Foreign Relations of the United States, 1951, National Security Affairs; Foreign Economic Policy, Volume I

394.31/10–650: Telegram

The Acting Secretary of State to the United States Delegation to the Torquay Conference ¹

secret

Washington, October 6, 1950—6 p. m.

40. USTAC. For Corse. Transmit following to Wyndham White:²

• “1. Escape clause investigation by US Tar Com women’s fur felt hats and hat bodies valued more than $9 and not more than $24 doz results finding serious injury within terms GATT Art XIX.
• 2. Tar Com recommended Pres concession this product be withdrawn effective Dec 1, 1950.
• 3. Pres considering fol recommendation and US proposing issue proclamation by Nov 1 making term effective Dec 1.
• 4. Early term necessary because believe further delay cause damage difficult repair.
• 5. US recognizes obligation consult.
• 6. Request communicate above as secret document to all CPs informing them readiness US enter consultation Torquay immed.”

For urinfo from Tar Com report. Tar Com finds withdrawal in whole this concession without specified time limit as to duration necessary prevent continuance injury; such withdrawal afford greater relief if effective date such action prior Dec 1 than if at later date.

Imports women’s fur felt hat bodies since concession supplied progressively larger share domestic consumption; domestic production materially smaller than prewar. Imports in 30’s and immed postwar years less than 5 percent production; imports 7.2 percent production 1948, 21.4 percent 1949, and 30.5 percent six months 1950. Reduction domestic output due large part decline total domestic consumption but increased competition imported hat bodies also contributed substantially.

Little competition between imports and domestic production in either low-priced or high-priced fields. Re price range $9 to $24 direct and sharp competition particularly as to special finishes. This range comprises great bulk import trade. It is the marked increased imports this range which caused serious injury. Injury steadily increased since concessions became effective and unless concessions withdrawn injury continue and perhaps become worse.

Peak period production and sales domestic hat bodies June, Jul, Aug and of fon hat bodies for US market somewhat earlier. However samples made up and price lines established much earlier—sometimes preceding Dec or Jan. Hence greater relief if effective date not later than Dec. 1.

Withdrawal will restore compound rates Tar Act 1930 on women’s fur felt hat bodies in four value brackets between $9 and $24.

Great part of women’s hat bodies made by firms who make very few men’s hat bodies. Domestic fur felt hat industry highly concentrated in few cities in east. Difficult make specific determination but considerable part reduction total employment attributable increased imports. Total imports thousands of dozens were 6 in 1939, 16 in 1947, 45 in 1948, 121 in 1949, 62 in 1950 (Jan–June). Imports by country 1949 in thousands dozens: UK 1, Czecho 57, Fr 5, Italy 57. End info Tar Com report.

Concession negotiated with UK.

Pres requested Dept’s views effects withdrawal on our fon economic relations countries concerned. Dept replied: (1) Proposed action is in accordance GATT, (2) Not have such serious adverse effects as to raise difficulties proceeding with proposed action, (3) Probably involve compensation by US, (4) US required consult CP’s, will do so immed, but this not prevent issuance necessary proclamation to term concessions Dec 1. Del shld discuss withdrawal and compensation, if any desired, with interested govts and report dels recommendations compensation based on such discussions. Since Pres has definitely decided make withdrawal effective Dec 1, proclamation likely Nov 1, probably prior completion above consultations. Pls report fully their progress for receipt Wash Oct 30 with prompt prior report any special considerations.

Imperative no leaks occur. Del has discretion revise statement Wyndham White also to discuss informally with him before present. Background info, including Tar Com report, pouched.

Webb

1. Willard L. Thorp, Assistant Secretary of State for Economic Affairs, was Chairman of the U.S. Delegation to the Torquay Conference. The Alternate Chairman of the Delegation was Winthrop G. Brown, Director of the Office of International Trade Policy. The Vice Chairman of the Delegation was Carl D. Corse, Chief, Commercial Policy Staff. Thorp was at Torquay only briefly for the opening sessions of the conference. Brown remained at the conference until early December, functioning also as the Chairman of the U.S. Delegation to the Fifth Session of the Contracting Parties to the General Agreement which met at Torquay, November 2–December 16, 1950. After Brown’s departure Corse was Acting Chairman of the U.S. Delegation until the termination of the conference on April 21, 1951.
2. Eric Wyndham White, Executive Secretary of the Interim Commission of the International Trade Organization which functioned as a secretariat for GATT.