International Trade Flies, Lot 57D2S4, Box 111

Extract From Confidential Report by Mr. Henry F. Grady, Chairman of the United States Delegation to the Fourth Session of the Contracting Parties to GATT, to the Secretary of State


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9. Communication from South Africa on Application of Import Restrictions.

The Delegation’s instruction directed it to take the position that the extent of discrimination in the South African program of import restrictions was not justified by the available information.

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Before discussion of this item was initiated in plenary session, the Delegation learned that South Africa would insist that consultation had been concluded during the Third Session at Annecy and that the matter should not be considered a separate agenda item. Telegraphic instructions from the Department stated that the question was being considered by the International Monetary Fund and that the Delegation should seek to postpone substantive discussion until the Fund’s report had been received by the Contracting Parties. In order to avoid protracted controversy in plenary session, that might develop into a discussion of policy considerations contrary to the Departments instructions, the Delegation arranged a meeting with the British and South African Delegations. All three Delegations agreed that it would be best to postpone a debate of the issues at this time, and a resolution was drafted which took note of the fact that the Fund was studying the matter and authorized the working party on financial matters to take up the question after receipt of the Fund’s report. This resolution was adopted by the Contracting Parties.

When the Fund’s report was received, it stated that the general level of South African restrictions was justified on balance of payment grounds, but that the discriminatory aspects of the restrictions required further study. During the discussions in the working party, the South African Delegate continued to insist that consultation under Article XII had been concluded at the Annecy Conference. He received support in this position from the other Commonwealth countries.

The report from the Fund on the discriminatory aspects of the South African restrictions was not received during the course of the Session and in line with its instructions, the Delegation was able to have consideration of the matter postponed. A report was approved, which while it concluded that consultation under Article XII (4) (a) had been completed, also stated that the report by the Fund on the discriminatory aspects of the South African program had not been received and that therefore further consideration would have to be deferred. This procedure leaves the way clear for such action at the next session as may be deemed desirable in the light of the Fund report, without the necessity of making a specific complaint under Article XII (4) (d) in order to reopen the matter.