Foreign Relations of the United States: Diplomatic Papers, 1945, The British Commonwealth, The Far East, Volume VI

611.4131/5–146

Draft Combined Minutes of the Meeting of the United States-United Kingdom Committee on Commercial Policy

[Washington,] December 1, 1945—11:30 a.m.

Present:	Mr. Clair Wilcox (In the Chair)
	U.S. Representatives	U.K. Representatives
	Mr. Oscar B. Ryder	H. E. Lord Halifax
	Mr. Robert Schwenger	Lord Keynes
	Dr. Amos Taylor	Sir P. Liesching
	Mr. Norman T. Ness	Prof. L. C. Robbins
		Mr. R. J. Shackle
	Others Present (U.S.)	Others Present (U.K.)
	Mr. George Bronz	Mr. J. H. Magowan
	Mr. Lynn R. Edminster	Mr. E. L. Hall-Patch
	Mr. Charles Harley	Mr. F. G. Lee
	Mr. Arthur Smithers	Mr. B. Cockram
	Mr. Leroy D. Stinebower	Mr. P. Bareau
	Mr. Frank A. Waring
	Secretaries
	Mr. Winthrop G. Brown
	Mr. John M. Leddy
	Mr. P. S. Young

1. The Chairman, in opening the meeting, said that he had been asked by Mr. Clayton to express his regret that, owing to ill-health, he was unable to attend this final meeting of the Committee on Commercial Policy.

2. Comtrade 1 Revised as of November 5th, 1945.²⁹

Mr. Wilcox explained that this document included both the amendments to the earlier texts of Comtrade 1 which had been agreed in U.S./U.K. Sub-Committees and also those formally adopted at previous plenary sessions of the Comtrade Committee. He said that he believed that the U.K. side had certain points which they wished to place on the record in connection with this document.

3. U.K. Comments on Comtrade 1

Sir Percivale Liesching said that he had the following points to make:

(a) Non-Tariff Preferences (Reference Chapter III, Section B, paragraph 1, and 4th Plenary Minutes, paragraph 2).³⁰

Sir Percivale Liesching said:

“On non-tariff preferences I refer to a point which was made at the 4th Plenary meeting and the subsequent discussions, and would place on record our view that the principle of negotiating tariff preferences applies also to trade preferences other than tariff preferences”

Mr. Wilcox in reply, said:

“We (i.e. U.S.) understand that this statement is made in the light of the comment offered by the U.K. side at the 4th Plenary—namely, that to the extent that tariff preferences may remain after the bilateral negotiations, these margins of preference may be reflected in the operation of State trading monopolies. We do not understand that the U.K. members mean to suggest that discriminatory quotas or exchange controls must be negotiated individually. Otherwise the general quota and exchange control provision would have no meaning.”

Sir Percivale Liesching replied that what he had just said was not intended to relate to exchange preferences. It was true, as Mr. Wilcox had said, that the U.K. point had originally been raised when State trading was under discussion. As regards preference under quotas the U.K. attitude was as he had given it in the statement which he had just made. The question was no doubt one which would come up for discussion at the Spring Conference.

(b) Import Restrictions on Balance of Payments Grounds (Chapter III, Section C, paragraph 2)

Sir Percivale Liesching said:

“We should like to place on record that in the administration of quotas, when they are applied on balance of payments grounds, our intention is to have regard to commercial considerations, such as price. We are not necessarily prepared to pay more for things we can get cheaper elsewhere merely because they have a past history.”

Mr. Wilcox said that the U.S. side understood this.

(c) The International Trade Organization (Chapter VI)

Sir Percivale Liesching said:

“On the subject of organization, there are some points, such as voting procedure, amendments to the constitution, and relations with other specialized agencies, on which we have not formed any final judgment.

On one of these points (namely voting in what is called the Conference of the International Trade Organization) we feel that the present wording in Chapter VI, Section C, paragraph 2, tends to prejudge the issue in favour of ‘one State, one vote’.

We have not made up our minds on these points, but will put forward our views about them at the Spring Conference.”

Mr. Wilcox said that the U.S. side understood that the position of the U.K. representatives on this point was reserved, and that further discussion would take place at the Spring Conference.

Lord Keynes said that he earnestly hoped that further thought would be given to the question of voting. From his experience at the Peace Conference after the first World War he could say that the principle of “one State, one vote” was extremely dangerous. The smaller nations, by having a greater preponderance than their status merited, could wreck plans upon which the greater nations were agreed. He said that a satisfactory solution to this problem had been reached at Bretton Woods and he therefore strongly recommended that the I.T.O. should follow this precedent. The voting arrangements of the I.T.O. need not, he thought, be exactly the same as Bretton Woods. But he thought that as Bretton Woods was a precedent on analogous economic matters, voting in the I.T.O. should be on the same lines. Mr. Wilcox said he felt that there were differences between the two cases, and he would prefer not to discuss their relative merits now. Further thought would, however, be given to the question of voting and full discussion would take place at the Spring Conference.

4. Printing Errors in Comtrade I.

Mr. Wilcox said that the U.S. side wished to place two points on the record:

(a) In the Printed Copy of Comtrade I, in Section B.³¹ (Tariffs and Preferences) the word “international” had inadvertently been omitted from the final words of the first sentence of paragraph 1 which should read “as part of the mutually advantageous international arrangements contemplated in this document”.

(b) In Chapter VI of Comtrade I, Section E, paragraph 4(b) (i) (The Commission on Business Practices) it had been agreed in discussion with the U.K. side that, in order to bring the passage into line with the revised text of Chapter IV, subparagraph 1(b) should read “Inquire into complaints regarding activities” etc. The introduction of the words “complaints regarding” had been agreed in Sub-Committee after Comtrade I had been sent to the printers. Efforts had been made to get the words inserted but without success, and the words did not appear in the printed copy.

Mr. Wilcox said that the record of the 7th and final meeting of the Committee on Commercial Policy should show that these words i.e., “international” in Section B and “complaints regarding” in Section E. para: 4(b) (i) had been inadvertently omitted in the printed document. He thought it preferable not to attach an errata sheet to the document as this would tend to draw attention to the omitted words and give them an importance which they did not merit. The understanding of the substance of the passage was perfectly clear. Sir Percivale Liesching said that he had consulted London on these points and the U.K. side agreed that, for the reasons given by Mr. Wilcox, it would be undesirable to issue a corrigendum slip. The document would therefore appear in the U.K. in the form in which it was printed in the U.S.A. This, however, would be done on the understanding that the U.K. Government were at liberty to say, if necessary, in public that the words had been omitted in error. Mr. Wilcox agreed.

5. Adoption of Comtrade I.

Sir Percivale Liesching said that the U.K. side had no further points for the record and concluded by saying:

“The United Kingdom members of the Comtrade Committee are in full agreement on all points of importance with respect to the proposals in Comtrade I”.

Mr. Wilcox said that the U.S. side also had no further comments on Comtrade I and that there was agreement on the U.S. side on all important points in that paper. The paper was then formally adopted.

6. Shipping Subsidies.

Mr. Wilcox said that in the course of the Committee’s discussions the question of shipping subsidies had been raised. He desired to place the following statement on the record:

“The United States agrees that the collection and examination of data relating to shipping and ship-building subsidies and the analysis of the effects of such subsidies upon international trade would be a desirable function to be performed by some international organization which would study such questions and make recommendations relating thereto.

It is our position, however, [that?] the I.T.O. is not the proper body to assume jurisdiction over this question for the following; reasons:

1. Shipping is only one form of transport, and should not be dealt with independently of other forms of transport, particularly aviation.

2. Shipping problems involve many closely interrelated elements of which subsidies are only one.

a. Other types of protection are frequently more injurious to the free flow of trade than subsidies; e.g. exchange control for shipping payments, deferred rebates and other restrictive shipping conference practices, discriminatory tariffs and preferential through rates, tie-ins between carriers and shippers, etc.

b. Important problems of national and international security are involved in shipping subsidies which are outside the scope of I.T.O.

c. Problems of competition within the shipping field between types of vessels and types of operations, which raise questions of rates, conferences, pools, surplus tonnage, operating costs, etc., must be considered in conjunction with subsidies.

3. In view of these considerations, the inclusion of shipping subsidies within the jurisdiction of I.T.O. would lead either to inadequate consideration of one part of a much larger problem, or the discussion of all shipping questions in I.T.O.

4. Tentative proposals have been made for the establishment of a permanent Transport and Communications Commission under the E.S.C.O.C.³² of the United Nations Organisation, and unofficial suggestions have also been made that a permanent international shipping organization take the place of the United Martime Authority when it goes out of existence on March 2, 1946. With these developments pending, the allocation of segments of shipping problems to other agencies would prejudice consideration of transport problems as a whole.

The United States would be glad to discuss with the United Kingdom what body other than I.T.O. should appropriately study shipping questions and the scope and terms of reference of such a body.[”]

Sir Percivale Liesching replied:

“Mr. Chairman we take note of your statement and do not object to your proposal that shipping subsidies should be dropped from the commercial policy discussions and that they should be pursued in another context. We wish, however, to place two points on record—

The first is to emphasise again the extreme importance of this matter to the United Kingdom in view of the contribution which shipping income makes to her external balance of payments. In this respect the question is highly germane to the general subject matter of the present Anglo-American discussions.

The second point is that our Government are not ready to be committed at this stage to remit such questions to the Transport and Communications Commission of the Economic and Social Council. The terms and functions of that Commission have, we understand, not yet been considered.”

7. Adoption of Comtrade 3 (Revised as of 5th November, 1945)³³

Mr. Wilcox asked whether the U.K. side had any comments on this document.

Sir Percivale Liesching replied that the U.K. members of the Committee were agreed upon the procedure indicated in Comtrade 3 for negotiating and implementing the proposals in Comtrade I.

Mr. Wilcox thanked Sir Percivale Liesching and said that there was also agreement on the U.S. side.

Comtrade 3 was formally adopted.

8. Adoption of Comtrade 10–Joint Report to Combined Top Committee.

Mr. Wilcox read a draft Joint Report (Comtrade 10)³⁴ to the Top Committee as follows:

• “1. The Combined U.S.–U.K. Committee on Commercial Policy, having completed its work, presents to the Combined Top Committee the following documents:

  (i) The document entitled “Proposals for Consideration by an International Conference on Trade and Employment” and bearing the reference “Comtrade–1” (revised as of November 5, 1945) and

  (ii) The document bearing the reference “Comtrade-3” dated November 5, 1945, indicating the procedure for negotiating and implementing the proposals in Comtrade–1.

• 2. There is full agreement within the Committee on all important points with respect to the proposals in document (i), above.
• 3. There is also agreement within the Committee upon the procedure indicated in document (ii), above, for negotiating and implementing the proposals in document (i).
• 4. The Committee recommends that the two documents be submitted to the United States and the United Kingdom Governments for their favorable consideration, and invites the Top Committee to secure and record the agreement of the two Governments to give general support to the proposals contained in these documents and to use their best endeavors to bring the international discussions envisaged to a successful conclusion, in the light of the views expressed by other countries.”

Lord Halifax said the U.K. side agreed to it. The report was thereupon adopted.

9. Conclusion of Proceedings.

Mr. Wilcox said that with the adoption of the Joint Report the work of the Commercial Policy Committee was at an end. They were most gratified that this part of the U.S./U.K. negotiations had come through to such a happy conclusion, and he thought that agreement on the issues which had been before the Committee held out real hopes for the peace of the world.

Lord Halifax said that he wished to record on behalf of the U.K. group the appreciation which they all felt of the manner in which these negotiations had been conducted. He had not been so closely connected with the work involved as other members of his group. But he was left with the feeling that the happy agreement to which the Chairman had led the Committee would be a prelude to agreement on other issues. It was, he hoped, a good augury for larger things to come.

Sir Percivale Liesching said that, before the final session of the Comtrade Committee rose, he would like to make a few remarks on behalf of himself and his colleagues. They all remembered the important series of meetings in plenary session at which they had broken successfully into the main commercial policy topics under the wise and patient chairmanship of Mr. Clayton. They joined in wishing him a speedy return to good health.

A smaller number of officials of both sides, under the authority and guidance of the main Committee, had been entrusted with the working out of many points of principle and detail. If he might speak of that working party which had spent many long days and weeks of arduous work under the Chairmanship of Mr. Wilcox, he would like to say this on behalf of the U.K. officials who took part: they were grateful to Mr. Wilcox for his steady guidance; and they had as civil servants—if he might speak professionally—a profound respect and admiration for their opposite numbers; and as men they had, both for Mr. Wilcox and for his colleagues, feelings of high personal regard and friendship.

Mr. Wilcox said that the problems with which they had had to deal had been difficult and the way had not always been easy. Speaking for his colleagues and himself he had found the work extremely interesting and the contacts a source of great personal satisfaction. They hoped that these pleasant contacts would be renewed in the spring and summer.

The Chairman then declared the meeting concluded.

29. See footnote 8, p. 160.
30. The fourth meeting was held on October 5; minutes not printed. Paragraph 2 reads as follows: “With regard to preferences under state trading, Sir Percivale Liesching suggested that in so far as tariff preferences remained after the bilateral negotiations, it would only be right and proper that these should be reflected in the operations of state-trading monopolies. He mentioned the point at this stage in order that there should be no doubt about the attitude of the U.K. side; but he thought that its discussion in the state trading context could profitably wait till there had been a further exchange of views about tariff preferences.” (611.4131/5–146, Folder 3)
31. Reference is to chapter III, section B.
32. Presumably reference is to the Economic and Social Council of the United Nations (ECOSOC).
33. See footnote 8, p. 160.
34. Dated November 19, 1945.