Office of the Historian

305. Memorandum From the Acting Special Representative for Trade Negotiations (Roth) to President Johnson1

Washington, February 4, 1966, 8 p.m.

SUBJECT

  • Definite Acceptance of the GATT

For the reasons set out below, I recommend that you approve the definitive acceptance of the United States of the General Agreement on Tariffs and Trade (GATT).2

Since 1948, when the GATT entered into force, United States application of the GATT, like that of most of the other countries concerned, has been based upon a Protocol of Provisional Application. By that Protocol the United States, in addition to undertaking to give full effect of the most-favored-nation principle and to tariff concessions granted to other countries, agreed to apply the other general trade rules of the GATT to the fullest extent not inconsistent with domestic legislation existing on October 30, 1947. By this means, the United States was able to apply the GATT as an executive agreement pursuant to the President’s constitutional powers and his authority under trade agreements legislation.

Article XXVI of the GATT establishes the formal procedures for the definitive acceptance of the GATT and provides, in particular, that the Agreement shall not definitively come into force until accepted by countries which account for 85% of the trade of the major countries of the free world. In 1955, all the members of the GATT adopted a resolution which [Page 810] provides that definitive acceptance of the GATT pursuant to Article XXVI shall be valid even if accompanied by a formal reservation that the general trade rules of the GATT shall be applied to the fullest extent not inconsistent with domestic legislation which existed on October 30, 1947.3 In other words, the members of the GATT agreed that any country choosing to accept definitively the GATT could do so with a reservation retaining the substance of the Protocol of Provisional Application.

Definitive acceptance of the GATT by the United States together with this permissible reservation, would involve the assumption of no greater legal obligation than the United States now has under the GATT. At the present time, there are two significant provisions of domestic legislation which were in existence on October 30, 1947, and which would be inconsistent with the GATT but for the Protocol of Provisional Application. They are section 303 of the Tariff Act of 1930,4 which provides for the imposition of countervailing duties without a showing of serious injury, as required by Article VI of the GATT, and Schedule 4 of the Tariff Schedules of the United States5 and section 336 of the Tariff Act of 1930, both of which provide for the use of American selling price as a basis of valuation for certain products, which is inconsistent with the provisions of Article VII of the GATT. By virtue of the reservation, definitive acceptance would not change the status of these domestic provisions under the GATT and could therefore be effected by Presidential, as opposed to Congressional, action.

On his last trip to the United States, Mr. Eric Wyndham White, Director-General of the GATT, again emphasized the desirability of having the United States definitively accept the GATT. In Wyndham White’s judgment, definitive acceptance by the United States, though essentially a symbolic action, would be followed by similar action on the part of the other major members of the GATT, who are looking to the United States to take the lead in this matter. He feels that such a combined action would serve in a particularly effective way to emphasize the importance of the GATT and its trade rules. We fully share these views, and especially at the present time when efforts are being made by less-developed countries to establish an international trade organization which would rival or supplant the GATT.

We have discussed the definitive acceptance of the GATT with both Democratic and Republican members of the House Ways and Means and Senate Finance Committees. In the Ways and Means Committee we have [Page 811] encountered no objection, and Chairman Mills, in particular, has asked us to communicate to you his full support for this action.6 In addition, Congressman King of California (D.) and Curtis of Missouri (R.) have indicated their approval. Because of the fact that this matter is less known in the Senate Finance Committee, it has been difficult to obtain a clear expression of views from the members to whom we have spoken, including Senators Talmadge, Ribicoff, Williams (of Delaware), and Carlson. However no clear objection to the proposal has been made.

Accordingly, with the concurrence of the Departments of Agriculture, Commerce, Defense, Interior, Labor, State, and the Treasury, and the Council of Economic Advisers, I recommend that you sign the attached document,7 whereby the United States would definitively accept the GATT, subject to a reservation continuing the exception for inconsistent 1947 legislation contained in the Protocol of Provisional Application.

William M. Roth 8
  1. Source: Johnson Library, Bator Papers, Kennedy Round, CAH, May 4, 1964 [1 of 2], Box 11. Limited Official Use. The source text is attached to a February 11 explanatory memorandum from Bator to President Johnson recommending approval. A note on another copy of Bator’s memorandum reads: “Hold for staff mtg. Thursday [February 14]. McGB.” (Ibid., National Security File, Name File, Bator Memos [2 of 2], Box 1)↩
  2. For text of the General Agreement on Tariffs and Trade, signed at Geneva on October 30, 1947, see 61 Stat. A3.↩
  3. For text of the revised GATT text resulting from a review of the Agreement conducted by the ninth session of the contracting parties in Geneva, October 28, 1954–March 7, 1955, see American Foreign Policy: Basic Documents, 1950–1955, vol. II, pp. 2953–3013; see also 8 UST 1767.↩
  4. Approved June 17, 1930. (P.L. 361; 46 Stat. 590)↩
  5. Not further identified.↩
  6. No other record of Mills’ communication has been found.↩
  7. Printed as Document 307.↩
  8. Printed from a copy that bears this typed signature.↩