Foreign Relations of the United States, 1955–1957, Foreign Economic Policy; Foreign Information Program, Volume IX

22. Minutes of a Meeting, Washington, February 15, 1955, Afternoon Session¹

Washington, February 15, 1955, Afternoon Session

PARTICIPANTS

• Mr. Randall, White House, Presiding
• Mr. Morse, Agriculture
• Mr. Hauge, White House
• Mr. Morgan, White House
• Mr. Morton, State
• Mr. Waugh, State
• Mr. Schnellbacher, Commerce²
• Mr. Brown, State
• Mr. Flemming,
• Mr. Stambaugh, White House
• Mr. Galbreath, White House
• Mr. Thibodeaux, State
• Mr. Frank, State
• Mr. Metzger, State
• Miss Kirlin, State
• Mr. Nichols, State
• Mr. Schaffner, Treasury³
• Mr. Rossiter, Agriculture⁴
• Mr. Tischner, Agriculture⁵
• Mr. Pickering, State
• Mr. Blake, State, Secretary

1. Section 22

Mr. Randall stated that the issues with respect to Section 22 were whether the United States Delegation could agree to an annual review by the Contracting Parties, based on the United States report to them, of its actions taken under a Section 22 waiver, and whether it could agree to having the waiver granted for a stipulated period of time.

Mr. Brown stated that the Delegation believed that an annual review by the Contracting Parties of U.S. action under the Section 22 waiver would be advantageous to the United States. Under such procedure the examination in the GATT of Section 22 actions would take place in a more or less routine manner. In the Delegation’s view it would be far better to have U.S. Section 22 actions appear as a regular feature of the GATT agenda rather than in an atmosphere of challenge by a contracting party under Article XXIII. Moreover, if the United States agreed to an annual review of its actions based on a U.S. report, it might be possible to secure an annual review of the restrictions which certain countries desire to maintain to protect their industries after the balance of payments justifications for such restrictions had disappeared (“hard core” restrictions). Finally, there was considerable pressure among other Contracting Parties for including an annual review in the Section 22 waiver which it would be difficult to resist.

Mr. Randall pointed out that an annual review would afford the United States an opportunity to explain the basis for its agricultural policy. He asked for the opinion of the Department of Agriculture on this matter.

Mr. Rossiter of the Department of Agriculture stated that his agency had no objection to an annual review of Section 22 actions by the Contracting Parties, based on a U.S. report submitted to them, provided that other Contracting Parties agreed to subject to an annual review the restrictions that they desire to maintain to protect certain of their industries. Mr. Morgan asked whether the acceptance by the United States of an annual review requirement might raise at each session the question of whether Section 22 should be continued. Mr. Brown replied in the negative but stated that this question did arise in connection with whether the United States could agree to a waiver having a stipulated duration.

Dr. Hauge asked whether the annual review of Section 22 actions might lead to resolution of censure by the Contracting Parties against the United States at some future session. Mr. Brown stated that this was unlikely unless the U.S. were to use Section 22 on a very extensive basis. Dr. Hauge suggested that it would be desirable to indicate publicly, when the necessity arose for doing so, that the U.S. obligation under the waiver would be to report to the Contracting Parties, with the Organization reviewing its report. Mr. Brown stated that this was exactly the description of what the term “annual review” meant.

Decision: Section 22 Annual Review

Mr. Randall stated that if there were no dissent, the Delegation would be authorized to agree to the inclusion in Section 22 of a requirement for an annual report by the U.S. to the Contracting Parties on actions taken under the waiver, which report would then be reviewed by the Contracting Parties. There was no dissent.

Mr. Randall stated that the next issue was whether the U.S. could agree to a waiver which would be valid only for a stipulated period of time. He asked Mr. Brown to describe the elements of this problem.

Mr. Brown stated that he believed the Delegation would be able to secure a Section 22 waiver without agreeing to a limitation on the waiver with respect to time. On the other hand, if the waiver were granted for a specified period of time, there would be a strong implication that it could not be revoked before the expiration of that time limit. The main issue here was the presentation problem, i.e., whether it could be made clear to the Congress that no matter which waiver was granted, the United States would still be able to use Section 22 without any limit on its actions.

Mr. Randall asked whether a waiver having a duration of five years could be satisfactory from the U.S. point of view. He noted that the United States would want a shorter period of time on the restrictions which other countries would want to impose for protective purposes. Mr. Flemming expressed the opinion that any waiver should have a clear indication as to its duration. Otherwise, the Section 22 problem would be on the agenda of every meeting of the Contracting Parties, with the possibility of the question being raised of whether the waiver should be continued.

Mr. Randall suggested that a waiver granted for a stipulated period of time might lead the Congress to believe mistakenly that the Administration at the end of that period intended to get rid of Section 22. However, from what Mr. Brown had said, it appeared that there was some negotiating advantage to be gained by agreeing to a waiver having a fixed duration. He asked for the views of the members of the group.

Mr. Morgan stated that for presentational reasons he was opposed to a Section 22 waiver of stipulated duration. Mr. Stambaugh expressed the opinion that the waiver should be limited in time, with the understanding that the United States would not discuss the question of renewal of the waiver or its continuance during that period of time, which would be, say, five years. Mr. Morse stated that for presentational reasons the Department of Agriculture was not in favor of a waiver that would not contain any stipulation as to its duration. Mr. Chalmers stated that the Department of Commerce favored a waiver having a stipulated duration.

Mr. Waugh for State indicated that it would be easier to present to the Congress a waiver having no stipulation as to time. Mr. Flemming stated that he was in favor of a waiver having a stipulated period of time. Mr. Brown indicated that the Delegation would probably be able to secure a waiver of unstipulated duration but that this would affect the negotiations on the restrictions which other countries desire to impose for protective purposes after the balance of payments justification for those restrictions will have disappeared.

Mr. Randall requested the members of the group to consider the problem further in view of the absence of any clear consensus of opinion and to be prepared to express a definite position on the matter the next day.⁶ Mr. Randall then asked whether Mr. Waugh could indicate the position of Mr. Phleger of the Department of State with respect to the problem of “full powers” that had been discussed by the group that morning. Mr. Waugh stated that Mr. Phleger concurred in the opinion of the group on “full powers”, i.e., that all documents resulting from the Session were to be signed by the Delegation in Geneva (the Organization Agreement, ad referendum) after the documents had been examined and checked at the policy level in Washington.

1. Source: Department of State, GATT Files: Lot 66 D 209, GATT, Ninth Session Review. Limited Official Use. No drafting information is given on the source text.
2. E.E. Schnellbacher, Director of the Office of Intelligence and Services, Bureau of Foreign Commerce, Department of Commerce.
3. Philip P. Schaffner, Office of International Finance, Treasury Department.
4. Fred J. Rossiter, Assistant Administrator of Foreign Service and Agricultural Analysis, Department of Agriculture.
5. Presumably Gerald E. Tichenor, Deputy Assistant Administrator of Foreign Service and Agricultural Analysis, Department of Agriculture.
6. In the meeting held on February 16, Clarence Randall stated after some discussion that it appeared that there was a slight majority in favor of seeking a waiver of unlimited duration, and he authorized the delegation to seek such a waiver. Winthrop Brown asked whether the delegation might agree to a waiver for a stipulated period if the United States appeared to gain some clear advantage from such an agreement. Randall assented but pointed out that the basic problem would be to convince Congress that a waiver of only limited duration would not restrict the government’s freedom of action in enforcing Section 22. (Minutes of Randall meeting, February 16; Department of State, GATT Files: Lot 66 D 209, GATT, Ninth Session Review)