394.31/9–1553: Circular instruction

The Acting Secretary of State to Certain Diplomatic Offices 1


CA–1470. Subject: Eighth GATT Session.

I. Background

A. The Contracting Parties to the General Agreement on Tariffs and Trade (GATT) will open their eighth business session September 17 at Geneva.2 Approximately 40 items are on the agenda for consideration. This session will relate solely to the business of the GATT and will not be concerned with tariff reductions. Out of the 40 agenda items the following are of principal concern to the United States:

Japan’s application for provisional accession to the GATT.
Possibility of maintaining tariff concessions currently in effect on a firm basis after January 1, 1954 (Article XXVIII of GATT).
The British preference problem, principally on horticultural items.
The complaints against the United States for certain restrictions we have imposed on agricultural imports and United States subsidies affecting exports of certain agricultural commodities.

B. GATT is a multilateral agreement under which the countries which are parties to the Agreement (Contracting Parties) have agreed to various general rules for the conduct of international trade and to specific tariff reductions. It was originally negotiated in 1947. There have been three rounds of tariff reductions (Geneva, 1947–Annecy, 1949–Torquay, 1951) and seven business sessions of the Contracting Parties. There are now 33 Contracting Parties accounting for some four-fifths of the world’s trade. Although the United States is a Contracting Party to GATT, Congress has made clear on numerous occasions that it reserves its view on the question whether it would approve United States participation.

C. Japanese Accession: For some time Japan has been anxious to accede to the GATT in order to obtain benefits possible only through participation in this Agreement. Prior to acceding to GATT a country ordinarily enters into tariff negotiations with other parties which are its major partners in world trade. Under a commitment made to the United States Congress this past winter by the Secretary, the United States is estopped from entering into full-scale negotiations on tariff reductions until after the President’s Commission on Economic Foreign Policy makes its report and new legislation is submitted to the Congress. Japan therefore has requested that it be permitted to accede to GATT on a temporary basis. The preliminary view of the United States, pending final decision after public hearings, has been one of strong support for Japanese accession partly because of the importance of obtaining Japanese cooperation in military security measures, and because of our concern over Japan’s unhealthy dependence on United States assistance. The United States position has met with opposition from other countries, particularly the British, but United States-British talks over the past several months have paved the way for temporary Japanese accession at the forthcoming meeting. The final United States position to be taken is subject to public hearings now being held in the United States. At the meeting we hope that a formula can be developed to permit provisional Japanese accession to the GATT.

D. Extension of Firm Life of Tariff Concessions: Article XXVIII of the General Agreement provides that on and after January 1, 1954 any Contracting Party may withdraw or modify individual tariff concessions. It is feared pressures will be exerted in various countries to raise tariffs and representatives of several foreign governments [Page 160] have indicated that unless this date is extended their governments will be unable to resist pressure to use the Article.

As in the case of Japan, the final United States position is subject to consideration of the results of public hearings currently being held. On the basis of present information, the United States delegation is being instructed to advocate extension of the date from January 1, 1954 to either January 1, 1955 or June 30, 1955 and that no country make changes in existing concessions prior to the change in the date. We would prefer a declaration signed by individual Contracting Parties binding the signers not to invoke Article XXVIII for the extended period, but if this method proves non-negotiable, the United States will sponsor approval of a resolution recommending that each Contracting Party not invoke the Article for a period of either 12 or 18 months.

It is felt that extension of the date would help stem the growing feeling of a number of countries that the United States Government is moving toward increased protection for domestic industries. Extension also is consistent with the President’s policy of maintaining the stability of the general tariff situation during this interim period of study of United States foreign economic policy. Considerable international support exists for extending the date. Among others, the Chairman (a Norwegian), France, Canada and Cuba have indicated support for extension. Australia and New Zealand have implied they would like some leeway to raise tariffs on some items.

E. United Kingdom Preference Problem: Under the General Agreement, the United Kingdom is committed not to increase any tariff preference which exists in favor of Commonwealth countries. The United Kingdom has been pressing for a formula under which it would be free to raise its duties on certain items not now bound and imported from outside the Commonwealth, principally horticultural items, without placing a duty on the same class of products which enter free of duty from the Commonwealth. Although consideration of such a matter would be preferable in the context of a general review of the Agreement, protectionist pressures in the United Kingdom have forced the British to request its consideration at this meeting. The United States and the United Kingdom have explored a formula which might meet both the British requirements for a waiver and the limitations desired by the United States. However, the formula may not be acceptable to a number of Western European countries.

F. Complaints Against United States Restrictions: The Agenda also includes consideration of complaints against United States restrictions on imports of dairy products, dried figs, and shelled filberts, United States subsidies affecting exports of oranges, raisins [Page 161] and alleged dumping of almonds. The United States delegation will attempt to prevent acrimonious debate by presenting facts in each case.

G. Other Matters: It is also expected that consultations will be held with certain of the countries attending the meeting on the continued application of balance of payment import restrictions.

It is expected that the meeting will thoroughly examine the first annual report of the European Coal and Steel Community.

Other Agenda items include consideration of two proposals for new methods of multilateral tariff reduction; a method of valuation for customs purposes; consular formalities; nationality of goods; Italian special treatment for Libyan products; South African-Southern Rhodesian customs union; Nicaragua-El Salvador free-trade area; Brazilian internal taxes; Greek import taxes; discrimination in transport insurance; and a convention on importation of samples and advertising material.

II. Treatment

We should give good news coverage to meeting, taking our cue from the United States delegation. If provisional Japanese accession to GATT is approved, give favorable action heavy play in output to Japan but only modest play to other areas. Feature any agreements reached on the extension of the firm commitment date beyond Jan. 1, 1954, and on British preferences. Emphasize also all other aspects of cooperative action resulting from the meeting. In background stories and in original and selected comment, demonstrate United States support for the principles and objectives of GATT and review GATT accomplishments. Cite the success of GATT in resolving difficulties among the participating nations.

Further guidance will be provided if circumstances warrant.

  1. This instruction was sent to the Embassies in Ottawa and Prague, the Consulates in Geneva and Salisbury, and the Legation in Luxembourg. It was drafted by Selma Freedman of the Division of Public Liaison and Charles F. Johnson of the Office of Policy and Plans.
  2. Samuel C. Waugh, Assistant Secretary of State for Economic Affairs, served as chairman of the U.S. Delegation to the Eighth Session; Winthrop G. Brown, Counselor for Economic Affairs of the Embassy at London, was vice chairman. A list of the remaining members of the U.S. Delegation is printed in the Department of State Bulletin, Sept. 28, 1953, p. 450.