394.31/11–950: Telegram

The Alternate Chairman of the United States Delegation to the Torquay Conference ( Brown ) to the Secretary of State

confidential

149. Following for information Department is summary analysis proposed French Withdrawals and compensation offers of direct interest to US.1

French withdrawals under Article XXVIII are on scale far greater than envisaged in Geneva “Gentlemen’s Agreement” to keep with [Page 1261] drawals to minimum and many times more than any other country.2 237 tariff items are notified for withdrawal from all contracting parties. Moreover, there is pronounced disparity between withdrawals and compensatory offers. Attention also drawn Schuman Plan reservation.

With respect US, French propose withdraw 100 items, some of which are on US request list. Imports these items in 1948 were valued at 3, 782 million francs as compared total imports from US of 118,679 million francs and imports from US of Geneva concession items amounting to 46,585 million francs. Compensatory offers made on 88 items and many these also on US request list. Moreover, compensatory list includes number items not normally imported (e.g. wheat flour, rye) and many POL items not expected to be imported in future. Imports 1949 of items on list withdrawals from US amounted to 5,631 million francs, of which US has substantial interest in 93 percent (5,249 million francs) and little or no interest in 7 percent (382 million francs). Imports of items on the compensatory list offered to US amounted to 4,966 million francs of which the US has a substantial interest in 62 percent (3,103 million francs) and little or no interest in 38 percent (1,863 million francs).

There is similar disparity in extent duty increases proposed for withdrawal items and duty decreases proposed for compensatory items. Increases above present rates on items substantial interest to US are as follows: First figure indicates range percent increase and second figure 1949 imports from US in million francs up to and including 50–744, 51 to 100–3223; 101 to 150–640; 151 to 200–185; 201 to 250–85; over 250–372. The total of above (all direct withdrawals of substantial interest to US) amounts to 5,249 million francs. On other hand, proposed reductions below present rates of compensatory items substantial interest to US are as follows: First figure indicates range percent decrease and second figure 1949 imports from US in million francs; up to and including 10–0; 11 to 20–1,493; 21 to 30–1, 125; 31 to 40–41; 412 50–44, over 50–400. Total above (all direct compensations of substantial interest US) amounts to 3,103.

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1949 figures indicate French proposal (much more unfavorable US than shown 1948 figures) possible that figures promised soon by French Delegation for first nine months 1950 will again change picture somewhat, although probably not substantially. Also, Lecuyer3 indicated informally French will have few concessions offer in any new negotiation addition compensations suggested. In opinion USDel, Hoffman’s article New York Times November 2nd essentially accurate appraisal.

Preliminary analysis basis 1948 figures of withdrawals and compensations vis-à-vis third countries as whole are comparatively minor importance US.

French insistent proposed withdrawals most important items based large increase imports from Ger. We do not accept French position large increase would necessarily justify withdrawal of an item. Moreover, although imports from Germany in 1949 higher for some withdrawal items these increases are not on scale indicate threat French economy. Also, except for one or two items of US interest data so far available through 1949 fail support French thesis Germany supplanting US in many important withdrawal items. The increases in German imports where substantial, and which are mostly increases from low levels, are more than offsetting aggregate by increases in imports from US. Also, Germany still generally behind other European suppliers. 1950 data may indicate change relative positions somewhat, but consider US has present and long run substantial interest almost all large items in withdrawal list.

At present stage French showing little interest expansion trade with US or in pushing either for solution withdrawal problem or for new negotiations. They have repeatedly indicated informally that, at least as far as French delegation concerned, they are not position make more than minor modifications in withdrawal and compensation lists. (Head French delegation4 is lower rank than most delegation leaders and apparently acting under strict instructions.)

As result, large list French proposed withdrawals, US, UK, and Canada inter alia have not begun negotiations with French.

Ben[elux] exchanged offers French but French offers so meager Ben have not continued negotiations pending resolution Article XXVIII items.

Article XXVIII and new bilateral negotiations closely related owing fact both withdrawals and compensations overlap US request list. Imports into France in 1949 of items on withdrawal list in which US has substantial interest and on US request list amounted to 1,741 million francs and imports similar items on compensation list amounted to 2,805 million francs. Should French fail bring withdrawal list into line with an acceptable compensation list, US requests will have be reappraised determine whether worthy our authorized offers. This [Page 1263] would further delay opening bilateral negotiations. If delay too long, possible not be able conclude negotiations. No approach being made French delegation pending receipt data first nine months 1950 in order have all data available French make decision re tactical approach to French.

Summary tables airmailed. Despatch number 30, November 9.5

Brown
  1. This had to do with the Article XXVIII negotiations for the extension from January 1, 1951 to January 1, 1954 of tariff concessions given by France (and other Contracting Parties) at the Geneva and Annecy Conferences, rather than with the negotiations for new tariff concessions which in the Torquay Conference timetable were to come only after the conclusion of the Article XXVIII exchanges. Actually at this time the French Government (as well as certain other governments) had both “notified” the United States of withdrawals and modifications (i.e., increases) which it was requesting in regard to the Article XXVIII item; and also had presented to the United States the French “requests” and “offers” for new concessions.

    The basic Department of State central indexed file for all the Torquay Conference tariff negotiations, whether Article XXVIII or new, is 394.31. The official United States Delegation file is located in International Trade Files, Lot 57 D 284 (FRC Accession 65A987), Boxes 133–140. There is a master telegram file (both incoming and outgoing, Torquay) in Box 139. Correspondence between principal officers of the Delegation and the Department which often throws light on the negotiating process is located in Box 134.

    Particular reference should be made to Boxes 133, 135, and 136 for the negotiations with France; this material is of a highly technical nature for the most part.

  2. At the Fourth Session of the Contracting Parties to GATT, held at Geneva, Switzerland, February 23 to April 3, 1950, the CP’s had initiated the action providing for the Article XXVIII negotiations at the Torquay Conference. The United States had agreed somewhat reluctantly to support this proposal, which was initiated by the United Kingdom (U.S.–U.K. exchanges on this matter went back to November 1949 (Department of State central indexed file 560.AL/11– 1849, 11–3049, 12–149, 12–1849)). This reluctance arose primarily from the U.S. Government’s concern that GATT members might demand increases in the rates of duty specified in their Geneva and Annecy schedules as a condition to agreement to extend the date in Article XXVIII. The Department of State had warned GATT members through the diplomatic channel in June 1950 (circular instruction, June 8, 1950, 394.31/6–850) that it was the “expectation” of the United States that the Article XXVIII negotiations at Torquay would not lead to a widespread impairment of the tariff concessions negotiated at Geneva and Annecy.
  3. Ernest Lécuyer, member of the French Delegation to the Torquay Conference.
  4. André Philip.
  5. Not printed.