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

394.31/11–2850

Minutes of Meeting Between Members of the United States and Czech Delegations to the GATT Torquay Conferences, Torquay, England, December 11, 1950¹

Torquay, England, December 11, 1950

confidential

Subject: United States Withdrawal from Schedule XX of the GATT of the Concession on Ladies’ Fur Felt Hat Bodies Valued from $9 to $24 Per Dozen.

Participants:	Czechoslovak Delegation
	Dr. K. Svec
	Dr. Vazna
	Mr. A. Svejnoha
	U.S. Delegation
	Mr. Corse, CP
	Mr. Dorfman, Tariff2

Representatives of the Czechoslovak Delegation, following their “consultation” with us on November 20, had sent us a letter on November 28 proposing that the United States not withdraw the Geneva concession on felt hats and hat bodies in the $9 to $18 value bracket or that, in lieu thereof, the United States Delegation propose some other suitable compromise solution. The United States Delegation responded, under date of December 1, to the effect that it was impossible to accede to the Czech request but that, if they wish to consult further or to make any other specific proposal, the United States Delegation was at their disposal. The Czechs replied on December 6 that they desired to consult further at the earliest possible date, with the result that an appointment was made for December 11.

At the opening of the meeting with the Czechs, Mr. Corse briefly reviewed the events leading up to this meeting, and concluded with the statement that compensatory concessions would not be possible. He suggested that the Czechs might consider making compensatory withdrawals of concessions, as provided under 3(a) of Article XIX.

Dr. Svec observed that at the meeting of the Contracting Parties at which the United States action on hats was initially discussed, Mr. Brown³ stated that there were “several possibilities” for adjusting the matter, but that now the United States Delegation referred only to compensatory withdrawals—which the Czechs considered unsatisfactory. Such withdrawals—he stated, would operate to raise trade barriers and to reduce the volume of world trade—just the opposite of what the GATT was attempting. Moreover, he pointed out, Czechoslovakia was free to make compensatory withdrawals without consulting the United States. Recourse to such action would really mean that the “consultations” had failed. Dr. Svec made several proposals to restore the Geneva rates to hats and hat bodies in various price brackets: $9 to $15; or $9 to $12; or $12 to $15.

Mr. Corse and Mr. Dorfman expressed the view that Mr. Brown did not suggest before the Contracting Parties that the United States would consider cancelling any part of the withdrawals of concessions on hats and bodies. The compensation for such withdrawals would therefore have to apply to other articles. Mr. Corse explained that the basis of the withdrawal of the concessions on hats and hat bodies was the finding of the Tariff Commission that the domestic manufacturers of such articles had been seriously injured. The United States, therefore, could not reinstate rates of duty which were found to cause serious injury.

Drs. Svec and Vazna stated that they did not feel that the Tariff Commission report met the requirements of GATT. Moreover, they did not feel that United States hat manufacturers had been injured by the imports from Czechoslovakia, since these consisted almost wholly of velours, few of which were made in the United States. Dr. Svec again repeated his proposals for “splitting the [United States]⁴ market” in such a way that the Czechs could have part of it, say in the $9 to $15 range.

Mr. Corse again repeated that he did not believe that the United States was prepared either (a) to modify its withdrawal of the concessions on hats and hat bodies, or (b) to offer any compensatory concessions for this withdrawal. He again recommended that the Czechs obtain compensation by making withdrawals in accordance with Article XIX 3(a).

The discussion with the Czechs revolved in the same circle for almost two hours. The Czechs were clearly not satisfied with the results of the “consultations” and will no doubt bring the matter before the Contracting Parties before they disband.

1. This memorandum was drafted by Carl D. Corse on May 17, 1951.
2. Ben D. Dorfman, Chief Economist and Chief of Economics Division, the U.S. Tariff Commission, member of the U.S. Delegation to the Torquay (Tariff Negotiating) Conference.
3. The reference is to the meeting of November 20, 1950. Winthrop G. Brown was Chairman of the U.S. Delegation to the Fifth Session of the Contracting Parties of GATT (as well as Alternate Chairman of the U.S. Delegation to the Third Round of Tariff Negotiations under GATT, also at Torquay).
4. Brackets in the source text.