611.0031/428
The Chairman of the Subgroup of the Interdepartmental Reciprocity Group ( McClure ) to the Secretary of State
In accordance with the recommendation of the Sub-group3 of the Inter-Departmental Reciprocity Group which has been considering the question, there are attached hereto copies of draft bills,4 for possible presentation to Congress, authorizing the President (1) to enter into a multilateral agreement for a horizontal ten per centum reduction in tariff duties and (2) to enter into bilateral reciprocity arrangements for such reductions in the tariffs of the contracting countries as may be agreed upon.
The two bills may preferably be put together as a single bill if such course would not make it more difficult to obtain enactment in Congress. It seems possible, indeed, that the form of a single bill would facilitate passage through Congress. It will be noted that the two bills have precisely the same stated objective.
In each case it is presupposed that the action of the President shall be by Executive Agreement. It seems desirable that such enabling legislation should be enacted as soon as possible in preparation for the forthcoming monetary and economic conference, as a substantial means of resuming international trade, and as a gesture calculated to improve the international economic atmosphere.
The bill authorizing a horizontal reduction presupposes that the monetary and economic conference will take appropriate action with reference to grosser evils, such as quota restrictions, prohibitions, and exchange control. As drafted, it leaves wide discretion with the President. This seems necessary because of the uncertainty of the future of the most-favored-nation clause. Should the obligations of the clause, by general agreement, be cancelled with reference to the reciprocal favors of general conventions, it would seem feasible for the United States to enter into a horizontal reduction agreement with a few important countries. Should the obligations of the most-favored-nation clause remain as at present, however, such horizontal reduction agreement would scarcely be feasible unless substantially all countries should become parties.
The draft bill authorizing bilateral reciprocity agreements presupposes the continued maintenance of the unconditional most-favored-nation clause, asks for wide discretion for the President and, lest [Page 923] Congress should consider the authorization to cut existing duties by as much as fifty per cent too high without some Congressional supervision, provides also that the Congress may, by affirmative action, veto a particular agreement within a limited time. If the latter provision is not necessary, it may appropriately be omitted, but it seems preferable to have a wide margin of reduction with the veto than to omit the veto and leave the President with only a narrow margin of reduction.
- The group that met on March 3 to consider the draft bills consisted of: Department of State—Wallace McClure (Chairman), Herbert Feis, Frederick Livesey, Harry C. Hawkins, Henry L. Deimel, Jr.; Department of Commerce—Thomas R. Taylor, Louis Domeratzky; United States Tariff Commission—Benjamin B. Wallace.↩
- Not printed.↩