281. Memorandum From the Director of the Bureau of Foreign Commerce Files, Department of Commerce (Macy) to the Assistant Secretary of Commerce for International Affairs (Kearns)0
SUBJECT
- UN Commission on International Commodity Trade
In 1954, the Economic and Social Council of the UN established a Commission on International Commodity Trade over U.S. objections. After long consideration, this Government declined to participate in the Commission’s work. Despite its election to the Commission, the U.S. did not send a representative and in fact did not even send a formal observer. When the U.S. term of office expired in 1956, the Council, on U.S. urging, failed to reelect the U.S. Even with this urging, a small scattering of votes was registered for the U.S.
The United Kingdom at first participated in the work of the Commission. In 1956, the U.K. also withdrew. The ground for the U.K.’s withdrawal was somewhat different from the reasons for our non-participation. The U.K. has always been more tolerant of international commodity arrangements than we, at least theoretically. Clarence Blau, who was present at the time of the U.K. withdrawal, reported that this was a move dictated by the British Board of Trade over Foreign Office opposition.
The failure of the U.S. to participate was stated to be the inclusion in its term of reference of the task of developing “measures aiming at the maintenance of a just and acceptable relationship between the prices of primary commodities and the prices of manufactured goods in international trade”. We took the position that this international parity provision was of doubtful economic validity and practicality.
The net effect of the U.S. and U.K. non-participation has been that the deliberations of the Commission have been dominated by the Soviet bloc and the underdeveloped countries. Such countries as France and the Netherlands have been members, but in commodity matters, they tend to take the viewpoint of the underdeveloped areas. Canada is currently a member, but finds itself quite isolated.
The State Department has increasingly felt that our non-participation has very serious political disadvantages. In effect, this Commission provides a forum for the Soviet bloc, the uncommitted countries and the Latin American countries to discuss commodity problems in [Page 567] the absence of real Western participation. The Soviet bloc thus has the opportunity to score cheap propaganda victories over the Western countries with the underdeveloped countries by showing sympathy for the commodity problems of those countries and at the same time pointing out the absence of the major Western consumers of commodities. Our absence therefore can be used as an indication that despite our statements of willingness to discuss commodity problems, we are not in fact prepared to do so.
With the worsening of the markets for basic commodities, the State Department has felt that our position of non-participation has been getting more and more difficult. At the same time, the underdeveloped countries have shown an increasing desire for us to participate. This has gone to the extent that both Argentina and Uruguay have proposed changes in the terms of reference of the CICT which would remove the objectionable reference to the parity principle.
Under these circumstances, the U.S. will be faced with the question at the forthcoming meeting of the Economic and Social Council whether it is willing to participate in the CICT if appropriate changes are made in the terms of reference of that Commission. It is the State Department position, at the Dillon–Wilcox level, that it is politically desirable that we participate if the U.S. Delegation to the 26th Session of the Economic and Social Council can negotiate satisfactory changes in the terms of reference. The State Department would propose that the delegation make it clear that this represents no basic change in our policy with respect to commodities but merely an implementation of our often repeated statement that we are willing to discuss commodity questions with other countries.
While we ordinarily do not look behind State Department political views, I should say that Clarence Blau, who has attended ECOSOC meetings for a number of years, has been reporting to us for two years that he feels that our position vis-à-vis the CICT is becoming increasingly untenable politically. He has also reported to me that the U.S. Chamber of Commerce representative to the UN has made remarks to the same effect to him as late as this April.
Under the circumstances, I would like authority to approve the State Department position. You may wish to call this matter to the attention of the Secretary, inasmuch as he participated in the 1954 decision of non-participation.
It may not be amiss to recall that one of the resolutions adopted at the Buenos Aires meeting which you attended provided for the setting up of a similar group in Latin America.1 The U.S. joined in that [Page 568] resolution and has participated in the commodity discussions in that group. We would interpret the participation in CICT as doing on a UN basis what we have already agreed to do on a Latin American basis.
Since this matter must be finally decided within the next week or two, I should appreciate your early attention to this question.2
- Source: Department of Commerce, Bureau of Foreign Commerce Files 321, Economic and Social Council. Administratively Restricted. Drafted by C.I. Blau, International Resources Staff, Bureau of Foreign Commerce, on June 3.↩
- See Document 279.↩
- At the 26th Session of the U.N. Economic and Social Council, held at Geneva, July 1–31, the U.N. Commission on International Commodity Trade was reconstituted with new terms of reference and new membership, including the United States and the United Kingdom. The new terms of reference emphasized primarily study and analysis of international commodity trade rather than its former main responsibility of attempting to avoid excessive price fluctuation in commodities and maintaining a “just and equitable relationship” between primary commodities and manufactured goods. The U.S. representative to the Council emphasized that U.S. membership was under the new, broader terms of reference and in no way altered U.S. opposition to international commodity agreements. (U.S. Participation in the UN: Report by the President to the Congress for the Year 1958, p. 125)↩