Foreign Relations of the United States: Diplomatic Papers, 1945, General: Political and Economic Matters, Volume II

560.AL/9–2545

The Department of State to the Belgian Embassy ⁸

Memorandum

Proposal for a United Nations Conference on Trade and Employment ⁹

With the ending of hostilities with Japan and the restoration of world peace, the adoption by the United Nations of concrete measures and policies to assure the maintenance of employment and to reconstruct and enlarge world trade on an enduring basis has become a matter of urgency.

Constructive long-term policies in the fields of trade and employment are essential to the success of the international economic and political system envisaged by the United Nations Organization and by the specialized international agencies already established or drawn up in the fields of food and agriculture, monetary and exchange stabilization and international investment. Unless long-term trade and employment policies are agreed upon soon, there is grave danger that the pressing economic problems of the transition period, already upon us, may be solved by resort to measures of expediency which will tend to become permanent and thus seriously hamper later efforts at constructive international cooperation in these fields.

It is considered imperative, therefore, that a United Nations Conference on Trade and Employment be held at the earliest practicable date, preferably not later than June 1946.

It should be the objective of the Conference to develop methods of international cooperation with regard to the maintenance of employment and to achieve concrete and definitive agreement among the United Nations with regard to: a) the reduction of tariffs and other trade harriers and the elimination of all forms of discriminatory treatment in international commerce, b) the principles which should govern the institution and operation of intergovernmental commodity agreements, c) the elimination of restrictive trade practices by private business enterprises, and d) the establishment of international machinery for continuing consultation on these matters.

In order to assure the success of the proposed conference, there should be adequate preparation for it, particularly on the part of the principal trading nations of the world. Indeed, the success of the conference may be largely dependent upon the extent to which these nations can develop, in advance, concrete proposals which they would be prepared to support and make effective.

Consideration should therefore be given in the coming weeks as to the best means of facilitating the necessary consultations and negotiations among the principal trading nations.

It may be useful in this connection to indicate briefly the tentative proposals, now being prepared by technical experts within the United States Government, which it is believed might be proposed for the consideration of the conference and as a subject for preliminary consultations and negotiations among the principal trading nations:

A. Employment. Since the prosperity of the various nations is interdependent, and the maintenance of employment is essential to enlarged world trade, there should be an undertaking by each nation that it will take appropriate action designed to maintain employment within its own jurisdiction (avoiding, however, employment measures which aggravate the trade and employment problems of other nations) and that it will cooperate with the other nations in the collection and exchange of information regarding employment problems.

B. Trade. In the field of trade, there should be established an International Trade Organization, the members of which would undertake to conduct their international commercial policies and relations in accordance with agreed principles to be set forth in the articles of the Organization. These principles should provide for:

1. The relaxation of trade barriers of all hinds, including:

a. the substantial reduction of tariffs and the elimination of tariff preferences,

b. the general abandonment of quantitative restrictions on imports and exports (except when used for agreed purposes),

c. the general elimination or limitation of export subsidies, and the establishment of certain requirements with regard to the use of other subsidies affecting international trade,

d. the general elimination of exchange restrictions on commercial transactions,

e. the relaxation of restrictionist practices by state-trading enterprises,

f. the relaxation of miscellaneous barriers to trade such as those involved in the application of internal taxes, customs formalities, antidumping and countervailing duties, marks of origin, et cetera, and

g. the general prohibition of discriminatory trade treatment.

2. The establishment of principles governing the institution and operation of intergovernmental commodity arrangements. These principles should:

a. set forth the circumstances under which restrictive intergovernmental commodity agreements should be permitted (e.g. to control burdensome world surpluses of an agricultural commodity or to combat widespread unemployment in a mineral industry);

b. assure that any commodity agreements entered into shall, in accordance with the objectives of a liberal commercial policy, afford increasing opportunities for satisfying world requirements from sources from which they can be supplied most effectively; and

c. provide for equitable representation by producing and consuming countries in the formulation and operation of commodity agreements.

3. The elimination of restrictive business practices. Member nations should undertake to prevent commercial enterprises within their jurisdiction from participating in agreements, combinations, etc., which restrict international trade or access to international markets or foster monopolistic control of international trade. Certain practices, such as price-fixing, allocating markets, limiting production, etc., should ipso facto be regarded as restrictive. The member nations should cooperate with each other and with the Organization in carrying out these provisions.

The functions of the proposed International Trade Organization would, in general, include the collection, analysis and publication of information relevant to its purposes; the rendering of technical assistance to members; the interpretation of the principles laid down and referred to above; and consultation and settlement of disputes arising out of the application of these principles. The Organization would have sections dealing with each of the three broad fields described above.

Washington , September 25, 1945.

8. Handed to the Belgian Foreign Minister (Spaak) by the Director of the Office of International Trade Policy (Wilcox) at a meeting on September 25, 1945. Mr. Spaak was in Washington as head of a Belgian delegation which opened a series of financial and trade discussions with United States representatives on September 19. For a statement of the result of these conversations, see note to the Belgian Foreign Minister, October 19, vol. iv, p. 111.

   A similar memorandum was handed by the Chief of the Division of Commercial Policy (Brown) to Mr. Ch. J. H. Daubanton, Minister in the Netherlands Embassy, on October 23.

9. In a note of October 3, acknowledging this memorandum, the Belgian Ambassador (Silvercruys) stated that as soon as official invitations were extended the Belgian Government would be happy to notify its willingness to participate in the conference and in a preparatory meeting to which Mr. Wilcox had stated the United States Government intended to invite Belgium.