710 Financial and Economic Advisory Committee/228

Report of Subcommittee II to the Inter-American Financial and Economic Advisory Committee With Respect to Export Control Systems 10

In accordance with the resolution of the plenary session of June 19, 1941, Subcommittee II has undertaken the consideration of the statement (a copy of which is annexed hereto)11 made at that session by the Chairman of the Advisory Committee, the United States member, with reference to organization for considering and handling export control and related policies by the American republics.

[Page 160]

It is the view of the Subcommittee that it is desirable and necessary to devote the materials and products of the Western Hemisphere primarily to the defense of the Hemisphere. This objective may be best realized, and at the same time the essential import requirements of the American republics fulfilled in so far as is feasible, by the creation in each of the American republics of parallel systems of export control involving strict restrictions and control of the exportation of products outside of the Western Hemisphere with a maximum of free commerce within the Hemisphere which is compatible with defense requirements.

The Subcommittee believes that the general problem may be considered in four principal aspects:

The establishment of parallel systems of export control in all of the American republics.
Form of organization for handling export control and importations in each of the American republics.
Estimations of the minimum essential import requirements of each of the American republics indicating the relative importance of various principal uses.
Form of organization for disseminating information regarding systems of export control in existence, the several types of organization and procedures relating thereto, and the outlook regarding the supply situation of the various important products.

The Subcommittee in this report undertakes to consider only (1) and (3).

1.—Establishment of Parallel Systems of Export Control.

Some steps towards the establishment of export controls have been taken by all of the American republics, and the Subcommittee has had before it for study the legislation on the subject of thirteen American republics, copies of which are also annexed.12 As is inevitable, these systems differ considerably in scope and form. Some are limited to specific lists of commodities; others empower the Executive Power to control, at its discretion, the various categories of materials and products. A few envisage the control at once of all exportation, while one, at least, would control all products controlled in other American republics. In view of the development of its manufacturing for export, and its role in production for national and continental defense, the United States of America has imposed one or another form of control over more than sixty percent of its export trade, and its representative has made the following statement of policy in the discourse mentioned above:

“It is the objective of this policy on the one hand to restrict the exportation, and in some cases domestic consumption, of goods produced in the United States to amounts consistent with the demands [Page 161] of the defense program, while on the other hand to facilitate in so far as is feasible the exportation to the other American nations of at least their essential import requirements, and in general as large amounts of particular United States products as are consistent with the exigencies of defense.”

From the variation in the scope and form of the several systems of export control now in vogue there arise a number of practical problems such as for example the question of the control only of the re-exportation of articles imported from one particular country as contrasted with control over all exports of the particular articles, whether imported from any source or produced domestically. Another problem which gives rise to extensive and complex administrative difficulties lies in application by the several republics of controls to varying lists or categories of commodities. As a result, certain American republics have been compelled to limit the issuance of general licenses and to permit the free exportation and re-exportation of the goods therein covered only to such other American republics as happen to control the particular item.

Commerce among the American nations can obviously be made most free under the present world conditions which have occasioned the imposition of all these types of export control, if all of the American republics adopt parallel systems of export control, thus establishing an inter-American system: To this end it is recommended that appropriate legislation be adopted in each of the American republics providing that:

The Executive Power be authorized to prohibit and control both the exportation and re-exportation of materials and products important to national and continental defense, whether imported from any source or produced domestically.
Such exportation and re-exportation be permitted freely to other American republics having parallel systems of control to the extent compatible with the defense program.
Suitable penalties for violations be imposed.

In order to have a better understanding, enclosed herewith is a memorandum prepared by the Delegate of Costa Rica referring to this matter (Annex C).13

Obviously such parallel systems of control will be most effective in making possible the greatest feasible quantities of essential import goods and in permitting a maximum of free commerce within the Western Hemisphere, if the Executive Powers of all of the American republics exercise such control to the greatest degree attainable over identical categories of commodities. To this end, a close coordination of policy will be required, and it is suggested that the Inter-American [Page 162] Financial and Economic Advisory Committee provides the best vehicle for such continuing coordinating functions.

It is accordingly requested that the Governments of the American republics furnish the Advisory Committee with texts of the laws and regulations from time to time adopted in their territories with respect to export control.

3—Estimations of the Minimum Essential Import Requirements of Each of the American Republics.

The broad program in which the United States is engaged of production of materials and equipment essential to national and continental defense has led to a situation of scarcity with respect to many commodities, and the establishment by the United States of a system of control of the export and the domestic consumption of such items. In order to cooperate with the United States in its policy of facilitating, as far as possible, to the other American republics the supply of their essential import requirements, accurate information is needed whereby an estimation of these requirements of each American republic can be made.

With respect to this problem, Subcommittee II suggests the following recommendations:

That through the medium of the Inter-American Financial and Economic Advisory Committee, the American republics be requested to furnish, as soon as feasible, the following information, as accurate as possible, and containing the essential minimum import requirements of the said republics, that is to say:

—Estimations of the amounts of materials listed in Annex D,14 required to be imported during the last two quarters of 1941 and first two quarters of 1942; only to meet the most essential needs of the country:
—For the requirements of the Government:
in matter of defense
in other matters, not included in the following paragraphs;
—For the requirements of enterprises (either official or not) of public services, railroads, shipping lines and other transport agencies.
—For the requirements of projects of national development, as steel mills, aqueducts, shipyards, etc.
—For other commercial and industrial requirements (of a private character).
Comparison of the figures corresponding to each item mentioned in the above paragraphs with the imports of the same items during 1939 and 1940.
The order of preference attributed to each item on account of its urgency or importance.

In order to gather all the information and data the Subcommittee has prepared a model form to be filled by the Governments, for each article listed in Annex D. This form is also annexed hereto (Annex E).15 The employment of these forms is recommended because they will render more easy the task of collecting all the data received.

Dr. León DeBayle

Chairman of Subcommittee II and Delegate of Nicaragua
  1. Approved by the Inter-American Financial and Economic Advisory Committee in plenary session of July 3 and transmitted to the Secretary of State by the Chairman of the Committee, Sumner Welles, July 8, 1941.
  2. Supra.
  3. Not printed.
  4. Not printed.
  5. Not printed.
  6. Not printed.