Foreign Relations of the United States, 1949, National Security Affairs, Foreign Economic Policy, Volume I

560.AL/6–2449: Circular airgram

The Secretary of State to Certain Diplomatic Missions ¹

confidential

Washington, June 24, 1949.

This airgram relates to the project for the establishment of an International Trade Organization (ITO) and the problem of maintaining the continuing interest and support of other countries for this project and of reassuring them of the high importance which this Government attaches to the ITO.

At the United Nations Conference on Trade and Employment, which was held at Havana from November 21, 1947 to March 24, 1948, a proposed Charter for an International Trade Organization was completed. This achievement marked the culmination of some two years of negotiation directed toward the development of an ITO. The Charter as drawn up at Havana was then submitted to the Governments represented at that Conference for their approval. The approval of 20 countries is required to put the Charter into force.

From the outset it was clear that the prospects for establishing the ITO hinged largely on whether or not the United States would accept the Charter. This Government was the principal inspirer of the project and the prime force in its development. The conceptions in the Charter are largely those which have guided the foreign economic policy of this country in the past fifteen years. With the United States as a principal trading country and economic power of the world, the participation of this country in the ITO is essential to the establishment and successful functioning of such an organization.

As a result of these considerations, most countries of the world have been marking time and awaiting action on the Charter by the United States before they themselves take action. To the Department’s knowledge only two countries, Liberia and Australia, have approved the Charter, the approval of Australia, however, being conditional upon acceptance of the Charter by the United States and the United Kingdom.

So far as the United States is concerned, the President has submitted the Charter to Congress for approval,² and it now awaits hearings before the Foreign Affairs Committee in the House. Because of the pressure of other business, notably the ERP, the North Atlantic Pact, and domestic matters, it now appears that it will not be possible to complete consideration of the Charter at this session.

The Department is concerned that this delay in United States action on the Charter and in the establishment of the ITO may result in a loss of interest and support by other countries for this program and in a questioning as to whether the United States will ever approve the Charter and as to whether the ITO will ever come into force. These countries may feel some measure of skepticism that this Government is in fact wedded to and intends to follow the liberal principles of economic policy espoused in the Charter and that these principles offer any sound guide for their foreign economic policy.

You are therefore instructed, unless you perceive objection, to approach an appropriate, high-level official in the government to which you are accredited with a view to reassuring such government as to the intentions of the United States regarding the Charter. You should indicate that the Administration intends to seek the earliest possible approval of the Charter and that only the pressure of other urgent business, such as the ERP, the North Atlantic Pact, and domestic matters, has prevented Congressional consideration of the Charter thus far. You should point out that if the Congress meets this fall, an effort will be made to get the Charter considered at that time. You should indicate further that if there is no fall session of the Congress, it is intended to press ahead with the Charter at the next regular session beginning in January. Finally, you should emphasize the high importance and value which this Government attaches to the objectives and principles of the ITO Charter as a guide to the conduct of international economic policy and as a basis for the promotion of prosperous and peaceful relations among the nations of the world. In this connection you may wish to refer to the fact that in his latest foreign policy address of June 11, 1949 President Truman reemphasized the need for “a permanent international trade organization to apply standards of fair dealing in commerce among nations”.

In order to stress the importance this Government places on the ITO program, it is requested that the head of mission or the next highest ranking officer communicate the foregoing to the appropriate, high level official in the government concerned.

This airgram is repeated to USDel, GATT, Annecy, for information only.

Acheson

1. Sent to Canberra, Brussels, Rio de Janeiro, Rangoon, Ottawa, Colombo, Santiago, Canton, China for Embassy Office, Habana, Paris, New Delhi, Beirut, Luxembourg, The Hague, Wellington, Oslo, Karachi, Johannesburg for Southern Rhodesia, Damascus, Capetown, London, Bogota, Cairo, San Salvador, Athens, Rome, Mexico City, Manila, Copenhagen, Stockholm, and Annecy.
2. The President’s message in transmitting the Habana Charter to the Congress, asking for approval in a joint resolution, together with an explanatory memorandum from the Secretary of State, is printed in 81st Congress, 1st session, Senate Document No. 61 (April 28, 1949). There is documentation in the file series 560.AL, which is not printed, that deals with the question of whether Congressional approval should be sought through the joint resolution or the treaty process; although Senate leaders of both parties seemed to favor the latter, the Executive seems never to have considered seriously any alternative to the joint resolution.