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

GATT Files, Lot 66 D 209, Box 454

Position Paper for the United States Delegation to the Sixth Session of the Contracting Parties to GATT ¹

restricted

[Washington,] September 7, 1951.

TAC D–221/51²

Consideration of the Report of the Intersessional Working Party on Article XIX Action With Respect to Hat Bodies

problem

What should be the position of the United States with regard to consideration at the Sixth Session of the Report of the Intersessional Working Party³ on the United States action in withdrawing the concession on women’s hats and hat bodies under Article XIX?

recommendations

1. The delegation should attempt to delay consideration of this report until after consideration of its request for a release from our obligations toward Czechoslovakia.

2. However, the delegation should advise other delegations informally before the matter comes up, that the United States will not oppose consideration of the report by the contracting parties. If possible, the delegation should seek to have some other contracting party having an interest in the complaint, perhaps the U.K., France or Italy, propose that, notwithstanding the release from obligations of the United States toward Czechoslovakia, the report of the working party should be considered as a matter of general concern.

3. The delegation should work for approval of the report by the contracting parties with no substantial change, attempting to limit the discussion to the report rather than to other complaints which the contracting parties might have with respect to the escape clause problem in general. The delegation should, if requested by other contracting parties, present the most recent information available with respect to the production and imports of women’s hats and hat bodies, indicating that the question is being kept under review.

discussion

Procedure. The delegation should attempt to delay consideration of the report of the Working Party until after consideration of our request for a release from our obligations toward Czechoslovakia. Assuming that this release is granted, it would undoubtedly put us in an easier position toward the Czechs while discussing the report, especially with a view to any claims as to what we might do in the future with respect to the matter.

Termination of obligations between the United States and Czechoslovakia might technically enable us to have consideration of the report taken off the agenda, since it relates to an action under Article XXIII brought by Czechoslovakia against the United States. We will probably want to ask for the exclusion from the agenda of other items which might be in the nature of Czechoslovak claims against us by using this argument. However, in view of the work which has been put into this report, of its generally satisfactory nature, and of the interest of other contracting parties in both the general and particular problems which it discusses, the delegation should not try to prevent consideration of the report. In order that its consideration might not conflict with our position with regard to other Czechoslovak attacks on us, it would seem desirable that the delegation of some other contracting party having an interest in this matter, perhaps the British, or the French or Italian, be approached informally with a view to their proposing that, notwithstanding the release from obligations of the United States towards Czechoslovakia, the report should be considered as a matter of general concern.

Consideration of Report. Since the report is generally satisfactory to the United States, to the extent of being much less critical than had been anticipated before the meetings of the Working Party, it would seem desirable that it should be approved by the contracting parties without any change in substance. In fact, because of the care with which many provisions were worded, the delegation should consider very carefully any proposed changes in language.

In order to obtain this result it would be desirable that the discussion be kept as closely as possible to the report. In this connection, it would probably be desirable for the delegation not to attempt to introduce new evidence or new arguments except, possibly, if considered appropriate to answer points beyond the scope of the report raised by other contracting parties. In particular, the delegation should attempt to prevent, as inappropriate under the circumstances, any addition to the report regarding, and if possible any discussion of, the Tariff Commission pamphlet or criteria and procedures for applying the escape clause, or of the escape clause provisions of the Trade Agreements Extension Act of 1951. It was difficult to keep out of the report provisions expressly critical of the Tariff Commission pamphlet.

The principal point in the report of disagreement by the United States and the so-called neutral members of the Working Party was on the meaning of the term “unforeseen developments”. The United States took the position that the provision refers to developments which actually had not been foreseen, in effect that the claim by the United States that they had not been foreseen by the negotiators would be sufficient. In this connection the delegation had in mind, but did not develop as a justification in this case, the argument that any serious injury must result from unforeseen developments since the concession would not have been granted had such injury been foreseen. The neutral members of the Working Party considered that unforeseen developments mean developments which the negotiators could not reasonably have been expected to foresee. In view of the deletion of the reference to unforeseen developments in the escape clause language in sections 6 and 7 of the Trade Agreements Extension Act of 1950 [1951], and of Mr. Ryder’s³ statement during the Senate hearings that the phrase had little meaning, this point of difference is likely to arise during consideration of the report. The delegation should, to the extent practicable, attempt to prevent a discussion of this point, or to limit as much as possible any discussion which takes place.

Future Developments. The Working Party’s report in a number of places indicates the desirability that the United States should keep the situation with regard to women’s fur felt hats and hat bodies under constant review, with a view to possible restoration of the concession in whole or in part. The United States delegation recognized that such action would be required by GATT if it could be done without causing a continuation or renewal of the injury.

It is understood that the available statistics of imports and production of women’s hats and hat bodies will be furnished to the delegation before the matter comes up. Should the figures indicate that the situation has greatly improved, it will be difficult for the delegation to answer queries as to what is being done under this obligation unless it can state specific steps that are being or will be taken, such as a holding of hearings by the Tariff Commission or the Committee for Reciprocity Information.

In considering whether steps can be taken to restore the concession without injurious effect, it should be borne in mind that by the time any such action is being taken undoubtedly Czechoslovakia will be denied all trade agreement benefits. Consequently, the concession, if restored, would be applicable only to imports from suppliers other than Czechoslovakia. This would seem to be a relevant consideration in determining the time during which the concession may remain completely withdrawn, and is likely to be raised by other contracting parties when the report is under discussion.

1. The Sixth Session of the Contracting Parties to GATT convened at Geneva, Switzerland on September 17, 1951. For the composition of the U.S. Delegation, see Department of State Bulletin, October 1, 1951, p. 553. Willard L. Thorp, Assistant Secretary of State for Economic Affairs was Delegation Chairman, and John M. Leddy, Acting Director, Office of Economic Defense and Trade Policy, was Vice Chairman. Files of the U.S. Delegation are located in GATT Files, Lot 63 D 134, Box 268, and Lot 66 D 209, Box 454 (FRC Accession Nos. 65A987 and 71A6682, respectively).
2. This was a document of the Interdepartmental Committee on Trade Agreements (TAC).
3. See footnote 1, supra.
3. Oscar B. Ryder, Chairman of the U.S. Tariff Commission.