Memorandum by the Chairman of the Interdepartmental Committee on Trade Agreements (Corse),2 to the President
Subject: Request for Approval of Results of Torquay Tariff Negotions
The Interdepartmental Committee on Trade Agreements herewith requests your approval of the results of the Torquay Conference which has been held, under the auspices of the countries parties to the General Agreement on Tariffs and Trade, for the purpose of arriving at agreement on tariff concessions to be applied under the General Agreement.3 If you approve, the United States will sign, on April 21, the [Page 1246] instruments embodying the results of the negotiations, including principally:
- The Torquay Protocol containing the tariff concessions negotiated at Torquay among 34 countries and containing an amendment to the General Agreement continuing on the original basis for an additional period tariff concessions previously granted.
- Decisions agreeing to the accession of six countries which have negotiated with the parties to the Agreement at Torquay.
By signature of the Protocol the United States will accept the results of the negotiations and undertake to give effect on June 6, or on later dates following such an undertaking by other governments, to tariff concessions negotiated with the following countries:
Belgium, Brazil, Canada, Denmark, Dominican Republic, France, Indonesia, Italy, Luxembourg, Netherlands, Norway, Sweden.
Countries which have negotiated for
Austria, Germany, Korea, Peru, Turkey.
Concessions obtained and granted by direct negotiations in which the United States participated are contained in Annex A.4 Schedules containing all concessions to be granted by each country are contained in Annex B.4
Signature of the Protocol will also constitute acceptance of the obligation to maintain until January 1, 1954, with the usual escape clauses unaffected, concessions previously granted. It will also constitute acceptance of the modifications, withdrawals, and compensations negotiated by certain countries at Torquay.
Signature of the decisions will constitute a vote in favor of accession by each of the countries named in (b) above and by the Philippines, which also negotiated at Torquay. The United States is prevented, by the Philippine Trade Act, from entering into a trade agreement with the Philippines. We did not therefore negotiate with this country and have indicated that Article XXXV of the General Agreement will be invoked in order to prevent the agreement from applying as between the United States and the Philippines; there is no legal bar, however, to voting in favor of accession by the Philippines.
In terms of trade coverage, the United States has secured at Torquay new direct concessions on United States exports valued at over one billion dollars. Additional trade will benefit from concessions granted by third countries in negotiations among themselves. To secure these new concessions, the United States bound or reduced duties on products [Page 1247] imports of which from the respective negotiating countries amounted to about $270 million in 1949. Imports of these same products from all countries amounted to $478 million in the same year. Summary tables containing trade data are contained in Annex C.5
The firming up of most of the concessions previously granted at Geneva and Annecy benefits an export trade of some two and a half billion dollars (partly overlapping with the trade on which new concessions were obtained at Torquay). Considerable adjustments were made by certain countries in their schedules of concessions prior to their acceptance of this undertaking, but in all cases the United States secured adequate compensation in the form of new concessions for all concessions of interest which were withdrawn or modified. For this firming up of old concessions the United States granted only a reciprocal guarantee to continue our Geneva and Annecy concessions subject to the usual safeguards.
There is no dissent by any member of the Interdepartmental Committee to any of these recommendations. Since no agreement was reached with the United Kingdom, Australia, New Zealand, South Africa, India or Cuba, part of the authority to grant concessions which you have previously approved has not been used, and some of the most controversial concessions have not been made, including the principal concessions contemplated on the following: wool, woolen textiles, cotton textiles, earthenware and china, leather goods. All of the concessions for which approval is sought are within the limits of authority previously granted.
A fuller description of the results of the Conference and of the reasons for some of the major decisions taken is contained in Annex D.
The Interdepartmental Committee on Trade Agreements (TAC) was the highest level policy-formulating body in the Executive Branch on United States foreign trade policy and at this time consisted of a member of the United States Tariff Commission and representatives designated by the Secretaries of State, Agriculture, Commerce, Labor, Defense, and Treasury and the Administrator for Economic Cooperation. The State representative served as chairman. TAC was at Torquay during the Torquay negotiations.
The Torquay Conference began on September 28, 1950. For information regarding the United States Delegation, see Department of State Bulletin, October 2, 1950, pp. 553–555. In the 1951 stage of the conference Corse, permanent Vice Chairman of the Delegation, functioned as Acting Chairman. (Willard L. Thorp, Assistant Secretary of State for Economic Affairs, was the Delegation Chairman and the Alternate Chairman was Winthrop G. Brown, Director, Office of International Trade Policy, Department of State.)↩
- For text of the Protocol of Provisional Application of the General Agreement on Tariffs and Trade (GATT) concluded at Geneva, Switzerland on October 30, 1947, see Department of State Treaties and Other International Acts Series (TIAS) No. 1700 (two volumes) or 61 Stat. (pts. 5 and 6). The many agreements that modify, rectify, or provide for accession to the General Agreement are printed as appropriate in the sources cited and also from 1950 in United States Treaties and Other International Agreements (UST). The United Nations Treaty Series also includes both the basic agreement and subsequent protocols. For a comprehensive analysis of the basic agreement of 1947, see Department of State Publication No. 2983, Analysis of the General Agreement on Tariffs and Trade (Washington, Government Printing Office, 1947). For other information relating to the General Agreement and United States adherence thereto, see Foreign Relations, 1949, vol. i, p. 651, footnote 2.↩
- Not printed.↩
- Not printed.↩
- Not printed.↩
- As indicated, the Torquay Conference constituted the third “round” of tariff negotiations to be carried on within the framework of the General Agreement (not to be confused with “sessions” of the Contracting Parties (CP’s when used collectively) to GATT, which met often concurrently with the tariff negotiations, the delegations to the tariff negotiating round and the CP’s session being one and the same). The first “round” of tariff negotiations was held at Geneva during April—October 1947 when 23 countries successfully concluded negotiations and became the original contracting parties to the agreement. The second “round” was held at Annecy, France from April-August 1949, when 10 additional countries were accepted for accession to GATT. For documentation regarding the Annecy negotiations, see Foreign Relations, 1949, vol. i, pp. 651 ff. For detailed information regarding the tariff negotiations conducted at Annecy, see Department of State Publication No. 3651, Analysis of Protocol of Accession and Schedules to the General Agreement on Tariffs and Trade Negotiated at Annecy, France, April–August 1949 (Washington, Government Printing Office, 1949).↩
Tariff concessions (on specific products) which might be negotiated under GATT were of several types: (1) reductions in specified rates of customs duty, or “bindings” of such rates—a guarantee against increases of rates during the life of the agreement; (2) the provision of a “low duty” period, often to be preferred, against a general rate reduction, and variations thereof; (3) the binding of the duty-free status of an article—a guarantee not to impose a tariff on the article if it is being admitted duty free at the time the agreement is concluded; application of a rule adopted by the CP’s to the effect that the binding of a low rate of duty may be accepted as a concession in compensation for a reduction in a high rate of duty. United States law provided for very specific negotiating limits: the United States in a trade agreement might not increase or (more significantly) decrease a tariff rate by more than 50 percent of the rate existing on January 1, 1945 (the Trade Agreements Act of 1934 as amended in 1945 (July 5, 1945), 59 Stat. 410).
Certain basic methods governed the negotiations. They were conducted on a selected product-by-product basis, and governments were free not to grant concessions on particular products. No government was required to grant unilateral concessions, or to grant concessions without receiving adequate concessions in return. Special rules regulated negotiations on products to which a preference applied, contingent upon whether reductions were in the most-favored-nation rate, the preferential rate, or both. Dominating all negotiations was the principal supplier rule, a cardinal principle of United States policy: it was intended that the countries participating in the 1950 negotiations would propose for negotiation only those of their products of which they were or were likely to be the principal suppliers individually or collectively to the countries from whom concessions were asked.↩
- These were the so-called Article XXVIII negotiations. Article XXVIII of the General Agreement specified that concessions initially negotiated between participating governments could be modified or terminated by the granting government after January 1, 1951 (after appropriate consultation). Accordingly, this rule regulated the life of concessions granted at Geneva in 1947 and Annecy in 1949. The Contracting Parties at their Fourth Session in Geneva in February–April 1950 recommended that the January 1, 1951 date be extended to January 1, 1954, in effect “re-binding” the Geneva and Annecy concessions and putting them on the same basis as new concessions to be made at Torquay which would be valid until 1954. It was the intent of the Fourth Session CP’s that such a re-binding at Torquay would if desired be preceded by limited adjustments in the Geneva and Annecy schedules. In fact, the United States was to insist that all such “Article 28 negotiations” be completed before this government entered upon any negotiations at Torquay for new concessions. Documentation on these matters follows.↩