394.31/12–450: Circular telegram
The Secretary of State to Certain Diplomatic and Consular Offices 1
Circular 229. In next few days, probably Wed Dec 6, White House will issue statement along fol lines:
Begin statement. Pres has decided ask for legislative auth to increase effectiveness of US participation in GATT. Proposal to authorize US participation in ITO will not be reintroduced in Congress.
Now more important than ever that economic unity of free world be strengthened and causes of commercial friction among friendly [Page 788] countries eliminated. In view of problems facing US Congress and other legislatures under present conditions, clear that this objective must be achieved by programs with best chance of early results.
For US, this means that trade agreement program must be continued and administration of GATT strengthened. GATT is first multi-nation trade agreement, a landmark in internatl commercial relations. GATT has achieved remarkable results in trade barrier reduction, while suffering under serious handicaps. Handicaps include lack of permanent Secretariat, lack of continuing intersessional machinery, present provisional nature of application by govts. These handicaps must be removed, and a small organization organized on a flexible basis created.
For US, virtually all changes in legislation required for definitive application of GATT are embodied in Customs Simplification Act, introduced in 81st Congress. This legislation, together with certain other proposed changes in law, will be resubmitted to 82nd Congress to make definitive application possible. End statement.
Request you immed inform appropriate officials of govt to which accredited of US decision and reasons therefor, and report reactions.
In addition to above, you may wish stress: (a) necessity at this time to avoid prolonged period consideration by legislatures various countries, which wld be necessary prior to ITO adoption; (b) undesirability launching new large-scale internatl organizations at this time; (c) fact that passage of time has rendered some details of ITO obsolete and others unnecessary by reason of work of other internatl organizations.
At your discretion, you may supplement statement above by observation that this decision in no wise to be construed as abandonment of US support for any of basic principles underlying ITO. US continues to support these objectives. Full employment objective being handled through ECOSOC. Stimulation of internatl investment and aid to underdeveloped countries proceeding on important scale through Point IV, ExIm Bank, Internatl Bank, bilateral FCN treaties, certain ECA programs. ITO Charter rules on commodity agreements are in effect on interim basis through ECOSOC resolution. US will continue to press, in cooperation with other countries, for prevention of cartel practices.
Plos request confidential treatment this info until White Housue release.
- Circulated to 38 posts and the U.S. Delegation at Torquay. The Torquay Delegation had been notified immediately on November 21 of the President’s decision by teletype conversation which was confirmed by telegram 191 (to Torquay), November 21, 7 p. m., 394.31/11–2150.↩