shall be given consideration by the
Organization which is authorised to recommend a conference
of interested Members on the subject
The Members shall co-operate with each other and
through the Orgnization with a view to preventing the use
of trade names in such a manner as to misroprcsent the true
origin of a product, to the detriment of the distinctive
regional or geographical names of products of a Member
country, which are protected. by the 'legislation of such
Each .Member shall accord full and sympathetic
consideration to such requests or representations as may be
made by any other Member regarding the application of the
undertaking. set forth in the preeding sentence to names of
products which have been communicated to it by the other
Member.
The Organization may recommend a conference of
interested Members on this subject. E/PC/T/103
page 31.
COMMENTS.
20 : 6. Tho United States Delegate proposed that the word
"shall" be substituted for "should" (cf. paragraph
3 above).
20 : 7. The Delegate for Chile reserved his position as
to the version of this paragraph recommended by
the Working Party. E/PC/T/103
page 32.
C H A R T E R.
ARTICLE 21.
PUBLICATION AND ADMINISTRATION OF TRADE
REGULATIONS ADVANCE NOTICE OF RESTRICTIVE
REGULATIONS.
1. Laws, regulations, Judicial decisions and
administrative rulings of general application made effective
by any Member, pertaining to the classification or the
valuation of products for customs purposes, or to rates of
duty, taxes or other charges, or to requirements, restrictions
or prohibitions on imports or exported or on the transfer of
payments therefor, or affecting thoir sale, distribution,
transportation or insurance, or affecting their warehousing,
inspection, exhibition, processing, mixing or other use, shall
be published promptly in such a manner as to onable traders
and governments to become acquainted with them. Agreements
in force between the government or a governmental agency of
any Member country and the government or govornmental agency
of any other country affecting international trade policy
shall also be published. Copies of such laws, regulations,
decisions, rulings and agreements shall bo communicated
promptly to the Organization. This paragraph shall not
require any Member to disclose confidential information
which would impede law enforcement, or otherwise be contrary
to the public interests or would prejudice the legitimate
business interests of particular enterprises, public or private.
2. "No measure of general application taken by any Member
effecting an advance in a rate of import duty or other charge
under an established, and uniform practice or imposing a new or
more burdensome requirement, restriction or prohibition on
imports, or on the transfer of the payments therefore, shall
be enforced before such measure has been legally published." E/PC/T/103
page 33.
COMMENTS.
21 *: 1. . . ..........
21 : 2. This new paragraph was proposed by an Ad Hoc Sub-
Oommitteo Composed of delegates for Czechoslovakia,
France, the Netherlands, the Union of South Africa,
the United Kingdom and the United States. The
paragraph was adopted by the Working Party on the
understanding that the members of the Sub-Committee
might wish to propose alterations in tho wording
when the Article is discussed in Executive Session. E/PC/T/103
page 34
CHARTER
[3. No administrative ... countervailing duties.]
[2] 3. Each Member shall administer in a uniform, impartial
and reasonable manner all its lows, regulations, decisions end
rulings of the kind described in paragraph 1of this Article.
Moreover, Members [undertake to] shall maintain, or [to ] in-
stitute as soon as practicable, Judicial, arbitral or
administrative tribunals or procedures for the purpose inter
alia, of the prompt review and correction of administrative
action relating to customs matters. Such tribunals or
procedures shall be independent of the agencies entrusted with
administrative enforcement and their decision shell be
Implemented by and shall govern the practice of such agencies
unless an appeal is lodged with a court or tribunal of
superior jurisdiction within the time prescribed for appeal
to be lodged by importers, provided thet the central admin-
istration of such agency may take step to obtain a review
of the matter in another proceeding if there is good cause
to believe that the decision is inconsistent with established
principles of few or the actuel acts.
* The text of this paragraph, which the Working Party
proposes to delete, is not quoted above in full. E/PC/T/103
Page 35.
COMMENTS
21:3 The deletion of the old paragraph 3 is recommended by
the Working Party.
The text of the new paragraph 3 shown opposite
has not been approved by the Working Party but is
suggested by an Ad Hoo Sub-Committee composed of
Delegates for Canada, the Netherlands, the United Kingdom,
and the United States, (c.f. E/PC/T/WP.1/AC/SR/3). E/PC/T/103
page 36.
C H A R T E R.
ARTICLE 22.
INFORMATION, STATISTICS AND TRADE TERMINOLOGY.
1. The Members shall communicate to the Organization or
to such agency as may be designated for the purpose by the
Organization as promptly and in as much detail as is reasonably
practicable:
(a) Statistics of their external trade in goods (including
imported, exported [,] and, where applicable, re-exports,
transit and transhipment and [, where applicable,] goods in
warehouse or in bond);
(b) Statistics of governmental revenue from import and
export duties and other taxes on goods moving in international
trade and, in so far as readily ascertainable, of subsidy
payments effecting such trade.
So for as possible, the statistics referred to in (a)
and (b) shall be related to tariff classifications and be in
such form a to reveal the operation of any restrictions on
importation or exportation which are based on or regulated in
any manner by qunntity or value, or by amounts of exchange.
made available.
2. The Members shall publish regularly and as promptly as
possible the statistics referred to in paragraph 1 of this
Article.
3. The Members shall give careful consideration to any
recommendations which the Orgnization may make to them with
a view to improvement of the statistical information furnished
under paragraph 1 of this Article.
4. The Members shall make available to the Organization, at
its request and in so far as rensonably practicable, such other
statistical information as the Organization may deem necessary
to enable it to fulfil its functions, provided that such
information is not boing furnished to other inter-governmental
organizations from which the Organization can obtain the
required information. E/PC/T/103
COMMENTS.
22: 1. The Delegate of France drew attention to the
practical difficulties of many States in supplying
the information relative to subsidy payments and
quantitative restrictions.
22 :2 ................................................2..
22: 3.
22: 4.
...................................................
..................................l................ E/PC/T/103
page 38 CHARTER
5. The Organization shall act as a centre for the collection,
exchange and publication of statistical information of the kind
referred to in paragraph 1 of this Article. The Organization
any, in collaboration with the Economic and Social Council of
the United Nations and its Commissions, and with any other
interested international organization, engage in studies with
a view to bringing about improvements in the methods of
collecting, analyzing, and publishing economic statistics and
may promote the international comperability of such statistics,
including the possible international adoption of standard
tariff and commodity classifications.
6. The Organization may also, in co-operetion with the other
organizations referred to in paragraph 5 of this Article, study
the question of adopting standards, nomenclatures, term and
forms to be used in international trade and in the official
documents and statistics of Members relevant thereto, and may
promote the general acceptance by Members of such standards,
nomenclatures, terms and forms as may be recommended. E/PC/T/103
page 39
COMMENTS
22 : 5 (a) The Delegate of the United Kingdom proposed that
the word "shall" in line l be changed to "may".
(b) The Delegate of France wished the record to suggest
that the Organization should resume as soon as
possible the work begun by the League of Nations
on the preparation of a standard customs nomenclature.
The Delegate of the Union of South Africa dissented.
(c) The Delegate of the United States expressed the
wish that Chapter VIII on Organization should be
framed so as to leave the Organization sufficient
latitude to call into consultation the experts of
various governments when investigating technical
problems such as standard classifications. E/PC/T/103
Page 40
CHARTER
Article 23.
Boycotts.
No Member shall encourage, support or participate in
boycotts or other campaigns which are designed to discourage,
directly or indirectly, the consumption within its territory
of products of any specific Member country or countries on
grounds of origin, or the sale of products for consumption
within other Member countries on grounds of destination. E/PC/T/103.
Page 41.
COMMENTS
23. The delegates for Lebanon-Syria reserved their position,
stating that this Article was not acceptable to them
if not amended so as to permit of boycotts protecting
a vital interest of a Member (unless it were clearly
understood that the provision does not apply to the
particular case envisaged by them). E/PC/T/103
page 42
C H A R T E R
ARTICLE 37.
GENERAL EXCEPTIONS TO CHAPTER V. E/PC/T/103
page 43
COMMENTS.
General Comments.
37. (a) The Delegations of Belgium, France, the Netherlands,
and Luxemburg suggested substitution of the words
"Members shall be entitled to take measures" for the clause
beginning "nothing in Chapter V shall be construed....".
This change, howev r, depended on a rearrangement of the order
of Sections F - I. (Articles 34 - 38) suggested by the same
delegations (of. document E/PC/T/W.45). Since this proposal
gave rise to questions beyond the terns of reference of the
Working Party, the matter was left for consideration by the
Executive Committee-
(b) The.Delegate for Canada suggested that the following
now sub-paragraph be added: "Relating to importation of goods
the production of which was prohibited in the country of
importation prior to 1 July 1939".
(c) The Delogate for India maintained his suggestion
in the Drafting Committee that a Member should be allowed
temporarily to discriminate against the trade of another
Member when this is the only effective measure open to it. to
retaliate against discrimination practised by that Member
outside the purview of the Organization, pcnding a settlement
of the issuu through the United Nations.
(d) The Delegate for the United States suggested that
sub-paragraphs (c), (d), (e) and (k) be removed from ;
Article 37 and inserted .tn a new article elsGuwhere in the
Charter. The Working Party considered such a changi-beyond
its terms of rrfaronce but agreed to recommend to the
Executive Committe, that tho proposed transfer of the sub-
paragraphs in question be made. E/PC/T/103
page 44
CHARTER.
Subject to the Zrequirement that such measures are not
applied in a manner which would constitute a means of arbitrary
or.unJustifiable..dis.rimination between countries where the
same conditions. prevail, or a disguised restriQtion on inter-
national trade, nothing in Chapter V sha1l be construed to
prevent the adoption or enforcement by arny l.1mbér.eof measures:
(a) NXcusary to protect public morals;
(b) £ or the purpose of protecting/ N.cessary to
-rotect human, animal or plant life or health, rf corresponding
domestic safeguards under similar conditions exist in the
importing country provided thEit corresonding sefeSuards
are applied in the importing-oountry if' similar conditions
exist in that country.
(c) Relating to fissionable materials;
(d) Rel1ting to the traffic in arms, ammunition and
implements of war and to such traffic in other goods and materels
as i8 csrrled on for the purpose of supplying a military
establishment;
(e) In timu of wer or other emergency in international
relations, relating to the protection or the essential security
interests of a Membc-r; E/PC/T/103
page 45
COMMENTS.
Specific Comments:
37;a,b. The Delegate for Norway referred to his country's
restriction on importation, production and sale et
alcoholic beverages that had as its ohief obJeot
the promotion of temperance. He re-stated the view
put forward by the delegation of his country to the
Drafting Committee that the taxation and the prioe
policy of its State liquor and wine monopoly was
covered by sub-paragraphs (a) and (b).
37: 0 The Delegate for the United States mentioned that
he understood the term fissionablee materials" to
Include source materials.
37: d _
37: e The Chinese Delegate again drew attention to his proposal
in the Dratting Com=ittee that permission should be given
for measures "temporarily imposed to prevent, arrest or
relieve conditions of social disturbance, natural
calamity or other national emergencies., provided that
su¢h measure& are withdrawn as soon as the said
conditions cease to exist". (The Report of the Dratting
Committee suggests that paragraph 2 (b) of Article 25
covers this point to a certain extent.) E/PC/T/103
page 46
CHARTER.
(f) Relating to the importation or exportation of gold
or silver;
(g) Necessary to secure compliance with laws or
regulations which are not inconsistent with the provisions of
Chapter V, suoh as those relating to custom enforcement,
deceptive practices and the protection of patents, trade marks
and copyrights;
(h) Relating. to..th.e products of prison labour;
(i). Imposed for the protection of national treasures
of artistic, historic or archaeological value;
(J) Relating to the conservation of exhaustible
natural resources if suoh measures are taken pursuant to
international agreements or are made effective in conjunction
with restrictions on domestic production or consumption; or
(k) Undertaken in pursuance of obligations under the
United Nations Charter for the maintenance or restoration of
International peace and security. E/PC/T/103
page 47
COMMENTS.
37: t - - - -
37: g - _ _ _
37: h - - - -
37: i - - -
37: J (a) The Delegate for India repeated the suggestion made by
his Dlelegation a;- «he Fi Session that the words following
upon "natural rescues" should be deleted.
(b) The Delegate for Brazil provisionally suggested that
the words "are taken pursuant to international agreements
or" be deleted. He would, Lowever, study the matter further.
37: k - - - -
Note by the Secretariat.
The United Kingdoii Delegation has proposed (see E/PC/T/7/137)
that a reference to Chapter VII should be inserted in Article 37
("'Genoral Exceptions") in the following form:
"(1) Undertaken in pursuance of obligations under inter-
governmental commodity arrangements concluded in
accordance with the provisions of Chapter VII"
The Working Party did not consider this suggestion, as the
matter vas under discussion in Commission B in connection with
Chapter VII. Commission B now advises thet, while there was
general agreement in that Commission rith th_ principle of
including in Article 37 some referencG -co inter-goverrmental
oommodity arrangements es a general exception, the question is
receiving further consideration viith a vievi to deterriining
whether the exception should be limited to inter-governmental
commodity agreements of a regulatory character. |
GATT Library | dc627nf3887 | Second session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Working Party on Technical Articles. Report of the Ad hoc Sub-Committee on Article 19 | United Nations Economic and Social Council, May 21, 1947 | United Nations. Economic and Social Council | 21/05/1947 | official documents | E/PC/T/W/103 and E/PC/T/W/82-124 | https://exhibits.stanford.edu/gatt/catalog/dc627nf3887 | dc627nf3887_90050236.xml | GATT_155 | 746 | 5,163 | RESTRICTED
UNITED NATIONS
ECONOMIC
AND
SOCIAL
COUNCIL
NATIONS UNIES CONSEIL
ECONOMIQUE
ET SOCIAL
E/PC/T/W/103
21 May,1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
Working Party on Technical Articles
Report
of the Ad hoc Sub-Committee on Article 19
Chairman. Mr. R.J.Shackle (U.K).
Members: Australia, Canada, France, Netherlands,
New Zealand, Union of South Africa,
United Kingdom, United States.
Observers:
International Monetary Fund
International Bank for Reconstruction &
Develooment.
Meetings held on 19, 20 and 21 May 1947,
1. The Ad hoc Sub-Committee had before it Article 19
as given in the D.C. Report (page 15), and as amended by the
working Party on Technical Articles (E/PC/T/AP.1/SR1, page 5),
and the following amendments:
E/PC/T/W.23 pages 4 & 5.
E/PC/T/W.38
E/PC/T/W.39
E/PC/T/W.50
E/PC/T/W.67
E/PC/T/W.77
E/PC/T/W.88
United States
- France & Benelux
- France & Benelux,
- Czechoslovakia
- United States
- China (left to be raised by the
Chinese Delegate in due course),
- United Kingdom,
2. The Representative of the international Monetary Fund
raised the question if there is any provision in Article 19
which could be interpreted as prohibiting a Member from
employing multiple currency practices, or the equivalent thereof,
for balance of payments Durposes where. the action of such Member
is taken in accordance with the recommendations or approval of
the International Monetary Fund.
3. Mr. Leddy (United States) replied that with regard
to the question raised by the representative of the Monetary
Fund as to whether Article 19 would prevent a Member from
maintaining or adopting multiple currency practices with the
approval of the Fund, the following statement may be made:
.
.
. E/PC/T/W/103
page 2
While Article 19 does not cover multiple rates of
exchange as such, paragraphs 1 and 5 would condemn the use
of exchange taxes or fees as a device for implementing
multiple currency practices. On the other hand, it is
perfectly clear that if the Member is using multiple currency
exchange taxes for balance of payments reasons with the
approval of the Fund, the provisions of paragraph 2 would
fully safeguard its position since paragraph 2 merely
requires that such taxes be elimInated at the earliest
practicable date.
The Ad hoc Sub-Committee approved this statement.
4. The Ad hoc Sub-Committee suggests to the
Preparatory Committee that an explanation should be included
in the Report-to the effect that sub-paragraph 5 (d) is
without prejudice to the provisions of the Charter relating
to safeguarding balance of payments and to exchange control.
5. Text approved by the Ad hoc Sub-Committee:
ARTICLE 19 - FORMALITIES CONNECTED ITH
IMPORTATION AND EXPORTATION.
1. The Members recognize that fees and charges, other
tnan duties, imposed by governmental authorities on or in
connection with importation or exportation should be limited
in amount to the approximate cost of services rendered and
should not represent an indirect protection to domestic
products or a taxation of imports or exports for fiscal purposes.
They also recognize the need for reducing the number and
diversity of such fees and charges, for minimizing the
incidence and complexity of import and export formalities,
and for decreasing and simplifying import and export
documentation requirements.
2. The Organization is authorized to study and
recommend to Members specific measures for the simplification
and standardization of customs formalities and techniques and
for the elimination of unnecessary customs requirement.s
3. Members shall give effect to the principles and
objectives of paragraph 1 of this Article at the earliest
practicable date. Moreover, they shall, unon request by
another Member, review the operation of any of their laws
and regulations in the light of these principles. The
Organization is authorized to request from Members reports
on steps taken by them in pursuance of the provisions of
this paragraph.
4. Members shall not collect or otherwise enforce
substantial penalties for minor breaches of customs
regulations or procedural requirements. In particular, no
penalty in respect of any omission or mistake in customs
documentation which is easily rectifiable and obviously made
without fraudulent intent or gross negligence shall be
greater than necessary to serve marely as a warning. E/PC/T/W/103
page 3
5. The provisions of this Article shall extend to
fees, charges, formalities and requirements imposed by
governmental authorities in connection with importation
and exportation, including those relating to:
(a) Consular transactions, such as consular
invoices and certificates;
(b) Quantitative restrictions;
(c) Licensing:
(d) Exchange control;
(e Statistical services;
(f) Documents, documentation and certification;
(g) Analysis and inspection;
(h) Quarantine, sanitation and fumigation; and
(i) Port facilities. |
GATT Library | rc916mb1730 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Working Party on Technical Articles. Summary Record of the Eighth Meeting held on Monday, 19th May 1947, at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, May 19, 1947 | United Nations. Economic and Social Council | 19/05/1947 | official documents | E/PC/T/WP.1/SR/8, E/PC/T/WP.1/SR.1-11, and E/PC/T/WP.1/AC/SR.1-3 | https://exhibits.stanford.edu/gatt/catalog/rc916mb1730 | rc916mb1730_90260208.xml | GATT_155 | 1,477 | 9,532 | UNITED NATIONS
ECONOMIC CONSEIL RESTRICTED
AND ECONOMIQUE E/PC/T/WP.1/SR/8
SOCIAL COUNCIL ET SOCIAL 19th May 1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF
THE UNITED NATIONS CONFERENCE ON TRADE AND
EMPLOYMENT.
WORKING PARTY ON TECHNICAL ARTICLES
Summary Record of the Eighth Meeting held on
Monday, 19th May 1947, at 10.30 a.m. in the
Palais des Nations, Geneva.
Chairman: H.E.Erik Colban.
Plan of Work. The EXECUTIVE SECRETARY attended the
opening of the meeting and informed the Working Party of the
arrangements which had been made by the Steering Committee for
the conduct of the Charter discussions in executive session. He
said that a short time, possibly two days, would be allowed for
the general discussion of each chapter and for each of the
several sections into which Chapter V had been divided. It was
expected that the general discussions would reveal the main
problems and these would then be referred to Drafting Committees.
The EXECUTIVE SECRETARY stated that the Steering Committee would
like this Working Party to finish its examination of the Technical
Articles, if possible, by the end of the current week; problems
which require some lengthy study could be referred to sub-
committees whose reports could be submitted direct to the
Executive Committee for discus ion along, with the reports of
other committees on the other chapters of the Charter.
The CHAIRMAN said that he entirely agreed with the plan
put forward by the Executive Secretary. He said that the
Working Party should endeavour to complete its study of the
Technical Articles by Saturday and that the sub-committees which
had not reported to the Working Party by that time would submit
their reports direct to the Executive Committee.
NATIONS UNIES E/PC/T/WP.1/SR/8.
page 2.
Sub-Committees. The CHAIRMAN announced the following
meetings:
(a) Sub-Committee on Article 16 Paragraph 5 & 6 - the
same day at 3 p.m.
(b) Sub-Committee on Article 19 - the following morning
at 9.30
1. Article 20 - Marks of Origin. The Delegate for Cuba
asked leave to refer to the Report of the Sub-Committee on
paragraph 7 which had been adopted at the previous meeting. If
he had been present when that report came up for discussion he
would have stated that it was necessary for him to record the
formal reservation of his Delegation. The new text would be
studied by his Government and he might have objections to put
forward at a later date.
2. Article 21.
Paragraph 2. The CHAIRMAN drew the attention of the
members to document W/24 Add.l containing a proposal of the
United States Delegation to add a proviso to the amendment
proposed by Canada and adopted by the Working Party at the
third meeting on 12th May. It was agreed that an ad hoc Sub-
Committee, consisting of the DelegateSof Canada, the Netherlands,
the United Kingdom and the United States, should be set up and
report to the Executive Committee.
Paragraph 3. The Working-Party then discussed the--
comments by the Legal Officer of the Secretariat upon Article
21 and the amendment proposed in document W1/51 by the Czechoslovak
delegation; the Legal Officer gave a choice of two paragraphs to
be inserted as a new paragraph water paragraph 1. The CHAIRMAN
Suggested the adoption of the second alternative with the deletion
of the words "of an exceptional nature". The UNITED STATES
Delegate proposed the adoption of the second alternative, subject E/PC/T/WP.1/SR/8
page 3
to the deletion '.f' all but the first sentence. The UNITED
KINGDOM Delegate proposed the adoption of the first two-and-
a-half lines of the first alternative.
The Delegate for SOUTH AFRICA raised a question of
principle; he stated that many countries follow a practice
of imposing increases in customs duties before the relevant
law is approved by parliament, To meet this difficulty the
Delegate for the UNITED KINGDOM suggested the insertion of the
words "whether provisionally or finally effective"
To rive further consideration to the points discussed,
the CHAIRMAN suggested the appointment of' a sub-commitee
composed of the Delegates for Czechoslovakia; France, the
Netherlands, the Union of South Africa, the United Kingdom
and. the United States to report to the Wiorking Party, if
possible, before the end of the week or otherwise direct to
the Executive Committee. The appointment of this sub-committee
was approved and arrangements were made for a meeting at
3 p.m.. on the following, day.
3. Article17 - Anti-Dumping and Countervailing Duties.
The CHAIRMAN gave the following list of documents
containing amendments proposed by various delegations:
Australia W/84
Benelux W/68
Benelux &.France W/34, W/35 and W/35 Add.l
Cuba W/29
India W/53
Lebanon-Syria W/66
United Kingdom .W/91
United States W/23
In addition, the Secretariat had put forward a few drafting
suggestions in the Annotated Agenda, E/PC/T/WP. 1/SR/8
page 4.
It was agreed to hold the general discussion in the
Working Party and then to refer all the proposed amendments to
a sub-committee composed of the delegates who had put forward
amendments. M. Massart of the Belgium Delegation was appointed
Chairman of the sub-committee and therefore the Netherlands was
adde. to the membership of the sub-committee.
Arrangements were made for the first meeting of the
sub-committee tn be held at 3 p.m. on Wednesday, 21st May. The
CHAIRMAN instructed the sub-committee to consider:
(a) Reservations noted in the Report of the Drafting
Committee.
(b) Amendments proposed by delegations and by the
Secretariat.
(c) The views expressed by delegates during the general
discussion in the Working Party.
On the suggestion of the Delegate for FRANCE, the
Secretariat was asked to prepare the new annotated agenda for
Article 17, incorporating all the proposed amendments.
The general discussion of the scope of Article 17
then followed.
The Delegate for the UNITED STATES urged that the
Article should be confined to price dumping. He said that
exchange dumping, for example, was a problem to be dealt with
by Article 29 and by the International Monetary Fund. He drew
attention to the fact that some of the proposed amendments went
so far as to suggest penalties for dumping over and above
special duties equal to the dumping margin.
The Delegate for the UNITED KINGDOM said that the.
Article appeared to involve two questions of real substance:
(1) Should the Article be restricted to price dumping? -
in his opinion it should be so restricted; freight E/PC/T/WP.1/SR/8
page 5.
dumping could be more appropriately dealt with by
countervailing duties though in some cases the
carriage of goods at special low rates was a sound
commercial practice.
(2) In addition to the injury to established domestic
industry, envisaged in paragraph 5, there was the
problem of injury suffered in a third country, and
on this account the United Kingdom had suggested an
amendment.
The Delegate for SOUTH AFRICA stated that the
discussion of this Article would provide the Conference with
a test of its ability to be objective in the consideration of
the interests of relatively small countries with young
industries. He mentioned three respects in which the present
Draft is incomplete:
(1) It does not prevent dumping by means of sales to a
branch office in the importing country and the resale
of such imports at less than the nominal purchase
price.
(2) There may be many forms of dumping which are normally
commercial, such as special low freight rates
mentioned by the Delegate for the United Kingdom,
but which are, nevertheless, injurious to industries
in the importing country.
(3) The problem of exchange dumping would be treated by
the International Monetary Fund but it may be that
the membership of the I.M.F. and the I.T.O. will
not be the same, in which event members of the
I.T.O. should be free to use exchange dumping
duties against countries that are not members of
the I.M.F. E/PC/T/WP.1/SR/8
page 6.
The CHAIRMAN agreed with a suggestion of the Delegate
for SOUTH AFRICA that injury arising from dumping in markets of
third countries should be kept apart from the discussion of
dumping duties and he stated that this should be noted for the
information of the Chairman of the Sub-Committee.
The Delegate for CANADA agreed with the view of the
Delegate for the United States that Article 17 should be restricted
t-o price dumping. He referred to the first problem mentioned by
the Delegate for SOUTH AFRICA and suggested that the question of
the resale of goods bought on consignment should be specially
considered by the Sub-Committee.
The Delegate for BRAZIL stated that he favoured the
deletion of paragraph 5 but his Delegation would not propose
amendments until after they had heard the general discussion.
The Delegate for CHINA stated that he wished to
withdraw his proposal to extend the second paragraph of the
Article by the addition of the sentence recorded in the Report
of the Drafting Committee. On certain other Articles of
Chapter V, however, the CHINESE Delegation would have to maintain
their reservations.
The meeting rose at 12.55 p.m. |
GATT Library | ys550sv6974 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Working Party on Technical Articles. Summary Record of the Eleventh Meeting held on Thursday, 22nd May 1947, at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, May 22, 1947 | United Nations. Economic and Social Council | 22/05/1947 | official documents | E/PC/T/WP.1/SR/11, E/PC/T/WP.1/SR.1-11, and E/PC/T/WP.1/AC/SR.1-3 | https://exhibits.stanford.edu/gatt/catalog/ys550sv6974 | ys550sv6974_90260211.xml | GATT_155 | 1,148 | 7,486 | UNITED NATIONS
ECONOMIC CONSEIL RESTRICTED
AND ECONOMIQUE E/PC/T/WP.1/SR/11
SOCIAL COUNCIL ET SOCIAL 22nd May, 1947.
SECOND SESSION OF THE PREPARATORY COMIMITTEE OF THE
UNITED NATIONS CONFERENCE, ON TRADE AND EYMPLOYMENT.
WORKING PARTY ON TECHNICAL ARTICLES
Summary Record of the Eleventh Meeting held on
Thursday, 22nd May 1947, at 10.30 a.m. in the
Palais des Nations, Geneva.
Chairman: H.E. ERIK COLBAN.
1. Article 21 - Publication and Administration of Trade
Regulations.
Approval was given to the report of the Sub-Committee
(document WP.1/AC/SR/2) recommending the insertion of a new
paragraph after paragraph 1 and the deletion of paragraph 3,
subject to the right of the members of the Sub-Committee to
propose further alterations when the Article is discussed in
Executive Session.
2. Article 37 - General Exceptions to Chapter V.
Sub-paragraph (j). The delegate for NEW ZEALAND with-
drew his suggestions in the Drafting Committee that the words
following upon "natural resources" should be deleted and
that the words "or other" be added before "resources". The
delegate for INDIA maintained his suggestion that the words
following upon "natural resourcesshould be deleted. The
delegate for BRAZIL modified his suggestion at the Drafting
Committee by stating that he would accept this sub-
paragraph if the words "are taken pursuant to international
agreements or" were deleted and said that he required time
for further study. Accordingly the sub-paragraph was
adopted, without alteration, subject to the Indian reserva-
tion and the provisional reservation of Brazil.
Sub-paragraph (k). Consideration was given to a
proposal to delete the words "or restoration", but it was
decided to make no change.
Proposed new sub-paragraph. The Working Party then
discussed the proposal of the Canadian delegation contained
in document W/28 Corr.1 to add the following sub-paragraph:
"Relating to the importation of goods, the production of
which was prohibited in the country of importation prior to
1st July 1939". The CHAIRMAN drew attention to the fact
that a similar suggestion had been made by the Canadian
NATIONS UNIES E/PC/T/WP.1/SR/11
page 2.
delegate to the Drafting Committee as recorded in the General
Comments of the Report. It was agreed not to add this sub-
paragraph, and the delegate for CANADA stated that he would
sustain his reservation. The delegate for INDIA declared
that he maintained his suggestion under (e) in the "General
Comments" to Article 37 in the report of the Drafting
Committee (page 31).
Transfer of sub-paragraphs (c), (d), (e) and (k). It
was decided that the proposal of the UNITED STATES delegate
to remove four of the sub-paragraphs from Article 37 and to
draft a new Article to be inserted elsewhere in the Charter
(document W/23) was beyond the terms of reference of the
Working Party. It was, however, urgreed to recommend to
the Executive Committee that this transfer should be made and
that a new Article should be drafted on the lines proposed by
the delegate for the UNITED STATES.
Re-arrangeement of Articles. Similarly, the Working
Party was of the opinion that the proposals of the French
and Benelux. Delegations (document W/45) to re-arrange the
last Articles of Chapter V so that Articles 37 and 38 would
appear after Article 33 should be referred to the
Executive Committee for consideration. The object of the
suggested change, it was pointed out by the delegate for
FRANCE, was to render it clear that Article 35 and the
procedure of appeal prescribed therein should cover the
general exceptions" now specified in Article 37.
Preamble. The preamble to Article 37 was approved
without alteration.
3. Article 15 - National Treatment on Internal Taxation
and Regulation.
The Working Party discussed the best procedure far
dealing with the large number of amendments proposed for
Article 15. Several delegates supported the proposal of
the delegate for the UNITED STATES that a Sub-Committee
should be appointed by the Working Party to study the amend-
ments and to recommend a draft Article (possibly with
alternative paragraphs) to the Executive Committee. In
favour of this proposal it was stated that a small sub-
committee could develop and clarify the major issues and
dispose of points of minor importance; such a Sub-
Committee could focus attention on the main problems without
attempting to reach agreement and could thus facilitate
subsequent discussion in the Executive Committee.
: A number of other delegates, however, supported the
view of the Australian delegation that the whole of
Article15 and all the amendments proposed should be
referred direct to the Executive Committee to be taken up
in conjunction with Article 14; it was stated that the
issues involved in Article 15 be discussed in the first
instance on the political rather than on the technical
level.
In view of this differance of opinion it was decided
to refer the question of procedure to the Steering Committee E/PC/T/WP.1/SR/l1
page 3.
on Charter Discussions and to obtain their decision whether
a Sub-Committee should be appointed by the Working Party or
whether the Article and the proposed amendment should be
referred to the Executive Committee. Authority was given
to the Chairman, in the event of the Steering Committee
deciding that a Sub-Committee should be appointed by the
Working Party, to convene a meeting of the Sub-Committee
proposed by the UNITED STATES delegation, comprising the
delegates for Australia, Belgium (or, alternatively, the
NETHERLANDS), Brazil, China, India , Norway, the United
Kingdom and the United States.
The Secretariat was asked to prepare a revision of the
annotated agenda for Article 15 incorporating all the
amendments now proposed.
4. Proposed Article 15 A. It was agreed that the United
States proposal to insert a new Article after Article 15
(document W/23), together with the Brazilian suggestion of
an addition to that proposed new article (document W/105),
should be treated in the same manner as and along with the
proposed amendments to Article 15.
5. Sub-Committees. It was agreed that the Sub-Committee
on Article 17 would continue its deliberations at 3 p.m.
that same afternoon and that, when these were completed, the
Sub-Committee on Article 16 would begin its study of the
questions of valuation.
6. Article 19 - Customs Formalities. It was noted that
the Report of the Sub-Committee on Article 19 (document
W/103) had been distributed that same morning. The
CHAIRMAN of the Sub-Committee mentioned that the last item
in the final paragraph, namely, "(i) port facilities",
should be deleted.
The CHAIRMAN announced that the duties of the Working
Party had now been discharged; the original plan to
undertake the Second heading of the ten Technical Articles
had been altered and further discussion would take place in
meetings of the Executive Committee. Accordingly, the
two sub-committees on Articles 17 and 18 would report
direct to the Executive Committee and the report of the
Sub-Committee on Article 19 would also be referred direct
to the Executive.
The Meeting then concluded at 1.10 p.m. with a vote
of thanks to the Chairman for the conduct of the meetings. E/PC/T/WP.1/AC/SR 1- 3 |
GATT Library | gp590pb8333 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Working Party on Technical Articles. Summary Record of the First Meeting held on Friday, 9 May 1947 at 10.30 a. m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, May 9, 1947 | United Nations. Economic and Social Council | 09/05/1947 | official documents | E/PC/T/WP.1/SR.1, E/PC/T/WP.1/SR.1-11, and E/PC/T/WP.1/AC/SR.1-3 | https://exhibits.stanford.edu/gatt/catalog/gp590pb8333 | gp590pb8333_90260201.xml | GATT_155 | 1,061 | 7,096 | UNITED NATIONS NATIONS UNIES RESTRICTED
ECONOMIC CONSEIL 9 May 1947
AND ECONOMIQUE ORIGINAL: ENTGLISH
SOCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENICE ON TRADE AND EMPLOYMENT
WORKING PARTY ON TECHNICAL ARTICLES
Summary Record of the First Meeting held on
Friday, 9 May 1947 at 10.30 a. m. in the
Palais des Nations, Geneva
Chairman: H. E. Erik Colban
The CHAIRMAN announced that when possible a verbatim record
of the Working Party's discussions would be taken, but this would
be retained for the use of the Secretariat and for reference by
Delegates and would not be distributed; a Summary Record of the
discussions at each meeting incorporating the decisions and reso-
lutions adopted would, however, be distributed to each Delegation.
The Cnairman explained during the course of the discussion
that he proposed asking the Secretariat to issue each Article,
as amended by the Working Party for a Second Reading; thus it
would be possible for Delegations to agree to the adoption of
Articles, even though they were not entirely satisfied, in the
knowledge that an opportunity would occur during the Second
Reading for them to propose further amendments.
Further, the Chairman requested Delegates who discovered
mistakes in the French version of the Charter to notify the
Secretariat. E/PC/T/'P.1/SR. 1
page 2
1. Article 19 - Customs Formalities
Title agreed.
Paragraph 1. It was agreed to delete the words "the prin-
ciple" from the first line.
On the recommendation of the United States Delegation (W. 23)
it was agreed to insert the following paragraph after paragraph 1:
"2. The organization is authorized to stuuy and
recommend to Members specific measures for the simplifi-
cation and standardization of customs formalities and
techniques and for the elimination of unnecessary customs
requirements."
Subsequent paragraphs were to be re-numbered accordingly.
In view of the insertion of this new paragraph, the Czechoslovak
Delegation withdrew their proposal that a new paragraph (5)
should be added at the end of the Article (see W.50).
Paragraph [2] 3. It was agreed that the words "undertake
to" in the first line and the word "undertake" in the fourth line
should be replaced by the word "shall"; also that the word "to"
in the fifth line should be deleted.
The Chinese Delegate declared that he might wish, in the
Second Reading, to suggest insertion of the words "and upon due
consideration by the Organization of its merits" after "Member"
in the fifth line.
. oth.-rp
Prragraph [3] 4. On the proposal of the French and
Benelux Delegations (W.39) the following paragraph (as amended by
the, Working Party) was adopted to replace the .ormer paragraph 3,
~4 Members shall not impose substantial penalties for
minor breaches of customs procedure or regulations. In E/PC/T/WP.1/SR.1
page 3
particular no penalty in respect of any omission or mistake
in customs documentation which is easily rectifiable and
obviously made without fraudulent intent or gross negligence
should be greater than necessary to serve merely as a
warning."
Paragraph [4] 5. Consideration was given to the proposals
of the United States Delegation that sub-paragraph (d) should be
amended to read "Foreign exchange transactions" (to which the
United Kingdom Delegate suggested the addition of "relating to
imports and exports") arid that the following sub-paragraph should
be added at the end of the paragraph:
"(i) Port Facilities."
During the discussion it was further suggested that the
preamble to the paragraph should be altered to read
"The provisions of this Article shall extend to public
fees, charges, formalities and requirements relating to
all matters of importation and exportation, including:"
The Working Party accepted the proposal of the CHAIRMAN
that those Delegates who had taken part in the discussions
should meet and endeavour to reach an agreed text for the
consideration of the Working Party during Second Reading. In
addition the CHAIRMAN proposed that these Delegates should
give consideration to the proposal of the United Kingdom
Delegate that the title of the Article should be altered to read
''Formalities Relating to Imports and Exports." E/PC/T/WP .1/SR. 1
page 4
2 Article 20
Paragraph 1. Adopted
Paragraph 2. Adopted
Paragraph 3. It was proposed by the Delegate for Czecho-
slovakia and supported by the Delegate for the United States
that the word "should" in the second line should be altered to
"shall" as it appeared in the United States Draft Charter.
The United Kingdom Delegate, on the other hand, stated that
unless the word "should" was allowed to remain he would have to
maintain his reservation and suggest deletion of this paragraph.
The Chairman drew attention to the commitment in paragraph 5
requiring the Organization to investigate and recommend measures
directed toward the early elimination of unnecessary requirements
as to marks of origin, and suggested that in view of this
commitment the Working Party might accept the wording established
by the Drafting Committee.
The paragraph was adopted without alteration subject to
reconsideration in Second Reading.
It was agreed. that the next meeting should be held at
10.30 a.m. on Saturday, 10 May 1947.
The meeting rose. at 1 p.m. E/PC/T/WP. 1/SR. 1
page 5
ANNEX
ARTICLE 19: CUSTOMS FORMALITIES
(as amended by the Working Party on
Technical Articles, 9 May)
1. The Members recognize [the principle] that subsidiary
foes anrd charges....
2. The Organization is authorized to study and recommend to
Members specific measures for the simplification and
standardization of customs formalities and techniques and for
the elimination, of unnecessary customs requirements.
[2] 3. Members [ undertake to] shell give effect to the
principles and objectives of paragraph 1 of this Article at
the earliest practicable date. Morcover, they [undertake]
shall, upon request by another Member, [to] review the
operation.
[3] 4. Members shall not impose substantial penalties
for minor breaches of customs procedure or regulations. In
particular no penalty in respect of any omission or mistake in
customs documentation which is easily rectifiable and
obviously made without fraudulent intent or gross negligence
should be greater than necessary to serve merely as a warning.
[4] 5. The following alternative preamble has been proposed:
"The provisions of this article shall extend to public fees,
charges, formalities and requirements relating to all [ customs ]
matters of importation end exportation, including:"
The following alternative has been suggested for
sub-paragraph (d):
"(d) Foreign exchange [regulations] transactions relating
to imports and exports."
The following additional sub-paragraph has been suggested:
"(i) Port Facilities" |
GATT Library | tm682xn0415 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Working Party on Technical Articles. Summary Record of the Fourth Meeting held on Tuesday, 13th May 1947, at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, May 13, 1947 | United Nations. Economic and Social Council | 13/05/1947 | official documents | E/PC/T/WP.1/SR.4, E/PC/T/WP.1/SR.1-11, and E/PC/T/WP.1/AC/SR.1-3 | https://exhibits.stanford.edu/gatt/catalog/tm682xn0415 | tm682xn0415_90260204.xml | GATT_155 | 498 | 3,273 | UNITED NATIONS NATIONS UNIES J LY.) U G RESTRICTED
1E/PC/T/1S/SR
ECONOMIC CONSEIL 13 May 1947.
ORIGINAL:ENGLISH
AND ECONOMIQUE
SOCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADEMPpm ANDLOYMENT.
WORKING PARTY ON TECHNICAL ARTICLES
Summary Record of the Fourth Meeting held on
Tuesday, 13th May 1947, at 10.30 a.m. in the
Palais des Nations, Geneva.
Chairman: H.E. Erik Colban
On opening the meeting theMm CHAIAN announced that he
wished to mention four questions of procedure:
(1) Sub-Committee on Article 20. The Ad Hoc Sub-Committee
appointed the previous day would meet at 3 p.m. that afternoon.
(2) Non-governmental organizations. The Chairman had been asked
whether the views expressed in the memorandum distributed by the
International Chamber of Commerce could be mentioned in the
annotated agenda for the Charter discussions. The WORKING PARTY
agreed with the Chairman that the agenda should include only the
proposals of Delegations.
(3) Agenda for subsequent meetings. The WORKING PARTY agreed
with the suggestion of the Chairman that when the examination of
Articles 19/22 had been completed, 23 should be taken next,
followed by 16, 17 and 18, and Articles 15 and 37 be left until
the last.
(4) Next Meeting. It was agreed that the next meeting of the
Working Party would be held at 10.30 a.m. on the following da
in spite of the clash with the meeting of the Chairman's Committee
(Heads of Delegations).
1. Article 21. - Publication and administration of trade
regulations - Advance notice of restrictive
regulations.
aParagrph 2. The Delegate for the United States recalled
that the Canadian Delegation's amendment to paragraph 2 had been
approved at the previous meeting subject to further consideration
of its interpretation during the Second Reading; the United
States Delegation had now prepared the amendment which it wished
to propose and this could be read to the meeting or distributed
asthe Chairman 'esired. The CHAIRMAN said that he preferred to
&Irx11rfiNc,
fN IIA11S E/PC/T/WP . 1 /SR . 4
page 2
distribute the amendment to the Delegations and that it would then
receive consideration during the Second Reading of Article 21.
It was agreed that this should be done.
Paragraph 3. . The WORKING PARTY proceeded to discuss the
proposal of the Czechoslovak Delegation to substitute a new
paragraph for paragraph: 3 (sea document W/51). After a discussion
during which it appeared that the Working Party. were divided in
opinion in choosing between the paragraphs proposed by the Drafting
Committee and the Czechoslovak Delegation, the CHAIRMAN accepted
the suggestion of the United Kingdom Delegate that the proposed
new paragraph should be referred to the legal adviser of the
Secretariat to consider to what extent the main intention of the
Czechoslovak Delegation was, or could be covered by paragraph 1
of the Article. The WORKING PARTY agreed to this procedure and
the CHAIRMAN stated that there would be no further discussion of
this paragraph pending receipt of the Secretariat 's report.
The meeting rose at 1.20 p.m. |
GATT Library | fs733md2191 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Working Party on Technical Articles. Summary Record of the Second Meeting held on Saturday, 10 May 1947 at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, May 10, 1947 | United Nations. Economic and Social Council | 10/05/1947 | official documents | E/PC/T/WP.1/SR.2, E/PC/T/WP.1/SR.1-11, and E/PC/T/WP.1/AC/SR.1-3 | https://exhibits.stanford.edu/gatt/catalog/fs733md2191 | fs733md2191_90260202.xml | GATT_155 | 683 | 4,324 | UNITED NATIONS NATIONS UNIES RESTRICTED
ECONOMIC CONSEIL E/PC/T/WP.1/SR.2
AND ECONOMIQUE 10 May, 1947
SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
WORKING PARTY ON TECHNICAL ARTICLES
Summary Record of the Second Meeting held on Saturday,
10 May 1947 at 10.30 a.m. in the Palais des Nations,
Geneva.
Chairman: H.E. Erik Colban
The CHAIRMAN drew attention to document DEL/31, calling
upon delegations to submit to the Secretariat, not later than
13th May at noon, proposed amendments for all Chapters of the
Charter, so that-an annotated agenda could be prepared.
The CHAIRMAN also drew attention to the Annex to docum-
ant W.P.1/SR.1 recording the changes agreed upon in Article 19
and stated that the second reading of this Article would be
taken in a few days time. A delegate suggested that the full
text of each Article should be given in the Annex to the Summ-
ary Record. The CHAIRMAN welcomed this proposal, and it was
agreed that in future this should be done.
1. Article 20 - Marks of Origin
Paragraph 4. Adopted.
Paragraph 5. The Working Party discussed the proposal
of the Czechoslovak Delegation (W.52) that paragraph 5 should
be re-written to incorporate a time limit of two years within
which the Organization should complete a study of measures to
bring about the gradual elimination of obligatory requirements
as to marks of origin. (In the course of the discussion the
F 4 or l n Al e
A' e Z f row l _ s E/PC/T/WP.1/SR.2
page 2
Czechoslovak Delegate agreed to substitute the word "unnecess-
ary" for "obligatory" in his amendments).
The NETHERLANDS Delegate proposed that paragraph 5
should include specific mention of certain products which
should be exempted from marking requirements as in the corres-
ponding Article No. 14 of the United States Draft Charter.
Both these proposals were rejected., but it was con-
sidered desirable that the discussion of this paragraph at
this meeting, as well as those at the Drafting Committee in
New York and of the First Session in London should be considered
by the Organization when it undertakes its investigation of this
problem.
On the suggestion of the NETHERLANDS Delegate, the
Chairman and the Working Party agreed that mention should be
made in the Summary Record of the desirability of placing
particular emphasis upon the word "early" in the first sentence
reading "...... the early elimination of unnecessary require-,
ments ......"
Paragraph 5 was then adopted subject to the substitu-
tion of "study" for "investigate" in the fifth line.
Paragraph 6. It was noted that the comments under
(a) and (b) in the Report of the Drafting Committee would not
have to be repeated in the report of the present Session,
The UNITED KINGDOM Delegate stated that his reservation
on this paragraph could be withdrawn provided the word "should"
in the second line were not altered.
The UNITED STATES Delegate advised that he would prefer
the word "shall" in place of "should" in the second line, but
would not insist upon this alteration. E/PC/T/WP. 1/SR.
page 3
The paragraph was then adopted in First Reading,
subject to the substitution of "is" for "has been" in the
fifth line and corresponding chances in the verbs in the
following lines.
Paragraph 7. The CHAIRMAN drew the attention of the
Working Party to documents W.29 and W.40 containing proposals
of the Cuban and French Delegations to revise the wording of
paragraph 7.
The CUBAN, FRENCH and CZECHOSLOVAK Delegates strongly
opposed the acceptance of paragraph 7 as presented by the
Drafting Committee and the meeting closed without a decision
being reached.
It was agreed that the next meeting should be held at
10.30 a.m. on Monday, 12 May 1947.
The meeting rose at 12.55 p.m.
Addendum to Summary Record of First Meeting (WP.1/SR.1),
page 4:
Article 20, Paragraph 3: The Delegate for NORWAY with-
drew his reservation recorded on page 15 of the Report of the
Drafting Committee. The Delegate for the UNITED STATES main-
tained provisionally his reservation but would ask for instruc-
tions on this point. |
GATT Library | sk277mw6718 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Working Party on Technical Articles. Summary Record of the Seventh Meeting held on Saturday, 17 May 1947, at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, May 17, 1947 | United Nations. Economic and Social Council | 17/05/1947 | official documents | E/PC/T/WP.1/SR/7, E/PC/T/WP.1/SR.1-11, and E/PC/T/WP.1/AC/SR.1-3 | https://exhibits.stanford.edu/gatt/catalog/sk277mw6718 | sk277mw6718_90260207.xml | GATT_155 | 546 | 3,502 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/WP.1/SR/7
17 May 1947
ORIGINAL: ENGLISH
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
WORKING PARTY ON TECHNICAL ARTICLES
Summary Record of the Seventh Meeting held on
Saturday, 17 May 1947, at 10.30 a.m. In the
Palals des Nations, Geneva.
Chairman: H.E. Erik- Colban
During the course of the meeting the CHAIRMAN expressed the
opinion that the Working Party should, at a later stage, appoint
a Sub-Committee of French-speaking Delegates to examine the French
text of the Technical Articles. A similar Sub-Committee might
be established for considering the consistency of the English
text as compared with the French. He said that the final res-
ponsibility for accurate documents must rest with the Committee
itself.
1. Article 20 - Marks of Origin.
The report of the Sub-Committee on paragraph 7
(Document W/80), substituting A new paragraph for that contained
In the Report of the Draftlng Committee, was approved without
discussion.
2. Article 16 - Freedom of Transit.
Paragraph 1. Adopted without further discussion.
Paragraph 2. The. Delegate for INDIA stated that he did
not wish to press for the change proposed by his Delegation as
recorded In the Report of the Drafting Committee. The proposal E/PC/T/WP.1/SR/7
page .2
of the UNITED KINGDOM (Document W/89) was discussed and the
paragraph was adopted subject to the deletion of the words
``the nationality of persons".
Paragraph 3. A proposed change in the French text
(document .33) was noted and the paragraph was then adopted.
Paragraph 4. Adopted subject to time insertion of the
words "in transit" after ``traffic'' in the second line.
Paragraph 5. It was agreed to alter the word " rules"
in the first line to "regulations".
The WORKING PARTY then discussed the proposal of the
Czechoslovak Delegation (W/63) to and the following at the end
of the paragraph:
"This rule, however, shall apply to any special
provision regarding transport charges only in cases
where like products are being transported on the same
route, in the same direction and under the same conditions."
Delegates expressed understanding of the problems posed
by the Czechoslovak Delegate and it was agreed to appoint.a
sub-committee to decide upon a suitable amendment. Accordingly,
arrangements were made for sub-committee composed of the
Delegates for Belgium, Czechoslovakia, United Kingdom and the
United States to meet at p. m. on Monday, May 19th.
Paragraph 6. The CHAIRMAN noted that the Delegates for
FRANCE and BENELUX proposed the deletion of the sixth paragraph
(Document W/32) while the Delegates for Cuba and the United
States proposed the deletion of the second sentence (Documents
W/29 and W/23). The proposal that the paragraph should be
deleted was discussed a t length and was eventually referred to
the sub-committee appointed to prepare the amendment of the E/PC/T/WP. 1./SR/7
page 3
fifth paragraph. The Delegates for Australia and France were
added to the sub-committee.
3. Sub-Committee on Article 19.
Mr. R.J. Shackle was appointed Chairman of the Sub-Committee
on Article 19, and arrangements were made for a meeting to be
held at 9.30 .. m. on Monday, May 19th.
It was agreed that the next meeting will be hold at
10.30 P.m. on Monday, May 19th.
The meeting rose at 12.50 p.m. |
GATT Library | ty948hf5324 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Working Party on Technical Articles. Summary Record of the Sixth Meeting held on Friday, 16 May 1947, at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, May 16, 1947 | United Nations. Economic and Social Council | 16/05/1947 | official documents | E/PC/T/WP.1/SR/6, E/PC/T/WP.1/SR.1-11, and E/PC/T/WP.1/AC/SR.1-3 | https://exhibits.stanford.edu/gatt/catalog/ty948hf5324 | ty948hf5324_90260206.xml | GATT_155 | 959 | 6,067 | UNITED NATIONS RESTRICTED
ECONOMIC CONSEIL E/PC/T/WP.1/SR/6
AND ECONOMIQUE 16 May 1947
SOCIAL COUNCIL ET SOCIAL Original: ENGLISH
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
WORKING PARTY ON TECHNICAL ARTICLES
Summary Record of the Sixth Meeting held on Friday,
16 May 1947, at 10.30 a.m. in the Palais des Nations,
Geneva.
Chairman: H.E. Erik Colban.
In opening the meeting the Chairman made two announcements:
(a) Article 20 - Marks of Origin. The Chairman drew attention
to the fact that the ad hoc sub-committee appointed to discuss
the proposed amendment of paragraph 7 had now submitted a
revised text (document W/c0). At the request of members who
had not had an opportunity of studying the proposed text, it
was agreed to postpone discussion until the next meeting.
(b) Article 19 - Customs Formalities. The CHAIRMAN recalled
that delegates who had taken part in the discussion on paragraph
5 (formerly paragraph 4) had been asked to meet informally to
discuss the differences of opinion which had emerged during
the discussion of the Working Party. He suggested that this
informal meeting should beheld at an early date. He
enumerated the following delegations as having taken part in the
discussion:
Australia, France, New Zealand, Union of South Africa,
United Kingdom and United States.
4 3 f to 1tT as
YAT1ONS NIES E/PC/T/WP.1/SR/6
page 2.
1. Article 23 - Boycotts. The delegates for Lebanon
and Syria agreed to the suggestion of the CHAIRMAN that their
proposal to delete Article 23 could be set aside and that the
Working Party could proceed with the examination of the
alternative proposal that the Article should be amended as set
forth in document W/61. The Delegates for LEBANON and SYRIA
advised that they wished to amend the second of the alternative
proposals contained in that document by the deletion of the
words "with political objectives".
It was agreed that Article 23, as it appears in the Report
of the Drafting Committee, should remain unaltered. The
Delegates for Lebanon and Syria reserved their position,
declaring that they could not accept this Article if it were
not amended so as to permit of boycotts when. required because
of a vital interest of a Member, unless it were clearly under-
stood that the provisions do not apply to the case envisaged
by them.
The Delegate for INDIA announced that although h.s
delegation was not in accord with Article 23, they would not
insist upon its deletion or amendment.
2. Article 16 - Freedom of Transit. Referring to the
general comment in the Report of the Drafting Committee, the
CHAIRMAN stated that paragraph (a) required no action, the
Delegate for INDIA stated that he would withdraw the objection
mentioned in paragraph (b), and the Delegate for CHILE
announced that he wished to maintain, for the time being, his
views expressed in paragraph (c).
Paragraph 1. The CHAIRMAN announced that, concerning
paragraph 1, reservations by the Delegates for Australia E/PC/T/WP. 1/SR/6
page 3.
and Belgium appeared in the Report of the Drafting Committee and
that amendments had now been proposed by France and Benelux
(document W.31) supported by Czechoslovakia (document W.63) and
by Chile (document W.55).
The amendment proposed by the French and Belgian Dele-
gations was discussed and it was agreed to add to the last
sentence of the first paragraph the words "but shall apply to air
transit of goods and baggage".
At the request of the Delegate for CANADA, the Working
Party then discussed the possible desirability of confining the
provisions of this Article to goods to the exclusion of means of
transport by the deletion of the words in the first two lines.
"and also vessels and other means of transport", as had been
suggested by the Delegate for Chile in the Drafting Committee.
In suggesting the deletion of the words in question, the Delegate
for Canada pointed out that while appreciating the reasons for
including means of transport put forward by certain countries,
it did not seem quite consistent to deal with one aspect of
transportation in the Charter and exclude others,
After discussion it was agreed that the paragraph, as it
appeared in the Report of the Drafting Committee, should be
retained on the understanding that the Delegates, for Canada and
Chile should have the opportunity to raise the matter again in
Second Reading if they should so desire.
The Working Party then discussed the proposal of the
Chilean Delegation (document W.55) concerning the shipment of
goods from one point of a Member country to another point of
the same country across the territory of another state. Members
of the Working Party agreed with the Chairman that it was clear E/PC/T/WP. 1/SR/6
page 4
fom the wording of Article 16 that the provisions of this
Article were meant to cover such transit traffic as that
envisaged by the Chilean Delegation. The Delegate for CHILE
stated that if this interpretation were mentioned in the minutes
he would be content to withdraw his proposed amendment.
The NETHERLANDS Delegate enquired whether goods arriving
in one country from abroad without the final destination being
known and subsequently (while still in bond) being sold to a
third country, would enjoy freedom of transit to that country
according to this paragraph. While it appeared the general
opinion of the Working Party that this would be the case, the
Delegates for Australia and New Zealand thought that such goods.
were not covered by this paragraph. The Chairman asked the
Netherlands Delegate to reconsider the question in the light
of the discussion that had taken place and, if necessary,
submit an amendment.
It was agreed that the next meeting of the Committee should
be held at 10.-30 a.m. on Saturday, 17 May.
The meeting rose at 1 p.m. |
GATT Library | bw043st1612 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Working Party on Technical Articles. Summary Record of the Tenth fleeting held on Wednesday, 21st May 1947, at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, May 21, 1947 | United Nations. Economic and Social Council | 21/05/1947 | official documents | E/PC/T/WP.1/SR/10, E/PC/T/WP.1/SR.1-11, and E/PC/T/WP.1/AC/SR.1-3 | https://exhibits.stanford.edu/gatt/catalog/bw043st1612 | bw043st1612_90260210.xml | GATT_155 | 961 | 6,526 | RESTRICTED
ECONOMIC CONSEIL E/PC/T/WP.1/SR/10
AND ECONOMIQUE 21 May, 1947
SOCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
WORKING PARTY ON TECHNICAL ARTICLES
Summary Record of the Tenth fleeting held on
Wednesday, 21st May 1947, at 10.30 a.m. in the
Palais des Nations, Geneva.
Chairman: H.E. Erik Colban.
1. Article 16 - Freedom of Transit
The Working Party adopted the report of the Sub-Committee on
paragraphs 5 and 6 Document WP.1/AC1/SR1. It was noted that the
sub-committee did not recommend any change in the text and merely
wished the following paragraphs recorded in the Report of the
Working Party:
Relating to Paragraph 5
"With regard to transport charges it would be understood
that the principle of paragraph 5 refers to like products
being transported on the same route under like conditions."
Relating to Paragraph 6
"The Sub-Cormittee were in favour of the retention of this
paragraph in the New York text, subject to a reservation
by the French delegate who will raise this matter when
Article 14 will be discussed."
2. Article 21 - Publication and Administration of Trade
Regulations
It was noted that the Report of the Sub-Committee on para-
graph 3 (WP.1/AC/SR/2) had been distributed but it was agreed
that consideration should not be given thereto until the follow-
ing meeting.
UNITED NATIONS
NATIONS UNIES E/PC/T/WP.1/SR/10.
page 2.
3. Article 37 - General Exceptions to Chapter V.
The Working Party agreed with the suggestion of the
Chairman that the amendments proposed to Article 37 should
be examined by the full Committee instead of being referred
to a Sub-Committee; in addition to the General and
Specific Comments contained in the Report of the Drafting
Committee, the following amendments had been received:
Canada W/24
China W/71
France and Benelux W/45 and W/46
South Africa W/62
United States W/23 and W/98
Preamble
It was found that the proposals of the French and
Benelux delegations contained in document W/45 gave rise
to questions beyond the terms of reference of this Working
Party and should therefore be referred to the Preparatory
Committee.
Sub-paragraph (a). The Norweigan delegate
suggested the addition of the following words, "and to
regulate the production and use of alcoholic beverages".
On the suggestion of the CHAIRMAN it was agreed to
note in the Working Party's Report that the Norweigan
Delegation adhered to the reservation recorded in the
Report of the Drafting Committee.
Sub-paragraph (b). During the discussion of the
proposal submitted by the French and Benelux Delegations
in document W/46, the following variations were suggested:
By the Delegations for France and Benelux (W/46): E/PC/T/WP.1/SR/10.
page 3.
"Necessary to protect human, animal or plant
life or health if corresponding domestic
safeguards under similar conditions exist in
the importing countries."
By the United Kingdom Delegation:
"Necessary to protect human, animal or plant
life or health."
By the South African Delegation (W/62):
"For the purpose of protecting human, animal
or plant life or health."
By the United States Delegation:
"Which are, in fact, essential to protect
human, animal or plant life or health."
By the Chairman:
"Necessary to protect human, animal, or plant
life or health, provided that corresponding
safeguards are applied in the importing country
if similar conditions exist in that country."
The Working Party agreed to adopt the wording proposed
by the Chairman.
Sub-paragraph (c). The proposal of the Australian
Delegate (W/62) to add the words "if taken in accordance with
provisions of any international agreement concerning such
materials" was not accepted, and the sub-paragraph was
adopted without alteration. The Delegate for the United
States mentioned that he understood "fissionable materials"
would include source materials.
Sub-paragraph (d).
Adopted. E/PC/T/WP.1/SR/10
page 4.
Sub-paragraph (e). The Chinese Delegate supported the
proposal (Of document W/71) of his delegation, recorded in
the Report of the Drafting Committee, to the effect that
permission should be given for measures "temporarily imposed
to prevent arrest or relieve conditions of social disturbance,
natural calamity or other national emergencies, provided that
such measures are withdrawn as soon as the said conditions
cease to exist". He said that his Delegation would not
insist upon this alteration if the Working Party found that
there were insurmountable obstacles. It was agreed that the
views of the Chinese Delegation should be recorded, and sub-
paragraph (e) was adopted without alteration.
Sub-paragraph (f). The Delegate for INDIA stated that
he did not wish to insist upon his reservation mentioned in
the Report of the Drafting Committee. The sub-paragraph was
then adopted.
Sub-paragraph (g) Adopted.
Sub-paragraph (h) Adopted.
Sub-paragraph (i) Adopted.
Sub-paragraph (j). The Delegates for INDIA, BRAZIL and
NEW ZEALAND sustained their reservations recorded in the Report
of the Drafting Committee. The Delegate for INDIA wished to
delete all words after "resources". The Delegate for NEW
ZEALAND wished to delete the same words and to insert "or
other" before the word "resources". The Delegate for BRAZIL
said that he would be satisfied with the deletion of the words
"pursuant to international agreements or are made effective". E/PC/T/WP.1/SR/10
page 5.
The Delegate for NEW ZEALAND offered to consult with
the Delegate for India and report to the next meeting.
The Delegate for the Netherlands stated that he would
withdraw his comment recorded in paragraph (a) of General
Comments on Page 31 of the Report of the Drafting Committee.
It was agreed that the remainder of Article 37 and
Article 15 would be discussed on the following day at 10.30 a.m.
4. Sub-Committees
The CHAIRMAN announced that the Sub-Committees on
Article 19 and Article 21, paragraph 3, had completed their
deliberations, and that the remaining Sub-Committees would meet
at the following times:
Article 17 21st May 3 p.m.
Article 21, paragraph 2. 22nd May 9.30.a.m.
Article 18 22nd May 3 p.m.
The Meeting closed at 1 p.m. |
GATT Library | yz434jr5219 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Working Party on Technical Articles. Summary Record of the Third Meeting held on Monday, 12 May 1947 at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, May 12, 1947 | United Nations. Economic and Social Council | 12/05/1947 | official documents | E/PC/T/WP.1/SR.3, E/PC/T/WP.1/SR.1-11, and E/PC/T/WP.1/AC/SR.1-3 | https://exhibits.stanford.edu/gatt/catalog/yz434jr5219 | yz434jr5219_90260203.xml | GATT_155 | 1,911 | 12,067 | ECONOMIC CONSEIL RESTRICTED
AND ECONOMIQUE E/PC/T/WP.1/SR.3
SOCIAL COUNCIL ET SOCIAL 12 May 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
WORKING PARTY ON TECHENICAL ARTICLES
Summary Record of the Third Meeting held on Monday,
12 May 1947 at 10.30 a.m. in the Palais des Nations,
Geneva
Chairman : H.E.Erik Colban
1. Article 20 - Marks of Origin
The Working Party continued its examination of paragraph 7
and the proposals for amendment of this paragraph by the Cuban
and French Delegations contained in documents W. 29 and W.40.
It was decided to appoint an ad htc Committee consisting of the
representatives of Australia, Belgium, Cuba, Czechoslovakia,
France, the Union of South Africa; the United Kingdom and the
United States, with Mr. SHACKLE, representative of the United
Kingdom, as Chairman, to examine the issues which had been
raised by delegates in connection with this paragraph. The
CHAIRMAN stated that the ad hoc Committee would hold private
and confidential meetings and no record of their discussions
would be retained. He stated that he was hopeful that the
Committee would be able to present an agreed report within a
few days. It was suggested that interested countries should
send suggestions concerning the wording if this paragraph to the
Secretariat and that members of other delegations might attend
the meetings of the ad hoc Committee.
2. Article 21 - Publication and Administration of Trade
Regulations - Advance Notice of Restrictive Regulations.
In reply to an enquiry concerning the title of this Article,
the CHAIRMAN explained that he understood from the discussions
of the Drafting Committee that great importance need not be
attached to the wording of the titles of Articles since these
would fall away once the whole Charter was adopted.
Paragraph 1. The CHAIRMAN remarked that the foot-note
relating to this paragraph in che Report of the Drafting Committee
appeared to call for no comment or action, and since no amend-
ments to this paragraph had been proposed it appeared to be
acceptable to all delegations.
Paragraph 1 was adopted.
UNITED NATIONS
NATIONS UNIES E/PC/T/WP.1/SP. 3
page 2.
Paragraph 2. The Delegate for New Zealand supported the
reservation standing in the name of the New Zealand and South
African delegations in the Report of the Drafting Committee.
The South African Delegate stated that the matter was being
reconsidered by his Delegation and meanwhile he would like
his reservation to stand.
It was agreed that paragraph 2 as it appeared in the
Report of the Drating Committee should be adopted without
alteration in First Reading, subject to the reservation of
the New Zealand and South African Delegations, and subject
to the substitution of "shall" for "undertake to" in the fifth
line and the deletion of "to" in the sixth line.
The Working Party then considered the proposal of the
Canadian Delegation contained in document We 24 that the
following words should be added to the last sentence of
paragraph 2 : : , .
"ed thlr :iiandios shal be implemented by .:4
K -gov - aticet such ageies unless
aa l wj h s ode it'i a cou our tribual of
-jrrisdiction u;i I 1 . le etma rescrbed:
rfo paaeols to be lodged by importers. "
Thipsopo alrsw s sa uopprted by the Canadian Delegate but was
pop-ed by ht, eDegczte of the United Sattes..hTesheDlegates
of'teh niUtdeK ingdmo,S outh Afric,a Australia,F rance and the
Netherlnds ap aritcpiated in the disucssion,an d the Chaimran
diretcd ehat tjhesinnihficant statmeents that had been made by
Deegatel sh,oldu be recorded in the minutes.
OTE: Extracts ffm the Verbatilm apuorrwill be found
ni hte 2nnex f, this Summary Record
After i cus.sion the Uinetd teaest Delegate stated that his
Delegation could accept the amendment proposed by ;naada co the
understanding that the Preparatory Cromittee cnsostued the amend-
ment as meeinng that it would be left open to the Central Customs
Administration, though not to subordinate officials, to seek
judiciel crroectio bnefore a judicial tribunal of what the
administration might consider a udjicial error. He explained
that is i:nerpretation was different frm othat put forward by
the Dele-:te fr oCaadna I.t was then agreed that the Canadian
amendment should be adopted in Frst Reading so as to give
interestce delegatinaosamlae opportunity to examine the full
implications tofhe canh-g
t wIas surwgseu etha athe first words of the amendment
should rd eae"d nthe resulting decisions shall..-
Po(*r:opoN t Qew Paragramhe () ._rencFh and Benelux Delega-
tions had prosed pothat the foll.i ownewg aZraarphg be inserted
after par-rar)L 2 (,udLonomst 42 .2 E/PC/T/WP.1/SR. 3
page 3.
"2(a). The Organization shall be responsible for
collecting, analysing and publishing in the most
accessible form all laws, regulations and decisions
concerning foreign trade and for the periodical
collection, in the form of detailed studies, of
information concerning the regulations of Member
states on a given point."
It was agreed that this proposal should be noted in the
minutes of the meeting, but in view of the provisions of
paragraph 1 and of Article 61 the Woorking Party was of the
opinion that it was not necessary to include this paragraph
in the Article.
Paragraph 3. The French and Benelux Delegates announced
that they would withdraw their proposal that paragraph 3 should
be deleted (document W. 43) in favour of the new version of the
paragraph proposed by the Czechoslovak Delegation (document W.51).
It was agreed that the next meeting should be held on the
following day, Tuesday, 13 May at 10.30 a.m. to continue the
examination of Articles 21 and 22.
The meeting rose at 1 p.m.
CORRIGENDUM
The last three lines on page 2 of the Summary Record of the
Second Meeting (E/PC/T/WP1/SR/2) should be changed as follows
"The United States Delegate proposed that the word "shall"
be inserted in the place of "should" in the second line.
He referred to the similar proposal made by the Czecho-
slovak delegate and supported by the United States in
respect of paragraph 3, and wished to state that the two
should be on the same footing."
On page 8 of the same Record (lines 3-4) the words "and
corresponding changes in the verbs in the following lines"
should be deleted. E/PC/T/WP.1/SR. 3
page 4
TO SUi. 'ARY RECORD OF THE THIRD MEETING
ARTICLE 21 Paragraph 2
Extracts from verbatim report of discussion on the amend-
ment proposed by the Canadian Delegation (document W/24):
Mr. SIM (Canada): It is important that once a tribunal
has come to a conclusion, that conclusion should be imple.-,ented....
The initial decision of a tribunal can be evasive if notice is
given that an appeal is going to be made. This a amendment
is designed to ensure that once a superior jurisdiction has
come to a conclusion, that conclusion should govern the
practice of the administrative agencies, but if they disagree
with that decision they should proceed to appeal within the
same time limit as is given to the importers.....
Mr. JOHNSON (United States): In the United States the
result would be a very serious restriction upon the accessibility
of importers to our system of judiciary review of administrative
decisions..... This would be a very serious restriction upon
the importers, much more serious than upon the government, and
would require a complete revision to the disadvantage nf trade.....
Mr. 3OW' (Canada).. If an importer is dissatisfied
with an administrative act and has recourse to these
tribunals ....... the decision should be implemented or the
administrative authorities should lodge the appeal within an
appropriate time.
Mr. JOHNSON (United States): The basic question presented
by this proposal is whether the principle of res judicate is
applied to customs Iitigation.We have had for fifty-
seven years a system of special customs tribunals. These
independent tribunals have eliminated the rule of res judicata
for the reason that customs litigation involves very diverse
and complex questions of fact ........ Since the rule of res
judicata does not apply against the government, the government
itself exercises its right of appeal just as the importer
does .. The government does not pursue this, in actual
practice, from the point of view of augmenting the revenue......
The prime occasion for making a new case is when we believe the
decision of the court is inconsistent with established
principles and we must determine whether the judiciary is
establishing a new principle or whether there has been some
misunderstanding or some inadequate presentation of the issues.
Mr. SHACKLE (United Kingdom):.... In the United Kingdom
we have kept to the doctrine of res judicata ... .. The
administrations would not ignore the finding of the courts , but
would always consent to an importer bringing another case
where he alleges there is a difference of circumstances. E/PC/T/WP. 1/SR, 3
page .5
Dr. HOLLODAY (South Africa):. If the absence of the
doctrine of res judicata is so in rpreted that an official
can place obstacles in the way of an importer, that would
have an exceedingly far-reaching effect for this Conference
because it means that we are not negotiting with the govern-
ment, with the judiciary or legislature behind it, but,
instead, the power is in the hands of the officials, and in
that case there would be no use coming to an agreement.
Mr. JOHNSON (United States): .... With one very minor
exception, the government and the importer have exactly the
same tire and the same limitations for appeal. That minor
exception gives the government 60 days as against 30 days for
the importer and it is purely for administrative reasons.
There is nothing in our judicial procedure of disregarding, the
rule of res judicata that has resulted in any arbitrary action
or any harassing of importers ......... I would suggest that we
disregard the amendment and proceed with the full assurance
that the United States will welcome any action under Article 35
if there is ever any belief that the United States is attempting
to nullify or impair its obligations
Mr. VAN DEN BERGE (Netherlands):......In general, when
there is a permanent jurisprudence astablished by the Courts,
the administration ought to accept that jurisprudence and, in
any case , the minor officials must accept it: but the central
administration always has the right - if the decision rendered
by the tribunals does not seem clear to it - to go before the
Court of Appeal. That is a right which cannot be denied the
central administration.
Mr. JOHNSON (United States): If this Canadian amend-
ment were susceptible to the interpretation indicated by the
Netherlands Delegate, it should be entirely acceptable to the
United States.
. ... . .... . .. . . . . .. .
Our acceptance is on the understanding that this Committee
construes the proposed amendment as leaving it open to the
central customs administration, though not to subordinate
officials, to seek judicial correction before a judicial tri.-
bunal of what the administration might consider a judicial
error.
Mr. SIM (Canada): I readily accept the interpretation
placed upon this amendment. It was never intended at any time
that this should place any obstacle in the way of the central
government from appealing in a proper case. It was simply
designed to ensure that that appeal will be taken promptly and,
unless the appeal is taken promptly, the decision given by
the courts should govern,
Mr. JOHNSON (United States): I might repeat that our
acceptance is conditioned upon the interpretation which I
consider is very different from that expressed by the Delegate
for Canada. |
GATT Library | zm616kq2197 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Working Party on Technical Articles. Surnmary Record of the Fifth Meeting held on Wednesday, Bl 1947., at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, May 14, 1947 | United Nations. Economic and Social Council | 14/05/1947 | official documents | E/PC/T/WP.I/SR/5, E/PC/T/WP.1/SR.1-11, and E/PC/T/WP.1/AC/SR.1-3 | https://exhibits.stanford.edu/gatt/catalog/zm616kq2197 | zm616kq2197_90260205.xml | GATT_155 | 1,007 | 6,361 | UNITED NATIONS NATIONS UNIES ESTRICTED
ECONOMIC RESTRICTED CONSEIL RESTRICTED
AND WE.1 5 ECONOMIQUE E/PC/TP/SR/
14 May 1947.
SOCIAL COUNCIL ET SOCIAL Original: English
SECMIOND SESSION OF THE PREPARATORY COMTTEE OF THE
UNITEED NATIONS CONFERENC ON TRADE AND TPLOYMENT
WORKING PARTY ON TECHNICAL ARTICLES
Surnmary Record of the Fifth Meeting held on Wednesday,
Bl 1947., at 10.30 a.m. in the Palais des Nations,
Geneva.
Chairman: Mr. R.J. Shackle
1. Article 22 - Information, Sytatistics and Trade Terminolog,
Paragraph 1. On the suggestion of the Canadian and
Netherlands Delegates it was agreed to insert the words ", or to
such agency as may be designated for the purpose by the
Organization," after the word "Organization" in the second line.
In Sub-paragraph (a) it was decided to remove the words
"where applicable" from the third line and to insert these words,
preceded by "and", after the word "exports" in the second line.
It was pointed out by the French Delegate that the French
equivalent ofô "in wa àrehouse" ôNàwas "en entrept" not" l'entrt"!
Paragraph 5. The United Kingdom Delegate proposed that the
word "shall" in the first lie be changed ~o "may". After
discussion the CHAIIAasked each Delegation for its opinion
and, in view f the fact that the majority favoured the retention
of the word "shall", it was agreed to retain in the first reading
the wording proposed in the Report of the Drafting Committee.
.he proposal of the Delegate for South Africa it was
agreed to ask the Legal Officer of the Secretariat whether he
UNITE NAT #NS
NATlONScUNIE' E/PC/T/WP.I/SR/5
page 2.
considered it advisable to retain in Article.22 the specific
statements of the functions of the Organization which appear
in paragraph 5 or to incorporate them in Article 61. The
United States Delegate pointed out that the Charter had been
planned to leave only the statement of general functions for
Chapter VIII on Organization while stating the specific functions
in the relevant Articlesthroughout the Charter; and it was
hence agreed that the Legal Officer should consider not only the
paragraph under review but the Corresponding point in relation
to the lay-out of the Draft Charter generally.
The Delegate for FRANCE mentioned that many countries would
encounter practical difficulties in supplying the information
required under paragraph 1 in relation to subsidy payments and
quantitative restrictions. He agreed to the suggestion of the
CHAIRMAN that his remarks should be placed on record so that the
question could be raised again, if necessary.
The Delegate for FRANCE requested that the Minutes of the
Meeting should record the positive desire of the Working Party
that the Organization should take up as soon as possible the
work begun by the League of Nations on the preparation of a
standard customs nomenclature. The Delegate for SOUTH AFRICA
said that he could not agree to express such a desire. It was
decided that the remarks of the FRENCH Delegate should be given
in the Summary Record.
(Note: The relevant extracts from the verbatim report
will be found in the Annex to this Summary Record)
At the request of the Delegate for the UNITED STATES it
was decided to mention in the minutes that Chapter VIII on
organization should be so framed as to give the Organization
sufficient latitude to call into consultation the experts of E/PC/T/WP. I/SR/5
page 3.
various governments when investigating technical problems such
as standard classifications.
Paragraph 6. It was noted that the remarks in the Report
of the Drafting Committee referring to paragraph 6 called for no
comment by the Working Party.
2. Article 23 - Roycotts.
The CHAIRMAN remarked that the notes in the Report of
the Drafting Committee referring to Article 23 appeared to
require no special attention in view of the important amendment
proposed by the Delegation of LEBANON-SYRIA (Document W.61); he
drew attention to the fact that the Lebanon-Syria Delegation
proposed the deletion of the whole of the Article. At the
request of the Delegate for Lebanon-Syria, it was agreed to
pestpone discussion of Article 23 until a later date.
The meeting rose at 11.50 a.m. E/PC/T/WP.I/SR/3
page 4.
ANNEX
To the Summary Record of the Fifth Meeting
Article 22 Paragraph 5 - Extracts from verbatim report on
statement by the Delegate for France
on standard tariff classifications.
M. ROUX (France) ........ There is a recommendation at
the end of paragraph 5 which is concerned with the possible
international adoption of standard tariffs and commodities
classification. I think we should state in our minutes that
we wish the work which was started before the war to be con-
tinued, that it be reviewed in connection with the evolution
of industry and commerce in the period which has elapsed and
that we wish the Organization to proceed as soon as possible
with the review and with the continuation of this work.
.............
If I insist on this matter it is because all those who
have been personally concerned with the drawing up of the tariff
statistics know that these statistics are correct only insofar
as they are based on tariff terms, so that if the statistics are
to be comparable it is necessary that the terms of the tariffs
themselves are comparable. That is why the London Drafting
Committee considered it necessary to note that the purposes which
are contained in the Charter so far as the uniformity of inter-
national commercial statistics, international comparability of
those statistics, and the adoption of typical definitions of
standards are concerned - could be reached only insofar as the
work begun by the League of Nations for the uniformity of
tariff nomenclature is taken up again and carried to a success-
ful conclusion. The tariff statistics could only be established E/PC/T/WP. I/SR/5
page 5.
upon the basis of the statement of the persons who pay the
duties and these statements could only be based on the tariff
nomenclature of the different states. That is why the
condition of the tariff statistics being in conformity with the
tariff terms of every country is a condition of the tariff terms
and nomenclature. |
GATT Library | sx883kw0597 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Working Party or Technical Articles. Summary Record of the Ninth Meeting held on Tuesday, 20th May 1947, at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, May 20, 1947 | United Nations. Economic and Social Council | 20/05/1947 | official documents | E/PC/T/WP.1/SR/9, E/PC/T/WP.1/SR.1-11, and E/PC/T/WP.1/AC/SR.1-3 | https://exhibits.stanford.edu/gatt/catalog/sx883kw0597 | sx883kw0597_90260209.xml | GATT_155 | 1,383 | 8,781 | UNITED NATIONS NATIONS UNIES RESTRICTED
ECONOMIC CONSEIL E/PC/T/WP.1/SR/9
AND ECONOMIQUE 20th May 1947
SOCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF
THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
WORKING PARTY OR TECHNICAL ARTICLES
Summary Record of the Ninth Meeting held on
Tuesday, 20th May 1947, at 10.30 a.m. in the
Palais des Nations, Geneva.
Chairman: H.E. Erik Colban.
1. Article 22. - Information, Statistics & Trade Terminology.
The CHAIRMAN recalled that, at the request of the Delegate
for South Africa at the Fifth Meeting on the 14th May, the legal
Officer of the Secretariat had been asked whether he considered it
advisable to retain in Article 22, paragraph 5, the specific
statements of the functions of the Organization or whether they
should be incorporated in Article 61. The Legal Officer had now
reported that, in his opinion, the present arrangements were
preferable although the wording of Article 61 might be considerably
improved. The Delegate for South Africa said that he was satisfied
with this report.
2. Article 16 - Freedom of Transit.
It was noted that the Sub-Committee on paragraphs 5 & 6
had presented their report (document AC.1/SR/1) and it was agreed
that this should receive the attention of the Working Party at
the next meeting.
3. Article 17 - Anti-Dumping and Countervaling Duties.
The CHAIRMAN enquired whether delegates wished to
continue the general discussion on Article 17 or whether they would E/PC/T/WP.1/SR/9.
page 2.
be content to leave further discussion to the Sub-Committee which
would meet on the following day to examine the proposed amendments.
The general discussion was not resumed.
4. Article 18 - Tariff Valuation.
The CHAIRMAN suggested that the Working Party should
follow the same procedure as with Article 17, namely, to engage
in a general discussion on the scope of the Article and then to
refer all the proposed amendments to a sub-committee, He
mentioned that the most important amendment proposed was that
submitted by the Canadian Delegation (W.24) and therefore he
invited the Delegate for Canada to lead the discussion.
The Delegate for CANADA said that one of the main
objects in framing the Charter was to bring about the reduction
of trade barriers, including administrative obstacles such as
arbitrary valuations. He stated that reductions in customs
duties might be of little value if the system of valuation could
be so manipulated as to discourage importers. Therefore, the
CANADIAN Delegation proposed that Article 18 should incorporate
more detail by endeavouring to give some precise meaning to the
term 'actual value'
The Delegate for CHINA supported the Canadian amendment.
He attributed relatively less importance to the Chinese amendment
(W.78), the object of which was to ensure the declaration of the
bona fide actual value and to prevent collusion between buyer and
seller.
The Delegate for the UNITED KINGDOM said that, he fully
supported the Canadian amendment, in particular because it would
allow sufficient latitude in the system of valuation. It would,
he thought, not be advisable to add anything to the Canadian
amendment. E/PC/T/WP.1/SR/9
page 3.
The Delegate for INDIA said that he was in general
agreement with the Canadian draft.
The Delegate for the UNITED STATES said that he could
not agree; the technical and administrative problems of
valuation are tremendous and innumerable and to endeavour to
be as specific as the Canadian draft raises more questions than
are solved. He expressed the opinion that alternative A in the
Report of the Drafting Committee goes as far as is practicable
and would abolish the worst practices in valuation. He drew
attention to the fact that paragraphs 1 and 2 provide for
continued study of valuation problems by the Organization and-
lay down a set of Principles. Further, he said that even if
alternative A is adopted, many countries; including the United
States, will have to alter their present practices.
The Delegate for SOUTH AFRICA stated that he was in
general agreement with the Canadian draft but wished to propose
an alternative (document W/57) as otherwise the importer who
pays a relatively higher price because he is purchasing a small
quantity will have to pay a higher duty.
The Delegate for AUSTRALIA repeated the point made by
the Delegate for Canada that the problem of tariff valuation is
closely bound up with the tariff negotiations. He said that
Alternative A is "negative" and so vague that each country would
be free to carry on with its present valuation system; he
thought the Working Party should endeavour to find the solution
of this problem and that, if it failed, the Organization, when
established, would not do much better.
The Delegate for the UNITED STATES replied to the
Delegate for Australia, drawing attention to paragraph 2 of
Article VIII of the Draft General Agreement on Tariffs and Trade E/PC/T/WP.1/SR/9.
page 4.
which provides that "no contracting party shall alter the general
principles ......... for determining the dutiable value ....... so as
to impair the value of any of the concessions .......". He stated
that this provided a safeguard against methods of valuation
nullifying the value of' tariff reductions. The Delegate for
AUSTRLIA replied that he had referred to existing rather than to
new practices which could render tariff reductions valueless.
The Delegate for BELGIUM drew attention to the note in
the Resort of the Drafting Committee recording the desire of his
Delegation that the Article should provide a definite early date
for the entry into force of paragraph 2; he gave unreserved
support to the Canadian amendment and referred to document W/58
containing an addition proposed by his delegation. He said that
he could not share the United States Delegate's view that the
question of valuation should be left for further study.
The FRENCH Delegate informed the meeting that he supported
the Canadian proposal with the addition of the paragraph set forth
in document W/58.
The Delegate for the UNITED KINGDOM thought that the
Canadian proposal did not attempt to provide the details of a
method of valuation and that failure to define the term 'actual
value' would leave each country in a state of uncertainty.He said
that valuation is a keystone of the Tariff Provisions of the
Charter.
The Canadian amendment was supported also by the
Delegate for the NETHERLANDS, who said that the Working Party
should not avoid lengthy discussions if these should be necessary
to reach agreement.
The UNITED STATES Delegate said he could not agree that
the Canadian text gave a precise meaning to the term 'actual value'; E/PC/T/WP.1/SR/9.
page 5.
many delegates had said that they supported the Canadian amend-
ment but, in fact, they had submitted documents containing
numerous proposals for amendments; he thought the appearance of
precision was deceptive and that where the amendment was precise
it pointed in the wrong direction.
The Delegate for NEW ZEALAND said that his country was
not much affected by the wording of the Article insofar as imports
were concerned but, as an exporter, New Zealand favoured the
Canadian proposal.
The Delegate for the NETHERLANDS suggested that the
Canadian draft should be used as a basis for further discussion
in an endeavour to reach a more precise definition.
The UNITED STATES Delegate said that he would agree to
take Alternatives A and B .s the basis for discussion.
The CHAIRMAN, in summing up, said that there appeared
to be a large majority in favour of a more elaborate text than
Alternative A and that the discussion should be continued in
Sub-Committee.
The following Sub-Comimittee was appointed:
The Delegates for Australia, Canada, China, France,
the Netherlands, the Union of South Africa, the United Kingdom,
the United States, with the Delegate for South Africa as Chairman.
It was agreed that the next meeting would be held the
following day to discuss Article 37 and then Article 15.
The Meeting closed at 11.50 a.m.
CORRIGENDUM to E/PC/T/WP.1/SR/6
Article 23 - Boycott.
The Delegate for India has asked that it be noted
that the statement attributed to him on page 2 of the Summary E/PC/T/WP. 1/SR/9
page 6.
Record of the Sixth Meeting held on the 16th May should read
as follows;
The Delegate for INDIA. announced that although his
Delegation felt that there was really no place for an Article
if this kind in this Chapter, they would not insist upon its
deletion or amendment. |
GATT Library | dq454mm9231 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Eployment : Notification of non-discriminatory Measures | United Nations Economic and Social Council, October 17, 1947 | United Nations. Economic and Social Council | 17/10/1947 | official documents | E/PC/T/256 and E/PC/T/228-267 | https://exhibits.stanford.edu/gatt/catalog/dq454mm9231 | dq454mm9231_92290327.xml | GATT_155 | 190 | 1,370 | UNITED NATIONS NATIONS UNIES RESTRICTED
ECONOMIC CONSEIL E/PC/ T/256
AND ECONOMIQUE ENGLISH
SOCIAL COUNCIL ET SOCIAL 17 October 1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EPLOYMENT
Notification of non-discriminatory
Measures
With reference to documents nos. E/PC/T/250 Add. 1,
E/PC/T/248 and 251, and E/PC/T/246, the Tariff Negotiations
Working Party 4- taking up with' the Chilean, Lebano-Syrian and
Norwegian delegations the question of bringing their lists et
non-discriminatory Measures into conformity with the provisions
oif paragraph 6 of Article XVIII. It is hoped to clear up this
matter within the next few days.
DEUXIEME SESSION DE LA COMMISSION PREPARATOIRE DE LA
CONFERENCE DES NATIONS UNIES SUR LE COMMERCE ET L'EMPLOI
Notification de mesuros
non discriminatoires
Comme suite aux documents E/PO/T/250 Add. I, E/PC/T/248
et 251; et E/PC/T/246, le Groupe de travail charge des
négociations tarifaires etudie avec les délégations du Chili,
du Liban et du la Syrie, et dc 'La Norvège, le moyen de mettre
leurq listes de measures non discrimiratoires en harmonie avec
les despositions du paragraphe 6 de l'article XVIII. On peut
esp rer que la question sera réglée d'ici quelques ours. |
GATT Library | jb614zw6979 | Second session of the Preparatory Committee of the United Nations Conference on Trade Employment : Corrigendum to Wording suggested by the Chinese Delegation in substitution, for their previously proposed amendment (E/PC/T/W/75, 14th May, 19470) | United Nations Economic and Social Council, August 16, 1947 | United Nations. Economic and Social Council | 16/08/1947 | official documents | E/PC/T/W/260 Corr.1 and E/PC/T/W/236-260 | https://exhibits.stanford.edu/gatt/catalog/jb614zw6979 | jb614zw6979_90050412.xml | GATT_155 | 157 | 1,185 | UNITED NATIONS NATIONS UNIES RESTRICTED
E/PC/T/W/260 Corr.1
ECONOMIC .CONSEIL 16 August 1947
AND ECONOMIQUE ORIGINAL: ENGLISH
SOCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE AND EMPLOYMNTE
Corrigendum to
Wording suggested by the Chinese Delegation in sub-
stitution, for their previously proposed amendment
(E/PC/T/W/75, 14th May, 19470)
The following title:
"Article 25, paragraph 2(e) (Sub-paragraph (c) of
revised text - E/PC/T/l)141",
should be altered to read:
"Additional Sub-paragraph (d) to Article 25, paragraph
2 of the revised text (E/PC/T/141) ".
DEUXIEME SESSION DE LA COMISSION PREPARATOIRE
DE LA CONFERENCE DU COMMERCE ET DE L'EMPLOI
DE L'ORGANISATION DES NATIONS UNIES
Corrigendun à
la rédaction propose par la Délégation de la Chine
en replacement de son amendement antérieur
(E/PC/T/W/75 du 14 mai 1947)
Le titre suivant:
"Article 25, paragraph 2(e), alinéa (c) du texte revise -
E/PC/T/141
doit etre modifié comme suit:
"Alinéa (d) additionnel à l'article 25, paragraphe2
du texte revisé (E/PC/T/l41)". |
GATT Library | hm795fs4992 | Second Session of the Preparatory Committee of the United Nations Conference Trade and Employment : Note by the Secretariat concerning the revised texts of the Final Act, the General Agreement proper, and tho Protocol | United Nations Economic and Social Council, October 4, 1947 | United Nations. Economic and Social Council | 04/10/1947 | official documents | E/PC/T/226 and E/PC/T/214/ADD.1/REV.1-228 | https://exhibits.stanford.edu/gatt/catalog/hm795fs4992 | hm795fs4992_92290290.xml | GATT_155 | 300 | 2,209 | NATIONS UNIES
RESTRICTED
ECONCMIC CONSEIL E/PC/T/226
AND ECONOMIQUE 4 October 1947
SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE T Q
ED NATIONS CONFERENCE TRADE AND EMPLOYMENT IEPQYkNr'îT
letc ba iat Soncerning c:>nc(rnin-. the revised texts
l Act FenGeneral tAgreement proper, andt nroer, and
tho Protocol
The Socretarig ïs issuin,- to-sey the revi cd texts of
nts o doci4r.e following o followir., document symbols;
The Final Act - - E/PC/T.. 214, Rev.1
Thegreeerlil .Ar1rament - E/PC/T.2e4,1Add.1, Rov.l.
The Protocol of Pro-
visional Application - E/PC/T.2e4, Add.2, Rov.1
Theso texts changesrate c'iathe made by t1i Legal
mrafting Cxrnittee as a reeult of its oxamination of the earlier
ed:Ltion. The present text of Ahe Goneral agreementt hns also been
h-ineod t.:> incorporate prove ionally thInterpretativetorpretativo
ing rezrardinrv areas undoccupation recomd tion recoMnended by
sub-committee -cDr;Eittlee in :seeC/T.2nne(soc in Aiiox I the Note
roncernin-<. Article XXVI and the ainal Note; mnd the footnote
relating' thereto). The Protosol of Provi.ionl Application has
beon amnded to include the UniteB States of 3razil among the
countries listed thQrein, in accorEance with .e/PC/T.223.
It willabe noted thlt, io addition ta the Interpretative
Ngtes relatinYXXo article Y'VI and the Final Noteherrrtain othar
not yet b have rott been settled. Footnotes accompany the
present g xts drawinr Athention to thGee points (soi the footnote
"nccrhams" r and hcrns" in Annex Ao and the foDtnote in Annex H
conc:>rnin! the absence of confirmapercentages percentares
indicated provisionally for India and Pakistan). With the
exception of the above-mentioned points outstandin; in Annexes
A, HJ ?nd I, the present revised versioncleanetexts leaon te-ts
ig the form a:reed by greementff Arro!rent Committec.
It should be noted further that tgotiationsNehiti2tions
'!,rkinr Party wielcirculating cia preposed Inter-q9 Ir'Wr-
Notative ',-t relatingr to para-Article r.t Lice I.
IONS;ITlL:I1) ) .V S |
GATT Library | rn204dd6696 | Second Session of the Preparatory Committee on Trade and Employment : Speech delivered at the Plenary Session, Palais des Nations, Geneva, Saturday, August 23 19471947-08-23 by MR.J.Harold Wilson, M.P | August 23, 1947 | 23/08/1947 | press releases | PRESS RELEASE NO.36-354 and PRESS RELEASE NO.36-354 | https://exhibits.stanford.edu/gatt/catalog/rn204dd6696 | rn204dd6696_90260234.xml | GATT_155 | 2,011 | 11,995 | *For release on delivery of speech
SECOND SESSION OF THE PREPARATORY COMMITTEE ON TRADE AND EMPLOYMENT
Speech delivered at the Plenary Session, Palais des Nations, Geneva,
Saturday, August 23, 1947 by
MR.J.HAROLD WILSON, M.P.
Secretary for Overseas Trade and
Acting Leader of the United Kingdom Delegation
The Plenary meetings yesterday and to-day mark the end of the first
of the two tasks we set ourselves when the work of this session of the
Preparatory Committee began in April. The world may not realise from
the long and complex document, necessarily technical in
its terms, how much work and thought, negotiation and argument have
entered into it. What I think the world will realise is the difference
which the principles and provisions of this Charter, if adopted by the
nations, can make to world trade and to the standard of living of all
peoples as compared with the system which we knew in the nineteen
thirties, with its strangling restrictions, its measures of mounting
economic nationalism, and all that lurked behind these barriers in the
form of uneconomic vested interests.
The work of the past four months has proceeded against the background
of a darkening storm in international economic affairs; hence the
criticism that our work here has been in vain and remote from the
realities of the present situation. I want for our part to repudiate
that suggestion. But none of us would claim that our work here can
ever yield its true value unless all nations recognise that the hopes
we all hold of establishing a new order in international trade are
dependent for their fulfilment on the solution of the world problems
which are now pressing upon us.
Even at the beginning of our work we knew that the rations were,
as a result of the intensity of the war and its immediate aftermath,
stepping into a world where the conditions of trade were completely
unknown. Perhaps no one has more cause to realise this than the
United Kingdom. From being,for over a century, a nation, part of
whose essential needs were met from the returns on investments made
in countries in many parts of the world, we have now sacrificed the
/greater greater part of those investments in financing the war, We are now
dependent on the proceeds of our exports. From the low level to
which we reduced them as part of our contribution to the common
struggle for victory, we have to build up to a figure nearly twice
that of prewar.
In the nineteen-thirties the nations of the world were suddenly
faced with the disappearance of the old gold standard system, which with
all its faults (and they were many) had been the almost automatically
accepted basis of international trade for a century. In its place
there grew up a whole series of hastily improvised self-frustrating
devices on a national basis. It is a matter for satisfaction in any
case that the nations represented here have agreed to recommend the
establishment of an organisation which quite apart from its detailed
rules provides for regular and free and frank consultation on
international trade problems.
But the achievement of the Preparatory Committee has, I think, been
more positive than this. The Draft Charter it has drawn up shows what
is necessary to achieve a multilateral trading system based on the
freest possible flow of world trade; this we believe is in the long
run as much in our own national interests as in those of the world as
a whole.
As we of the Preparatory Committee part with the Draft Charter
and as our thoughts turn to the task before the World Conference at
Havana, we must realise the responsibility which will rest on those
countries which have been represented here to explain and defend the
various provisions of the draft we have elaborated. We are glad that
so many other countries have sent observers to Geneva to follow our
proceedings with such close attention. None the less it is the members of
the Preparatory Committee who will be most familiar with the reasons
underlying the solutions we have suggested to the most difficult
problems we have faced and the pitfalls involved in other solutions.
I do not feel it is necessary to elaborate on the various
Chapters and Articles of the Charter, but I should like to make a
brief comment on one or two of the more important Chapters.
/Once Once again I should like to state our welcome and support for the
provisions on full employment. My Government is fully cimmitted to
internal measures for the maintenance of employment and is very well
aware of the danger of sudden slumps in other parts of the world; and
we accordingly welcome the obligation to maintain the highest possible
volume of employment and income within each national economy and the
measures which are being taken on an international scale for securing
the highest possible level of employment. The full success of this
project will go far beyond the scope of I. T. O. and will need the support
of the Economic and Social Council and all the international economic
organisations. That is why we trust that the World Conference will
take up this wider aspect of the problem as contemplated in the Draft
Resolution prepared at the London session of this Committee.
My second point is development. As a country which bears a great
responsibility for large and important Colonial territories - for whose
further development we have indeed in the past few weeks announced
revolutionary new proposals - we very naturally welcome anything that
can be done in this field just as we sympathise with the aspirations
of those of our friends who have made the position of the so-called
under-developed countries a key point in the discussions here. But we
do feel that it is possible to over-stress the distinction between
developed and underdeveloped countries. No country' s economy is
static: each must undergo a constant process of re-adaptation. A
country which is at present mainly or wholly agricultural will
undoubtedly benefit both its own economy and the world economy by
sound measures to increase its own productivity. This does not mean
that that development should necessarily involve too wide a range of
new manufacturing industries. We must not overlook the very real
advances which can be made in the field of primary production, which
can be achieved by irrigation, power and transport projects and by
the use of modern methods and scientific discoveries in the technique
of primary production. In this field the services of the more
advanced agricultural nations and the resources and knowledge at the
disposal of the Food and Agriculture Organisation of the
United Nations stand ready to assist in the achievement of
/revolutionary revolutionary advances in productivity.
But if these are to be achieved (and this brings me to my third
point), and are to result in the raising of the standard of living of
the peoples of the world and not in so-called surpluses and economic
depression, then pleasures such as were never adequately developed
before 1939 must be used. In this connection we feel that the Chapter
dealing with primary commodities, drawing as it does on the work of
the F. A. O. Preparatory Commission and the experience gained from the
working of Commodity Study Groups in recent months, represents a real
advance on the draft prepared in London last Autumn.
My fourth point relates to the balance of payments. It is not a
matter for surprise, with the growing difficulties which many of the
nations represented here are experiencing in their balance of payments,
that the Preparatory Committee has been much concerned to ensure that
the Articles dealing with the balance of payments and with
non-discrimination should be realistically drawn. It is of the utmost
importance that we should not bring discredit on the fundamental
principles of non-discriminatory multilateral trading by attempting to
move too far and too fast in this difficult period when many of the
conditions essential for such a system have not yet been realised. We
have ourselves only this week had to record a serious setback to our
hopes of proceeding rapidly in the direction of convertibility and
non-discriminatory trade and, as you will have seen from the exchange
of letters between the Chancellor of the Exchequer and the
Secretary of the United States Treasury, we have had, as an emergency
measure, to call a temporary halt. Whatever the lessons to be drawn
from the events of the last few weeks in our own case and that of
other countries, we are certainly all in agreement that the period of
recovery from the war has been far longer than most of us had hoped.
As a result of serious devastation in the war areas, of crop failures
and other difficulties since the war, the productive power of the
nations outside the Western Hemisphere has not been restored to the
extent necessary to put the world in true balance once again. Owing
to these factors and to the high prices of essential imports
international payments are badly out of equilibrium Unless they can
/be be put into balance once again much of our work here will be lost.
It is not for us here in Geneva to say how equilibrium can be
restored, This is a matter which is receiving urgent and concentrated
attention in many places at this tine - by the Economic Commission for
Europe, the Economic Commission for Asia and the Far East, and on the
agricultural side by F.A.O.; pre-eminently it is the subject of the
important conference now being held in Paris. And it is a problem which
must dominate the thought of all the governments represented here and
many more besides. It is a problem of restoring our national production
in each country, of building up again our war shattered economies, of
replacing our war damaged or obsolete capital goods and for many of us
in repairing the years of neglect prior to the war in our basic industries.
It is a problem of securing greater economic co-operation between countries
with complementary economies, of taking action in Europe and in Asia and in
many parts of the world for the mutual development of production. In our
own case we shall find it necessary and desirable to have even closer
economic co-operation with other countries of the Commonwealth.
I feel that the Governments represented at the Preparatory Committee
must face this position frankly, not only that our work itself will be in
vain unless all the governments and agencies concerned can solve this
overriding problem, but also that the methods we may have to use in the
intervening months and years may appear to be opposed to the principles and
methods of the Draft Charter. Many of us will certainly have to assist our
position by agreements with particular countries, some of whom are represented
here. Such agreements if realised will not only bring additional materials
and food into our national economies for the purpose of maintaining and
increasing production, they will make it possible for each one of us to make
such sacrifices as will enable us to part with much needed goods to
other countries in order that goods even more urgently needed may come to
us in return. But in these methods, designed to meet the short term and
urgent problems which are pressing upon us, the guiding principle must
be that we do not establish permanently artificial channels of trade which would in the long run defeat the principles and methods we have
been discussing here. To do so would reduce the total volume of world
trade in goods and services and bring about a lower standard of living for
the people of the world than we hope to achieve as a result of full
economic co-operation on a multilatoral basis. Only on such a basis
can we secure for all our peoples the full benefits available from the
advances of science and from the skill and resources of all nations of the
world. |
|
GATT Library | zc269hj8165 | Second Session of the United Nations Preparatory Committee Conference on Trade and Employment | European Office of the United Nations Information Centre Geneva, August 5, 1947 | European Office of the United Nations Information Centre Geneva | 05/08/1947 | press releases | Press Release No.273 and PRESS RELEASE NO.36-354 | https://exhibits.stanford.edu/gatt/catalog/zc269hj8165 | zc269hj8165_90260223.xml | GATT_155 | 312 | 1,903 | EUROPEAN OFFICE OF THE UNITED NATIONS
Information Centre Press Release No.273
Geneva. 5 August 1947.
SECOND SESSION OF THE UNITED NATIONS
PREPARATORY COMMITTEE CONFERENCE
ON TRADE AND EMPLOYMENT
Membership of the Executive Board
Arising out of questions at the press conference given
by Mr. Wyndham-White. this morning, the following sets out
the proposals of the Committee on Voting and Membership of
the Executive Board of ITO.
1. The Executive Board shall be composed of 17 members,
made up as follows:
One representative to be appointed every three
years by Canada, China, France, USSR, U.K., U.S.A.
and Benelux (provided Belgium, Luxembourg and the
Netherlands desire to be represented as a unit. If
not, Belgium and the Netherlands shall, alternately
every three years, appoint one representative).
(b) Three members to be elected by the American Repu-
blics, excluding U.S.A.
(c) One member to be elected by the Arab States.
(d) One member to be elected by the Scandinavian States.
(e) Five members to be elected by the remaining members
of the I.T.O.
2 Members shall normally be elected for three years..
3. Should any of the States named in paragraph (a) above
not join I.T.O. or withdraw from it, the number of seats
on the Executive Board would be decreased accordingly,
4. If seven or less American Republics, excluding U.S.A.,
become members of I.T.O., they shall be entitled to one
seat on the Executive Board; if more than 7, but less
(P.t.o.) Press Release No.273
Page 2.
than 15, to two seats; if over 15, to three seats.
5. If the number of members of I.T.O. falling under para-
graph (e) above be from 4 to 7, they shall be entitled
to one seat; if from 8 to 14, to two seats; if from
15 to 20, to three seats; if from 21 to 27, to four
seats; if 28 and over, five seats. |
GATT Library | fb043wp0188 | Second Session of the United Nations Preparatory Committee Conference on Trade and Employment : Draft Report of Preparatory Committee | European Office of the United Nations Information Centre Geneva, August 21, 1947 | European Office of the United Nations Information Centre Geneva | 21/08/1947 | press releases | Press Release No.295 and PRESS RELEASE NO.36-354 | https://exhibits.stanford.edu/gatt/catalog/fb043wp0188 | fb043wp0188_90260231.xml | GATT_155 | 221 | 1,514 | EUROPEAN OFFICE OF THE UNITED NATIONS
Information Centre Press Release No.295
Geneva. 21 August 1947.
SECOND SESSION OF THE UNITED NATIONS
PREPARATORY COMMITTEE CONFERENCE
ON TRADE AND EMPLOYMENT
DRAFT REPORT OF PREPARATORY COMMITTEE
1. Attention is drawn to the fact that Document E/PC/T/180
is a DRAFT, which is subject te change in the final Executive
Session of the Preparatory Committee on Friday, 22 August or
in the Plenary Meetings.
2. Plenary Meetings of the Preparatory Committee will
be held in the Assembly Hall on Friday, 22 August at 2:30 p.m.
and on Saturday, 23 August, at 9.30 a.m.
3. Documents E/PC/T/117/Rev.1, E/PC/T/148 and E/PC/T/149
will be included in an Appendix to the printed Report of the
Second Session of the Preparatory Committee.
COMMISSION PREPARATOIRE DE LA CONFERENCE
INTERNATIONALE DU COMMERCE ET DE L'EMPLOI.
PROJET DE RAPPORT DE LA
DEUXIEME SESSION
1. L'attention est attirée sur le fait que le document
E/PC/T/180 est un PROJET susceptible d'être modifié au cours
de la session executive finale de la Commission preparatoire
qui s'ouvre vendredi, 22 août.
2. Les séances plénières de la Commission préparatoire
se tiendront dans la salle des Assemblées vendredi après-midi à
14 heures 30 et samedi à 9 heures 30.
3, Les documents E/PC/T/117 Rev.l , E/PC/T/148 et E/PC/T/149
seront reproduits comme annexes au rapport imprimé sur la Deuxiè-
me Session. |
GATT Library | dy692pv0805 | Second Session of the United Nations Preparatory Committee Conference on Trade and Employment : Plenary Session | European Office of the United Nations Information Centre Geneva, August 22, 1947 | European Office of the United Nations Information Centre Geneva | 22/08/1947 | press releases | Press Release No.297 and PRESS RELEASE NO.36-354 | https://exhibits.stanford.edu/gatt/catalog/dy692pv0805 | dy692pv0805_90260232.xml | GATT_155 | 555 | 3,637 | EUROPEAN OFFICE OF THE UNITED NATIONS
Information Centre Press Release No. 297
Geneva. 22 August 1947.
SECOND SESSION OF THE UNITED NATIONS
PREPARATORY COMMITTEE CONFERENCE
ON TRADE AND EMPLOYMENT
Plenary Session
Following the completion of the draft of the I.TO.
Charter the Preparatory Committee today opened a two-day
plenary session to receive and adopt the Report of the Second
Session of the Preparatory Committee of the United Nations
Conference on Trade and Employment. The draft Charter, which
is contained in the Report, was adopted unanimously, chapter
by chapter.
The Second Session of the Preparatory Committee was con-
vened at Geneva on 10 April 1947. The First Session was held
in London from 15 October to 26 November 1946.
M. Max SUETENS, Chairman of the Preparatory Committee,
announced at the beginning of the Session that a substantial
number of reservations made by member countries of the Prepa-
ratory Committee concerning certain parts of the draft Charter
had been withdrawn earlier in the day (See E/PC/T/180.Corr.8)
The draft Charter is now ready for consideration as the
basic document at the World Conference on Trade and Employment
to open in Havana on November 21.
During the course of today's plenary session various de-
legates appraised the work of the Preparatory Committee.
Dr. H.C. COOMBS (Australia) said that he felt proud of
the work of the Committee in constructing a skeleton on which
the nations of the world could construct a truly living organism,
capable of enduring the economic climate of the world.
(P.t.o) Press Release No.297
Page 2.
Baron VAN DER STRATEN-WAILLET (Belgium) commented on
the remarkable team spirit of the Preparatory Committee, and
on the close cooperation between the Belgian and Netherlands
delegations.
H.E. DE VILHENA FERREIRA-BRAGA (Brazil) said that Brazil
had during the discussions on the Charter acted in the spirit
of conciliation. He hoped that the questions left open for
discussion at the World Conference would be approached in a
truly democratic spirit.
Ambassador L.D. WILGRESS (Canada) affirmed his belief
that the same spirit of cooperation as had produced the draft
Charter would also help to produce the General Agreement on
Tariffs and Trade and would finalize the tariff negotiations
still in progress. The Charter represented inevitably a com-
promise between conflicting views of countries with diverse
economies and philosophies.
H.E. Mr. WUNSZ KING (China) emphasized the great finan-
cial and economic difficulties being faced today by China and
stated that China would wish to examine very carefully any
parts of the Charter which might hinder her immediate recv_
Mr. SERGIO I. CLARK (Cuba) termed the draft Charter the
most daring experiment in commercial affairs ever attempted.
M. ANDRE PHILIP (France) pointed out that the realization
that every country was "in the same economic boat" made it ob-
vious that international cooperation provided the only way out,
The draft Charter was a realistic document constituting a great
advance oh earlier approaches to the problem.
Dr. J.E. HOLLOWAY (South Africa) said that the whittling
down of fundamental principles had brought the draft Charter
into a dangerous situation and any further escape clauses might
be fatal to its success.
J.P.D. JOHNSEN (New Zealand) called attention to some of
the difficulties faced by the smaller delegations. In the last
few weeks economic realities had been forced upon the delegates
and new provisions had been introduced into the Charter, |
GATT Library | my033pd3327 | Second Session of the United Nations Preparatory Committee Conference on Trade and Employment : Progress Report from opening of the Conference on 10 April, 1947 to date | European Office of the United Nations Information Centre Geneva, July 28, 1947 | European Office of the United Nations Information Centre Geneva | 28/07/1947 | press releases | Press Release No. 262 and PRESS RELEASE NO.36-354 | https://exhibits.stanford.edu/gatt/catalog/my033pd3327 | my033pd3327_90260220.xml | GATT_155 | 2,549 | 16,798 | \\
EUROPEAN OFFICE HF TEE UNITED NATIONS
Information Centre Press Release No. 262
Geneva. 28 July 1947.
SECOND SESSION OF THE UNITED NATIONS
PREPARATORMY COMITTEE CONFERENCE
ON TRADE AND EMPLOYMENT
Progress Report from opening of the
Conference on 10 April, 1947 to date.
BRIEF RECAPITULATION OF ITO BACKGROUND
The Economic and Social Council at its first session,
in February 1946, resolved to call an international conference
on trade and employment for the purpose of promoting the ex-
pansion of production, exchange and consumption of goods. At
the same time the Council set up a Preparatory Committee to
prepare for the conference a draft agenda, including a draft
convention.
The first session of the Preparatory Committee was held
in London in Oetobar-Novr,mbe; 1946. In the course of this
session a draft charter for an International Trade Organization
was prepaaed end published (Document E/PC/T/33).
The first session appointed a Drafting Committee to edit
the Draft Charter produced in London. The Drafting Committee
met in New York in January-February, 1947. The results of its
work were published as Document E/PC/T/34.
The second session of the Preparatory Committee began on
10 April 1947, at Geneva and will continue until, approximately,
the end of August. During this session, the Preparatory Committee
is completing its work on the Draft Charter, which will then form
the basic document for discussion at the World Conference. The
Preparatory Committee, during this session, is also concerned
with the drafting of a General Agreement on Tariffs and Trade,
which is to be offered for signature by Governments before the
end of this session.
.P.)wo* Press Release No. 262
Page 2.
It is therefore clear that the Charter under discussion
during this session of the Preparatory Committee will emerge
as the final draft to be discussed on a wider basis at the
forthcoming World Conference.
Similarly, it should be remembered that the Preparatory
Committee is composed of 18 nations of which all but one, the
Union of Soviet Socialist Republics, have taken part in the
work of the first and second sessions and of the Drafting Com-
mittee. In addition, four intergovernmental organizations,
many members of the United Nations who are not members of the
Preparatory Committee and several non-governmental organizations
have sent observers who have given the Committee the benefit
of their views. All members of the United Nations will auto-
matically be invited to the World Conference. In addition,
the Preparatory Committee has recommended to the Economic and
Social Council that invitations should be extended to a group
of non-members which have an appreciable interest in world
trade, to the appropriate authorities in Germany, Japan and
Korea, and to Burma, Ceylon and Southern Rhodesia.
A. CHARTER DISCUSSIONS
The Charter discussions are proceeding within the rigorous
timetable laid down. It is expected that the Sub-Committee stages
will be completed as scheduled on 31 July and that Executive Ses-
sions of the Preparatory Committee will start on 1 August. The
possibility of public sessions during August will be considered.
The texts of Chapters III, VI and VII are agreed, at the
Commission stage.
Discussions of Chapter I, II and VIII are proceeding satis-
factorily. In certain Articles of Chapters IV and V agreement
has not yet been reached on important points of substance (for
details see Part Two of this release).
It is expected that the revised Charter, as a whole, will
be published (and made available to the press with explanatory Press Release No. 262
Page 3.
orvvnts) in the second half of August. The prior publication
of Chapters already revised and agreed is being considered.
As already announced, the Preparatory Committee has re-
commended to the Economic and Social Council that the World
Conference on Trade and Employment should be convened on 21
November 1947 and that the invitation of the Government of
Cuba to hold the Conference in Havana should be accepted. The
Economic and Social Council is likely to consider this during
the current week.
B. TARIFF NEGOTIATIONS
The target date for the conclusion of Tariff Negotiations
is 15 August. A number will finish earlier. Eight pairs of
countries have announced they have reached final agreement,
subject to any adjustment required in the light of other nego-
tiations as they are completed.
In all, 104 negotiations have been opened, out of a
theoretical maximum of 120. In conducting these 104 negotia-
tions more than 500 meetings have been held since the end of
April. A few negotiations require only 2 or 3 meetings but
the more complicated require regular meetings over a long pe-
riod. Canada and the United States, for instance, have held
34 meetings.
C. GENERAL AGREEMENT ON TARIFFS AND TRADE
The General agreement, the draft of which appears in Part III
of the Report of the Drafting Committee (Document E/PC/T/34) has
now been redrafted by a Working Party. It is proposed that all
delegations will obtain the authority of their Governments to
sign the General Agreement by l September. The agreements reached
on the Tariff Negotiations (see above) will be annexed to the
General Agreement in the form of Schedules of tariff concessions.
(P.t.o. ) Press Release No.262
-4-
PART II
MAIN POINTS OF REVISION IN CHAPTERS OF CHARTER ALREADY AGREED
The revised texts of the following Chapters are
agreed:
III, VI, VII
CHAPTER III EMPLOYMENT, EFFECTIVE DEMAND AND ECONOMIC
ACTIVITY
Main Changes One change has been an explicit recognition
of the importance of production, without however shifting
the main emphasis of the chapter from employment. The word
'Production' has been introduced into the title of Article 3
which now reads, "Importance of Employment, Production and
Demand in relation to the Purposes of this Charter."
Other changes have emphasized the following points:
(a) The I.TO. is to be empowered to call Members
together and to initiate consultations "against the
international spread of a decline in employment,
production or demand", in urgent cases in which the
taking of action indirectly through the Economic and
Social Council might involve undue delay.
(b) While it is recognized that difficulties in the
Balance of Payments of a Member may be due to
conditions beyond the control of the affected Member
or of any other Member, an obligation is laid on all
Members concerned to assist in remedying the difficulties
before requiring. the affected Member to reduce
employment or to resort to trade restrictions.
(c) The emphasis on the dangers of deflation in the
earlier draft has been broadened to recognise the
problem of inflation by including reference to the
need for production as well as employment. Press Release No.262
-5-
CHAPTER VI RESTRICTIVE BUSINESS PRACTICES
Main Changes The main change has been the addition of a
new article to follow Article 44, which recognises that certain
services such as Transportation, Telecommunications,
Insurance and Banking are substantial elements of international
trade and which indicates the principles by which they can be
dealt with outside of Chapter VI.
CHAPTER VII INTERGOVERNMENTAL COMMODITY ARRANGEMENTS
Main Changes There have been no fundamental changes in the
aims and principles of this Chapter, but there is now greater
emphasis on expansion of production and consumption. The main
changes of detail relate to (a) the definitions of commodities
which may be subject to intergovernmental agreements, (b)
provision for agreements to expand production and consumption,
and (c) relations with other intergovernmental organizations.
(a) The new text defines the types of commodities
for which new agreements may be concluded. In particular,
the definition of a non-primary commodity has been qualified
so as to exclude entirely highly manufactured goods from the
field of intergovernmental agreements. For those non-primary
commodities which do fall within the new definition, inter-
governmental agreements may be concluded, but only in
exceptional circumstances and subject to additional safeguards.
(b) Agreements involving the regulation of
production, trade or prices have been redefined, in order to
recognise that the purpose of regulation may not always be
restrictive. (Regulation of production and provision for the
possible application of minimum prices may, for example, be
essential to the success of agreements to expand total Press Release No.262
-6-
production and consumption of basic foodstuffs. In such
circumstances the operation of regulatory machinery would
in no way be inconsistent with the aims of the I.T.O.
Charter). The new definition of what are now called
"commodity control" agreements and which are still
subject to certain rigid safeguards and conditions is
therefore designed specifically to exclude expansionist
agreements.
(c) The Article regarding relations with
intergovernmental organizations has been clarified so
as to ensure the closest possible co-operation with
these organizations at all stages of commodity
consultation and agreement. MAIN POINTS OF REVISION AND MAIN POINTS STILL AT ISSUE
IN CHAPTERS OF CHARTER NOT YET AGREED.
The following Chapters are not yet agreed, as a
whole:
I, II and VIII
IV and V
CHAPTER I PURPOSES
CHAPTER II MEMBERSHIP
CHAPTER VIII ORGANIZATION
Consideration of Chapters I, II and VIII is
proceeding satisfactorily. The main point at issue is
likely to concern procedures for voting (Articles 64 and
69) and it is possible that alternative suggestions will
be submitted to the World I.T.O.Conference. Other points
of interest may arise in connection with the discussion of
the composition of the Executive Board (Article 68), the
procedures for the interpretation and settlement of
disputes (Article 86), and the applicability of the Charter
to fissionable materials (Article 37).
CHAPER IV ECONOMIC DEVELOPMENT
This Chapter is generally regarded as one of the
keys to the effectiveness of the Charter as a whole
In general terms, the reasons for the prolonged discussions
are the differences of views which exist as to what
protective measures can be used to promote economic
development, and in what circumstances. A balance has had
to be sought between, on the one hand, the promotion of
economic development of undeveloped countries by the use
of protective devices and, on the other hand, the reduction
and elimination of barriers to world trade (in particular
of quantitative restrictions) which is a fundamental
objective of the Charter. Press Release No.262
The Sub-Committe has completed its consideration
of Articles 9, 10, 11 and part of Article 12. Discussion
continues, however, on the three following issues:
(a) The question of the prior approval of the I.T.O.
with regard to protective measures which would
conflict with the provisions of the Charter, aimed
at eliminating quantitative restrictions.
(b) The question of new preferential arrangements
envisaged as necessary to promote the establishment,
development or reconstruction of an industry where
hampered by the lack of a sufficiently large market.
(c) The provisions for the use of measures in
conflict with the Charter during a transitional
period immediately following the time when a Member
using these measures joins the Organization.
In addition to the above points in Chapter IV
still under discussion, a proposed addition to Article 13
to give explicit recognition in the Charter to foreign
investment as a problem related to economic development
remains to be considered. The main point of this proposal
is that although capital for reconstruction and industrial
development could be supplied through international
organizations, by Government loans, or by private lending,
the Charter should recognize the need for encouraging a
renewal of the flow of private capital which has largely
dried up since the end of the war.
CHAPTER V GENERAL COMMERCIAL POLICY
The Articles of Chapter V can best be
considered in the following related groups rather than
consecutively.
Articles 14, 15 and 24: Most Favoured Nation Treatment,
National Treatmert, National Treatment on
Internal Taxation and Regulations, Reduction Press Release No.262
-9-
of Tariffs and Elimination of Preferences.
Articles 16 to 23 inclusive and Article 37: Customs
Administration and Related Matters, commonly
known as the Technical Articles.
Articles 25 and 27: Quantitative Restrictions
Articles 26, 28 and 29: Balance of Payments.
Articles 30: Subsidies
Articles 31 and 32: State Trading.
Article 33: Expansion of Trade by State Monopolies.
Articles 34, 35 and 38: Emergency Provisions and
Nullification Procedure.
Article 36: Relations with Non-Members.
Articles 14, 15 and 24 Provisional agreement has been
reached on Articles 14 and 15 and on Article 24. The main
trend of the changes has been to define more precisely the
permissible margins of preference (Article 14), to extend
Article 15 to cover cases of countries which, having no
substantial domestic production, might apply new or
additional taxation to protect directly competitive or
substitutable products and to apply more concisely internal
quantitative regulations where products are used in mixing
or processing. A new article relating to cinematograph
films, to replace Article 15, paragraph 4, is being
considered.
Articles 16 to 23 and Article 37. Agreement has been
reached with the exception of minor points. Amongst the
technical changes there is an improved agreement in
tariff valuations not to resort to artificial or fictitious
values. Press Release No.262
Articles 25 and 27. Article 25 dealing with import
restrictions on agricultural and fisheries products has
been broadened to cover restrictions on such products as
are directly substitutable for a domestic product of which
there is no substantial domestic production.
The only change of substance in Article 27
is the omission of "commercial considerations" as a
criterion in the administration of quota or license systems,
because their application by government authorities was
considered impracticable.
Articles 26, 28 and 29: The main point at issue
relates to precisely how it is to be determined that a
Member is in balance of payments difficulties of such a
character that it might be allowed to resort to import
restrictions as a means of safeguarding its external
financial position. A further point concerns the division
of responsibility as between the I.T.O. and the
International Monetary Fund in relation to balance of
payments questions and quantitative restrictions on
trade.
Article 30 This Article now provides for cases where a
Member's exports are adversely affected by subsidies
granted by a non-Member.
articles 31 and 32 No important change was made in
Article 31, but the position of Marketing Boards in
relation to State Trading was revised and will be further
considered by the Preparatory Committee.
Article 32 is still under discussion.
Article 33 The main point at issue is that in the view
of certain delegations, there should be more specific
provision in this Article (or elsewhere in the Charter)
for countries with a planned foreign trade which fall between
the accepted categories of free private trade and State
monopoly, and which consider it necessary to be selective
in determining the sources of their imports and the Press Release No.262
-11--
destination of their exports. In relation to this,
proposals have been made involving a more rigid
relationship between earning abroad and spending abroad.
Articles 34, 35 and 38. These Articles provide the
vital procedures for emergency action, nullification
or impairment of the Charter, and possible ultimate with-
drawal from the I.T.O. Articles 34 and 35 remain
substantially unchanged. Article 38 now provides under
paragraph 2 (b) for a first transitory stage in the
formation of a customs union.
Article 36 The relationship between the I.T.O. and
Non-Members remains unresolved by the Preparatory
Committee, which may decide to transmit several
alternative texts to the World I.T.O.Conference. If
this procedure is adopted the World Conference would be
expected to select for discussion the text most appropriate
to the general situation in which it is then expected
that the Charter will come into effect. |
GATT Library | pd495pw4813 | Second Session of the United Nations Preparatory Committee Conference on Trade and Employment : Progress Report to 1 August 1947 | European Office of the United Nations Information Centre Geneva, August 4, 1947 | European Office of the United Nations Information Centre Geneva | 04/08/1947 | press releases | Press Release No.269 and PRESS RELEASE NO.36-354 | https://exhibits.stanford.edu/gatt/catalog/pd495pw4813 | pd495pw4813_90260221.xml | GATT_155 | 864 | 5,647 | EUROPEAN OFFICE OF THE UNITED NATIONS
Information Centre
Geneva. Press Release No.269
4 August 1947
SECOND SESSION OF THE UNITED NATIONS
PREPARATORY COMMITTEE CONFERENCE
ON TRADE AND EMPLOYMENT
Progress Report to 1 August 1947
Note This Release should be read in conjunction with Release
No. 262 of 28 July.
PART
GENERAL PROGRESS
It is expected that the Sub-Committees examining Chapters
IV and V of the draft charter will continue their work until
7 August. From 8 August to 16 August, Commissions A and B are
scheduled to consider the reports of the Sub-Committees. The
target dates for the final Plenary Sessions of the Preparatory
Committee are 18 and 19 August, when the Committee will consider
the adoption, as a whole, of the Report of the Second Session
of the Preparatory Commission. These Plenary Sessions will
complete the work of the Preparatory Committee which will
probably not be required to meet again The Draft Charter will
then go forward for consideration at the World ITO Conference to
be held at Havana on 21 November 1947. Remaining work in Geneva,
relating to the Tariff Negotiations and the General Agreement on
Tariffs and Trade, will be continued. It is expected that the
Tariff Negotiations will extend beyond 15 August, the original
target completion date.
Publication of the Draft Charter as a whole may be
expected at the time of the final Plenary Sessions. The revised
Chapter VII will probably be published during the current week.
Publication of the details of the completed Tariff Negotiations
will probably be delayed at least until the meeting of whichever
appropriate Parliament or legislative Assembly is the first
to re-assemble. Page 2 Press Release No - 269
PART II
DETAILED PROGRESS ON CHARTER DISCUSSIONS
In addition to Chapters IlI, VI and VII already agreed
(for main revisions see Release No. 262, page 4) Chapters I,
II and VIII have been agreed in Sub-committee.
CHAPTER I PURPOSES
This Chapter has been broadened subject to discussions
still proceeding on Chapter IV, to include, among the
purposes of the ITO (a) encouragement of the international
flow of capital for productive investment, (b) the facilitat-
ing of the solution of problems relating to international trade
in the fields not only of employment and economic development,
but of commercial policy, business practices and commodity
policy, as well.
CHAPTER II MEMBERSHIP
It is now proposed to extend membership in certain
circumstances to territories which have full autonomy in the
conduct of their extedk . commercial relations, but which
are not yet fully responsible for the formal conduct of their
diplomatic relations.
CHAPTER IV ECONOMIC DEVELOPMENT
Articles 12 and 13 remain under discussion (see Press
Release No. 262, page 8).
CHAPTER V GENERAL COMMERCIAL POLICY
Articles 14, 15 and 24. The additional section to
Article 15, relating to filre remains to be discussed. In
Article 24 a change has been proposed, and is yet to be
discussed, which instead of permitting negotiation for
reduction of Tariffs and elimination of preferences either
through the Tariff Committee or on a strictly bilateral basis,
would channel all negotiations through the Tariff Committee and Page 3 Press Release No.269
incorporate the results in the General Agreement on Tariffs
and Trade.
Articles 25, 28, 29 are still under discussion (see
Press Release No. 262, page 10).
Article 33. The situation, as outlined in Press
Release 262, page 10, will probably be covered by textual
adjustments in Article. 26 and possibly other articles to
meet the case of countries with planned foreign trade.
Article 36. On the subject of relations with non-
members the Preparatory Committee will submit three texts
to the World Conference. The three draft texts vary in
dealing with the part proposed for the ITO to play in
relation to the action of members towards non-members.
The texts also vary in regard to the criteria by which the
ITO may approve existing or proposed agreements between members
and non-members, including variations in the allowance to be
made for the effect of such agreements on the member directly
concerned and on other members. All three texts provide that
Members shall not "seek" exclusive or preferential advantages
from non-members, although each of the texts in varying degrees
recognizes the possibility of exceptions being made.
CHAPTER VIII ORGANIZATION
Important discussions have centered round the problem
of the settlement of differences. It is now proposed that the
Executive Board or the Conference of the ITO may request from
the International Court of Justice advisory opinions on legal
questions. But whether the Court is to consider legal questions
only or whether it is also to consider questions of economic or
other facts established by the ITO will remain for the World
.Conference to decide and it is expected that the Preparatory
Committee will submit alternative texts. It will be seen that
the principle of whether the ITO is to be "master of its own Page 4 Press Release No.269
house" is, to some extent, involved.
A further point which will be left for the World
Conference is the suggestion that notes interpreting
certain parts of the Text of the Draft Charter, and
unanimously agreed, should be incorporated in the Charter
as evidence of the intentions of members. |
GATT Library | rg073rk9144 | Second Session of the United Nations Preparatory Committee Conference on Trade and Employment : Progress Report to 12 August 1947 | European Office of the United Nations Information Centre Geneva, August 12, 1947 | European Office of the United Nations Information Centre Geneva | 12/08/1947 | press releases | Press Release No.282 and PRESS RELEASE NO.36-354 | https://exhibits.stanford.edu/gatt/catalog/rg073rk9144 | rg073rk9144_90260224.xml | GATT_155 | 502 | 3,352 | EUROPEAN OFFICE OF THE UNITED NATIONS
Information Centre Press Release No. 282
Geneva. 12 August 1947.
SECOND SESSION OF THE UNITED NATIONS
PREPARATORY COMMITTEE CONFERENCE
ON TRADE AND EMPLOYMENT
---------------------____-____-_____
Progress Report to 12 August 1947
PART I
GENERAL PROGRESS
The target dates for the final plenary sessions of the
Preparatory Committee are now August 21 and August 22, when
it is expected that work on the Draft Charter will be comple-
ted. The target date for completion of Tariff Negotiations
is September 10. Discussions on the General Agreement on
Tariffs and Trade are in progress in the Tariff Agreement
Committee on which all 17 member countries of the Prepara-
tory Committee are represented.
PART II
DETAILED PROGRESS OT CHAPTER DISCUSSIONS
The following Articles have been completed in subcommittee
since the issue of Press Release No.269 of 4 August.
ARTICLE 26.
The general purpose of the original text, which was to es-
tablish terms under which an ITO member in balance of payments
difficulties may restrict the quantity or value of imports,
remains unaltered. The article makes allowances specifically
(a) for the difficulties of post war adjustment, and (b) for
the need to maintain full employment and to develop industrial
and other resources and to raise standards of productivity..
Member cou"tries must undertake to ."play fair' in restoring
equilibrium in their balance of payments and not to exclude
(P.t.o.) Press Release No. 282
Page 2.
imports of "minimum commercial quantities" (such as sample.4
which would damage regular channels of trade. The ITO is to
be the forum for discussion of import restrictions designed
to safeguard balance of payments, and will have powers to re-
command Member countries to withdraw or modify Such restric-
tions. It is recognized that trade or financial speculation
might result from premature disclosure about imposing or with-
drawing import restrictions which are related to balance of
payments difficulties. ITO is, therefore, instructed to
conduct its relevant consultations in "utmost secrecy".
ARTICLE 28 deals with exceptions to the general rule that
quantitative restrictions should not discriminate against the
products of any particular country. It is recognized that when
"a substantial and widespread disequilibrium prevails in inter-
national trade and payments a Member country should, under
certain safeguards, be able to increase its imports from certain
sources without unduly depleting its monetary reserves, provided
that the ITO is fully informed.*
ARTICLE 29 provides the working basis between rTo and the Inter-
national Monetary Fund. ITO will be obliged to consult fully
with the IMF on problems concerning monetary reserves, balance
of payments or foreign exchange arrangements. Subject to an
agreement to be worked out between ITO and IMF. ITO will accept
IMF statistics in these fields and IMF determination as to the
monetary reserve position of an ITO member. Arrangements are
laid down for dealing with cases of ITO Members which are not
members of IMF or vice versa.
* The views of the members of the Subcommittee which redrafted
Article 28 are subject to further instructions from their
Governments. |
GATT Library | tz460yq4769 | Second Session of the United Nations Preparatory Committee Conference on Trade and Employment : Prospect for I.W.O. by Eric Wyndham-White, Executive Secretary, Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment | European Office of the United Nations Information Centre Geneva, August 25, 1947 | European Office of the United Nations Information Centre Geneva | 25/08/1947 | press releases | Press Release No.302 and PRESS RELEASE NO.36-354 | https://exhibits.stanford.edu/gatt/catalog/tz460yq4769 | tz460yq4769_90260236.xml | GATT_155 | 1,459 | 9,077 | EUROPEAN OFFICE OF THE UNITED NATIONS
Information Centre Press Release No.302
Geneva. 25 August 1947.
SECOND SESSION OF THE UNITED NATIONS
PREPARATORY COMMITTEE CONFERENCE
ON TRADE AND EMPLOYMENT
PROSPECT FOR I.W.O.
by Eric Wyndham-White,
Executive Secretary, Second Session of
the Preparatory Committee of the United
Nations Conference on Trade and Employment.
(To be published in the next issue
of the Weekly Bulletin of the
United Nations).
With the publication on August 23 of the Draft Charter
for an International Trade Organization, the stage is set for
the final scene in what is already the longest economic con-
ference in history. Looking back over some 600 meetings in
London, Lake Success and Geneva during the past 10 months,
recollecting the literally thousands of documents issued, the
Executive Secretary might well be expected to take a broad view
of the prospects for an International Trade Organization.
The thirty thousand-word Draft Charter will provide the
programme for the World Conference on Trade and Employment due
to open at Havana on November 21, to be attended possibly by as
many as 75 states and territories which are vitally concerned in
commerce and trade. But the draft Charter is an intensely compli-
cated and highly technical document which cannot be analysed in a
few words, except as to its main intention of unfreezing the
regular flow of goods between countries from the barriers that in
the past have held it back and so prevented countries from
achieving high and stable levels of employment and production at
over-rising standards of living.
Further, the draft Charter, argued and debated in minute
detail by the leading commercial experts of seventeen countries, Press Release No. 302
Page 20
is written largely for experts in their own special language.
It cold, for this reason amongst others, be all too easily
termed impractical or idealistic or out of touch with realities.
This is precisely why I would like to analyse some of the many
questions I have been asked during the past six months by non-
specialists, by the intelligent man in the street who wants to
keep abreast of international developments.
First let me answer the charge that the intention to create
a new international organization with ambitions that are little
short of revolutionary in the field of trade and commerce, is
simply beyond practical possibility. It is significant, say
those critics, that on the very day when the draft Charter is
published, Britain declares sterling to be no longer convertible.
How can there be serious discussion of proposals to reduce trade
barriers when the tide is obviously running :in the opposite
In answering this one may bear in mind that the experts
of the 17 countries which have evolved the draft Charter are by
no means starry-eypd, impractical theorists, they are the working
experts of government departments, familiar with all the day-to-
day problems of world trade. The ITO draft Charter sets down
general principles on which it is hoped that all trading nations
will agree.
These are the rules of fair trading which, if applied in
normal world conditions, would bring a general increase in the
prosperity of nations and would help them to keep their people
fully employed in producing what is needed for consumption both
at home and abroad. But, as everyone knows, normal world
conditions do not prevail today. The ITO draft Charter makes
specific exceptions for these abnormal conditions, such as Press release No. 302
40 Page 3.
balance of payments difficulties. The exceptions are mostly
temporary, they will only apply to a limited extent, and, most
important of all, it is intended that they shall be under
international control through the ITO. Admittedly, the ITO
sets its sails for "fair weather". But it can face up to
economic blizzards and still remain true to its principles.
The second question arises from the first. The draft
Charter, it is said, contains too many so-called "escape"
clauses; that is, provisions which allow a country to adopt
or to maintain, in certain circumstances, the kind of barriers
to trade - import quotas or tariff preferences for instance -
which the ITO is pledged to remove or reduce. It is true that
several of the 17 countries which have constructed the draft
Charter feel that there are too many escapes in the Charter.
But I think they realise that to send to a World Conference a
draft Charter with its head in the clouds of unreality might
well be the quickest way to kill the ideal trading conditions
for which all countries are striving.
The draft Charter therefore is designed to attract every
country, whether it is mainly agricultural like New Zealand or
mainly industrial like Czechoslovakia, whether it is comparati-
vely "undeveloped" like India, or whether it has been highly
developed for many years, like the United Kingdom, to become
members of ITO. There would be no point in creating ITO if
many countries felt they could not join because the rules of
ITO would damage their present state of prosperity or hinder
their legitimate development. Hence the need for "escape
clauses" to deal with the realities of today. They do not
whittle down the broader perspective of ITO looking forward
to stable world trading and monetary conditions which are
essential if the ITO principles of "multilateral" trading (or
the interchange of goods between many countries on fair,
equal terms 're to be nut into practice. Press release No. 302
Page 4.:
i third question concerns mone., It is all very well,
says the criti,7 to set up an international agency to lay down
rules for fair trading for its member., u&t, as recent events
show only too clearly, it is not the goods that matter so mcoh
as the right kind ofcourrecoy with which to buy them. Is it
worth creating a new internatoQnal agency whose success, in
reducing barriers to trade can be completely frustrated if
purchasing power is not fairly distribute .amongst the nations
intecohanging theirgo ds ? .
This is not an easy question to answer. The lack in
many countries today of dollars toubuy the prodjcts of the
dollar countriesb aid the inasilIty of thece countries to
provide these products for themselves is poifuing to a re.nc-
tion rather then an increase i. worlp trade- ITO ;rinciples
cannot ba puteinto prthtico while auese abnormal post-war
conditions persist. ITO itself wouod not have pcwers to help
to rectify these conditions, although it will, as intended, be
vary closely associaIndewiah the iMoarnotional i~netary Fund
wheneverabalence-of-psyments qeestiens arisa. Th.re is, how-
ever, a good case for b lieving that.once more normal conditions
in both finance and trade were restored, the ITO could have a
powerful influence in warding off the trading restrictions
which hove in the pest led ta depressi.n end slumps0
The lesiseuestion rar is an ioune of param ..t importance.
Whet will happen if a number of important trading countries
decide not to join the ITO ? Thas qeestion hos b'en constantly
before the 17-naeion committe. nhioh has unazimcusly approved
the draf. ITO Cecrter0 A prcili se newer wllnot'bA possible
wn il the vie's,of thergeeat concoufso of nations attending
the Havana Conference b.come e, denwe eT,isf- hoviv-ry can be
said : the 17 countaies ae Gen vrareicr.sent.p;octyally every
kind of national coadm. cheand traul.TbQ partica,ar interests Press Release No. 302
Page 5.
of each one have had a substantial effect on the drafting of
every one of the hundred articles. It is, therefore, reasonable
to hope that the countries represented at Havana will find,
when they examine the draft Charter, that their interest have
not been excluded.
But something more positive may be needed : a realisation
that, with the declining success of international negotiations
in the sphere of politics, the need for success in the sphere
of trade and commerce becomes not only the more urgent, but
possibly the only alternative to a long period of chaos amongst
the nations of the world.
There must also be a realization that the great fundamental
objectives of ITO - full production and full employment and
the free flow of goods between all countries - provide the only
means to enable nations to be sure of their individual well-
being. And nations assured of the wellbeing of their peoples
are peaceful nations. If the countries which meet at Havana
give the ITO their support, and insist that ITO shall work
efficiently, the results can bring great and hitherto unknown
benefits, not only amongst governments and in high places, but
as affecting the daily struggle for existence of millions. It
may require a stretch of imagination to associate the ITO draft
Charter with the dinner plate of an Indian roadmender; but in
fact the relationship is by no means in the realm of fantasy. |
GATT Library | ks591yp9017 | Second Session of the United Nations Preparatory Committee Conference on Trade and Employment : Publication of Chapter VII of Draft ITO Charter | European Office of the United Nations Information Centre Geneva, August 15, 1947 | European Office of the United Nations Information Centre Geneva | 15/08/1947 | press releases | Press Release No.286 and PRESS RELEASE NO.36-354 | https://exhibits.stanford.edu/gatt/catalog/ks591yp9017 | ks591yp9017_90260226.xml | GATT_155 | 193 | 1,330 | EUROPEAN OFFICE OF THE UNITED NATIONS
Information Centre Press Release No.286
Geneva. 15 August 1947.
SECOND SESSION OF THE UNITED NATIONS
PREPARATORY COMMITTEE CONFERENCE
ON TRADE AND EMPLOYMENT
PUBLICATION OF CHAPTER VII
OF DRAFT ITO CHARTER
_________-______________________-__
Chapter VII of the draft ITO Charter, dealing with
Intergovernmental Commodity Arrangements is being made
public for consideration at the first meeting of the Interim
Co-ordinating Committee for International Commodity Arrange-
ments on 18 August. It is the first chapter of the Geneva
draft to be made available and is still subject to approval
in the final plenary session of the Preparatory Committee.
The general purpose of Chapter VII is to prevent intergovern-
mental commodity arrangements from obstructing trade, to pro-
vide safeguards by limiting the use of such arrangements to
conditions in which they are justified, and to establish
principles to which they must conform.
There have been no fundamental changes in the aims and
principles of this section of the ITO Charter since it was
discussed at the earlier meetings of the Preparatory Committee
in London and New York, The main alterations in the Geneva
draft are summarized in Press Release No.262, page 5. |
GATT Library | mz305pw2325 | Second Session of the United Nations Preparatory Committee Conference on Trade and Employment : Sub-Committee Reports on Articles 14, 15 and 24 | European Office of the United Nations Information Centre Geneva, August 18, 1947 | European Office of the United Nations Information Centre Geneva | 18/08/1947 | press releases | Press Release No.290 and PRESS RELEASE NO.36-354 | https://exhibits.stanford.edu/gatt/catalog/mz305pw2325 | mz305pw2325_90260227.xml | GATT_155 | 584 | 3,999 | EUROPEAN OFFICE OF THE UNITED NATIONS
Information Centre Press Release No.290
Geneva. 18 August 1947.
SECOND SESSION OF THE UNITED NATIONS
PREPARATORY COMMITTEE CONFERENCE
ON TRADE AND EMPLOYMENT
___________________________________
SUB-CONMITTEE REPORTS
ON ARTICLES 14, 15 and 24
_________________-___--------------
The following Articles have been completed in Sub-Committee
and will be taken in Commission on Monday 18 August:
ARTICLE 14.- General Most Favcured Nation Treatment, states the
fundamental principle of equal treatment on which the I.T.0,
Charter is based. The Geneva draft leaves practically unchanged
the most favoured nation paragraph to the effect that "any ad-
vantage, favour, privilege or immunity granted by any Member to
any product originating in or destined for any other country,
shall be accorded immediately and unconditionally to the like
product originating in or destined for all other Member countries
respectively."
The remainder of this article elaborates.-the exceptions to
the MFN principle allowed for certain existing preferences, in
force in (a) the "British - Commonwealth - Colonial" territories,
(b), the Frenoh Union, (o) the Benelux territories, (d) the U.S.
and its dependent territories and Cuba and the Philippines, (e)
Chile and Peru, and(£) between the Syro-Lebanese Customs Union
and Palestine end Transjordaa respectively, A paragraph has
beed addedto define the margins of the above preferences to be
permitted.
ARTICLE 15.- National Treatment on Internal Taxation and Regulations.
The general purpose of this article, which states that I.T.O.
members shall not put internal taxes or other requirements on
products imported from other I.T.O. members different
from those applied to the same products produced domestically
(P.t.o.) Press Release No.290
Page 2.
remains unchanged. Where there is no substantial domestic
production of like products, the application of new or increased
internal taxes on the products of other Members for the purpose
of protecting competitve or substitutable products is prohibited.
Existing internal taxes will be subject to negotiation with a
view to their reduction in the same way as customs tariffs,
The Article allows for certain exceptions to this general rule
of "equal national treatment", including government procurement
of products purchased for governmental purposes.
Several delegations reserved their position on certain see-
tions of Article 15.
A new Article is recommended in order to provide Special
revisionss Relating to Cinematograph Films. If any I.T.O Member
established or maintains quantitative regulations relating to
films, these regulations mast be in the form .of screen. quotas
and must conform to certain conditions. While under a soreen
quota screen time may be reserved for films of national origIn,
the remaining screen time must not formally or in effect be al-
located among other sources of supply.
Two delegations reserved their position on this Article.
ARTICLE 24.- Reduction of Tariffs and Elimination of Preferences,
states one of the major objectives of the I.T.0, "Each Member
shall, upon the request of I.T.O., enter into and carry out with
other Members as specified by I.T.O, negotiations directed to
the substantial reduction of Tariffs and other charges on imports
and exports and to the elimination of the preferences referred to
in Article 14." The Article lays down _u.>ls for such negotiations,
and for the application of the results achieved and looks forward
to incorporating the results in the General Agreement on Tariffs
and Trade. The second part of Article 24 provides that if the
I.T.O. finds that a Member has failed to carry out its negotia-
tions to reduce tariffs and eliminate preferences, the I.T.O can
determine that any other Member may be entitled to withhold tariff
benefits already negotiated with that Member. |
GATT Library | vs699dx9630 | Second Session of the United Nations Preparatory Committee Conference on Trade and Employment : The Importance of the Tariff Negotiations at Geneva | European Office of the United Nations Information Centre Geneva, September 8, 1947 | European Office of the United Nations Information Centre Geneva | 08/09/1947 | press releases | Press Release No.354 and PRESS RELEASE NO.36-354 | https://exhibits.stanford.edu/gatt/catalog/vs699dx9630 | vs699dx9630_90260237.xml | GATT_155 | 754 | 4,663 | EUROPEAN OFFICE OF THE UNITED NATIONS
Information Centre Press Release No.354
Geneva. 8 September 1947.
TO BE PUBLISHED IN THE
UNITED NATIONS WEEKLY
BULLETIN.
SECOND SESSION OF THE UNITED NATIONS
PREPARATORY COMMITTEE CONFERENCE
ON TRADE AND EMPLOYMENT
The Importance of the
Tarif'f Negotiations at Geneva
Since File beginnig of April when negetiations began,
nearly 700 meetings lave been held in Geneva amongst 19 coun-
tries for the purpose of negotiating tariff reductions. A
total of 107 sets of bilateral negotiations (or discussions
between pairs of countries) have been started, and, of these,
27 have bean completed, and a further 16 are nearing comple-
tion.
What is the significance of these negotiations, why are
they taking place in Geneva, and in what wey are the results
expected to benefit the countries concerned and the world as a
whole ?
The countries ccncerned are those which were entrusted by
the United Nations Economic and Social Council with the task of
drafting a Charter for an International Trade Organisation to-
gether with Syria (wnich belongs to a Customs Union with one
of these countries) . The draft Charater was completed in August
and will be the basic document for consideration at the World
Conference on Trade and Employment to open in Havana on November
21st. These 19 territoies share amongst them some 70 per cent
of the world's trade. It has been truthfully stated that these
negotiations represent by far the greatest international concerted
effort to reduce trade barriers that the world has ever seen.
(P.t.o.) Press Release No.354
Page 2.
Not least in importance is the fact that these negotia-
tions have been proceeding simultaneously with the hammering
out of the 30,000 word ITO Charter. The countries concerned
in drafting each one of its 100 Articles were in no sense mere-
ly engaged on an exercise in academic ingenuity. They have
been bargaining, behind closed doors, for over four months,
item by item, to reduce barriers to trade between each other
and so to provide not only for their own benefit, but as an
example to the whole trading would, a practical indication of
the way in which the principles of the ITO Charter can and must
be put into practice if the straitjacketi of preferences, quotas
and all such forms of restrictions is to be cast off.
As Mr. J.J. Dedman, Australian Minister of Post-War Recons-
truction, said in a broadcast from Geneva on 21 August, "The
Charter cannot stand by itself. The Charter and the proposed
multilateral trade agreement (to which the tariff concessions
will be appended) are integral parts of the general plan to ex-
pand trade. The success or failure of the whole plan now depends
on a similar degree of understanding being reached in the trade
negotiations."
During recent months while world disequilibrium, particu-
larly in currency matters, has been increasing, the task of ne-
gotiating tariff concessions has not proved easy. But progress,
if slow, has been made. Mr. Clair Wilcox, leader of the U.S.
delegation, explained some of the difficulties in Plenary Ses-
sion of the Preparatory Committee on 23 August. "Negotiations
on tariffs, even when confined to a single pair of countries,
are difficult enough. But here in Goneva, together with the
completion of the Charter, we have carried forward a hundred such Press Release No.354
Ppge 3.
negotiations in the same place and at the same tile. It appeared
to many of us, before we began, that the mere physical obstacles
to such an undertaking might be insuperable. But these obstacles
have been surmounted. The machinery of negotiations has been
constructed and oiled and set in motion. The wheels are turning.
Our disappointment is that they have not turned as rapidly as
we had hoped."
Progress has been and is being made in the series of bilateral
discussions amongst the 19 nations at Geneva, in their task of ne-
gotiating a multilateral agreement. But it would be short sighted
not to recognize that serious difficulties have yet to be overcome
and that too much in the way of achievement is not to bo expected.
Nor would it be fair to pre--judge the results.
What is significan is that, with world trading and monetary
conditions about as unpropitious as could be imagined, a start has
been made on a substantial scale and covering a high proportion
of the trading nations of the world, to reduce barriers to trade
and so to stimulate the free flow of goods between countries which
is one of the fundamental objectives of ITO. |
GATT Library | sm313xx2428 | Second Session of the United Nations Preparatory Committee Conference on Trade and Employment : Voting Rights of Non Members of United Nations at I.T.O. World Conference, Havana. (arising out of Document E/PC/T/149 Unrestricted) | European Office of the United Nations Information Centre Geneva, August 5, 1947 | European Office of the United Nations Information Centre Geneva | 05/08/1947 | press releases | Press Release No.272 and PRESS RELEASE NO.36-354 | https://exhibits.stanford.edu/gatt/catalog/sm313xx2428 | sm313xx2428_90260222.xml | GATT_155 | 174 | 1,196 | EUROPEAN OFFICE OF THE UNITED NATIONS
Information Centre
Geneva.
Press Release No.272
5 August 1947.
SECOND SESSION OF THE UNITED NATIONS
PREPARATORY COMMITTEE CONFERENCE
ON TRADE AND EMPLOYMENT
Voting Rights of Non Members of United Nations
at I.T.O. World Conference, Havana.
(arising out of Document E/PC/T/149 Unrestricted)
The following resolution was adopted by the Economic and
Social Council on Friday, 1st August:
"The Economic and Social Council having considered
the resolution of the Preparatory Committee relating
to the invitations to the Conference, resolves that
voting rights at the United Nations Conference on
Trade and Employment shall be exercised only by Members
of the United Nations attending the Conference."
This resolution was adopted by 8 votes to 4 with 6
abstentions;
For
: Canada, Chile, China, Norway, France, U.S.A.,
Turkey, Peru.
Against : Lebanon, India, Czechoslovakia, UK.
Remainder abstained.
The resolution to invite *the Government of the Indonesian
Republic was adopted by 6 votes to 4, with 8 abstentions
For
. Lebanon, India, Chile, Venezuela, Cuba, Peru.
Against : U.K., U.S.A., France, Netherlands.
Remainder abstained. |
GATT Library | zj647zd3424 | Seconde Session de la Commission Preparatoire de la Conference du Commerce et de L'Emploi de L'Organisation des Nations Unies : Délégation Tchécoslovaque | United Nations Economic and Social Council, May 14, 1947 | United Nations. Economic and Social Council | 14/05/1947 | official documents | E/PC/T/W.63 and E/PC/T/W/23-81 | https://exhibits.stanford.edu/gatt/catalog/zj647zd3424 | zj647zd3424_90050194.xml | GATT_155 | 285 | 2,028 | RESTRICTED
ECONOMIC CONSEIL E/PC/T/W.63. 14 May 1947
AND ECONOMIQUE FRENCH
SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH
SECONDE SESSION DE LA COMMISSION PREPARATOIRE
DE LA CONFERENCE DU COMMERCE ET DE L'EMPLOI
DE L'ORGANISATION DES NATIONS UNIES
Délégation Tchécoslovaque.
Amendements à l'art. 16 de la Charte.
Par. 1 :
La délégation tchécoslovaque appuie l'amendement proposé
par la France, la Belgique, les Pays-Bas et le Luxembourg, et
contenu dans le document E/PC/T/W/31.
Par. 5
Ajouter à la fin de ce paragraphe la phrase suivante
"Toutefois, cette règle ne s'appliquera aux dispositions
spéciales afférentes aux droits de transport, que dans les cas
où des produits similaires sont acheminés par le même itinéraire,
dans la même direction et dans les mêmes conditions."
Commentaires
L'application de la clause de la nation la plus favorisée
en matière de dafts de transport, et en particulier de droits
de transport par chemin de fer, exige, en raison du caractère
particulier du régime de ces droits tel qu'il fonctionnait au-
trefois, une clause interprétative de la nature de celle qui
est proposée ci-dessus. La Tchécoslovaquie n'a pas de débouchés
directs sur la mer; aussi a-t-elle un intérêt tout particulier
à obtenir pour elle-même des droits avantageux de la part des
pays voisins qui, par leur réseau ferroviaire, la relient à
des ports présentant une grande importance pour le commerce
tchécoslovaque avec les pays d'outre-mer. Si ces pays appliquent
des dispositions spéciales au trafic tchécoslovaque, la
Tchécoslovaquie accorde, à titre de réciprocité, un traitement
analogue. Une application trop large de la clause de la nation
la plus favorisée pourrait provoquer des répercussions défavo-
rables sur le commerce de la Tchécoslovaquie, qui dépend dans
une large mesure des facilités d'accès à la mer.
UNITED NATIONS
NATIONS UNIES |
GATT Library | jw876bb8985 | Secretariat Redraft | United Nations Economic and Social Council, February 5, 1947 | United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee | 05/02/1947 | official documents | E/PC/T/C.6/W.50 and E/PC/T/C.6/W/26-58 | https://exhibits.stanford.edu/gatt/catalog/jw876bb8985 | jw876bb8985_90230255.xml | GATT_155 | 156 | 1,270 | United Nations Nations Unies
RESTRICTED
ECONOMIC CONSEIL E/PC/T/C.6/W.50
ECONOMIQUE 5 February 1947
SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH
DRAFTING COMMITTEE OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
SECRETARIAT REDRAFT
Article 46
General Statement on Difficulties Relating
to Primary Commodities
[Members recognize that] Disturbances in the relationship between the
Production and consumption of some primary commodities may [present] cause
special difficulties [These special difficulties are different in character
from those which] of a nature general not applying to manufactured goods.
[present generally] [They arise out of such conditions as the disequilibrium
between production and consumption] These difficulties, which are reflected in
the a cumulation of burdensome stocks and in pronounced fluctuations in
prices, [They] may have [a seriously] serious adverse [effect] effects on
the interests of [both] producers and consumers, [Moreover they may have]
as well as widespread repurcussions [which would jeopardize the] jeopardizing
[General policy] general policies of economic expansion. |
GATT Library | sn046gs4462 | Secretariat Redraft | United Nations Economic and Social Council, February 5, 1947 | United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee | 05/02/1947 | official documents | E/PC/T/C.6/W.51 and E/PC/T/C.6/W/26-58 | https://exhibits.stanford.edu/gatt/catalog/sn046gs4462 | sn046gs4462_90230256.xml | GATT_155 | 253 | 1,870 | United Nations Nations Unies
RESTRICTED
ECONOMIC CONSEIL
AND ECONOMIQUE 5 Februa y .er 194'7
SOCIAL COUNCIL ET SOCIAL ORIGIENAL: NGLISH
lNGngAFMITTETCOMO I OF TPHE PREARATMMIORY CETTEE OFNITED NTHE D I7ATIONS
CIFERECE ONN TRADE MEN,AD EMPLOT
ASECEDRRETARIT RAFT
7Article 4
Objectives of Inter-governmmontal Comongimty sArrageent
LIbers agr]ee thatj nter-governmemmntal coriity arrangements may
be employed [to achieve the following objecti]ves: 17 to enable countries
to [find solu]tions omto overce the speoial [ c]mmodity7 difficulties
referredrto in Axticle 46 without resorting to action inconsistent with the
urposes.of the Charter, bynachieviag the following objectives:
[27 (a) To prevent or alleviate the serious economic problems
which may arise when production, adjustments cannot be effected by the
f4ee play of market forces as rapidly as the circumtances require.
3_7(b) To provide, during the period which may be necessary , [a
franework for the consideration end development of measures which
will have as their p]rpose 7 for economic adjustments designed to
promote the expansion of ccnsumption or a shift of resources and
mnncower out of over-expanded industries into new and pvoducti-e
occupations.
4] (c)- To moderate pronounced short-term fluctuations in the
pric of a -prommary canodity. [above and below the level which
sxpresses the long term equilibrium between the forces of supply
and ]emand 7
[5] (d). To maintain and develop the natural resources of the world
and protect them from unnecessary exhaustion.
[5_ (a) To provide for expansion in the production of a primary
commodity which is in such short supply as seriously to prejudice the
s of rpo+sumecsn-mr-r |
GATT Library | wh755bp0644 | Secretariat Remarks on Article 39 | United Nations Economic and Social Council, January 31, 1947 | United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee | 31/01/1947 | official documents | E/PC/T/C.6/W.38 and E/PC/T/C.6/W/26-58 | https://exhibits.stanford.edu/gatt/catalog/wh755bp0644 | wh755bp0644_90230242.xml | GATT_155 | 206 | 1,585 | United Nations
Nations Unies
RESTRICTED
ECONOMIC CONSEIL E/PC/T/C.6/W.38
AND ECONOMIQUE 31 January 1947
SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH
DRAFTING COMMITTEE OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFEREN ICETRN ADIEEMADO DPNTILYME
TASIATECEtuRMPAKS ON ARTICLE 39
Committee IIfI o the First Session of the Preparatory Committee
approved a set of specific instructions to the Draftingmmio=tttee, setting
out those reservations which wema ride and maintained at the First Session
(document E/PC/T/C./WwII.5 of the First Session). The attention of the
DraftingmConmittee is drawn to thesne istructions and to Part II,
ChapteV IT, Section H, page 19 of the Report of the First Session.
The last words of this paragraph may rereii4 later consideration in
the light of the text of Article 1 which will be submitted to the
DraftingmCormittee by themAdninistrative Submco~mittee.
aarxegaph(2 Ca)
The phrase "among publicmmoxuercial enterprises (i.e., trading
agencies of governments or enterprises in which there is effective
government control)" seems closely related to the definition of state
enterprises in Article 31. The reason for the differentiation in
formulation ought to be cleared up or otherwise a text consistent with
Article 31 should be formulated.
Paragraph 3)(e!
This sub-paragraph might read as follows: "Suppressing the
application of technology or invention, whether patented or unpatented". |
GATT Library | gp994wp2477 | Secretariat Suggestions in Connection with the preparation of a Draft Charter by the Drafting Committee | United Nations Economic and Social Council, January 27, 1947 | United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee | 27/01/1947 | official documents | E/PC/T/C.6/W.26 and E/PC/T/C.6/W/26-58 | https://exhibits.stanford.edu/gatt/catalog/gp994wp2477 | gp994wp2477_90230228.xml | GATT_155 | 758 | 4,874 | United Nations
Nations Unies
RESTRICTED
ECONOMIC CONSEIL E/PC/T/C. 6/W. 26
AND ECONOMIQUE 27 January 1947
SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLLISH
DRAFTING COMMITTEE OF THE PREPARATORY COMMITTEE
OF THE. INTERNATIONAL CONFERENECE ON
TRADE AND EMPLOYMENT
SECERTARY SUGGESTIONS IN. CONNECTION WITH THE PREPARATION
OF A DRAFT CHARTER BY THE DRAFTING COMMITTEE
Article 30
The Secretariat submits the following observations on Article 30
(Subsidies) intended to replace those on the same article contained in
Document E/PC/T/C. 6/W.8.
Points intended for consideration by the Legal Drafting Committee
are omitted, and references are made to the chief points raised in
connection with Article 30 in Part II of the Report of the First Session
of the Preparatory Committee. The countries represented by the Delegates
making the points in question are identified below (in so far as possible).
Article 30 (Subsidies)
Paragraph 3
"A system for the stabilization... may be determined by the
Organization not to be a subsidy" etc. Since it is not the system of
stabilization but the amount by which the domestic price exceeds the
export price which is determined not to be subsidy, it appears that some
redrafting is required. The following suggestion may be considered:
"When a system for the stabilization of the domestic
prices of a primary product sometimes result in the
/sale of Page 2
sale of that product for export at a price lower than the
comparable price charged for the like product to buyers in the
domestic market, this fact may be determined. by the Organization
not to imply that the export is subsidized under the terms of"
etc.
Article 30, paragraph 1, line 1: Of, Part II, page 16, paragraph d. (iv)
where it is suggested that the Drafting Committee consider
whether it is necessary to retain the words, "Except as
provided in paragraphs (2) and (4) of this Article."
Article 30, paragraph 1, line 6: Of, Part II, page 16 paragraph d (iii):
The Delegate for the United Kingdom suggested. that the
Drafting Committee be requested to add, after "imports of
such products", the words "or of closely competitive products".
The Delegate for Chile declared. he was not in a position to
judge whether such a request should be made.
Article 30, paragraph 2, lines 6 and 12: Of, Part II, page 16,
paragraph d (vii), recommending that the Drafting Committee
consider the implications of words qualifying the expression
"the like products".
Article 30, paragraph 2, line 18: Of, Part II, page 16,
paragraph d (viii): The Delegates for Brazil, France, and
India felt the period of three years unduly long. "It was
agreed that the question of shortening this period. should.
be taken up at a later stage".
/Article 30, paragraph 2. E/PC /T/C .6/W.26
Page 3
Article 30, paragraph 2 - Of, Part II, page 16, paragraph d(ix): The
Delegate for China suggested that subsidies to promote exports
of 'special commodities" should be permitted in certain countries
until they have attained equilibrium in their balance of of payments.
He also suggested that subsidies on such special exports should
not be subject to the limitation of paragraph 4c. The
Delegates for the United States and the United Kingdom advised
against these amendments.
Article 30, paragraph 3 - Of, Part II, page 16, paragraph d(x): The
Delegates for Australia and New Zealand thought the exemption
under paragraph 3 implicit under paragraph 2. The square
brackets were added at the end of paragraph 3 "to indicate
that suggestions may be forthcoming to cover other exceptional
cases" .
Article 30, paragraph 3 - Of, Part II, page 16, paragraph d (xi): The
Delegate for New Zealand raised the question whether the
domestic price referred to in paragraph 3 should not be that
paid to domestic producers.
Article -30, paragraph 4 (a) - Of, Part II, page 16, paragraph d.(xii):
Suggestion that the Drafting Committee consider Article 30
in connection with Chapter VII (Inter-governmental Commodity
Arrangements) and with Article 66, paragraph 6, "with a view
to simplifying the texts in question".
Article 30 paragraph 4 (b) and. (c) - Of, Part II, page 17,
paragraph d(xiii): The Delegate for China reserved his
position regarding sub-paragraphs 4 (b) and (c).
/Article 30 E/PC/T/C.6/W.26
Page 4
Article 30 (in general) - Of, Part II, page 17, paragraph d (xiv):
The Delegate for the Netherlands thought the Drafting
Committee should consider Article 17 (Anti-dumping and
Countervailing Duties) in connection with Article 30.
He felt that Article 11 should, in the same way as Article 25:2
(a) does for quotas, provide for the legitimation of subsidies
under certain conditions. |
Subsets and Splits