Foreign Relations of the United States, 1958–1960, Foreign Economic Policy, Volume IV

124. Telegram From the Department of State to the Embassy in Paraguay⁰

May 27, 1960, 1:12 p.m.

289. At GATT Session Geneva May 17 USDel noted EFTA now ratified all 7 member states and will soon enter into force.¹ Recalled the 7 governments had provided very detailed answers to questions GATT contracting parties and that GATT Intersessional Committees had done good work in exploring provisions Stockholm Convention as they relate to GATT. Delegate then indicated our overall view of Stockholm Convention is that, on balance, it deserves support and approval of the Contracting Parties. Said that exemption from free trade provisions EFTA of entire economic sector of agriculture and question as to how third country trade in agriculture will be affected by bilateral agreements related to EFTA seem to us to warrant consideration Stockholm Convention by Contracting Parties under GATT procedures other than those set forth in Art XXIV. Comment: Without so stating this means that in our view waiver under Art XXV required; further examination Stockholm Convention including questions whether Contracting Parties deem waiver necessary and, if so, its terms will be required in GATT framework.

In statement on Latin American Free Trade Area (Montevideo Treaty)² USDel endorsed Treaty objectives of achieving higher standards of living and accelerating economic development through elimination intraregional trade barriers and maximum utilization productive factors. Congratulated signatory governments on their initiative and assured them USDel would give treaty sympathetic and serious consideration. Said US looks at any agreements for regional economic integration in context principles GATT Art XXIV. Made a few general substantive comments on Treaty and said that, as in case other regional arrangements, Montevideo Treaty should be considered in detail by appropriate GATT working party.

If questioned re reasons US has not indicated support Montevideo Treaty in terms equivalent to those employed in relation Stockholm Convention, addressee missions should point out US on record in favor Montevideo Treaty objectives; GATT examination Convention has advanced much farther than that of Treaty; Convention has been ratified and is about to enter into force whereas Treaty ratifications pending; US has not endorsed Convention in detail and has indicated provisions Art XXIV alone not fully adequate cover Convention. US continues favor full GATT consideration each of the free trade area arrangements on its own merits, a process which in both cases is expected continue for some time.³

Herter

0. Source: Department of State, Central Files, 394.41/5–2760. Official Use Only. Drafted on May 20 by Herbert F. Propps of the Commercial Policy and Treaties Division of the Office of International Trade; cleared by Butler and Leddy, in draft by ARA, and in substance by Hartman; and approved by Hadraba. Sent also to Buenos Aires, Geneva, Lima, Mexico City, Montevideo, Rio de Janeiro, and Santiago.
1. The 16th session of the GATT Contracting Parties convened in Geneva on May 16. On May 3, Outer Seven Representatives signed the Convention Establishing the European Free Trade Association (“Stockholm Convention”); see Document 116.
2. For text of the Treaty Establishing a Latin American Free Trade Area and Association, signed at Montevideo February 18, 1960, and entered into force June 2, 1961, see American Foreign Policy: Current Documents, 1961, pp. 358–372.
3. The U.S. assessment of the accomplishments of the 16th GATT session is ibid., 1960, pp. 818–823.