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:

Contracting parties

Belgium, Brazil, Canada, Denmark, Dominican Republic, France, Indonesia, Italy, Luxembourg, Netherlands, Norway, Sweden.

Countries which have negotiated for accession

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.

Carl D. Corse
Annex D

Memorandum by the Interdepartmental Committee on Trade Agreements


Results of the Torquay Negotiations

The Third Set of Tariff Negotiations under the auspices of the Contracting Parties to the General Agreement on Tariffs and Trade convened at Torquay, England on September 28, 1950 for the purpose of furthering the reduction of tariff barriers by multilateral agreement within the framework of the General Agreement on Tariffs and Trade [Page 1248] of October 30, 1947.6 These negotiations are now in their final stage and if their results are approved by the President, the United States will sign the Torquay Protocol on April 21, thereby accepting these results and obligating the United States to give effect to its concessions on the forty-sixth day following signature or on such later dates as the countries with which individual concessions were negotiated give effect to their concessions.

As were past conferences of this kind, this conference was conducted by means of a series of simultaneous bilateral negotiations among pairs of participating countries, the bilateral negotiations in this case numbering about 150. At the close of each successful negotiation, the concessions granted by each country were circulated to all other participating countries for inspection of overall results. After the close of this multilateral stage, which is now in progress, each country’s concessions to all others, with any appropriate modifications, will be incorporated into the agreement in the form of a single list of concessions which will be granted to all parties to the agreement.7

[Page 1249]

Three groups of bilateral negotiations were carried on at Torquay: (1) negotiations by countries already parties to the General Agreement for the purpose of putting concessions granted at Geneva in 1947 and at Annecy in 1948 on a firmer basis for an additional three years; (2) negotiations among the contracting parties for new concessions among themselves, beyond those previously negotiated at Geneva or Annecy; (3) negotiations by six new countries which wish to accede to the agreement, such negotiations being both between themselves and with contracting parties.

The countries which participated are (a) the following contracting parties: Australia, Belgium, Brazil, Canada, Ceylon, Chile, Cuba, Czechoslovakia, Dominican Republic, Denmark, Finland, France, Greece, Haiti, India, Indonesia, Italy, Luxemburg, Netherlands, New Zealand, Norway, Pakistan, Southern Rhodesia, Sweden, Union of South Africa, United Kingdom and United States; (b) the following acceding countries: Austria, Germany, Korea, Peru, Philippines and Turkey; and (c) Uruguay, which negotiated for accession at Annecy but did not sign the Annecy Protocol in time to accede in accordance with the terms of that Protocol.

Before agreeing to the firming up of Geneva and Annecy concessions, several countries negotiated with the other contracting parties for the purpose of modifying or withdrawing some of their concessions and making compensatory concessions. Although not initiating any action of this kind, the United States participated in the negotiations for this purpose with twelve countries, namely Benelux, Brazil, Chile, Cuba, Denmark, Finland, France, Haiti, Italy, New Zealand, South Africa, Uruguay. All of these negotiations were concluded except one of the items still under discussion with Cuba.8

Negotiations directed to the mutual exchange of new concessions were undertaken with the following 17 contracting parties: Australia, Belgium, Brazil, Canada, Cuba, Denmark, Dominican Republic, France, India, Indonesia, Italy, Luxemburg, Netherlands, New Zealand, Norway, Sweden, United Kingdom. Negotiations were however not completed with the following five: The United Kingdom, Australia, New Zealand, Cuba and India. New negotiations were also [Page 1250] undertaken and successfully completed with all of the acceeding countries except the Philippines, with which the United States may not, by domestic law, negotiate a trade agreement. To comply with the requirement of the Philippine Trade Act to this effect, the United States not only refrained from bilateral negotiations but intends to notify the contracting parties that, while welcoming the Philippines as a party to the agreement, it is necessary to invoke Article XXXV of the agreement to prevent it from applying between the United States and the Philippines because of this Act.

Results of each of these categories of negotiation are discussed in succeeding sections.

i. extension of existing concessions

As drafted at Geneva in 1947, the General Agreement provided that concessions granted would not be withdrawn except in various specified circumstances until January 1, 1951, after which they could be withdrawn by a simple process to be preceded by renegotiation. When plans for the Torquay Conference were formulated, it was decided that, although these existing concessions might continue in force after January 1951, it would be desirable to obtain agreement by the parties to substitute the later date of January 1, 1954 and so assure a continuation of concessions free from the rights under Article XXVIII for an additional period.

This change, which involved an amendment of Article XXVIII of the Agreement, will have been accomplished by the Torquay Conference when two-thirds of the parties (the required majority) accept the amendment which has been included in the Torquay Protocol, to be opened for signature on April 21. A declaration, by which countries agree not to invoke Article XXVIII until January 1954 will also be opened for signature, to cover the period prior to the entry into force of the amendment.

Before accepting the extension of time on concessions previously granted, a number of countries indicated that they would have to exercise their right under Article XXVIII as originally drafted to withdraw or modify certain concessions which they felt they could no longer maintain. In accordance with that Article, however, they were ready to negotiate (attempt to agree) with the parties with which such concessions had initially been negotiated and with others substantially interested as to what other equivalent concessions they should grant in exchange. In all cases the United States was able to obtain substitute concessions which the Committee believes constitute adequate compensation. It may therefore be said that the tariff reduction previously achieved has not been impaired in any of these negotiations.

[Page 1251]

Not all countries exercised their right to renegotiate particular items prior to accepting amendment of Article XXVIII. After examination of the cases in which interested parties in the United States had urged that we exercise this right, none were found to justify the risk that any use of the right would create widespread demand for similar treatment of many other products. The United States did not, therefore, exercise this right with respect to any items, although it did renegotiate a few minor technical adjustments under another procedure. Canada also refrained from exercising this right, and the United Kingdom made only very limited use of it. Australia, Burma, Ceylon, Czechoslovakia, Greece, India, Liberia, Pakistan, Southern Rhodesia also refrained from Article XXVIII action on any item.

The total coverage of United States exports on which concessions were obtained at Geneva is, in terms of 1949 export trade, something like 2 billion dollars. At Annecy we obtained commitments on another half billion dollars worth of export trade. With relatively minor exceptions discussed below, the undertaking to continue the favorable treatment specified in the General Agreement for at least another three years will thereby have been secured. Even at the cost of somewhat more extensive renegotiation than was contemplated it is a major achievement to have firmed up these important guarantees for United States export trade.

The largest group of concessions originally negotiated with the United States which eventually were notified under this article were Cuba’s concessions to the United States on a group of articles including cotton and rayon textile items on which concessions had been granted to the United States at Geneva.

The trade in question was valued in 1949 at about $33 million (imports into Cuba of U.S. merchandise), or some 8 percent of total imports into Cuba from the United States. The United States originally undertook to renegotiate with Cuba the rayon and cotton textile items which made up the bulk of this trade as a result of Cuba’s representations at Annecy that she faced a crisis in her textile industry. Long negotiations at Torquay failed, however, to result in the offer by Cuba of rayon textile rates which the United States was willing to accept. Thereupon Cuba decided to modify rayon rates in question under the procedure of Article XXVIII. This move was one which Cuba was fully entitled to make; the rates thus set were fixed by unilateral action of Cuba, and the United States did not accept them. We did, however, accept compensation for this action which was separately reported to you in March and which the Committee believes offers satisfactory alternative opportunity for expansion of American trade.

Subsequently, for technical reasons, Cuba decided to transfer to Article XXVIII the modifications in cotton textile rates and the compensation [Page 1252] therefor which had been agreed upon with the United States, so that all of these negotiations as well as negotiations on relatively minor items notified from the start under Article XXVIII have now been effected under a single procedure. This agreement was completed at Torquay, subject to your approval.

Still later, upon representations by the United States that Cuban treatment of American rice is not in accordance with Cuba’s agreement obligations, Cuba notified this concession also under Article XXVIII and negotiation in regard to it will be carried forward after Torquay under a special procedure adopted for such cases.

The next largest group of concessions initially negotiated with the United States and modified or withdrawn under Article XXVIII were those of France which, as initially proposed, affected a trade valued at over $20 million, or 10 percent of the trade covered by France’s Geneva concessions on dutiable items. The items were all in the machinery and equipment fields, as were the compensatory concessions finally obtained after extended negotiations. In the negotiations the scope of proposed unfavorable action by France was considerably reduced, and significantly more compensation was obtained than was first offered. The Committee believes that good compensation is now offered.

South Africa originally wanted to withdraw or modify concessions on a trade valued at about $40 million but was persuaded to continue the most important part of the concession on agricultural tractors, which accounted for two-fifths of the trade involved, and to give a binding of the duty on automobile parts in exchange for other modifications which will allow South Africa somewhat greater protection for developing light industries, while continuing favorable treatment on American export specialties.

The other Article XXVIII negotiations were considerably less serious, and it is believed that in all cases in which United States trade was involved adequate compensation was obtained, whether the concessions involved were initially negotiated with the United States or some other country. The texts of the Article XXVIII agreements in all of these cases are contained in Annex A.

ii. new negotiations with contracting parties

Of the fifteen negotiations with seventeen existing contracting parties (one negotiation with all three Benelux countries), ten were successfully concluded. Five were terminated without agreement, namely those with the United Kingdom, Australia, New Zealand, Cuba and India.

Of the agreements obtained, the best by far is with Canada, both qualitatively and quantitatively. A good though much smaller agreement was also obtained with France. Of the others, small agreements [Page 1253] were concluded with Indonesia and Brazil and five rather small agreements were concluded with other European countries. The latter were limited partly because we had negotiated only two years ago with some of them (Denmark, Italy, Sweden), partly because such countries as Benelux, Norway, Sweden and Denmark have relatively low tariffs in which they have already given concessions. They now hesitate to give more partly to maintain some domestic protection and partly because they feel bound to secure first some reduction in the existing disparity of tariff levels between themselves and other European countries with high tariffs, notably France and Italy. The coming of the time when it will no longer be possible for balance of payment reasons to restrict imports by quantitative restrictions, and the resulting greater importance of tariffs undoubtedly also played a part.

The United Kingdom agreement failed partly for reasons of this order but mainly for other reasons. The ending of Marshall Plan aid highlighted the probability that the time would soon come when the United Kingdom would be expected to relax substantially quantitative restrictions now maintained for balance of payments reasons, and this prospect increased British reluctance to reduce tariffs.

Probably the most important single consideration in the formulation of the British position was the slender majority of the Labor Party in the House of Commons and the fear that any action to reduce protection, particularly any action to impair the Commonwealth preference system, would strengthen the opposition.

From the beginning of the conference there was evidence that the United Kingdom not only proposed to make very meager offers but was encouraging Commonwealth countries to do likewise. This was accompanied by a firm attitude that such offers should nevertheless be worth the grant by the United States of all or nearly all of our controversial offers, which made up the bulk of the requests the United Kingdom had made on the United States. Repeated and unsuccessful efforts were made to secure from the United Kingdom expanded offers adequate to justify the granting of the bulk of our controversial offers. At the same time we drastically reduced our requests on the British, which had originally been based on the assumption that a very comprehensive agreement would be obtained. In spite of this, it was made clear by the British that the only terms on which an agreement could be secured would be by our offering concessions on most of the controversial items, including woolen and cotton textiles, leather, china and earthenware, with other good offers thrown in, in exchange for concessions by the British no one of which offered any break in the preferential system and no one of which offered any substantial improvement in British treatment of United States agricultural products.

[Page 1254]

Three main arguments were used by the British to defend this position. First, they maintained that the dollar shortage made it impossible for them to offer more substantial concessions. Secondly, as concerns preferences, they indicated that in their judgment, this was no time to weaken the ties within the Commonwealth and that it was contrary to United States interest to seek to do so. Finally, they claimed their offers balanced ours.

As for the dollar shortage argument, it is clear that so long as the dollar shortage exists, the United Kingdom will in any case maintain quantitative restrictions which prevent any undue increase in British dollar purchases, and therefore the agreement would be somewhat one-sided even if our requests were met. As for the political wisdom of reducing preferences and thereby weakening Commonwealth ties, this argument was felt to be irrelevant since in fact no such result would have occurred; in fact in some cases it developed that the Commonwealth country involved had no objection to reductions and the only obstacle was the United Kingdom attitude.

So far as the balance of offers was concerned, total United Kingdom offers covered 1947 trade valued at $130,000,000 compared with our offers of $122,000,000; but the United Kingdom offers covered only 11 percent of our trade, whereas ours covered 55 percent of our imports from the United Kingdom. Furthermore, of the British offers, $100,-000,000 represented bindings of existing rates, most of which were worthless, and reductions were only $30,000,000 (the United States offers were almost entirely reductions in duty). If 1948 figures were used, the figure for total United Kingdom offers would have been about half of that for 1947. Qualitatively, the United Kingdom offers were small, and there were no offers at all on our most important exports, agricultural products, and no significant reductions in preference. In fact there were only two or three offers which we could by any stretch of the imagination call important.

The Delegation was well aware, throughout, of the seriousness of not having an agreement with the United Kingdom but likewise believed that unless there were adequate concessions by the United Kingdom, it would be impossible to grant United States concessions on various controversial items. Its efforts were, therefore, directed toward securing a good and comprehensive agreement.

In the middle of March, the lack of substantial United Kingdom offers was explained to the Department of State which agreed that an unbalanced agreement should not be made and accordingly a note was handed to the Foreign Office by the United States Ambassador. The note warned that failure of the British to make additional concessions, including reductions in Empire preferences, might lead to no agreement at all and that in any event a one-sided agreement [Page 1255] would not be possible. Protracted meetings followed with no change whatever in the British position.

The impasse with the United Kingdom which arose, as indicated above, primarily because of their unwillingness to offer us any significant reductions in duties on agricultural products or in preferences, necessarily gave rise to a similar impasse in the negotiations with the other Dominions, particularly Australia. The United Kingdom has commitments with the Dominions under which the United Kingdom is obliged to obtain the consent of the Dominions before it reduces preferences. In our negotiations with the Dominions we insisted that part of the price for our offers to them (especially, in the case of Australia, New Zealand and South Africa, raw wool) was their agreement to the reduction of preferences in the United Kingdom or other parts of the Commonwealth. In view of the stated unwillingness of Australia to release the United Kingdom to the extent necessary to grant the concessions we desired, the Committee decided that we would be unable to grant Australia the very controversial concession on wool without which no agreement was possible. As in the case of the United Kingdom, high level approaches to the Australian Government were unavailing. Without the concession on wool, no agreement could be concluded with New Zealand or South Africa.

On the issue of preferences, Canada adopted a much more cooperative attitude: although Canada was unwilling to grant us preference reductions where to do so would have meant breaking contractual commitment to the other parts of the Commonwealth, she readily agreed to release the United Kingdom and other Commonwealth countries from any obligations which would have prevented these countries from meeting our requests. On most items involved, the United Kingdom professed its inability to make concessions because of commitments to countries other than Canada, but even in the case of items (such as canned salmon) on which the preference was bound only to Canada, and on which Canada had granted releases, the United Kingdom refused to make any offer.

In the circumstances, it was not possible in the judgment of the Delegation, to make any agreement whatever with the United Kingdom since the United Kingdom insisted that even a limited agreement would have had to include offers by us which we would not feel justified in making on the basis of the poor offers forthcoming from the United Kingdom. This position was strengthened by the fact that such an agreement might have become public just as the Senate voted upon extension of the Trade Agreements Act. More basically, it is felt that the United States tariff has now been reduced to a point where it is of real importance to conserve the bargaining power remaining to secure the substantial reductions in tariff levels and preferences which we still hope to obtain.

[Page 1256]

Failure of the negotiations with Cuba must be attributed primarily to lack of time for adequate negotiations. By the time the textile and other Article XXVIII negotiations had been completed it was March, and the ranking members of the Cuban delegation had already left Torquay, apparently leaving instructions that in no event was the delegation to accept any form of modification of the United States present commitment on sugar, which would adversely affect the concession if domestic quota legislation in the United States ever lapsed, as was desired by this Government. Agreement to some provisions along this line was requested by the United States in return for any further reduction in the duty on Cuban sugar. When it finally became evident that sugar would not be included in the agreement, almost no time remained to negotiate for adequate concessions to match our other offers.

For all of these reasons, part of the authority granted to make concessions was not used. Valuable results have nevertheless been obtained for those concessions which were granted. In all, the United States obtained direct concessions on exports to these countries totaling about $400 million, about three-fourths of which in concessions from Canada. It is not possible to give at this time a figure for the additional benefit we will derive from concessions by other contracting parties among themselves, but such benefits will be substantial. Among the outstanding concessions obtained in our own negotiations are reductions by Canada in duties on salt beef and pork, grapefruit juice and apples, gelatine, liquid medicinal compounds, petroleum products, miscellaneous machinery, automobile parts, rubber tires and hose. Other important Canadian concessions were listed in the separate memorandum on Canada submitted to the President on March 23. From France important concessions obtained are reductions on dried fruit, lard, fruit juices, various chemicals, air-conditioning machinery, truck trailers, aircraft, and a number of types of scientific apparatus. From Benelux we obtained concessions improving treatment of United States wheat, dried fruit, canned vegetables and canned fruit. Low duties were bound on certain chemicals, rubber tires, pneumatic tools, cranes and hoisting apparatus and electric drills.

In exchange for these and many other concessions, the United States granted concessions on products imports of which from the country with which each concession was negotiated amounted to about $182 million. This figure does not include the value of imports of these same commodities from negotiating countries other than the one to which each concession was granted by initial negotiations nor does it include imports from other countries, though all imports of the commodities in question will benefit, regardless of country of origin. Principal concessions involved by the United States in point of difficulty are reductions [Page 1257] in duties on sheet glass (Benelux), lace and table wines (France), plywood, aluminum, cheese and canned salmon (Canada). Duties on lead and zinc are also reduced by negotiation with Canada and, in the case of lead Peru, but the rates established are those which were in effect until January 1, 1951 under the agreement with Mexico which was terminated effective on that date.

Of these, only the reductions on sheet glass, Douglas fir plywood and aluminum were reductions to the limit of the authority under the Trade Agreements Act, and in view of heavy demands for rearmament and related purposes imports of these products will hardly be any greater than they would have been without the concession for some time to come, and there will be no threat of injury to the domestic industries. In the case of the food products, imports of both salmon and cheese are very small in relation to domestic production and there is at present no surplus of cheese. The reduction in laces is a very moderate one, from 40 to 35 percent, and leaves a substantial duty.

All of these concessions granted and obtained are contained in the final bilateral offer lists contained in Annex A. Tables in Annex C show the trade coverage of concessions obtained and of concessions granted, in each case by country.

iii. negotiations with acceding countries

Negotiations with the acceding countries were very satisfactory. Apart from the trade benefits obtained for United States commerce, accession by these countries will bring into effect for Germany, Austria, Turkey, Korea, the Philippines and Peru a set of guarantees of fair treatment and a set of standards for the regulation of their commercial policies which is now standard throughout most of the trading countries of the world. The guarantee of most-favored-nation treatment in tariff matters and in internal restrictions on use of imports may be particularly important in the case of ex-enemy countries. Conversely, it will be especially useful to have Germany bound by the rules of the General Agreement during the present formative period in its commercial policy since it is no longer possible to influence German policy directly.

Concessions were obtained by the United States in negotiations with the acceding countries on trade totaling over $660 million in 1949, most of which consisted of concessions by Germany, and we should obtain very substantial additional benefits from negotiations by the acceding countries with other countries since the average number of negotiations by these countries was relatively high. Germany, for example, completed 20 negotiations, Austria 20, Peru 13, Turkey 18, while only Korea’s negotiations were few (5).

[Page 1258]

In exchange, the United States negotiated concessions on imports from the negotiating countries valued in 1949 at about $82 million, including reductions to Germany on various chemicals, Christmas tree ornaments, certain scientific instruments, mechanical toys and cameras valued over $10 each, a reduction to Peru (and the Dominican Republic) in the rate on sugar imported at the most-favored-nation rate, a reduction to Peru on bonito and a reduction to Turkey in the rate on raisins. With the possible exception of the reduction on raisins, of which imports are insignificant but on which there is an agricultural support program, none of these concessions is highly controversial, and rates on a number of the German items remain high. Cuba retains a margin of preference on sugar of 20 percent, the minimum preference which she regards as due her. The sugar concession, as in the case of the Dominican Republic, is subject to termination in the event United States quota legislation should lapse.

The apparent imbalance between the value of concessions granted and concessions obtained, with the balance heavily in our favor, is explained partly by the fact that as always our concessions actually apply to imports from all countries, so that a fairer picture might be obtained by considering imports of the products in question from all countries. Furthermore, however, the quality of concessions granted is in this case much better than the quality of concessions obtained. Peru, to take one case, has had a considerable inflation as a result of which her old specific duties no longer provide the protection they were designed to give. This country has therefore revised its tariff and the concessions we have obtained are reductions from or, oftener, bindings of tariffs which have been revised upward since the conclusion of the bilateral agreement between the United States and Peru in 1943.

Austria, to take another example, has given valuable concessions but not as valuable in the long run as would appear from the trade figure of $30 million which enters into the above total, since in the year in question recovery shipments were still being made on a scale which will not continue when our assistance terminates. In the case of Germany, also, our export trade is likely to fall off when we no longer are contributing to German recovery. Furthermore, nearly $400 million out of the total $660 million on which concessions were obtained from the five countries consists of shipments of three commodities to Germany, namely, wheat, corn and cotton, on all of which we obtained only a binding, although in two cases a binding of free entry. Unfortunately, on wheat it was not possible to reduce the German duty of 20 percent, but it should be borne in mind that the German concessions were made from a tariff drawn up under the supervision of [Page 1259] Allied representatives who exercised a restraining influence on the level of tariffs adopted which was not present in the tariff revisions of other countries. Even so, though not succeeding in reducing the wheat tariff, reductions were obtained from Germany in duties on fat pork, concentrated milk, dried fruit and dried peas. An important additional guarantee included in this agreement is the commitment that Germany will admit a favorable quota of American motion picture films.

The concessions granted and obtained in negotiations with acceding countries are contained in Annex A.

iv. conclusion

Altogether, at Torquay, new direct concessions have been obtained (though to a considerable extent on products covered earlier) on United States exports valued at over a billion dollars. Concessions have been granted on products imports of which from the negotiating countries amounted to about $270 million in 1949. Imports of these products from all countries amounted in the same year to $478 million. A substantial new agreement was made with Canada which reaffirms through positive action the policy of promoting the greatest possible harmonization of the economies of the two countries. Smaller but valuable agreements have been obtained in addition with eight ERP countries and with Turkey, Indonesia, Korea and three American Republics. Among the acceding countries are Germany and Austria which through this agreement are fully recognized as members of the international trading community. Finally, the United States secured a firming up of concessions previously obtained on exports valued at something like two and a half billion dollars.

  1. 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.)

  2. 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.
  3. Not printed.
  4. Not printed.
  5. Not printed.
  6. 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).
  7. 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.

  8. 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.