560.AL/10–847
Memorandum by the Director of the Office of International Trade Policy (Wilcox) to the Under Secretary of State for Economic Affairs (Clayton)
[Washington,] October 8, 1947.
Subject: Report on Geneva Conference
- I.
- Character of negotiations.
- 1.
- Length of negotiations.
- a.
- Charter has been under continuous international negotiation by Preparatory Committee for nearly a year.
- b.
- Previous bilateral trade agreement negotiations with U.K., Canada, France required 10 to 11 months. Geneva multilateral negotiations with 17 countries have been under way only 6 months.
- 2.
- Complexity of negotiations.
- a.
- Substantive agreements on
- i.
- Commercial policy,
- ii.
- Cartel policy.
- iii.
- Commodity policy.
- iv.
- Employment policy.
- v.
- Economic development policy.
- b.
- Constitution setting forth structure and operation of ITO.
- c.
- 108 bilateral tariff negotiations conducted simultaneously; U.S. participating in 15 negotiations; deriving indirect advantage from concessions made in other 93 negotiations.
- 3.
- Significance.
- a.
- Wide agreement on long-run trade policy despite present economic difficulties.
- b.
- Largest undertaking to reduce trade barriers in history.
- 4.
- Relation of Charter and general agreements on tariffs and
trade.
- a.
- Charter not effective until completed at Havana and ratified by 20 countries. Will be presented to Congress in 1948. ITO cannot be established and operating before 1949.
- b.
- General agreement on tariffs and trade becomes provisionally effective for those among 19 countries (including Syria and Luxembourg) who can make it so on January 1, 1948; becomes fully effective when formally accepted by all signatories. Acceptance in US by Presidential proclamation under provisions of Trade Agreement Act.
- c.
- General agreement contains common provisions on most-favored-nation treatment, customs matters, quantitative restrictions and state trading parallel to those in commercial policy chapter of Charter. These are similar to provisions in previous trade agreements; are necessary to protect tariff concessions. General agreement contains nothing on cartels, commodities, employment, economic development or establishment of an ITO. But it will commit signatories on essential commercial policy provisions of Charter.
- II.
- Tariff negotiations
- 1.
- Involve most comprehensive action in history for reduction of trade barriers.
- 2.
- Achieved in face of adverse economic conditions.
- 3.
- Great majority of 108 bilateral negotiations now completed.
- 4.
- All U.S. negotiations virtually completed except with British Commonwealth.
- 5.
- All negotiations should be completed and Conference closed this month.
- 6.
- General agreement will have appended list of tariff concessions each country will make to all other countries.
- 7.
- Plan is for simultaneous publication all capitals, when legal formalities are completed, translations made, and lists checked and rechecked, presumably late in November.
- III.
- Charter negotiations.
- 1.
- Achievements of U.S. Delegation at Geneva.
- a.
- Amendments to meet almost all detailed criticisms made in Senate hearings and by business and other groups in the U.S.
- b.
- Addition of article for protection of American motion picture sales in foreign markets.
- c.
- Additional provisions on protection of private foreign investment—an entering wedge for inclusion of this material in Charter and later development of international investment code under ITO.
- 2.
- Major issues at Geneva.
- a.
- Prior approval on industrialization exception to rule against import quotas.
- b.
- Finality of Monetary Fund determination as to balance of payments position of countries seeking to use import quotas to correct balance of payments.
- c.
- U.S. successful in both cases in safeguarding two major exceptions to rule against import quotas.
- 3.
- Issues undecided at Geneva which will arise in Havana.
- a.
- Voting power in ITO—choice between
- i.
- One country—one vote.
- ii.
- Light weighted voting.
- iii.
- Heavy weighted voting.
- iv.
- Combination of two voting systems on certain issues.
- b.
- Relations with non-members—choice between
- i.
- Tight provision ultimately confining tariff concessions to ITO Members.
- ii.
- Loose provisions involving no incentive to join ITO and no penalty for non-members.
- IV.
- Relation of ITO program to
Marshall Plan
- 1.
- Reasons for present magnitude and increase of bilateralism.
- 2.
- Importance to ITO program of solving immediate economic problem.
- 3.
- Importance to Marshall Plan of long-run objectives in ITO Charter.
- 4.
- Recognition of relationship in CEEC report.
- 5.
- Importance of relationship in U.S. foreign policy.