Foreign Relations of the United States, 1950, National Security Affairs; Foreign Economic Policy, Volume I

394.31/12–450: Telegram

The Secretary of State to the United States Delegation to the Fifth Session of the Contracting Parties to GATT, at Torquay

confidential

Washington, December 4, 1950—7 p. m.

236. For Brown from Leddy. Fol represents Dept position re organizational arrangements for GATT. Since discussions commence Wed, no inter-agency clearance being attempted here. Suggest you obtain appropriate clearance in Del at Torquay.

Summary recommendations fol:

1. US shld seek adoption of WP report setting out the organizational proposals below in form of an outline. Report shld not contain any full text of organizational provisions.

2. WP report shld contain fol recommendations:

(a) That there be established under the General Agreement an organization which, in general, wld exercise functions and powers of CP’s as now provided for in GATT.

(b) That the organization shld be set up in such a form as wld entitle it to become a “specialized agency” of UN, competent to enter into relationships with ECOSOC.

(c) That the organization shld be set up by such form of internatl agreement as may be necessary to qualify it as a “specialized agency”, preference being given to form least likely create procedural or other delays in adherence to new organization by present CP’s.

(d) CP’s shld exercise all functions and powers not assigned by them to Exec Board.

(e) Functions and powers to be assigned by CP’s to the Exec Board shld include fol:

(i) In general, to make recommendations to CP’s on any matter on which action by CP’s is required or appropriate under GATT.

(ii) To initiate and conduct consultations under Arts XII, XIII, XIV and XVI and make appropriate recommendations to CP’s.’

(iii) To consider applications under Art XVIII and make recommendations to CP’s.

(iv) To implement Art XV, paras 1, 2 and 3 and to administer Art XV, paras 7 and 8.

(v) To expedite consultations between individual CP’s, e.g., as provided for in Arts XVI, XIX(2), XXII, XXIII(1), and XXVII.

(vi) To convene special sessions of CP’s. (Note: It may be desirable to lodge this power in Chairman.)

(vii) To conduct telegraphic polls in special cases.

(viii) To negot agreements of relationship with ECOSOC and other specialized agencies. (Note: Such agreements, however, will have to be approved by CP’s.)

(ix) To make recommendations to CP’s with respect to annual budget and, generally, with regard to administration of organization.

(x) To perform any specific action or exercise any specific function as may be expressly assigned to Board by CP’s at any regular or special session, provided, however, that CP’s shall not delegate to Board other than on a case-by-case basis the power to take decisions on any matter on which GATT expressly requires a vote by CP’s.

(f) Exec Board shld consist of reps of not less than 12 and not more than 15 of CP’s. Selection of such reps shld be governed by three considerations:

(i) Shld include members of principal importance in field of trade, which shld be permanent members of Board;

(ii) Shld be representative of different geographic areas; and

(iii) Shld be representative of countries representing different types of economy or degrees of economic development to be found within membership of organization.

(g) Secretariat shld be headed by Exec Sec who shld be named by Board.

(h) Exec Board shld meet on call of Chairman or Exec Sec.

(i) Contributions of each CP to expenses of organization, incl tariff negots, shld be based upon importance of each CP in internatl trade.

(j) Seat of organization shld be at (London, Paris, or Geneva, in that order of preference).

[Leddy]

Acheson