The Acting Secretary of State to the Assistant to the President (Steelman)1


My Dear Mr. Steelman: I have your letter of September 27 in which you state that the President has received a recommendation from the Tariff Commission that the tariff concessions under the General Agreement on Tariffs and Trade on women’s fur felt hats and hat bodies valued at more than $9 and not more than $24 per dozen be withdrawn effective December 1, 1950. Your letter states that the President proposes to follow the recommendation of the Tariff Commission, but before acting wishes to have the views of the Department of State as to the effects of this withdrawal on our foreign economic relations with particular regard to the countries with which this concession was originally negotiated.

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It is the view of the Department that the action recommended by the Tariff Commission would be authorized by the provisions of the General Agreement on Tariffs and Trade and would not have such serious adverse effects upon our relations with the countries most directly concerned as to raise difficulties in proceeding with the proposed action.

In taking this action, the United States will for the first time be exercising its rights under Article XIX of the General Agreement. In view of this fact the Department wishes to bring to your attention that, under that Agreement, we are obligated to give the Contracting Parties notice of our proposed action as long in advance as may be practicable and to afford them an opportunity for consultation. I note that the President proposes to make the withdrawal effective as of December 1, 1950. The Department, therefore, proposes to advise the Contracting Parties, most of which are now participating in the tariff negotiations at Torquay,2 of this proposed action and to ask our Delegation there to undertake the consultation required under the Agreement.

The concessions affected by the proposed action were originally negotiated with the United Kingdom, and in recent years Czechoslovakia, Italy and France have been the most important suppliers of the product. Since these countries have a contractual right to the concessions under the General Agreement it may be anticipated that the withdrawal of the concessions will result in requests being made upon the United States by these countries for compensation in the form of substitute concessions from the United States or withdrawal on their part of concessions of approximately equivalent value made in the General Agreement.

It is assumed that the President would wish to give at least 30 days notice before the entry into force of the increased duties, in accordance with customary procedures, and the necessary proclamation to give effect to this withdrawal will therefore be prepared in this Department for the President’s signature about November 1, 1950. Accordingly, I propose to instruct our Delegation at Torquay to enter immediately into consultation with the countries mentioned above.

Sincerely yours,

James E. Webb
  1. This letter was drafted in the Office of International Trade Policy by the Director of the Office, Winthrop G. Brown, and the Deputy Director, Wilson T. M. Beale, Jr. It was cleared with the Office of British Commonwealth and Northern European Affairs and the Assistant Legal Adviser for Economic Affairs and forwarded for approval to the Acting Secretary of State through the Acting Assistant Secretary of State for Economic Affairs (O’Gara).
  2. For documentation regarding the conference which began at Torquay, England, on September 28, 1950, for the purpose of conducting the Third Round of Tariff Negotiations under the General Agreement on Tariffs and Trade, see pp. 1245 ff.