Datasets:

PleIAs

/

GATT_library

like 4

GATT Library

ry735qn6260

Summary Record of the Fourth Meeting : Held at Lake Success on 12 February 1947, 2:45 p.m

United Nations Economic and Social Council, February 12, 1947

United Nations. Economic and Social Council, Preparatory Commission of the Conference on Trade and Employment Drafting Committee, and Sub-Committee on Tariff Negotiations

12/02/1947

official documents

E/PC/T/C.6/74 and E/PC/T/C.6/73-85/CORR.1

https://exhibits.stanford.edu/gatt/catalog/ry735qn6260

ry735qn6260_90230139.xml

GATT_155

United Nations Nations Unies . ECONOMIC CONSEIL E/PC/T/C.6/74 AND AND ECONOMIQUE SOCIAL COUNCIL ET SOCIAL ORIGINAL DRAFTING COMMITTIEE OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYEMENT SUB COMMITTEE ON TARIFF NEGOTIATIONS SUMMARY RECORD OF THE FOURTH MEETING Held at Lake Success on 12- February 1947, 2 :45 p.m. chirman:Mr.3.M ADARSAR The CHIRMAN drew attention to a typographical error at the foot of page 2 in document 6.6/67. The two lies starting with the words "Chapter VIII" should be regarded as a now paragraph and should read: "With regard to Chapter VIII (Organization), reference was made to the United States Paper (C.6/w.2/58)". On the suggestion of Mr.MORTPON (Auatraliai, the Sub-Committee agreed that the drafts of the General Agreenment and the Declaratton would be submitted to the Seconad Session as a working document. The CHIRMAN introduced the following documents for discussion: C.6/'W.58 Draft of the General Agreement on Tariffs and Trade, as tentatively suggested by the United States Delegation; C.6/65 Secretari-tts Amendments to the General Agreement; C.6/55/Rev.1 Report cf the Technical Sub-Committee Discussion of the General Agreement on Tariffs and Trade (c .6/w.58) The CHIRMAN stated that all changes and amendments subsequently adopted by the Drafting Committe would be .included in the Articles incorporated in the General Agreement or referred to in the Declaration. The Sub-Committee was of the opinion that the activities 'of the Interim Trade Committee should be confined to essential functions. Preemble After some diiscussion the Sub-Committee agreed to deal with the Preamble /again E,/PC/'T/C .6/74 Page 2 again after having considered all Articles of the General Agreement and the Declaration . Article I. (Aiticle 14 of the Charter). It was agreed to use the expressions "contracting party" for "Memeber" and "territory of the contracting party" for "Member country" throughout the General Agreement and the Declaration. Paragraph 1. It was aggeed to incorporate this paragraph in the General Agreement. Another paragraph will be added to this Article, relating to exceptions for preferences of certain astegories remainig after negotiations . Meanwhile, the provisions of paragraph 2 of Article 14 and Article 24 of the Charter would apply. Article II (Article 15). paragraphs 1, 2, 3, 4 and 5. It was agreed to incorporate these paragraphs in the Geeral Agreement. Article III . (Article 16). paragraphs 1,2,3,4,5, and 6 .It was agreed to incorporate these paragraphs in the General Agreement. By doing so, the Sub-Committee did not with to express any preference for alternative B embodied in the text. Article IV . (Article 17); Paragraphs 1, 2, 3, 4, 5 and 6. It was agreed to incorporate these paragraphs in the General Agreement. The words "the principles of" were incerted after the words "conforming to" at the beginning of paragraph 6. Paragraph 7. It was agreed that this paragraph should be incorporated in the General Agreement if the Drafting Ccmmittee decided to include it in the Charter. Article 18 of the Charter. paragraph 1. It was agreed not to incorporate this paragraph in the General Agreement. Paragraph 2. it was agreed. to incorporate this paragraph in the General Agreement, with the exception of the last sentence of the introduction /to this E /PC/T/C. 6/74 page 3 to this paragrpaph beginning with the words "The Organization". The Delegatos for Brazil and the United States wished to reserve the position of their respective Governments on the inclusion of this Article in the General Agreement. Article 19 of the Charter. It was agreed to incorporate this Article in the General Agreement with the exception of the last sentence in paragraph 2, beginning with the words "The Organization". Article 2O of the Charter. It was agreed that this Article should be incorporated, by reference, in the Declaration. Article V. (Artrcle 21 of the Charter). It was agreed to incorporate this Article in tha Geneal Agreement with the exception of paragraph 4, which was now transferred to Article 19, and with the addition, to paragraph 1, of the words in square brackets "or would prejudice the legitimate business interests of particular enterprise, public or private." Articles 22 and 23 of the charter. It was agreed that these Articles should be incorporated, by reference, in the Declaration. Article XVIII. (Article 37 of the Charter). It was agreed to incorporate this Article in the General Agreement. Article VI. In the discussion of this Article, which does not appear in the Charter, reference was made to the suggestion of the Delegate for the United Kingdom Paragraph 1. It was agreed that this pargraph should be incorporated paragraph 1 It was agreed that this paragraph should be incorpated in the General Agreement with the Note in square brackets on page 8 of C .6/w.53 as a footnote. The rest of the Article and the suggsstion of the Delegate for the United Kingdom will be discussed at the next meeting, tomorrow at 2:45 p.m.

GATT Library

bt280pp9749

Summary Record of the Fourth Meeting : Held at the Capitol, Havana, Cuba, on 13 December 1947 at 3.15 p.m

United Nations Conference on Trade and Employment, December 15, 1947

General Committee

15/12/1947

official documents

E/CONF.2/BUR/SR.4 and E/CONF.2/BUR/SR.1-12

https://exhibits.stanford.edu/gatt/catalog/bt280pp9749

bt280pp9749_90180212.xml

GATT_155

United Nations Nations Unies RESTRICTED CONFERENCE CONFERENCE E/CONF. 2/BUR/SR.4 ON DU 15 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH SUMMARY RECORD OF THE FOURTH MEETING Held at the Capitol, Havana, Cuba, on 13 December 1947 at 3.15 p.m. Chairman: Mr. Max SUETENS (Belgium) First Vice-President 1. CENTRAL DRAFTING COMMITTEE (Note by the Executive Secretary, E/CONF.2/BUR/10) The EXECUTIVE SECRETARY suggested that the persons comprising such a committee should be experts in drafting international instruments and treaties and hoped, that, if this note were acted upon, delegations would shortly send nominations to the President of the Conference. He stated that countries were not specified in the note in order to emphasize the fact that the Committee was a technical one and its members should be chosen on the basis of their technical knowledge rather than on a geographical basis. Mr. CHARLONE (Uruguay) Chairman of Committee IT,suggested that two. candidates should be Spanish speaking and one Chinese speaking. Mr. WONSZ KING (China) replied that if the Committee were to provide texts in Spanish and Chinese, there should be two Spanish and two Chinese- speaking members. At this point, Mr. D. WILGRESS (Canada) Chairman of Committee III, requested the Committee to pass on to the next item on its agenda, returning later to the first, as he would shortly be obliged to leave so as to preside at the meeti.ng of Committee III. - 2. PROG SS S OTHF E COERENNFC(Note by the ExecuE tive Secretary, EONFB2/.UR/11)./B e EEEXUTICMR ECRFTERY pointed out that progress so far would make it. impossible even to approximate the original target dates sent unless there were some change in the procedure and in the interpretation put by many delegations on the flexible rules regarding simultaneous meetings of committees, agreed to previously in the General Committee. In so large a conference, difficulties and inconveniences had to be faced and to endeavour to avoid all conflicts would prolong the conferen ce by many months. /Mr. WILGRESS E/CONF. 2/BUR/SR. 4 Page 2 Mr. WILGRESS (Canada), Chairman of Committee III, explained that his committee, the least advanced to date, had evolved a procedure for grouping and classifying the amendments with a view to the general discussion in the main committee, so as to leave the discussion of each separate amendment for the sub-committee stage. He agreed that Committee III would be unable to meet the date set for it but believed that it could be very nearly finished by 15 January and that a target date of 31 January might be set for the entire Conference. Mr. ROYER (France) was in favour of the same procedure with regard to amendments but suggested that the so-called "technical articles" might with advantage be referred immediately to a sub-committee without previous broad discussion in full committee. He suggested that it might now be possible to limit the time of speeches. He also pointed out that too much haste in setting up sub-committees and in scheduling their meetings with the consequent difficulty for small delegations to be heard at the sub-committee stage, would result in issues being reopened in the main committees. Mr. COLBAN (Norway), Chairman of Committee VI, supported by Mr. CLAYTON (United States), was against limiting the length of speeches. Mr. NASH (New Zealand), Vice-President, suggested that a saving of time could be effected by arranging for delegations which had put forward similar amendments to meet with a view to consolidating their amendments. Mr. STUCKI (Switzerland) said that the procedure proposed by Mr. Nash had been used in many conferences and that it had been Successful whenever the authors of the amendments were desirous of reconciling their views. The CHAIRMAN believed that this proposal was already covered in the last sentence of paragraph (a) of the Executive Secretary's note. Mr. NASH (New Zealand), Vice-President, felt that such a sub-committee would not discuss the amendments themselves but merely their relationship to one another. Mr. COLBAN (Norway), Chairman of Committee VI, while agreeing with the purpose, wished to. point out that great care would be necessary to avoid grouping amendments which looked similar but were based on quite different viewpoints. Mr. MALIK (India) Second Vice-President, wished the secretariat to work out some machinery to carry out Mr. Nash's suggestion. Mr. NASH (New Zealand), Vice-Chairman, suggested that the application of the rule that, two persons having spoken for one side, the following speaker must speak against them or the discussion end, would save time. The CHAIRMAN pointed out that Rule 22 applied only to motions for the closure of debate. /Mr. AUGENTHALER E/CONF.2/BUR/SR.4 Page 3 Mr. AUGENTHALER (Czechoslovakia), Vice-President, suggested that fewer delegates would feel obliged to speak if some sort of vote were taken at the beginning of debates that would show the sense of the meeting. The CHAIRMAN said that the committee appeared to be agreed that speeches should not be limited but that the chairman should remind delegates to be brief and should keep debates to fundamental points, and that delegations presenting similar amendments should try to evolve common ones in order to ease subcommittee work. He pointed out that this brought the Committee to consideration of point (b) regarding the question of revising the target dates for the Conference. Mr. HOLMES (United Kingdom) thought that since the date had been set with some expectation of exceeding it, it would perhaps be unwise to alter it so early in the Conference as the possibilities of going beyond a target date were for his delegation, and presumably also for others, limited. Mr. ABELLO (Philippines), Vice-Chairman of Committee II, agreed with Mr. Holmes and pointed out the psychological value of a target date. Mr. STUCKI (Switzerland), Vice-President, felt that it would be more realistic not to establish a target date. Mr. ROYER (France), while agreeing with Mr. Stucki, thought it dangerous to have no target datea nd suggested that it was still too early to fix a date other than 15 January. Therefore, this date might be maintained for at least another week. This was agreed. The CAIRHMAN than drew the Committee's attention to the question of the arargnement of meetings mentioned in the last paragraph. Mr.WwUNZSK ING (China) considered that too many sub-committees were being set up. r. COLBANW(NorwBr), Chairman of Committee VI, said that his delegation, which was a small one, was willing to face the fact that sub-committee meetings could not be rranged so that they could be represented at every meeting. However, he felt that not more than two of the main committees should meet simultaneously. The EXECUTIVE SECRETARY understood it was the consensus of opinion within the General Committee that, provided only two main committees met together, the original formula, set out in document E/CONF.2/BUR/2, was not to be a rigid one and that the secretariat would arrange sub-committee meetings with all possible regard for the avoidance of undesirable clashes, although it was obviously impossible to avoid them entirely. Mr. NASH (New Zealand), Vice-President, stated that he was in favour of many working sub-committees being set up, to expedite the work. /Mr. STUCKI E/CONF. 2/BUR/SR . 4 Page 4 Mr. STUCKI (Switzerland), Vice-President, stated that, as a representative of one of the smallest delegations, he accepted the Executive Secretary's proposals, for the same reasons as Mr. Colban. Mr. ROYER (France) asked the General Committee, to authorize chairman of sub-committees to schedule night meetings where necessary and the EXECUTIVE SECRETARY replied that meetings could be called at another than the normal hours of 10.30 and 4.00. 3. THE DISCUSSION RETURNED TO THE FIRST POINT ON THE AGENDA,THE CENTRAL DRAFTING COMMITTEE. Mr. WILCOX (United States) said that, if the terms of reference of this committee were to produce clear texts in English and French it need only consist of people familiar with those languages and, if it were to produce them in the other official languages, three rather than four other members was sufficient. The EXECUTIVE SECRETARY stated that it was extremely unlikely that any texts other then the English and French, (the authoritative ones according to Article 92), would be available, whilst the Conference was still in- session, although the secretariat would endeavour to produce them as soon as possible. He had thought it would be useful for representatives who were expert in the other official languages to be present, as they might be called on later for assistance, when the texts in those languages were established. He had provided for two Spanish-speaking members because the large number of delegations from Latin America made it easier for them than for the Chinese delegation to nominate representatives to the Committee. Mr. HAKIM (Lebanon), Chairman of Committee V, considered that, since one of the functions of the committee would be to reconcile the texts of the various chapters, a knowledge of languages should not be the sole criterion. Mr. COLBAN (Norway), Chairman of Committee VI, believed it to have been agreed that the Central Drafting Committee should be responsible only for the texts in the working languages and that the soeretariat should produce translations into the three other official languages. Mr. IWLCOX (United States) while agreeing with Mr. HAKIM, pointed out that, in order to complete efficiently its purely mechanical task, the Central Drafting Committee should consist of no more than five members chosen on the basis of linguistic ability and logical minds rather than geographical distribution. - In reply to Mr. WUNSZnK 's G reuest for clarification of the larguaes question ,t wa the uEUIVE SECRETARy exlained that iwa fsnderstandingg that the Final Act authnz iancating the texts in the two working.nuages /would be E/CONF.2/BUR/SR.4 Page 5 would be signed at the end of the Conference. Texts would be prepared in the three other official languages and deposited with the Secretary-General of the United Nation but in case of disputes only the English and French texts would be authoritative. He repeated that the purpose of having members who were expert in the other official languages was to have persons who could be called on for assistance by the secretariat should any questions arise during the translation of the texts. Mr. WUNSZ KING (China) was in favour of a Final Act and asked that it be signed in the five official languages. Mr. ROYER (France) suggested that, as the Drafting Committee could not take responsibility for all five languages the third and fourth lines of paragraph (b) be changed to read "....and that the authentic texts are identical". Mr. COLBAN (Norway), Chairman of Committee VI, wished to reserve his position regarding the translation of the Final Act into the official languages, as he was not certain whether such action entailed any additional privilege in connection with the use of those languages by the United Nations. Mr. WUNSZ KING (China) said that he must, in that case and pending consultation, with his delegation, make a general reservation regarding Article 92, paragraph 1, of the Draft Charter. . The CHAIRMAN stated that it was agreed to have a.Drafting Committee consisting of four persons and a chairman with a perfect knowledge of English and French. There would also be observers for the three other official languages, to be available, later as experts. The Executive Secretary would expect to receive nominations from delegations. 4. P-UBLICITY OF SUBCOMMITTE MEETINGS The EXECUTVISECRETARY stated that a technical breach of Rule 47 had been committed as the Department of Public Information had been issuing press communiques covering sub-committee meetings. He explained that he had taken the position that he could accept no responsibility for their accuracy as this would make them official records of the Conference and the proper way for official records to appear was as summary records. The latter had not been contemplated for sub-committee meetings as a report of conclusions reached by such working groups was considered of more value than a record of the debate which produced them. Moreover, the publication of summary records for all sub-committees would require a substantial enlargement of the documents and languages staffs. He requested the.General Committee to reach some final conclusion and wished to explain that it was the practice of the Department of Public Information at United Nations Headquarters to issue press communiques of the proceedings of closed meetings without the /prior approval E/CONF. 2/BUR/SR.4 Page 6 prior approval of the chairman. Moreover it seemed to be the experience of the Conference that it was not possible to withhold information regarding close meetings as accounts had appeared of meetings where no release had been made which were sometimes weighted. Mr. HOLMES (United Kingdom) said that the question appeared to be whether the rule which had been adopted was to be adhered to or not. He considered that there might be occasions when publicity would not be desirable. Mr. COLBAN (Norway), Chairman of Committee VI, considered that press releases emanating from the United Nations information service would be considered as authentic and if they were to be made must be accurate. Mr. WILCOX (United States) considered that the best way to avoid arousing interest in sub-committee meetings was to have regular routine press releases with no official standing. He suggested that a representative of the Department of Public Information mgiht explain their character to the Committee. Mr. GORDON (Department of Public Information) explained that at the Headquarters of the United Nations there were no secret meetings and that closed meetings were always attended by members of his department and communiques issued impartially after each one. Mr. DEDMAN (Australia), Chairman of Committee I, considered that the rules must be complied with and that, therefore, the chairman of the sub- committee must approve any releases before they were issued. He was supported by other members of the committee, who also pointed out that, in order to save time, there should be no discussion in the sub-committee of the contents of such releases. This was agreed .5The EEXCUTIVE SECRETARY asked whether the committee wished to consider the question of non-governmental organizations and it was agreed that he should circulate papers on this question instead. 6. Mr. STUCKI (Switzerland), Vice-President, wished to make it clear,i n the name of all the delegations who were not members of the Preparatory Committee, that such amendments as they submitted answered to their desire to improve the Charter and not, as had been suggested in the press, to destroy it. The CHAIRMAN assured Mr. Stucki that there could be no such misconception. The meeting rose at 7.00 .p m.

GATT Library

by645td5672

Summary Record of the Fourth Meeting : Held at the Capitol, Havana, Cuba, on 17 December 1947 at 6.30 p.m

United Nations Conference on Trade and Employment, December 23, 1947

General Committee

23/12/1947

official documents

E/CONF.2/BUR/SR.5 and E/CONF.2/BUR/SR.1-12

https://exhibits.stanford.edu/gatt/catalog/by645td5672

by645td5672_90180213.xml

GATT_155

United Nations Nations Unies CONFERENCE CONFERECE E/CONF.2/BUR/SR.5 ON DU 23 December1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINA:ENGLISH GENERAL COMMMITEE SUMMMARY RECORD OF THE FIFTH MEETINGI Held at the Capitol, Havana, Cuba, on 17 December 1947 at 6.30 p.m. Chairman: M. Max SUETTEN (Belgium), First Vice-President THE CHAIRAN opened the meeting by proposing a ruling that meetings of the General Committee were private and that at the close of each meeting an official coiammunique approved by the Chairman should be issued to the press by the Executive Secretary. This would be the only information on the meeting issued to the press. This was agreed. 1. PARTICIPATION OF NON-GOVERNMENTAL ORGANIZATION IN THE WORK OF THE CONFERENCE (document E/CONF.2//BUR13) The EXECUTIVE SECRETARY explained that, after the discussion of this questioni n the General Committee, he had spoken with the representatives. of the non-governmental organizations who had all expressed a certain dissatisfaction with the decision. He had explained to the International Chamber of Commerce, with regard to its suggestion concerning the procedure for speaking at meetings, that he considered it already covered in the original arrangements and further that he considered it premature to question the arrangements before they had been tested. However, the non-governmental organizations had asked for an official interpretation of the arrangement by the General Committee. M. COLBAN (Norway) Chairman of Committee VI, said that he also had already had occasion to point out to the representative of the International Chamber of Commerce that the last paragraph of their letter was covered by the arrangement. Mr. WILCOX (United States) suggested that the President of the Conference should communicate to the non-governmental organizations the decision of the General Committeei n this sense. Mr.HOMELS (United Kingdom), questioned, whether a possible undesirable precedent were not being established by not adhering strictly to the Rules of the Economic and Social Council, which provide that non-governmental organizations should submit their viwes and documents to a consultative committee. /The EEXCTUIVE E/CONF.2/BUR/SR,5 The EXECUTIVE SECRETARY eplained that the Consultative Committee of the Economic and Social Council was peculiar to the Council itself and that the Economic and Social Council Report provided that consultation by the Commissions of the Council with non-governmental organizations should normally be direct. Therefore, if the arrangement for consultation agreed to in the General Committee were adhered to on the grounds of assimilating the Conference to the Commissions of the Council, there would be no precedent. It was agreed that the last paragraph of the letter of the International Chamber of Commerce was acceptable to the General Committee in that it was already covered by .he arrangements for consultation and -that the President of the Conference would inform the non-governmental organizations to this effect. 2. PUBLICITY OF SUB-COMMITTEE MEETINGS. COMMUNICATION RECEIVED BY THE PRESIDENT OF THE CONFERENCE FROM THE CUBAN DELEGATION (document E/CONF. 2/BUR/14) Dr. GUTIERREZ (Cuba), moved reconsideration of the decision taken at the last meeting of the General Committee and a return to the procedure frv press releases regarding sub-committee meetings which had been followed before the decision was taken. If it were necessary to amend Rule 47, he considered -tha this should be done. The CHAIRMAN, in order to channel the discussion, asked that those delegates who had speciifiq. complaints against the old system speak -first. Mr RICHARD(France)l, Mr. COLBAN (Norway.), Chairman of Committee VI: and Mr. STIKEI .(Switzerland.), Vice-President, cited specific incidents of inaccurate reporting. Mr. AMLLO (Philippines) Vice-Chairman of Committee II,- suggested that the question was whether the rule should be maintained or not. Mr. TINOCO. (Costa Rica), Vice-President, supported Dr. Gutierrz Mr. CHAONELM (Uruguay), Chairman of Committee IV, stated that he would be in favour of revising Rule 46, which provides that sub-committee. meetings should , be private, as he considered it the cause of the difficulty,. He believed. that, since the most important work of the Conference was done in sub-committees, they should be open to press and public. Failing a revision of this rule he would support Mr. Gutierrez and Mr. Tinoco in asking. for a very liberal interpretation of Rule 47 and the issuance of detailed communiques regarding sub-committee meetings. Mr. ABELLO (Philippines), Vice-ChaiIrman of Committee II suggested a the letter from the Cuban delegation be considered as an amendment and refferred to a sub-committee. to discuss and reporting a plenary meeting The CHAIRMAN did not think that an amendment to the Rules of Procedure /was E/CONF. 2/BUR/SR.5 Page 3 was necessary. He considered. that the rule could be interpreted as meaning that Chairmen of sub-committees had the right to issue formal communiques when they considered it advisable but that these need not necessarily exclude the issue of routine press releases by the information services of the Secretariat. Mr. WUNSZ KING (China) agreed with the Chairman and suggested that such communiques be marked "official" and all others "unofficial". Mr. COLBAN (Norway, Chairman of Committee VI, stated that in his-opinion, to give full publicity to sub-committee meetings would be to defeat their purpose and savoured the rule in its present form. He did not consider errors in press, releases unimportant and indicated displeasure regarding reports that had appeared in the press concerning the last meeting., Mr. ABELLO (Philippines), Vice-Chairman of Committee II, considered the Chairman's interpretation of the rule so broad as to make it advisable to consider changing the rule itself. . Dr. GUTIERREZ. (Cuba) felt that it was not a question of correct or incorrect quotation in the press which could. not be controlled and. agreed with Mr. Abello regarding the interpretation of the rule. He suggested that. it be altered to read as follows: "At the close of any private meeting the Department of Public Information will issue a press communique or give an oral report to ., the press as might be considered convenient. Although this information: must be made impartially, it shall have no official standing, only when a private meeting be declared secret by a decision. of a sub- committee, there will not be a representative of the Department of . Public Information attending and no communiques issued.. The Chairman, subject to the concurrence of the body concerned, if it is considered. necessary, may issue official communiques to the press through the Executive Secretary when he sees fit". Mr. MALIK (INDIA), Second Vice-President, stated that his delegation had always been in favour of open meetings. He suggested that serious: consideration be given to referring both Rules 46 and 47 back to a plenary meeting. Mr. NASH (New Zealand), Vice-President, was in favour of the retention of beth rules with the interpretation placed on them at the last meeting. He considered it dangerous for the Conference to be controlled by the press and public opinion and felt that to refer this matter to a plenary session-. would be unnecessarily time consuming. Mr. WILCOX (United States) suggested that the new arrangement had not bee. sufficiently tested as yet and asked. the President of the Conference /to request E/CONF.2/BUR/SR . 5 Page 4 to request the Chairman sub-committee to. issue informative communiques after each .meeting Mr. HOLMES.(United Kingdom believed that, sine the I4 -had been passed, there was no question of interpretation but only of compliance with it. He pointed out that the rule did not specify who should draft the commmiques and considered. ccattableould be perfectly acceptable for the information services of the Secretariat to do so but that it was, to their advantage :to- check with. the Chairmen for accuracy. Mr. STCI (Switzerland), Vice-President, agreed with Mr;. Colban, Mr. Nash and Mr, Holmes and pointed out that no commercial treaties had..ever been signe where the press was admitted to the negotiations. He did not wish the work of the Conference hampered or too great publcity or pressure from the press and hoped that Mr. Wilcox's suggestion would be carried out. MR.HAKIM (Lebanon),.Chirman of Committee V, also -supported Mr. Wilcox's proposal. The, EXECUTIVE SECRETARY wished to reply to some of the charges .that had been made against. the Department of Public Information. He pointed out that the secretariat could not, of course, accept responsibility for reported: appLaring in the press which did not or iginanite in its press communiques and: added that the inacuracies in. the communiqes themselves had been relatively few, given. the numbers issued and the conditions of work, Correction were always made imeddiately a, delegation so requested., With respect to the charge,made against the head of the public information; services concerning. reports of. the previous meeting of the General cCommittee in the press, he wished to inform delegatinos that no communique whatsoever, written or Oral, had, been issued.by the secretariat except the four line prose release ITO 112. Mr.COLBAN (Norway), Chairman of Committee VI, accepted the statement of the Executive:Scoretary. In reply to a question from Mr. Nash, Mr. WlLCOX (United States) explained. that. the information regarding the last meeting of the Generlal Committee had been be.given to. the press. by the press officer of the United States delegation. The CHAIRMAN stated that three members of the Committee were in favour- of the revision.of..Rule 46, whereas the discussion really concerned Rule 47. He suggested as a compromise, that it should be understood that there would be close collaboration between the Chairmen of. the. sub-committees and the Department of public Information: and that the original decision be retained, changing it to read as follows: "The Department of Public Information would continue to Issue press release but should be mad up in agreement with appropriate subcommittee Chairman." /Dr. GUTIERREZ E/CONF.2/BUR/SR.5 page 5 Dr. GUTIERREZ (Cuba) reserved the right to present the case to a plenary meeting. Mr. CHARLONE (Uruguay), Chairman of Committee IV, stated that if the question were referred to a plenary meeting he would propose that Rule 46 be amended to make sub-committee meetings public. Mr. WILGRESS (Canada), Chairman of Committee III, stated that he hoped this question would not be taken to a plenary meeting as he considered it would be dangerous for the success of the Conference and he believed the latter to be more important than relations with the press. Ie was in agreement with the arguments of Mr. Colban and Mr. Stucki. Mr. WILCOX (United States) asked that his suggestion be put to the committee. Mr. TINOCO (Costa Rica), Vice-President, suggested the following resolution: "In carrying out the disposition of Rule 47, the Department of Public Information shall co-operate with the Chairmen of the bodies concerned in drafting the communiques provided for in the Rule, in order to assure the most correct information to the public." Mr. CHARLONE (Uruguay), Chairman of Committee IV, said that he did not believe that publicity or lack of it would affect the success of the Conference. He considered that its work could be expedited by calling a meeting of Heads of Delegations to determine where divergencies really existed. The CHAIRMAN put Mr. Wilcox's proposal to a vote. There were ten representatives in favour, one against and four abstentions. It was, therefore, agreed that "the President of the Conference shall instruct the sub-committee chairmen to make full and informative statements after each meeting in collaboration with the information services of the Executive Secretary". Dr. GUTIRREZ (Cuba) repeated his reservation. Mr. CHARLONE (Uruguay), Chairman of Committee IV, explained his abstention on the grounds he had previously stated of proposing an amendment should the question go before a plenary meeting. Mr. HOLMES (United Kingdom) explained that he had abstained because he considered. the resolution too vague. The meeting rose at 9.25 p.m.

GATT Library

vq463st7469

Summary Record of the Fourth Meeting : Held at the Capitol, Havana, Cuba, on Wednesday, 3 December 1947, at 10.45 a.m

United Nations Conference on Trade and Employment, December 3, 1947

Committee III: Commercial Policy

03/12/1947

official documents

E/CONF.2/C.3/SR.4 and E/CONF.2/C.3/SR.1-16

https://exhibits.stanford.edu/gatt/catalog/vq463st7469

vq463st7469_90190217.xml

GATT_155

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/C.3/SR.4 ON DU 3 December 1947 DU ORIGINAL: ENGLISH TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI COMMITTEE III: COMMERCIAL POLICY SUMMARY RECORD OF THE FOURTH MEETING Held at the Capitol, Havana, Cuba, on Wednesday, 3 December 1947, at 10.45 a.m. Chairmr: Mb.L.L .SWIRE;S (Cda) IVUCTIONyORCLEI ISCUSSION .: Mr.TRCOICOONS (e) stt ated hiesd belief tthat icoeu ldb srable toproorvid. n the Chartoe fd reedom of immigration as well.a for freedom ovf trade to help oll the problem of those countries faced with a surplus of labour. Although he had no specific proopos sals to make,he wuldupportthe Italian delegate's statement on this point. * The Charter seemed to him to be concerned primarily with obligations; in very few instances did it directly n,ote rights and privileges. As an example he referredto Article a21, paragraph 5, which.provided only the the Cganization:hould initiate discussions to consider whether other measures might be taken ih h e case of a general disequilibrium.- e merely wished to raise this point, without making a specific proposal. .-- - The `otthats certain customs duties were designed primarily a: instrumentso f fiossc,al policies, not necessarily for protective-urpQs. particularly in economically under-developed countries, shouldbe kept in mind when onsidering Article 17 providing for negotiations directed to the substantial reduction of tariffs, It had breeen said that all types of economies had been repsented at Geneva. neHovver, he believed there was another category, zther under-develop ed nor industrialized but what might be termed afragile economr ocf wmy hicb-hsceountry--warepresentative. The eqono:.ofeecq was based largely upo n twoiegidulural commodities generally not'cosidred.7 basic!ecdasiesu;y - T-fac , thast they were considered luxmrj-pocts-plui customs and fiscal barriers and statde monopolies in other countries,presente condderable obstacles to their:export. Such freile-econawoi as uGseec,--deadent-pon ne. or tio prict-s not indispensable to o,ther c tountr iees, should be protected eveno th xtent of permitting the use of-iscns.riminatory quantitative restrictioi r JBBARAA- y ria) felt tedhat the principle ofz mo-favour'14-ion treatmentj established in Article 16 was ustn, but pointed out that exceptios /ha&been admitted; E/CONF.2/C.3/SR.4 Page 2 had been admitted which would permit the continuation of existing preferential arrangements representing vested interests. However, there were certain countries, within the same ? area, having traditional relationships which should not be overlocked even though these had not been formalized. His delegation had submitted amendments, both in Geneva and here, which would permit the conclusion of new preferential tariff agreements for such economic areas. His delegation would like to have clarified the obligations new members would assume under Article 17. For example, could a country refuse to negotiate on particular items or raise unbound items for fiscal purposes? Article 18 required clarification; the principle of preventing the use of internal taxes to nullify tariff concessions was acceptable. But it should not be necessary to accord national treatment in the event there was no national production of the identical product and no specific binding agreement. Although the elimination of quantitative restrictions was a good pinriciple, it should be possible to use quantitative restrictions for the protection of certain vital industries where tariffs could not accomplish that aim. As for Article 22, countries which introduced restrictions because they lacke d certain currencies shoul. not be prevented from continuing to import from otherou cntries with which they ha?d favourable monetary balance. Article 33 should be reconsidered and permissible defense measures against dumping strengthened. The anti-boycott amesures dealt with in Article 39 should be extended and strengthened, but exceptions should be made where the vital interest of a country was concerned. Specificme amndents would be presented at the proper time. . HAIDER (Iraq), while in full agreement with the basic principles of Chapter IV, felt that tariffs designed for fiscal purposes should not be subject to negotiation, and hoped that a member who had been present at; the Geneva Conferenc e and who had been involved in the negotiations leading p to the General Agreement on Tariffs and Trade might clarify the intention of Article 17 in this respect. In particular, would a preferential argina established.undir Articl's 15 or 42 be subject to negotiation under Article 17? He believed that preferential arrangements between small producing areas having complementary trade would not cause the dislocation which Article 16 was designed to prevent. Customs unions, although permitted under Article 42;. required a long time to establish and involved administrative difficulties. Therefore preferential arrangements should be permitted as well as customs unions and supported the Syrianyrian, Lebanes anda Turkish proposals in this respect. /Hi delegation E/CONF.2/C.3/SR.4 Page 3 His delegation would have an amendment to submit to Article 39 to permit countries to utilize economic sanctions as a defensive measure where their national interest was threatened. The situation of the Arab League at the present time might necessitate resorting to such measures. Mr. HAKIM (Lebenon) felt that one solution for the handicap of small countries with limited markets was regional co-operation through customs unions, free trade agreements, or preferential tariff agreements. His country knew the difficulties of customs unions and it was doubtful if many would be formed. He would present amendments to Articles 16 and 42 to allow free trade and preferential agreements for economic regions. He saw no reason why the smaller countries should not exchange preferences in order to compete with highly developed countries which did not need them or which might not be ready to reciprocate. Also he urged that boycotts should be allowed where the national interest of a Member was threatened. Mr.HASKNIE (Pakistan) supported the remarks concerning Article 20 made by the representative of Ceylon. He suggested that under-developed countries should be permitted to protect their resources and to give priority to essential imports. Mr.GONZALEZ (Uruguay) felt that the argument for quantitative restrictions for agriculture as against industrialized products was prejudicial when it affected countries whose sole source of income was from agricultural products. He felt that the right of a state to protect itself within adequate limits could not be delegated to any international organization. Mr. STUCKI (Switzerland) felt there was a contradiction between Chapter II and Chatper IV. His country was faced with a problem of exporting merchandise which must be paid for in hard currency and which could be considered as luxury items. He understood the concession granted to under-develoepd countries and those with difficulties concerning balance of payments, but he was concerned with the possibility of ? in a country whose chief industries were directed towards export. The application of quantitative restrictions by countries permitted to do so under the rule of Article 21 would involve Switzerland in unemployment and thus defeat the provisions of Article 3. His proposal was intended to assist in maintaining employment in the face of such a threat. He recalled that there had been an international conference twenty years ago which had sought to reach agreement on the abolition of prohibitions. This Conference had produced a general and simpler formula in contrast to the complexity of the Articles of the draft Charter. This complexity was a most serious obstacle to ratification by parliaments. He wished to substitute such a general provision for the whole of Articles 21 to 24. \; b RICHARD (France)).' E/CONF.2/C.3/SR.4 Page 4 Mr. RICHARD (France) stated his government had approved the General Agreement, which contained almost all of the Articles of Chapter IV of the Draft Charter, and he stressed the provisional nature of the Agreement. He pointed out that one of the essentials of the Charter was the evaluation of the balance of payments problem which would give rise to quantitative and emergency restrictions; this evaluation was left to the ITO which would follow the opinion and advice of the International Monetary Fund. Here was a new problem in that certain countries were not members of the Fund. What organization would have the task of evaluating their situation? The autonomy of the Organization had not been clarified. If there should be one vote to every member, he would not oppose that but this would be in conflict with the weighted voting system of the Fund. Mr. DEJOIE (Haiti) reserved the position of his delegation concerning Article 16. The twelve countries in the Central American trade zone sought a preferential system. Their customs tariffs were for fiscal purposes and there had already been some reduction on materials required for industrial development and there would be others when their system of taxation had been developed. Mr. AZIZ (Afghanistan) drew attention to the vital problem of transportation as it particularly affected his country because of its special geographic position. He would submit amendments to Article 35 asking for rate reductions or "free zones". He would also submit amendments concerning "breaking of bulk". Mr. COOMBS (Australia) admitted the complexity of Chapter IV. His government was prepared to accept the obligations of Chapter IV provided that Members carried out the obligations of the other Chapters, particularly those relating to employment. Should the conditions of 1929 and the following years prevail, he did not pretend that it would be practicable to carry out the commercial policy provisions and his government would seek a revie wof their obligations by the ITO in accordance with the provisions of the Charte.r His country would abide by the decision of the Organization should review be sought. It seemed to him that some representatives did not understand the intent of Article 17. It was true that the Article required negotiations toward the reduction of tariffs and the elimination of preferences, but if the experience of Geneva was a criterion, reassurance could be offered as to its operatio.n His country, looking forward to considerable industrial development, had gone to Geneva determined to protect that policy and to use protective devices for that purpos.e Accordingly, requests received for reduction of tariffs were scrutinized, and when they were not consistent with Australian /development E/CONF.2/C.3/SR.4 Page 5 development policy, were rejected. In some cases minor concessions were made; in other it was stated they were not prepared to bind the items; and thus they preserved the freedom necessary to raise the rates when future development was contemplated.- Australia preserved its freedomi st action and itself decided what items were negotiable. Under the General Agreement bindigns were not permanent. Afte rthree years, it was possible to unbind a particular item without treminating the agreement as a whole. There was also provision in both the General gAreement and nd the Charter fora country to seek release from obligations before the end of ther thze year period, provided the concurrence ollf a parties was obtained. The ITO would use its good offices in such circumstances. Ifa tariff wasfor revenue pusrpoes there was, as in the case an of xn industry, subject to future development, reason for withholding negotiations on that iEtem. ven when an item was bound, the duty could be increased for revenue purposes provided a comparable duty pwas imosed on the same domestic p.roduct He considered tariffs the simplest protective device in the majority of cases of industries undergoing developmIent.-n some instances, however, quantitaetive rstrictions might be the most efficient and least reaterictiv, but these w ere so'few they should have the prior approval o- the ITO. Australia was prepared to accedes to thi. The argument for regional preference arrangement for economic dev eloment ha, msomeercait inc sses, but under Article 15.prefeorence- fr this purpose were permissible with the prior approval of the Organization. Concerning the point raised by the representative oaf Pakistn regarding tlihem nestabshet of priorities on imports, he felt this would come under Article 21 because such priorities would be necessitated by the very lack of foreign exchange envisaged in that Article. The Problem posed by the representative of Switzerlaind was dfficult ad complex anl should be studied with the same concern eas thoe problems affecting the under-industrialized countries. Mr. Coombs could not believe there was a contradiction between Chapter II and Chapter IV. As he understood it, Switzerland was a hard currency country and had a positive balance on current account, but because of limitations placed upon its exports by other countries it was faced with a possibility of unemployment, the method of resolving this was provided in Cha. ,pter I. A country which stimulated internal purchasing power in order to sustain effective demand, might icur balance of payments difficulties. However, the Sviss economy was not in this position at present. To deal with the situation envisaged /by the Swiss E/CONF.2/C.3/SR.4 Page 6 by the Swise representative by drafting the Charter in more general terms would allow a wide range of independent action leading to abuse. He felt it would be far better to consider the problem in detail and decide what specific provisions could be introduced into the Charter to deal effectively with the situation, affording a maximum relief to Switzerland with a minimum of harm to other countries. Mr. D'ASCOLI (Venezuela) was in agreement with those delagates who felt that the exemptions from general principles to cover particular situations, e.g. those to be found in Aritcles 16, 18, 19, 20 and 26, would have to be admitted for countries defending their new industries or protecting their national incomes, but he could not understand why the prior approval of the Organization was required for some and not for others. He strongly supported the need for preferential arrangements for such groups of countries as the Near East, Central America, other Latin-American countriens and other geographic regions. He would like a clarification of the position regarding the raising of tariffs after negotiations had been carired out and he referred to the terms of Article 1, paragraph 4, which could be involved as ground for a complaint under Article 89. He alsor requested the amplification of Article 21 to cover further contingencies. The CHAIRMAN stated that the general discussion would be closed after hearing the representatives of New Zealand and Argentina at the next Meeting. Then next meeting would be held Thursday, 4 December 1947 at 4.00 p.m. The meeting rose at 1.15 p.m.

GATT Library

nf496fv9963

Summary Record of the Fourth Meeting : Held at the Capitol, Havana, Cuba, on Wednesday, 3 December 1947, at 4.00 p.m

United Nations Conference on Trade and Employment, December 4, 1947

Second Committee: Economic Development

04/12/1947

official documents

E/CONF.2/C.2/SR.4 and E/CONF.2/C.2/SR.1-17

https://exhibits.stanford.edu/gatt/catalog/nf496fv9963

nf496fv9963_90180438.xml

GATT_155

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE . E/CONF.2/C.2/SR.4 ON DU 4 December 1941, TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL : ENGLISH SUMMARY RECORD OF THE FOURTH MEETING,, Held at the capitol, Hawana, Cuba on Wednesday, 3 December1947, at 400 p.m. Mr. Ramon Chairman(:BETETA ).(Mexico) The CHAIRMAN invited the attention of the delegations the amenments to Chapter III submitted by Argentina, Burma, Costa Rica, Czechoslovakia, India, Italy, Turkey, and the United States of America, and to three papers prepared by the Secretariat with reference to Article 10, paragraph 2, E/CONF.2/C.2/3)The responsibilititiesi and Activities of the Unied Nations in the Field of Economic Development (E/CONF.2/C.2/2), and Function Funtuatios and Activities of Specialized Agencies of the United Nations in the Field of Economic Development (E/CoNF.2/C.2/4). He also informed the Committee of a reecommdation made by the General Committee for the guidance of all Committees to avoid, as far as possible, all annottadios and interpretative notes the substance of which should be incorporated within the integral text of the Charter. Only unavoidable annotations should be permitted to form part of the Charter. He then suggested that in the event of no agreement being reached on any Article, a small Sub-Comittee should be appointed to study and report back to the Committee where the general debate would then be resumed. Individual Representatives who were not members of the Sub-Committee would be allowed to participate or attend its sessions. Mr. BRIGNOLI (Argentina) moved that the Spanish Language be adopted as a working language together with, English and French and said that similar motioes had been made in other Committees. . The CHAIRMAN informed the Argentine Representative that facilities for simultanineous interpretation would and be made available but that in view o the inability at the Secretariateto provide for consecutive interpretation into Spanish, the rulling of the General Committee would have to be followed. Thin ruling only provide only English that and French were to be the working language of the Conference. He also recalled, the motion made by the delegation of China that Spanish adopted as a working language Chinese would have to used too; this, the CHAIRMAN explained, would necessary retard the work in hand. /After E/CONF..2/C.2/SR. 4 Page 2 After a protracted discussion on this language question, in which Ar. OLDINI (Chile), Mr. LIEU (China), Mr. ABELLO (Philippine Republic) and the CHAIRMAN participated, the Chairman ruled the discussion out of order and invited discussion of Article 8. Mr. SEACKLE (United Kingdom) expressed agreement with the substance of the Article but called attention to the footnote to Chapter III on page 12 of E/PC/T/186, regarding the inclusion of the word; "reconstruction" wherever the terms "economic development" or "industrial and general economic development" were used. Since this intention of inclusion had already found expression in Article 9, he thought that the footnote might be dispensed with. Mr . SPEEKENBRINK (Netherlands), supported by Mr. KOJEVE (France), Mr. d'ANNA (Italy) and Mr. WILGRESS (Canada), thought that it was premature to decide on the elimination of this footnote and suggested that this point be discussed again after a Drafting Committee had had time to study and report on it. Mr. OLDINI (Chile) felt that entering into a discussion of Article 8 would be very difficult before the deadline for the submission of amendments (6 December 1947) had been reached. A general discussion could, of course, profitably be entered into, but decisions should await the time when all amendments had been submitted. Mr. BRIGNOLI (Argentina) supported the Chilean representative and added that no Article should be discussed until at least 24 hours after modifications or amendments thereto had been presented to the Commission. Mr. WILGRESS (Canada), supported by Mr. HEIDENSTAM (Sweden), suggested that the discussion should continue and that Articles should be provisionally accepted, in the nature of a first reading, so as not to waste valuable time. The CHAIRMAN pointed out that since the general debate on Chapter III had already closed there was no choice but to adjoumi if the Committee felt the same way as the representatives of Chile and Argentina. He urged, however, that the discussion should be continued withoat making finsl decisions. Mr. OLDINI (Chile) regretman'the Chairman's interpretation of his words as a move to larifiedn and clarified his point of viuw as being much the same as that of the representative of Canada. He had only wished to prevent the taking of a final decision on the footnote to Chaemur III, inasmuch as this point, or any other, might have to be reconsidered in the light of new amendments offered, even if at the present time everybody seemed to be in agreement. No adoption should be automatic, as the Chairman had suggested, and no decision should be made provisionally or finally until after the second reading. He approved of a continued discussion of Chapter III article- by article. /Mr. LIMA E .2/C.2/SR.4 Page 3 Mr. LIMA (1. Salvador) thought that the footnote on page 12 should be omitted for two reasons, (1) because of its contradiction to the Meaning of Article 8 which, as it stool, referred to the economic development of undeveloped countries as apart from reconstruction, and (2) because the General discussion had shown that there existed, important differences between reconstruction end economic development. Mr.d'ANNA(Italy) pointed out that his delegation attached the utmoat importance to the necessity of the reconstruction of the economies of war-devastated countries. Mr.. OLDINI (Chile) re-affirmed. his opinion that the question could not be resolved until a careful study had been made of the entire Chapter. He recalled that at Geneva there had beer a tendency to place economic development and reconstruction on an equal footing, mainly in order to avoid a cumbersome text and to avoid unnecessary repetition. It was not imperative to follow the recommendation of the General Committee to embody footnotes in the relevant Articles and the Committee had full right to determine whether such footnote should be eliminated or maintained. Mr. NASH (New Zealand) suggested that a small drafting committee should be formed to decide on a new text to be submitted for approval by the full Committee. He was convinced that the question of reconstruction should be included in the field of activity of economic development outlined in Article 8. Mr. COOMS (Australiae)explain-e that the problem arose because the Chsrter firts had, been written wtih an ey eto economic development in the omre limited sense, It was later realized that the problems of reconstruction and economic developmetn were mcuh the same. toreferred to Article 9 where reference was specifically made to reconstruction, and to paragraph 1 of Articles 13, 14 and 15 where both economic development and reconstruction were mentioned. Late in the proceedings it was discovered that specific reference had not been madei an ll p lce. At the smae time he was satisfied that it would be preferable to incorporate specific reference to reconstruction in the places where it properly belonged, rather than to cover both questions in a footnote. The references to development (in Article 8) could not literally be read to cover the case of countries whose economies had been impaired by the war, but it seemed desirable that this article should cover such cases. The desirable thing awas for a allr sub-committee to examine each Article and see where it was necessary to include reference to reconstruction. It was better to be precise rather then to leave nay meaning in doubt. Results should be submitted for apprvoal to teh full Committee. Perhaps the footnote should be left pvroisionayll during the re-drafting of the tAricles. NrM. NVOAO E/CONF. 2/C. 2/SR.4 Page 4 Mr. NOVOA(Mexico) felt that the terms "economic development" and "reconstruction" although similar in meeting should be separately expressed. He thought that the best solution would be for a Sub-Committee, consisting of members of war devastated countries should prepare a new draft article which would answer their specific needs. Mr. KOJEVE (France) believed that there was disagreement on the substance of the text to be incorporated. It was difficult to ask a drafting committee to incorporate the footnote into the text of Article 8 since its contents were contested. He suggested. that the word "reconstruction" should be added into Article 8. This modification was admissible. It would be difficult to achieve the aims of the Charter if wer devastated countries were not given the possibility of reconstruction. Mr. COOMBS (Australia) formally suggested that a drafting committee be asked to prepare, for the consideration of the full Committee, drafts of the various articles in Chapter 3 as they would read after the elimination of the footnote on page 12. If those drafts proved unsatisfactory, an alternative solution to the problem could be sought. Mr. FRESQUET (Cuba) agreed with the representative of Mexico that the two ideas of reconstruction and economic development could not embodied in the same text. Mr. RUBIN (United States of America) said of the two Proposals- p3 that of Mexico for the establishment of a Sub-Committee to redraft a new. Article covering the needs of those countries interested in reconstruction, and the Australian suggestion to study the possibilities of incorporating the footnote in the text, the latter seemed the easier solution. He stated. that while he was prepared to agree that the two concepts of reconstruction and economic development might be different, there was always the possibility of the two ideas being embodied in the same Article. -6 zlggested the adoption of the Australian proposal. A long discussion ensued in which the representatives Ha Cuba, Raiti, the Netherlands, the United Kingdom and Chile took part. THE CHAIRMAN suggested that a Sub-Committee be appointed consisting of representatives of Australia, Chile, the United Kingdom, E1 Salvador and France to examine the proposals. At the suggestion of the representative of Chile, Mexico was substituted for Chile. After further discussion it was decided to reach a decision at the next meeting of the Commmittee, The meeting rose at 7.30 p.m.

GATT Library

qj966gb4221

Summary Record of the Fourth Meeting : Held at the Capitol, Havana, Cuba Thursday, 4 December 1947, at 10.30 a.m

United Nations Conference on Trade and Employment, December 4, 1947

First Committee: Employment and Economic Activity

04/12/1947

official documents

E/CONF.2/C.1/SR.4, E/CONF.2/C.1/C/1-4, and C.1/SR.1-13

https://exhibits.stanford.edu/gatt/catalog/qj966gb4221

qj966gb4221_90180275.xml

GATT_155

United Nations Nations Unies CONFERENCE CONFERENCE UNRESTRICTED ON DU E/CONF.2/C.1/SR.4 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI 4 December 1947 ORIGINAL:ENGLISH FIRST COMMITTEE: EMPLOYMENT AND ECONOMIC ACTIVITY SUMMARY RCORD OF THE FOURTH MEETING Held at the Capitol, Havana, Cuba Thursday, 4 December 1947, at 10.30 a.m. Chairman: Mr. J. J. DEIMAN (Australia) 1. CONTINUATION OF GENERAL DISCUSSION OF CHAPTER II The CHAIRMAN opend the meelting, and caled upon the representative of Haiti to speak.. Mr. LEROY (Haiti) agreed with representative or Australia and the Unite d Kingdom that there was a close link between Chapters II and IV of the Der.raft Chart His delegation had presented a formal am emendment to Article 4. Concerted action was necessary with a view to granting equal social rights to all ,workers both national and foreign in every country. It was to the interest of the highly industrialized powers to encourage the deovelopment of the backward countries because they could not sustain full employment within their boundaries if they did not encourage in other countries effective demand their goods, and help the agricultural countries to develop. industry and trade. Mr. MARTINEZ (Argentina) declared himself to be in agreement in principle with Chapter II, and with the objectives of the Organization. He drew the attention of representatives to a programme of ten points, entitled "The Rights of the Worker" which had been adopted by the Argentine Government , and expressed a wish to have it read by the Secretary The CHAIRMAN that this question concerned more closely the work of Committee VI on Chapter I, and suggested that the document be distributed in order that delegates might be enabled to take the matter up in the relevant committee. Mr. MARTIZ (entina) signified his acceptance of this suggestion. He himself was a worker, and. represented the trade unions of his country, an aggrgte of3 millions. Tuld be he voice of the workers shoi4dard at'th Confern of .tablishing the new organizan of-for the egulatioof>n See document E/CONF.2/C.1/3/Add.l /world trade E/CONF .2/C.1/SR.4 Page 2 world trade on a solid and lasting basis, it should be recognized that labour was not a commodity, but a social function, and that it should, as such, be supported by the State. Mr, TERRA (Uruguay) stated that his delegation was in agreement with the Draft Charter, particularly with Chapters I and II, subject to the clarifications which had been enumerated by the delegate for Uruguay at the Plenary Meeting. Article 1 should be identical with Article 55 of the Charter of the United Nations. He was happy to vote that the views of Uruguay coincided with those expressed by the United States in his initial speech, in which he had described the preparatory work of the Conference in London and Geneva. There seemed to be little divergence between the opinions of the various delegations which could not be bridged by minor adjustments. His delegation proposed an amendment to Article 4 Mr. FRESQUET (Cuba) thanked the delegate for the United States for his mention of the fact that it was Cuba which had proposed and obtained the insertion of Article 4, dealing with fair labour standar His delegation was satisfied with the present draft of Chapter ,Il although they were prepared to give sympathetic consideration to amendments of an economic. character which might be presented by other delegations. The CHAIRMAN announced that as thene were no other peakers on the list, the general discussion of Chapter II was closed. 2. DISCUSSION OF CHAPTER II, ARTICLE BY ARTICLE The CHAIRMAN drew attention to the annotated agenda wich had been circulated (E/CONF.2/C.1/3). By decision o f the Conference,amendments could be lodged with the Secretariat up t o 6 December, so that this. version did not contain all the amendments, which might be submitted. He ruled therefore that.the best method of procedure was o iscuss the articles one by one without reaching any final decision on them. Article 2, paragraph 1 Mr. BURGUETE (Mexico) stated that the amendment. proposed.by his delegation for the deletion of the last phrase of paragraph 1 of Article 2 was because it seemed redundant. The objectives wits regard to the expansion of international.trade:and the well-being of aIl countries had-already been stated in Article 1. The achievement of full employment should not.be made subject to the. expansion of international trade. Mr ROYER (France) thought that drafting amendment, of which,this seemed to be one, should be referred to a drafting committee, after the substance had been. agreed upon The phrase recommended for deletion had been discused See document E/CONF.2/C.1/3/Add.2.. /several times E/CONF. 2/C .1/SR.4 Page 3 several times in Geneva, and had finally been included because it was felt that not only from a doctrinaire, but also from a practical point of view, it was well at the outset to stress the close link between the development of international trade and full employment. The CHAIRMAN stated that at a later stage a drafting committee would be set up as suggested, but it might be questioned whether this, the Mexican amendment, was an amendment of substance or one of drafting, Mr. FRESQUEF (Cuba) considered that the Mexican amendment was one of substance. It expressed a similar idea which had been in the mind of his delegation, who had wanted to avoid the inference, that the expansion of trade might have priority over questions of employment. This phrase had been included to strengthen the view that if problems of employment and production were not solved, expanding international trade could not be achieved. He asked the delegate of Mexico if the idea they had in common was mot better served by leaving the text as it was. Mr. MARTINS (Brazil) said that he had taken part in the preparatory work of London and Geneva, and agreed with the reasons put forward by the representatives of France and Cuba for the maintenance of the text. The CHAIRMAN ruled that as no final decision could be taken it would be best to proceed to the discussion of the next article. He declared that it appeared that the sense of the meeting favoured the retention of the paragraph as it stood, Article 2, paragraph 2 Mr. MONGE (Peru) explained that the amendment presented by his delegation was divided into two parts. In the first place, it was s ggested that the word "primarily" should be replaced by the word "partly". Full employment or its opposite, unemployment, could not be achieved or avoided primarily by the. action of the country affected, particularly in the case of underdeveloped countries, In the second place the present text of paragraph 2, dealing with. "concerted action under the sponsorship of ahe Economic and Social Council", was too generalized. The Chapter.should include a clause recognizing the relationship of investment to employment. Mr. LING (China) supported both parts of the Peruvian amendment. Mr.FREQUET(Cuba) thought that perhaps the fault with the word "primary" was caused by the Spanish. translation. The present text should in his opinion be maintained because it guaranteed the legislative Sovereignty of each country in dealing with the problems which arose within their territories. With regard to the second part of the Peruvian amendment, he was in favour of maintaining the present text. Investment /was only one E/CONF.2/C.1/SR.4 Page 4 was only one of the measures which affected employment, and its specific mention might limit the beneficial, scope of international action. Mr. LEROY (Haiti) supported both parts of the Peruvian amendment. Mr. PIERSON (United States) explained that Article 2 recognized certain particular principles and led up to more substantive commitments in succeeding articles. Article 6. contained a commitment whereby members of the Organization should participate in arrangements made or sponsored by. the Economic and Social Council (1) for the systematic collection of information. and (2) for consultation with a view to concerted action. If it was felt that one type of action should be emphasized, it should be done under Article 6. He drew attention to the fact that a part of this amendment had not been discussed, and that was the deletion of the words at the end of the paragaph. He explained that those words were intended only to recognize the lines of jurisdiction. Mr. MONGE (Peru) wonsidered that fromiscussion was leading away from the Cherter. If unemployment could come about through the disequilibrium of.a highly industrialized country it was not equitable. to:attribute. primary responsibility to an undereevelope country for the repircusion which it suff'ered as a resut.He could not agree to withdraw first part of his amendment. With regard to the second part,there there might befifty of action to be taken, but the one. mentioneed was the one which the underdeveloped countries required. of With regard to the deletion of the passage the end the paragraph, thanked the representative of the United States for his explanation. was prepared to withdrarw the suggestion he had made for this passage the deleted. .Article 2, paragraph 3 Mr.MARCELLETTI (Italy) introducing the proposal made by his delegation maintained that there could not be economic equilibrium if there were disequilibrium in the international distribution of labour. Article:3, paragraph 1 Mr. BURGUETE (Mexico) said his. delgation had sutestedt a e r ."approp neriate to" in-he fifth lino f paragraph 1 of Ariticle 3 should be changed to read "consistent with" because it felt that any measues to be taken by Governments in connection with the maintenance of domestic employment must be econsistent with and not merely appropriate to the legislation of the country in question /Mr. FRESQUET (Cuba) E/CONF.2/C.1/SR.4 Page 5 Mr. FRESQUET (Cuba) supported the proposal of the representative of Mexico. Mr. SHACKLE (United Kingdom) felt that the wording of paragraph 1 should not be changed. Mr. MARTINS (Brazil) considered that the amendment suggested by the delegation of Mexico was one of drafting, and suggested that it should be submitted to a drafting committee to be set up at a later date. The CHAIRMAN agreed with the suggestion made by the representative of Brazil. Article 3. paragraph 2 Mr. MARCELLETTI (Italy) said his delegation had proposed the insertion of the words "principally by means of international co-operation" in paragraph 2 in order to emphasize the fact that such co-operation was essential to the attainment of the objectives of the Article. Article 3. proposed new paragraph 3 Mr. AMADOR (Mexico) said that his delegation had proposed an addition to Article 3 for the reason that those countries which, because of their special position, needed seasonal workers, should. promulgate laws which would prevent employers from engaging workers who had entered their countries illegally. The proposed paragraph would not apply to political refugees or to persons who had had to leave their countries because of forced labour systems. Mr. CABILLI (Philippines), while agreeing in principle with the e Maxican delegation,considered that the matter in question was not primarily the. concern of the International Trade Organization but should be the subject of deceaete legislation.The amendment in question was closely related to that fittd by the representative of Italy which his delegation could not support. Mr.Van VEGDUW (Union of south Africa),referring to the remarks of the representative for the Phillippines,said his delegation consldered that Legislation of the brand suggested in the amendment propesed by the Mexican delegation was matter of interral policy. If the problem of illegal migration assumed propertions which required special action, then such action should come from the F.I.C Mr. GANGULI (India) said that his delegation has considerable sympathy with the points of view expressed the represernatives of Italy and Mexico. He did not not consider that migration problems could only handled by individual nations. There was considerable scope for action . He felt that international employment services, international refugee /organizations etc., E/CONF.2/C.1/SR.4 Page 6 organizations etc., which existed or which might be set up in the future should deal with the problem of international migration. Mr. PIERSON (United States) asked whether the representative of the ILO would give some details regarding the work of the Permanent Migration Committee of that organization.. Mr. TATT (International Labour Organization) said the question of co-ordination of employment services was under consideration by the Conference of the lLO at the present time. The Permanent Migration Committee,which had held its first meeting in 1946 and, would probably hold another meeting in the near future, had various migration problems under consideration. An International Convention had been adopted by the ILO Conference covering conditions on which migration of workers should take place from one country to another. The Permanent Migration Committee would study at its forthcoming meeting the possible modification of that Convention in addition to the question of establishing a model agreement or the use of Govenrments in initiating bilateral treaties concerning migration. At a recent meeting of the Economic and Social Council certain of those - problems had been brought to its attention by the American Federation of Labour, and the Council had decided to refer such problems to the ILO for necessary action. Mr. RYEMR (France) said his delegation was grateful to the Italian delegation for having stressed the great importance of the mobility of manpower from the point of view of international equilibrium. He felt, however, that a provision of such a legislative character should not be inserted in Chapter II. It could be inserted in another part of the Charter. Referring to the amendment proposed by the delegation of Mexico, Mr. Royer considered that it would not be advisable to entrust a study of such a problem to several specialized agencies or organizations. The question of migration should be entrusted to the ILO. Mr. MARTINS (Brazil), referring to the remarks of the representative of France, recalled that in the Preparatory Committee the Brazilian delegation had submitted an amendment stressing the need for co-ordination of work and activities of the various specialized agencies in connection. with the problem of migration. Brazil suffered from a lack of manpower and counted on a large number of immigrants from other countries which suffered from a surplus of manpower. He had the greatest sympathy with the views expressed by the representtative of Italy, but felt that the amendment in question should not be included in Chapter II. /Mr. AMADOR (Mexico) E/CONF.2/C.1/SR.4 Page 7 Mr. AMADOR (Mexico) said his delegation Agreed that a problem concerning the emigration of workers from one country to another should be dealt with by the ILO but considered that its proposed amendment regarding illegal migration should be inserted in Chapter II. The proposal of the Italian delegation involved demographic questions, which were being studied by the Population Commission, an organ of the Economic and Social Council. The Mexican amendment, however, simply implied the obtaining of a guarantee for workers who by their work would benefit countries in which they worked on a seasonal or temporary basis. The CHAIRMAN announced that the next meeting of the First Committee would be held on 5 December 1947 at 4.00 p.m.* The meeting rose at 12.55 p.m. * The hour of the next meeting has now been changed to 10.30 a.m.

GATT Library

qy743zx6230

Summary Record of the Fourth Meeting : Held on Wednesday 29 January 1947 at 2:45 p.m

United Nations Economic and Social Council, January 30, 1947

United Nations. Economic and Social Council, Preparatory Commission of the Conference on Trade and Employment Drafting Committee, and Sub-Committee on Voting and Executive Board Membership

30/01/1947

official documents

E/PC/T/C.6/25 and E/PC/T/C.6/21-36/ADD.1

https://exhibits.stanford.edu/gatt/catalog/qy743zx6230

qy743zx6230_90230062.xml

GATT_155

United Nations Nations Unies RESTRICTED ECONOMIC CONSEIL E/PC/T/C.6/25 AND ECONOMIQUE 30 January 1947 SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH DRAFTING COMMITTEE OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT SUMMARY RECORD OF THE FOURTH MEETlNG SUB-COMMITTEE ON VOTING AND EXECUTIVE BOARD MEMBERSHIP Held on Wednesday 29 January 1947 at 2:45 p.m. CHAIRMAN: Dr. Guillermo ALAMILLA 1. Corrections of Previous Summary Records The Chairman stated that the Summary Record of the Third Meeting contained an error insofar as the draft of Article 68 which he had submitted to the Sub-Committee was referred to as a draft on the part of Cuba. This draft was his personal draft in his capacity as Chairman of the Sub-Committee and not in his capacity as the Delegate from Cuba. The South African Delegate reuested to change the word "should" on page 1, fifth line of the Summary Record of the Second Meeting to "might", Consequently, it should read "the basic vote might be smaller". The Canadian Delegate announced that he would submit a correction with reference to one of his statements and requested to have this reproduced as a corremtion to the Summary Record. The Belgian Delegate stated that on page 2, second paragraph of the Summary Record of the Third Meeting, it should read that Belgium supports the principle of election instead of the principle of rotation. The Brazilian Deleate submitted the following correction of the Brazilian position as expressed on page 2 of the Summary Record of the Second Meeting (document E/PC/T/C.6/11): /Disagreement E/PC/T/C .6/25 Page 2 Disagreement with the United States Proposal was expressed by Brazil on the following grounds: 1. A question of substance and as such the Delegate reserved his position. Nevertheless, 2. The System of weighted voting of the Fund cannot apply to the International Trade Organization as there is no analogy. Weighted voting in the Fund is justified by capital contributions for operations. 3. Danger of the Fund intruding in the jurisdiction of the International Trade Organization. 4. Proposal would give major countries an undisputed majority and would secure their permanency in the Executive Board. 2. Working Papers Submitted to the Sub-Committee The following working papers were submitted to the Sub-Committee: (a) A third Secretariat draft on Article 68; (b) A working paper of the Chairman on the division of Membership in the Executive Board into three groups; (c) A United Kingdom draft of Article 64 if weighted voting is adopted; (d) A statistical elaboration of the Brazilian draft proposal by the Statistical Division of the Secretariat. 3. The Chairman opened the debate on criteria for the rating of countries with regard to permanent seats on the Executive Board and suggested debate on the following criteria: (a) International trade; (b) National income; (c) Ratio of international trade to national income; (d.) Population; (e) Voting system of the Fund, /The Delegate E/PC/T/C .6/25 Page 3 The Delegate of Canada suggested the adoption of an additional criterion namely, the amount of foreign lending. The Executive Secretary (Mr. Lacarte) stressed that the ITO was to be a specialized agency for trade and that, consequently, the principal criteria ought to be related to foreign trade. He suggested the following criteria: (a) Total foreign trade; (b) Ratio of foreign trade to national income; (c) Ratio of foreign trade to population (foreign trade per capita). The main criteria should be a country's share in global international trade, with the other factors as qualifying and correcting factors. The Brazilian Delegate supported this proposal but suggested that the criteria should give due weight not only to the actual economic importance of countries but also to its potentialities. The ITO Charter should not try to perpetuate the presently existing economic importance of countries. The Chilean Delegate seconded the position of Brazil and explained, that there was no necessity for three groups of countries but that two groups would be sufficient. An over-rigid grouping into three categories would only complicate matters unnecessarily. Chile feels sure that even in a straight election the politically and economically most important countries under all circumstances would be elected to Executive Board Membership, regardless of statistical data, the same as w ut any specific provision they will always be elected to the Economic and Social Council of the United Nations. The Chairman elaborated on his working paper and explained the reasoning behind his proposed for three categories of countries. The French Delegate observed that three countries in Group A might lead to difficulties because some countries mig feel there should be /four or E/PC/T/C.6/25 Page 4 four or five countries in this group. The United States Delegate pointed out t: the Chairman's proposal would be more favourable for small countries than proposals envisaging only two groups of countries. The Executive Secretary (Mr. Lacarte) suggested that a debate on the grouping of countries for permanent and non-permanent seats should be conducted on the basis of statistical data which would clarify the relative position of countries in regard to the criteria which should be applied in determining permanent and non-permanent membership. The South African Delegate moved to limit the debate to criteria on the basis of statistical data. Without such statistical data, the Sub-Committee could arrive at no valid conclusions. The Sub-Committee agreed to confine the debate to the isssue of which criteria should be selected for the purpose of obtaining the necessary statistical data from the Secretariat. The suitability of the following criteria for such a statistical table was consequently debated: 1. Share in international trade. This criterion was unanimously approved. 2. National income. Even division of votes developed on this criterion with a number of countries objecting to this criterion on account of the unsatisfactory statistical data in regard to national income, so far in existence.. 3. Ratio of foreign trade to national incomes. For the same reasons as under (2), no consent was forthcoming for this criterion. 4. Population. The majority of the Committee voted against the inclusion of population as an absolute criterion while the Committee unanimously approved the acceptance of population as a relative factor, with some Delegates preferring the ratio of population to national income and others the ratio of population to foreign trade. The Executive Secretary (Mr. Lacarte) announced that he had meanwhile /contacted E/PC/T/C.6/25 Page 5 contacted the Statistical Division of the Secretariat and that this Division is in possession of adequate figures for the computation of national income. In view of this announcement, the Sub-Committee resumed debate on the inclusion of national income as a criterion and agreed to include national income as one of the criteria on which the Statistical Division of the Secretariat should furnish statistical data. Upon the motion of the Canadian Delegate, the Sub-Committee requested the Secretariat to furnish it with a table on the national income, the per capita international trade and the share in international trade of all Member nations of the United Nations and all those other countries on which the necessary data were available. It was agreed that in addition to these data, the table should provide for an additional column in which each country s share in international trade is to be computed on the basis of twenty points per billion dollars, national income on the basis of two points per billion dollars and international trade per capita on the basis of one point per fifty dollars. The United States Delegate requested the inclusion of a column showing per capita national income, and the Brazilian Delegate requested the inclusion of a column based on the population factor of the Brazilian draft of Article 68. The meeting was adjourned until Friday, 31 January 1947, at 2:45 p.m. . * \ -~~~~~~~~~

GATT Library

qj011nv5006

Summary Record of the Nineteenth Meeting 11 February 1947

United Nations Economic and Social Council, February 12, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

12/02/1947

official documents

E/PC/T/C.6/69 and E/PC/T/C.6/61-72

https://exhibits.stanford.edu/gatt/catalog/qj011nv5006

qj011nv5006_90230132.xml

GATT_155

United Nations Nations Unies RESTRICTED E/PC/TC.6/69 ECONOMIC CONSEIL 12 February 1947 AND ECONOMIQUE ORIGINAL: ENGLISH SOCIAL COUNCIL ET SOCIAL DAFTING COMMITTEE OF THE PREPART0ORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT SUMMARY RECORD OF THE NINETENTH MEETING 11 February 1947 Chairman: H.E. Mr. COLBAN (Norway) 1. The CHAIRMAN, in opening the meeting, referred to an inquiry from the Chairman of the Administrative Sub-Committee whether the Sub-Committee should include in the scope of its work provisions regarding a Commission on Industrial Development. The United States suggested that such provisions needed very full and far reaching consideration and should better be left to the Second Session of the Preparatory Commiittee. Upon the suggestion of the Delegate of Brazil the Committee decided to refer the problem of a Commission on Industrial Development to the Second Session of the Preparatory Committee, and to include a not. in its report that the Drafting Committee had considered this matter and had for procedural reasons decided against including this subject within the purview of it work. 2. Discussion of Procedure at the Second Session of the Preparatory Committee. The CHAIRMAN introduced document C.6/53 outlining the views of the United States Delegation on tariff negotiations to be conducted at the time of the Second Session of the Preparatory Committee. He pointed out that some provisions of the Charter had a direct bearing upon tariff negotiations and that, in his opinion, every delegation should include members who are in a position to discuss or at least elucidate the provisions of the Charter. On-the point of the duration of the Geneva Conference. the CHAIRMAN thought that nobody could predict how much time would be needed. / . A~~~~~~~~~~~/Mr. LECUYER E/PC/T/C.6/69 Page 2. Mr. LECUYER (France) and other Delegates thought that an outline of the work in Genava would be very welcome by the participating Governments, even if this matter did nat fall within the competence of the Drafting Committee, and suggested that the Executive Secretary prepare a paper for consideration by Delegates. Mr. BAYER (Czechoslovakia) and M. JUSSLANT (Belgium) stressed that there was a clear decision of the Committee of the Heads of Delegations in London that the first four weeks of the Second Session would be devoted to tariff nagotiations and that discussions of the Charter should start on 6 May. It should be clear that this decision must be finding on the Preparatory Committee. M. JUSSIANT added that the emphasis of the Geneva Conference was on the tariff negotiations and that it should not be weakened. Mr. LEDDY (United States) explained that the paper presented by the United States Delegation was in full agreement with the decision taken by the Committee of tie Heads of Delegations. The purpose of the paper was to indicate that it was not possible to exclude rigidly discussions of the Charter during the tariff negotiations because some Articles were relevant to the negotiations and reference would certainly be made to them The Governments should be aware of it when deciding on the composition of the delegations which are to meet in Geneva on 8 April. After several Delegates had expressed the wish to forward to their Governments at least a tentative outline of work in Geneva, Mr. LACARIE (Executive Secretary) undertook to lay before the Committee an attempt to evaluate, in terms of procedure and time the programme of the Geneva Conference. 3. First Reading of Article 66 (continued). Upon the suggestion of the Delegate of the Netherlands the Committee decided to delete the words "in the trade" in the two last lines of this paragraph and to change the references in this paragraph to "in Article 30 and in Article 52". / agrap ' ~~~~~~~~~~~/Pargrrh7 E/PC//T/C.6/69 Page 3 Paragraph 7. The Committee agreed to refer the question to the legal Draifting Sub-Committee whether the text and the references of this Paragraph were consistent with all other parts of the London Chapter. Paragraph 8. The United Kingdom Delegate, in his capacity as Chairman of the Technical Sub-Committee, explained that the Technical Sub-Committee had decided to 'recommend the deletion of this paragraph and moved to delete it. The CHAIRMAN ruled the provisional acceptance of this paragraph, pending the second reading which will take place after receipt of the report of the Technical Sub-Committee . . Paragraph 9. The Committee accepted the London draft. The Delegate of Canada referred, to document E/PC/T/C.6/W.64 and asked. that this should be considered upon the occasion of the second reading of the whole of Article 65, The United Kingdom Delegate requested to correct the last line of E/PC/T/C.6/w.64 to read "concurring votes representing. two-thirds of the voting power of. the Members". The CHAIRMAN ruled that the present agreement of Article 66 was on a purely tentative basis pending consideration of all other matters entering into it, especially a thorough study of E/PC/T/C.6/W.64. 4. Article 61. - The CHAM71 rferred to two papers before tmmhe Sub-Coefitege ref~rrna to Article 61, namely Kthgeo Unitedindm paper /WE/PC/T/C.6.62 and the white working paper of the United States .containing the UnitedStates redraft oif ethis artcl. After a short debate whether it was Preferable to assisthe. askn olifg -rco-r-& hese two drafts -mt tshre AvdsiitiaitV- Sub-Comittee or to appoinHt an Ad Rc Drafting Sub-Committhee for..is- paragraopmh, the Cmitteed a ppoHinteanAd oc SDb-ramfiting uComttee co mposedlof=he De 'gateals-f:ustlrL I~, C,hiin,.dia; nUdimted Kito' and the United iStathe es, wth tmasndate t the Drafting Committeeo ubmitto t sa reconciliation oftie. 61. wo drafts of Article-£--: . -- /5- Article 67. E/PC/T/C.6/69C . b Pae 4 5. Alrt6ice 7. - .. -- The Coritee faphproved- aragraph 1- tfiLondon draft text. with regard to paraeph2, -th Utnied States subfmitted ani'andrmet "orthe last sehsce of paragraph 2, t:o read as follows. -- "Wheiv er th3 umber r f embers -ofthe-.Oanization,-wch are also Members off the Citt]ee, constitute [our-fifths7 o the total number of M efe eisof the oOrganizamtion,-stnctions 6fthe Co~mttee shall be exercied by the Ccnerence." The Delegate of Canadwa queried. whether it as appropriate to use a Iactionm,al qtntitative dete-ration of them iInterim Drafting Conmtee and moved for a change to four-fifths of the total number of Members, if such efractional determination should be dmectided upon. The Cozicee. avroved -aagraph 2 with tamhe United dStates =edment anf.ecided to put the Srcentage into square brackets. FMr-mma=-a'hThe Coxdite reserved its decision because the -isse. of weighia oting enters pinto tpohis maagrak - ParaDraph 4. oThe elegate f France remarked that this provision. was an apt illustsration to hi observations at the Eighteenth Meeting on the paradoxical character of voting rules in the Charter. On this most important subject a simple majority of thes Members preent and voting would be sufficient, while purely procedural matters 'require a two-thrds majority. He moved, if it were beymsond:the tenceraof --fene- of themm tDrafting Coitee to strike out this clause, to at least note the French observation in the fin ale Drreport ofmmth afting Coittee. The Delegate of Canada secnonde: the Frich motion, but pointed out- that the mere striking ount of the votig clause would not remove the anomaly in the procedures Perngvaiss aged in aarph2, 3 and4 of this ArtlleM The Delusegates of Aiia'la, India and Kinthe- nited: momi lso seconded the French motion but requested time to consider fully the /implications E/PC/T/C. 6/69 Page 5 implications of a change, and the Committee agreed to defer any decision on paragraph 4. Paragraph 5. The London draft text of paragraph 5 was approved. .6. Articles 68, 9> and 70. TheL ondon draft text of these articlesw as approved and it asw clarified. that the Chairman of theEx ecutive Board was to be elected fomr among the Delegates to the Board and that the government whose representative on the Board. had been elected Chairman would be in a position tonom inate another delegate. 7. Article 71. The Asutrlaain Delegate moved to clarify the subordination of the Executive :Board to the Conference in the text, and the Committee decided. to insert in the first sentence of paragraph 1 between the words "to it" and. "by the Conference," the words "and prfform the duties laid upon it'. It was decide'" to include in the report a note to the effect htat the last sentence of paragraph 1 would be unnecessary if the Second Session of the Preparatory Committee should decide to include in the Charter provisions for a Commission on EcoonmicD evlepoment. arPgaraph 2. The Committee approved the London text, merely changing the word "approve" in the next to last line to the word "prepare". Paragraph 3. Paragraph 3 was accepted in the form of the London reporta nd the ommCittee decided. to delete paragraph 4 as redundant in view of the provisions of paragraph 1. In view of an observation of the Observer from the Monetary Fund as to whether provisions would be needed enabling the Board to directly ommucnicate with Member governments whenevre a decision of the Conference vs needed, the Comaittee agreed that this should be left to the rules of procedure of the Executive Board and was adequately covered in Article 65, paragraph 1. The meetingg was adjourned until 12 February 1947, at 10: 30 a.m.

GATT Library

vj654fh0113

Summary Record of the Nineteenth Meeting (IIIb) : Held at the Capitol, Havana, Cuba, Monday, 29 December.1947 at 4.00 p.m

United Nations Conference on Trade and Employment, December 30, 1947

Third Committee: Commercial Policy

30/12/1947

official documents

E/CONF.2/C.3/SR.19 and E/CONF.2/C.3/SR.17-31

https://exhibits.stanford.edu/gatt/catalog/vj654fh0113

vj654fh0113_90190244.xml

GATT_155

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/C.3/SR .19 30 December 1947 ON DU ORIGINAL: ENGLISH TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI THIRD COMMITTEE: COMMERCIAL POLICY SUMMARY RECORD OF THE NINETEENTH MEETING (IIIb) NM ING (I ) Held at the Capitol, Havana, Cuba, Monday, 29 December1947 at 4.00 p.m. CIhaiErm (Canada)an: Mr. L. D. WLGRSS e1. ARTICLE 20 -f Genral Eliminesation ooQuantitative Rtrictins (First )- .adi M. FORTHS (Bgium) agreed with the oorAueprsentative v:f salia tempthat the word vrarily" should be deleted from paragraph 2 (a), but felt that there should be some indication that the measures were not to be of permanent duration. 2. ARTICLEi 1 - Restrictons to safeguard the Balance of Payments g(First Readii Paragmi (Items 27 and 32) Mr. COREA (Ceylon) said that his amendments to this paragraph were intimately connected with the proposal of his delegation to delete Article 20. The purpose of these amendments was to make the provisions of Articles 20 and 21 positive rather than negative and to create a compromise formula. He thought unjustified the fear of the representative of the United States that chaos would result if quantitative restrictions could be imposed without prior approval. His amendment required no prior approval, but quantitative restrictions could only be imposed by those countries needing them to safeguard their external financionial posits and balance of payments or for purposes of development where no other form of protection was avThj eailable provisions of p2 aragrauph (b) wold, however, continue to apply. The amendment recognimized the potrtant fac that Member countries wqere not eual. This was taken into consideration in Article 1 of the Charter and also in 1 Artigraph grra 3 (b; if it was permissible for certain countries to impose quantitative restrictions because of the particular domestic policies they pursued,r thee could be no objection to the extension of the privilege to the developed countries. The wording o f paragraph3 (b) was, however, ambiguous. /(Items 28 and 33) E/CONF. 2/C .3/SR .19 Page 2 (items 28 and 33) Mr. PHILIPS (Australia) said that these amendments were not designed to change the substance of the article, but only to clarify it according to the intention expressed at Geneva; this could best be considered by the drafting Committee. Paragraph 2 (Item 29) Mr. BRIGNOLI (Argentina) thought the drafting of sub-paragraph (a) (i) should be more precise and should give greater latitude. Threats depended on many circumstances which could not possibly be stated directly. Any qualification here might give rise to doubts concerning the rapidity with which a country could apply restrictions. (Item 30) Mr. CORTAT (Venezuela) believed that if a country had to wait until a threat was imminent, then in most circumstances it would not have the opportunity to prevent the damage. (Item 31) Mr. MULLER (Chile) was in agreement with the representatives of Argentina and Venezuela. The drafting of the paragraph was too rigid. He therefore proposed the substitution of the word "positive"' for "imminent", and amended the last part of the sentence to read "a serious or persistent decline..." Mr. LLORENTE (Philippines) agreed in principle to the provisions of the Article, but noted that, although the tern "special factors" had been defined in Article 20, in Article 21, 2 (a) (ii) no definition had been given. It was important to his country that this term be clarified and the Sub-Committee was asked to take special note of this point. Paragraph 3 (a) (Items 34 and 40) Mr. BRIGNOLI (Argentina) said that the object of these amendments was to establish that the Organization should not have powers to adopt decisions binding upon members, but should merely fulfil the functions laid down in Article 69. There were practical reasons which would prevent Members from consulting with the Organization regarding. restrictions on imports; measures of that nature, in order to be effective and give results, must be imposed with secrecy and great rapidity. He might withdraw the Argentine amendment to paragraph 3 (c) (ii) (Item 38), if the procedures there referred to could be satisfactorily explained. Mr. FORTHOMME (Belgium) said that if the Argentine amendment to paragraph 3 (a) of Article 21 (Item 34) were adopted, the remainder of the paragraph would be superfluous. Mr. COLOCOTRONIS (Greece) stated that the Greek delegation felt that Articles 21 and 23 contradicted one another. Article 23 recognized the existence of a widespread disequilibrium and called for the Organization to review this question in 1952; and after 1952 no Member could impose /discriminatory quantitative E/CONF .2/C .3/SR.19 Page 3 discriminatory quantitative restrictions without determination by the Organization. Paragraphs 3 (a) and 4 (b) of Article 21 also referred to the transition but it was here laid down that the Organization shall. review quantitative restrictions still existing after only two years. A redraft should be made to eliminate the contradiction. Further the phrase "the Organization shall, when required to take decisions under this Article or Article 23..." in paragraph 3 (a) was obscure and should be clarified. Mr. BOYER (France) felt that the contradiction between Articles 21 and 23 was more apparent than real. Article 21 permitted countries to apply quantitative restrictions to safeguard their balance of payments. The question was whether these quantitative restrictions could be discriminatory. Article, 23 permitted Member States to carry out discriminatory measures without the prior approval of the Organization until 1 March 1952 or until such time as the Organization might state that the condition of disequilibrium was over. In Article 21 at the end of two years there was to be a review of all quantitative restrictions but there was no idea of introducing prior approval. Article 23 did not provide for action by the ITO. The ITO was to give Judgment under Article 23 only if a Member complained under Article 21 paragraph 4 (d). (Item 35) Mr. SEIDENFADEN (Denmark) stated that if a country had a full employment policy, difficulties in the balance of. payments might result because exports might be curtailed owing to .a high home demand for products usually exported. His amendment was designed to allow for this case. Mr. de VRIES (Netherlands) referring to the note in the Geneva draft on paragraph 3 (b) (i) felt that the phrase was unclear and the note did not clarify it. This sub-paragraph was directly related to Articles 3 and 9 but the obligations of Article 5 were equally important; in the Draft Charter, however, this sub-paragraph conflicted with Article 5. If the provisions of paragraph 2 did not apply to paragraph 3 (b) (i), then much of the value of paragraph 2 would be destroyed. The real point of Paragraph 2 was that if a country had a reconstruction policy it would want to decide on how beat to use its monetary reserves; he agreed with the representative of Chilets remarks on the importance of giving priority to essential imports. Paragraph 3 (b) (ii) would allow this; paragraph 3 (b) (i) could be omitted, He called the. attention of the sub-committee to the views of the representative of the International Chamber of Commerce ,,' . ~~~~~/Mr. STWRa (Switzerland) E/CONF 2/C .3/SR .19 Page 4- Mr.STUCKI (Switzerland) stated that the Swiss delegation was opposed to Article 21 in its entirety because the Swiss export trade was largely with nations which had difficulties in their balance of payments. He endorsed the comments of the representative of the Netherlands that Chapters 2 and 4 were contradictory. Members were bound to aim at full employment but were then kept from accomplishing. this goal by paragraph 3 (b) of Article 21. Mr. FORTHOMME (Belgium) agreed with the views of the representative of the Netherlands and particularly objected to paragraph 3 (b) (i), which opened the door wide for the use of quantitative restrictions, Mr. AUGENTHALER (Czechoslovakia) said that paragraph 3 (a) was the result of the fact that there were different types of economy in the world. Paragraph 2 (a) dealt with countries having difficulties in their balance of payments. Paragraph hs 3 (a) and 3 (b) referred to states which had a planned economy. He supported the text but would not object to the removal of the .,note to paragraph 3 (b) (i). MrI. OLIBRGN (Argentina) disagreed with the statement of the delegate of Belgium that the adoption of his amendment (Item 34) would destroy the logical structure of the paragraph . - MD ROlERzance) said that paragraph 3 (b) did not vitiate Article 21 ArtIce 21 was applicable only if a country can-prove balance. of payments difficulties. It was notht correct to say that a country mig . restrict its imports in order to maintain full employment, :but the demand for imports which would result from economic development should not be allowed to rise so rapidly that balance of payments difficulties would ensue. He drew attention to the provisions of paragraph 3 (c). r.ASH (New Zealand) said that New Zealand would be helped to expand its economy and increase its trade under Article 21. New Zealand had a controlled economy and an import selection policy. The government'. estimated annually the probable ea rnings from exports and then issuedimport licenses up to the full amount of available exchange. There was no- intentionof restricting trade. Article 21 was one of the most important in the Charter - Mr. IORf (Philippines) shared the view of the representative of nw Zealand as -to the merits of paragraph 3 -(b) (i). Chapter IV was the mechanism for impleIIImenting -the principles of Chapters II and 1, with wh4h the Phigralippine delegation :as in full accord; para'h 3 of Article 21 to gave opportunity for theemml -coutries Xe dcriminate - in fav our of egssential iwmports, directing, notretardin , the flo world trade. The Ph ilippinminaes wished to reduce controls, butthe elition of Article 21 rBM-Charter would require instead their 'extesion. /Mr. STT : Switzerland), E/CONF. 2/C .3/SR .19 Page 5 A. STUCKI (Switzerland), replying to the representative of New Zealand, stated that his country, where different circumstances obtained, considered Article 21 harmful to its economy; although he had proposed no amendments, he would have liked to have seen it deleted. Mr.THOMPSON-McCAUSLAND (United Kngdom) said that world trade had once been regulated by the gold standard, which was the link between internal and external purchasing power. Imports and exports were in fact restrained under the Gold Standard by powerful impersonal forces. The conditions., appropriate to the workings of such a mechanism had, however, been destroyed by the two world wars and Article 21 attempted to find a substitute arrangement. The protection provided by Article 21 for those not in balance of payments difficulties should not be overloragraoked. Paragraph 2 (a) did not allow the application of universal restrictions, but only ".. to the extent necessary..."; paragraph 2 (c) provided for their withdrawal. The countries resorting to the restrictions allowed were also obligated to restore equilibrium in their balance of payments. Further, paragraph 3 stated that restrictions should be imposed. in such a way as to avoid unnecessary damage to another member, and paragraph 4 provided the procedure for appeal to the Organization by an injured Member. The crucial point in the Charter was the seeming contradiction between the aims of economic development and full employment and the aim of freeing trade by eliminating restrictions;it was vital to avoid overstatements on either side of the case. Paragraph 4 Mr. LA ROSA (Italy) said that the amendment to paragraph 4 (b) (Item 41) was submitted to eliminate the necessity of prior apprprioroval. Prior consultation would delay the application of emergency measures and make the necessary secrecy difficult to maintain. Abandonment of restrictions should not be harmful to the state applying them; the provisions of paragraph 4 were insufficient and ethe amendmment to paragraph 4 (c) (Item 48) set forth further criteria to direct the Organization in its decisions. . Mr. CORIAT (Venezuela) explained that the amendment to paragraph 4(b) (Item 44) would change the date to 1 March 1952 to coincide with the fifth aniversary of the International Monetary Fund. The amendment to sub-paragraph (c)(Item 46) was the result of the amendment to sub-paragraph (a).He was not opposed to the use of the word "etent" in the English text of this amendment. /Mr.GONZALEZ(Urugay) E/CONF.2/C.3/SR.19 Page 6 Mr. GONZALEZ (Uruguay) stated that his amendment (Item 42), similar in substance to-those proposed by Argentina and Italy, would substitute the obligation to consult by the simpler act of informing the Organization. Paragraph 4 (a) differentiated between restrictions in force when the Charter became effective and those which would be imposed in the future, by creating the obligation to consult with the Organization concerning the latter. Paragraph 4 (b) further accentuated the complexity of the Article: his amendment (Item 43) proposed the deletion of the provrision for prior consultation. The proposed deletion of paragraph 4 (c) (Item 45) would eliminate another complex procedure. Mr. ROYER (France) felt that the several amendments to paragraph 4 had been submitted because of its water-tight construction. Sub- paragraph (a) provided not for prior approval but for prior consultation, in order that the Organization might render assistance to prevent or remedy foresesable balance of payments difficulties; emergency situations were provided for in line 5. Secondly, since such consultations would deal with principles the matter of secrecy was not of so great an importance; moreover, the experience at Geneva had proved that consultations could be carried out under conditions of secrecy The right of the Organization to intervene (paragraph 4 (b)),carried with it no power to impose sanctions and would expedite the elimination of unnecessary restrictions. Sub-paragraph (c) set forth an option, not an obligation: a state could continue its programme. without hindrance by obtaining prior approval. Sub-paragraph (d) provided appeal procedure: in trying to set up more specific criteria for Judegment delegate of Italy arrived at coonclusins not easily upheld. It was of vital importance for the orgaization to have the right to intervene to the extent of determinig that restrictions were in accordance with the Charter and of asking that harmful restrictions should be abandoned Mr. FORTHOMME (Belgium) asked whether the Venezuelan amendment proposed that the date of 1 March 1952 should apply to restrictions in force on the effective date of the Charter, or also on subsequent ones. The existing procedure achieved a proper balance between the two classes. The Article on general of agreements provided that all should be reviewed at the end of two years. - - OMD(Norr. Jrway) supported the staeme nt ofthe representative of France. Article 21 was a realistic solution to the pr oblemof restricting im porttdue 'o balan ce ofpayments difficulties and exc controls. /Norway would have E/CONF. 2/C .3/SR.19 Pate 7 Norway would have to apply the provisions of Article 21 for the next few years, but it was reasonable to expect that any country feeling itself damaged should resort to the procedure of paragraph 4 (d). The CHAIRMAN said that the discussion of Article 21 would be continued at the next. meeting, on Tuesday, 30 December at 4.15 p.m., which would follow a brief meeting of Comittee III a. The meeting rose at 7.00 p.m.

GATT Library

wp811rr0692

Summary record of the Ninth Meeting : Held at Havana on Tuesday, 30 December 1947 at 10.30 a.m

United Nations Conference on Trade and Employment, December 30, 1947

Fifth Committee: Inter-Governmental Commodity Agreements

30/12/1947

official documents

E/CONF.2/C.5/SR.9 and E/CONF. 2/C. 5/SR. 1-15

https://exhibits.stanford.edu/gatt/catalog/wp811rr0692

wp811rr0692_90200093.xml

GATT_155

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/C.5/SR.9 ON DU 30 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH FIFTH COMMITTEE: INTER-GOVERNMENTAL COMMODITY AGREEMENTS SUMMARY RECORD OF THE NINTH MEETING Held at Havana on Tuesday, 30 December 1947 at 10.30 a.m. Chairman: Mr. George HAKIM (Lebanon) 1. REPORT OF SUB-COMMITTEE 'A' (document E/CONF.2/C.5/9) The CHAIRMAN congratulated to Sub-Committee on the excellent work performed and he called on Mr. de Vries (Netherlands) to present the report of the Sub-Committee in the absence of its Chairman, Mr. Schwenger (United States). Mr. de VRIES (Netherlands) stated that a number of representatives not members of the Sub-Committee had participated in the discussion of particular amendments and had greatly contributed to the degree of agreement reached. On behalf of the Sub-Committee he paid tribute to the untiring efforts of Mr. Schwenger as Chairman. Referring to the amendment to Article 67 proposed by the United States delegation, the Sub-Committee agreed that the Charter should provide for an exception to inter-governmental commodity agreements designed to meet the essential requirements of national security, and that that exception should be drafted as narrowly as possible consistent with its purpose, but felt that the decision on drafting and appropriate place in the Charter could best be taken in connection with the discussion on Article 94. The C HAIRMA then called for general comments on the report of the Sub-CozmMttee before proceeding to the second and final reading of Chapter. VI. Mr. JIMENEZ (El Salvador) and Mr. ZAYRA (Philippines) stated that they would ask for further discussion of the proposed amendments to Article 54 (c) on the question of remunerative prices. Mr. de GAIFFER (Belgium) felt that the condemnation of cartels in Part II of the Sub-Committee's Report was an unfair judgment. He thought that this reference should have been confinet to a statement that agreements might have unfavourable results for the users of the equipment. He was not In agreement with the addition to sub-paragraph (b) of Article 54 recommended by the Sub-Committee. /Mr. CAPLAN (United Kingdom) E/CONF.2/C.5/SR.9 Page 2 Mr. GAPLAN (United Kingdom) declared tha his delegation was ready to accept the revised text of Chapter VI since il, provided, for three necessary essentials, namely: (i) a statement of clear and desirable principles, (ii) a simple and practical procedure and (iii) general flexibility to meet special circumstances. The revised Draft Chapter also provided for a Just balance between the varying types of interest in the commodity' field. Mr. CHRISTENSEN (Denmark) stated that his delegation was prepared to accept generally the revised text of Chaptur VI. However, the proposed additional sentence to Article 54 (b) might cause difficulties for countries whose economies were based on highly processed goode for the production of which great quantities of primary products were required.. Article 58, paragraph 5 did not appear to be drafted in clear and precise terms. Mr. KENNEDY (United States) declared that his delegation was willing to accept the amended text of Chapter VI which he recognized was an improvement on the London and Geneva drafts. Mr. COREA (Ceylon) was pleased that the revised text incorporated a number of points that he had raised, but he regretted the retention of the word "efficient" (producers) in relation to en agreement designed to moderate pronounced price fluctuations. He thought this might cause difficulties for the Organization and vould like to see it deleted. He welcomed the new preamble to Article 59, but thought that the drafting still needed clarification, Mr IGONET (France) was completely satisfied that the requirements of metropolitan France and her overseas territories vere reflected in the-present text of Chapter VI. Mr. STEWAMD (Uruguay) emphasized his regret that none of the amendments presented by his delegation had been accepted by the Sub-Committee, although they had received some support in the main Committee. The Charter provided little opportunity for development in Uruguay. Mr. KUNFER (Turlkey) agreed that the term "efficient" was too vague in spite of all assurances that the expression was sufficiently flexible at include all proposal.. 2. SECOND READING OF CHAPTER VI The Committee then decided to proceed to the second reading of Chapter VI Article by Article. Article 52 Difficulties Relating to Primary Commodities This Article was agreed to without comment. Article 53 - Primary and Related Commodities Paragraph 1 Mr. STEWARD (Uruguay) maintained his revised amendment for the addition of a second sub-paragraph to paragraph 1, namely: /"(b) the standard. E/CONF.2/C.5/SR.9 Page 3 "(b) the standard mechanical equipment required for producing the product referred to in paragraph (a) of this Aticle." Mr. REICHART (Argentina) appealed to the Committee to find some formula which would. cover the substantial principle presented by Uruguay, which had the full support of Argentina. Industrial equipment was closely related to expansion of trade and distribution of essential products and its inclusion as a primary commodity was justified. The amendment of Uruguay would represent a valuable contribution to the success of future inter- governmental commodity agreements and to the attainment of the objectives of the Charter, The definitions In Article 53 were already wide, reflecting the advances in the scope of agreements. He referred to the expansion of production and other objectives of agreements and stated that the inclusion of the Uruguayan proposal would aid in reaching these objectives. Mr. CAPLAN (United Kingdom) was firmly convinced that Article 53 would become less effective by the adoption of the amendment of Uruguay. Hardly any article of such equipment existed which could reafly be called standard. There were very f ew governments which exercised effective control or direction over industrial production. The oniy possible .way.to secure multilateral action was to get the producers of the equipment together and this would strengthen their bargaining powers against the agricultural. primary producer. Mr. STEWARD (Uruguay) pointed out that the revised amendment was limited. to the concept of the standard equipment necessary for the production or primary commodities. The aim of the amendment was (1) to provide for standardization of industrial equipment for the production of, primary commodities, and (2) for recognition of the principle involved in the expansion of world trade. The CHAIRMAN said that apart frora the substance of the proposal there was the question of its location in the Chapter. He pointed out that paragraph 1 of Article 53 in its present form simply gave a definition of primary commodities. He drew the attention of the Committee to the logical difficulty of including machines and equipment in the definition of primary commodities. Mr. LACARRA (Mexico) endorsed the Uruguayen representatives statement and said that the fact that there was a considerable variety of prices and types o? mechanical equipment did not present an unsurmountable difficulty. While very few governments at present controlled. agricultural or mining production, the Charter nevertheless envisaged inter-governmental agreements for those commodities; if that were possible he saw no reason why /similar procedures E/CONF.2/C.5/SR.9 Page 4 similar procedures could not also be used in the case of commodities covered by the proposal. It was the aim of the amendment to induce machinery producing countries to establish greater standardization of types and models as well as prices. While it was not easy to reconcile the text of Article 53 to include standard mechanical equipment, the fundamental, principle had to be stated in the Charter that countries producing primary commodities needed assistance in acquiring essential equipment. Re supported the Uruguayan amendment and urged that-the difficulties ipn wording the amencment should not prevent the acceptance of the principle behind it. Mr. McCARTHY (Australia) opposed the amendment because of its. impractical nature. His country's interest were in .many respects similar to those of the delegations supporting the Uruguayan. proposal, and the high coat and difficult importation of mechanical equipment was of serious concern to Australia. He was, therefore, sympathetic to the idea of simplifying the acquisition of agricultural equipment but he could not see any hope of drawing up multilateral inter-governmental agreements to achieve that end. To take account of such a new departure,. the whole Chapter would have to be changed fundamentally. This applied particularIy to. Article 59 because the contingency of "a burdensome surplus" could never. arise in the case of mechanical equipment, as factories would simply shut down when a surplus develope. Such a situation did not obtain in real primary conmodlties where the producers would, on the contrary, try to' produce more and thereby to make up for the lower price of their products. That was the reason why Article 59 had been written into the Charter. Inter-governmental agreements or price controls. on manufactured goods were impossible to achieve or to carry out. The supporters of the amendment had apparently overlooked the details of working, qut their scheme in practice. The controls necessary to cover agricultural or other mechanical equipment vent far beyond. that needed for primary commodities, and experience had shown the difficult of administering such controls. There were considerable difficulties to be expected even in the conclusion of agreements on certain primary commodities, as he had had occasion to observe, but they would become insurmountable when it came to machinery. Finally, Mr. McCarthy observed- that international action for standardization of agricultural machinery a's not prevented by anythIng in the Charter and full scope was left open for action in that respect. Mr. HAUSWIRTH (Switzerland) agreed with the Belgian representatives. statement regarding the reference to cartels in the Sub-Committee's Report. As to the uruguayan amendment he sympathized with the idea behind it, but could only endorse the Australian representative's objections to it. /His country was E/CONF.2/C.5/SR.9 Page 5 His country was demonstrating its belief in greater freedom of trade by removing wartime controls. As regards suggestions made about increased standardization of processing equipment, he had observed no such trend in Switzerland. On the contrary, most countries wanted very specialized equipment suitable to their own special needs. The Uruguayan amendment was lacking in realism and should be rejected. Mr. de VRIES (Netherlands), in supporting the Australian representative's statement, said that the countries favouring the Uruguayan amendment might stand to lose more than they would gain from it. He argued that the conditions set out in Article 59 could not apply to agricultural machinery. Nothing in the Charter, however, would obstruct governmental or non-governmental efforts to obtain a higher degree of standardization and efficiency in the production of agricultural equipment. He drew attention to Article 43 II as offering a possible means of meeting the problems raised by the Uruguayan amendment. His delegation, however, did not approve wholly of that Article particularly as regards its time limit and would propose amendments to it. Mr. USMANI (Pakistan) felt that the amendnent was opposed to the spirit of the whole Draft Charter. It was true that Chapter VI was an exception to the principles 6f the Charter, but for that very reason it should be confined to those primary commodities which all governments were interested to control. Manufactured goods should be excluded from the provisions of Chapter VI as otherwise the spirit of Chaptbrs IV and V would be violated. The whole question of equipment needed to be considered in the context of economic development. Mr. STEWARD (UrUguay), in summing up, said that it had been due to the standardizing influence of England in the last century that his country had had to adopt her production. Farms and herds had to be modified so that the meat and wool produced would be in line with English standards. A similar aim had been in the minds of his delegation when submitting the amendment, namely to bring about a more standardized type of equipment and a greater uniformity of price. His country was small and was being exploited by world industry. The increase of agricultural production, which the world sought, could not be achieved without an adequate supply of equipment. Ploughs and tractors could be standardized, in his opinion, and thereafter inter-governmental agreements could be made. The CHAIRMAN then established that the consensus of opinion of the Commitee was to reject the Uruguayan amendment. /Paragraphs 1, 2 and 3 E/CONF.2/C.5/SR. 9 Page 6 Paragraphs 1, 2 and 3 of Article 53 as drafted (see E/CONF. 2/C.5/9 pages 12 and 13) were adopted. The Chairman then referred back to the statement by the representative of Belgium regarding the reference to cartels in the Sub-Comiitteets report and pointed out that the explanatory text in Parts I and Il of that Report was not subject to adoption by the Committee as it was only a statement of the considerations underlying the decisions of the Sub-Committee. The meeting rose at 1.15 p.m.

GATT Library

xg006yx6943

Summary Record of the Ninth Meeting : Held at Lake Success on 30 January 1947, at 10:30 a.m

United Nations Economic and Social Council, January 30, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

30/01/1947

official documents

E/PC/T/C.6/27 and E/PC/T/C.6/21-36/ADD.1

https://exhibits.stanford.edu/gatt/catalog/xg006yx6943

xg006yx6943_90230064.xml

GATT_155

United Nations Nations Unies RESTRICTED ECONOMC CONSEIL 30 January1947 AND ECONOMIQUE ORIGINAL: ENGLISH SOCIAL COUNCIL ET SOCIAL DRAFTING COMMITTEE OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT SUMMARY RECORD OF THE NINTH MEETHING Held at Lake Success on 30 January 1947, at 10:30 a.m. Chairman: H.E.M. Eric Colban In opening the meet, the CHAIRMANreferred to document E/PC/T/C.6/W.29 containing an addition, to Article 25 .(a) proposed by the Belgian. Delegation, which will be considered. by the Legal Drafting Committee. The time-table of the work of the Drafting Committee and its Sub-Committees was discussed and it was decided that next Saturday was to be considered an ordinary working day. The Committee should finish discussions of Chapter V by the end of this week. The CHAIRMAN then gave his views on the composition of the Report to be presented to the Second Session of the Preparatory Committee: : If there is no objection to a certain part of the text but if .no final decision has been reached as to whether or not it shall be retained because of its implications on other parts of the Charter, it will be put into square brackets; if there are objections on the part of a few delegations to a certain text, this fact will be stated in a note; if objections to a certain text have been voiced, by a .substantial number of delegations and an alternative text is drawn u, this text will be put in the left-hand column of the final Report. The.CHIRMAN understood .that. reservations ad& comments would not be attrbubted-to particular countries in.te eoport. /The CHAIRMN E/PC/T/C. 6/27 The CHAIRMAN drew the attention ofthe Legal Drafting Sub-Committee to certain expressionsin:CbapterV ,- Section A, paragrph3 on page 19 of the London Report. In. his opinion the task of the Legal Drafting sub- Comittee shold not be to define these terms but endeavour to ensure uniformity and consistency in their application throughout the Charter., The CHAIRMAN moved thesecond reading of Articles 26, 27and28. . Article 26 (C.6/15): In view- of the advice offered by the Observer of the International Monetary Fund (C.6/W. 30), M. PHILLIPS (AUSTRALIA) withdrew his proposal to replace the word "or" in line 2 by the word, "and". The text in square brackets in paragraph3 (b) and paragraph 4 should be considered by the Legal Drafting Sub-Commitee as an alternative text. Mr. JUSSIANT (BELGIUM) informed the Chairman that he had, prepared and handed. to the Secretariat an amendment to paragraph 3 (d). The amendment was referred to the. Legal Drafting Sub-Committee. In line 8 of paragraph 3 (e) the word "the" was replaced by "their'. Article 26 was approved after second reading. Article 27 (C.6/W.31): Mr. LEDDY (UNITED STATES) informed the Chairman that the drafting group (Cuba, France, United Kingdom and United States) which was set up to consider paragraph 2, had. not yet met. The matter was disussed privately however, and the group would circulate its findings. - -- - - _, . ' ' ' '- - The, comm i" line 4 "fwas deleted3 (b) after productss deeted -2b-;i .- , ;- . *fo : t Article .27 wa approved after second reading, subject to the report Of the drafting group.- - _ .*_@seTZ* * * ,t! w;- . I .* .. ~T6- Article 28 (0.6/W.31); The last sentence of paraph 3w referred to the Legal Mrafting Sub-Comittee to consider the following changes., Mr. NAUE (O AMICA) wished to replace the word "restrict by ce' t e~wrl ret.it "'obstract" and Messrs.' LI (FRcEW ) and SAE (T K DOM sggested that the sentence should. red "insofar as th-- restrict the expanalcu of international trade". /Article 28 E /PC/T/C. 6/27 Page 3 Article 28 was approved after second reading, after deleting "s" in "opertions" in line 4 and inserting "or" before "both" in paragraph 1:d (iii). The CHAIRMAN made reference to the document of the Economic and Employment Commission (E/CN/1/18/Add.1 and 2) which dealt with some problems of the Charter., Mr. MA (CHINA)asked leave to state his Government's views on a special aspect. of quantitative restrictions. The Chinese Government, desirons to promote industrial development in the country, proposed an additional article to be inserted after article 29 as Article 30 of Section C, as follows: "1,. Any Member country recognized as an economically under-developed country, shall be allowed., as a means for creating favourable conditions for its industrial development, to impose or maintain restrictions on the quantity or velue of merchandise permitted to be imported or exported. 2. Any Miember country which considers such an action necessary to .facilitate its industrial development, shall be entitled to impose or maintain quantitative restrictions on imports or exports under pararaph 1 of this Article until it is recognized as having been faithly industrialized. 3. -Any Member country making use of the provisions of this Article shall conform to the following conditions: (a) quantitative restrictions to bo thus imposed or maintained should be applied on the basis of non-discrimination in respect of its imports from or exports to all Member countries; (b) such quantitative restrictions should be periodically adjusted to meet the changing requirements of the country's national economy and progressively relaxed with the advance of its industrial development." Mr. MA explained that his Government was far from intending to cause any harm to other countries andthat he understood that consultationwith the Organization would follow the introduction of such restrictions. /The CHAIRMAN J ~~~~~~~~~/he CRAMMU2 E/PC/T/C .6/27 Pege 4 The CHAIRMAN ruled that the discussion of this proposal would exceed the terms of reference of the Committee and that the text should be included in the minutes of the meeting. The Committee then proceeded to consider Article 31 Non-discriminatory Administration of State-Trading Enterprises as amended by the United States Delegation (C.6/W.22). Paragraph 1: Mr. BAYER(CZECHOSLOVAKIA) wished. to delete the words "distributed or produce" because they referred to activities in the domestic market and not to foreign trade. He also wished to delete the words in square brackets in lines 5 and 6. Mr. WHIT (NEW ZEALAND) wished to delete the words "distribute or produce" and to remove the square brackets in lines 5 and 6. Mr. ALVAREZ (CHILE) wished to delete the words "distribute or produce". Mr. LEDDY explained 'that the words "distribute or produce" are necessary because industrial enterprises might also import foreign goods and should in such a case be bound by the provisions of this paragraph as far as this part of their activities is concerned. There was no intention to interfere with their domestic activities.' The words in lines 5 and 6 could. be deleted since language to the same effect was now added in paragraph 3. Mr. BAYER.wished .to reserve the position of his Government on this paragraph. Mr. LEDDY raised the question, already discussed in London, whether for commercial reasons a state enterprise could sell a product at different prices in different markets. Mr. SHACKLE suggested the following statement to be included in the final Report: /"The charging E/PC/T/C.6/27 Page 5 "The charging by a state enterprise, of different prices for its sales of a product in different markets, domestic or foreign, is not precluded by the provisions of this Article, provided that such different prices are charged for commercial reasons." While no decision concerning the interpretation of Article 31 with reference to this point was taken, the view expressed in this statement met with general approval. After comparing paragraph 1 of Article 31 with paragraph 6 of Article 26, it was decided to delete the proviso in square brackets in Article 26:6, and to transfer it provisionally to Article 31:1. The Commitee discussed' the change suggested by -the United States Delegation with regard to differential customs treatment in this paragraph and it was decided, at the suggestion of Mr. SHACKLEthat the words following upon "purchase and sale" should read: ";and also any differential customs treatment maintained consistently with the other provisions of this Charter." The words "and exercises effective control over the trading operations of such enterprise" in lines 5-6 were to be given in square brackets in the text to be prepared by the Secretariat for consideration in the second reading. Paragraph 2. The Delegates for Czechoslovakia, New Zealand and Chile objected strongly to the addition of the words "or industrial use" in line 3. Mr. SMITH (CANADA) suggested the wording "for resale or use in the production of goods for sale". It was decided not to include in this paragraph the words "or industrial use" (appearing twice in the draft suggested by the United States). With this change the United States text was adopted. The words proposed by the Delegate for Canada were to be mentioned in the report as an alternative text. Paragraph 3.Mr. SHACKLE proposed a clarification of the text in - lines 1 and 2 as follows: "to any enterprise, organ or agency in which there is effective control by a Member Government". /Mr. BAYER E//C/T/C .6/27 Page 6 Mr BAYER agreed tentatively to this change b ut proposed to delete all subsequent language of, the United States. amendment .. .The Delegations for Belgium, Chile and New Zealand supported the Czechoslovak Delegatee's point of view. It was agreed to approve paragraph 3 with the change suggested by Mr. ShackLe and with the deletion of the words added in lines 3,4 and.5 of the United States amendment. The same text including these words was to be given as an alternative version. Mr. BAYER drew attention to paragraph 2 (g) of Article 25 which was not yet discussed. - Mr. SI;CXE suggested thag this paregraph should provimainally reiin in its place pending the discussion of Article. 37. Tbh was adopted.

GATT Library

yz784qr8128

Summary Record of the Ninth Meeting : Held at the Capitol, Havana, Cuba, on Wednesday,17 December 1947, at 10.30 a.m

United Nations Conference on Trade and Employment, December 17, 1947

Second Committee: Economic Development

17/12/1947

official documents

E/CONF.2/C.2/SR.9 and E/CONF.2/C.2/SR.1-17

https://exhibits.stanford.edu/gatt/catalog/yz784qr8128

yz784qr8128_90180447.xml

GATT_155

United Nations Nations Unies CONFERENCE CONFERENCE UNRESTRICTED ON DU E/CONF.2/C.2/SR.9 17 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH SECOND COMMITTEE: ECONOMIC DEVELOPMENT SUMMARY RECORD OF THE NINTH MEETING Held at the Capitol, Havana, Cuba, on Wednesday,17 December 1947, at 10.30 a.m. Chairman: Mr. ABELLO (Philippines.) REPORT OF SUB-COMMITTEE A ON ARTICLE 8 (document E/CONF. 2/C.2/A/3) Mr. SHACKLE (United Kingdom) explained that Article 8, as amended, had been adopted unanimously by the Sub-Committee. It was furthermore agreed that the phrase. "is of concern to all countries" was to, be understood in a completely general sense, i.e. that all countries had a collective concern in the development of resources of the world at large. It in no way implied a right of interference in the internal affairs or national policy of a member, either on the part of any other individual member or of members generally.The Argentine representative had accepted the report subject to the satisfactory translation into Spanish of the word "concern". The report oof the Sub-Committee was approved. It was agreed that the explanation of the meaning of the amendment would be inserted in the summary record and that special attention should be given to the translation of the word "concern" into Spanish. ARTICLE 15 Mr. BRIGNOLI (Argentina) felt that all member states shoul d be free to establish preferential arrangements, when necessary, without there prior approval of the Organization. The powers of ITO should be limited to the provisions of Article 69 and its decisions should take the form of recommendations. If too great powers were granted to the Organization, there would be a risk, that national parliaments would not ratify the Charter, for a substantial part of national economic policy would have been transferred into the hands of ITO. From the practical point of view, such prior consultation would make for delay. Mr. Brignoli also expressed approval of the Chilean amendment to Mr. GARIA OLDIN(I Chile) said that the sugestion of prior approval was unacceptable to him for reasons of justice and equity. Preferential arnragements had been established hitherto without any prior approval and /it seemed E/CONF.2/C.2/SR.9 Page 2 it seemed logical that new arrangements could be made in a similar manner. If preferences were to be eliminated, such a provision would have to apply to those already in existence. Preferential arrangements, however, had been established because of the necessity of assuring stability and economic development and. countries would seek new preferences as a basis for their economic equilibrium and normal economic development. He was prepared to accept any form of words which would have the effect of preventing abuses, but insisted that the final decision concerning its economic policy should be left to the country itself. Mr. HURTADO (Venezuela) drew attention to the fact that the question of preferential arrangements had been debated exhaustively in the Third Committee. For the same reasons as those put forward by the representative of Chile and because it would make for a more flexible procedure, he urged the acceptance of his amendment. It eliminated the idea of prior consultation with the Organization, which would not interfere in the arrangement unless a member state complained that its trade had been damaged. Mr. GUERRERO (Ecuador) withdrew his amendment in favour of those proposed by the representatives of Argentina, Chile and Venezuela. Mr. WILGRESS (Canada) wondered if the representatives of Argentina, Chile and Venezuela had fully realized the implications of their amendments. The establishment of new preferential arrangements was an exception to the provisions of the most-favoured-nation clause which had been designed to make for stability in international trade and to prevent discrimination. Existing preferences had been condemned as discriminatory and therefore none would quarrel with the fact that any new preferential arrangements, even in connection with economic development, also would be discriminatory. Canada was greatly interested in the economic development of under-developed countries and wished to participate in that work. It had to be carried out, however, in co-operation with countries at all stages of economic development and if it was not to be promoted in an orderly manner, the main purpose of the Organization would have been defeated. It was essential that ITO should take into consideration the effect which particular preferential arrangements might have on other countries. If preference proposals were contemplated which were both practical and justified, they would be viewed with sympathy by other countries; however, if they involved the injury of another country, that country would be able to explain its point of view and other arrangements would be worked out. In connection with the remarks of the representative, of Chile, Mr. Wilgress pointed out that most of the existing preferential arrangements had been established for historical reasons, as for example, the one to /which E/CONF.2/C. 2/SR.9 Page 3 which Canada was a party which had been established in 1897. The provisions of Articles 16 and 17 demonstrated the length to which countries had gone in recognizing the need to modify existing preferences. He hoped that in the Sub-Committee, the proposers of the amendments would be able to see the force of his arguments concerning the necessity for prior approval of any new preference arrangements. Mr. HAKIM (Lebanon) agreed with the amendment submitted by the delegation of Venezuela, and said that the delegation of the Lebanon had supported the idea of regional preferences ever since the first session of the Preparatory Committee. The fact that it had not reserved its position regarding Article 15 did not mean that it was satisfied with that Article. Regional preferential agreements were justified as countries belonging to the same region had a special interest in trading with each other and mutually developing their resources. He did not see any strong economic justification for any other kind of preference. The delegation of the Lebanon could not support the proposal that the ITO might grant, by an affirmative vote of two-thirds of the members voting, an exception to the provisions of Chapter IV. It should not be necessary for the ITO to give prior approval to regional preferential agreements. Countries belonging to the same economic region should have the right to establish preferences among themselves, and then the ITO could ascertain whether or not those preferences were harmful to the interests of international trade. Mr. TORRES (Brazil) stated that one of the main purposes underlying the convening of the Conference was to eliminate existing preferences. He supported Article 15 as at present drafted. The delegation of Brazil was opposed in principle to new preferential systems, regarded with grave apprehension attempts at establishing such new systems, and regretted that it had to disagree with other Latin American countries in that respect. The establishment of new preferential systems was one of the most serious exceptions to the Charter and the prior approval of ITO should be obtained before any such arrangements were entered into. The present Conference was the most important of its kind in history and no attempt should be made to nullify its efficacy. Mr. Torres considered that a date should be agreed upon for the termination of all existing preferential agreements. Mr. HAIDER (Iraq) asked what were the special circumstances mentioned in paragraph 1 of Article 15 which would justify new preferential arrangements. What were the limitations to be imposed by the ITO when an application to conclude a preferential agreement was made? The Charter should give a clear /answer E/CONF.2/C.2/SR.9 Page 4 answer to those questions, and he therefore suggested that Article 15 should contain a schedule similar to that in Article 16 which would reserve the right of certain groups of countries to institute preferences because of their special circumstances. The other alternative would be to specify broadly what those circumstances were, in order to safeguard the interests of those groups of countries whose situation really justified preferential agreements. The meeting rose at 12.30 p.m.

GATT Library

nr480zh9665

Summary Record of the Ninth Meeting : Held at the Capitol, Havana, Cuba, Saturday, 20 December 1947 at 10.30 a.m

United Nations Conference on Trade and Employment, December 20, 1947

First Committee: Employment and Economic Activity

20/12/1947

official documents

E/CONF.2/C.1/SR.9, E/CONF.2/C.1/C/1-4, and C.1/SR.1-13

https://exhibits.stanford.edu/gatt/catalog/nr480zh9665

nr480zh9665_90180281.xml

GATT_155

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/C.1/SR.9 ON DU 20 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH FIRST COMMITTEE: EMPLOYMENT AND ECONOMIC ACTIVITY SUMMARY RECORD OF THE NINTH MEETING Held at the Capitol, Havana, Cuba, Saturday, 20 December 1947 at 10.30 a.m. Chairman: Mr. J. J. DEDMAN (Australia) 1. CONSIDERATION OF PARAGRAPHS 2 AND 3 OF THE ARTICLE ON "FAIR LABOUR STANDARDS (documents E/CONF.2/C.1/9 and 12) Paragraph 2 was adopted without comment. Mr. TAIT (International Labour Organization), introducing the amendment suggested by the Director-General of the ITO, said that it was not a change of substance but would help to express the opinion of the Committee more clearly. There were two aspects relating to the problem of labour standards - the trade aspect and the labour aspect. The ILO would not intervene in connection with the trade aspect, but felt that, so far as the labour aspect was concerned, it was the competent specialized agency in that field. Mr. PIERSON (United States of America) said his delegation would have no objection to the adoption of the amendment moved by the ILO but suggested that the words "act in co-operation" in the last line be replaced by the words: consult and co-operate". That change was suggested in order to avoid any possible misconstruction to the effect that the ITO could not act on trade aspects without obtaining the agreement of the ILO. Mr. SASTRO MOELJONO (Netherlands) associated himself with those delegations which supported the ILO amendment. He considered the word "co-operation" prefarable to the word "consultation". . r Mr. TAIT (International Labour Office), having accepted the amendment suggested by the representative of the United States of America, the Committee aphproext vedp teg tphof arara 3. Mr. inLIEU (ChaSHACKL) , Mr. E K(United ingdom) and Mr. BENDA (Czechoslovakia), referring to paragraph 1, suggested that the word "inter-goalvernment" should relace the word "international". m/The Cotttee E/CONF. 2/C .1/SR . 9 Page 2 The Committee decided that the word "international" in the first sentence of paragraph 1 should be replaced by the word "inter-governmental". The Article on fair labour standards was approved. 2. CONSIDERATION OF REPORT OF SUB-COMMITTE B ON OTHER ARTICLES OF CHAPTER II (documents E/CONF.2/C.1/10 and 13) Mr. ROYER (France), Chairman of Sub-Committee B, introduced the report of that Sub-Committee, and drew attention to the provisional reservations by the delegations of Italy, Mexico and Peru. The Sub-Committee suggested that the Article on fair labour standards should be placed at the end of Chapter II. The amendments submitted by the delegation of Norway had received careful consideration in the Sub-Committee, and it had been decided that the question raised might best be considered in connection with other parts of the Charter. The words "inter-governmental organizations" in paragraph 2 of Article 2 might, he felt, be changed to read "specialized agencies" now that the International Bank for Reconstruction and Development and the International Monetary Fund were both specialized agencies. The Central Drafting Committee might consider this drafting point:. Mr. MONGE (Peru), referred to the amendment submitted by his delegation (document E/CONF.2/C.1/7/Corr.1). While he recognized that Chapter VI was concerned with commodity problems he would emphasize that the concern in that Chapter was only with such problems after they had developed on a wide scale. The amendment proposed by his delegation, on the other hand, was concerned with precautionary measures to prevent the difficulties of one or two countries from spreading and threatening the entire international equilibrium. It was one thing, he thought, to solve existing problems which have upset a certain balance but quite another thing to deal with a situation which is developing with a view to preventing the spreading of the maladjustment. His amendment was concerned with the latter. He regretted that the full significance of his proposal appeared not to have been appreciated. However, as the Sub-Committee had decided not to recommend the inclusion of any provision on this subject in Chapter II, the Peruvian delegation withdrew its amendment. Article 2 Mr. SHACKLE (United Kingdom) pointed out that the last word in the title of Article 2 should read "Charter" and not "Chapter". Article 2 as a whole was approved. Article 3 - paragraph 1 Mr. AMADOR (Mexico) referred to the explanations given by the representative of Mexico when he first submitted the proposal that a new paragraph should be added to Article 3, laying down measures to be taken to /secure fair E/CONF.2/C.1/SR.9 Page 3 secure fair treatment for workers who migrate legally and to prevent illegal immigration which might prove prejudicial to the economic and social interests of the country from which the workers were proceeding. His delegation considered that matter of great importance, and he emphasized the necessity of having such a paragraph in the Charter in order to enable nations to maintain full and productive employment. Illegal immigration presented a problem also for the country which the immigrant entered, and employers in that country should be penalized for giving work to such immigrants. Mr. NASH (New Zealand) supported the remarks of the representative of Mexico. He pointed out, however, that there might be difficulty in having such a paragraph in the Charter as the problem affected only two or three countries. He considered the matter could be solved by organizations of workers in the receiving country and in the home country taking steps to stop their fellow workers being exploited. It would be difficult to prevent immigration of workers who felt they might thereby improve their standard of living. Referring to Article 3 in general, he considered it to be one of the most important in the Charter. Each member of the ITO would have the double responsibility, in giving effect to that Article, not only of ensuring productive employment but also of ensuring a wiser and more equitable distribution of goods already produced or to be produced. Mr. ROYER (France) assured the Mexican delegation that a great deal of interest and importance was attached to the issue which it wished inserted in the Charter. As the problem concerned only a few countries, however, it would not appear feasible to ask Member States before they ratified the Charter to alter their legislation in order to solve such a problem. He suggested that the necessary powers should be given to the Organization to study the matter and make recommendations, and that any countries which considered that the present situation was harmful to their interests, and prevented them from carrying out the provisions of Chapter II, had the right under Articles 89 and 90 to appeal to other Members and to the ITO. Mr. LEROY (Haiti) emphasized the importance of the problem of - eeandestin immigration and the need to include some refit in ce to ±en t. Charter, He supported the proposal of the Mexican representative. MrO. AMADR (Mexico) welcomed the remarks whic had been made by the Newn Zealad, French and Haitian representatives. His delegation did not /insist on a E/CONF. 2/C. 1/SR. 9 Page 4 insist on a particular form of words nor on a particular place in the Charter, but requested recognition of the fact that the problem did exist and directly affected the question of full employment. The Mexican delegation hoped that even if Article 3 was adopted as it now read, its proposal, would receive careful consideration. The respresentative of France had drawn attention to Article 89, but his delegation felt that the provisions of that Article should be applied only infrequently. . . Mr. AMADOR again reserved the right to bring aup his proposal t a ater.datem in the First Conittee or in a Plenary Session of the Conference. It was suggested by the Chairman that the Mexican proposal might be rewdeq asrelaated to.theItelia amendment of Article 5 and to the proposed n Re solution oEployment. In reply to the representative of TurkKLLey, Mr.d K nSHAE (Uniteigdom) expressed the view that amember state could raise tarffirffs in an eot to promote full employment, in cases whewre the rate as not bound. Measures to promote full employment in one country would hbe bound to ave some.adverse effect on the economies of other couwnt ries. It asdesirable, however, tolae down lthe, generaJprinciple that unemployment problems should nfot betwenrred from one country to. another, MEl;r. Ln XSvador) felt that the Mexican representative had called attention to a gap in Article 3 and therefore supported proposalhis thatinternational population movements should be carefully studied. Mr ROYER (France) referred the Turkish representative to the provisions of Article 1, in which It was clearly stated that thequestion of l fi1mployment had a prominent place. As the representative of the United Kingdom had pointed out, Article 17 did not oblige member states to reduce all tairffs. Migratory movements were an aspect of the question of full employment and in that respect the provisions of Article 89 should apply. Article 3w as adopted without change. Article 4 It wsa agreed that this Article should be transferred to the end of Chapter II to become Article 7. New Article 4. This Article was adopted as read. . _ New Article 5. ,. . ; Mr. MgCLm (l) drew at tention toethe amenment which.had been forwarded byN his d1e1legation (document E/COF.2/C./3). The original Italian amendment had been rejected by the Sub-Committee, but he reserved his right to introduce a concrete recommendation concerning international /migration movements E/CONF .2/C .1/SR. 9 Page 5 migration movements in connection with the resolution on employment His country and others, were greatly concerned with migration problems and he was convinced that the Organization would be forced to deal with the question if international trade was to remain on a stable basis. The new Italian amendment did not meet the views of his delegation completely but would give a certain amount of satisfaction. The introductory words of Article 5 were approved by the Committee. In reply to the representative of Turkey, the United Kingdom and French representatives pointed out that the inclusion of both Article 5 (1) (a) and Article 69 had been deliberate. Article 69 dealt with functions which the ITO itself might perform whereas Article 5 referred to subjects within the competence of the Economic and Social Council and other Specialized Agencies and not exclusively or initially the concern of ITO. The attention of the Central Drafting Committee might be drawn to the need of avoiding overlapping between Articles 69 and 5. Paragraphs 1 (a) and (b) were approved by the Committee. The representatives of Greece, the United States, Mexico and India supported the insertion of the Italian amendment. Mr. PIERSON (United States of America) stressed the fact that his delegation would have been unable to accept any provision which overlooked the fact that migration questions. were primarily the concern of individual states. It also would have been opposed to any text which assigned to ITO a large share of the responsibility for dealing with the inter-relation of migration and employment problems. The representatives of Cuba, Czechoslovakia, Norway, Burma and the United Kingdom did not feel that the Italian amendment would serve any useful purpose. Mr. SKAUG (Norway) was sorry that the Italian representative had withdrawn his original amendment, which had underlined the importance of migration movements in the maintenance of full employment. The present amendment was valueless unless it meant that the work of other bodies was to be duplicated. In support of the remarks of the Czechoslovak representative, Mr. SHACKLE (United Kingdom) proposed the insertion of the phrase "insofar as relevant to the purpose of the organization" after the word "studies" in the Italian amendment. The Italian amendment, as amended by the United Kingdom representative, was approved by the Committee. Paragraph 2 of Article 5 was approved by the Committee. /New Article 6 E/CONF. 2/C.1/SR.9 Page 6 New Article 6 In reply to the representative of Sweden, the CHAIRMAN explained that at a previous meeting when attention had been drawn to the proposal no delegation had offered to sponsor the proposal of the International Chamber of Commerce to delete this Article (E/CONF.2/C.1/SR.7). Mr. SKAUG (Norway) recalled that the Norwegian proposals concerning price stabilization and the prevention of inflationary developments had been supported in principle by several delegations. It had been decided in the Sub-Committee, however, that they more appropriately applied to Articles 18, 20, 25-29 and 43, than to the provisions of Chapter II. Mr. SKAUG again reserved the right to introduce his proposals in the First Committe, should no satisfactory results be achieved under other Articles. The CHAIRMAN announced that the Committee had completed its consideration of Chapter II and that the approved text would be referred to the Central Drafting Committee. It was agreed that the Chairman would nominate a Sub-Committee to consider the text of a resolution on employment and to report to the full Committee. The meeting rose at 1.35 p.m.

GATT Library

wz778qm0797

Summary Record of the Ninth Plenary Meeting : Held at the Capitol, Havana, Cuba on Monday, 1 December 1947, at 4.00 p.m

United Nations Conference on Trade and Employment, December 2, 1947

02/12/1947

official documents

E/CONF.2/SR.9 and E/CONF.2/SR.1-21

https://exhibits.stanford.edu/gatt/catalog/wz778qm0797

wz778qm0797_90180136.xml

GATT_155

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/SR.9 ON DU 2 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH SUMMARY RECORD OF THE NINTH PLENARY MEETING Held at the Capitol, Havana, Cuba on Monday, 1 December 1947, at 4.00 p.m. President: Mr. Sergio I. CLARK (Cuba) Mr. TANHAM, (International Organization of Industrial Employers) felt that the Conference was preparing the ground work necessary for determining how the needs of nations could be satisfield by practical and mutual assistance through production and multilateral trade. Production was the business of industrial employers and trade was the life blood of business. The eyes of industrial employers all over the world, therefore, were focused on the Havana Conference. The Organization which he represented had accumulated, through the years, the knowledge and the techniques to manufacture products which were needed and to distribute them efficiently. By stimulating production and trade and by removing impediments which blocked trade between nations, ITO could bring to consumers everywhere more of the goods which they needed. It could also increase the flow of investment capital for the development of natural resources and of industry. (For fuller text, see Press Release ITO/92). Mr. COREA (Ceylon) pointed to the need for a spirit of mutual tolerance and good will in the drafting of a Charter which would be just and fair to all. There was general agreement as to the purposes and objectives of ITO, but he was afraid they might lose their significance when the Conference came face to face with the grim realities of international commerce. He did not feel that it was unfair to say that undue importance had been given in the Charter to the point of the more highly developed countries. The effect of the Charter as it was now drafted could be to freeze the economic life of the underdeveloped countries at its present unsatisfactory low level. Such countries had to make a sacrifice for the attainment of the common goal but not to the extent of paralyzing their economies. The Chapter on Inter-Governmental Commodity Arrangements would need drastic revision to satisfy the special needs and difficulties of primary /producers E/CONF. 2/SR .9 Page 2 producers. Study groups should be established for each industry and should make recommendations to ITO when difficulties arose or were apprehended. A simpler and more efficient procedure would have to be evolved to secure for primary producers the safeguards which it was the intention of ITO to provide, Ceylon had a special interest in Article 4 concerning the elimination of substandard labour conditions. One of the principal aims of the Organization should be the raising of the miserably low labour standards which prevailed in most underdeveloped regions. (For fuller text, see Press Release ITO/86). Mr. POLITIS (Greece) stated that although his country had not taken part in the preliminary discussions at London and Geneva, it was in general agreement with the provisions of the Draft Charter. Greece had always depended for its livelihood on its foreign trade and therefore could fully approve any recommendation to remove trade barriers. The authors of the Charter had realized that a free international trade would depend on the willingness of the highly developed countries to aid in every way possible those which were not sufficiently developed. The Chapters on Employment and Economic Development treated of that question and perhaps would need further clarification. The conception of the economic interdependence of nations had been confirmed by the example of United States aid to Greece and to other countries through the Marshall Plan. The Greek delegation was not convinced that sufficient allowance had been made for the transition period. It was not enough to include a list of exceptions in the Charter; problems would have to be solved by a series of ad hoc rulings. The economic life of Greece has been dislocated and shattered and a long convalescent period would be needed before her traditional commercial policy could be abandoned. A change now would result in unemployment on a large scale and would be contrary to the principle of the Charter. In conclusion, Mr. Politis expressed the view that only the most flexible rules should be laid down for the transition period, while the work of ITO should be carried on optimistically but in a spirit of realism. (For fuller text, see Press Release ITO/88). Mr. SPEEKENBRINK (Netherlands) said that his delegation had made no formal reservations concerning the Draft Charter though it was not in entire agreement with respect to certain stipulations concerning transport or with the terms of Article 21, sub-paragraph 3 (b). /On the whole, E/CONF.2/SR.9 Page 3 On the whole, the Charter reflected fairly the needs of both highly -developed and less developed areas of the world. Mr. Speekenbrink, however, shared the fears of the Canadian representative that it contained too many escape clauses. His delegation had received with satisfaction the news that all the "key countries" had signed the Protocol of Provisional Application of the Agreement on Tariffs and Trade, before 15 November. That would mean that on 1 January 1948 many reduced tariffs-rates would come into force. In connection with the speech of the representative of the Indonesian Republic, he drew attention to the fact that the delegation of the Kingdom of the Netherlands represented all the component parts of the Kingdom. The official record of Mr. Gani's statement still contained certain reflections on conditions in Indonesia before and after the Second World War, and on those he felt compelled to make a few observations. It was impossible to have a clear picture of the problems of such a densely populated part of Asia through considering a few statistics and therefore he would limit himself to some brief remarks on the questions of education and hygiene. The Netherlands educational system in Indonesia compared. well with that of any other Asiatic country and all prominent Indonesian leaders could testify to the fact that it had done more for the Indonesians than could be proved by statistics. It had been said that only twelve thousand doctors were available for the population of the whole of the Indonesian Archipelago. That figure only represented the doctors who were government officials; no mention had been made of the many doctors who were engaged in private practice or who wore working with the missions. The Governmental Service for Public Health had established numerous local organizations for the prevention of contagious diseases and from 1931 to 1940, the official mortality figures for the Indonesian population on Java and Madura never reached as much as two percent. With reference to Article 68, Mr. Speekenbrink insisted that there could not be the slightest doubt that under the rules of international law, the Kingdom of the Netherlands still retained full sovereign powers with regard to all the component parts of the Kingdom. The Economic and Social Council had said nothing which could be construed as disputing that sovereignty. On that basis alone, the Netherlands delegation would take part in the discussions of the Conference, although it was prepared to co-operate fully with every delegation present. (For fuller text, see Press Release ITO/96). /Mr. DEJOIE E/CONF.2/SR.9 Page 4 Mr. DEJOIE (Haiti) drew attention to the heavy responsibility which rested with each representative towards the peoples of the world. The masses who now lived in a state of physical and moral degeneracy had to be assured of employment and an adequate standard of living. The obsolete economic policies which had lead to so much suffering had to be set aside. His delegation in general agreed that trade barriers should be removed, but some formula would have to be found to cover the problems of underdeveloped countries. Haiti's tariff regulations were not protectionist in character. The Haitian Government favoured the introduction of investment capital but reserved its position with respect to Article 13. During the war, the production of sisal had been greatly increased and a new industry was developing. Surely it would be possible for Haiti to protect, in some measure, that infant industry. The terms of Article 13 should apply, more particularly, to the more highly developed countries. The same considerations applied to Article 18 concerning Internal Taxation and Regulations. Paragraph 2 of that Article would hamper any state which did not possess a merchant navy. The richest nations of the world would have to adopt policies which would not result in the placing of insuperable obstacles in the way of small capital investments. Haiti had freed herself of a financial lock and now, Free of debt offered her co-operation in the establishment of a democratic economic order. Perhaps it would nou be possible to embark on a scheme of international economic planning, without which a world of peace could not be assured. (For fuller text, see Press Release ITO/93). Mr. D'ASCOLI (Venezuela) stated that his country had always worked towards a reduction of tariffs as a means of decreasing the cost of living. Today, further studies were under way to reduce tariffs on goods not justifying national production, while at the same time Venezuela was promoting industrialization. The equality embodied in the Charter must not be of the nineteenth century type, which actually established disequality by making it impossible, for instance, for Latin American Countries to develop new economies. During that period they had furnished raw materials and had been but a dumping grand for finished products. This had now been substituted by the just idea of economic interdepence for the welfare of all. A Charter would not be possible unless the old prejudices were discarded and instead modern, dynamic principles of co-operation adopted. Some speakers had insisted that there must be amendments to the draft Charter, others that it was practically perfect. Concerning guarantees of /investment E/CONF.2/SR.9 Page 5 investment, he felt that so far the Charter contained only platonic declarations. To develop its economy was a just aspiration of any country; and should not be strangled. How could the under-industrialized countries defend themselves under the clauses regarding quotas, subsidies, exchange customs, even though they were told that the draft Charter provided protection? In fact, there were many contradictions. Paragraph 4 of Article 1, for example, was concerned with reducing tariffs as a fundamental way of increasing trade. How could the "younger" countries protect themselves from the competition of the more highly developed countries? The needs of all countries must be taken into consideration; the Organization must not be tied inextricably to such clauses if the necessary economic development was to be realized. Concurrently with the desire to co-operate in commerce, Venezuela was making a great effort to improve its industry, agriculture and animal husbandry in an attempt to be free itself from dependence upon one single exhaustible product - oil. Diversification was imperative for the future of his country. Goodwill, co-operation and patience must be exhibited during the transition period of the development of small countries, at the same time that agreement and understanding was reached in trade relations designed to organize and liberate world trade. The PRESIDENT announced the next plenary meeting would be held Tuesday, 2 December 1947, 10.30 a.m. The meeting rose at 5.20 p.m.

GATT Library

nt902bt9833

Summary record of the Second Meeting : Held at Havana, Friday, 28 November 1947 at 5.15 p.m

United Nations Conference on Trade and Employment, November 28, 1947

Committee V: Inter-Governmental Commodity Agreements

28/11/1947

official documents

E/CONF.2/C.5/SR.2 and E/CONF. 2/C. 5/SR. 1-15

https://exhibits.stanford.edu/gatt/catalog/nt902bt9833

nt902bt9833_90200083.xml

GATT_155

UNRESTRICTED United Nations Nations Unies E/CONF.2/C.5/SR.2 CONFERENCE CONFERENCE 28 November 1947 ON DU ORIGINAL: ENGLISH TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI COMMITTEE V: INTER-GOVERNMENTAAL COMMODITY AGREEMENTS SUMMARY RECORD OF THE SECOND MEETING Held at Havana, Friday, 28 November 1947 at 5.15 p.m. Chairman: Mr. George HAKIM (Lebanon) in opening the meeting, the CHAIRMAN thanked the representatives for the honour they had done his country and himself in electing him Chairman. He hoped, that with their co-operation the work of the Committee would be brought to a successful conclusion. Selection of Vice-Chairman Mr. MAURITZ BONOW (SWeden) was chosen as Vice-Chairman, Interpretation In reply to an intervention by Mr. STEWARD (Uruguay) requesting interpretation into Spanish when the system of consecutive interpretation was used, Mr, LACARTE (Deputy Executive Secretary) drew the attention of delegates to Articles 39 and 40 of the Rules of Procedure (E/CONF.2/2/Rev.4) which had been unanimously adopted by the full Conference. These Articles only provide for interpretation into English and French. However, future meetings of Committee V would probably take place in a Committee room wired. for simultaneous interpretation, and interpretation into and from English, Spanish and French would then be available. Public or Private Meetings It was decided. that in principle, the meetings of the Committee should be public, but that in the interests of speeding up the work, the Committee might decide that particular meetings should be held in closed session. Agenda The CHAIRMAN announced. that ln order to facilitate the work of the Committee a preliminary annotated agenda would be prepared and circulated early the following week. If any delegation wished to include amendments in this preliminary statement, they should submit them in three copies to the Executive Secretary not later than Monday, 1 December. /Mr. JUDD E/CONF. 2/C. 5/SR.2 Page 2 Mr. JUDD (Secretary) announced that the following documents would be prepared for members of the Committee: (1) A General Document containing (a) the report of the relevant committee of the -Genava,Conferens, and (b) a general statement of the principles of Chapter VI. This document would be available 29 November. ) The Preliminary Annotated Agenda referred to by the Chairman. This would be Issued about 2 December. This would contain amendments submitted up to i December. (3) The complete Annotated Agenda. This would be issued about 8 December, and would contain all amendments, submitted by the due date approved by the Conference, 6 December. . `Records .. In reply to a question the CHAIRMAN announced. that Summury. Records of the Meetings of the Committee would. be prepared and circulated. to delegations. ::.- The next meeting would take place on Monday at l0.30 a.m. The meeting rose at 5.50 P.m..

GATT Library

fq313zz6063

Summary Record of the Second Meeting : Held at Havana, Saturday, 29 November 1947 at 10.30 a.m

United Nations Conference on Trade and Employment, November 29, 1947

Fourth Committee: Restrictive Business Practices

29/11/1947

official documents

E/CONF.2/C.4/SR.2 and E/CONF.2/C.4/SR.1-15

https://exhibits.stanford.edu/gatt/catalog/fq313zz6063

fq313zz6063_90190671.xml

GATT_155

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/C.4/SR.2 ON DU 29 November 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH FOURTH COMMITTEE: RESTRICTIVE BUSINESS PRACTICES SUMMARY RECORD OF THE SECOND MEETING Held at Havana, Saturday, 29 November 1947 at 10.30 a.m. Chairman: Mr. CHARLONE (Uruguay) The CHAIRMAN announced that the General Committee had set a time limit of 20 December for the completion of the work of the Committee, He would carry out his duties with the utmost impartiality and knew that he would receive the fullest co-operation from the members of the Committee. Election of Vice-Chairman On behalf of the representatives of Ecuador, Mexico and Argentina, Mr. LOREBTO (Venezuela) nominated Mr. Coppola D'Anna (Italy) as Vice-Chairman. The Italian representative asked that his canditure be withdrawn as he did not feel able to undertake the heavy duties of the office. Mr. Anwar MAZI (Egypt), supported by the representative of Afghanistan, nominated Mr. aUiMW (Iraq). Mr. CAPLAN (United Kingdom) supported by the representative of Norway, nominated Mr. Van Velden (Union of South Africa). Mr. VAN VELDEN (Union of South Africa) was elected Vice-Chairman. Decision as to whether the meetings of the Committee should be held in public or in private: On the proposal of the representative of Chile, seconded by the representative of the United Kingdom, it was agreed that the meetings of the committee would be held in public unless a delegation requested otherwise for the consideration of a confidential document. Submission of Amendments In conformity with the explanation given by the Deputy Executive Secretary, document E/CONF.2/11, it was agreed that the final date for the submission of amendments was 6 December, but that delegations which wished their amendments to appear in the preliminary annotated agenda would submit them to the Secretary of the Committee by 6.00 p.m. Monday. The meeting rose at 11.12 a.m.

GATT Library

jh089zk2363

Summary Record of the Second Meeting : Held at Havana, Saturday, 29 November 1947 at 10.30 a.m

United Nations Conference on Trade and Employment, December 2, 1947

Fourth Committee: Restrictive Business Practices

02/12/1947

official documents

E/CONF.2/C.4/SR.2/Corr.1 and E/CONF.2/C.4/SR.1-15

https://exhibits.stanford.edu/gatt/catalog/jh089zk2363

jh089zk2363_90190672.xml

GATT_155

United Nations CONFERENCE ON TRADE AND EMPLOYMENT Nations Unies CONFERENCE DU COMMERCE ET DE L'EMPLOI UNRESTRICTED E/CONF.2/C.4/SR.2/ Corr.1 2 December 1947 ENGLISH - FRENCH ORIGINAL: ENGLISH FOURTH COMMITTEE: RESTRICTIVE BUSINESS PRACTICES SUMMARY RECORD OF THE SECOND MEETING Held at Havana, Saturday, 29 November 1947 at 10.30 a.m. The following corrections should be made in the names of Delegates listed in the 4th paragraph: Mr. Anwar MAZI (Egypt) should be - Mr. Anwar NIAZI (Egypt) Mr. Shaider (Iraq) " " - Mr. S. HAIDER (Iraq) QUATRIEME COMMISSION : PRATIQUES COMMERCIALES RESTRICTIVES COMPTE RENDU ANALYTIQUE DE LA DEUXIEME SEANCE tenue a La Havane, le samedi 29 novembre 1947, a 10 heures 30 Il convient de rectifier, conformTment aux indications ci-aprTs, le nom des reprTTsentants suivants qui figure au quatFFime alTTa a M. Anwar NIAZI (Eygpte) au lieu de M. Anwar NAZI (Egypte). M. S. HAIDER (Irak) au lieu de M. SHAIDER (Irka).

GATT Library

qk885cs5401

Summary Record of the Second Meeting : Held at Havana, Saturday, 29 November 1947 at 10.30 a.m

United Nations Conference on Trade and Employment, November 29, 1947

Fourth Committee: Restrictive Business Practices

29/11/1947

official documents

E/CONF.2/C.4/SR.2 and E/CONF.2/C.4/SR.1-15

https://exhibits.stanford.edu/gatt/catalog/qk885cs5401

qk885cs5401_90190671.xml

GATT_155

GATT Library

yy064cn9843

Summary Record of the Second Meeting : Held at the Capitol, Havana, Cuba, on 2 December 1947 at 7.00 p.m

United Nations Conference on Trade and Employment, December 2, 1947

General Committee

02/12/1947

official documents

E/CONF.2/BUR/SR.2 and E/CONF.2/BUR/SR.1-12

https://exhibits.stanford.edu/gatt/catalog/yy064cn9843

yy064cn9843_90180209.xml

GATT_155

United Nations Nations Unies RESTRICTED CONFERENCE CONFERENCE E/CONF. 2/BUR/SR.2 ON DU 2 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH GENERAL COMMITTEE SUMMARY RECORD OF THE SECOND MEETING Held at the Capitol, Havana, Cuba, on 2 December 1947 at 7.00 p.m. Acting Chairman: Mr. Max SUETENS (Belgium), First Vice Chairman 1. REPORT OF SUB-COMMITTEE ON RULE 54 OF THE RULES OF PROCEDURE (document E/CONF .2/BUR. 3) Mr. NASH (New Zealand), Vice President, presented the Sub-committee's report. Mr. DEDMAN (Australia.), Chairman Committee I, moved its adoption. It was agreed to adopt the report and recommend to the Conference the amendment of Rule 54 in accordance with the report. The EXECUTIVE SECRETARY stated that a Plenary Session would be convened Wednesday, 3 December at 10.30 a.m. to consider: (a) The General Committee's recommendation on Rule 54. (b) Phe PRESIDENT'S proposal for the nomination as seventh vice- president of Mr.Walter STUCKI (Switzerland) whose Government had now authorized him to accept this office. 2.INTEPRETATIVE NOTES REGARDING PROVISIONS OF CHARTER (note by the Executive Secretary (E/CONF.2/BUR/W.1)). The Executive Secretary presented t his paper and asked the Committee's guidance as to: (a) whether the final text of the Charter should be accompanied by interpretative notes; (b) the form any such notes should take. Mr.WILGRESS(Canada),Chairman Committee III, said he would welcome a decision on this point, particularly so that all committees would follow a uniform procedure. His view was that insofar as possible the text should be made so clear that no need for interpretative notes would arise. Mr. PHILIP (France) did not favour the adoption of such a policyas a strict rule, suggestgin that notes might sometimes make for less complicated text. He agreed, however, that interpretative notes should be avoided au much as possible Where such notes proved to be necessary, they should be made an integral partof the text. /Mr. ALAMILLA E/CONF. 2/BUR/SR. 2 Page 2 Mr. ALAMILLA (Cuba) concurred in the views expressed by the delegate for France. Mr. NASH (New Zealand), Vice President, expressed the view that any court considering a case arising out of the Charter would be bound by the text only and not by any interpretative notes accompanying the text. Mr. CHARLONE (Uruguay), Chairman Committee IV, was of the opinion that the text should be made so clear that no interpretative notes would be required, and opposed formally the inclusion in the Charter of any interpretative notes. Mr. BETETA (Mexico), Chairman Committee II, supported this point of view. Mr. HAKIM (Lebanon), Chairman Committee V, supported the view that any interpretative notes which proved to be unavoidable should be incorporated into the text of the Charter. Mr. DEDMAN (Australia), Chairman Committee I, proposed that committee chairman should be requested to seek the elimination of all interpretative notes, but if a wider area of agreement would be made possible by the inclusion of an interpretative note, such a note should be permitted. Mr. WUNSZ KING (China) was inclined to agree that any notes generally accepted should be embodied in the text of the Charter. However, he suggested postponing any final decision in this matter for at least a fortnight; the position to be reviewed at that time in the light of subsequent developments. It was agreed that insofar as possible the text of the Charter should be made so clear that no interpretative notes would be required, and that committee chairmen should be guided accordingly. If it were decided ultimately that some interpretative notes were unavoidable, such notes should be made an integral part of the text of the Charter. This recommendation would be reviewed later in the light of the then existing facts. 3. OFFICIAL WORKING LANGUAGES FOR THE CONFERENCE AND ITS COMMITTEES The EXECUTIVE SECRETARY called attention to Rules 38 through 41 of the Rules of Procedure with respect to official and working languages. The question of interpretation into Spanish had been raised in several committees. Arrangements had been made for interpretation into English, French and Spanish when simultaneous interpretation was in operation. When consecutive interpretation was used, it would be possible to interpret only into the two working languages - English and French. This was the practice of the General Assembly. Additional interpreters were not available in order to provide interpretation into Spanish. It would not now be possible to install simultaneous interpretation equipment in additional large committee rooms /before Thursday E/CONF. 2/BUR/SR. 2 Page 3 before Thursday or Friday of this week, due to the prolongation of the General Assembly. The Executive Secretary suggested, in view of these difficulties, that the Chairman of Committees II and IV, which would have to meet on Wednesday and possibly Thursday in a committee room in which simultaneous interpretation was not available, should abide by the Rules of Procedure which provided for only two working languages. Mr. BETETA (Mexico), Chairman Committee II, while appreciating that the Rules of Procedure did not provide for Spanish as a working language, urged that some temporary arrangement be made, if possible, for interpretation into Spanish pending availability of simultaneous interpretation. The EXECUTIVE SECRETARY pointed out that on the basis of the available staff, interpretation into Spanish could not be provided. Mr. WUNSZ KING (China) stated that if any of the five official languages of the Conference were to be used as working languages other than the present working languages, English and French, he would have to insist that Chinese, an official language, also be made a working language. It was agreed to accept the Executive Secretary's suggestion with respect to working languages. The Committee adjourned at 8.45 p.m.

GATT Library

rq193gs1626

Summary Record of the Second Meeting : Held at the Capitol, Havana, Cuba on 29 November 1947 at 10.30 a.m

United Nations Conference on Trade and Employment, November 29, 1947

Third Committee: Commercial Policy

29/11/1947

official documents

E/CONF.2/C.3/SR.2 and E/CONF.2/C.3/SR.1-16

https://exhibits.stanford.edu/gatt/catalog/rq193gs1626

rq193gs1626_90190215.xml

GATT_155

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/C.3/SR.2 ON DU 29 November 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH THIRD COMMIttEE: COMMERCIAL POLICY SUMMARY RECORD OF THE SECOND MEETING Held at the Capitol, Eavana, Cuba on 29 November 1947 at 10.30 a.m. Chairmen: Mr. D. L. WILGRESS (Canada) 1. ELECTION OF VICE CHAIRMAN Mr. ## (Netherlands) proposed and Mr. MOLINARI (Argentina) seconded the Nomination of Mr. Walter Muller (Chile) for Vice-Chairman. .: Mr. RYDER (United States of America) stated that his delegation had wished to nominate Mr. ## (El Salvador), but inasmuch as it was not possible for him to serve, be would support the nomination of Mr. Muller. The CHAIRMAN declared Mr. Muller elected unanimously as Vice-Chairman of Committee III. The CHAIRMAN stated Mr. Muller would. take. his chair as Vice-Chairman at the next meeting. 2. DECISION ON WHETHER MEETINGS SHALL BE HELD IN PUBLIC OR PRIVATE It was agreed that, in general, Committee III meetings would be public, but that any member might request a private meeting if that would expedite the work.. The CHAIRMAN suggested the Committee adopt the rule that in general documents be Unrestricted, unless a member propose that a particular document be Restricted, at which time the Committee would decide in the light of the circumstances at the time. Mr. SHACKLE (United Kingdom) suggested it might be more practical, considering the deadlines for submission of documents, that the Member decide whether his document should be Restricted or Unrestricted. Mr. RYDER (United ## of America) thought it preferable that the Committee should decide. There being no further comment, the proposal of the CHAIRMAN. was accepted. 3. OTHER ORGANIZATIONAL MATTERS The CHAIRMAN called attention to the Note to Delegations Regarding Amendments to the Charter (E/CONF.2/11) which proposed that a preliminary edition of the annotated agenda be issued including amendments received by 6.00 p.m. on 1 December. He noted that formal proposals and amendments /would be E/CONF.2/C.3/SR.2 Page 2 would be accepted up to 6 December, but urged that insofar as possible they be submitted by the earlier date. The proposals regarding the preliminary edition were approved. The CHAIRMAN announced the next meeting of the Committee was to be held on Tuesday, 2 December, at 10.30 a.m. He felt that general discussion of Chapter IV as a whole might be concluded in one, or possibly, two meetings; after that, there would be a second reading of the Chapter, Article by Article and paragraph by paragraph. Sub-Committees should be kept to a minimum; it probably would be necessary to form a sub-committee for each of the six sub-sections of Chapter IV, as well as ad-hoc sub-committees to resolve points of view on certain questions. He thought it best, however, not to establish sub-committees now, but as the work progressed. Mr. AUGENTHALER (Czechoslovakia) asked that the members of the Committee be supplied with the working papers of all sub-committees. The CHAIRMAN stated this was the intention, for both Restricted and' Unrestricted documents, an d declared the procedure of work esuYatlined approved. The meeting rose at 11.05 a.m.

GATT Library

qp031pr1811

Summary Record of the Second Meeting : Held at the Capitol, Havana, Cuba on Friday, 28 November 1947 at 4.00 p.m

United Nations Conference on Trade and Employment, November 28, 1947

Second Committee: Economic Development

28/11/1947

official documents

E/CONF.2/C.2/SR.2 and E/CONF.2/C.2/SR.1-17

https://exhibits.stanford.edu/gatt/catalog/qp031pr1811

qp031pr1811_90180436.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/C.2/SR.2 ON DU 28 November 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH SECOND COMMITTEE: ECONOMIC DEVELOPMENT SUMMARY RECORD OF THE SECOND MEETING Held at the Capitol, Havana, Cuba on Friday, 28 November 1947 at 4.00 p.m. Chairman: Mr. Ramon BETETA (Mexico) The CHAIRMAN opened the meeting and invited nominations for the Vice-Chairman. Mr. GUTIERREZ(Cuba) proposed Mr. Emilio ABELLO (Philippine Republic), and. Mr .MELANDER (Norway) warmly supported and seconded the motion. The CHAIRMAN declared Mr. Abello unanimously elected as Vice-Chairman of the Second Committee. The VICE-CHAIRMAN took his seat. Th CHAIRMAN then invited a discussion on the question of public and and closed meetings and papers. After discussions in which Mr. SEACKLE (United Kingdom), Mr. LLERAS (Colombia), Mr. FORTHOMME (Belgium), Mr. FARINA (Uruguay), Mr. LIEN (China) and Mr. COOMBS (Australia) participated it was agreed that meetings should be held in public unless the Committee otherwise decided. In the event of the Committee desiring a closed meeting a decision would be taken at the preceding meeting It was also agreed that proposals or amendments should be freely circulated unless the Committee decided otherwise or the Delegation concerned requested otherwise. Mr. FARINA (Uruguay) expressed regret that the Committee meeting had been scheduled at the same time as the Plenary meeting but was informed by the DEPUTY EXECUTIVE SECRETARY that the Plenary meeting that morning had approved the report of the general committee (E/CONF.2/BUR.2) that during the remainder of the present week at least one principal committee should meet each morning and each afternoon. The CHAIRMAN announced that the third and fourth meetings of the Second Committee would be held on Monday, 1 December 1947, at 10.30 a.m., and Tuesday, 2 December 1947, 4.00 p.m. respectively. He also called attention to the decision of the Plenary meeting that all formal proposals to amend the draft Charter, apart from those arising out of and in the coures of discussion at the Conference, should be submitted in writing toh the Executive Secretary not later than Saturday, 6 December. If any delegate /wished E/CONF. 2/C.2/SR.2 Page 2 wished to have its amedments included in a preliminary edition of the annotated agenda it should send them to the Executive Secretary in three copies by 6.00 p.m. on Mondays, 1 December. The meeting rose at 4.40 p.m.

GATT Library

hh785mt8180

Summary Record of the Second Meeting : Held at the Capitol, Havana, Cuba, Saturday, 29 November 1947 at 5.00 p.m

United Nations Conference on Trade and Employment, November 29, 1947

First Committee: Employment and Economic Activity

29/11/1947

official documents

E/CONF.2/C.1/SR.2, E/CONF.2/C.1/C/1-4, and C.1/SR.1-13

https://exhibits.stanford.edu/gatt/catalog/hh785mt8180

hh785mt8180_90180271.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF. 2/C.1/SR.2 ON DU 29 November 1947 TRDE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH FIRST COMMITTEE: EMPLOYMENT AND ECONOMIC ACTIVITY SUMMARY RECORD OF THE SECOND MEETING Held at the Capitol, Havana, Cuba, Saturday, 29 November 1947 at 5.00 p.m.. Chairman: Mr. J. J. DEDMAN (Australia). 1. ELECTION OF VICE CHAIRMAN The CHAIRMAN thanked representatives for the confidence they had shown in him by electing him Chairman, and called for nomination for Vice-Chairman, Mr. HEBERT (Canada), supported by Mr. ROYER (France), nominated Mr. Waerum, Chairman of the Danish delegation, for Vice-Chairman. Mr. GALFRASCOLI (Argentina) nominated the representative of Colombia. DECISION: The sense of the meeting was that Mr. Waerum, Chairman of the Denish delegation, was elected Vice-Chairman. Mr. BERTRAM (Denmark) thanked representatives for electing Mr. Waerum, Vice-Chairman. 2. DECISION ON WHETHER MEETINGS SHALL BE HELD IN PUBLIC OR PRIVATE (See Rule 45 of the Draft Rules of Procedure, documet E/CONF. 2/2/Rev.4) The CHAIRMAN, referring to decisions taken by other Committees, suggested that meetings of the First Committee should be public except when any representative considered that the following meeting should be private in which case the Committee might decide that the meeting should be private. DECISION: The proposal of the Chairman was adopted. 3. OTHER ORGANIZATIONAL MATTERS Mr. ROYER (France) suggested that all texts of documents should be unrestricted unless a representative asked that they should be restricted, in which case it would be open to the Committee to accede to the request if it thought fit to do so. After a brief discussion in which Mr. SHACKLE (United Kingdom) and Mr. COOMBES (Australia) took part, it was decided that the First Committee would follow the procedure adopted by the Fourth Committee; i.e., that documents should be unrestricted but that should a request be made for a document to be restricied it was open to the Committee to agree to that request. /The CHAIRMAN E/CONF. 2/C .1/SR. 2 Page 2 The CHAIRMAN suggested that those delegations which wished to make amendments should furnish them to the Secretariat before 6.00 p. m. 2 December as proposed in document E/CONF.2/11 if they desired them to be incorporated in the annotated Agenda. The third meeting of the Committee would be devoted to a general discussion of Chapter II and at the following meetings the Chapter would be dealt with Article by Article and paragraph by paragraph. He reminded the Committee that it was expected to complete its work by 20 December. The meeting rose at 5.30 p .m.

GATT Library

jm285tw6895

Summary Record of the Seventeenth Meeting : Held at Lake Success on 8 February 1947 at 10:30 a.m

United Nations Economic and Social Council, February 10, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

10/02/1947

official documents

E/PC/T/C.6/51 and E/PC/T/C.6/37-55

https://exhibits.stanford.edu/gatt/catalog/jm285tw6895

jm285tw6895_90230103.xml

GATT_156

United Nations Nations Unies RESTRICTED ECONOMIC CONSEIL E/PC/T/C.6/51 ECONOMIC CONSEIL 10 February 1947 AND ECONOMIQUE ORIGINAL: ENGLISH SOC1AL COUNCIL ET SOCIAL DRAFTING COMMITTEE OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE, ON TRADE AND EMPLOYEMENT SUMMARY RECORD OF THE SEVENTEENTH MEETING Held at Lake Success on 8 February 1947 at 10:30 a.m. Chairman: H. E. M. Erik COIBAN 1. T he CHAIRMAN introduced the Report of the ad hoc Sub-Committee on Paragraph 2 of Article 27 (document E/PC/T/C.6/W.55). In the discussion of this redraft of Paragraph 2 of Article 27, Mr. SHACKLE (United Kingdom) suggested the following additions to Paragraph 3 of this Article: (a) Add after the words "shall apply" the words "mutatis mutandis"; (b) Add after the words "restriction" the words "by quantity or value". The redraft was approved with the above changes and the CHAIRMAN declared the whole of Article 27 thus adopted in second reading. 2. Second Reading of Articles 44 and 45 (document E/PC/T/C.6/47) 'The Committee did not find It necessary to bring any changes to the agreed text. 3. Second Reading of Articles 46 through 51 - (document E/PC/T/C.6/43) The Delegate for the Netherlands stated that he would have preferred to see the escape clause no contained in paragraph 1 of Article 53 shifted to Article 49. He received the support of the Australian and of the United States delegates, and it was decided to reconsider the question when Article 53 was discussed. The Indian Delegate stated that he would prefer the Cuban amendment to Article 47 (c) stated as a reservation in the Report, rather than in /square E/PC/T/C .6/51 Page 2 square brackets in the text. The CHAIRMAN answered that inclusion of the Cuban suggestion within square brackets in the text was in conformity with the views of the Committee and meant that the text would be referred to the meeting in Geneva. - The Delegate for the United States considered Article 47 (b) as a substantial change from the London text contained in Article 47, paragraph 3, and expressed his prefrence for the latter text. The Delegates for Australia, Canada, the Netherlands and United Kingdom supported the United States position and it was decided to revert to the London text. With the exiepton of these points, the Committee agreed to the text of Document E/PC/T/C.6/43. 4. Discussion of' the Chilean Draft of Article 51 - Paragraph 4 contained in Document E/PC/T/C.6/W.42 The Chilean Delegate explained that the draft submitted by his delegation aimed to prevent a deadlock in the decisions concerning commodity arrangements. To facilitate the proceedings, he suggested that consumers should accept two conditions; a reasonable price increase when (a) there has been an appreciable decrease from the price of the previous period; and (b) when the present price does not cover costs. The United States Delegate was unable to agree with the Chilean amendment because it nullified the intention of the Charter as to equality of voice between consumers and producers. The Canadian Delegate was of the opinion that the Chilean amendment would create a reasonable limitation to the voice of the importers. He asked the United States Delegate whether he would veto any agreement containing a price increase. In the United Kingdom Delegate's opinion the discussion raised by the Chilean proposal illustrated the wisdon of maintainng the London text. The Cuban Delegate asked that the Report should mention the fact that /a reasonable E/PC /T/C .6/51 Page 3 a reasonable price should not below the cost of production. He added that the Cuban delegation hoped that a proviso on reasonable price would be included in paragraph 4 of Article 47 in Geneva, and in that case the Chilean point would be covered. The Belagian Delegate stated that he was not agreeable to the substantive change contained. in the Chilean proposal because it would facilitate the maintenance of a status quo in world production, and this was not the aim of commodity agreements as expressed in Article 47; when a price decreased it should not necessarily be increased again. The Chilean Delegate stated at the proposal was not meant to be a substantive change and that the point raised by his delegation would be covered if the Cuban amendment on reasonable price was included in Article 47. It was agreed to maintain the London text and to include in the Report a note on the Chilean text, which would include the statement that "Some Delegates understood that other stipulations of the Charter covered any legitimate interest the Chilean amendment was meant to cover." 5. Discussion of. the Suggestion Made by the F.A.O. Observer Concerning Article 52 - (document E/PC/T/C.6/W. 59) The Executive Secretary called the attention of the Committee to the following printing errors: (a) In. the sixth line the inverted brackets should follow the word "or" instead of preceding it . . - (b) The last paragraph s.hould not be within brackets The F.ACiGe"r added. thatthoulde word production" ' shcad b insertedrnthe nin"th -le a"fter the word expandede&" The Cuba D-egtione d no -othr objectIlc the text than that it ent byr d. ths of refeence of ntheommit DraftHGig C ttee. lso tthjhough thats 6-oint raF.ieOd "y the T.0 Observer was-covered by the fin teallyf agicree4edxt bo.ArtI 7 - () : - /:' T lhe Dalegete- Page 4 The Delegate for the Netherlanda expressed his agreement with the F.A.O.- Observer.. .:. HAIRMAN s atedtthat the Comiije Cmttee was not empowered to insert a new paragraph 1, but a statemenwt d raingattnentio to the point raised by .A.O.the Fv Obseer could be inclun ded iethe .Rport ThDeleg fate-h? te Nethandserl stdate that he wans udesrstrict intcrionu foI'om 'iGovernments atto foinsider 'he consistency between pvisions of r.oFAO. and I.T.O.. ThEee xcutive Secretaryu gsgested that smalla group which would inucI tee d.hFA..O Obserrve, and theel gDeate for the Netherlands could , : ..* . , .* . * , . \ ccnslder a euitabl4 t~it foi' inclusion in th: Report which then would be issuea:by`the-omcretariat and discussed in the CGamittee. The Delegate for Canada said tha even though the point raised- by the F.m.O, Observeri was outside thesterns of reference, he agreed that it wvuld have to be careoully coosideoed; public atteinticn will fccus cn that poxint and it would be adver'svisableto e.riss the F.A.O. Obserypoint Of view in the best pssib1 .-ja.. ThexXc Cuban Deletagatae agreed with the eutive Secrery nd added nthat a norotanticaholaionspwamsingd be made ±h e Repc tid elegattg adhere to it could do o. . The Llegates for China and.ndia agreed and it was decided to fic3cwExecative ec:etaxy~ sgesion. 6. Discuai~nConce~rn r~tcle4.. . * Paof raNas9 12, 3,n4, -? nd.o ? theonn text were ad9pted.- without discussion. . - - _ r . , , In compin wth paIxragh5 the FA.O,. Coser x~rstathat n agebmemsrelatln-to gicuJIturl products it should e possible for F.A.O. of Commodity touncils./pio supply certain members f the Serefti::.- The ChMIRI hsated that there was mlothip : t. bch precluded such a posibility and the Delegates for Cuba and the United States added that it is the Couodity Council which appoints the Secretariat /in cnsultation E/PC/T/C.6/51 Page 5 in consultation with I.T.O Paragraph 5 of the London text was then adopted. In regard to paragraph 6 the Cuban Delegate stated that the intent of the amendment suggested by his delegation and which amendment is contained in document E/PC/T/C.6/52 was to avoid the necessity for specific approval by the Organization of every detailed rule. In order to express the Cuban idea of preference for an overall approval of the rules and procedures of the Commodity Council, it was agree, upon the suggestion of the Delegates for Belgium and the Netherlands, to include a textr to that effect. - 7. Consideration rofAticle 55 The Cuban Delegate explained that his delegonasti' suggestion documenttPC E//T/C.6/W.52) was aimed at making an explicit reference to the problems of terminonati of agreements and withdrawal from agreements. The Cuban amendment was unanimously accepted ahndteoncquiseent dranftig points were referred to the Legal Drafting Sub-Committee. The F.A.O. Observer stated ttha as the Articnele w read it seemed possible to have in an agreement a price clause valid fallor the five years. .: The Delegate for United States stated that the Council shoud keep cprx clauses under constant review and the om c ittee agreed that tshia point was covered in the agreement. To ths FO.A.. Obser'vers question that it should be possibler fo competent organizations to secure information mfro the archives of mComodity Counc ilscwhih after the termnonati of the agreeme,nts are in possession of the Organizon,ati thHe CAIRMAN answered that he did not see anythinn g iArticle -55 which precluded such possibility. 8. Consideration of Article 5 . - -- Qte Ex'ecutive Secretary8s uggestion it was decided to replace thei reference to Artlcle 71 by a reference to Article 86; and on the United' Kingdom Delegatews suggestion the ords "subject to" were changed to "in pursuance of", /9. Consideration E/PC/T/C.6/51 Page6. 9. Consideration of Article 57 Paragraph 1 and 2 were accepted and a small drafting point in paragraph 2 was referred to the legal drafting Sub-Committee. 10. Consideration of Article 58 This Article was approved without any change from the Lordan text. 11. Consideration of Article 59 Paragraph 1: The United Kingdom Delegate suggested a drafting change in connection with conservation agreements relating to wildlife and fisheries; he proposed that all exceptions should be grouped together in paragraph 1 of Article 59 instead of having the clause relating to wildlife and fisheries in Article 60 as suggested by the United States draft. This change was accepted by the Committee. To the question of the Delegate for -United Kingdom as to whether "Naticns affected" included Consumers, the CHAIRMAN answered that it did. On the suggesting of the Delegate for "Gzechoslovakia, it was decided to include in the Report a text to the effect that the arrangements referred to in Article 59, paragraph 1,relating solely to the equitable distribution of commodities in short supply, should be short term agreements of a transitional character. Paragraphs 1 and 2 were then accepted subject to a small drafting change in paragraph 2. 12. Consideration of Article 60: Paragraph 1: After a short discussion on a suitable definition of the words "primary commodity" the Committee agreed to accept the Canadian Delegate's suggesting that a "primary commodity" is any product of farm, forestry of fishery or any mineral which eaters would trade in substantial volume in a form customarily called primary". The Committee was anxious to make it clear that commodity agreements can also be concluded for synthetic products and it was agreed to replace the last sentence of /paragraph 1 E/PC/T/C .6/51 Page 7 paragraph 1 by a text suggested by the Delegate for Belgium. Paragraph 1 was then accepted and it was agreed to maintain paragraphs 2, 3, and 4 of the London text. The Delegate for Brazil stated that he reserved the position of his Government as to the whole or Chapter VII insofar as it interfered with the production of primary commodities for home consumption. The meeting adjourned until Monday, 10 February 1947, 10:30 a.m.

GATT Library

jm301mk2796

Summary Record of the Seventeenth Meeting (III.a) : Held at the Capitol, Havana, Cuba Monday, 22 December 1947, at 4.00 p.m

United Nations Conference on Trade and Employment, December 22, 1947

Third Committee: Commercial Policy

22/12/1947

official documents

E/CONF.2/C.3/SR.17 and E/CONF.2/C.3/SR.17-31

https://exhibits.stanford.edu/gatt/catalog/jm301mk2796

jm301mk2796_90190239.xml

GATT_156

UNRESTRICTED United Nations Nations Unies E/CONF.2/C.3/SR.17 CONFERENCE CONFERENCE 22 December 1947 ON DU ORIGINAL: ENGLISH TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI THIRD COMMITTEE: COMMERCIAL POLICY SUMMARY RECORD OF THE SEVENTEENTH MEETING (III.a) Held at the Capitol, Havana, Cuba Monday, 22 December 1947, at 4.00 p.m. Chairman: Mr. L. D. WILGRESS (Canada) 1. JOINT SUB-COMMITTEE OF COMMITEES II AND III. The composition of the joint sub-committee, already approved by Committee II, was now approved as follows: Argentina, Belgium, Brazil, Canada, Chile, El Salvador, France, Haiti, Iran, Poland, Sweden, Syria, Turkey, United Kingdom, United States of America, Venezuela. 2. SUB-COMMITTEE A OF COMMITTEE III (ARTICLES 16, 17, 18, 19). The addition of Mexico to the representation on Sub-Committee A was approved. 3. SECTION F OF CHAPTER IV (FIRST READING) (E/CONF.2/C.3/11 and. Corr.1). At the request of Mr. STUCKI (Switzerland) it was agreed that Item 32 should be transferred to Committee III b. Article 40, Paragraph 1 (a) Mr. FINERO (Peru) stated that amendment (Item 1 ) ptopodsed the deletio of the clatse in paragraph 1 (a) relating to quantitatire restrictions. Under Article 40 restrictions were allowed without prior approval of the Organization, and that would be particularly dangerous to agricultural products. Mr. COREA (Ceylon) opposed the Peruvian amendment. If the emengency measures provided in Article 40 were applicable to tariff concessions, quotas should also be subject to such treatment. No difference should be made in the treatment of bilateral or multilateral agreements in that respect. Article 20 dealt with general practice, whereas Article 40 provided for emergency action in special circumstances. Mr . FERRERO (Peru) replied that his amendment was an expression of his continued opposition to quantitative restrictions; he was opposed to the application of quotas on imports provided in Article 20 and to restrictions of agricultural products in Article 40. /Mr. FRESQUET E/CONF.2/C.3/SR.17 Page 2 Mr. FRESQUET (Cuba) said that the drafting change of his amendment (Item 2) substituting "or" for "and" in the second line of 1 (a) would clarify the intent of Article 40; emergency measures could be taken in either circumstance. Similarly, Mr. LA ROSA (Italy) proposed substituting "or" for "and" in the seventh line of paragraph 1 (a), so that emergency measures might be taken in either circumstance. Mr. SEIDENFADEN (Denmark) stated that paragraph 1 of Article 40 altered to some extent all of Article 17. The regrettable fact that sub-paragraph (a) had been admitted as a compromise was no excuse for including sub-paragraph (b); his amendment (Item 4) proposed its deletion. No country, even after negotiations, could be sure of stabilizing its economy if emergency measures resulting in the withdrawal of tariff concessions, were permitted. Mr. SHACKLE (United Kingdom) said that the object of Article 40 was to provide for unforeseen situations which might aris arise from tarirf or preference negotiations. It might have been preferable not to allow emergency measures, but it had seemed necessary to provide them .This being the case, concessions concerning preferences should be included on the same grounds as tariff concessions. agraphsihs 2 and 3 Mr. PELLIZA (Argentina) stated that the use of the word "any" for "critical" (Item 5) would eliminate the necessity for defining a "critical circumstance". The amendment to paragraph 3 (Item 6) would remove the necessity of prior approval of the Organization of the emergency action. New Article 40 A Mr.PEREZ (Colombia) explained that the proposed new Article (Item 7) sceks to avoid the consumption of any primary product being unfavourably affected by measures taken by Member countries. Countries affected by the establisment of a ceiling price should have some protective recourse to the ITO against damage to their national economies, and the opportunity for protective action when necessary. ALMEIDA (Brazil) supported the amendment, which he felt was a complement to Chapter IV but noted that the purpose of paragraph (c) was covered by Article 18. Replying to a question by Mr. AUGENTHALER (Czechoslovakia) as to whether the producing or consuming country would decided on the .... relation of ceiling price "with the costs of production and transportation....", Mr. PEREZ (Colombia) stated that it was the producing country. The fact that /a country did not E/CONF.2,/C.3/SR.7 Page 3 a country did not produce an article and had to import it, did not mean that the price should be loft to the mercy of the consumer country. The Organization would fix the prices; it should have all information on cost of production, etc., in order to reach a satisfactory solution, so that the producing countries should not be exploited. The amendment would, in effect, protect the smaller countries from the pressure of low prices. Mr. MELANDER (Norway) could not accept the principle of the amendment and feared that it would preclude the price stabilization policy in Norway and in other countries which subsidized domestic consumers in order to prevent a general rise of prices. If this wore not permitted, the economy of many countries would be subject to wide price fluctuations. As for non-discrimination between domestic and imported products, Norway presently discriminated in favour of imports. Mr. LECUYER (France) while understanding the purpose, doubted the practical application of the amendment. Estimating the cost of production of manufactured goods was extremely difficult, and that of agricultural products practically impossible. Establishing price ceilings by the producing country would encourage high cost of production. Which producer country would be used as a criterion of cost of production? Would essential industrial goods as well as basic commodities be considered? RepIying to the request of Mr. PEREZ (Colombia) that the details should be discussed in sub-committee, the CHAlRMAN stated that that would be the case and that the general discussion in the Committee was concerned with principle. Mr. DJEBBARA (Syria) felt that the idea of affording certain protection to producers of basic commodities was sound, but that the practical application of the proposed Article would be difficult. In determining a ceiling price, a country would be influenced by whether its own production was equal to or greater than domestic consumption, the surplus being exported, or was insufficient for national consumption, or was non-existent. The exporter's price usually prevailed. Mr. AUGENTHALER (Czechoslovakia) expressed the view that the interests of consuming and producing countries of primary commodities were similar It would be disastrous to repeat experiences of last crisis. He favoured stabilization of the prices of primary commodities and basic foodstuffs, but he questioned whether fixing of ceiling prices would prevent price fluctuations and economic disaster. The question should be considered in the light of provisions dealing with inter-governmental commodity agreements. He suggested that the question be studied by a special sub-committee. Mr. BLUSZTAJN (Poland) agreed with the views expressed by the representatives of Czechoslovakia that the stabilization of prices of basic /commodities E/CONF.2/C.3/SR.17 Page 4 commodities could be best accomplished through inter-governmental commodity agreements. The Colombian amendment sought to protect producer countries against consumer countries, but he was also concerned with the need of protecting consumer countries against producer countries. Mr. de PEREZ (Colombia) emphasized that the Colombian amendment provided for the member countries the right to complain. The whole problem should be studied. Mr. SAENZ (Mexico) endorsed the views expressed by the representative of Colombia, and suggested that this amendment be referred to the sub-committee. He was concerned lest policies of price stabilization and rationing might violate concessions granted through negotiations. Mr. ALMEIDA (Brazil) felt that the remarks of the representative of Norway did not detract from the merits of the Colombia proposal. He disagreed with the French statement that ascertaining of coat of production presented an unsurmountable difficulty. It was known that it had been taken into consideration in wartime price control. The difficulties of the issue could be dealt with in the Sub-Committee. The CHAIRMAN proposed and the Committee agreed to refer the Colombian amendment to the Sub-Committee. ARTICLE 41 CONSULTATION Mr. AZIZ (Afghanistan) stated that the purpose of his amendment (item 8) was to ensure freedom of transit. Mr. MELANDER (Norway) endorsed the Afghanistan proposal which he considered a mere drafting change which did not affect the original content of the Article. The CHAIRAMAN referred the Afghanistan proposal to the Sub-Committee. ARTICLE 42 - TERRITORIAL APPLICATION OF CHAPTER IV - FRONTIER TRAFFIC-CUSTOMS Sub-paragraph 2 (a) The CHAIRMAN stated that items 9, 10, 12, and 13 of the Agenda (E/CONF.2/C.3/11) were referred to the joint Sub-Committee of Committees II and III. . .- Sub-paragraph 2 (b) - Mr. OLDINI (Chile) traced the evolution of the Charter from London and stressed the necessity for new preferential agreements for regional groups with a period of transition and gradual evolution which might lead to a customs union. At Geneva not all possibilities which present themselves had been explored. No rigid pattern or time limit could be set up in the Charter in this case. Can the Organization determine at a given moment whether a customs union would result or not? He felt that his amendment (Item11) would make for greater realie and flexibility and would avoid /excessive E/CONF.2/C.3/SR.17 Page 5 excessive intervention on the part of the Organization. Mr. EVANS (United States) asked whether the Chilean amendment was intended to alter the Geneva draft where it requires that a plan for customs union should include a definite schedule for the attainment of a customs union within a reasonable length of time. Mr. OLDINI (Chile) replied in the affirmative, stating that the intention of the Chilean amendment was the elimination of a fixed time limit. The CHAIRMAN referred the proposal to the Sub-Committee. Paragraph 3 (a) Mr. PELLIZA (Argentina) speaking on his amendment (item 14) agreed with the Chilean amendments (items 17 and 20) and requested the deletion of sub-paragraphs (b) and (c) in order to eliminate the obligation of a prior consultation and replace it by optional consultation. He felt that the conduct of economic policy should be left to the states and that certain findings of an international organization could have no binding character. The CHAIRMAN referred the Argentina proposal to the Sub-Committee. Sub-paragraph 3 (b) Mr. LA ROSA (Italy) explained that the purpose of the Italian amendment (item 15) was to simplify the establishment of customs unions. The Charter gave a right of veto to the Organization and the purpose of the Italian amendment was to eliminate this. The CHAIRMAN proposed and the Committee agreed to refer this amendment to the Sub-Committee. The CHAIRMAN referred to item 23 of the agenda. The representative of Chile did not wish to comment. Paragraph 4 Mr. SUETENS (Belgium) referred to the meeting at Brussels which had considered the possibilities of forming a customs union among the countries of Western Europe. He had arranged for certain documents which were drafted at Prucsels to be made available for the work of the Conference. Differences had been pointed out in these documents between the nature of tariffs and other restrictive regulations in the case of a customs union. Mr. OLDINI (Chile) agreed with the representative of Belgium as to the difference between the unification of tariffs and that of other regulations. Mr. EVANS (United States, felt that the lesson of Belgium should make everybody humble about the infaliability of the written rules. International trade could be seriously injured by arrangements which, although entered into for the purpose of a customs union did not lead to its formation. If rules /cannot E/CONF.2/C.3/SR.17 Page 6 cannot be made clear, power must be given the Organization to determine if a proposed customs union is a customs union. Mr. SUETENS (Belgium) said that deadlines for forming customs unions should not be too rigid. He agreed with the representative of the United States that the Organization should not be deprived of its authority. There was no point in drafting a Charter unless Members were willing to submit to the control of our Organization. Although the customs union between Netherlands and Belgium would go into force before the establishment of ITO, these countries would gladly submit to the control of the Organization. Mr. OLDINI (Chile) pointed out that there would be many cases in which the process would be carried on slowly until the time arrived when the customs union would be formed. It had been recognized that a transitional period was unavoidable. He wondered what would happen if the Organization intervened and applied the rigid terms of paragraph 4 to the union between Belgium and the Netherlands. It was very difficult for sovereign countries embarking on a road to a customs union to submit itself to an international organization which would decide on the desirability of the plans they had drawn up. He felt that the text should be much more flexible. Mr.LAMSVELT (Netherlands) associated himself with the statement made by the representative of Belgium, and repeated that neither the Belgian nor the Netherlands had any objection to submitting their plans to the Organization. Mr. AUGENTHALER (Czechoslovakia) believed that the Charter should impose conditions, under which customs unions could be formed, applicable, to all countries, in order to ensure that economic and not political motives should direct the decisions. Mr. PELLIZA ( Argentina) did not want the Organization to become a super state with powers greater than those possessed by the Governments themselves. Sovereignty meant that a country should conduct its own economic policy; this could not be completely surrendered to an international organization. He was not in agreement with the intransigent character of the draft Charter prepared at Geneva. The CHAIRMAN said that due note would be taken of the statement by the representative of Switzerland that his country had a customs union with Liechtenstein and that when Switzerland signed the Charter it would also apply to Liechtenstein. Mr.NASH (New Zealand) pointed out that the rules of the Charter were made according to the views of the majority, and it was their right as sgovereign powers to join or not to join the Oranization. Exercising the prerogative of joining the ITO was using their sovereign power, not renouncing it. /Mr. OLDINI E/CONF.2/C.3/SR.17 Page 7 Mr. OLIDINI (Chile) agreed with the representative of New Zealand that the rules of the Charter should not be too flexible as to make for deceit nor so rigid as to be unacceptable to countries on account of their conception of sovereignty. Mr. PELLIZA (Argentina) agreed with the representatives of Chile and New Zealand concerning sovereignty but pointed out that the conference is considering a draft which may be amended. Article 43 - General Exceptions to Chapter IV Mr. PACHACHI (Iraq) stated that Iraq had prohibited during the war the entrance of certain goods which were not of purely commercial nature, but whith conveyed political ideas. In answer to his question whether these prohibitions, still in force, were a violation of any Articles of the Charter, and if not, what Article of the Charter covered such exceptions, the CHAIRMAN referred to Article 94, and stated the representative of Iraq might submit an amendment either to Article 43 or to Article 94. Mr. DJEBBARA (Syria) believed that a case such as that of Iraq should be dealt with under Article 94 rather than Article 43. Section I (d) Mr. FRESQUET (Cuba) referred to the Cuban amendment to section I (d) (item 24) and wished that disloyal practices should not be tolerated. The CHAIRMAN referred the Cuban proposal and the proposal of Australia (item 25) I (g) to the Sub-Committee. Section I (i) Mr. PELLIZA (Argentina) stated that the Argentine amendment (item 26) was in agreement with the spirit of the Article. He did not agree that the adoption of measures, imposed on the exports of raw materials to assure the development of a national industry should be subject to a time limit. Section I - new Sub-paragraph Mr. AZIZ (Afghanistan) said that his amendment (item 28) took into consideration governmental policy in his country to ensure a stable income to agricultural producers. The proposals of the representatives of Uruguay (item 27), Argentina and Afghanistan were referred to the sub-committee. Final paragraph Mr. MELANDER (Norway) believed that there should be no fixed time limit within which the measures referred to at the end of Article 43 should be abolished, but that the Organization should decide upon the time limit. It was agreed that the proposal of the representative of Norway (item 31) should be referred to the sub-committee. Section II (a) Mr. PELLIZA (Argentina) proposed the deletion of the proviso (item 29) thereby attempting not to restrict the powers of the Member to adopt all /measures E/CONF.2/C.3/SR.17 Page 8 measures considered indispensable. He thought it would be difficult to fulfill the recommandation that all Members were entitled to an equitable share of the international supply of products. Section II (C) Mr. PEL.LMZA (Argentina) pointed out in respect of his amendment (item 30) that the proviso would create difficulties. The liquidation of surpluses had already been provided for in the Charter. The interests of Members would not be harmed by the deletion of the proviso. He also requested the deletion of the final part of the Article, because he felt that a time limit was unnecessary (item 32). The amendments of Argentina were referred to the sub-committee. Section I (c) The CHAIRMAN referred to the sub-committee the suggestion of the representative of Turkey that platinum should be included in Section I (c). Composition of the Sub-Committee The committee approved the following countries as Members of sub-committe of Committee III to examine and report on the amendments to Section F - Special Provisions, with the exception of the Amendment by Switzerland which had already been referred to Committee III (b). Argentina, Belgium, Colombia, Denmark, France, Iraq, Italy, Peru, Southern Rhodesia, United Kingdom and United States. The meetings rose at 7.25 p.m.

GATT Library

vb756rt1387

Summary record of the Seventh Meeting : Held at Havana, Thursday, 11 December 1947 at 4.00 p.m

United Nations Conference on Trade and Employment, December 12, 1947

Fifth Committee: Inter-Governmental Commodity Agreements

12/12/1947

official documents

E/CONF.2/C.5/SR.7 and E/CONF. 2/C. 5/SR. 1-15

https://exhibits.stanford.edu/gatt/catalog/vb756rt1387

vb756rt1387_90200090.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/C.5/SR.7 ON DU 12 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH FIFTH COMMITTEE: INTER-GOVERNMENTAL COMMODITY AGREEMENTS SUMMARY RECORD OFTHE SEVENTH MEETING Held. at Havana, Thursday, 11 December 1947 at 4.00 p.m. Chairman: Mr. George HAKIM (Lebanon) Article 67 - Addition of sub-paragraph (d) proposed by the United States Delegation ,Mr. SCHWENGER (United States), in introducing his delegation's amendment, pointed out that Chapter VI had not been drafted with reference to questions of national. security. Agreements relating primarily to national security should not be forced into a mould designed for ordinary commercial commodity agreements. They should, therefore be excepted from the provisions of Chapter VI. Although Article 94 laid .down that nothing in the Charter should be construed to prevent any Member from taking action considered necessary to protect its essential security interests, the United States delegation was not satisfied that it applied .to joint or multilataral action. On the other hand, if the United States proposal.. were placed under the general exceptions of Article 94 it might be construed as applicable to the whole Charter, when it is intended to apply the. exception only to that part directly related to joint action. He emphasized that the amendment was meant only to apply to action in the military sphere. Mr. MUNOZ (Chile) falt that to accept the United States amendment would weaken the whole Chapter. The words "national security" were subject to very wide interpretation. He believed that Article 94 fully covered the point raised. Mr. COREA (Ceylon) in supporting the representative of Chile, argued. that each country was the judge of its own national security. If commodity agreements affecting national security were exempted from the Chapter, any country could claim the right. to conclude arrangements on the grounds of national security. Mr. de GAIFFIER (Belgium). said that he had been reassured by the explanation of the United States delegate. He thought that a formula could be found, the terms of which should, however, be as restrictive as possible. /Mr. PAIVA E/CONF.2/C.5/SR.7 Page 2 Mr, PAIVA (Brazil) supported the United States proposal. Mr. OTANEZ (Venezuela) said that his delegation must reserve its position in the preliminary discussion since the proposed exception was wide in character and its field of application vague. He agreed with the delegate of Belgium that a conciliatory formula should be sought. Mr. MUNOZ (Chile) suggested that the proposal be referred to the Sub-Committee for study. Mr. CAPLAN (United Kingdom) expressed doubts as to the proposal in its present wide terms. Subject to clarification of the intent of the proposed amendment, he thought that the Sub-Committee could devise an acceptable formula. Mr. PEICHART (Argentina) believed that the amendment could be usefully studied by the Sub-Committee with special reference to the just use of the clause in order not to restrict the sovereign right of all countries in regard to national security. It was decided to refer the proposal of the United States delegation to the Sub-Committee. Mr. FAWCETT (New Zealand) drew attention to the reference to Section D of Chapter IV contained in Article 67, 1(a) and to the footnote to paragraph 1 of Article 30 of that Section referring to the operation of Marketing Boards, since this had an important bearing on commodity agreements. The New Zealand delegation had submitted a new sub-paragraph to paragraph 1 of Article 30 which embraced, the operations of Marketing Boards and other similar organizations He asked the Secretary to take note of the interest of the Fifth Committee in his amendment to Article 30 and advise the Secretary of the Third Committee accordingly. Article 67 - Amendment to paragraph 1 (c) proposed by the Delegation of Norway Mr. OFTEDAL (Norway) pointed out two typographical errors which had occured. in the Norwegian submission, namely the word "Charter" should be substituted for the word. "Chapter", and (2) the reference to Article 57 (e) should, be Article 57, 1(e). The effect of the amendment was to exclude fisheries and wildlife conservation agreements from Chapter VI and to clarify their status. The present text might lead to the conclusion that fisheries were either excepted under Article 67, 1(c), relating to the protection of animal life or included under Article 67(3) as exhaustible natural resources. Fisheries might be considered rather as renewable than as exhaustible resources. International fisheries and wildlife conservation agreements were not con dity agreements in the usual sense. They were not concerned with prices or distribution but directed towards the efficient /management E/CONF.2/C.5/SR.7 Page 3 management of the fishery. Fisheries and wildlife agreements were regional and often bilateral in character, and entered into by the interested nations on the basis of biological and oceanographical evidence that the resources were declining. Mr. Oftedal added that the interested of all nations would be adequately protected by the provision providing for full publicity on such agreements and by the obligation that they should not be used, to achieve results inconsistent with the objectives or the Charter. Mr. BOGAARDT (Netherlands) was not convinced of the necessity for the Norwegian proposal and wished to reserve the position of his deleigation. Mr, SCHWENGER (United States), in supporting the Norwegina proposal, stated that fisheries were in a special class and should be treated separately as far as conservation was concerned, He drew a distinction between fisheries and fishery products, Mr. CAPLAN (United Kingdom) was doubtful as to the need for amendment. Its essence could be met by deletion of the word "exhaustible" ln paragraph 3 of Article 67; this would retain such agreements within the general framework of Chapter VI without subjecting them to Section C. He said that the term "wildlife" had no exact meaning, while the French equivalent, "la faune et la flore", was even vaguer. The reference had been dropped at Geneva, because it was considered that the conservation of exhaustible resources had been fully covered by the provisions of paragraphs 1 and 3 of Article 67. Mr. PETER (France) recalled that numerous international conferences had attempted to provide measures for the protection of fisheries, including whaling, which was of special interest to his country. Whaling should be included in the purview of Cha.pter VI, particularly in view of its bearing on fats. Agreements should be reached through international conferences or studies fallin within the framework of Chapter VI. Mr. McCARTHY (Australia) raised the question of agreements which did not related solely to conservation. Difficulties would arise by -the introduction of other aspects in an agreement which primarily referred to. conservation. It would be up to the Organization, under Article 58(3), to decide whether such an agreement should be treated as a control agreement. It was essential that exemption /of any agreement E/CONF.2/C.5/SR.7 Page 4 of any agreement should met cover important aspects unrelated to conservation. He agreed wi.th the representative of the United Kingdom in regard to the redundancy of the amendment. It was decided to refer the Norwegian proposal to the Sub-Committee. New paragraph proposed by the Delegation of Colombia Mr. PARGA (Colombia) stated that the question. of price speculation was a special difficulty which had, not been fully covered. in the Chapter. Referring to the export of coffee, of vital importance to many Latin-American countries, ho explained that owing to the concentration of consumption in the United States, and to the fact that its distribution was in the hands of a limited number of firms with considerable financial resources, speculation was an easy matter. On a recent occasion coffee futures had. failed sharply. If action had, not been taken by certain. countries, great hardship would. have resulted for coffee-producing countries. The Colombian proposal would permit productingcountries to reach rapid agreement in order to counteract price speculation and defend their interests in time. Mr. PETER (France) thought that the proposal would weaken the provisions of Chapter VI. Inter-governmental commodity agreements, by organizing production and trade, offered. the best defence against speculation. Mr. CASTILLO (El Salvador) supported the Colombian proposal, The Latin-American nations were vitally concerned in the coffee market and this was a specific case of general interest to producing countries. Mr, CAPLAN (United Kingdom) stressed that the problem should not be regarded. merely from the point of view of producing countries. Speculation had also been known to exist on the great commodity exchanges in producing countries and speculative movements in commodity prices could also adversely affect consumer countries over a long-term period. The proposal would require careful examination in order to find a means of protecting both producer and consumer countries from the evil of speculation. Some distinction should, be drawn between the normal movement of prices on the different commodity exchanges and fluctuations resulting from speculation. Mr. McCARTHY (Australia) pointed out that long-term difficulties caused by the disruption of supply and demand patterns could. be /adjusted E/CONF.2/C.5/SR.7 Page 5 adjusted by inter-governmental agreements. It must be recognized that there were short-term difficulties caused by speculation, but it was doubtful if they could be solved by the means proposed in the Colombia amendment. It would, furthemore, give the countries producing basic commodities the power to combine which would be no better than if consuming countries mis-used that power. He thought that the solution was the conclusion of agreements in particular commodities, between producing and consuming countries, embodying both floor and ceiling prices, Such agreements would adequately protect both parties. His delegation would not support the Colombian amendment. Mr, STEWART (Uruguay) agreed with the objectives of the Colmbian amendment but thouht that a clause condeming speculation might more fittingly be inserted in Article 54. Mr, YATES (FAO) referred to the fact that the width between floor and calling prices would be different in the case of different commodities He thought the Chapter as it was contained. sufficient basis for machinery to control long-term fIuctuation. Mr. OTANEZ (Venezuela) believed that the Colombian proposal amply safeguarded the interests of consumer countries and suggested that it be sent to the Sub-Committee for further study. This suggestion was supported by Mr. FAWCETT (New Zealand) and by Mr. SCHWENGER (United States) who also wished to have certain explanations by the Colombian delegation regarding the machinery intended to be set up. Mr. PARGA (Colombia) emphasized that rapid action was needed to prevent hardships caused by speculation to countries producing basic commodities like coffee. The machinery provided in Chapter VI for such contingencies was too slow to be of value. His proposal would, on the other hand, leave consuming countries adequate protection against the possibility of producing countries mis-using this new right, by their appealing to the Organization to have such mis-use set aside. Mr. COREA (Ceylon) supported the Colombian proposal. /Mr. McCARTHY E/CONF.2 /C.5 /SR.7 Page 6 Mr. McCARHY (Australia) felt that the Colombian proposal was contrary to the spirit of the Charter inasmuch as it would prevent producing and consuming countries from getting together and working out amicable agreements. The Committee should decide whether such a departure was acceptable before sending the amendments to the Sub-Commitee. Mr. SCHWENGER (United States) supported the Australian point of view and observed that while price extremes were for a short time profitable to individuals, they were unpfofitable and disruptive to the economies of both producing and consuming countries in the long run. The CHAIRMAN explained that it would be difficult for the Committee to decide the issue at the first reading and referred it to the Sub-Committee which was to consider it on the basis of the views expressed in the Committee. Article 53, paragraph 1 - Proposal of the Delegation of Urguay Mr. STEWART (Uruguay) stated in support of his amendment that the high ideals of the Charter were being watered down by limitations exceptions, and that producers of basic commodities needed industrial equipment without which they could not work for the word market. His amendment would equalize the position of producers of basic commodities with that of countries exporting agricultural machinery and equipment. Mr. REICHART (Argentina), Mr. LACARRA (Mexico) and Mr. KUNTER (Turkey) supported the Uruguayan amendment. Mr. SCHWENGER (United States) was of the opinion that te appropriate supply of the means of production to primary producing countries was already being discussed elsewhere in the Conference. Mr. STEWART (Uruguay) replied that his amendment provided for equal treatment of producers and consumers. It would provide the necessary safeguards to assure co-operation between these two parties in the discussion of prices both of basic comodities and of the machinery to produce them. Mr. CAPLAN (United Kingdom) felt grave concern at the implications of the Uruguayan amendment, apart from its dealing with certain matters being discussed in Committee Il. Many such industrial commodities were already covered elsewhere in the Charter; and Article 53 provided a wide application. If the Uruguayan proposal were to be adopted it would require considerable re-drafting of the Chapter. Mr. USMANI (Pakistan) agreed with the position taken by the United States and United Kingdom delegations, and pointed to the Pakistan amendment to Chapter III, Article 10, regarding assistance by technical advice and equipment, as well as to the amendment to /Article 70 E/CONF.2/C.5/SR.7 Page 7 Article 70 regarding the creation of a Development Committee. If those amendments were accepted, they would. fulfil the Uruguayan objective much better, Mr. McCARTRY (Australia) sympathized with the objective of the Uruguayan amendment but did not think it could be achieved by these means. Manufactured goods, like tractors, could. not be treated by multilateral or inter-governmontal agreements as was the case with standardized primary commodities. Mr. RICHARDS (Canada) supported the Australian view and added that the Uruguayan amendment would only serve to bring the producers of agricultural machinery together Into a combine which would. be even stronger than, the individual manufacturers in imposing conditions on primary producers. Mr. LACARRA (Mexico). supported the Uruguayen proposal which would help avoid the very difficulties foreseen in Article 52. While the whole Charter was trying to maintain the principle of equality, this Chapter seemed to favour the industrialized countries over the primary producers, who had. to sell on a controlled market while having to buy on a free market. Mr. STEWART,(Uruguay) admitted, that there were difficulties and obstacles but they could be overcome. Producers of primary products are consumers of industrial equipment. It was important that the Charter should not discrimtinate against co-ntries like Uruguay. Mr. CAPLAN (United Kingdom) thought that the text of Article 53 would satisfy the objective of the proposed amendment. The CHAIRMAN referred the matter to the Sub-Committee. Article 54 - Sub-paragraph (b) - Proposal of the Delegation of Mexico Mr. LACARRA (Mexico) explained. the importance of his delegation's amendment to countries with potentialities for industrial development, ena cited the Mexican chicle production as an example. In certain cases, the Organization should recognize the right of under-developed countries to process their own primary products, or at least their right to receive assistance in their attempts at industrialization. Mr. BOGAARDT (Netherlands) opposed the Mexican amendment, the substantive parts of which he felt should be discussed in Committee II. Mr. CAPLAN (United Kingdom), while sympathetic to the difficulties of primary producers, and familiar with the aimed of secondary industries, thought -that the proposal, if implemented, would only serve to encourage restriction of world trade and high prices. - Mr. LACARRA (Mexico) explained that it was a question of temporary measures only, to alleviate maladjustments by shifting resources into new occupations. /Mr. COREA E/CONF.2/C.5/SR.7 Page 8 Mr. COREA (Ceylon) and Mr. STEWART (Uruguay) warmly supported the Maxican amendment, which the CHAIRMAN then referred to the Sub-Committee. Sub-paragraph (c) - Proposals of the Delegations of the Philippines, Ceylon, Uruguay, Venezuela, El Salvador, Mexico and Cuba. Mr. ALAMILLA (Cuba) in explaining the amendment of his delegation, referred to the wording of the Caracas Declaration. For the-guidance of the Sub-Committee to which the matter would be referred, he emphasized the need for a clarification of the word, efficient". His delegation had been unable to define this vague term, but 'had evolved an adequate definition of "not efficient" as meaning a producer who resorted to sub-standard working conditions and workers' pay to achieve lower prices. Some such provision was necessary to avoid the destruction o' an industry by sub-standard conditions elsewhere. If such a provision could be formulated, the Cuban delegation would withdraw its amendment. Mr. CAPLAN (United Kingdom) thought it would be better to drop the different amendments and leave only the sentence: "on a basis of prices fair to producers and consumers". Mr. RICHARDS (Canada) stated that he was willing to agree to the deletion of the word "efficient" and to the addition of the words 'producers and consumers alike". After a further discussion on the retention of the word efficient" in which Mr. de GAIFFIER (Belgium), Mr. ZAFRA (Philippines), Mr. RICHARDS (Canada), Mr. COREA (Ceylon), Mr. REICHART (Argentina). and Mr. LACARRA - (Mexico) participated, it was decided to refer the question to the Sub-Committee. Article 54 - sub-paragraph (e) - Proposal of the Delegation of Cuba - Mr. ALAMILLA (Cuba) announced that his delegation would withdraw the proposed. amendment because after careful study the case was found. to be fully covered by paragraph (c) of Article, 60. Article 54 - Proposal of the Delegation of El Salvador for the addition of two new paragraphs (g) and (h) Mr. CASTILLO (El Salvador) explained that the proposal for sub-paragraph (g) was intended to provide measures for the relatively weaker ,ountries to defend themselves by means of inter-governmental agreements against powerful foreign companies. Mr. CAPLAN (United Kingdom) urged that no attempt should be made to overlap with the work of Committee IV, which was considering restrictive business. practices;. nor should the debate proceed, as an issue between producers and consumers. It was decided to refer the proposal for examination by the Sub-Committee. /Article 54 E/CONF.2/C.5/SR.7 Page 9 Article 54 - Proposal by the Delegation of Uruguay This proposal to add a new paragraph was referred without comment to the Sub-Committee. Appointment of Sub-Committee The CHAIRMAN declared that the first reading was completed. He proposed that the Drafting Sub-Committee previously appointed and which had now completed its work, should be enlarged into a working Sub-Committee. This would be done by the addition of the representatives of Cuba, Egypt, El Salvador, Italy, Pakistan, and Sweden. The Sub-Committee would be given the following terns off reference: 1. to consider all proposed amendments to Chapter YI as contained in document E/CONF.2/C.5/5 together with the suggestions made during the discussions in Committee V of these proposed amendments; and 2, to recommend texts which would reconcile the various points of view expressed. The meeting rose at 7.55 p.m.

GATT Library

nx229xy3023

Summary Record of the Seventh Meeting : Held at Lake Success on 18 February 1947 at 2:45 p.m

United Nations Economic and Social Council, February 19, 1947

United Nations. Economic and Social Council, Preparatory Commission of the Conference on Trade and Employment Drafting Committee, and Sub-Committee on Tariff Negotiations

19/02/1947

official documents

E/PC/T/C.6/93 and E/PC/T/C.6/93-97

https://exhibits.stanford.edu/gatt/catalog/nx229xy3023

nx229xy3023_90230164.xml

GATT_156

United Nations Nations Unies RESTRICTED ECONOMIC CONSEIL E/PC/T/C.6/93 19 February 1947 AND ECONOMIQUE SOCIAL COUNCIL ET SOCIAL DRAFTING COMMMITTE OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT SUB-COMMITTEE ON TARIFF NEGOTIATIONS SUMMARY RECORD OF THE SEVENTH MEETING HelLd at Lake Success on 18 February 1947 at 2:45 p.m. CHAIRMAN: Mr. B. N. ADARKAR Correction. E/PC/T/C.6/87, page 3, line 4, and page 4, line 24: The name of the Brazilian Delegate should read correctly: Mr. Roberto de Oliveire CAMPOS. The CHAIRMAN introduced, in second reading, Draft General Agreement (E/PC/T/C.6/5) and its two Corrigenda. Corrigendum 1 hh ecorrections set forth in this document were carried out by the Sub-Cmmoittee. Corrgandam 2 (Whiet paper) Point 1: The last worsd of the second paragraph of the Prmaeble starting with" as a Preparatory Committee" were amended to read "to constitute a Preparatory Cmmeittee to make rReparations for an International Conference nr Trade and Emply.ment"; Point 20: The words '"the Protocol relating to the draft Charter for an International Trade Organizatonn nmexeed thereto, which Protocol isa-n integral arr of tthis Agreement" in Article XVII, paragraph 2 (a) and in ArticleXIX , paragraph 2, were replaced by the phrase "its acompanyning Protoco" yhr asnd a now Article XVI wwith the folowoing text was added t tthe General gAreeernt: . /'he annexed E/PC/T/C .6/93 Page 2 "The annexed Protocol signed this day is hereby made an integral part of this Agreement." Point 30: The phrase "hereinafter referred to as the Charter" was inserted at the end of paragraph 3 of the Preamble. As a consequence it was decided to use the words "the Charter" throughout the General Agreement. All other corrections of Corrigendum 2 were also carried out by the Sub-Committee. Furthermore, the Sub-Committee agreed on the following amendments and corrections: Page 2, paragraph 5: .The words "without commitment to any government" were added at the end of this paragraph; Page 2, paregraph 1 of the Preamble: The words in round brackets were deleted; Page 4, line 10: Article "VI" should road "Article VIII"; Page 7, paragraph 6: This paragraph should read: "Nothing in this Article shall preclude parties to a regulatory commodity agreement conforming to the principles of Chapter VII of the Charter from incorporating in such agreement provisions prohibiting, as between themselves, the use of anti-dumping duties in cases in which dumping, within the meaning of paragraph 1 of this Article, may be permitted under the terms of such an agreement." Page 10, paragraph 1, last sentence: The words "publish administrative rulinge which would" were deleted and the words "which would" inserted between "information" and "impede"; Page 30, line 5: The phrase "without prejudicing the legitimate business interests of particular business enterprises" was deleted. The Sub-Committee decided to draw the attention of the Drafting Committee to both changes on pages 10 and 30. Page 12, paragraph 3, line 1: The words "on which this Agreement enters into force" were replaced by "of the signature of this Agreement". /The Sub-Committee E/PC/T/C .6/93 Page 3 The Sub-Committee expressed the opinion that the General Agreement should be signed after the approval of the Governments; Page 14, Article IX: The Sub-Committee agreed that paragraph 2 (g) of Article 25 of the London Charter should be added to Article IX as its last paragraph; Page 21, line 4: The words "or in the next following period or periods" should be added after "in question". Page 21, paragraph 5: Mr. LEDDY (United States) pointed out that a revision of this paragraph might be needed in the light of the findings of the Legal Drafting Sub-Committee; Page 28, lins 10: The words "to such further limitations" should be inserted between "or" and "as"; Pace 31, sub-paragraph (b), line 1 was amended to read: "necessary for the purpose of protecting human, animal or plant life or health if..."; Page 34, paragraph 3: The words "within such period as the Committee may specify" were substituted for "within [one month] of the date of the meeting at which the decision was taken". The following reservations were noted for inclusion in the Report: The Delegate for Czechoslovakia made the following statement: Provisions of the Charter, now enumerated in the Protocol, should have the same degree of obligatoriness as all other provisions incorporated in the General Agreement itself. Should it prove to be impracticable to incorporate the entire Charter in a simplified form) in the Genenral Agreement, this instrument should contain only provisions relating, to Tariffs and Tariff Concessions, Preferences and the Most-Favoured-Nation Treatment; all other provisions should be included in the Protocol. The Delegate for Cuba reserved the petition of his government on the entire draft Agreement. In view of this general reservation, he wished to delete the word "Cuba" in document E/PC/T/C.6/85, page.1, line 2 from the bottom. /The following E/PC/T/C.6/93 Page 4 The following statements were noted for inclusion in the minutes of this meeting: The Delegate for Australia stated that his government may wish, at a later date, that the entire Charter be incorporated in the General Agreenent. The Delegate for Chile accepted in principle the General Agreement, subject to stidy by the Chilean Government before the Geneva Session. The Delegate for China wished to state that, having no instruction from his Government as to which provisions should go into the Agreement and which should not be included, all he could do was to refer the General Agreement to his Government for study. With reference to the paragraph "Avoidance of Tariff or other Restrictive Measures" on page 49 of the London, Report, Mr. TORRES (Brazil) considered that changes in the form or system of tariffs, or changes in tariffs owing to the depreciation or devaluation of the currency of the country maintaining the tariff as well as the enactment of additional taxes or charges on imports or exports, equivalent to the charges resulting from exchange taxes or multiple currency practices, which do not result in an increase of the protective incidence of the tariff, should not be considered as new tariff increases under that paragraph. The Sub-Committee was of the opinion that it could not consider the question raised by the Delegate for Brazil. It was agreed, however, that his statement should be recorded in the minutes of the meeting. The CHAIRMAN considering the work of the Sub-Committee as compIeted, expressed his thanks to the Sub-Committee, and to the Delegations of the United States and the United Kingdom for having facilitated the task of the Sub-Committee by submitting drafts for its consideration. He also extended his thanks to the working group which had drafted the Protocol. Mr. SHACKLE (United Kingdom), on behalf of the Sub-Committee, expressed in apprecitation for the excellent work done by the Chairman.

GATT Library

np498mt7515

Summary Record of the Seventh Meeting : Held at Lake Success, on 28 January 1947 at 10:30 a.m

United Nations Economic and Social Council, January 30, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

30/01/1947

official documents

E/PC/T/C.6/21 and E/PC/T/C.6/21-36/ADD.1

https://exhibits.stanford.edu/gatt/catalog/np498mt7515

np498mt7515_90230056.xml

GATT_156

United Nations Nations Unies RESTRICTED ECONOMIC CONSEIL E/PC/T/C.6/21 AND ECONOMIQUE 30 January 1947 SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH DRAFTING COMMITTEE OF THE PREPARATORY COMMITTEE OF THE SUMMARY RECORD OF THE SEVENTH MEETING Held at Lake Success, on 28 January 1947 at 10:30 a.m. It was agreed that the Delegates of Canada, Cuba and the Netherlands should be appointed as additional members of the Sub-Committee on Tariff Procedures. It was also agreed that the date of the first meeting of this Sub-Committee should be decided at the end of the week. In response to a question by Mr. SHACKLE (UNITED KINGDOM) the Chairman stated that the task of this Sub-Committee would be to consider the form and contents of the General Agreement on Trade and Tariffs and would not be to review the procedural memorandum drafted at the First Session. It was agreed that the Delegates of Brazil, Canada, Cuba and New Zealand should be added to the membership of the Technical Sub-Committee. The Drafting Committee then considered the addition proposed by Mr. SHACKLE (UNITED KINGDOM) to Article 24, which was set out in Document E/PC/T/C.6/W.15. Mr. Shackle explained that there were two ways in which the question of a change in the methods of tariff valuation or tariff classification could be handled. The first way was to provide for fresh negotiations and this method was embodied in the addition which he proposed. The second way was to freeze the methods of tariff valuation and tariff classification. Mr. Shackle said that he had no strong preference for either of these methods, but that he thought that the method proposed in his amendment might be more elastic than the method of freezing. /Mr. SMITH E/PC/T/C.6 /21 Page 2 Mr. SMlTH (CANADA) observed that he preferred the method set out in Mr. Shackle's proposed addition. He was unable to agree to the use of the other method which would tend to prevent the Organization from fulfilling its function of working out standards of classification and methods of valuation. However, for the tine being he reserved his position upon the amendment. Mr. LEDDY (UNITED STATES) stated that the problem raised by Mr. Shackle might be treated in several ways, for example, it might be solved by inserting in the General Agreement on Trade and Tariffs an undertaking not to change methods of tariff valuation or tariff classification. He also pointed out that the methods which could be employed to remove this difficulty might vary in individual countries. Finally he suggested that the question might be deferred for consideration when the text of the General Agreement on Trade and Tariffs was being considered. After several delegates had agreed with Mr. Leddy's suggestion to consider this question when the text of the General Agreement on Trade and Tariffs was being prepared, it was agreed that Mr. Shackle's addition should be referred for consideration to the Sub-Committee on Tariff Procedures. The CHAIRMAN then directed the Committee's attention to Document E/PC/T/C. 6/14 which contained the text of Article 25 as it had been provisionally drafted at a previous meeting. The Committee's attention was aIso directed to the redraft of the first proviso to sub-paragraph (a) (iii) of paragraph (2) which had been produced by the Australian. and United States delegates. It was agreed that with the substitution of this proviso for the proviso as originally drafted, the text of A Article 25 should be accepted and passed to the Legal Drafting Sub- Committee. Mr. MA (CHINA) stated that he had received instructions for his government to the effect that it would be impossible for China to accept /any fixed E/PC/T/C.6/21 Page 3 any fixed ratio between the quantities of her Agricultural imports and those of like domestic products permitted to be marketed or produced, as provided in sub-paragraphs (e) und (f) of paragraph (2) of Article 25. China regarded this provision as imposing grave handicaps on the economic development of an underdeveloped country. Such a country, allowing for sizeable industry and commerce, had a predominantly agricultural economy, on which an overwhelming majority of its people depended for their subsistence. The government of such a country must from time to time take appropriate measures to regulate the quantities as well as varieties of production and consumption, so as to stabilize the prices of its agricultural products and maintain a proper balance between foodstuffs and raw materials on one hand and industrial manufactures on the other. The constantly changing state of demand and supply must be fully taken Into account. It would not be possible in these circumstances for an Agricultural country to accept any fixed ratio between its imports and its like domestic products based upon any previous representative period as the standard for regulating its future imports. The CHAIRMAN noted Mr. Ma's reservations and requested him to submit alternative texts for consideration by the Legal Drafting Sub-Committee. The Committee resumed its consideration of Article 27. It was agreed that sub-paragraph (a) of paragraph (3) as drafted at the First Session should be accepted subject to minor Secretariat amendments and that sub-paragraph (b) should also be accepted subject to such revision as might be needed later in the light of the revision of paragraph (2). by the ad hoc Sub-Committee. . In connection with sub-parhgr.pI (c), it was suggestet tha.the a* ts of the quotas allocated among supplying countries should be. made public. In reply to this suggestionLMrD. IEDITYD (UNTE STAES) said that he would prefer to revise sub-paragraph (b) toi provde that public noticue shold be given of the total quantityaor v.Iue ef tha /quota of E/PC/T/C.6/21 Page 4 and of the amounts which were allocated. After some discussion, mr. JUSSIANT (BELGIUM-LUXEMBOURG) suggested that to meet this point the word "total" migt be deleted from sub-paragraph (b) It was agreed that this question should be referred to the Legal Drafting Sub-Committee which might endeavour to find a more satisfactory form of words. Sub-paragraph (c) was adopted tentatively drafted at the First Session. Mr. MA (CHINA) stated that his objection to the representative period mentioned in sub-paragraph (c) of paragraph (2) of Article 25 applied also to paragraph (4). Paragraphs (4) and (5) were adopted provisionally as drafted at the First Session. Discussion of Article 28 - Exceptions form the Rule of Non-Discrimination Sub-paragraphs (a) and (b) of paragraph (1) were provisionally accepted as drafted at the First Session. In connection with sub-paragraph (c) of paragraph (1), Mr. LEDDY (UNITED STATES) pointed out that the purpose of this provision was to enable countries by attaching conditions to their exports to obtain currencies other than their own currency or convertible currencies, The text as drafted at the First Session did not give effect to this purpose and he therefore suggested that it be amended. This suggestion was opposed by Messrs. SHACKLE (UNITED KINGDOM) and SMITH (CANADA) who stated that if any change were made in the text they-would be forced to reserve their positions. After further discussion, Mr. Leddy - withdrew his suggestion. The text as drafted at thersFintsSie8son was then accep tedtentatively. Mr. RGAUER B(CUA) stated that sub-paragraph (i) ofparagraph) (d was toox akcin that it was not an except on'to the rule of -nondiscrimination. To meMret . Guerra's pointr, LUXFORI D (Internatilona Bank) suggested that the title of Article 28 bea gcdhne from "exceptions" to - "qualificattions". I was agreed that this point should be further econsiderd by the Legal Draftinmmg Sub-Coittee. Sub-paragraph (d) was then accepted as drafted at the First Session. L/, PHILIPS E/PC/T/C. 6/21 Page 5 Mr. PHILLIPS (AUSTRALIA) directed attention to the words appearing in paragraph (2) "... or exchange restrictions on payments and transfers in connection with imports..." and questioned whether they should not be omitted from the text. Two points were involved; one of drafting and one of considerable substance. As the text stood, these words appeared to be qualified by the following word, "... inconsistent with the exceptions provided under this Article ... but these exceptions dealt only with import restrictions, not with exchange restrictions. The point of substance was that this provision appeared to give the Organization power to adjudicate in a field which was the direct concern of the International Monetary Fund and would appear to make it possible, (even if unlikely) for the Organization to direct a Member to discontinue exchange discriminations which had been specifically approved by the Fund (for example, under Article VIII, Sect. 3 of the Fund's Articles of Agreemen). Since the power of Members to use discriminatory exchange restrictions would be strictly limited by the Articles of the Fund (for those who were also members of the Fund) and by the special exchange agreements contemplated under Article 29 (for those who were not members of the Fund), it seemed at least doubtful whether this provision should be included in Article 28. Mr. PHILLIPS appreciated that this Article had received very full consideration at the London Conference, but suggested that the point raised nevertheless required examination. Messrs. SMITH (CANADA) and GUERRA (CUBA) expressed preference for the text as drafted at the First Session. Mr. LEDDY (UNITED STATES) pointed out that under Article 14 countries were permitted, during the present transitional period, to maintain exchange restrictions and discrimination and the Fund was authorized to recommend that they be removed only in exceptional circumstances. However, the use of exchange restrictions might defeat the purposes of the Charter. Also the Fund /could hardly E/PC/T/C.6/21 Page 6 could hardly be given more authority to deal with exchange restrictions by means of the Charter for the Trade Organization. Mr. HEXNER (International Monetary Fund) agreed with Mr. Leddy. Mr. WHITE (NEW ZEALAND) felt that exchange restrictions should be governed by the Fund, but that at some stage it might be possible for the ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ OrgaoazatiITH tC NAove,riUERtAe FUBA. Messrs. SM3 (cADA)j Gt=:R. (CEM.), LDA.AR ( =ha an IECUYR (`vAICer stated. tb.they would prefbr to see the text remain un-Jtered. Pfter allyher discussion it was firl3 . agreed that the toxt should remain unaltered, but that Mr. Phillips shoud submit a paper nr.he questiod if he wished it to be considere'&- further by the Dsafting Co=mittee, Paragraph (2) wad then adopted. provrLionally. t The Conmittee held.a lenthy -iscussion concerng- te meaning'o .. the pb'a 'hall review the pr6vislons of this Mticle" in p=aa ,;(.3). It .as queried aethir ths 'ra:inG:is "ahal review action ta ken iler. the Xovis'%.3 of this article" or whether it was that the OxgSnization should rriawfthe text of the Article with a view to revisit it. Mi LMDY (wIrNTST' -) suggested that the bphra e sreed to xead, tsAabl eview reatrict-ons applied.under this Article".:Mr. !DR3:R (:lDIp) pbinted out that -f this word-!g were adopted, the Oraidztin hrwld re1 obliged to review all restrictions applied under the Article with a view tte ellminatIn mer.'y two types of them. Finally it was-ageed tha:th Phrs ehold be r3'.or6. to red "shall review the oprations of tlif Artifcve', e . G"?A (C:i) recor&l.ngthat hi Cove:et aroured -a revaieo Wtfthe object 'f the ebxlieit poasbl 1 elinticn ot all discrzminations. SubJectr to t ~sean~eintefs h text of par~PA (3) as dafteodats the First SessioniW proviveloy -acceted.- tmuSon of Article 29 - Exchenge rrazenents Paxaragh-(lirwi, 8accep and as drafted at the FI st Session.md- par`raph (2) was slnnlaxly accepwed.subject to the deletion of the Jord~ /"Members E/PC/T/C. 6/21 Page 7 agree that they will not seek" and the substitution therefore of the words "Members shall not seek". Paragraphs (3) and (4) were accepted as drafted at the First Session.

GATT Library

dj257kr1922

Summary Record of the Seventh Meeting : Held at the Capitol ,Havana, Cuba 13 December 1947 at 10.30 a.m

United Nations Conference on Trade and Employment, December 13, 1947

Second Committee: Economic Development

13/12/1947

official documents

E/CONF.2/C.2/SR.7 and E/CONF.2/C.2/SR.1-17

https://exhibits.stanford.edu/gatt/catalog/dj257kr1922

dj257kr1922_90180442.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/C.2/SR.7 ON DU 13 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI SECOND COMMITTEE: ECONOMIC DEVELOPMENT SUMMARY RECORD OF THE SEVENTH MEETING Held at the Capitol ,Havana, Cuba 13 December 1947 at 10.30 a.m. Chairman: Mr.E. ABELLO (Philippines) 1. CONTINUATION OF DISCUSSION ON NEW ARTICLE 12A PROPOSED BY COLOMBIA (pages 25-28 of revised annotated agenda -document E/CONF.2/C.2/9) The CHAIRMAN said that before the Committee began discussion of new Article 12A, proposed by the delegation of Colombia, he wished to suggest (1) that the committee should at the same time consider. the amendment to Article 12 proposed by Chile which appeared at the bottom of page 20 and, the top of page 21 of the revised annotated agenda and which was closely related to paragraph 1(a) (vi) and paragraph 2 of the new Article 12A.. His second suggestion referred to paragraph 1 (b) of the proposed new Article 12A. As double taxation was referred to in Article. 69 he felt the Committee might wish to refer paragraph 1 (b) to the Sixth Committee,which was dealing with that Article. Mr.OLDINI (Chile) agreed with the Chairman's proposal regarding the Chilean amendment. Mr.ARAUJO (Colombia)emphasized that Chapter VII of the Draft Charter dealt solely with the structure and functions of the ITO, and therefore it would not in order to refer paragraph 1 (b) of the proposed new Article I2A to the Sixth Committee for connsideration in conection with Article 69. The question of double taxation was of paramount importance to esonomically weak countries and paragraph 1. (b) should be considered in connection with the problem of economic development. Mr. LIMA (El Salvador) supporting the remarks of the representative of Colombia, suggested that the amendment submitted by the delegation of Costa Rica (page 21 of document E/CONF.2/C.2/9) should be discussed at the same time as the amendments submitted by the delegations of Chile and of Colombia. Mr. SHACKLE (United Kingdom) said that the question of double taxation.. was a highly complicated one and should left for experts of the future /Mr.BLAZEJ E/CONF. 2/C.2/SR.7 Page 2 Mr. BLAZEJ (Czechoslovakia) referred to Resolution. No. 67 adopted by the Economic andSocial Council at its Fifth Session and said that there might be a duplication of the work done by the Fiscal Commission of the United Nations, if the study of the problem of double taxation were to be undertaken by the ITO. Mr. EUBIN (United States of America) supported the remarks of the representative of Czechoslovakia end considered that in view of the work being done by the Fiscal Commission the provisions of Chapter VII of the Draft Charter should stand as at present drafted. Provision should be made, however, for co-operation between the ITO end other organizations already operating in the sane field. Mr. ADARKER (India) endorsed the remarkedof the representatives of New Zealand and of the United Kingdom, and considered that the ITO should deal with the problem of double taxation by means of studies in connection with Article 69 (c) (ii). Although it was correct that some countries night be able to deal with the problems of investment and double taxation by means of bilateral or multilateral regional agreements, most of them could not do so, Mr. ARAUJO (Colombia) requested that new Article 12A should be discussed. paragraph by paragraph in the order in which it was drafted, beginning with the preamble, Although he agreed with the representative of the United Kingdom that the matter of double taxation was one for experts to consider, he felt that the Chapter of the Charter dealing with economic development should give some directive in the matter. Mr. COLOCOTRONIS (Greece) said the question of double taxation was of importance to industrialized as well as to under-developed countries. He proposed that paragraph 1 (b) of the new Article 12A should be divided into two parts. The first part relating to the co-ordination of systems of taxation to facilitate private investment in development countries should be dealt with by Committee.II. The second part regarding the bases of taxation, should be dealt with by such committee as might be decided upon Mr. ARAUJO (Colombia) supported by Mr. OLDINI (Chile) repeated his request that the proposed Article be discussed in the order in which it was drafted. The CHAIRMAN said that in compliance with the request of the representative of Colombia new Article 12A, including paragraph 1 (b), was open for discussion. After discussion a decision would be taken as to which Committee the whole of new Article 12A or paragraph 1 (b) would be referred.. Mr. FARINA (Uruguay) supported the remarks of the representative of Czechoslovakia. The problem of double taxation had many aspects and that /connected with E/CONF.2/C.2/SR.7 Page 3 connected with economic development was only one of them. Chapter III of the draft Charter should contain a.clause connecting Article 12A. with the provisions of Article 69. Mr. MONGE (Peru) said that had the hones raised by the establishment of the International Bank for Reconstruction and. Development materialized it Would, not have been necessary to mention the problem of investments in the Draft Charter of the ITO. The delegation of Peru supported. the Colombian proposal, although it considered. that the second part (paragraphs 2 and 3) did not solve the problem with which it was concerned.. Mr.COMBS (Australia) said his delegation found the amendment submitted by the Colombian delegation full of sound suggestions as to the activities of the ITO in relation to economic development. It felt, however, that the new Article 12 A contained not only provisions appropriate to the Charter but also provisions appropriate to the report of the ITO to its first conference. Mr. Coombs suggested that it should be decided which part of the new Article 12A might be incorporated in the Charter as a permanent basis for the future activities of the ITO, and which part should be emodied in a resolution or a directive to whatever interim organization might be established. Mr. de VRIES (Netherlands), said that all delegations agreed. with the principles expressed in the Colombian proposal. He pointed out, however, that the preamble was not so strongly worded as was paragraph 1 of Article 10, which referred also to co-operation for economic development. Referring to the report of the United Nations Secretariat on the functions and actvitities of Specialized Agencies in the field of economic development (document E/CONF.2/C.2/4), Mr. de Vries emphasized that there should be no overlapping of work between those organs and the ITO. He referred to clausee (iv) of new Article 12A on pages 26 and 27 of document E/CONF.2/C.2/9, and pointed out that certain of the activities therein mentioned came within the scope of UNESCOand ILO, WHO and FAO. The CHAIRMAN presumed that apart from the question of double taxation, there was no oposition to the principles of the Colombian amendment. Mr. SHACKLE (United Kingdom) said that countries could not be expected to accept a priori, such an undertaking to promote economic development by means of bilateral treaties or multilateral conventions of a regional nature. Each regional arrangement had to be studied thoroughly before it was established.. He was inclined to agree witlh the Indian representative that the question of investments would have to be dealt with on a world-wide rather than on a regional basis. /Mr. ADARKAR E/CONF. 2/C.2/SR. 7 Page 4 Mr. ADARKAR (India) was unable to accept, the view that the economic development of certain regions could be promoted by the. country es of that region - re Organiz tion woda entalbedamen able to carry out.its funtal ctits cn rning wrd trad umnless, at the sael time, i shouldered its share of the responsibility for economic development. Although Mr Adarkar did not .consider that economic development could best p carried out-by regional arrangements, he felt that -TO might have to Make such arrangements for the provision of technical assost e. That question should bexleft to the ECeoutive Board t decide. t e.acceptidc he Colomblan amendment with the exception of the question of regional arrangements and requested that provisgon concernin by the zatiow which ITO would. rant technical assistance, should be inserted in Article 10. REM wE7Z..(Cub f elt tat the Colombian amendment could be referred to ITO when established for consideration, but,sfirqt, the Confeerenc would. have to decide whether it supported its basic principle. Ze ban delegation had already made clear its attitude concerning the lac -of proportion which existed between the comercial and trade. provisions ofTNhe Charter and those which related to empopymen tand economic developmen. [On reading the Charter, it would seem that the - proiperlty of the world depended exclusively on the esixpa of interartonaal trae]. For that reason a sub-committee or study group woud lhave to be created to consider theCGolombian proposal and to decide how much of it should. be included in the Charter and how mch shhould be onsiereda ta later date. Mr,.Gutierrez did not deny that certain aspects of the proposal were already covered in the terms of reference of the International Bank and FAO, but the specific question of economic development was not being dealt with 'b ainy specialized agency. C/The HAIFMaA E/CONF.2/C.2/SR.7 Page 5 The CHAIRMAN drew the Cuban representative's attention to the terms of reference of the Joint Sub-Committee, according to which, in his opinion the Colombian amendment would be referred. On the understanding that the Joint Sub-Committee would be able to devote sufficient attention to the proposal, Mr. GUTIEERREZ withdrew hie proposal for a separate sub-committee. Mr. MELANDER (Norway) associated himself with the remarks which had been made by the United Kingdom representative. The problems of economic development were being studied by the Sub-Commission on Economic Development of the Economic and Social Council and by specialized agencies and it was essentially to prevent ITO from becoming a super- organization with authority over all the various economic and social organizations. His country was in need of capital and technical assistance from other countries and he therefore recognized the problems of economic under-development. The principal function of ITO [however] was the promotion of international trade and if it were to be overburdened with work in its early stages, it would be impossible for it to carry out even its specific tasks concerning the expansion of trade. There was no need to make a particular reference to regional arrangements in the Charter. He was also not convinced of the desirability of the reference to the creation of technical institutions, for in that way, the functions of ITO might be by-passed. Mr. LIEU (Chine) considered that paragraphs 1 and 2 could be referred for study to the Organization where established, but that some reference to the provisions of paragraph 3 should be included in the Charter. ITO had to take into account the amount of assistance which was being granted to a country by other countries. Mr. TORRES (Brazil) regarded economic development as the positive aspect of the expansion of international trade. Parts of the Colombian amendment duplicated certain provisions of the Charter and the terms of reference of the specialized agencies. In as much as ITO should carryout positive work concerning economic development, the duplicating of the activities of other organizations would only serve to defeat that purpose. A committee on economic development would have to be created to act as a counterpart to the Tariff Committee and the Charter would have to state clearly that if oth - bodies were not undertaking particular activities concerning economic development, ITO would carry out those activities. /The Colombian E/CONF.2/C. 2/SR.7 Page 6 The Colombian amendment should be referred to the Joint Sub-Committee and to help in the-consideration-of the question, the Secretariat should circulate a summary of the report of the Sub-Commission on Economic Development. - ; Mr. MACEIAM (Iieland) shared the doubts of the Norwegian representative concerning the advcsabclity, at this stage, of extending the funotions-of ITOameamndment.be ln the Colombian nendment. Ireland wae neitler so under-developed that it would want the assistance specified'in the proposal nor was it rich enough to give substantial aid to other- countries. He hoped, therefore, that the Col ibian representative had had'in mind the fact that countries in the position of 'his own could not be bound by the terms of paragraph 1. The ub-Comittee should redraft the paragraph to make that point quito clear. Mr. IGONET (Fra ce) explained :that it was not the purpose of the Charter to-create v super-organization, but to indicate the means by which interuationXl"economic order could be established. If international action was toehave useful'resule s, it would have to show th economic interdependence of al countries, eand to that end, the Chartr should not contain too many obligations. - - It wad not for the Conference to decide whether regional arragezenta should be encotiage or enlarged. The Colombian amendment: should be examined by the Joint Sub-Committee and it should be noted that it would serve as a form of agenda for a further study of this question. Mr;ARAIJO -(Colombia) said that in the original Draft Charter which had been discussed in London there had only been a very brief reference to economic development. At the ir'tigtion of the Braziliat delegation, the point of view of the under-developed countries was given a larger place in the Charter, and at Geneva, Chapter III had been adopted it its-present form. - Abstract' far-reaching expressions of principle,cieverjbwere not sunficient and it was fair to say that the questions -of employment axd economic development did not hav an adequate place in the Charte It had been argued that those questions were being dealt with by other Specialized agencies. MreAraujo drew attention to -tatemants which had b en made by repieb6ntatives of the Bank and&FAO-to the effeot that-the former would not have sufficient technical staff, nor the latter sufficient resources to be able to give countries financial 'and technical' assistance concerning econoahc development . The Commlttee had to decide whether it wished to be nitente with- an abstract expression-of tcipleancl the cbnviction'that'by regulating /trade E/CONF. 2/C. 2/SR. 7 Page 7 trade, greater aconomic development would result, or whether it wished to lay on clear an specific provision for the future. The CHAIRMAN announced that the new Article 12A proposed by Colombia, would be referred to the Joint Sub-Committee of Committees V and VI. He drew the attention of the Joint Sub-Committee particularly to the suggestions and points made by the representatives of Australia, Cuba, China and Ireland.

GATT Library

mc827rg3923

Summary Record of the Seventh Meeting : Held at the Capitol, Havana, Cuba, on 8 December 1947 at 4.00 p.m

United Nations Conference on Trade and Employment, December 8, 1947

Third Committee: Commercial Policy

08/12/1947

official documents

E/CONF.2/C.3/SR.7 and E/CONF.2/C.3/SR.1-16

https://exhibits.stanford.edu/gatt/catalog/mc827rg3923

mc827rg3923_90190221.xml

GATT_156

United Nations Nations Unies UNRESTRICTED E/CONF .2/C .3/SR .7 CONFERENCE CONFERENCE 8 December 1947 ON DU ENGLISH ORIGINAL: FRENCH TRADE EMPLOYMENT COMMERCE ET DE L'EMPLOI THIRD COMMITTEE: COMMERCIAL POLICY SUMMARY RECORD OF THE SEVENTH MEETING Held at the Capitol, Havana, Cuba, on 8 December 1947 at 4.00 p.m. Chairman: Mr. D. L. WILGRESS (Canada) CONTINUATION OF DEBAT ON ARTICLE 16, PARAGRAPH 2. Mr. CHIRIBOGA (Ecuador) pointed out. the importance to his country of trade relations with Colombia, Panaa and Venezuela, and of the benefits to be derived from preferential agreements with these countries. There was a preferential system in existence between his country and Colombia and as a result the export of rice and import of manufactured goods were greatly facilitated. He hoped this system would be extended to include Panama and Venezuela, as it would contribute materially to the prosperity of both countries. It was significant that forty of the countries represented at the conference considered the system of preferential treatment indispensable to profitable world trade. Mr. DOMOND (Haiti) observed that, so far, the amendment submitted by Haiti had only been opposed by the representative from Peru. He thought the Committee appeared to be in favour of preferential treatment; but that in view of the difficulties encountered in Article 16 a sub-comimttee should be nominated to discuss all the views and amendments expressed and proposed. It would also be very helpful if the United States representative would give his views on the question of the United States - Cuban preferential system. Mr. HAIDER (Iraq) considered that the most favoured nation clause was the right principle on which international trade should be based. It would be just and fair, if nations were equally developed and equally large, but this was not the case. Certain exceptions should therefore, be allowed to conform with the complexities of the situation, and to ensure more equality to less favoured countries. There were well developed countries with large organized industries and wide markets, and undeveloped countries, under-industrialized and possessing only narrow markets. / ,,~~~~~T'he developed E/CONF.2/C. 3/SR.7 Page 2 The developed countries had reasonably stable internal and external markets; they could compete more favourably at home and abroad and were protected by internal tariffs. In addition, some countries had enjoyed a preferential treatment on a reciprocal basis outside of their own countries. In many of the undeveloped. countries there were native industries insecurely established. These could by protection, be given certain advantages in their own local markets. If sufficient protection could be given to smaller industries to allow of their full growth, it would benefit the world as a whole. Under Articles 15 and 42 new preferential arrangements were subject to approval, through the Organization, by the large and developed countries which were enjoying preferences themselves. He was in wholehearted agreement with the amendment submitted by the representatives of Syria and the Lebanon. Mr. POLITIS (Greece) supported the proposal submitted by the representative of Lebanon, concerning preferential arrangements for the Near and Middle East. The Question was whether preferential arrangements were beneficial, in which case they should be extended, or whether they were detrimental to world trade, in which case they should be abolished. The provisions of the Charter accepted the principle of preferences and sanctioned some of them; and it also recommended the formation of customs unions. The Marshall plan was a recent example that regional arrangements were considered desirable. In the countries of the Near and Middle East close economic ties had been in existence for centuries. Mr. BRIGNOLI (Argentina) explained the amendments to Article 16 submitted. by his delegation (document CONF. 2/C. 3/11/Add. 3). His delegation advocated the adoption of the most favoured nation clause in its conditional form. After further observations to paragraph 1 of Article 16 the CHAIRMAN intervened and asked the speaker to confine his remarks to matters relevant to paragraph 2 which was the subject of the discussion. Mr. BRIGNOLI (Argentine) held that paragraphs 1 and 2 of Article 16 could not be separated, and a certain reference to paragraph 1 had been necessary to clarify his provision with regard to paragraph 2. He advocated that the principle of the preferential treatment should be extended to all Member States on terms of eiquality and without discrimination. Mr. COOMBS (Australia) pointed out that his country had been part of a preferential system for a long time; the acceptance of this Article would mean a departure from Australia 's established commercial policy. These preferences had helped certain industries to grow and develop, and these industries were largely dependent on them. /Preferential E/CONF 2/C.3/SR.7 Page 3 Preferential arrangements had to remain in operation for a time while, countries which were parties to them reorganized their economies; this was merely a recognition or economic facts, Preferences had developed as tariffs and quantitative restrictions were being established, and the elimination of preferences must keep pace with the removal of those barriers. Australia was in sympathy with other members who had stated their needs, and considered there was justification for the establishment of new preferences, in specific instances especially in the case of small countries seeking to establish industries in inadequate markets. These special cases, however, required study before application and should be subject to the approval of the Organization; the two-thirds majority was a technical one, and certain other effects should be studied before a decision was reached as to whether this majority was a fair and proper one. He did not favour the proposals for preferential arrangements on a regional basis. Such arrangements should be considered in respect of individual articles, commodities and industries. For regional arrangements the provision of Articles 15 and 42 were adequate. Mr. AZAR (Egypt) said that although the Preparatory Committee had sanctioned a number of preferential arrangements, they had failed to include preferences between the Arab League countries. Such preferences were necessary for the expansion of their trade. Mr. SHACKLE (United Kingdom) felt that much depended upon the form, scope and character of proposed new preference arrangements. Small units made for a lesser volume and a less balanced flow of trade, but the advantage of larger units was conditional on changes end adjustments being made. The Draft Charter favoured the formation of customs unions, where they were no internal barriors rather than preferential arrangements, where internal barriers did not disappear. The Draft Charter provided for scrutiny of proposed preferential arrangements by the Organization, which would take into account all relevant circumstances. It would be better not simply to apply the regional principle along, but, as the representative of Australia had pointed out, to allow preferences rather industry by industry. The interested countries should have concrete, specific proposals to. place before the Organization. Some of the exceptions of paragraph 2, Article 16 were of long standing and had established patterns of trade which could not be quickly changed; within these systems new preferences were not to be established and the existing ones were subject to a progressive reduction or elimination. This was an important substantive matter for the countries concerned to accept. If the creation of new preferences were not subject to examination by the Organization, the position would have to be reexamined. /Mr. ABAD E/CONF.2/C.3/SR.7 Page 4 Mr. ABAD (Panama) supported the amendment submitted by the representative of Ecuador. Mr. GONZALEZ (Uruguay) stated that the antithesis of the purposes of the Charter was the exception founded on nationaIism regionalism or on political motives. of these the preference arrangements between the United Kingdom and others concerning meat and cereals, found in paragraph 2 (a) of Article 16 and repeated in paragraph 5 (b) of Article 23 were of direct concern to his country since they had resulted in a reduction of fifty per cent in its exports to the United Kingdom. The immediate abolition of all preferences was not requested, but it was noted that the Charter stabilized a preference which at the present time was suspended. The sub-committee should not only find the formula for future preference arrangements, but should take into consideration the de facto situation of a country when preferences were suspended. Mr. LEDDY (United States of America) was in accord with the principle of eliminating preferences, both existing and new ones, because they tended to reduce and distort trade, reduce the world's wealth and give rise to international political friction. The present exceptions had been accepted since it was recognized that their immediate elimination would have created economic and political difficulties. If the provisions of Article 16 and 17 were accepted, it would be the first time there had been a complete limitation of that nature and agreement to undertake negotiations toward the reduction of preferences. The forty-five year old preference between Cuba and the United States should be considered on the same basis as other exceptions in paragraph 2, Article 16 and subject to reduction in accordance with Article 17. Economic regional preference arrangements were not a promising device for economic development. Special circumstances justifying such an arrangement should be submitted to the Organization for its decision as to the net gain to world trade, otherwise the whole object of eliminating preferences would be undermined. Mr. JIMENAZ (El Salvador) thought that the special situation of the Central American countries should not be confused with other proposals: without some preferences Central America could not exist. The five Oentral American countries were separated primarily by lack of communication; as a consequene eighty per cent of El-Salvador's exports had gone to the United States - only ten per cent her neighbouring countries. In order to stimulate new industries, with the present expansion of communications, some preference was necessary. Concerning the statements made by the representatives of the Dominican Republic and of Peru regarding the preferential agreement between the United states and Cuba, the problem was quite complex: the preference was not /the cause E/CONF.2/C.3/SR.7 Page 5 the cause but the effect. Perhaps the Committee should suggest the immediate organization of a study group regarding the sugar problem. Mr. D'ASCOLI (Venezuela) supported the proposals of Colombia and Ecuador regarding preferential arrangements. He warned against statements which might lead to the belief that the countries represented on the Preparatory Committee were better placed than those who had later Joined the Conference. Such statements gave the impression without intending it, that the status quo was being protected. Mr. CHANG (China) supported the intent of paragraph 1 of Article 16 and recognized the necessity for the exceptions in paragraph 2, but pointed out that there was no time limit set for their abolition provided for in . Article 17. Paragraph 2 of Article 16 legalized, and perpetuated for an indefinite time the preferential arrangements, although they were subject to negotiation. It did not seem not fair or equitable to preclude new proposals. The sub-committee should note that under Article 17 the Organization could request the elimination of new preferences at any time. Paragraph 2 of Article 16 might become the rule rather than the exception, thus nullifying the principle of the unconditional most-favoured-nation clause. The sub-committee should be asked to study the conditions for new preferences, the general rule rather than specific proposals. The conditions applicable to existing and to new preferences should be the same. The CHAIRMAN asked whether the Committee wished (a) to postpone reference to a joint sub-committee of Committees II and IIIafter the discuss of Article 15 had. been concluded or (b) to establish a sub-committee only of Committee III to consider Articles 16 and 42 later to become a joint sub-committee of Comittees II and III. On a suggestion of Mr. MULLER (Chile) the Chairman stated he would discuss further the possibility of Committee II taking up Article 15 at an early date, but it appeared difficult at the present time. Upon the suggestion of Mr. LEDDY United States of America) supported by Mr. MELANDER (Norway), it was agreed to defer setting up a sub-committee until a Joint-sub-committee of Committees II and III could be formed. The CHAIRMAN, taking into account suggestions made by Mr. ZORLU (Turkey), Mr. BLUSZTAIN (Poland), Mr. SHACKLE (United Kingdom) and of Mr. LLERAS (Colombia), suggested the terms of reference for the Sub-Committee as follows: To Consider and submit recommendations to both Committees regarding Articles 15 16 (2) and (3) and 42 and the relevant proposals and amendments submitted in relation thereto with a view to finding a solution of the question of new Preferential arrangements, /including those E/CONF.2/C.3/3/SR.7 Page 6 including those for purposes of economic development and reconatruction, and of the maintenance of existing preference as an exception from the most-favoured-nation clause. The final decision would be made after consultation with the Chairman of Committee II. This was agreed to. Upon the query of Mr. BOYER (France) and with the agreement of Mr. BRIGNOLI (Argentina) the CHAIRMAN stated the Argentina proposal concerning Article 42 was considered a general exception and would therefore be referred to the joint sub-committee. 2. ARTICLE 16, PARAGRAPH 2 - ANNEXES The CHAIRMAN proposed to defer to a sub-committee to be established for consideration of other questions arising from Articles 16 and 17, the amendments proposed by the delegation of Denmark, concerning Annex A and by the delegation of Cuba concerning Annexes A and D. 3. ARTICLE 16, PARAGRAPH 3 Mr. D'ASCOLI (Venezuela) suggested that an amendment to paragraph 3 of Article 16 submitted by his delegation might be referred to the proposed sub-committee. Mr. STUCKI (Switzerland) requested clarification of a statement made that the General Agreement on Tariffs and Trade was a preferential arrangement. Mr. SUETENS (Belgium) replied that this was not the case. Mr. D'ASCOLI (Venezuela) emphasized the relationship between paragraph 3 of Article 17 and Article 81. The CHAIRMAN that this point would be clarified during the first reading of Article 17. Mr. NASH (New Zealand) wished to make sure that the substance of the note to Article 16 should not be lost, since it had great importance for his country. The CHAIRMAN recalled the instruction of the. Gneral Committee to remove interpretative notes and to make them a part of the text if their elimination was not feasible. The CHAIRMAN suggested in order to take up the matter of quantitative restrictions and exchange controls, that the Committee be divided in two and to meet. alternately: Committee III-A to take over Sections A, E, and F of Chapter IV and Committee III-B, Sections B, C, and D. Each Committee would be presided over by the Chairman or Vice-Chairman allowing division of the work and qicker progress. Upon the suggestion of Mr. STUCKI (Switzerland) it was agreed to postpone a decision until the next meeting The next meeting to be held on Thursday, 11 December 1947. The meeting rose at 7.00 p.m.

GATT Library

wq221jp9775

Summary Record of the Seventh Meeting : Held at the Capitol, Havana, Cuba Tuesday, 9 December 1947, at 10.30 a.m

United Nations Conference on Trade and Employment, December 9, 1947

First Committee: Employment and Economic Activity

09/12/1947

official documents

E/CONF.2/C.1/SR.7, E/CONF.2/C.1/C/1-4, and C.1/SR.1-13

https://exhibits.stanford.edu/gatt/catalog/wq221jp9775

wq221jp9775_90180279.xml

GATT_156

United Nations Nations Unies CONFERENCE CONFERENCE UNRESTRICTED E/CONF.2/C. 1/SR.7 ON DU 9 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH FIRST COMMITTEE: EMPLOYMENT AND ECONOMIC ACTIVITY SUMMARY RECORD OF THE SEVENTH MEETING Held at the Capitol, Havana, Cuba Tuesday, 9 December 1947, at 10.30 a.m. Chairman: Mr. J. J. DEDMAN (Asustralia) 1. CONTINUATION OF THE DISCUSSION OF THE PERUVIAN AMENDMENT TO ARTICLE 5. Mr. MARTINS (Brazil) endorsed the principles of the Peruvian amendment while considering that it might be more suitably worded and put in the context of Article 7. Mr. HEXNER (Intenational Monetary Fund) expressed the view that Article 5 dealt with cases of Members handicapped in maintaining full. domestic employment without resorting to trade restrictions. Article 2, paragraph 5, on the other hand, dealt with, t same matter in the event of a general disequilibrium accompanied by w idepread application of import, restrictions. Mr. BURGUETE (Mexico) endorsed th Peruvian amendment and state that it was for the large countries to assist in remedying the maladjustments within the balance of payments by absorbing surpluses, increasing International investments and adopting methods similar to those employed by the united Kingdom in the19th century. The Peruvian amendment, by requesting the Organization to direct surpluses to other countries, would improve the balance of payments of maladjusted countries and their adopting restrictive measures Mr.MONGE (Peru)) noted that there had been certain discrepancies between original Spanish text of his amendment and the English translation which therefore had become misleading. His delegation would submit a new translation. (See E/ CONF.2/C.1/7, Corr.1). He suggested suggested that his amendment be referred to Sub-Commitee B for further consideration. 2. DISCUSSION OF ARTICLES 6 AND 7 ON THE BASIS OF THE RELEVANT PORTION OF DOCUMENTE Article 6 Exchange of information and Consultation.. Mr. BURGUETE (Mexicoquote) quoted from Article 55 of the charter the /United Nations E/CONF.2/C.1/SR Page 2 United Nations to support his proposed amendment to paragraph 1 (b) safeguarding worker's rights as embodied in the ILO Philadelphia Declaration. Apart from the possible legal implications of the omissions from present text, his amendment would incorporate the Declaration of Philadelphia in the Charter, thus unifying its character and guaranteeing the principles of the Declaration which were the basis for the raising of standards of living in the world. Mr. HAKIM (Lebanon) felt that the word "employment" was being used in two meanings in the discussion and needed clarification. It was being used both in reference to employment of resources in general (including labour, capital, etc,) and to labour conditions and rights of workers. Conditions of employment and rights of workers fell within the competence of the ILO. Mr. ROYER (France) considered that the Charter was concerned with- "full employment" rather than with ``employment'' in the narrow sense. In the event of urgent and grave maladjustments the Organization could intervene but such action would never tend to restrict trade or create deflation, and thus endanger workers' rights or conditions of "employment", as the representative of Mexico apparently feared. He felt that the present version of paragraph 2 was adequate for the purpose and recalled that in the first session of the Preparatory Committee (London report E/PC/T/33, page 5) more detailed measures had been provided for. It had been recognized that the Organization could not intervene in matters of national sovereignty. Mr. NASH (New Zealand) agreed with the spirit of the Mexican amendment, but thought it might be covered in paragraph 2, rather than in paragraph 1 ( b). The Charter should provide not only for full employment but also for the maintenance by all countries of good living standards for all who work. Mr. GANGULI (India) f elt that there was misa prehension regarding the concerted action provided for in sub-paragraph (b). The London draft mentioned various types of action but none of them could be interpreted to mean an attack on workers' rights, and it had been made clear that demand could not be raised by lowering wages. While he fully agreed with the object of the Mexican amendment he thought that its purposes had already been achieved. Mr. LAMBOGLIA (Argentina) was of the opinion that the decision had: already been made as no whether labour problems should be dealt with in the Charter or not, inasmuch as the draft had provided for this. While some delegations now preferred to leave the whole subject to the ILO, the Argentina delegation felt that it was necessary to include it in the Charter. He supported the Merican amendment. /Mr. BENDA E/CONF. 2/C .1/SR.7 Page 3 Mr. BENDA (Czechoslovakia) made the formal suggestion to refer the Mexican proposal for further study to Sub-Committee A. Mr. BLRGUETE (Mexico) explained, in reply to the Lebanese representative, that Article 4 spoke of "fair labour standards" which clearly was different from "employment" in the broad sense. To achieve full employment and bring about effective demand, it was necessary to uphold and safeguard labour conditions. The London draft (Chapter I, Section C, paragraph 2) gave examples of action the Organization could take; his amendment would at least assure that under paragraph 2 no directions could be made to Jeopardize workers rights, Otherwise any pretext could be used to curtail workers' rights, and sub-paragraph (b) was not clear enough to forestall this. The CHAIRMAN referred the proposal to Sub-Committee B and requested the Chairman of that Sub-Committee to confer with the Chairman of Sub- Committee A any matters that touched upon the subJect of Article 4. Article 7 - Safeguards for Members subject to external deflationary pressure. The CHAIRMAN inquired whether any representative wished to support the proposal made by the International Chamber of Commerce (document E/CONF.2/14) that Article 7 should be deleted. No delegate spoke in favour of deletion. Mr. SKAUG (Norway) informed the Committee that his delegation had submitted that morning an amendment to Article 7 which was consequential upon the amendment it had submitted to Article 3. Me. BURGUETE (Mexico) said that his delegation had proposed the addition of a new Article (document E/CONF.2/11/Add.31) which was in harmony with the proposal made by the delegation of Colombia regarding Article 4. Pointing out that the draft ITO Charter implemented the ideas laid down in Article 55 of the Charter of the United Nations, Mr. Burguete said that a country which suffered from unemployment or from the lowering of standards of living of its workers by reason of measures to promote international trade taken by another country, should be allowed to take appropriate steps to avoid unemployment. Mr. SHACKLE (United Kingdom) felt that the proposed new Article, as at present drafted, was an escape clause from a great deal of the substance of the draft Charter. Mr. ROYER (France) agreed in principle with the representative of Mexico that the development and promotion of international trade must not lead to the export of unemployment or to a lowering of the standard of /living of E/CONF.2/C .1/SR. 7 Page 4 living of workers. He considered, however, that the matter was already covered in the draft Charter. The CHAIRMAN said that the new Article proposed by the delegation of Mexico would be submitted to Sub-Committee A for consideration in connection with Article 4. DISCUSSION OF THE AMENIMENT TO ARTICLE 2 PROPOSED BY THE DELEGATION OF THE PHILIPPINES (DOCUMENT E/CON.2/C.1/7) Mr. ABELLO (Philippines) said that his delegation considered that effective demand and efficient production depended not only on the avoidance of unemployment and under-employment, but also on establishing security for workers. The CHAIRMAN said that the proposal of the delegation of the Philippines would be referred to a Sub-Committee. 4. DISCUSSION OF NEW AMENDMENTS TO ARTICIE 3 (DOCUMENT/CONF.2/C.I/7) Mr. ABELLO (Philippines), referring to the proposal submitted by his delegation', that the last sentence of paragraph 2 of Article 3 should be deleted, said that its purpose was toensure that members of the ITO not did assume obligations of an undetermined character. Mr.PHILLIPS (Australia), SHACKLE (United Kingdom) and Mr. ROYER (France) regarded the retention of the sentence as of great importance. Mr. PIERSON (United States of America) had no objection to the retention of the sentence in question. He would suggest in Sub-Committee B that the sentence should become pagraraph 1 of Article 5, and the present paragraph 1 of that Articlshould become paragraph 2. That suggestion would, be made in order to bring the mattere of the relation between employment and balances of payments together in onw Article.. Mr. SLAUG (Norway), referring to his delegation's proposde amendment to paragraph 1 of Articgese 3 and to its suggastion that a new paragraph should be added to Article 7, said the purpose of those proposale was to bring up for consideration by the Committee the whole question of price regulation and its relations to the principles of theCharter. Experience had shown that it was necessary for many countries to apply a system of price control as a part of their internal economic policy The matter had been considered by the Pitreparatory Committee in Geneva and it had been decided to amend the New York draft so as to allow exemption for countries undergoing shortagies subsequent to the war. (See Article 43 b) Systems of price stabilization might, however, be conducted by certain countries as a permanent part of their economic policy, and the Charter did not so far contain any provision relating to permanent price regulation. /(See the E/CONF.2/C.1/Sr. 7 Page 5 (See the footnote to paragraph a of Articlel 43 on page 37 of Geneva Report - E/PC/T/186) The Norwegian delegation felt that the words "and to prevent wide fluctuations in the general level of demand or prices" should be added in paragraph 1 of Article 3 after the word "demand", and that, consequentially to this amendment, a new paragraph should be added to Article 7. Mr. SHACKLE (United Kingdom) said his delegation. entirely sympathized with the object of the Norwegian amendment. As Article 7 made provision for the safeguarding by countries of their national economies against doflationary pressure developing elsewhere, it was appropriate to make provision also for protection against inflationary influences which might arise. Mr. BOYER (France) supported the proposal of the Norwegian delegation but suggested that it should be dissociated from Article 7 as it would be preferable to have a special Article covering problems raised by inflation. Mr. BENDA (Czechoslovakia) said his delegation agreed in principle with the idea contained in both amendments suggested by the delegation of Norway, Mr. MARTINS (Brazil) agreed with the remarks of the representative of France that the amendment submitted by the delegation of Norway should be dissociated from Article 7. of the draft Charter. Mr. Van HEIDENSTAM (Sweden) fully supported the point of view expressed by the Norwegian representative. The CHAIRMAN said the work of the Committee was completed insofar as the first reading stage was concerned. It was hoped that the report of Sub-Committee A would be ready for consideration by the following Monday, 15 December; no decision would be taken in the meantime as to the next meeting of the Committee as a whole. Mr. FRESQUET (Cuba) suggested that the amendments to Article 2 submitted by the representative of the Philippines came more appropriately within the scope of Sub-Committee A. The CHAIRMAN said that he would consult the Chairmen of the two Sub-CoMMittees regarding the suggestion made by the representative of Cuba and would take action accordingly. The meeting rose at 12.50 p.m.

GATT Library

fg653nr3627

Summary Record of the Seventh Plenary Meeting : Held at the Capitol, Havana, Cuba on Saturday, 29 November 1947 at 4.00 p.m

United Nations Conference on Trade and Employment, November 29, 1947

29/11/1947

official documents

E/CONF.2/SR.7 and E/CONF.2/SR.1-21

https://exhibits.stanford.edu/gatt/catalog/fg653nr3627

fg653nr3627_90180135.xml

GATT_156

United Nations Nations Unies CONFERENCE CONFERENCE UNRESTRICTED ON DU E/CONF.2/SR.7 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI 29 November 1947 ORIGINAL: ENGLISH SUMMARY RECORD OF THE EVENTH PLENARY MEETING Held at the Capitol, Havana, Cuba on Saturday, 29 November 1947 at 4.00 p.m. P Ccesident: Mr.Segio I.LARK (Cuba) The PRESIDENT opened the meeting and called on the delegate of Southern Rhodesia. Sir Ernest GUEST (Southern Rhodesia) noted that this was the first occasion on which his country had been invited to attend an international conference in its own right. The self-governing colony of Southern Rhodesia, while not a Member of the United Nations and not en osing aign sovereign rights, did possess full autonomy regarding external, commercial relations and was therefore very much interested in this conference. He agreed with the disappointment and dissatisfaction expressed by other representatives with the decision of the Economic and,Social Council i strict voting rights to Members of the United Nations but was confident that the Council would reconsider itd . Burma, Ceylon anSouthern Rhodesia had been recognized fully at Geneva, yet now they were not allowed the right to vote on a Character which would very much influence their future economic and social existence. Nevertheless, Southern Rhodesia would be anxious tccontributeeto the success of this Conference, as she had contributed to the winning of the war. WhileSouthern Rhodesia's external trade exceeded th t of certain Member nations , it had at present, not yet reached large proportions. It was to be expected, however,. in view of the abundant natural resources of the country that its international trade would soon increase considerably. It was for that reason that the provisions of the Charter dealing with economic development were very importan, t to his countryparticularly those dealing with economic assistance to weaker Members and those calculated to accelerate the process of economic development. He warned against narrow nationalism which would destroy the aims of the Charter,and expressed his appreciation of the friendly and co-operative spirit at the mettings of the Conference which would inspire his Delegation to make every, effort to bring them to a successful conclusion. (For fuller text see Press Release ITO/49) /Mr. STUCKI E/CONF. 2/SR. 7 Page 2 Mr. STUCKI (Switzerland) thanked the Preparatory Commission for the admirable work it had accomplished. Switzerland, without raw materials or access to the sea, was greatly dependent on foreign trade, and in fact, had the greatest volume of foreign trade per capita in the world. The Swiss delegation had some doubts as to whether it was possible to settle all the complex. trade problems by one instrument, but the Preparatory Committee had had good reasons for taking thin, procedure and he accepted it. He called attention to the unique situation of Switzerland where any agreement reached would have to be ratified not only by Parliament, but also by the people. Multilateral conventions necessarily restricted the freedom of action of, the contracting parties which would accept sacrifices only if they were compensated by advantages. Parliaments and public opinion would have to be convinced that this was the case. The Preparatory Committee had not taken account of the unique position of Switzerland. The result was that this balance between sacrifices and advantages showed a deficit in the case of his country.- Switzerland was facing the increasingly restrictive Attitude of many countries forbidding importation of Swiss goods or refuisn gthe necessary currency for their payment. Such obstacles were much more serious to international trade than high customs duties. Switzerland would gladly welcome the application of the principles of ,the Charter abolishing or restraining quantitative retsrcitions and other indirect protections, but from these principles exceptions had been permitted which creates' serious difficulties. Under Article 21, States with a disequilbiruim in their balance of payments had the right to mainati nexisting restrictions as well as to establish new ones and to discriminate against countries with a sound currency. In the field of imports the prospects were equally dark. Many nations ereestimulating exports by all means, particularly to hard currency- countries. Thus, Switzerland was faced with a flood of imports whci hist national production could not resist without protection. Switzerland had not relied on high customs tariffs but rather on quantitative restrictions on imports conditions of purchase of Swiss manufactured goods, and other means. The Draft Charter wo ld' force us to give up this system in favour -of .protection by low customs tariffs. Under normal conditions this might be possible but under present conditions such a system would be impossible. The escape clauses provided for ini the Charter did not afford adequate protection in the opiniono fthe Swiss Government and his Deaegstion would /therefore E/CONF. 2/SR. 7 Page 3 therefore propose in section F of Chapter IV of the Charter a general clause safeguarding the interests of those countries which cannot make use of the provisions of Article 21. cuch a clause would admittedly weaken the Charter's principles but the exceptional situation in which Switzerland found itself would not permit any other step. Countries in better economic condition and with a strong currency could, not remain isolated and had obligations towards weaker nations, and Switzerland had, in fact, granted to other European countries credits of bout one billion Swiss francs and permitted large volumes of merchandise to be imported. Thedeficit in the trade balance for the first ten months of this year had risen to above one billion Swiss francs, or 300 france per capita. . . ' , * Whlle'ot misuhdrstanding or forgetting the difficulties of other. countries, he urged that the unique difficulty of Switzerland be appreciated. (Forfuller text -ee Press Release ITO/57) Mr;HABH&k(dia) expressed satisfaction that his Delegation had been associatet since its first session with the Preparatory Commitee and paid tribute to the'irit "f utual understanding in which modifications had been arrived at' m''theansed o countries w aith different economic syetemsnd in'arying-tae6of conomic development. - . He would iittia te areservations his Delegation had made a' GnevB bt assuredthe noerence of tt he general agreement of his Government wiihhe roa&;ttli-of eCharter". He dd not believe that automatic expansion otWrld trade.wul: ioao upr. signg of the Charter, however, since ose `ltoaeofprodctio, repair of war damages and, epf t~tc-rci i"'rs's nowlying idle. Thce ageny contr oll termsinggthe condand ns oitioodf such evelopment should be decided by a l nationarather atb-by ^nternatioanal' oecy. The misgivings,, prticulaorlyou sf ..nies ie en lytharg staes of industrial development, in this respect should not ,be fuller text (Zb press r ee:ae I'sI8O3) ; . 4LER (Chile'N4) allrc'ed he contributions of Chile in the League of Nions in San Fatrancciso and in the P-anAmericann Uion as well as in the Preparatory Committee. . ,,- - , parxgrap , o heR ~1f age~i g-wi h he aimsof Artc 5.5 ;.f ^t Chdamenar6ti'efXiidc sfatonsbe emphaszed the fun tal diftrenea i *§B~td~aizai ff 1±vtunder-developedi d countries Because ho ici~ilsa~sprt - -indutries u ntidolw thothey'woul be able-to 4 riQt tant to b; v {ellra hemet"vorere ' ctemight jeopardizept 'aL he MSarQs hich ZiA zo. ;a. in<W. ir;;#.- P- ** ch , , <-;- . /the E/CONF.2/SR.7 Page 4 their own development and the Improvement in the standard of living of their peoples. In Chile the working classes were well organized, and insisted upon the attainment of a better standard of living. Chile's problem was essentially an economic one and all provisions facilitating economic development would receive its full approval. On the other hand, measures which would impede its progress, due to the lack of sufficient capital, would have to be rejected, As in Geneva, his Delegation would associate with those countries whose undeveloped economies required long range measures reaching further than guaranteeing security to the investors. Chile desired the investment of foreign capital on an equal footing with national capital. While grateful for past and future loans, he felt that the Charter should provide for a mechanism to aid international investment of private capital. There was no organism or agency to facilitate the acquisition of capital by an industrialist in an under-developed country when he: could not obtain it at home, He appealed to the more highly industrialized nations not to obstruct industrialization of under-developed countries and emphasized the necessity of industrial development for his own countries which needed diversification both for domestic consumption and for export in order to avoid the fluctuations of prices in the international market.. The discrepancy between prices paid for the export of basic goods and the import of industrial merchandise was the cause of a serious disequilibrium in the Chilean balance of payments. In consequence, Chile had been obliged to establish various restrictions such as exchange controls, permits, quotas, etc., all of which were unavoidable if its already serious balance of payments was not to be further aggravated, The main problem was to find a balance between the provisions in the Charter dealing with trade and those dealing with economic development. Only some of the proposals which his Delegation had presented in London and Geneva had been accepted. However, even those that had been disregarded would continue to be advanced by his Delegation in order to achieve an instrument equally just to the interests of economically mature and undeveloped . countries. When attempting to assist undeveloped countries he advocated preferential agreements between neighbouring states as much as the establishment of multilateral tariff agreements. He felt, however, that previous authorization by the Organization was not indispensable. He repeated the suggestion made by his Delegation in Geneva to allow undeveloped countries the application of quantitative restrictions as a safeguard to their own infant industries. /He reaffirmed E/CONF. 2/SR. 7 Page 5 He reaffirmed the stand taken by his Delegation in Geneva with regard to voting and insisted that equal votes by all members were essential. He urged the Conference not to disregard the special situations in which different countries found themselves and which had already led to the adoption of solutions foreign to the initial purposes of the Charter. It was important to make possible a ratification of the Charter by the greatest number of states even if it was not perfect, but which would help to remedy the present chaotic conditions of international trade. He promised full co-operation of his Delegation in the work and hoped that a Charter would be written aiding economic relations between countries without containing measures which might aggravate the difficult economic situation of the world; (For fuller text see Press Release ITO/77) Mr. GUINNESS (International Chamber of Commerce) brought to the Conference good wishes for the success of its work from the many million business men affiliated to his organization in thirty-six countries. He declared that the International Chamber of Commerce believed that the growth of multilateral trade. and the revival and expansion of foreign investments were indispensable prerequisites of prosperous economic development and of high and effective employment and increasing standards of living. He made a appeal to the Conference to give business the tools in order to enable it to deliver the goods. Many of the delegations had made declarations which seemed to call for more restrictions and exceptions. It was not possible to expand by restricting; International economics was no exact science, but rather an art, and in solving the vast problems before the world much give and take was necessary. He hoped . that a Charter would not be created which was so complex and. ful of exceptions as to be only an object of contention in the future between the scholars and lawyers. He suggested that the Conference adopt a self-denying ordinance, and that each time a delegation put forward a new reservation it should ask itself - Is your amendment really necessary? In the view of his organization the main objective was to get the International Trade Organization set up upon a basis of simple broad principles, and he hoped that it might be possible at the final session of the Conference to pass a short introductory resolution to set out these principles in presenting the Charter. It was not the written word which was the most important, but the men who were to administer the Charter, and the willingness and single-minded intention of the member nations to make the Charter work. The great thing was to get the Organization set up as soon as possible, get the best men to run it, and. then empirically to work out the problems as they arose, with /goodwill E/CONF. 2/SR. 7 Page 6 goodwill and conciliation. He suggested that instead of trying to provide for every contingency by writing it into the Charter, a body of case-made law should be built up, founded on actual experience. This was long term work. What seemed vital to a delegation today might become a small matter in a few years time, Provision should therefore be made for the revision of the Charter say at three-year periods during its earlier years, and at longer intervals thereafter. He concluded with an expression of faith in the indivisibility of world peace, world trade and world prosperity. (For fuller text see Press Release ITO/56) Mr. ODHE (International Co-operative Alliance) recalled that the Congress of the International Co-operative Alliance hold at Zurich in 1946 had unanimously adopted a Resolution expressing whole-hearted support of the work which at that time had yet to be-begun by the Preparatory Committee, The Alliance had been represented at the London and Geneva sessions of the Preparatory Committee and had thus had an opportunity to present to the Committee its comments on the Draft Charter. The Draft Charter contained provisions for the consultation of. the International Co-operative Alliance, as well as other non-governmental organizations, in order to ensure the most effective implementation of the Charter. This could be done with regard to Chapter V of the Draft Charter by expressly assigning to 'the Ailiance specific tasks in carrying into execution the provisions of this chapter. Co-oparative organizations all over the world should be afforded an opportunity, through the Alliance, of placing their experience at the disposal of the international Trade Organization by a more stable and permanent consultation both with rag rd to general studies and to the investigation of complaints for which procedure had been laid down in Chapter V, and also with regard. to Commodity Agreements and at Commodity Conferences. -' -' Some complementat provisions might alningening heeleful in atta th6 aims of Chapter VIono without encouraging mopolistic price-fixing to the detriment of the consumer. o T he preliminary stugdofmarket conditions miht include investigation of cartels, combines and other private agreements active in the particular market concerned.' It might be feasible to establish some rule securing the right of all categommries of buyers - Governent ffrganizations, private irms, co-operati e enterprises - to buywithout discrimination in a market where a Commodity Control Agreement was in operation provided the buye s were will ng to-pay -oohe market -price and t fulfil other reasonable seller's conditions. /Increased E/CONF.2/SR.7 Page 7 Increased production and the improved satisfaction of human needs could only be attained by ever-increasing freedom in international trade relations and abolition of all artificial trade barriers erected by short-sighted economic nationalism. (For fuller text see Press Release ITO/72) Mr. HASSAN D'JABBARA (Syria) considered that the role to be played by the International Trade Organization in the economic and social life of the world could not be over-estimated. His country came to the Conference animated by faith and a desire to co-operate with the nations represented in bringing the Charter to a triumphant success. Countries could be divided into two groups: highly industrialized countries which needed outlets for the absorption of their finished products, and under-developed countries which were seeking to equip themselves industrially and to develop their resources. A crisis of overproduction or of underconsumption would affect the former even more vitally than the latter category. The General Agreement on Tariffs and Trade signed at Geneva provided for a substantial reduction of tariffs and other obstacles to international trade. Thus one of the aims of the Charter had already been put into effect, His delegation hoped that the part of the Charter relating to economic development would also be given as concrete a realization, and that the monetary and technical aspects of the problem would. also be the object. of clear and precise dispositions which would ensure to under-developed- countries effective assistance and possibilities for payment in harmony with their capacities.: Syria was essentially an agricultural country, and her industrial development was closely tied up with her agricultural development.: After- the 191-4191 8war customs barriers had been erected between herself and the neighboring countries, and since that time these countries had suffered from various economic ills, including a permanent deficit in their balance of payments. Syria's present economic difficulties could only be solved on the one band by the importation of the machines necessary to her agricultural and industrial development, with reasonable facilities for. payment and on the other by the organization of her commercial exchanges with neighbouring countries, which would have to be the subject of special regulations, in the conditions which had been put forward at Geneva, At Geneva; Syria and her neighbours, including Lebanon, had put forward certain amendments which aimed at the safeguard of their vital interests. These amendments were motivated by a previous agreement which /had been come E/CONF.2/SR.7 Page 8 had been come to between these countries prior to the preparation of the Draft Charter. He maintained these reservations and relied upon the comprehension and support of the Conference for their inclusion in the Charter. (For fuller text see ITO/69) Mr. DUNAWAY (Liberia) affirmed the belief of his delegation in the high purposes and objectives of the Conference. Liberia was a comparatively small country, undeveloped industrially and mainly agricultural. Her foreign trade was relatively unimportant, but that trade was of great importance to her people in terms of money income, goods for consumption and standard of living. A stoppage of trade would be a catastrophe. for, Liberia. She was willing to co-operate in any movement for the freest - possible flow of trade without preference or discrimination. Liberia asked for no special privileges - only a fair field and no favour, Liberia had had no part in drafting the Charter, but recognized it as a sane, sensible and equitable approach to the problems. However, the many exceptions and escape clauses gave rise to some doub s and: misgivings. He asked whether these meant that theObjigh obectives of the Charter were mere picus expressions of hope or whether the many nations represented intended really to carry them out to the best of their abilities, He thought there might be a danger that any exception might become the universal rule and become embedded in the various economic fabrics and never given up, he was further disturbed by expressions of a philosophy of foreign trade by some delegates which was reminiscent of that economic nationalism which motivated the restrictive measures of the nineteen thirties. He hoped his doubts were groundless, but in his opinion the Charter could not hope to succeed if it were based on economic nationalism (For. fuller text, see ITO/65) : . *. . The meeting adJurned at 5.50 p.m.

GATT Library

mf500jj3929

Summary Record of the Sixteenth Meeting : Held at Lake Success on 7 February 1947, at 10:30 a.m

United Nations Economic and Social Council, February 8, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

08/02/1947

official documents

E/PC/T/C.6/50 and E/PC/T/C.6/37-55

https://exhibits.stanford.edu/gatt/catalog/mf500jj3929

mf500jj3929_90230102.xml

GATT_156

United Nations Nations Unies ECONOMIC CONSEIL AND ECONOMIQUE 8 February 1947 SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH DRAFTING COMMITTEE OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE . AND EMPLOYMENT Held at Lake Success on 7 February 1947, at 10:30 a.m. Chairman:H.F.M. EriI COLBAN .1, Reconsideration of Paragraph 7 of Article 51 (Document E/PC/T/C.6/W.46). The United. States Delegate stated that he would prefer to restore the words "full publicity" in the text and. to add at the end of the paragraph the following words: "and. periodically to the operations of the arrangements." The Canadien Delegate stated. that the words "full publicity" might entail publicity before an arangement began operating, and. he was opposed. to that. The United States Delegate. answered. that it was not the negotiations, but only the results and conclusions of negotiations which would have to be publicized. The CHAIRMAN agreed. with the United States Delegate' s interpretation of the word "full-publicity" The Netherlands Delegate stated that the last sentence of paragraph 3 of Article 48 would. answer the, point raised. by Canada: this Article deals with the stages before the agreement is reached. and. states that the findings and recommendations of. the Study Group shall be transmitted. to Members. the Delegate for Canada stated. that he was prepared to accept the words "fully publicity", previed that the record. showed. that full publicity of batim statements would not be necessary before the conclusion of an arrangement. The CHAIRMAN and.the. Delegate for China. supported this text submitted by the United States and it was agreed by the Committee to accept it. /2, Consideration E/PC/T/C.6/50 Page 2 2. Consideration of Article .52. (a) Paragraph 1. (i) Consideration of the Cuban Proposal (Document. E/PC/C .6/W.52).. The Cuban Delegate stated that in reading the London text of this paragraph, it seemed as though the hardship would already have to exist in order that a commodity arrangement might be concluded.. He added, nevertheless, that Cuba could agree to the text submitted by the United States, (ii) Discussion of the United. States Proposal. The United States Delegate stated that in his opinion the London text contained an ambiguity which could. be remedied. by changing the sequence of the ideas. The meaning of this paragraph was not that a burdensome surplus situation would. not in the absence of governmental action be corrected by norma. market forces alone, but, rather that governmental action would. be used. to alleviate hardships to producers,. The FAO Observer considered. the United. States redraft an improvement, because. it made clearer the fact that a "preventive agreement" may be concluded. He thought, nevertheless, that the draft could still be improved and submitted the following text to that effect: "A burdensome surplus of a primary commodity has developed. or in the absence of appropriate governmental and. inter-governmental action is escpected to develop, which surplus would. cause, serious hardship to producers among whom are small producers who account for a substantial portion of the total output and., that these conditions cannot be 4 rected. by normal market.forces alone in time to preve.: such hardship, because characteristically, in. the .case of t he primary commodity /concerned, E/PC/T/C.6/50 Page 3 conconed a substantial reduction:in price does not readily lead to a 'significant in increase in consumption nor to a significant..decrease in productions." The United States Delegate considered this an important substantive change . The Netherlands. Delegate stated that he accepted the United. States draft on Condition thwt the vords "in time" should be included in the seventh. line after the word "alone" . He s *. also asggectd. that -onsa matte of cwxsdistencythe vorcl "product"cehoul& beommodity" by '"c dity" The South African Delegatedwas. impresse& by the point preseOted by the FAD Observer and stated that the Article as it stood e draf td from the. oint of view, of the producers *. end the Report should fuly- -represe' tithe consuerI si-de , - O 8as expressedby the FA Observer. The HA1MA closed. the discussion and referred -the zter- o aiomn c hoc- ommittee capsed oof the Delegates frcm Chile, Cuba, the Netherlandds, United States an, the repFrOesentatives of the A. (iii) . oppoDiscuSicn f the PrOl Made egabyo. he Chilean Del~ cn C/C. /W.a1) WC ':"' 'C. V ¢ * The Delegate for Chile stated that his country had submitted an amendment in London which failed. to receive due consideration because of the lack of time. The purpose of the Chs leai amendment wa to Iacrease sma lmportence of --Il countrTOs, Members of I., assmall tinct from -1I producers. s wtated that the vel-beingma of a counseltry y be adver afhfected even in tel absence of smal producers, To the: qHAIRM,Nestion of the AN, whether the Chilean amendment wvareeable to the Committee, the Cuban Delegate /answered E/PC/T/C.6/50¢,6! e ed.,.h anthat a.a suat-p ua sTstto theitttpe .ta,!present paragaph 1, he coul3ot accept. ita, hutcould thttli ogive it consideration asi a n tdd4ioragrapmo 1. pazs3 . -Te .Netherlaansds Degtte& that the points raised. by the Chilean Deeleecgaetio b wr ovredby, the last four lines of paragraphclCL 2 of Are 52 and by the addition of the words m,..'m..*-". undr-e xplonyzent' aftr the opecing-words of paragraph 2 oyment". "eprepd. m. .Then- Delegateo Ate Uaied States stated that the Chilean amendment constituted. a substantive' change because it would. make possionblof arrangements any time e the- conclusi the ecnn off neor more Member Icounries w-as. ffected, rfegardless. o the other conditions; The Delegate for the Uonited. Kingdm was oof the opinin that the Chilean amendment had. a limiting effect; it implied that the countries concerned must represent "a substantial f the total output" He asked the Chilean Delegate !hAnn T)Ala as wiflng-t delete the words refey rred to :bv'ei donited. ndom delegate.. The Observer from the FAO was of the opinion that paragraph 1 applied. to basic agricultural products produced mllainly by a producers, whereas paragraph 2 applied to ir ral products produced. by large corporations. It was rather to this second paragraph that the Chilean amendment referred . , . ** s .. . . .. and. therefore, it should. not be considered under paragraph 1. t - .3 .' ^.; The Chilean Delegate answered that the proposal was meant to aw* to agricultural productsi oo. ' * . ., '. '.. The Delegates from the Netherlands, Belgium, and the /UnIted States E/PC/T/C 6/50 Page 5 United States agreed that the Chilean proposal should not be ccnsidered under paragraph1 The Committee decided not to include the Chilean proposals in paragraph 1, and the CHAIRMAN referred the problem of giving expression to the Chilean amendment in paragraph 2, to the ad hoo Sub-Committee. (b) Paragraph 2. The United States Delegate was of the opinion that the words "in the absence of specific governmental action" were meaningless. He also suggested that the word "marketing" be replaced by the word "market". The Cuban Delegate stated that his understanding was that only in the absence of effective governmental action, was a commodity arrangement necessary. The Netherlands Delegate' s understanding was different. In his opinion, governmental action was inconsistent with the purposes of the Charter. The CHAIRMAN, after some discussion referred the matter to the ad hoc Committee and asked that it present its findings at an early date. (c) Paragraph 3 The United States Delegate explained that the amendment contained in document E/PC/T/C.6/W.46, was based on the fact that commodity arrangements concerning synthetic products should be more difficult to conclude than those for primary commodities. The text as it stood presently was ambiguous and. might be interpreted. to mean that arrangements for synthetic products could be conclude without a burdensome surplus or widespread unemployment being expected or present. The CHAIRMAN, and. the Delegates for the Netherlands and China supported the United States point of view, stating that the verbatim t. .cdn S ..... z..... records e. the Lsndon ronferenoe showed an intention aimila to that of the United. States &axet, fThm DelegLA~ E/PC/T/C.6/50 Page 6 The Delegate for New Zealand asked whether this new text would prevent an agreement on synthetic rubber. : The United States Delegatsweangered that the rubber problem, whether synthetic or naturalo sdcul& be treated in the light of paragraphs 1 and 2. The Delegates of Australia anw Nea aeslind wanted the inclusion of the United States amendment within square brackets. ToemCcmiittee agreed to include the text as suggested by the United States Delegate. 3. Consideration of Article 33. (a) Paragraph 1 The United States Delegate explained the reason for the deletion which ccurs inumoctrent E/PC/T/C.6/W.46; the procedure of direct negotiations should not be under the heading of princi,les. but, rather be included in Article 49 and should only refer to the Study Groups and not to toemccm=odity conferences. The Cuban Delegate madecit 6lear that his Delegation was opposed to eny deletion, ai th's was the smallest possible esccpe 6lause to which Cwoa iculd agree. He was supported by the Delegate for Brazil, and it was decided to maintain paragraph 1 as it stood in the London Report. (aragraph ar 2 ofumenDoc tC//PO[T/C.6/W.4aragraphPeia 4 of the London Text)* '''' .TheCcnmieeconsidered..th uban suggestion ;... (document E/PC/T/C .6f.52) proposine he inclusion of the words' ?stabl".price, remueratbve.to efficient producerss. ThewUnited States Delegate was opposed to the -ord "stable", as thIs impliedan e use of a buffer stock. With the Canadi=.ielegate, he pr"ferre4the word."reasonable' to.the word "stable" because it was emore flexible, and caljedattentcn to. q nte on- pge 20 of the Leosonandon. Report dealing with the word. "rable" .. /i was Page 7 It as agreed by the Committee to include the Cuban suggestion. within the text of this paragraph in square brackets. . (c)a rapPargh 5 . :* . '.'''''+ oTuhee CE/uban Delegate tatsa tbat n dpcimt4PC//C.6/W.52, hiM Deldegat"ioni popos ed tose delete the wor ecomcally".ecau it bn seori unerative Is price.atbXer a a xemaes tiv p h was the aim of Cuba. . dThe Indian DeogatQ t&-ttht he considered the London text a wanfair compromaise, and ted to maintin it. The FAO Observer pointed out that the same question has come up at WshingtCnduring the meeting ofm the Preparatory Comission on World. Food Proposals and that it has been decided to use the words "most effective utilization of the resour"ces of each country. anThe Delegate for Fme stated.that in the Fdrench text the wor& xecnssoMilly" V wa=pre8esdby"aux p"rix lee pls bas', wich was idenstical with "dan les meilleur'es conditions defficacite". The Ccuiee decided, (1) to leave" both words effectively" and "economically" in the text, and (2) to include in the Report the explanation of theom wolrd. "econicaly" giHAIRMAN,ven by the C i.e., that it a"does not men cheaply, but, with due consideration to all economic aspmects o",f the attre and (3) to change the French otranslation f the word "economically". (d) Paragraph 6 MiCubaon Delmegaticncs'bited. change in this paragraph contained in docment /WE/PC/TThht/C.6.52.e opinion of the Canadian and United Sgtates Deleates vas that the Cuban change would. weaken the Article, and therefore they were opposed to it. TNhe CRAthe BeMA d ean Delegate emphasized the fact that the aimommoi of a dangity arwrement as not necessarily to find a solution within five years, but to achieve a substantial progress within that time limit. .hA uban E/PC/T/C.6/50 Pace 8 e itti t uanhda d e Cabathe inlensiato fexpthe Cuban laidraftnere thtt nteton o re aB o bring out the fat that the word progressly here does not necessariJA mean a step forward, meanna buet mmaaainancy be, understo to th einte of 8a otus-equpr'th sveintiin;6f tihdoisetroratlon of ontdti.n6 - ietwe. ommittheo iption o h Cattee,"it wdecide to maintain prck o'dln the Lnatext an rhefer tie draftin question to the Legal Draftinig Ccmmttee. (e) Ppharagra 4 umof Docent E/PC/T/C.6/W.46 (Article 51. Ppar4agrah c othen Lecdor1port). . . The oUIted States provposal b paragraph 4 -n>lved,wo considerations: the chance in the text; and. a change inthe place of the text, 1. Chae in' he Text The Cuban elegand as of the opinion, that the United States oredrnaft was an 1prceme4 on tcahe London text, bepse he did not think that the intentioon ommiof the PreparatryCttee was to include rcinnrisuewvh~c al y ert ibant)l expoers or importers. Ita Vdsthe Cen-gata' Dleeae 2opinion that ;nt to give a vote to 1iucers- nud: onstmrs was opposed to the intention expressed in .London- . . ! MaIndian legap ncon.curred in that Qoiiol. .- The United 8s Deegate stated that the intention of his Delegation wwas ht o give an equal eigtand voice to groups of somewhat odpposed. interests an th at the interests. ofthe third grcsu .e., 'cduceawho a the same time consume the product, vll be taken into acciIount anyhow the.individus.al agreement heg Cuban-gDeledzte sugrmCstelthe fortion of a sub-committee to dispose of this question. In his opinion it was never the intee ntrin of othwP2mparatc y Comittee-t.Londonmto establish a t.hird group . Tghes CRAM= su~geatd hat the Delegates for Cuba, France, /Cama B/PC/T/C .6/50 Page 9 Canada and the United States should discuss informally the problem of how to deal with countries which are both exporters and importers of a commodity and countries substantially interested in the production and consumption of a commodity, but not in its import or export. He stated that the Report should include that the problem has been considered by the Committee and that a considerable opinion for the deletion of the third group has been found. 2. Change in the Place of the Text. From Article 51, paragraph 4 of the London Report, to Article 53, paragraph 4. The Australian Delegate considered this a change in substances; and referred to a note on page 20, Section B, paragraph 4 of the London Report which states that in london there has been "agreement on certain general principles which should apply to all commodity arrangements" He nevertheless, stated that he agreed with this change. It was finally decided to accept the change in place, with Australia, Canada and the United Kingdom reserving their position. The Delegate for the United Kingdom explained his attitude by stating that the export position of a country is fortuitous; a country exporting a commodity one year might import the same commodity the following year and therefore it may well be asked whether consumption and production are not a better criterion for participation than importation and exportation. The Delegate for France concurred in this opinion The meeting adjourned until Saturday, 8 February 1947, at 10:30 a.m.

GATT Library

qd069km1520

Summary Record of the Sixteenth Meeting (IIIb) : Held at the Capitol, Havana, Cuba, Saturday, 20 December 1947 at 10.30 a.m

United Nations Conference on Trade and Employment, December 20, 1947

Third Committee: Commercial Policy

20/12/1947

official documents

E/CONF.2/C.3/SR/16 and E/CONF.2/C.3/SR.1-16

https://exhibits.stanford.edu/gatt/catalog/qd069km1520

qd069km1520_90190237.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/C.3/SR/16 20 December 1947 ON DU TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI THIRD COMMITTEE: COMMERCIAL POLICY: COMCI PaL'CY 1SEAUiY TEENTH BRETING XIII0D OFH SIXM1M ME( b) Held at the Capitol, Havana, Cuba, Saturday, 20 December 1947 at 10.30 a.m. ChaiLGRESS rman: Mr. L. D. WIP3S (Canada) 1, AMICLE 20 -eneral Elimination of Quantitative Restrictions (First Bading) CUSSION OF O S ENDMENTS ND GENEVA DRAFT NOTES yTOF RCPOED MMZ'OM AM GWVA M NAFOTES (Document E/CONF. 2/C .3/14) Mr. CORP (Ceylon) restated the purpose Of is amendment to Article 20,, which was a matter of vital concern to Ceylon and to a1 ther coutries in a like position. It should be considered in the light of the amendment sugg ested to Article 21, which would permit quantitative retrictionsto be imposed for a limited period in order to further economic development if other protective measures were inadequate. He appealed for a realistic approach to the Articles of the Draft Charte. relating to the economic development of under-developed -countries. Certain preferences vre admitted because, however evil they were, their immediate removal would cause excessive dislocation; the same reasoning should be applied, to quantitative restrictions even if they were condemned in principle. But quantitative restriction' were not to be so condemned; their use led to increased articularemployment, production and demand, even if vrld trade In product concerned was diminished, then Chapter VI provided. adequate. means off dealing with such over-production. The volume of world trade in all products was dependent not on the extent oz the use of quantitative restrictions, but on altogether different factors, R did nbtagree with the representative of Belgium that economic development wa to be regarded as an evolutionary process; the handicap of th21e aragraph under-developed countries iaso great, Article a prapht-3 had. been Itroduced to deal with the case of New Zealand and should be extended to cover countries vose domestic policies might be different from- NevZealand's, since Article 13 as at present drafted. was inadequate for this purpose. It vase essential for some provision -to -be made to ensure th limited use of E/CONF.2/C.3/SR.16 Page 2 limited use of quantitative restrictions for the purpose of economic development in countries like Ceylon. Mr. MacCARTHY (Ireland) was also of the opinion that a distinction should be drawn between the so-called under-developed and the industrialized countries, nor could he agree that industrial and economic development was a process of evolution. Paragraph 2 of Article I of the Charter pledged all nations to foster and assist industrial and general economic development; this applied to those countries in an early stage of industrial development, such as Ireland, where the development of productive capacity could not be achieved merely by the use of tariffs, which were not satisfactory in all cases. Of all forms of protection imposed to assist industrial development in Ireland, quantitative restrictions were the least used. Nevertheless, it was important t o have the right to use that form of protection when the need arose. He felt that some amendment to Article 20 was necessary if the aims of the Draft Charter were to be achieved, and submitted that a more reasonable and realistic approach should be made to the problems of small countries. Mr. STU?I (Switzerland) pointed out that the amendment submitted by his delegation referred to Section F of Chapter IV and would be dealt with at the appropriate stage. He compared the condemnation of quantitative restrictions and exchange control to the verdict of a jury which had declared the former guilty while allowing certain extenuating circumstances in the case of the latter. Any impartial tribunal would judge that exchange control was just as dangerous as quantitative restrictions; both the accused should receive equal treatment. Had Switzerland not applied quantitative restrictions in 1934 against a certain powerful northern neighbour, it would have been deprived of adequate means of defending her national industries as a very vital period. At that time customs tariffs were bound; Switzerland was pledged to most-favoured- nation treatment;.small countries dared not use preferential tariffs. A similar situation arise in the future, and Switzerland. could not afford to be deprived of adequate means of defence. Although it was right to condemn quantitative restrictions under normal conditions, normal times were still far distant. There was no absolute truth in these matters and the Committee should beware of making a limited condemnation of one form of restriction and too strong a condemnation of the other. Mr. BRIGNOLI (Argentina) said that the economy of his county was very dependent on exports and imports and as a result had learnt the necessity of expanding their manufacturing production. That necessity had been increased by the closing of markets during the war. It was also indispensable to ration monetary reserves in order to ensure that sufficient /capital goods E/CONF 2/C .3/SR .16 Page 3 capital goods be imported. Argentina was now capable of producing goods previously imported. He cited figures showing that the expansion of Argentine industry, which now surpassed agriculture and livestock in importance, had coincided with an increased participation in world trade. The free conduct of a sound ecoromic policy should not be limited; the Argentine amendment was submitted to allow the use of quantitative restrictions by under-developed countries to create, maintain or increase production of manufactured goods. Mr. KHAN (Pakistan) stated that the processing of domestic raw materials to provide full employment was a natural aspiration of every country whose economy was primarily agricultural. Elimination of quantitative restrictions, however desirable as an ideal, would do fatal damage to such aspirations. He hoped it would be possible to meet the desires of those countries who sought recognition of the right to use quantitative restrictions to stimulate their economic development. He called attention to the use in the Draft Charter of different words to convey the same meaning, e.g.: "product"."commodities" and "merchandise"; consideration should be given to this detail. Mr. BURGESS (United Kingdom) stated that there was general agreement that quantitative restrictions were dangerous, although necessary in some cases; they should only be imposed in those cases and under the safeguards provided in the Draft Charter. The conflict between the aim of full and productive employment on the one hand and the reduction of tariffs and elimination of quantitative restrictions on the other was recogized by the Charter in Articles 13 and 21. If it was determined that the use of quantitative restrictions was in some nstances the best form of protection for a new industry, provision should be made to ensure that it was used solely for that purpose: the United. Kingdom would co-operate to that end. But it was arguable whether quantitative restrictions were desirable for encouraging economic development. Many countries had developed their industries under tariffs and the terms of the Charter were more favourable than those of bilateral agreements since they provided for a country's release from its obligations. It was doubtful if the price to consumers under quantitative restrictions would be lower than under tariffs and there was always a temptation, once quantitative restrictions had been imposed, to extend them indefinitely. Finally, if a country could provs its case under Article 13, paragraph 4 (b), the ITO had no power to refuse release from the obligations of Chapter IV: the United Kingdom was, however, prepared to support any clarification of Article 13. /Mr - WOLD (Norway) E/CONF .2/C.3/SR.16 Page 4 Mr. WOLD (Norway) said that the mos efficient industries in Norway had prospered without protective devices; indeed, the development of some had been retarded by the use of quantitative restrictions by other countries. The appropriateness of quantitative restrictions in certain circumstances was already recognized in Chapter III: Article 20 in its present form was valuable and sufficient. Mr. CAMPOS (Brazil) stated he reserved the position of the delegation of Brazil on the amendments to Article 20 pending the outcome of deliberations onArticles 13, 75 and 81. Mr.LA ROSA (taly) felt it was too early to decide whether QR might or might not be the beat form of protection for nascent industries. The ITO must be a dynamic force, studying and harmonizing all views in an atmosphere of mutual confidence and realism. Mr. ADARKAR (India) supported the purpose of the amendments proposed by Argentina, Ceylon and Chile though he did not accept their form. In Geneva it was recognized that quantitative restrictions should be used only in exceptional circumstances and with the prior approval of ITO. Acceptance of that condition, however, depended upon the degree of confidence felt for the ITO; at the moment the defence of particular interests seemed to be precluding an adequate objectivity of judgment. If quantitative restrictions were allowed for balance of payments difficulties, they should, in spite of the danger of corrupt administrative practices, also be allowed for the economic development particularly of food products, for which neither tariffs nor subsidies were practicable. Quantitative restrictions would not be applied to reduce imports so much as to regulate the flow of imports - a necessary part of any plan for stabilizing agriculture. In certain cases quantitative restrictions minimized the burdon to the consumer. A pooling system could be worked out where domestic production was small, so that the price to the consumer would be an average of domestic and foreign costs, although it was doubtful if the Charter permitted such a practice. Quantitative restrictions were also necessary for the protection of certain key industries which must be developed regardless of cost. The legality of quantitative restrictions for economic development should be explicitly recognized in the Charter. Mr. TRABOULSI (Syria) stated that some solution not detrimental to world trade must be found for the protection of new industries. Tariffs and subsidies had increased prices and weighed on national budgets. Quantitative restrictions arbitrarily imposed, often for political reasons, had yielded nefarious results, but some amendment to Article 20 should be in made order to permit their use for economic development. /Mr. ATAMAN (Turkey) E/CONF.2/C .3/SR.16 Paae 5 Mr. ATAMAN (Turkey) said that protection by tariffs could be surmounted by the large industrialized countries and also placed the burden on the consumer; quantitative restrictions for economic development should be permisaible Mr. PERRY (Canada) did not agree that the Charter represented the narrow views of a group bent on protection of their positions. Rather, it created a wholesome environment which could result in the maximization of production, of employment and international trade. It was not easy to draw a distinction between "developed" and "under-developed" countries, yet it had been said that quantitative restrictions should be allowed for under-developed countries only. The ITO would in practice find it difficult to deny any country the right to impose quantitative restrictions for development. Further, if protection was employed to encourage the production of a high-cost basic industry, there was a danger that costs would be increased throughout the economy and that further protective measures would be taken. As it stood now, however, Chapter III provided a working arrangement with a minimum of friction. The Charter was therefore taking the only realistic course. Mr. BURGESS (United Kingdom) pointed out that his remarks as to the dangers of quantitative restrictions were based on its tendency to lead to ever-increasing restrictions on imports, even when a country was acting in good faith. But he agreed that quantitative restrictions did also bring the serious danger of administrative corruption - which was an added reason for using quantitative restrictions only in very special cases. Mr. NARAGHI (Iran) stated that during fifteen years of quantitative restrictions Iranian imports had increased five-fold; therefore, they could not be considered an obstacle to international trade. The fact that the Draft Charter allowed quantitative restrictions only for balance of payments purposes merely showed that the countries on the Preparatory Commission were not faced with the problem of development. Too much time would be consumed if a developing country had to obtain prior approval. under Article 13. He supported the Chilean amendment. The CHAIRMAN observed that the discussion would be continued at the next meeting, Tuesday morning, with the following speakers: Chile, Finland, Guatemala and Mexico - The meeting rose at 1. 45 p.m.

GATT Library

vs737yn5491

Summary record of the Sixth Meeting : Held at Havana, Tuesday, 9 December 1947 at 4.00 p.m

United Nations Conference on Trade and Employment, December 10, 1947

Fifth Committee: Inter-Governmental Commodity Agreements

10/12/1947

official documents

E/CONF.2/C.5/SR.6 and E/CONF. 2/C. 5/SR. 1-15

https://exhibits.stanford.edu/gatt/catalog/vs737yn5491

vs737yn5491_90200089.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/C.5/SR.6 ON DU 10 Decemer 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH FIFTH COMMITTEE: INTER-GOVERNMENTAL COMMODITY AGREEMENTS SUMMARY RECORD OF THE SIXTH MEETING Held at Havana, Tuesday, 9 December 1947 at 4.00 p.m. Chairman: Mr. George HAKIM (Lebanon) The CHAIRMAN announced that the final edition of the Annotated Agenda had been circulated as document E/CONF.2/C.5/5 and stated that the first reading would proceed to Sections C and D of Chapter VI leaving new amendments to Sections A and B until a subsequent meeting. The first reading of the entire Chapter should be completed this week. SECTION C - INTER GOVERNMENTAL COMMODITY CONTROL AGREEMENTS Article 59 - Circumstances Governing the Use of Commodity Control Agreements Mr. COREA (Ceylon) proposed the deletion of Article 59 (C.5/3/Add.6) on the grounds that it constituted a further. limitation to the adoption of oommdity control agreements. While recognizing that there should be certain restrictions, he thought rules should. not be adopted which would unduly hamper the possibility of resorting to such agreements. Articles 55 and 56 provided for study groups and conferences; which should be sufficient to ensure that there was need for agreements, and that the difficulties did, in fact exist. Article 59 seemed, to impose the necessity of a further determination after a study group and conference had, been held; this would only delay the establishment of a commodity control agreement. Mr. PETER (France) did not share the views of the representative of Ceylon. Article 59 should be considered together with all of Chapter VI, and with the Charter as a whole. Chapter VI provided an exception to the provisions of previous Chapters, particularly Chapter IV; it permitted, Members, in exceptional circumstances, to use measures otherwise debarred. There was a distinction between inter-governmental commodity agreements in general and commodity control agreements. The former were for the purpose or expanding production or consumption and need not fulfil very strict conditions since they did not constitute an additional. barrier to international trade. But the purpose of control agreements was to limit production or trade or to regulate prices and. tended to place obstacles to /trade E/CONF.2/C.5/SR.6 Page 2 trade, therefore, such an agreement should take place only under specific circumstances, Article 59 was of great importance as it laid down the necessarily rigid conditions under which a commodity control agreement could be used; and it would not unduly delay such agreements when they were necessary. Mr. USMANI (Pakistan) did not find in Article 59 provision for the use of control agreements in the case of wide fluctuation in the price of a partIcular commodity. The Article should be more embracing in its scope. Mr. CAPLAN (United. Kingdom) thought the representative of France had explained. the background clearly. Secretariat document C.5/1 explained. the balance between Articles 58 and 59. Article 59 stated "burdensome surplus has developed, or is elected. to develop...." and similarly with the phrase concerning unemployment. The phrase "or is expected to develop", in Article 59 made for greater flexibility. It was recognized that Article 59 prescribed. the criteria under which members might take action under Chapter VI as an exception to the General Commercial provisions of the Charter. He.referred.to the fact that government representatives had proceeded with the drafting of a wheat agreement although there was not a burdensome surplus of wheat nor wide-spread unemployment in wheat production. However, remembering the experience of the. 1930's and earlier, there was reason to believe that without Inter-governmental agreementt the lack of balance in international trade in wheat would later cause a burdensome surplus of wheat to develop. Chapter VI recognize, that co-operation between governments could control extreme price fluctuations. Article 59 was not a delaying .procedure, in fact tho calling of a commodity conference by the Organization would indicate that difficulties envisaged under Article 59 were, anticipated.. Mr. COREA .(Ceylon) stressed the importance of Chapter VI procedures to Ceylon and countries with similar economies dependent upon the production of primary commodities He wanted to avoid placing unnecessary difficulties in the way of commodity control agreements and his view Article 59 was still unnecessary. His opinion was that after a study group and conference had reached agreement this should be sufficient and the additional step which Article 59 appeared to provide was necessary. Mr. SCHWENGER (United States) thought perhaps the wording of. paragraph 2 of Article 59 might be clarified. It had not been intended. that the force of the Article should. be procedural, and suggested that in paragraph 2 the word "shall" might have the ,significance of "shall have been made". As to the substance of Article 59, it was designed to limit permission for control agreements which were exempt from requirements in /the Chapter E/CONF.2/C.5/SR.6 Page 3 the Chapter on Commercial Policy, to commodity difficulties of a type which by nature vould not ordinarily bo adjusted through normal commercial processes. Mr. de VRIES (Netherlands) pointed out that Article 59, paragraph 2, read ln conjunction with the first sentence of Article 58, paragraph 6, stated that a determination to enter into a control agreement was made through the Organization, not by it, by consultation and agreement of member substantially interested. His delegation had f found this provision a safeguard. ln that it prevented countries not substantially interested in a commodity from destroying a decision of those who are. Mr. DUNAWAY (Liberia) asked for an interpretation of the word "substantial". Mr. JINENEZ (El Salvador) referred to the use of the word "under-employment". It could be considered from the viewpoint of the number of employed or of the income of the employees. It was important to deal with both unemployment and under-employment which would include the reduction of hours worked, which might lead to insufficient wages. Mr. PETER (France) noted the different uses of the term substantial" in Articles 55, 56 and 59. Article 55, fully respecting the sovereign rights of a nation admitted the right of any Member to say that it was substantially interested"; the term was thus subjectively used. Article 56, on the other hand, used. the term objectively: "substantial part of world production...." seemed to mean a Member's percentage of the volume of International trade. However, a substantially interested country might have only a very small percentage of the volume of trade. The Sub- Committee might consider the matter of uniformity in the use of this term. Mr. CAPLAN (United Kingdom) agreed with the suggestion of the representative of France regarding the need for redrafting in connection with the use of "substantial interest". Mr. JIMENEZ (El Salvador) referred to the doubt felt by some delegations as to the exact meaning of the word "substantially interested." He also considered that the term should be reviewed since there seemed to be a difference between "substantial interests" and the vital interested of one country in a given produot. For example, hie country could not agree to any delay in procedure should difficult conditions arise in the coffee market; it was necessary to have a procedure enabling rapid measures to be undertaken. The question of "vital interests' was important. Mr. GANGULI (India) referred to the difficulties that had been experienced in regard to the meaning of the term "unemployment or under-employment". This phrase was meant to include concealed or disguised. /unemployment E/CONF.2/C.5/SR. 6 Page 4 unemployment which was a characteristic of countries producing primary commodities. On the question of the deletion of Article 59 requested. by the representative of Ceylon, he felt that the context of that Article was quite clear. It laid down the conditions in which inter-govetmnental control agreements might be used. Mr. COREA (Ceylon) felt that his difficulty would be resolved if the purpose of his amendment could be referred to the special drafting committee, with instructions to consider the wording of Article 59 in relation to. Articles 55 and 56. He still believed that some clarification was called. for in order to remove any ambiguity regarding the procedure to be followed. Mr. LACARRA (Mexico) supported the views expressed by the representative of El Salvador, namely, that a distinction should be drawn between the various degrees of interest which countries might have in any basic product. It was impossible for countries which depended almost entirely on trade in one product-to have the same position in international life as those which had many other possibilities for trade. The CHAIRMAN stated that the words ''substantially interested' would require careful examination by the Sub-Committee and. that something more than drafting change might be needed. Mr. CAPDAN (United Kingdom) stated that the United Kingdom, which was one of the principal consumer countries, fully understood the rights. rights of smaller countries which were entirely dependent on a single product for their position in International trade. He wished however to correct any misapprehension which might appear from. the discussion. There was no country which was not both producer and consumer; each country was interested in -both aspects, although each might have a bias one way or the other The United Kingdom was vitally concerned in both aspect. . The CHAIRMAN then referred the Committee to the additional sub- paragraph proposed by the delegation of Venezuela. Mr. OTANEZ (Venezuela) stated that his delegation felt that an omission had been made in the. Chapter. Article 59 was strictly limited to agreements falling into two specific groups, while Article 54. (c) referred to international agreements made vith a view to moderating pronounoed fluctuations in prices. The present wording of Article 59 might make it impossible for any control agreement to be reached in connection with price fluctuations unless these were caused by a burdensome surplus of a primary. commodity or by widespread. unemployment. Disequilibrium in supply and demand and fluctuation of prices were not always caused by the conditions mentioned in Article 59. There seemed to be some contradiction between Articles -54 - (c) and 59. His delegation was fully awere that the authors /of the E/CONF.2/C.5/SR.6 Page 5 of the Chapter had intended to limit recourse to control agreements in order to avoid any restriction of world trade. The amendment of Venezuela had only one purpose in view, namely, the attainment of one of the most important objectives mentioned in Article 54. Mr. SCHWENGER (United States) felt that the point raised was one of interpretation, and had been fully dealt with in other parts of Chapter VI. Mr. PARGA (Colombia) in supporting the views of the representative of Venezuela considered that as the word "only" was used in paragraph 1 the scope of Article 59 should be widened. Mr. PETER (France) considered this was unnecessary as Article 59 could not be separated from paragraph 2 of Article 58, which stated that control agreements included price regulation. Mr. CAPLAN (United Kingdom) thought that the amendment was not necessary. He cited the reference to price fluctuation in Article 52 and pointed out that any sound agreement would moderate both long-term and short-term or speculative movements in prices. He stated that the Chapter has a positive approach to commodity agreements and referred to the fact that the use in Article 59 of the phrase " which in the absence of specific governmental action..." indicated positive action by governments. Mr. OTANTE (Venezuela) stressed that the purpose of the amendment was to attain one of the main objectives obtained in Article 54, namely, to moderate pronounced priced fluctuations; the specific reference to Article 54 was not important if tho purpose could be otherwise achieved. Mr. USMANI (Pakistan) thoug that Article 59 should be more explicit. Discussion had clearly shown that a commodity control agreement should be used: 1. when a burdensome surplus of a primary commodity had developed or was expected to develop; 2. In the event of widespread unemployment or under-employment; 3. when wide fluctuations in prices of a primary commodity occurred, and 4. in case of a shortage of a primary commodity. Article 59 should be enlarged in the light of the discussion and should embrace these conditions. Mr. de VRIES (Netherlands) agreed with the representatives of Venezuela and Pakistan that the circumstances governing the use of commodity agreements should. cover all conditions mentioned in the discussion, but felt that these were already provided for in the Chapter. Serious price fluctuations would accompany -the conditions described in Article 59, and were therefore covered. Also under Article 58 (5) it was provided that expansion agreements /were deemed E/CONF.2/C.5/SR.6 Page 6 were deemed not to be control agreements, while under Article 67, agreements relating solely to the equitable distribution of commodities in short supply were excepted from the provisions of Section C. Mr. USMANI (Pakistan) wished it to be made clear to the Sub-Committee that the question of shortage of a primary commodity and of price fluctuations should. be clearly declined in Article 59 so that control. agreements could be used in these cases. - Mr. WARWICK SMITH (Australia) recalled that during the London discussions the Australian delegation had. supported the same view as those representatives who had spoken today in favour of widening the provisions of Article 59.. As a result of those discussions, however, an explanatory note had been included in the report of the First Session of the- London Preparatory Committee, to the effect that the question of shortages was adequately covered. In the opinion of the Australian delegation, the draft agreement which had. resulted from the Wheat Conference was a commodity control agreement in the full sense of the word; the Conference had been called in the expectation of the development of a burdensome surplus of wheat, and the draft agreement thus conformed with Article 59. The problems of a burdensome surplus of a primary commodity and widespread unemployment or under-employnent were set forth in Article 59; the omission from that Article of a reference to shortages had already bean explained. The Australian delegation had been satisfied at the end of the London meetings that there was nothing in the Draft Charter to prevent the conclusion of a commodity control agreement in circumstances which would justify it. He thought it might be useful, however, to reconsider the wording of the Article in the Sub-Committee. It was agreed that Article 59 shoul' be referred to the Sub-Committee. Article 60 - Additional Principles Governing Commodity Control Agreements After a short discussion, It was agreed that the Sub-Committee should consider the desirability of incorporating in the text of this Article the first provision of the footnote (regarding "reasonable prices"). Mr. PETER (France), whose delegation had bean instrumental in securing the inclusion of the second provision of the footnote, suggested it be withdrawn, on the grounds that the position of countries which were important producers and consumers of a commodity and yet did not have a large share in the international trade, had been satistactorily dealt with in Article 60 (b). No objections were raised to the withdrawal of this part of the footnote. The Article was approved in first reading. /Article 61 E/CONF.2/C.5/SR.6 Page 7 Article 61 - Administration of Commodity Control Agreements This Article was approved in-first reading without comment. Article 62 - Initial Term, Review and Renewal of Commodity Control Agreements The CHAIRMAN referred the Committee to the proposed amendment by the delegation of Costa Rica to paragraph 1 of this Article. Mr. CAPLAN (United Kingdom) supported the retention of the reference to a period of not more than five years. Mr. NIAZI (Egypt) had spoken in favour of a period of four years, but the United. Kingdom delegation believed that five years was as long a period as governments could accept heavy obligations. This Article was approved in first reading. Article 63 - Settlement of Disputes This Article was approved in first reading. SECTION D - MISCELLAMEOUS PROVISIONS Article 64 - Relations with Inter-Governmental Organizations Mr. GANGULI (India) explained that the purpose of the amendment of the Indian delegation to this Article, and of its related amendments, was the achievement of a proper co-ordination between the work of the ITO and the FAO. The lack of definition concerning the jurisdiction of each, and their relationship, had made for obscurity. The following principles should be taken into consideration in any definition of the competence of each Organization: 1. ITO should make full use of the FAO agricultural experts; 2. in all studies concerning recommendations for commodity agreements on agriculture . commodities, FAO representatives should play a leading part; 3. Asi far as possible overlapping and duplication of work should be avoided If those principles were accepted, FAO would be given a more substantial position and would be able to carry a commodity study to its logical conclusion. This was the purpose of the amendment proposed by his delegation. Differences would. arias concerning the respective functions of the two organizations in regard to primary agricultural commodities and therefore in his opinion a Co-Ordinating Committee should be provided to settle such differences and facilitate smooth working arrangements. Regarding the Co-Ordinating Committee mentioned by the Indian representative, Mr. PETER (France) drew attention to the fact that the Economic and Social Council had created such a Committee in March 1947. During the FAO Conference in August and. September 1947, representatives of FAO and. the ITO Preparatory Committee had worked. together on the /Interim E/CONF.2/C.5/SR.6 Page 8 Interim Co-Ordinating Committee. Furtheremore, it was unnecessary to speak of a divergence of attitude, because the same governments would be represented on both the FAO and the ITO and the delegations to each would be subject to similar instructions. What it was necessary to avoid was a struggle between the two Secretariats and this migt be accomplished by something along the lines of the Indian amendment to Article 64. Mr. Peter was not in favour of the Indian amendment to Article 58 (6), since that Article referred. ta inter-governmental commodity control agreements. If the amendments were to be accepted, it might be interpreted that FAO could. sponsor a commodity control agreement subject to the provisions of Chapter VI. If the Indian representative had intended only to state that FAO should have a part in certain agreements, he could accept. the suggestion, but the wording of the amendment would have to be changed. He hoped that the Indian representative would. not press his amendment to Article 58 (6) and pointed out. that the Indian delegation to the ITO would be able to request a conference on any commodity in which they were particularly intereste, and. could ask, in that respect, that the relevant FAO documents should be taken into consideration. Authority as regards commodity control agreements, however, must rest with the ITO. Mr. RICHARDS (Canada) felt that divided jurisdiction, would lead only to difficulties and not to the harmony to which the Indian representative had referred. The question under discussion was closely linked to other provisions of the Charter and in particular to the subject of the subsidization of exports. The authority to initiate commodity control agreements could. not be allowed to rest outside ITO. For that reason he was unable to accept the Indian amendment. Mr. YATES (FAO) emphasized. that the FAO and the IT0 had much in common concerning their objectives and the means by which those objective could be achieved. He was not apprehensive that their would be conflicts as regard their aims of their work nor did he think that in practice there would be overlapping or duplication. There was bath a trade aspect and a production and consumption aspect to the question of agricultural primary commodities. The first was the concern of the ITO, while the second was the responsibility of the- FAO. Although detailed assigments of responsibility would have to be worked out in a relationship agreement, some were specified. in Article 64. If the Article were to be enlarged as the Indian delegation suggested: two main principles would have to be safeguarded: 1. The principles of Chapter VI and of the Charter would have to E/CONF.2/C.5/SR.6 Page 9 be observed regardless of which agency had initiated an inter-governmental commodity agreement; 2. in connection with inter-governmental commodity agreements, the particular responsibility of ITO would have to be maintained. It was not a question of stating which organization had a particular right but rather of attempting to draft a provision which would incorporate the substance of the Indian proposal while maintaining the two principles mentioned. Mr. ZAFRA (Philippines) support. the Indian amendment on the ground that FAO was specifically equipped to initiate inter-governmental commodity agreements concerning agreements concerning agricultural product. FAO already had responsibilities regarding the equitable distribution of commodities in short supplies. There should be full co-operation between FAO and ITO concerning commodity conferences. Mr. ALAMILLA (Cuba) said that for the same reasons which had been put forward by the representative of France, he was unable to accept the Indian amendment to Article 58 (6) nor was he able to accept the amendment to Article 64. The two Organizations had been formed by the same governments. and it would make for duplication of work if the 17AO vere to be given the right to initiate inter-governmental commodity control agreements. Mr. CAPLAN (United. Kingdom.) agreed. with the representative of Cuba and felt that there was no need. for detailed provisions concerning co-operation between the two Organizations when there already existed the provisions of Articles 84 and 64. To go beyond that *ould be the equivalent of attempting to include in the Charter an agreement between the two Organizations. The United Kingdom delegation was in favour of such an agreement but it should be negotiated at, a later date. The Indian amendment would. be prejudicial to such an agreement for it would have the effeot of laying down the specific relationship to be established. Mr. SCHWENGER (United States) felt that it was unfortunate that the discussion should have developed into an argument as to which Organization should. have the responsibility for a series of additional organizations; for the administration of the agreements which would be concluded would involve further organizations of mutually interested government. There had to be some central authority over the structure of the control agencies and it was logical that that authority should rest in ITO. The UnIted States delegation had. always favoured. the inclusion of an FAO representative in a Commodity Commission within the ITO, and no opposition to that idea had bean expressed during the Preparatory Committee discussions. As mentioned earlier, there was in effect already FAO - ITO co-operation in /the Interim E/CONF.2/C.5/SR.6 Page 10 the Interim Co-Ordinating Committee FAO obviously would hold many meetings or conference in the general sense, and it was only in connection with the preparation and negotiation of an inter-governmental commodity agreement, as defined in Chapter VI, that to make for the greatest amount of co-ordination and administrative efficiency, the primary responsibility would have to remain with the ITO. The CHAIRMAN suggested that there was apparently nothing in the Charter ta preventthe FAO from calling a conference to conclude an agreement other than a commodity contral agreement. Mr. CAPLAN (United Kingdom) doubted whether the FAO had appropriate powers under its Constitution to do this effectively. Article 64 was then referred to the Sub-Committee. Article 65 - obligations of Members regarding Existing and Proposed Commodity Agreements Mr. REICHART (Argentina) explained the amendments of his delegation to bath paragraphs 1 and 2 of Article 65 which dealt with the same fundamental concept of the powers of the Organization and the obligations and duties of Members. The definition of the word "decision" in the English text needed to be clarified. The Organization should be able to carry out useful studies and make recommendations. Its statements must be declarative - any other interpretation would be incompatible with the sovereignty of member states. The duties of member states could not be other than those clearly stated tn Article 1 of the Charter. An obligation an Members ta carry out, decisions of the Organization would place the Organization in a special position, again contrary to the sovereign rights of all countries. Some amendment to clarify these pointe was necessary. Mr. CAPLAN (United Kingdom) thought this a matter of principle that might. better be settled under Article 74, which dealt with the powers of the Organization. The United Kingdom would be more greatly affected than any country by the application of Article 65 but had no hesitation in accepting the obligation involved. It was entirely right that. the Organization should examine existing agreements and that States entering the Organization should abide by its recommendation. If "decisions" were changed to "recommendations", the Argentine objection might be overcome. Mr. REICHART (Argentian) stated that the amendment was primary concerned with the wording of this Article. Mr. de GAIFFIER (Belgium) agreed with the representative of the United Kingdom and stated. he could not accept the amendment as it would weaken Article 65. /The CHAIRMAN stated E/CONF.2/C.5/SR.6 Page 11 The CHAIRMAN stated that the Argentina proposal would be referred to the Sub-Committee Article 66 - Territorial Application As there were no amendments to this Article it was passeed in first reading. The meeting rose at 7.40 p.m.

GATT Library

fj679bf3544

Summary Record of the Sixth Meeting : Held at Lake Success on 14 February 1947 at 2.45 p.m

United Nations Economic and Social Council, February 17, 1947

United Nations. Economic and Social Council, Preparatory Commission of the Conference on Trade and Employment Drafting Committee, and Sub-Committee on Tariff Negotiations

17/02/1947

official documents

E/PC/T/C.6/87 and E/PC/T/C.6/85/REV.1-92

https://exhibits.stanford.edu/gatt/catalog/fj679bf3544

fj679bf3544_90230157.xml

GATT_156

United Nations Nations Unies RESTRICTED ECONOMIC CONSEIL E/PC/T/C.6/87 AND ECONOMIQUE 17 February 1947 . i/87 SOCA COUNCIL SOCIALEOT IN IGAGLL HENMLSE MATIOMMITTEE G CTHE PREPARATORY C1MMITTEE''"M±IHEF TIM SMMITTEE UB-TARIFF NEGOTIATIONSCOON -TIATI-S - - SUL4GP.EETENGCaD OIXTH !MI' 2cc1ellon ateeesuarys1 4CL. F~.r J..1 ,45 pm. Cr~MA Mr.N BADARKE. '. AA tionCcv t ion " SlC"Q!79, Paete the s3Ltence begLmirh ith ."'Another footnote..." ani insert: "The Sizor-an!consiclereda tet based on -the sggestion of the UniteeKingdomnfeeezaon (E/PC/TE/CY.6/W-.1) and.I epared by Mr. LZDD (7tlte&s), at its re~jest.. eo fllowing text, to be inccrporate. in the geas. aee snt as aeonrdfo 1otnote-to p mraaph- (/: approved."."LC6 58 as -., scussion on Article XXoha- #c discuion on..Artc LAt tnitedhe sedgston of W~.grean SZimE (UrKing t wa aed.to eand paragrahs I un.6of. tis Article to read:. Para.r.7_,h omm1.rim Tradle Ccsutteis hreby established., on which ingeach conhstract parnetry all have vo epresentatie". . a"'=Tph 6 A£ts ns as the alIaterntiontn1zal Te Ourgamtio has been established aand is cxapble ogfit euncercisin sftions, the. ay Pt~tesedamy diaslved. y the, rocdeduwre Iaparagraph i, ovnin Trgb h 3 of Article XZ and its assetstr anderr-func the tioens Ansfaltr -oe-tonations ons"."-a-den, o Article to : - gdom Delegate, waBpr -rtext- Irste Geera ate Cterent e -i .er nczyratio 6.Asn0 the Gemerl Agreeent'0:-rzto ~~~~~~~~~~~~/Atc a . Page 2 E/PC/T/C. 6/87 "Article XXI Amendment Revisions and Termination . . - "1.g Tehis mayAre emnt e-amended or revised, by tex procedure. lai&ragraphdown n palm of cthis nA-reile, ih ho ight of -.e provisions aof the Chrter for the International Trade Organization, drafted by the International Conference on TEmploymenrade andnt or othaxv. .;.- . t "2. In the evenmmt of the d-solutgrion of the Co~ttee under paraaph 6 osf Article IX, this Areement.eal'be terminated, provided that those contrMactinsg parties Which becomeTr ember of the Internationalrade Cganization may providee that suche eobligations undo this Agrecst as | they may specify shall continue in force beteween themselves as part of th hrelevant, proviicn of the- -ater of tnhzae Innternational -Tade Orgari2o=; t"3. Aa dessIciithe Cc=Lttee mend, rvise or terminate this Agreement under thI Article ommor to dissolve the C:ttee under Article XX (6). shall becosme effective upon it fowrmal acceptance by to-thirds of the conmmutracting s, cournated to the Secretary-General of t.he Unit[ed Natioa woithin fne month] c the date of the meeting at which the decision was taken. . ". Any contractingf party, which does not cc=uniits. accepance o . sucdeo ioa wimtbhin tehe; tie.apecffd, shll .case to be a mrer of t' Co=ree an', aamrty to this- Ageement provided. that it =ay e re-admitte.ith the concu=rece of all the contracting.paties, which have accepted ss uceh dmeyciprsiO, upo"n, such conditions arhy a dscribe. Article. XI i-P7C.k/c -.,. Paragraphs 'r and 3 of- i.i.ArI cl were approved.. Pa"ragrap44--lne 2:..hhs wrdsthe verseas" and. t}esqare brackets ccloeig the word .7ah. o were deleted.. rxaraph -4 31n 5he words "the Agreement!'. weey replaced b9 ar-grap:h quare5< ine 3--so ce acnket.t nlros"ig.s ei rywodand !'beiax~ I tche uwercd"orae"--eeleted.-- ..e ~ . . .** P /raragraph 6: : I II , - E/PC/T/C.6/87 Page 3 Paragraph 6: The Secretariat was requested to re-draft this paragraph in accordance with the revised wording of Article 89 of the Charter. The Sub-Comrmittee approved of the incorporation of Article XXII in the General Agreement. Mr. GARCIA DE SOUZA (Brazil), supported by Mr. PRESQUETLT (Cuba), suggested that a n ewparagraph with a wording similar to that of I. B. in document PE/C/T/C.6/W.40 should be added to this Article. The two Delegates reserved the position of theiro Gvnmerents on this question. Article XI E (/PC/T/C/W.58.6 ) The Artiscle wa amended to read: o"mThe Cmittee shall evolve procednures uder which not parties to thisme Agmreent ay accept it mon ters to be agreed between such mgovsernent andomi the mittee". The mSub-Comigrttee aeed to incorporate the Article as re-drafttheed ln Generalm Agreeent. Interpretation and Settlement pof Disutes The mSub-eComitte considered the question of incorogpaoratn n article covering Interpretation and settlement of disputes in nthe Geeralme Agreent in the light of document E/PC/T/C.6/65/Revg.2, pae 5. Thowe folelinwgs txt a approved for incorporation in the General Agreement. "Jx TeXs .f this mAgreennt in the official languages of the dUnite Nations shall be regarded as equally authoritative. "2. Any dispute arising out of the interpretati on oroperation of this Agreement shall be referr ed totmhie Comthtee wich shall deal with itin msnuechai as itm deen-appropriate." H -RMAN TeCb10 -introded.i aa whie psper giving a tentative roe-drft cf !he Protocol ton the Ggerrmeal Amee t on Tariffs and.Trade" (formerly called the "Declaration"). ER (I.fyE s o ki(Czehplva4a) pointed out the danger involved in dividing the Ckrter into two.parts, fthe one yeYectivel binding the contracting parties and, the othiedirg only bnnthem llto the fuest extent of their executive authority.*' ;' - * i.. /Th6text of E/PC/T/C.6/87 Page 4 The text of the Protocol, as drafted by a small t drfitg .roumcp-vwas approved by the S-ubmmCoitteeIn the. absence ofns itructisofromnm his Govemrne,nMt r BERAY C e(hzslcoaovkia) whised toe rrvese h pisosition on this text. ,, The Preamble to theisl Ggreemenra nAenit oTardffs adn Trad.- Thee Pisambslawae,dieussd ons the bai8p oef,hsubmitted apastee iby th s UnitDeedg States leation (E/PC/T/C.d6/W.58) an the Secretariat 5/(E/PC/T/C. 5/Iev.2), Tarhe Secsretsat war.eqRstped.to pre-re a re-draft of tlhe Preambleg in the iht of the discussion of omthe SubI-Cmittee t Was understood that the sre-draft hould cover ArtiE/cleT CV6/II (PC//.W .58) which n.qly was provnilsiorzalydeleted. fro the Articles oefGef talrh Conrme tAeenZani 4Artichlech r of te ater RMAN reminded the The MUmmiMSmin1d the Sub-uCoGttee f its previo-s decision to incorrate this Art'cl inm the General Agreeane and. dew attention to document E/PC/T/G /W. 8 containrng Article 4.as re-drafted.by.the Legal iifelr<fMrftinDDt tseI'x:*Y.(Ued.atas) mintd hiinesservationt5 retes atio v-: egancrd oto -tie_irpcrtion of Article 4. - Article 12 c 1-tete. The Delegaate3aor Brazil,e Cehin and.Cusba suggsts ouldthat thilArticle ShO N incorporatged ii:he G eneral ALrmmiement::sa.e Sub-Co;.ee maintained. its, decisione not to includehr th Aregticle, the tee Delates reserved the position of their G6V6t. - -. Article XIII (Article 30 of the stter). ROMr. Wz1ITv Zeaand.) 'ad -. EGAIADESOUZA. (Bra'zil) ere Of the opinin that promvisions relating-to thide elinnation of export subs es should& be inserted in this Article and resGevrvem,d the position of their oerents on this question. j The Sub-Cwmttee agreed. that there vouI...e..t bome provision z£dea for the proviaonal generallztioi t -th trade of governments not parties t'O the General Agromxiif the tari-f cnce~ s gante. Ader he Ageement pendin~consideration by the International Conerence, off be Uedtof ?hser /boef ts E/PC/T/C.6/87 Page 5 benefits under the Charter should be extended to non-Members of the organization However, as the Drafting Committee had not considered the terms of Article 36 of the Charter relating to non-Members, It twas decided to defer consideration of this question until a later stage. The CHAIRMAN requested the Secretariat to prepare a draft of the General Agreement which will be considered by the Sub-Committee at its next meeting on 18 February, at 2:45 p.m.

GATT Library

py859gb6857

Summary Record of the Sixth Meeting : Held at Lake Success on 27 January 1947 at 10:30 a.m

United Nations Economic and Social Council, January 27, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

27/01/1947

official documents

E/PC/T/C.6/20 and E/PC/T/C.6/1-20

https://exhibits.stanford.edu/gatt/catalog/py859gb6857

py859gb6857_90230053.xml

GATT_156

United Nations ECONOMIC AND SOCIAL COUNCIL Nations Unies RESTRICTED E/PC/T/C.6/20 CONSEIL 27January 1947 ECONOMIQUE ORIGINAL: ENGLISH ET SOCIAL DRAFTING COMMMITTE OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT SUMMAMARY RECORD OF THE SIXTH MEETING Held at Lake Success on 27 January 1947 at110:30 am. Mr. LOPEZ FRESQUET (CUBA) referred to the discussion which had taken place in the Committee in connection with Article 25 and pointed out that he wished to associate himself with the alternative text which was proposed by the IndianIDelegate in document E/PC/T/C.6/W.5 Mr WATTE (NEW ZEALAND) made a similar statement. Mr. ADARKAR (INDIA)said that in submitting the amendments which were set out in that document,his purpose was really to have the ideas expressed in the amendment worked into the text of Article 13 as it had been agreed by the Committee. THE CHAIRMAN remarked that Mr.ADARKAR's amendment would be passed on to the Second Session together with a suitable note of his wishes. The Committee then continued its discussion of Article 26. Mr. PHILLIPS (AUSTRALIA) pointe out that under the working of sub-paragraph (b) of paragraph(3) as it was set out in the United States amendment, the Organization was bound to review all restrictions which were in existence on the date the Charter came into operation even if some of those restrictions were lifted before two years had elapsed. He doubted whether a review of restrictions which bad been lifted was really necessary and therefore, proposed that the conclusion of sub-paragraph (b) be amended so as to read, "and still attained under paragraphs (1) and (2) at the time of the review". This was agreed.It was also agreed that the word "maintaining" at the commencement of sub-paragraph (b) should be altered to "applying". /On the suggestion E/PC/T/C .6/20 Page 2 On the suggestion of Mr. SHACKLE (UNITED KINGDOM)the words, "Members shall accept an invitation to participate", were changed to"Members thus invited shall participats". In connection with sub-paragraph (c) Mr. SHACKLE (UNITED KINGDOM)proposed that the phrase, "under paragraphs (1) and (2)", should be inserted after the word "proposes" in the first sentence. This was agreed. Mr. PHILLIPS(AUSTRALIA) drew the Committee's attention to the fact that although under the last sentence of sub-pargaraph (c) the action of a Member which had obtained the prior approval of the Organization for the application of a restriction was not subject to challenge under sub-paragraph (d), the provisions of sub-paragraph (a) wouldstill apply in that case. Accordingly, he suggested the addition of words which would prevent the application of sub-paragraph (a) when prior approval had been obtained under sub-paragraph (c). Mr LEDDY (UNITED STATES) agreed with Mr. PHILLIPS proposal but Mr. SMITH(CANADA)pointed out that the final sentence of sub-paragraph (a) had been inserted in orer to prevent commercial speculation. If a provision were inserted in sub-pararaph (c) to prevent the application of sub-paragraph (a) in the circumstances set out in the former sub-paragraph, the likelihood of commercial speculation would be increased. After further discussion it was agreed that no alteration in this respect should be made in sub-paragraph (c) but that the Australian Delegate's proposal should be mentioned in theReport to the Second Session. However, it was agreed that the concluding words of sub -paragraph (c) should be redrafted to read, "on the ground that such action is inconsistent with the provisions of pargraphs (1) and (2)". Mr. JUSSIAT (BELGIUM-LUXEMBOURG) suggested that under sub-paragraph (d), the Organization, as well as any Member, might be allowed to take the initiative. In support of this suggestion, he argued that the Organization /had been E/PC/T/C .6/20 Page 3 had been given the initiative in, certain other parts of the Char'ter and that action by the Organization was impersonal and was, therefore, less likely to be resented by a Member than action taken by another country. Mr. SMITH (CANADA) stated that if Mr. Jussiant's suggestion was adopted, the Organization would find itself in the position of both complainant and judge. Also, under the terms of the sub-paragraph as drafted in London, the Organization would find itself in the peculiar position of having to ascertain whether it itself had a prima faciecase for action The CHAIRMAN said that he doubted whether action by the Organization was more impersonal than action by a particular country. The Organization would always require some impetus and the identity of the country supplying this impetus could hardly be kept secret. M'essrs. LECUYER(FRANCE) and LEDDY (UNITED STATES) expressed preference for the text as it had been drafted at the First Session. Mr. HEXNER (INTERNATIONAL MONETARY FUND) strongly supported Mr Jussiant's suggestion stating that the Fund had raised this question at the First Session and there it had been deferred because at that time there was no precedent in the Charter. However, now a precedent did exist in paragraph (2) of Article 27. Mr. SMITH(CANADA) said that he would accept Mr.Jussiant's suggestion if the point of jurisprudence which he had raised could be satisfied by redrafting. Mr. PHILLIPS(AUSTRALIA)said that this question had been specifically discussed at the First Session and it had been definitely decided then not to give the Organization any initiative. Mr. ALVAREZ (CHILE) expressed preference for the text produced at the First Session. Mr. SHACKLE(UNITED KINGDOM)said that he did not see any danger in not providing that initiative should rest with the Organization because if any substantial damage were being done, Member would be certain to complain /After Mr. BAYER. E/PC/T/C.6/20 Pege 4 After Mr. BAYER (CZECHOSLOVAKIA)had said that he preferred the text produced at the First Session, Mr., Jussiant said that he would not argue the point further but would present an alternative draft. Mr. LUXFORD (INTERNATIONAL BANK) agreed with Mr. Hexner and Mr . Phillips that the question had been discussed at the First Session and he stated that considerable interest had been taken in it at that time. This interest had been taken because the application of quantitative restrictions had an effect extending beyond the boundaries of one country. It was the broad effects of quantitative restrictions upon world economy that the Organization would have 'in mind. Mr. LUXFORD also stated that it had been informalIy suggested at the meeting of the First Session in London that this question might be considered further at a later stage. Mr. WHITE(NEW ZEALAND) said that he would prefer no amendment to the text. Theo CHAIRMAN noted that Mr. JUSSIANT would present an alternative draft. In connection with sub-paragraph (d), Mr. LEDDY (UNITED STATES) suggested that the phrase, "under paragraphs (1).and (2)", be amended to, "under paragraphs (1), (2) and (4)". Several Delegates opposed this suggestion and Mr. Leddy remarked that if it was agreed that paragraph (4) was covered by sub-paragraph (d) without any specific mention of paragraph (4) being made in sub-paragraph (d ), he would not press his amendment. It was agreed that this interpretation was correct and that it would be noted in the Drafting Committee's Report. Mr. PHIILIPS (AUSTRALIA) suggested that words be added to sub-paragraph(d) to enable the Organization to attempt to bring about conciliation between Members before the stage of withdrawal or modification of restrictions was reached. Several other Delegates supported this suggestion and to give effect to it, it was agreed to insert- the following words after, "within the competence of the Fund', in sentence four: "and, if it considers desirable, after submitting observations to both parties. with the aim of achieving a satisfactory settlement of the matter indispute". /Mr. LEDDY E/PC/T/C.6/20 Page 5 Mr. LEDDY (UNITED STATES) drew the Committee's attention to the last phrase of sub-paragraph (d) and pointed out that it would be very difficult for the Organization to determine from what obligations a Member should be released. Mr. PHILLIPS (AUSTRALIA) suggested that to meets Mr. Leddy's point, the word, "specify" should be changed to "approve". This was agreed Mr. PHILLIPS(AUSTRALIA) suggested that to bring sub-paragraph (e) into line with sub-paragraph (d), the words, "general relaxation of restrictions" should be changed to "modification of restrictions". Mr. LEDDY (UNITED STATES) pointed out that the text as drafted at the First Session was much wider than the words which were suggested by Mr. PHILLIPS After some other Delegates had opposed any amendment in this respect, Mr. PHILLIPS agreed not to press his point. Mr. SHACKLE (UNITED KINGDOM) queried whether the United States suggestion to add the words, "imports required" to paragraph (4) was necessary. The Members of the Committee were evenly divided on the question and it was eventually agreed that the clause should be provisionally worded , "in giving effect to the restrictions on imports under this Article, a Member may select imports for restrictions on the grounds of essentiality in such a way as to give priority to imports required by its domestic employment, reconstruction, development or social policies and programmes", and that the words should be further considered by the Legal Drafting Sub-Committee. It was agreed that the last sentence of paragraph (5) should be redrafted to read as follows: "On the invitation of the Organization, Members shall participate in such discussions". It was agreed that the words in brackets at the end of paragraph (6) should provisionally remain in the text until the Legal Drafting Sub-Committee was able to decide whether they should be deleted in the light of the Drafting Commitee treatment of the provisions on State-trading. Paragraph (7) was adopted as drafted at the First Session /Mr. MA E/PC/T/C .6/20 Page 6 Mr. -MA (CHINA) asked whether the Committee should not give further consideration to the-period of two years mentioned in sub-paragraph (b) of paragraph'(3). Mr. -SMITH (CANADA) pointed out that the computation of this period was merely a question of administrative datail whilst Mr. LEDDY(UNITED STATES) replied that a period of two years was calculated to elapse on approximately the samedate as the transition period mentioned in the Articles of Agreement of the International Monetary Fund. Subject to the amendments mentioned above, the United States redraft of Article 26 was accepted provissionally. Discussion of Article 27 It was agreed that the phrase, "pursuant to this Section" in the second. line of paragraph (1) should be deleted and that the word, "Member" in the third and fourth lines of the same paragraph should be amended to, "Membercountry". Subject to these two amendments the United States redraft of paragraph (1) was tentatively accepted. In connection with paragraph(2), Mr. SHACKLE (UNITED KINGDOM) stated that he preferred the text as drafted at the First Session to the United States amendment, his principal reason being that the United States redraft implied at least some measure of approval for open quotas. In reply to Mr. SHACKLE ,Mr. LEDDY (UNITED STATES) said that the Report of the First Session established the following order of preference firstly, fixed. quotas, then, if these were not possible, import licenses, and in the event of import licenses not being available, quotas allocated among sources of supply. He considered that the text produced at the- First Session did not make this order of preference clear and that that text was contradictory in some respects. Messrs. LECUYER (FRANCE) and BAYER (CZECHOSLOVAKIA) favoured the text as drafted. at the First Session whilst Mr. ADARKAR (INDIA) supported the /United States E/PC/T/C.6/20 Page 7 United States redraft as removing the inconsistency which existed between sub-paragraphs (a) and (d). Mr. GUERRA (CUBA) agreed with Mr. Shackle's Interpretation of paragraph (2), but at the same time, he thought that some alteration in the text was needed. Wr. SHACKLE (UNITED KINGDOM)said that he thought some confusion arose out of the use of the term, "global quotas". He suggested that this term be avoided, throughout the paragraph. After Mr. MA (CHINA) had spoken in favour of the United States redraft, Mr. LEDDY- (UNITEDSTATES) suggested that an ad hoc sub-committee be appointed to further consider paragraph (2). The CHAIRMAN agreed with Mr. LEDDY'S suggestion and a sub-committee was set up consisting of the Delegates of the United. Kingdom, the United States, France and Cuba. The Sub-Committee on Tariff Procedures was also established and the Delegates of United Kingdom, United States, India, Czechoslovakia, Union of South Africa, New Zealand, Brazil, Lebanon, China, France and Norway were appointed as its members. It was agreed that the next meeting of the Drafting Committee should be held at 10:30 a.m. on 28 January 1947 and that the Legal Drafting Sub-Committee should also meet on that date at 2:45 p.m.

GATT Library

gt893yq4285

Summary Record of the Sixth Meeting : Held at the Capitol, Havana, Cuba, on 6 December 1947 at 10.30 a.m

United Nations Conference on Trade and Employment, December 7, 1947

Third Committee: Commercial Policy

07/12/1947

official documents

E/CONF.2/C.3/SR.6 and E/CONF.2/C.3/SR.1-16

https://exhibits.stanford.edu/gatt/catalog/gt893yq4285

gt893yq4285_90190219.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/C .3/SR.6 ON DU 7 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH THIRD COMMITTEE: COMMERCIAL POLICY SUMMARY RECORD OF THE SIXTH MEETING Held at the Capitol, Havana, Cuba, on 6 December 1947 at 10.30 a.m. Chairman: Mr. D. L. WILGRESS (Canada) CONTINUATION OF GENERAL DISCUSSION OF CHAPTER IV The CHAIRMAN stated since the first addition of the Annotated Agenda had been issued, additional amendments to Article 16 had been Submitted by Chile, Ecuador, Colombia and Italy. He said that these, and other amendments up would be taken up in the course of the discussion. Referring to the announcement made at the last meeting of the Committee that all proposals on Articles 15, 16 and 42, should be referred to a joint sub-committee of Committees II and III, he stated that the Chairman of Committee II was in favour of this proposal and would consult his Committee. These. proposals would, therefore, be referred mmto that joint sub-committee when discussion of these articles had been concluded. Mr. DOMOND (Haiti) considered the provisions of Article 16, paragraph 2, were opposed to the spirit of the Charter. Paragrap1 of Article 17 provided for the elimination of preferences which could, in certain circumstances, be justified, but which generally did not conform to the concept of equality in International Trade. Where a system of preference prevails between certain countries, their markets no longer offer opportunities trading on equal terms to countries outside tharfe preference. Haiti asked only that preferences given to Cuba, which constituted protection for young industries, be extended equally to all countries in the Caribbean area and proposed the following amendment of sub-paragraph (c): Article 16, paragraph 2 (c) "Preferences in force exclusively between the United States of America and which on the date of signature of the Charter. shall enter into force between the United States of America and other States of the Caribbean area or such preferences as the State of the Caribbean area may grant one another." Mr. AUGENTHALER (Czechoslovakia) drew attention to fact that about two-thirds of the countries represented at the Conference already have, or /etated their E/C ONF .2/C. 3/SR.6 Page 2 stated their intention to obtain the benefit of preferential regimes. He supported the amendment put forward by the representatives of Lebanon and Syria, adding that Czechoslovakia found herself in a similar situation. Mr. CHAVEZ (Peru) pointed out that, in his opinion, Cuba derived great advantages from the preferences given her by the United States; whilst he did not seek to deprive Cuba of these advantages, he wished to see them extended to his own country; there was resentment in Peru against these preferences, and the statement of the representative of the Dominican Republic has brought out the effects of such preferences and discriminations upon the economy of other countries. The length of time during which preferences had been in force did not Justify their maintenance. He could not support the amendment submitted by the delegate of Haiti which did not offer a solution for his country. He shared entirely the views of the representative of Czechoslovakia regarding the undesirability of preferential treatment, and said he was opposed. to the system as a whole; all such preferential treatment should be gradually eliminated and any which could be eliminated immediately should disappear. Mr. SEIDENFADEN (Denmark) stated that the Scandanavian countries had always been closely connected in their economic policies and that for the last twenty-five years a Scandanavian Preference Clause had been inserted into Trade Agreements with other countries, Customs unions referred to in Article 42 might not be feasible for some considerable time. If the text of Article 15 were certain to cover the Scandanavian countries, Denmark would agree to put the problem before the Organization. He wished to put on record the special interest of the Scandanavian countries in Article 16, paragraph 2. Mr. GUERRA (Cuba) pointed out that the statements made by the representatives of Peru and. the Dominican Republic tended to create the impression that the preferential treatment in force between Cuba and the United States was directly responsible for the undeveloped and backward conditions prevailing in those countries. He did not consider that the relations between Cuba and the United States injured the economies of either the Dominican Republic or Peru, and an historical analysis would prove that contention to be unfounded. The sugar industry of Cuba had. not been developed by the preferences with the United States markets, although a high proportion of the output did go to the United States by reason of their geographical proximity and economic relationship. He drew comparisons between the growth of the sugar trade in Cuba and /in the E/CONF.2/C .3/SR.6 Page 3 in the Doninican Ropublic and Peru during the last hundred years. Cuba had an annual output of half a million tons before the existence of a.- sugar industry in either of these countries. The development of this industry in Peru was even more recent than in-the Dominican Republic, and he failed to see how the relations existing between Cuba and the United States were responsible. The inaccurecies contained in the proposal put forward by the representative for Peru were in contradiction to the spirit of the Latin American countries, which should be one of common interest. It should not be jeopardized by untrue interpretations of various economic factors. Accordingly, in Geneva, Cuba had supported the proposals made by the representative of Chile in connection with Article l6. The Conference was concerned with general principles. There were other, preferential arrangements for whose deletion an agreed case could be made. The Conference could not produce a positive result, if any given country were guided merely by its own specific interests. Mr. MULLER (Chile) reviewed the various amendments to Articles 15 and 16 and. stated that his delegation would advocate general provisions for preferential arrangements on a regional basis rather than the specific provisions of paragraph 2, Article 16, for the reason-that, ' within the purposes of the Charter, provision should be made for all, and the present preferential arrangements, including those of his own country were too limited to attain the expansion of trade envisioned by the Charter. It was possible to use the same arguments for establishing preferences for-economic regions as for customs unions. But, in certain cases, custom unions might destroy, similar 'forms of production, -whereas regional. economic arrangements could. develop complementary industries mutually -beneficial to the countries involved. Such arrangements would allow a group of countries to use their hard currency to procure other necessities not available within their area. When this principle of economic regional preferences had been settled, draftings would be a simple matter. , - ' The CHAIRWJqted thadelegates who, hadspeak on asked to qpeak. o, thl:tion had been heard, the generaon Chapter 16 would hapter.16 w be lo~sed. -a -I' HlMA (Lebanon) read outamendment concerningdmert -coza er nal onmic;.reg so-:preferencesubitte d ghanistan, Egypt,unist^A.&; GLebanon, Syria, Transjordan and Turkey. (SeeStttttan; -Ira document E/CQW . 2/C .3/1/Add. 28) /Mr. ROM Page 4 Mr. ROYER (France) did not think the matter of preferences was simply a question of tolerating mutual sins. The purpose of the Charter was laid down in the unconiditional most-favoured nations clause; exceptions had been included since rgid and automatic application of that clause. had previously led to failure. His delegation had submitted an amendment to Article 1, paragraph, designed to liberate trade in economic regions, areas greater than political region. The development of large, integrated markets would be a positive contribution to international trade; therefore, exceptions designed to that end should be received with more sympathy than was evince, in paragraph 1, Article 16. The de facto situation of existing preferences must be recognized. As to future preferential arrangements for economic regions, France in principle favoured. regional organization but with the prior approval of the Organization, as a means of protecting third parties. He proposed a new Sub-paragraph (e) to be added to paragraph 2 of Article 16: ''(e). preferences resulting from exceptions to Chapter IV, granted by the Organization under Article 15 or Article 42." and to alter the text of paragraph 2 as follows: "----under paragraph 2, sub-paragraphs a - d of the present Article". Mr. Boyer agreed with the remarks of the representative of Denmark concerning customs unions; and noted that Articles 15 and 42 could not be separated when preferential arrangements in general were being considered. Mr. ADARKAR (India) supported the amendment for regional preferences proposed by the delegations of the Middle-Eastern countries. The merits of the preferential arrangements set forth in paragraph 2, Article 16 siould not be confused with the requests for regional preferences designed for economic development. The smaller countries would be frustrated in their plans for economic development without some protective preferences, and, tariffs did not meet that-need. . India's commercial policy had always been based on unconditional most-favoured-nations treatment; but his country was able to support these regional preferences asked for since they did not violate the;- principle of equality of treatment. The countries involved were in the same stage ,of economic development, . On the ot..er hand, some of the preference set forth in paragraph 2 were discriminatory, since they involved relationships between highly. developed and under-developed countries. It had appeared *in Londow-and Geneva that tho-principle of regional preferences had been agreed upon and that the only difficulty was procedure; .that question /should be dealt E/CONF.2/C .3/SR. 6 Page 5 should be dealt with by a sub-committee. The question of the reduction or elimination of preferences set forth in paragraph 2 should not be dealt with on the same level as the question of regional preferences for economic development. Mr. ZORIU (Turkey) atatctd that his delegation would withdraw its amendment if the amendment submitted this day by the countries of the Middle East was accepted. Mr, ###### (Syria) did not question the principle of preferences or ask the majority countries to give them up, but he did ask that the minority be given some hope or at least the appearance of equality, some safeguard to develop slowly within the framowork of the Organization. He could not agree with the delegate for France on the question of prior approval. Mr. LLORENTE (Philippines) stated that no country's economy should be based on an unstable product, dependent entirely upon the will of the consumer. The Draft Charter seemed. to tend toward equality and mutual understanding for the benefit of all, but it must always be kept in mind that the foundation was the principle of equality and co-operation; not pimply parliamentary rules. His country believed that political and economic independence should be simultaneous, but had been realistic enough, without sacrificing honour, to accept certain economic dicta in order to have their political independence recognized. He subscribed to the views of the representative of Chile that a lasting plan be evolved; a permanent Ogarization must not permit special privileges; it must be designed for the welfare of the whole, and each nation must be prepared to #### sacrifices for that principle. The CEATRMAN state thate general discuussion in article 16 would be concluded at the next meeting: Monday, 8 December 1947, 4 p.m. The meeting rose at 1 p.m.

GATT Library

wm890ny0794

Summary Record of the Sixth Meeting : Held at the Capitol, Havana, Cuba, on Thursday, 11. December 1947 at 4.00 p.m

United Nations Conference on Trade and Employment, December 13, 1947

Second Committee: Economic Development

13/12/1947

official documents

E/CONF.2/C.2/SR.6 and E/CONF.2/C.2/SR.1-17

https://exhibits.stanford.edu/gatt/catalog/wm890ny0794

wm890ny0794_90180440.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/C. 2/SR.6 ON DU 13 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH SECOND COMMITTEE:ECONOMIC DEVELOPMENT SUMMARY RECORD OF THE SIXTH MEETING Held at the Capitol, Havana, Cuba, on Thursday, 11. December 1947 at 4.00 p.m. Chairman: Mr. BETETA (Mexico) REPORT OF THE CHAIRMEN OF THE SECOND SIXTH COMMITTEES CONCERNING THE TERMS OF REFERENCE AND MEMBERSHIP OF THE JOINT SUB-COMMITTEE(document E/CONF. 2/C .2/8). Mr. OLDINI (Chile) felt that, in order to give the Mexican proposal all the attention it deserved, the scope of the Joint Committee would have to be widened. This would, however, put an undue burden upon it and he proposed therefore that its work be divided into two parts; one part, namely. Articles 9, 10 and 11 to be dealt with by a Sub-Committee of Committee II only, and the second part concerning the Mexican proposal for the establishment of an Economic Development Committee to be dealt with by a Joint Sub-Committee. The representatives of CHINA, AUSTRALIA and NORWAY supported the proposal of the Chairman and the terms of reference and membership of the Joint Sub-Committee of Committees II and VI were approved. REPORT-OF THE SUB-COMMITTEE ON ARTICLE 8 (document E/CONF.2/C.2/A/l). Mr. SHACKLE (United Kingdom) explained that the Sub-Committee had considered four alternative drafts of Article 8 in order to avoid the term "common interest" to which the Chinese delegate had objected previously. The Sub-Committee, he stated, suggested alternative (a) subject to the decision of the Chinese delegation as to whether it desired to have included a reference to "common concern". Mr. LIEU (China) stated that the text of alternative (a) was acceptable to his delegation on condition that the word "common" be deleted. Mr. NASH (New Zealand) emphasized the necessity for stating clearly the common interest that all countries had in the world's human and material resources.For that reason he preferred the original wording of Article 8. Mr. ENTEZAM (Iran) stated that from his country's point of view it was imperative to make it clear in the text of Article 8 that "common interest" could not be used as a justification for interference in the /internal E/CONF.2/C. 2/SR. 6 Page 2 internal affairs of a sovereign State. He was therefore opposed to the wording of the Article as presented in the Draft Charter. Mr. OLDINI(Chile) remarked that the text should express the obligation of all Member States to utilize the world's resources for the welfare of all nations. Mr. BRIGNOLI (Argentina) suggested consequently the following draft: "The Members recognize that the productive use of the world's human and material resources, and the industrial and general development of all countries, and particularly of those in which resources are as yet relatively undeveloped, will improve opportunities for employment, enhance the productivity of labour, increase the demand for goods and services, contribute to economic balance, expand international trade and raise levels of real income." After a discussion in which tLe representatives of CHINA, AFGHANISTAN, and the PHILIPPINES participated, the CHAIRMAN stated that be found general agreement in the Committee that the wording of Article 8 should be such that it could in no way be interpreted in the name of "common interest" to involve property rights of one country in another country. Mr. COOMBS (Australia) stated that the merit of drafts considered by the Sub-Committee was, that. none of them could be interpreted imply. property rights of countries in other countries resources. However, in the light of the foregoing discussion, he proposed that the Sub-Committee should prepare a further draft of Article 8. This suggestion was supported by ENTEZAM (Iran). Mr. ZORLU (Turkey) suggested in addition, that Sthe Sub-Committee should consider. the insertion of some phrase similar to that contained in Article 12 where it was stated that foreign investment was not to be used as a basis for interference in the internal affairs of Member countries Mr. SHACKLE (Unted Kingdom) put forward the following draft in order to avoid having to refer the question back to the Sub-Committee: "The Members recognize that the productive use of the worlds human and material resources will benefit all countries, and is of concern to thlm all and that the industrial and general economic development........" After further discussion, it was decided to -refer the matter back to the Sub-Committee and at tne suggestion of the Chairman to enlarge the membership by. the addition of New Zealand, Iran and Argentina. ARTICLE 9 With the coVsent of Mr. MAHADEVA (Ceylon) the amendment proposed by Ceylon to delete the word "progressively" which had been discussed at the /fifth meeting E/CONF.2/C.2./SR. 6 Page 3 fifth meeting was referred to the Joint Sub-Committee of Committees II and VI. With reference to the amendment submitted by Mexico to delete the words "through measures consistent with the other provisions of this Charter", Mr. NOVOA (Mexico) stated that in his opinion the words proposed to be deleted were unnecessary. Mr. COBMS (Australia) said that he would like to have a legal opinion as to whether the words proposed to be deleted were redundant or whether the deletion of the words would mean that Governments would be authorized to take action inconsistent with other provisions of the Charter. He also enquired whether there would be any change in meaning if the words "measures consistent with" were changed to measures not inconsistent with". The Mexican amendment was referred to the Joint Sub-Committee of Committees II and VI. Article 9 was then approved with the exception of the two amendments to be referred to the Joint Sub-Committee. ARTICLE 10 The amendments submitted by Burms to substitute the word "development" for the word "plans" in the seventh line of paragraph 2 and by Pakistan to add the words "capital goods, equipment and materials" to the end of paragraph 2 were referred to the Joint Sub-Committee. The CHAIRMAN stated that the Turkish addition to paragraph 2 E/CONF. 2/C.2/9, page 3) regarding recommendations to the International Bank for Reconstruction and Development had been partially discussed, but that in view of the fact that there was a similar amendment to Article 11 Proposed by China and that he had received a telegram from the Bank which would be distributed as a document he proposed that consideration be postponed. Mr. ZORLU (Turkey) agreed and explained that the purpose of the amendment was to fill a gap which he felt existed in the Charter. He requested that the Turkish amendment be interpreted in the light of Article 4 of the agreement between the Bank and the United Nations and of the need for co-operation between the ITO and the Bank. With regard to the additional paragraphs 3 and 4(E/CONF. 2/C.2/9, page 4) proposed. by Mexico the Chairman stated that paragraph 4 regarding the proposed Economic Developmemt Committee would be referred to the Joint Sub-Committee. Mr. COOMBS (Australia) agreed and stated that his delegation regarded the development of undeveloped countries as the basis of the success of the ITO and had come to the conclusion that no prejudgment as to how this object could be achieved should be made. The task of writting a Charter /should not E/CONF. 2/C .2/SR. 6 Page 4 should not be confused with working instructions to the Organization. The internal structure of the ITO should be kept as flexible ap possible and that the firet session of ITO Conference should formulate the working instruction. The ITO would not do its best work thrmugh part time committees. A small and expert full time staff would be referable. The Organization should not tie its own hands by formulating too rigid a Charmmr. The Committee should not commit itself too deeply now because of the requirements of a two thirds majority for any alteration in the Charter. With regard to the additional paragraph 3 proposed by Mexico, Mr. NOVOA (Mexico) stated that domestic savings should be used in productive activities before countries turned to other countries for help. Mr. de VRIES (Netherlands) stated that Article 9 covered the omestopment of domestic resources and thought the amendment should be considered under Article 9. Mr. NOVOA (Mexico) thought that the proposed paragraph 3 should remain in Article 10. The amendment was referred to the Joint Sub-Committee and at the suggestion of Mr.RUBIN (United States) the Joint Sub-Committee was asked to consider whether the amendment should fall urder Article 9, or Article 10. With regara to Article paragraph 1, Mr. MATSCH (Austria) asked hether it would be possible for a country weich was not a Member of the United Natlons to co-operate with the Economic and Social Council. The CHAIRMAN stated that the matter would be referred to the Joint Sub-Committee. Article 10 was approved with the exception of the matters. referred to the Joint Sub-Committee. PROPOSED NEW ARTICLE 12A The CHAIRMAN suggested that in view of the close connection the new. Article 12A proposed by Colombia (E/CONF.2/C.2/9, pages 25-27) should be taken up in conjunction with Article 10. Mr. ARAUJO (Colombia) said that careful co sideration given to the placd e of this proposed Article but that he had no objection to a first reading at this point. He stated that sub-paragraph (a) of the first paragraph was designed for the establishment of technical institutions to study the nat ral resources of countries and formulate plans for the adequate use of these resources. Today there was no organization to fulfil this task. The underdeveloped countries lacked technical workers and expert advice and had not the economic resourceseto carry out, the task. As a consequence they were forced to make contracts with international /business E/CONF. 2/C. 2/SR. 6 Page 5 business firms. Colombia had had unhappy experiences with foreign firms, who had not displayed good-will to the country and looked forward to the day when technical studies would be carried out by an international organization. With regard to paragraph (b) of the proposed new Article he stated that Colombia felt that no private investment should be made without express authority from the country in which such investment was to be made. Investments made in countries should not be subject to taxation in the country of origin of the investment. Double taxation should be eliminated. With reference to paragraph 2 it should be noted that there were already institutions established by the United Nations and by the United States of America for loans for monetary stabilization and economic development but these were not enough. There was new no adequate or normal flow of investment. Measures taken by the Bank and the Fund could not fill the gap. Aid and assistance between Governments was necessary. In connection with paragraph (3) the Organization in using its powers should consider whether the countries concerned had not received help from. other countries,-when help was needed. A country which violated the Charter in a moment of crisis could not be condemned if it had been unable to get help. The CHAIRMAN announced that he had been called back to Mexico by his Government and would be absent for a few weeks. In his absence Mr. Abello (Philippines), the Vice-Chairman, would preside. The meeting rose at 7.25 p.m.

GATT Library

ds252jf0830

Summary Record of the Sixth Meeting : Held at the Capitol, Havana, Cube, Monday, 8 December 1947, at 10.00 a.m

United Nations Conference on Trade and Employment, December 8, 1947

First Committee: Employment and Economic Activity

08/12/1947

official documents

E/CONF.2/C.1/SR.6, E/CONF.2/C.1/C/1-4, and C.1/SR.1-13

https://exhibits.stanford.edu/gatt/catalog/ds252jf0830

ds252jf0830_90180278.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/C.1/SR.6 ON DU 8 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL : ENGLISH FIRST COMMITTEE: EMPLOYMENT AND ECONOMIC ACTIVITY Held at the capitol, Havana, Cuba, Monday, 8 Decembr 1947 10.30 a.m. CONTINUATION OF DISCUSSION ARTICLE 4 AND SUBSEQUENT ARTICLE IN CHARTER II ON THE BASIS OF THE AMENDMENTS CONTAINED IN DOCUMENT E/CONF.2/C.1/3 WITH Article 4 - Fair Labour Standards (continuation of discussion). Mr. HOLLOWAY (Union of South Africa), referring to the amendment submitted by his delegation (document Y/CONF.2/C.1/3/Add.3), said that the reference in the Geneva text to "sub-standard" conditions of labour, implying that certain standard conditions of labour had been, or could be, laid down, was misleading. May matter such average rates of wages, hours of labour, holiday pay, health conditions in factories, mines etc., the minimum age for the employment of child labour, employment of women in mines, employment of woman before and after child-birth etc.might be involved in the term "conditions of labour". International standard covering all these aspects had ever been established although the International Labour Organization had been attempting to for ever a quarter of a century with some success. It would be rash for the ITO to venture into this field without experience comparable to that of the ILO and attempt to deal with such complex and ill defined concepts. Most countris represented at the Conference were also members of the ILO. The delegation of the Union of South Africa therefore suggested that all complaints received by the International Trade Organization under Article 4 should be transferred to the International Labour Organization. Mr. LIEVANO (Colombia) referring to the amendment to Article 4 submitted by his delegation (document E/C0NF.2/C.1/3/Add.5), said that it was urgent and necessary to establish a procedure by which any country which was suffering from the unfair competition of another country through sub-standard conditions of labour should be able to ask the ITO to investigate the matter /either directly E/CONF.2/C.1/SR. 6 Page 2 either directly or through the ILO. Such a matter should not, however, be submitted directly to the ILO. Mr. OTANEZ (Venezuela) supported the amendment submitted by the representative of Colombia. Mr. MERTINS (Brazil) agreed with the purpose of the amendments proposed by the delegations of Colombia and of Uruguay but could not support the amendment submitted by the representative of the Union of South Africa. Articles 89 and 90 of the Charter laid down the same procedure as that outlined in the amendment submitted by the delegation of Colombia. The delegation of Brazil would accordingly be prepared to have the text of Article 4 stand as at present drafted with possibly some minor drafting amendments. Mr. BURGUETE (Mexico) supported the amendment proposed by the representative of Colombia, and said that his delegation had raised a similar point in the proposed new Article. He also supported the proposal of the Uruguayan delegation. Referring to the remarks of the representative of Brazil, he said that if the procedure outlined in Articles 89. and 90 of the ITO Charter we followed, countries suffering from unfair competition might find themselves in a very difficult situation before any decision was taken in their case. Mr. BENDA (Czechoslovakia) said that although his delegation sympathized with the various suggestions put forward he felt that the term "employment" in this Chapter had been intended to refer to the volume of employment and to the resultant effective demand and not particularly to the social aspects of employment. He questioned the wisdom of including a prohibition against "involuntary" labour since in many countries the direction of labour had been found necessary to meet essential needs. The delegation of Czechoslovakia considered that it would not be wise to deviate from that course and therefore supported Article 4 as at prevent drafted, although it felt that the words "in production for export" might be omitted. Mr. HUMBERT (Switzerland) supported the proposals made to give primary responsibility in this field to the ILO inasmuch as he felt that the ITO should not infringe on the work of other international agencies. He mentioned the possibility of many interpretations of the present wording of the Article. Mr. SHACKLE (United Kingdom) agreed with the Czechoslovak delegation's statement and with observations of other Delegates concerning the difficulty of attaching precise meanings to the terms in Article 4. A refinement of /these terms E/CONF.2/C.1/SR.6 Page 3 those terms was not feasible at this stage beyond relating them to ''productivity" . He felt that the ILO would be capable of giving meaning to these terms and that it should assume the responsibility of so doing under this Article. Articles 89 and 90 provided a procedure for dealing with these matters so far as they relate to international trade. He hoped, with the representative of the Union of South Africa, that the countries listed by him would join the ILO as well as the ITO and thus simplify an appropriate division of functions between the two Organizations. He also agreed with the Czechoslovak representative's remarks regarding the danger of prohibiting the direction of labour by a general proscription since the United Kingdom was, at least for the time being, also force to adopt that measure and other countries might find themselves under the same necessity. Mr. FER (Turkey) felt that fair labour standards should not be defined or dealt with in the Charter but should be left to international conventions under the ILO. Overlapping and duplication should be avoided. Articles 89 and 90, together with consultation with the ILO were sufficient to provide for all contingencies. Mr. ROYER (France) felt that the eolombian suggestion would not add much to the legal aspect of the text. He felt that it might weaken the Charter, even for the purposes desired by the representative of Colombia., by rendering inapplicable the sanctions provided for in Article 90 in a case of "social dumping".It was better to unify procedures throughout than establish different ones for different Articles. Mr. MORISSEAU-LEROY (Haiti) felt that insufficient emphasis had been given to non-discrimination against foreign workers. He wished to make it cloar, however, that his earlier remarks had in no way been directed against Article 73 of the constitutional provisions of Cuba, nor against similar provisions in other Constitutions. He urged that his delegation' s amendment to Article 4 regarding non-discrimination be adopted. Mr. LIEVANO (Colombia) was of the opinion that while the general raising of the standards of living and labour conditions in the world was within the competence of the ILO, those related to the low cost production' by exploited labour of article to be sold in international markets could be handled only by the ITO. In the event of such unfair competition a rapidly working and simple procedure should be available for redress. The proposal advanced by Uruguay was an improvement on the present text, but his delegation preferred to have the procedure itself embodied in the Charter. Mr. HAKIM (Lebanon) suggested that the, representative of the ILO /be asked E/CONF.2/C.1/SR.6 Page 4 be asked whether it was competent to undertake investigations of unfair labour conditions. Even if ILO was competent to do that, however, the Organization might wish to retain the right to pass judgment on standards of labour.He agreed with the statements made by other representatives that the Charter could not atempt to regulate labour conditions throughout the world, and declared his support for the original draft. Mr. HOLLOWAY (South Africa) stated that, no attempt had been made in the discussion to define the word. "sub-standard" and that it would be very impractical to have two international organizations working on the same issue. The CHAIRMAN announced that a sub-committee would be create to examine Article 4 in greater detail, together with the Mexican new Article and all other consequential amendments. He also announced the formation of a second sub-committe to study the other Articles of Chapter II (except Article 4). (See E/CONF. .2/C.1/8 and addendom 1). Mr. ROYER (France) regretted that in view of the far-reaching implications of colonial labour problems no major metropolitian power was included in the membership fom the first sub-committee, and proposed the inclusion of the Netherlands delegation. The CHAIRMAN answered by calling stantion to the limitation of membership imposed by the general rules, but promised to look into the matter. Article 5. - Removal of maladjustments within the Balance of Payments. Mr. BERTRAM (Denmark) felt, with reference to paragraph 1, that the obligations of the Organization to take the initiative in cases of malad justment within the balance of payments were too narrowly drawn in the Charter. Since in the event of such an occurrence there would be more than one country involved, it would be difficult for the aggrieved country to raise the question of sanctions embodied in Article 89 and 90, and it would have to rely on the Organization taking such action. Mr. MONGE (Peru), in explaining the amendment offered by his delegation as paragraph 2 (E/CONF.2/C.1/3, page 5), emphasized the need for the Organization to have the powers to judge conditions whenever the balance of payments was maladjusted and assist in such cases in the disposal of surpluses at satisfactory prices. Those powers would be specifically authorized in his new paragraph. While the Mexican amendment to create a permanent economic committee was a step in the right direction the Peruvian proposal would be a guide of conduct for the whole /Organization E/CONF.2/C.1/SR.6 Page 5 Organization in this sort of situation. Mr. SEACKLE (United Kingdom) observed that Article 6, paragraph 2, and Article 5, paragraph 2 of the Charter already provided for this contingency, as did also Article 21, paragraph 5. It was in his view, unnecessary to add to those provisions. Mr. ROYER (FRANCE) asked for a further explanation of the Peruvian amendment. Mr. MONGE (Peru) referred to the destruction of oranges, the burning of coffee and wheat in his explanation of what he had in mind. Unsaleable surpluses should be put on the world market through some machinery to be evolved by this Organization. This was an extremely important problem, closely related to the lack of talance of payments, yet was not covered anywhere in the Charter. While Article 5 and Article 6, paragraph 2, recognized the lack of balance of payments, the affected countries themselves would be unable to seek redress unless the Organization itself had the power to re-establish the equilibrium of the balance of payments. Mr. ROYER (France) felt that the suggestion by the representative of Peru should more properly be included in the discussion of inter-governmental agreements (Chapter VI) rather than in Article 5. The Meeting rose at 1.00 p.m.

GATT Library

sq917hs8815

Summary Record of the Sixth Meeting Sub-Committee on Administration : Held at Lake Success on 3 February 1947 at 2:45 p.m

United Nations Economic and Social Council, February 3, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

03/02/1947

official documents

E/PC/T/C.6/39 and E/PC/T/C.6/37-55

https://exhibits.stanford.edu/gatt/catalog/sq917hs8815

sq917hs8815_90230088.xml

GATT_156

United Nations Nationsi Unies RESTRICTED ECONOMIC CONSEIL E/PC/T/C.6/39 AND ECONOMIQUE 3 February 1947 SOCAL COUNCIL ET SOCIAL ORGINAL: ENGLISH DRAFTING COMMITTEE OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT SUMARY RECORD OF THE SIXTH MEETING SUB-COMMITTEE ON ADMINISTRATION Held. at Lake Success on 3 February 1947 at 2:45 p.m. Chairman: Dr. Guillerme ALAMILLA 1. Corrections The Delegate of Brazil pointed out that the Secretariat paper containing a statistical elaboration of a Brazilian proposal was extitled "Formula for Weighted Voting Proposed by the Brazilian Delegation". In view of Brazil's attitude of "one vote - one country, be requested the record to show that this is a formula for rating economic importance with reference to Membership in the Executive Board and not a formula on weighted voting. The Brazilian Delegate also wished the record to show that in E/PC/T/C.6/31, second page, last three lines, the Brazilian motion referred to the elimination of the words "and for the reduction of tariffs and other trade barriers and the elimination of all forms of discriminatory treatment in international commercee", and Chile had supported that motion. 2. Papers Submitted (a) Table of the Statistical Division of the United Nations Secretariat and Corrigendum to this table; compiled on the request of the Administrative Sub-Committee In its fourth meeting; (b) Secretariat paper dated 2 February 1947 and entitled "Formula for Weighted Voting", although the correct title should be "Formula for Rating Economic Importance". /3. The Committee E/PC/T/C.6/39 Page 2 3. The Committee examined the statistical table submitted by the Secretariat, came to the conclusion that ons point per fifty dollars of foreign trade per capita was an inadequate measure of weighting the formlula and decided to use one vote per twenty-five dollars of foreign trade per capita. The Chairman requested the Secretariat to have a recomputation made on this basis. Upon the suggestion of the Chairman, the Sub -Committee decided to formulate two compromise drafts of Article 68, one upon the basis of the third Secretariat draft of Article 68, to be used as a formulation using the principle of two categories of Members of the Executive Board, and one entirely new formulation on the basis of thee categories of Executive Board Membership. In formulating these drafts, it was understood by all Delegates that these drafts were to be reported out merely as satisfactory formulations on the basis of the principle used, but would not involve any endorsement on the part of any Member of the Sub-Committee on behalf of his country. All reservations, made previously or in this meeting of the Sub-Committee are understood. to be fully sustained. With this understanding, the Sub-Comittee approved the two alternatives of Article 68 as contained in the working papers of the Sub-Committee, dated 3 February 1947 and entitled "Alternate Article on Composition of Executive Board Based Upon Divided Seats into Two (respectively, Three) Categories" The Untted Kingdom wished the record to show that the United Kingdom sustains a reservation against the factors:used in computing the formula for rating economic importance, as used in the Secretariat table as well as on the clause 'excluding the [ 6] [9] Members mentioned above" in paragraph 1 of the third Secretariat draft of Article 68. The Belgian Delegate wished the record to show that Belgium opposed the rating formula used in the Secretariat table on the rating of economic /importance, E/PC/T/C.6/39 Page 3 importance, if this formula was to be used for Executive Board Membership on the basis of two categories of Members. Belgium is of the option that the inclusion of national income and trade per capita constitute undue weighted factors in this formla. For this reason, he asked leave to postpone a final decision on the new draft based upon divided seats into two categories until the next meeting of the Sub-Committee. The decision to use figures for 1937 in paragraph 3 of the "Rederaft based upon divied seats into two categores", was taken by the Comittee in view of the fact that certain countries, such as Czachoslovakia, who were dismembered prior to 1938 or in the course of 1938 would otherwise be unjustly discriminated against. The United States proposed and the Sub-Committee approved unanimously to transfer Article 2 to Chapter VI11, thus eliminating the whole of Chapter II. In a preliminary discussion of Section E of Chapter VIII, the Delegate of Canada requested clarification from the United States Delegate on several points relating to Article 73. The United States Delegate explained that membership of commissions might be in some cases permanent, in others, temporary; this might very according to the nature of the comission. Members of the commissions will not be staff members of the Organization under the Director-General; they will be independeent experts, not representatives of their governments, but their governments will be consulted prior to their appointment. The commissions will present their reports directly to the Executive Board. The meeting was adjourned to 4 February 1947 at 2:45 p.m. . .~~~~~~~~~~~~~~~~~~~~7

GATT Library

xm930sd6646

Summary Record of the Sixth Plenary Meeting : Held at the Capitol, Havana, Cuba on Friday, 28 November 1947 at 4.00 p.m

United Nations Conference on Trade and Employment, November 28, 1947

28/11/1947

official documents

E/CONF.2/SR.6 and E/CONF.2/SR.1-21

https://exhibits.stanford.edu/gatt/catalog/xm930sd6646

xm930sd6646_90180132.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/SR.6 ON DU 28 November 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH SUMMARY RECORD OF THE SIXTH PLENARY MEETING Held at the Capitol, Havana, Cuba on Friday, 28 November 1947 at 4.00 p.m. President: Mr. Sergio I. CLARK (Cuba) 1. RULING ON POINT OF ORDER The PRESIDENT, referring to the point of order raised at the previous plenary meeting by the representative of the Netherlands, ruled (1) that as the present Conference was of an economic and technical nature, representatives should refrain from making statements of a political character; (2) no representative should attack another country. He requested the representative of the Indonesian Republic to withdraw certain parts of his speech, made at the fifth plenary meeting, which infringed the foregoing ruling. Mr. GANI (Indonesian Republic) accepted the President's ruling, stating that he would consult with the President on the parts to be withdrawn. Dr. SPEEKENBRINK (Netherlands) said that when replying to the speech made by the representative of the Indonesian Republic, he would confine himself to that part which had not been withdrawn. He was willing to submit his own speech to the President before he delivered it. 2. GENERAL DISCUSSION (Continued) Mr. HAIDER (Iraq) speaking also on behalf of the Government of the Kingdom of Transjordan, said that although Iraq and Transjordan had not participated in the drafting of the ITO Charter, they were in complete agreement with the purposes of the Organization and with many of the principles laid down for the regulation of international trade. He emphasized that the Conference should aim at the maximum degree of elasticity, and should ensure that stability did not counteract expansion, which should be so balanced that there would be the fullest development in all parts of the world. Underdeveloped countries should be helped during the transitional. period to carry out their obligations and to develop their resources until such time as they could carry out all the obligations of the Charter. /He pointed E/CONF. 2/SR.6 Page 2 He pointed out that since the opening of the Suez Canal great Progress had been made in his country. However, Iraq had been hampered by lack of capital, experience and skill, and the recent war had halted irrigation schemes and other construction projects. Certain restrictions had had to be placed on the importation of goods from hard currency areas. Iraq and Trans Jordan were members of the Arab League and were bound by the decisions of that League to strengthen economic ties among Arab countries. By the Treaty of Lausanne preferential treatment was given to those countries which had been part of the Ottoman Empire,: and Iraq had been one of those countries. He noted that the Charter did not exclude preferential treatment, but he felt that the interests of all would be better served if. they reserved the right freely to practice preference in order to foster the development of that part of the world to which they belonged. Until recently Iraq had never refused entry to goods on grounds of origin or prohibited the sale of goods on grounds of destination, nor had she prevented the passage of goods on either of those two grounds. However, such decision had been imposed on her in conformity with a decision of- the Arab League which had been taken before the drafting of the proposals which led to the Charter of the ITO. He was confident that there would be safeguards in the Charter to protect Iraq's vital Interests in that respect. (For fuller text see Press Release ITO/52). Dr. HAKIM (Lebanon) stressed the need for a system of economic co-operation and said the ITO represented an attempt to create such a - system) although the draft Charter, which had been prepared with the greatest care, did not give complete satisfaction to all nations. It had been subject to many reservations by the members of the Preparatory Committee. He emphasized that Lebanon was .a trading country and needed to be- developed in order that a higher standard of living might be provided for its people. The reduction of trade barriers would contribute to the development of underdeveloped countries such as the Lebanon. Fully developed countries should help in every possible way, as the development of production in backward countries was necessary for the maintenance of a high levelof economic activity in advanced countries. If the economic system was not to break down accumulation of capital should haveual outlet, and that outlet was to be found in the underdeveloped countries. That fact should be realized by highly-industrialized countries. Lebanon was a member of the Arab League and as such had to be guided by a policy of economic co-operation with other Arab countries, and had first /to consider E/CONF. 2/SR. 6 Page 3 to consider the common interest of those countries. That interest did not conflict with the trading countries of the world, but should there be any conflict in economic policies Lebanon wished to make sure that the interests of the region to which it belonged was safeguarded. Regional economic co-operation among small nations was the proper basis for world-wide economic co-operation. (For fuller text see Press Release ITO/67). Mr. PHILIP (France) stated that the work of the present Conference was definitive and should be accomplished in a spirit of compromise in order to achieve a, generally acceptable Charter. Texts which were found inacceptable by several delegations should not be adopted merely by majority votes. He hoped that those countries which-had not participated in the work would eventually adhere to the Charter since world unity must not be disrupted. Formulae should be sought aiming towards an increase in production and trade and a raising of the standard of living in all countries. A certain number of nations had shown their true desire to make the Charter effective by signing the General Agreement on Tariffs and Trade In application of Article 17 of the Charter. What was wanted was co-operation to avoid a repetition of past international depressions and economiC chaos 'the result of untramelled economic chauvinism, with resulting trade barriers and discrimination. The ultimate aim of the Conference was to define the purpose in view, namely, the development of international commerce by the gradual suppression of restrictions and discrimination. It was essential to organize exchanged on a sound basis so that every nation could benefit from the division of labour and specialized production best suited to each. The problem of Europe was one of economic harmonization; reconstruction would take longer than anticipated. Concerted international action was essential to prevent future economic crises. Economic equilibrium could only be achieved by an expanding world economy; each country must be prepared to relinquish a portion of its sovereignty for the common good. (For fuller text see Press Release ITO/73). Mr. VANER (Turkey) said his Government had followed with great Interest the preparatory work which had resulted in the draft Charter. That draft could be criticized,-but his delegation considered that it was a compromise between the ideal which all wished to achieve and the numerous restrictions and economic barriers in force at the present time, and which it was hoped would be removed at a not too distant date. The well-being of every nation depended on the prosperity of all. /His Government E/CONF.2/SR.6 Page 4 His Government was anxious to see the Charter become effective and would do its utmost to achieve the aims laid down in it. Turkey had. already initiated a trade policy based on general and multilateraI equilibrium There were two courses open to nations at the present time - on the one hand they could protect themselves by restricting imports, subsidizing exports and entering into bilateral agreements. That course could result in the lowest possible balance of. bilateral payments and would reduce the, standard of living even in the most powerful countries, On the other and, nations could accept the spirit of the Charter and thus ensure the greatest possible exchange of trade and increased production. (For fuller text see Press Release ITO/50) The Rt, Hon. Walter NASH (New Zealand) thought that there was general agreement as to the desirability of the objectives outlined in Chapter I of the Charter. In the relatively undeveloped countries and also within the larger countries, which were usually considered to have reached a high level of development, there were too many people whose standards of living were intolatably low. The world could not indefinitely tolerate the disequilibrium in distribution of goods which had characterized international economy in the past, It was essential to increase production, promote international exchange and ensure effective demand in all countries. A policy of import selection or quantitative regulations together with control of exchange had enabled New Zealand to develop her resources. New Zealand desired to continue their bulk sale system and also that of guaranteeing a price that would cover costs to producers of meat and dairy products. His Government believed that domestic planning and deliberate government direction and guiding of production and distribution would bring better results than the free play of market forces, His deletion believed that the objectives of the Organization could best be realized by each nation: (1) consciously developing the human and material resources of its, territory with the object of maximum production of goods and services in current need; (2) exporting all goods surplus to current requirements; (3) importing to the limit of its export reali ations after debt and other external commitments had been met; and (4) negotiating with other nations with a view tto promoting.that development of international industrial specialization which, while. enabling each nation to make the maximum contribution to world production and, living endards, preserved its own living standards. Those objectives required the assistance of the advanced nations In the Supply of credit and the provision of the necessary equipment to /underdeveloped E/CONF. 2/SR. 6 Page 5 underdeveloped countries. The New Zealand delegation hoped that a sensible system of production and distribution would be devised for the benefit of all nations. (For fuller text see Press Release ITO/68) Mr. GRUNDY (Peru) recalled that his Government had suggested at Bretton Woods that a world trade conference should be convened since the International Monetary Fund and the Bank for Reconstruction and Development were not sufficient to give the advice and assistance needed by so many countries, He paid tribute to the work of the Preparatory Committee and of the Inter-American Economic and Financial Committee in the preparation of the draft Charter. The draft Charter was a compromise between an ideal and a reality, but it had certain defects. Mr. Grundy referred to the four principal parts of the draft Charter, the greater part of which was concerned with economic problems and trade policies, although equal stress was not laid on both questions. Underdeveloped countries could not be placed on an equal footing with advanced countries. Agreements must be reached to give force to that principle, since otherwise the less developed countries could neither increase their resources nor improve their standard of living. Chapters II and III of the Charter required revision and implementation. The Government of Peru was in agreement with the principle contained in Chapters IV and V, namely that international trade should be organized an a multilateral basis. Peru was a nation of free trade but had suffered from the restrictive practices of other countries. His Government accepted the principles contained in each of the various sections of Chapter 1V, but folt that that the restrictive clauses should be carefully revised. Concrete proposals would be submitted in regard to Article 16. Mr. Grundy said that once the ITO had been constituted all countries having accepted the Charter should have the right to participate in the work of the Organization. The meeting rose at 6.15 p.m.

GATT Library

dd367ws4775

Summary record of the Tenth Meeting : Held at Havana on Wednesday, 31 December 1947 at 10.30 a.m

United Nations Conference on Trade and Employment, December 31, 1947

Fifth Committee: Inter-Governmental Commodity Agreements

31/12/1947

official documents

E/CONF.2/C.5/SR.10 and E/CONF. 2/C. 5/SR. 1-15

https://exhibits.stanford.edu/gatt/catalog/dd367ws4775

dd367ws4775_90200095.xml

GATT_156

UNRESTRICTED United Nations Nations Unies E/CONF.2/C.5/SR.10 31 December 1947 CONFERENCE CONFERENCE ORIGINAL: ENGLISH ON DU TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI FIFTH COMMITTEE: INTER-GOVERNMENTAL COMMODITY AGREEMENTS SUMMARY RECORD OF THE TENTH MEETING Held at Havana on Wednesday, 31 December 1947 at 10.30 a.m. Chairman: Mr. George HAKIM (Lebanon) CONTINUATION OF SECOND READING OF CHAPTER VI (document E/CONF.2/C.5/9) Article 54 - Objectives of Inter-governmental Commodity Agreements Mr. MUNOZ (Chile) said that his delegation withdrew its amendment to the Preamble in the light of the new text. The Preamble to Article 54 54 was agreed to without further comment. Paragraph (a) was agreed to without comment. Paragraph (b) Mr. FORTHOMME (Belgium), referring to the additional words recommended by the Sub-Committee: "including, as far as possible, in appropriate cases, the development of secondary industries based upon domestic production of primary commodities", asked for clarification of the full intent of the proposed additional sentence and for some explanation in regard to the actual. measures contemplated by the Sub-Committee. Re feared that these mesures might be of a restrictive character. Mr. CAPLAN (United Kingdom) explained that the objective of Article 54 was to provide a framework for measures of economic adjustment in the producing cc-untries; the amendment was merely an amplification of the existing concept of' "new and productive occupations". Mr. FORTHOMME (Belgium) felt that the suggested addition contributed nothing useful to the paragraph and was superfluous. He repeated his first question as to what specific measures were contemplated. Mr. IGONET (France) pointed out that the paragraph under discussion referred to those cases in which thero vas over-production of a given primary commodity. For the producing countries concerned the development of processing industries might be desirable in order to make their economies more flexible. /Mr. CAPLAN (United Kingdom) Page 2 E/CONF.2/C.5/SR.10 Mr. CAPLAN (United Kingdom) stressed that Article 54 was a statement of objectives, and the measures relevant to this particular objective were mentioned in Article 60 (d). It was for each of the participating countries to formulate and adopt programmes of internal economic adjustment. Mr. FORITHMME (Belgium) still felt doubt as to the measures contemplated by the Sub-Committee. He thought that the development of secondary industries based on domestic production of primary commodities might result in limitation of imports with harmful effects on processing industries in other coutries. Mr. CAPLAN (United Kingdom) replied that uniJateral action of such a character was covered by Chapter IV, and that if the action Were multilateral, it would come within a commodity agreement, in which all interested countries would be able to defend their interests. Protection was afforded in either case by the appropriate chapters of the Charter. Mr. LACARRA (Mexico) agreed with the remarks of the United Kingdom delegate. He thought that the amendment clarified the Geneva text. Mr. McCARTHY (Australia) felt that the sentence was unnecessary but would not oppose its retention. Mr. KENNEDY (United States) agreed with the Australian representative. He emphasized that the United States delegation did not consider that the sentence in question provided an escape clause from the provisions of Chapter IV. Mr. ALAMILLA (Cuba), supported by Mr. ZAFRA (Philippines), thought that the words "as far as possible" and "in appropriate cases" were sufficient indication that only in certain cases would the development of secondary industries offer a solution to particular commodity problems. Mr. JIMENEZ (EL Salvador) supported the maintenance of the sentence because it recognized the principle of economic development of underdeveloped countries producing primary commdities. Mr. OTANEZ (Venezuela) felt that the fears expressed were unfounded. A grave Injustice would result if no possibility were even afforded for the study of the development of secondary industries based upon domestic production. Under present conditions, primary producing countries had no protection against exorbitant prices being charged by the processing industries of other countries. Mr. HAUSWIRTH (Switzerland) endorsed the statements of the representatives of Belgium and Australia. The addition would merely create doubts in the industrialized countries since the exact scope of the amendment was not clear. /Mr. FORTHOMME (Belgium) E/CONF.2/C.5/SR.10 Page 3 Mr. FORTHOMME (Belgium) still maintained that it was not cIear what measures could be used to implement the concept in the produced addition. In reply to the Venezuelan representative he said that high prices for industrial exported were often due to middlemen. Mr. LACARRA (Mexico) did not see any danger of restrictive measures being taken in regard to processed commodities where a primary commodity was in a state of over-supply. Mr. ALAMILLA (Cuba) gave as a specific example the measures being taken to develop secondary industries based on sugar. By-products might usefully be included in a sugar agreement. The CHAIRMAN pointed out that the measures in question would have to be discussed at a commodity conference where all interested parties would be represented. Mr. PARGA (Colombia) stated that sub-paraaraph (b) would apply only in two situations: firstly, when consumption could not keep pace with increased production, and a surplus resulted; secondly, when consumption was reduced. Even then the measures in question would result from a commodity conference in which both producing and consuming, countries would be represented. Mr. REICHART (Argentina) favoured the amendment. Local processing would help to reduce costs to the consumer. Mr. PAIVA (Brazil ) supported the amendment. The aim of industrialization was to raise standards of living, and the growth of secondary industries would help to accomplish this. Mr. FORTHOMME (Belgium) thought that the discussion had been useful. In the light of the statements by the delegates of Cuba, Colombia and Mexico he would not press his opposition to the sentence. Sub-paragraph (b), as recommended by the Sub-Committee, was then approved. Sub-paragraph ( c)- It was agreed to discuss separately (a) a proposal of the Philippines delegation regarding the phrase "fair to consumers and remunerative to efficient producers", and (b) a proposal of the delegation of El Salvador regarding the meaning of the term "remunerative prices." Mr. ZAFRA (Philippines) explained the objection of the Philippine delegation to retaining the word "efficient". If a sugar conference determined a price level based upon "efficient" production, with no reference to the devastation suffered by his country in the war, the Philippines programme of reconstruction of its sugar industry might be adversely affected. He felt it would limit the scope of a commodity conference if /the qualifying word E/CONF.2/C.5/SR.10 Page. 4 the qualifying word "efficient" were retained, and the objective of Articl-e 60 (c) might be defeated. The Philippines delegation had proposed the words "rair to producers and consumers alike" as a more flexible terminology for determine the proper price level for. a commodity. This terminology had been used by the Food and Agriculture Organization at the Copenhagen Conference. Mr. CAPLAN (United Kingdom) was prepared to accept the phrase "fair to producers and consumer alike". The only concept needed was one of justice. Mr. de VRIES (Netherlands) referred to an amendment to Article 60 (c) which had been submitted to the Sub-Committee by the Philippines delegation. This was consequential to Article 54 (c) and had not been mentioned in the Sub-Committee's Report. He thought it desirable to draw the Committee's attention to the matter. In the Sub-Committee's discussion it had been pointed out that protection was provided by the existing text. It had been agreed to record that the understandings of the Sub-Committee was that the conditions of "due regard being had to the need for preventing serious economic and social dislocation and to the position of producing areas suffering from abnormal disabilities;" would have equal force with the principle to which it applied, namely that "such agreements shall make appropriate provision to afford increasing opportunities for satisfying national consumption and world market requirements from sources from which such requirement can be supplled in the most effective and economic manner manner,...." Countries suffering from abnormal disabilities need have no fear that these would not be taken into account. Mr. ALAMILLA (Cuba) said that if the word "efficient" were deleted, the word "remunerative" must also be deleted. It would be better to retain both words. Mr. STEWARD (Uruguay) preferred a Belgian proposal substituting "producers working under normal conditions"for "efficient producers". In any case he wished to see the word "efficient" delete, Mr. COREA (Ceylon) questioned the connotation of the phrases "fair to consumer" and "remunerative to producers'" RH objected to retaining the word "efficient" as small producers might be classed as "inefficient", but they might also constitute the major proportion of poducers. He agreed that efficiency in production was desirable, but other factors, such as lack or capital equipment must be considered. Mr. JIMNEZ (El Salvador) pointed out that the word "efficient" implied a condemnation of inefficient producers. He supported its deletion, but realized that in that case the word "remunerative" would have to be qualified. This was the reason for his delegations amendment which sought /to establish an E/CONF.2/C.5/SR.10 Page 5 to establish an equitable relation between the prices of primary commodities and manufactured goods. He was more concerned with the principle than with how it was drafted. He withdrew his delegations original amendment and substituted the following, which had been submitted to the Sub-Committee: "The term 'remunerative prices' shall be understood to mean prices which, while enabling the maintenance of fair labour standards,- maintain an equitable relation with the prices which the producers of primary commodities have ta pay for manufactured production goods and general consumption goods," After discussion on whether the amendments before the meeting should be discussed together or separately, the CHAIRMAN suggested their consideration as follows: 1. The Philippines proposal to delete the word "efficient", 2. the United Kingdom suggestion to use the phrase "fair to producers and consumers alike", and 3. the amendment of El Salvador regarding the meaning of the term "remunerative prices." Mr. KUNTER (Turkey) reserved the position of his delegation pending a decision on the term "efficient." Mr. KENNEDY (United States) supported the existing text of Article 54 (c) which protected all interest. The term "remunerative" must be qualified" by the term "efficient". However, he could accept the United Kingdom proposal for the deletion of both words and the simplify ication of the sentence to read "fair to producers and consumers alike". Mr. McCARTHY (Australia), also felt that ifl the word "efficient" were dropped, the word "remunerative" must be dropped. His first choice was to retain the present text, his second choice to support the United Kingdom proposal. The meeting adjourned at 1.15 p.m.

GATT Library

cj150py6186

Summary Record of the Tenth Meeting : Held at Lake Success on 31 January 1947 at 10:30 a.m

United Nations Economic and Social Council, January 31, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

31/01/1947

official documents

E/PC/T/C.6/29 and E/PC/T/C.6/21-36/ADD.1

https://exhibits.stanford.edu/gatt/catalog/cj150py6186

cj150py6186_90230070.xml

GATT_156

United Nations Nations Unies ECONOMIC CONSEIL AND ECONOMIQUE E/PC/T/C.6/29 SOCIAL-COUNCIL ET SOCIAL ORIGINAL: ENGLISH DRAFTING COMMIITEE OF THE PREPARARORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TR EiDAND lE P MEMLOYNT SUMARY RECORD THEOTENTH MEF M ING Held at Lake Success on 31 January 1947 at 10:30 a.m. ChairmaHn: . E. M. Eric baColn On the suggestion of the CHAIRMAN it was agreed that the Legal Drafting Suob-Cmmittee will present to the Draftingmm Coit teea clean text of Articles andan annotated text showing chesangs made. Them Comittee considered Article 32xp. Eianson of Trade by State Monpolies of Individual Products. aParpgrah 1 MAr. LVAREZH (CILE) wished. to record that in his opinion the provisions under 1 (b) do not prevent the monopolistinc.eterprise to adjust selling prices of exported goods to world market prices, and that, foorm cmearcil reasons, different prices may be charged in different countries. The ICMRNALM stated that this interpretationw va understood. Mr. HSAKCEL UNITE( KIN -=D OGDOM) doubted if in all cases of .export monopoly umthe maximm margin ust be subject to negotiations; in some cases the. exmport tax ay be negHotiable. e suggested, therefore, to insert in Pragraph 1 .(b1), line l after "export monopoly" the following words: "icn instanes mwxherme a aimu rate of export tax, which may be charged. on the product, is not negotiated."o s He alsuggestede twhat th. ords "reasonible margn" in linteis 23 of h Article be replaced by: "margin of profit- whicoh isreaasnable hving regard to the conditions of the tradee AREZMr. A,M E/PC/T/C.6/29 Page 3 Mr. BAYER (CZECHOSLOVAKIA) questioned the, real meaning of the words "substantially complete monopoly" in lines 3 and 4. He contended that there is either a monopoly or there is none. He asked for a more consistent language Mr. LEDDY thought that if there was not a real monopoly the other country would have no, interest to negotiate.. There was no obligation of a country to negotiate under this Article. Mr. SHACKIE pointed out that if there is no real monopoly then it is the "customs duty which will be negotiated. ML. IYERULM (FRANCE) suggested that the words olpp ete or substantially complete" be deleted.. r.H SUCKLE proposed that these words should be replaced by "effective" prpoe tha - and that the words "in effect" in line 3 should be replaced by "in fact." The Committee approved these changes, which would be considered by the ad hoc Sub-Comittee. Mr. BAYER wished that this Sub-Coittee should also consider the expression "solely" in the last line of the Article. This suggestion was adopted.- Mr. NAUDE (SOUTH AFRICA) questioned the suitability of the expression, "Expansion of Trade" in the heading of Articles 32 and 33. Mr. EnY explained that these words are descriptive of the contents of thie Article. If left, out, the heading would make no sense n the Charter. Mr. SACEM pinted out that the words are analogous to the words "reduction of tariffs" in Article 24. It was decided -that no change be made in the heading. Article 33. Expas on of Trade by Comlete State Monopolies of Foreign Trade Te CRIUMM sggested that the Committee should state in its report that it did not feel itself called upon to consider this Article. The suggqtlon.ws adopted. /Article 34 E/PC/T/C.6/29 Page. 4 Article 3. Emergency Action on Imports of oar culariPri;ucts ;- Praehagp .' MHr.KL SACE suggested . thatwthe ordmil r" sla"in line 6.a.rel byaced direcctmpetitive.ly o i ;e- 11 Mr. ECtER 'piitel t tFhe'dhJffculty of translation into Prenlr. Mr. MSTET UBA) oc ould not accept the deletion bf-th ord. "similar" in this Article but found. the expression "'directly.competitive" acceptable.' The Committee dedcided to substitute- these wors for '"similar". Mr. Sy (wCNDA) proposed that the irordsfrom the territory of any other Member country" be inserte d afterd the words "beingimporte."' in. line 3. He suggested as a possible altern"ative that the word."and in line 4 could be replaced. by the word: "or". Mr. EDDY wished to'discrussM TH.these points with Mf SP Mr. BAYR suggested. that the wobrds "modify or" should, e inserted before the w0ord "withdraw" in line 1.' The suggestion was adopted. (Mr. LEDDY, however, wished to have tigme to consider this chane..) The word. "the"' in line 8 was replaced. by a". Parah In line 5 the wlord. "the" was repaced by "those". The word Provide. and the following sentence -in line 9 were -attached to linpe 8; a new Paragrah (3) should begin with the words "if. agreement eon. 2' .' . . :. These changes were referred to the Leal'ra±frg ub-Commsitte. - gMtr. SMIreferred. to the -reervation made.by'tbQCdian Deleta~ion 0at the London conference, recorded under 3:b(iii) on e o,f heReport. e wished to maintain this reservation. - : Mr. ALVAREZ also wished. to maitti-.he reservatior o the Crhi-en Dlegation recorded in the saq paragraph of the 'Reort. The CHMMN, speaking as Delegate for Norvaay, pinted out that it was a dangerous provision which allowed an action to be taken without prior consultation. He did not object, however, to this provision. r.TORRmS E/PC/T/C.6 /29 Page 5 Mr. TORRES (BRAZIL) was in agreement with the working of the Draft Charter, but asked if the time limit of sixty days from the date on which written notice of such suspension received by the Organization could not be reduced to thirty days." After discussion this amendment was adopted. The word "other" in line 15 was deleted, and the word "oppose" in line 23 was replaced by disapproveve'. Mr. LEDDY suggested that the words "In serious cases". in line 23 be changed to "In cases of abuse", The change was adopted, subject to consideration by the Legal Drafting Sub-Committee. Article 35. Consultation - Nullification or Impairment. Paragraph 1. -. Mr. LEY proposed that all references in otheer Articles 't ths obligation o'members to. supply information concerning the operations of state trading enterprises dshould be delete, and tghat the followin words be added to this paragraph: ".. and will, in the course of. such consultation, provide the other Membemr with suchinforation as lwill enable a ful and iair appraisal of the situation which is the subject of such repreentatins." . Mr. SHACKL pointed out that a state .trading enterprise should be on the same footing tars.is a private enepre with regard to obligation to supply information. In particular it should not be required to disclose infortiat hmh would commercialope-htionsazipr tions. He proposed- theerefore, th followiehg insertiEDn 'to Mr. LDYs amendment before the word 'nable": without prejudice to the legitimate business interests of particular businessr entperpises,". Mr. BAYER agr eed weithksthef rmar HA KLEo Mr. SL but wished to give his onpinion o this hparagrap after further consideration, iThee Ct t proveed ths amndments of MessLrs. IEDD and SHACLKLE. /Mr.R ELACAT E/PC/T/C .6/29 Puge 6 Mr. LACARTE (EXCUTIVE SECRETARY) drew the attention to the recommendation of the Technical Sub-Committee (c.6/18, page o) to insert the words "anti-dumping and countervailing duties" after the word. "'Formalitics" in line 5. It was agreed. to make the suggested. insertion. Mr. TORRES wished to reserve his opinion for the time being as to the insertion of the words. Mr. WHITE (NEW ZEALAND) suggested., and the Committee approved, to insert the word "subsidies" after the words "exchange regulations" in line 6. The following changes were adopted: in line 2, the words 'has adopted" were replaced. by ."is applying ; in line 4, the words "has arisen" were replaced by "exist"; in line 5, the words ".Member or" were inserted before the word ."Members"; in 1ine 13, the word other was deleted. The language in the last two lines of the paragraph was rearranged as. following: "written notice of such withdrawal is received by the Organization". .. . . The Legal Drafting Sub -Cmmittee was asked to consider the expression 'obJect of this Charter" inline 5. Aricle .- Contractual Relactons with Non-Miebers -Treatment of the TaC of Non-Members tThe CHAIRKN referred. i tphe decision of the Precratory Committee to leave the question for consideration at a later stage. Article 37. General Exceptions The CHAIAN informed the Committee that this paragraph was referred fo consideration by ommithe Technical Sub-C=tee. Pre-entation of Alte:atieve Drafts in the Riort Mr. FMSTT wied. that the final Report of the Committee should. record the alternative drafts on the same footing as the texts to which /they refer E/PC/T/C.6/29 Page 7 they refer, preferably immediately after it. It should be apparent that these alternative drafts merit the same consideration of the Second Session of the Preparatory Committee as the main text. It might well be that a text which at present had the support of only a few delegations will at a later stage appeal to other Governments. After the discussion. in which the Delegates for China, Lebanon, Canada, France, United Kingdom, United States and Czechoslovakia took part, the CHAIRMAN assured the Committee that the views of all the Delegations would ae presented objectively and adequately in the Report. Mr. SHACKLEexpressed the hope that the Report will be tyrpogaphically superior to the Report of the London Conference.

GATT Library

tg749rq0569

Summary Record of the Tenth Meeting : Held at the Capitol, Havana, Cuba, on Thursday, 18 December 1947 at 4.00 p.m

United Nations Conference on Trade and Employment, December 20, 1947

Second Committee: Economic Development

20/12/1947

official documents

E/CONF.2/C.2/SR.10 and E/CONF.2/C.2/SR.1-17

https://exhibits.stanford.edu/gatt/catalog/tg749rq0569

tg749rq0569_90180448.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE ON DU E/CONF .2/C .2/SR. 10 ON DU 20 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH SECEOND COMMITTEE: ECONOMIC DEVELOPMENT SUMMARY RECORD OF THE TENTH MEETING Held at the Capitol, Havana, Cuba, on Thursday, 18 December 1947 at 4.00 p.m. Chairman: Mr. ABELLO (Philippines) ARTICLE 15 - Continuation of Discussion Mr. NASH (New Zealand) stated preferential arrangements, which had been in effect for fifteen years within the British Commonwealth, had been beneficial to New Zealand, and although she was not in favour of interfering with these arrangements, she would support any plan which would be of benefit to others and not detrimental to herself. She would agree to reduce tariffs on goods if this reduction were on a reciprocal basis. If the Charter were adopted, New Zealand as a Member of the British Commonwealth would adopt no new preferential tariff margin. The representative of New Zealand did not think it would be helpful if new preferential arrangements should be brought into being, although the countries in the higher categories had no right to maintain their standard unless those countries in the lower categories were improved. It was of prime importannce that no country should think only of improving its own standards. The policy must be to retain high living conditions and at the same time lift those of less fortunate countries. This could be done by some co-operative procedure whereby countries with higher productivity would help in the development of the resources of others, by the shipping in of products and equipment and with the help of technical and scientific skill. It would be impossible, however, if countries tied themselves in with others of equally low standards. A certain area, consisting, say, of five or six countries might be isolated as "preferential", but this suggestion would require thorough examination. Mr. TRABOULSI (Syria) supported the statements made by the representatives of Lebanon and Chile. Mr. SHACKLE (United Kingdom) said that the "most-favoured-nation" principle as incorporated in the Geneva Charter, was a cardinal feature, and any exceptionois from it should be controlled by the Organzation. He did not think geographical contiguity was sufficient justification by itself for countries to enter into preferential arrangements, and the ITO should control /the setting E/CONF. 2/C. 2/SR. 10 Page 2 the setting up of such arrangements. Otherwise there would be a risk that such regional groups might spread, so that whole continents might be absorbed. There would also be danger of clashes. The countries parties to the General Agreement on Tariffs and Trade were already under a general obligation not to apply new or increased preferences. Moreover theses countries had negotiated at Geneva various eliminations and reductions of preferences which would be put into effect by a number of them on 1 January next. It would therefore be inequitable that at the same time a general dispensation should be given for other countries to enter into preferential arrangements at will or on general grounds of contiguity or "complimentariness". He recognized that larger economic units might sometimes be desirable. Full Customs Unions would be most effective for this purpose, but for practical reasons less far-reaching arrangements might sometimes be necessary. He did not think that it would be possible to fix hard and fast criteria in advance in order to decide whether particular projects for preferential systems would be desirable or not. The "special circumstances" in Article 15 should essentially be taken to mean consideration of whether the project would do more harm than good, or vice versa. He believed that if, as the representative of Venezuela had suggested, there were to be no prior approval but only subsequent complaint to the Organization regarding preferential arrangements, it would be difficult and embarrassing to go back on a system already working. Prior approval by a two-thirds majority vote would be a just and reasonable solution. Mr. ZAYED (Egypt) felt economic relations between countries of the same culture, language and race, and in the same geographical area, would have good results. He endorsed the amendments on page 61 (document E/CONF. 2/C/9) and that of Venezuela. Mr. HAWKINS (United States) referring to a statement by the representative of Canada, pointed out that trade benefits gained through preferential arrangements in one block of countries might be at the expense not only of the well-developed countries but of others as well, and the Charter should be devised to prevent this from happening, and yet to leave room for preferential arrangements when expedient. He supported the basic principles stated by Brazil. Article 15 appeared to follow a middle course, permitting the use of preferences where they would be more helpful than injurious. The two-thirds majority vote would help to safeguard countries which might be seriously injured. He thought that if once preferential arrangements were adopted, it might be too difficult for a country to "reverse itself" and during the deliberations concerning a proposed preferential arrangement, trade might not be disrupted. /Mr . BRUDZINZKI E/CONF. 2/C .2/SR. 10 Page 3 Mr. BRUZINZKI (Poland) agreed with Chile that It would not be just to introduce obstacles to any new arrangements without restricting the ones already in existence. Obstancles to new preferential arrangements could only be called just and equitable if a date were set when all old preferences would disappear completely. He said that industrial development needed markets of a certain magnitude which could not be found in small independent countries. A Customs Union might produce the best results, but as some countries were not in a position for this move, the making of preferential arrangements should be the first step towards it. The arrangements should be left entirely to the members concerned. He asked if a limiting set of rules for preferential arrangements could not be embodied in the Charter instead of the prior approval clause. He suggested that such rules could, for instance, include provisions that no increase of customs duties or other charges of any kind In the most- favoured-nation rates should be made and further that no margin of preference of any product in respect of which a preference was permitted under paragraph 15 should exceed the preferential margin for the same, or, similar products already in existence under the preferential agreements permitted by Article 16 of the Charter. Mr. MULLER (Belgium) said that Belgium had always been opposed to preferential tariffs. Preferential margins were reduced at Geneva and should not be increased. He could, however, understand that countries with one-column tariffs would want to set up a preferential system. He thought preliminary consideration and approval by the ITO would be a wise procedure. Mr. ALVAREZ (Colombia) believed that the conditions of Article 15 were too strict. He said there were two tendencies - that of strong countries to guarantee their own preferential development, and that of other countries with common languages, etc., to enter into regional pacts. He felt preferential arrangements could be very useful in certain cases, and above all to countries which were neighbours and had parallel circumstances. He felt that the interests of industrial countries were guaranteed by the Intervention of the Organization, which would keep any harmful arrangements from being effected. Colombia believed that a two-thirds majority vote would make the Article absolutely ineffective. Mr. RICHARD (France) mentioned the long history of preferential arrangements practices by Britain and France. He said his delegation stood mid-way in the discussion. France was in favour of wider markets for trade, and of economic units larger than those within national boundaries. Customs Unions should be the aim, and she was prepared to take the initiative in their formation. /France believed E/CONF.2/C.2/SR.10 Page 4 France believed preferential arrangements to be necessary. As the aims and methods to achieve both economic development and reconstruction were very similar, diffrentiation between them would be. artificial. Mr. FRESQUET (Cuba) believed that the Geneva text offered an adequate solution to the whole problem of preferential arrangements. Mr. SKAUG (Norway) said that apart from countries which were members of a preferential system, and those who wanted a change in the wording of Article 15, there was a third group of small countries which were not members of existing preferential systems, but which supported Article 15 as it now read. Norway had suffered as a result of existing preferential systems and was of the opinion that any new preferential arrangement would have an undesirable effect on the economies of other countries. In some cases, the establishment of preferences might provide the best solution and, therefore, Article 15 had been included in the Charter. But there would be little reality to the obligation of member states to reduce preferences if, at the same time, the door was left open to new preferential arrangements. Such a situation would result in a third group of countries among which Norway would number, having to ask for some kind of protection for themselves. Mr. GARCIA OLDINI (Chile) considered it obvious that the Conference was divided between countries which enjoyed a large part of the world's economic potential, and others which did not share the same advantages. The procedure outlined in Article 15 was too vague and incomplete to meet the legitimate views of the latter group of countries and under it, the establishment of new preferential arrangements would be practicably impossible. All that was being asked by the representatives of underdeveloped countries was the opportunity to conclude the same kind of preferential arrangements which had been concluded hitherto. The arrangements would be governed by the provisions of the Charter, with the exception of the need for prior approval by the Organization. Mr. Wilgress had referred to the historical reasons for the existing preferential arrangements; Latin America had always felt itself to be a homogeneous economic whole and the idea of Latin American preferential arrangements was not a new one. A concession had been made by the underdeveloped countries in suggesting that it might be possible for the Organization to take action, if it were necessary, after the conclusion of preferential arrangements. In connection with the remarks of the Polish representative, Mr. Garcia Oldini said that it was not the intention of the underdeveloped countries to leave the door open to abuses and that he would agree to add further limiting provisions to his amendment. /The United Kingdom E/CONF.2/C .2/SR.10 Page 5 The United Kingdom representative had been prepared to make an exception in the case of customs unions. If that were so, why then could he not accept preferential arrangements? Mr. DENEL (Turkey) supported the remarks which had been made by the representative of Lebanon. If countries wished to support each other in their mutual economic development, two obstacles would stand in their way; the question of prior approval by the Organization, and the necessity for an affirmative vote of a two-thirds majority. The Turkish amendment for the deletion of the reference to "prior approval" in Article 13, was closely related to Article 15. He reserved his position concerning the latter Article until a decision had been taken on Article 13, but would be in favour of a vote by simple majority if the reference to prior approval" were to be maintained. Mr. D'ASCOLI (Venezuela) stressed that the underdeveloped countries were not attempting to destroy the Charter, but were asking that it be made more balanced and just. The argument that preferential arrangements would damage the economies of other countries had been exaggerated. They would promote the greater prosperity of the region in question and were a necessity because there was no immediate possibility of customs unions. The representatives of Argentina and Uruguay had drawn attention to the harm which had been done by existing preferential systems and yet those systems were consecrated in the Charter and no tine limit had been fixed - for their abolition. The Conference had an obligation to be just in its attitude towards a limited system of preferences for certain region of the world. Mr.HIDENESTAM (Sweden) associated himself with the remarks of the representative of Norway. Too much stress had been laid on the pointo of view of industrial underdeveloped countries, for such countries could haye immense agricultural or mineral resources. A Scandanavian preferential arrangement would be detrimental to the trade of agricultural countries, but if there were to be a world-wide move towards preferential systems, the Scandanavian countries would be forced to take similar steps. Mr. MOELIA (eNtherlands) supported the position which had been upheld by the Belgium representative concerning new preferential arrangements. Mr. POLITIS (Greece) felt that if preferential arrangements were harmful they should be abolished, but that if they were beneficial they should be encouraged or even extended. The Charter countenanced preferences and they could be instrumental in promoting higher standards of living if established between countries with analagous economies. /The procedure E/CONF.2/C.2/SR.1O Page 6 The procedure set forth in Article 15 was so vague that authorization for a new preferential arrangement would never be obtained. It should be noted that the Venezuelan proposal did make provision for complaints to the Organization in the event of countries being harmed by new preferential arrangements. Mr. SEAGLE (United Kingdom) drew attention to the fact that under Article 15 a procedure analagous to that of Article 13 would be gone through with the difference that the final decision would be taken by a two thirds majority. There was no question of a preliminary decision having to be taken by a two-thirds majority before the procedure was set in motion. Mr. BRIGNOLI (Argentina) pointed out that the preferential arrangements referred to in Article 16 were recognized as valid without any investigation having been carried out as to whether they were causing damage. For new preferential arrangements, however, prior approval of the Organization was demanded. Although he would not suggest it, a just solution to such a situation would be to submit all existing preferential systems to the Organization for consideration and to abolish those which were not approved. Mr. BANERJI (India) stated that from the London discussions, the Indian delegation had recognized the necessity for preferential arrangements among countries of underdeveloped economic regions. It also recognized, however, the importance of the remarks of the Canadian, United Kingdom and the United States representatives. The Lebanese representative rightly had suggested that by narrowing the terms of Article 15, it might be possible to reconcile the divergent views. By its inclusion in the Draft Charter, the principle of preferential arrangements had been accepted and it was for the Sub-Committee to find an appropriate form of words. Mr. HAIDER (Transjordan) pointed out that there was general agreement as to the desirability of customs unions and that It was recognized that the establishment of preferential arrangements was one way by which customs unions could be achieved. There were two ways in which a preferential arrangement could prove injurious; first, when preferences were established by raising tariff on goods form other parts of the world instead of lowering the barriers on the goods of the country with which the arrangement had been concluded. The economic well-being of a country could also suffer if a country with which it had a substantial trade established a preferential arrangement with a third country with which it also had substantial trade. He begged the representatives of countries which were opposed to any change in Article 15, not to oppose the justified demand of underdeveloped countries concerning new preferential arrangements, but to state the terms which would have to be laid down to protect their own legitimate interests in that respect. /Even if the E/CONF.2/C .2/SR.1O Page 7 Even if the existing preferential arrangements were to be eliminated immediately, the case for the establishment of new preference systems elsewhere in the world, could still be justified. Another point to be taken into consideration was the difficulty of defining what constituted a developed or an undeveloped country. For his part, a country was undeveloped if it were impoverished and unable to give its people an adequate standard of living. Mr. HEWITT (Australia) drew attention to the remarks which had been made by his delegation on this subject in the Third Committee. The CHAIRMAN announced that Article 15 with its amendments would be referred to the Joint Sub-Committee of Committees II and III which had been set up to consider that Article and Articles 16 (2) and (3) and 42. COMPOSITION OF THE JOINT SUB-COMMITTEE The CHAIRMAN said that jointly with the Chairman of the Third Committee he proposed that the Sub-Committee be composed of representatives of the following countries: Argentina, Australia, Belgium, Brazil, Canada, El Salvador, France, India, Sweden, Syria, United Kingdom, United States and Venezuela. Mr. GARCIA OLDINI (Chile), supported by the representative of Venezuela, emphasized the need for the composition of the Sub-Committee to reflect the tendency of the discussion in the full Committee. Two-thirds of the proposed members of the sub-committee represented the minority view in the discussion which had just taken place. Mr. BRIGIOLI (Argentina) proposed the representative of Chile as an additional member of the Sub-Committee. Mr. BANERJI (India) said that he would be prepared to withdraw the name of India from the list of members, if by so doing he could facilitate the Chairman's task. The CHAIRMAN said that he would consult with the Chairman of the Third Committee and would report back to the Committee at the following meeting. The meeting rose at 7.15 p.m.

GATT Library

st799ym4901

Summary Record of the Tenth Meeting of Committee III- (b) : Held at the Capitol, Havana, Cuba, on 13 December 1947 at 4.00 p.m

United Nations Conference on Trade and Employment, December 15, 1947

Third Committee: Commercial Policy

15/12/1947

official documents

E/CONF.2/C.3/SR.1O and E/CONF.2/C.3/SR.1-16

https://exhibits.stanford.edu/gatt/catalog/st799ym4901

st799ym4901_90190225.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/C.3/SR.1O ON DU 15 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH THIRD COMMITTEE: COMIERCL POLICY SUMRYMA RmDECR OF T= E MEETNGI OF COIPMTTEE III- (b) Held at the Capitol, Havana, Cuba, on 13 December 1947 at 4OO. p. Chairman: Mr. D. L. WILGIRS (SCanada) The CHAnMNR Astatedr that the Revised Annotated Agenda for Chapter IV (/COEO.NF/C.3/7 and Corr.3) would be the working paper for the discussion of Section B. He suggested that the agenda (E/CONF2/C.3/1.4) be followed in the discussion of Article 20. It was agreed that tho proposals relating to economic development (paragraph 1 (a) E/CONF.2/C.3/14) be referred to Committee II rather than to any sub-comittmee formed to study Article 20. ARTICLE 20: GENEAL DISCSIONUS Mr. SALIN H(Sweden) was in general agreement with Section B of Chapter IV. Swedish commercial policy was traditionally based on non discrimination and the mostfavo urednati on clause. The amendment to paragraph 2 (a) (Item 9: E/CF.2/ONC.3/7) was proposed to meet a situation inwhic h high world prices for, and consequent large exports of, agricultural products could cause a marked discrepancy between supply and demand in, the home market. The amendment to paragraph 2 (c) (ii) (Item 17) was submitted in order to make the provision more flexible; that to (iv) (Item P1) referring to seasonal and other short term fluctuations in supply, would be explained in sub-committee. Mr. SEIDADENENF (Denmark) reserved his position concerning the Swedish amendment to sub-paragraph (iv) until the second reading. Mr. ILRAS E(Colombia) commented that the establishment and-maintenance of excangd conetrols implied control of exports and he asked Whether the practice of controlling exports so as to ensure that the exchange proceeds were guaranteed would be permitted under Article 20. Following the remak ofr Mr. MARTIN (United States of Amierica) that he thought the matter was covered by Article 24, paragraph (bY'0)e , CHAIEN RsuAggested that the question of the representatives of Colombia should be dealt ith wby the sub-committee. /MrB .DATH E/CONF .2/C .3/SR.10 Page 2 Mr. BAHGAT (Egypt) explained that insertion of the word. "temporary" in paragraph 2 (c) (Item 15) would overcome any tendency toward permanency of measures mentioned there. Although "burdensome surpluses" had been stressed elsewhere, they should be particularly emphasized in this Article; qantitative restrictions were understandable when there were burdensome surpluses but should be limited or abolished otherwise. Mr. CHAVEZ (Peru) was not in favour of paragraph 2, which permitted exception to the principle of the first paragraph. There seemed to be no great objection to sub-paragraphs (a) and (b), but (c) should be entirely suppressed, or greatly amended. It was necessary that quantitative restrictions be applied only because of super-abundance within the country; otherwise the clause could be invoked too frequently and a government could increase Its production by restricting imports and perhapa by paying subsidies as well. Mr. LLORENTE (PhilIppines) compared the provisions of Alticles 20 and 18; If it were not right to impose an internal tax when there was no substantial Production, it would equally be proper to deny the right to impose quantitative restrictions in such a case. Article 20 (paragraph 2 (c)), Was discriminatory in that it excepted agricultural or fisheries products, but not manufactured. articles; provision for the termination. of such discriminatory practices should be made in the same manner as for preferences in Aticle 17. Mr. SAENZ (Mexico) agreed that quantitative restrictions should be limited to extreme cases and should be non-discriminatory. Item 10 sought merely to make paragraph 2 (a) more explicit, while the amendment in Item 12 was desired to exclude discrimination in this provision and also to meet. the difficulty of defining an agricultural product. Mr. CHANG (China) stated that if the exceptions of paragraph 2(c) could be transferred to Article 13, his delegation would withdraw its reservation to paragraph 2 (Item 3) made in Geneva; if not, he was killing to concede that. the reservation related to economic development but since all questions of marketing and production policy were matters. of economic development the exceptions could logically be grouped in Article 13. Mr. CREAM (Ceylon) felt that a complete denial of the right to impose quantitative restrictions would retard economic development; they were, necessarywh ere other forms of protection might prove, inappropriate. Cylnno had proposed the deletion of Article 20 (Item 26), put had also prposoed alterations to Article 21to include provision for quantitative restritcoins to further economic development as well as to crroect an adverse balance of payments. /Mr. CHRLONrE E/CONF .2/C .3/SR.10 Page 3 Mr. CEARLONE (Uruguay) supported the amendments of Argentina and Chile. He agreed with the representative of Ceylon that provision for quantitative restrictions should be more flexible, and proposed that paragraph 2 (c) should allow the protection of industries by that means. It was not equitable that under-developed countries be restricted in their control of imports of temporary surpluses of others products. Mr. DJEBRARA (Syria) emphasized his concurrence in the reservation of Lebanon. Mr. FORTHOMME (Belgium) noted the negative attitude of Section B, and particularly of Article 20, which devoted four or five lines to the principle of liberating international trade from all obstacles, and the remainder to avoiding that liberation. Perhaps international trade might be made most attractive and its liberation most easily achieved if it were altogether prohibited. Mr. McCARTHY (Australia) proposed deletion of the word "temporarily" in paragraph 2 (a) (Item 6) since the prohibition of exports might have to be maintained for a considerable period in order to restore the productive capacity in agriculture (e.g. sbeep breeding . That did not apply, however, in the case of manufactured products, The deletion of Article 20 would be a retrograde step; the right of developing countries to utilize quantitative restrictions was not to be denied, but should be controlled so as not to nullify other provisions of the Charter. The requisite criteria were to be found in Chapter III. Mr. McCARTHY (Ireland) explained that while his country at times had certain agricultural surpluses, they did not wish to damage the primary producers by making those surpluses available at prices below the current market level and for that reason had proposed two amendments (Items 18, 22). Their intention was not to ban imports altogether but merely to regulate them, having regard to the domestic supply. Generally speaking, the scope of the Article should be widened. A clause should be provided which would permit quota restrictions to be introduced, enabling countries to restrict imports, in the interest of domestic production. Mr. FRESQUET (Cuba) stated that the first amendment submitted by his, delegation (Item 4) was defensive in character and was designed to protect against foreign competition industries vhich had been created as a result of the war. The second (Item 5) was proposed to support a basic policy of development. Both amendments aimed at the development of production in order to provide for fuil employment. /Mr. MULLER (Chile) E/CONF .2/C.3/SR. 10 Page 4 Mr. MULLER (Chile) thought that the Article was too rigid and should cover the protection of incipient industries, to which end the amendments of his country had been submitted. Mr.. AZIS (Afghanistan) stated that the position of Afghanistan was covered by the provisions of Article 43 on General Exceptions to Chapter IV. The restriction on the export of cattle would be necessary until animal husbandry had been more fully developed in his country. Mr. BRIGNOLI (Argentina), referring to the earlier decision to submit the amendments of the delegations of Chile and Argentina.(Items 1, 2) for study by Committee II, stated that this decision should be reconsidered. Article 20 of Chapter IV prohibited quantitative restrictions but allowed certain exceptions, to which Argentina offered no objections. The under- developed countries should have the right of applying restrictions with a view to regulating imports and of developing their industries. There was no provision in Chapter III advocating the adoption of quantitative restrictions even temporarily. He considered that Items 1 and 2 should be discussed in connection with Article 20. Mr. MARTIN (United States of America) supported by Mr.MELANDER (Norway) felt that the provisions of Article 13 referred to the whole of Chapter IV and that the Chairmans decision should be upheld. Mr. CHARLONE (Uruguay) said that if quantitative restrictions 'were admitted as a legitimate measure, then the discussion could not follow the complicated procedure of requesting authorization from the Organization under Article 13; if, on the other hand, quantitative restrictions were not admitted, then the States must be free to take action in defense of their vital interests. Mr. MELADER (Norway) and Mr. FORTHOMME (Belgium) thought that an unnecessary duplication of the discussion would follow if proposals relating to economic development were considered under Article 20. Mr. LLORENTE (Philippines) recalled that an amendment had been submitted to Article 13 which, if adopted, would have far-reaching consequences on Chapter IV. He felt strongly that any discussion of quantitative restrictions in relation to economic development should be dealt with by Committee III. On a show of hands, the general .consensus of opinion was found to be against the proposal of the representative of Argentina. It was therefore agreed to maintain the previous decision to refer the amendment to Committee II for study and report. /Mr. COLOCOTRONIS (Greece)

GATT Library

rz769bv5380

Summary Record of the Tenth Plenary Meeting : Held at the Capitol, Havana, Cuba, Tuesday, 2 December 1947 at 10.30 a.m

United Nations Conference on Trade and Employment, December 2, 1947

02/12/1947

official documents

E/CONF.2/SR.10 and E/CONF.2/SR.1-21

https://exhibits.stanford.edu/gatt/catalog/rz769bv5380

rz769bv5380_90180137.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF. 2/SR.10 ON DU 2 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH SUMMARY RECORD OF THE TENTH PLENARY MEETING Held at the Capitol, Havana, Cuba, Tuesday, 2 December 1947 at 10.30 a.m. President: Mr. Sergio I. CLARK (Cuba) 1. FUTURE PROGRAMME OF MEETINGS The PRESIDENT, referring to document E/CONF.2/INF.27, pointed out that Committee III was scheduled to meet at 10.30 a.m. on 3 December and not Committee II as appeared in that document. 2. GENERAL DISCUSSION (Continued) Mr. CHIRIBOGA (Ecuador) said his delegation would co-operate fully so that the Charter of the ITO might become a reality. Article I of the ITO Charter called for customs duties and tariffs to be lowered and other protective measures to be abolished. Since the war Ecuador had had to impose restrictions and to institute protective measures, and ehc could not return to the free trade advocated by the Charter because of the repercussions there would be on her economy and social life. Ecuador had a depreciated currency, and the budget of 300 million sucres needed for the administration and the expenses of the public works and welfare programmes for 3,000,000 inhabitants had largely to be met out of customs revenue. Ecuador would have difficulties in complying with paragraph 4 of Article 1 of the draft Charter. To reduce tariffs and other trade barriers would mean ruin for the incipient industries of Ecuador and would bring misery to its people unless compensated by concessions. The delegation of Ecuador would like to see certain amendments introduced into the Charter in order that all countries might achieve the aims set forth in that document. Ecuador was contemplating a Customs agreement with Colombia and Venezuela but if the Charter were adopted as at present drafted that would be impossible. Mr. BRAGA (Brazil) pointed out that his delegation had taken part in the preparatory work at London, Geneva and New York, and was anxious and willing to co-operate in the creation of an organization which would regulate world trade, thus ensuring prosperity to all peoples and contributing towards the maintenance of world peace. His delegation was glad to see that certain changes had been made in the first draft of the Charter which was now more flexible. Every effort had been /made E/CONF.2/SR.10 Page 2 made by the delegation of Brazil at London and at Geneva to put forward the views held by Latin American countries, as well as by others, that the standard of living must be raised by national and international measures. After reviewing the part played by his delegation in the work of drawing up the draft Charter, Mr. Braga emphasized that it was useless to think that the objectives of the Charter could be attained simply by lowering tariffs and destroying trade barriers. It would be necessary to have other measures of co-operation which would help to raise the standard of living and increase the purchasing power of the people. Highly industrialized countries would have to help the less-developed countries. The International Trade Organization would be the third link in the chain of International economic collaboration - the International Monetary Fund and the Bank for Reconstruction and Development would have to play their part. The Charter was neither perfect nor complete, and those who were studying it for the first time should do so with great care. All should be fully Conscious that prosperity as indivisible and that poverty could be exported. Mr. CHARLONE (Uruguay) expressed the sincere desire of his delegation to contribute to the setting up of an international trade organization. The Trade Charter would have to be examined most carefully. Its emphasis should have been on unemployment and on the weaker and less developed nations. The Geneva Draft granted benefits rather to the economically stronger countries at the expense of the less advanced ones. Uruguay , a small country, had been able to give some aid to the countries devastated by the war. Undeveloped countries could not open their borders to indiscriminate imports from highly industrialized nations, as they could not compete on equal terms. The Charter limited the rights to a country to impose protective measures and Uruguay could not accept the obligation to obtain permission from ITO to impose or maintain such measures. Economic co-operation could bring about great improvement in the welfare of nations, but all countries should-receive equal treatment under the Charter. His delegation could not agree to a weighted vote nor could it agree to the allocation of permanent posts on the Executive Board of the Organization. Great and small countries should be treated alike. Mr. MOLINARI (Argentina) expressed his thanks to the Government of Cuba for the magnificant hospitality extended to the Conference. He did not wish to repeat the arguments which had been so ably stressed by previous speakers, but drew attention to the eloquent speech of the representative of Uruguay. The present generation had witnessed two cruel wars; the spectre of a third world war gave urgency to the problems now before the /Conference W/CONF.2/SR 10 Page 3 Conference. He recalled the Four Freedoms proclaimed by President Roosevelt, which should form the purpose and objectives of the present Conference. Mr. Molinari, referring to the investment of capital, stated that the attitude of the Argentine could be summed up as a desire for economic peace and co-operation among nations. There were three alternatives: (a) capitalism, (b) totalitarianism, or (c) a "socialized economy" as practised by, Argentina. It was obvious that if the relevant provisions of the draft Charter were put into effect, it would lead to the establishment of a capitalist system of world economy. His Government believed that economy and society were integral and that economic and political government should not be placed in different hands. The present Argentine Government had established a system of government control over credit and exchange, and this position could not be abandoned. On the question of the world monetary situation, Mr. Molinari said that the monetary system as it functioned in 1914 had not yet been reestablished. 1939 had found almost all countries in a state of penury and the truth was that the whole world was living under the dollar sign. Most of the world's gold was held by the United States, and this constituted a grave problem. Although the Argentine lacked dollars, this was not so important for her as for other countries. But the problem would have to be tackled, if not at the present Conference at least at a world monetary conference which could be held in the near future. All the countries of South America, with the exception of the Argentine, had been linked to the lend-lease system. In February 1942 a pact of mutual aid had been signed between the United Kingdom and the United States of America, which had been the first step to the present Conference. Mr. Molinari said that there were now two plans for post-war reconstruction, namely the Marshall Plan and the Molotov Plan. In addition, there was the Peron Plan, in which international cartels would never be permitted to play a part. Two criticisms had been levelled at the Peron Plan - that Argentina was selling her products abroad at prices which were too high, and that Argentine producers were being exploited. Argentine producers had never been so well off and Argentine export products were economically priced. Export statistics showed that wheat and meat to the total. amount of 317 million Argentine pesos had been donated freely to countries with food shortages, such as France and Norway, to the International Red Cross and to the Vatican for distribution to starving people. Argentina had also granted credits to the value of $1,150,000,000 to Belgium, Spain, Chile, Bolivia, Finland, France, Czechoslovakia, Rumania and Italy. These loans had. been carried out through the I.A.P.I. in the /currency E/CONF. 2/SR.10 currency of the respective countries and constituted a proof of Argentina's philosophy of universalism. The presence of his delegation did not imply that Argentina accepted the Draft Charter as a fait accompli, since the Charter was a legal instrument to be used in constituting the International Organization as stated in the Preamble. The present Conference was not a parliament but an assembly where all nations were placed on a footing of equality. The absence of Spain was regrettable and that of Russia lamentable since he believed that harmony between all peoples could be reached. Argentina was prepared to make sacrifices in the interest of establishing and maintaining a stable, just and prosperous peace. Mr. Molinari stressed the hope that Spanish would be recognized as a working language in view of the difficulties and misunderstandings which might arise in the translation of technical terms. As regards labour standards and full employment, the Draft Charter was too limited in scope. The Chapter on Economic Development was of primary importance and no mistakes must be made in regard to the economic realities of the world. He emphasised the important progress made by Argentina in the development of her own economy which was no longer subordinate to that of any other country. Mr. Molinari regretted that voting rights had not been granted to all nations participating in the Conference; he made a general reservation on this point. Argentina could not agree to the abolition of the I.A.P.I. (Argentine Institute for the Promotion of Commercial Interchange) since otherwise his country's modestcontribution to world reconstruction would be destroyed. Argentine was not concerned with the lack of dollars and preferred to have no money in order not to fall into dobt. Mr. Molinari stated that the "most-favoured nation" clause as contained in the Draft Charter established exceptions in favour of a number of countries. The nations must work loyally together; Argentina desired a cooperative economy and equality of treatment for all peoples. A situation should be reached where every country would have the right to vote as a sovereign nation. There could be no question of permanent seats on the Executive Board of the Trade Organization as had been so rightly stated by the representative of Uruguay. He stressed the importance of freedom and said that there "could be no free man in a slave nation". Mr. GUTIERREZ (Cuba) emphasized the need for world co-operation in the field of international trade and pointed out that at the present time no country could. stand alone. The ILO, FAO, International Monetary Fund, and International Bank for /Reconstruction E/CONF. 2/SR.10 Page 5 Reconstruction and Development were all cornerstones in the attempt to organize world economy. Following proposals made by the United States of America, the United Nations had set up the Preparatory Committee on Trade and Employment which had succeeded in drawing up a draft Charter. To achieve the aims outlined in Article I of the draft Charter it would be necessary, among other things, to ensure a large and steadily growing volume of income; to increase production, consumption and exchange of goods; to lower customs tariffs and other trade barriers and to abolish discriminatory treatment. The task before the Conference was difficult and delicate. The economics, of nations differed widely and their interests had to be reconciled. The Charter should be wade elastic. Cuba had imposed certain restrictions and could not remove them without injuring her economy, and that was true of many other small nations. If the Conference were successful, which the delegation of Cuba hoped it would be, it would. have rendered a great service to humanity. The PRESIDENT said the speeches which had been made at the plenary. meetings were a proof of the deep interest taken by all representatives in the complicated task of the Conference. He hoped that the same spirit of goodwill would prevail during the discussions in the Committees and Sub-Committees. . The meeting rose at 1.15 .M.

GATT Library

rm527mw0063

Summary record of the Third Meeting : Held at Havana, Monday, 1 December 1947 at 4.00 p.m

United Nations Conference on Trade and Employment, December 2, 1947

Fifth Committee: Inter-Governmental Commodity Agreements

02/12/1947

official documents

E/CONF.2/C.5/SR.3 and E/CONF. 2/C. 5/SR. 1-15

https://exhibits.stanford.edu/gatt/catalog/rm527mw0063

rm527mw0063_90200084.xml

GATT_156

UNRESTRICTED United Nations Nations Unies E/CONF. 2/C. 5/SR.3 CONFERENCE CONFERENCE 2 December 1947 ON DU ORIGINAL: ENGLISH TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI FIFTH COMMlTTEE: INTER-GOVERNMENTAL COMMODITY AGREEMENTS SUMMARY RECORD OF THE THIRD MEETING Held at Havana, Monday, 1 December 1947 at 4.00 p.m. Chairman: Mr. George HAKIM (Lebanon) The CRAIRMAN opened the meeting for general discussion on Chapter VI of the Draft Charter for an ITO. Mr. PETER (France) pointed out that Chapter VI as now drafted represented synthesis of the views of seventeen countries animated by a desire to maintain stability and equilibrium in international trade and consequently to provide full employment. He outlined the provisions of the Chapter under which there could no longer be commodity agreements limited only to producers. Any Member country of the ITO which considers that it has a substantial interest in a commodity would be free to participate in arrangements concerning that commodity. Article 53 permits the extension of the provisions of the Chapter by the Organization to cover commodities which cannot be "precisely" defined as primary or related commodities. Provision for expansion of production, which was of especial importance to agriculture, was made in Article 57. He drew attention to the fact that Article 58 as now drafted defines commodity control agreements precisely and makes specific provisions for unrestrictive agreements. Mr. Peter went on to discuss the co-ordination of commodity arrangements under the Draft Charter and he referred to the Interim Co-ordinating Committee for International Commodity Arrangements established by a resolution of the Economic and Social Council to co-ordinate and stimulate working groups on commodity problems. The Resolution establishing the Committee also requested governments to use the provisions of Chapter VI of the Draft Charter for an International Trade Organization as a guide in dealing with commodity problems. Mr. Peter drew attention to Articles 64 and 84 of the Draft Charter which specifically provide for co-operation and co-ordination amongst international agencies. In this connection he referred to the massage sent to this Conference by the Food and Agriculture Organization (see document E/CONF.2/7) indicating its interest in Chapter VI. Mr. Peter also pointed out that implementation of /the provisions E/CONF. 2/C. 5/SR/3 Page 2 the provisions of Chapter VI had already commenced and again drew attention to the Report of the Interim Co-ordinating Committee for International Commodity Arrangements which had been published by the United Nations, He referred to the expansion in the membership of the Rubber Study Group in consideration of the membership provision of Chapter VI. France had no reservations against the draft of Chapter VI and did not intend to submit any amendments. The Chapter represented a good equilibrium between the interests of producers and consumers, and this was important in view of the diverse intereste of the French Union. Mr. CAPLAN (United Kingdom) stated that although the Preparatory Committee had succeeded in presenting a text without any reservation, the United Kingdom had no amendments but would study with sympathetic interest the views and suggestions of the other countries. The United Kingdom felt that the basic principles and procedures of Chapter VI would receive support at the present conference. In the first place, the members of the Preparatory Committee represented every varied national interests in commodity questions, and they had also bean in close touch with the development of ideas by many other nations co-operating in the practical work of commodity organizations. Moreover, the Preparatory Committee had received valuable help from the work of the FAO Preparatory Commission on World Food Proposals, which had made an extended investigation of commodity problems. The United Kingdom as a warm supporter of the aims and work of FAO felt assured that the aims of the ITO were wholly consistent with those of the FAO in the commodity field. Most of the nations represented at the Havana Conference had participated in recent international discussion on commodity arrangements and particularly in the International Wheat Conference. Governments already had such valuable experience as to the manner in which Chapter VI could be used. The United Kingdom considered that there were five fundamental principles which must be embodied in any commodity agreement to which they were a party. They were: (a) all agreements must be fully representative of producers and consumers; (b) all agreements must ensure adequate supplies at "reasonable" prices; (c) all agreements must be based on measures to prevent extreme price fluctuations; (d) all agreements must promte increased production and consumption (except in special cases of chronic oversupply); and (e) all agreements must afford increasing opportunities for satisfying world requirements from the most effective producing areas. /All these E/CONF.2/C.5/SR.3 Page 3 All these principles had been incorporated in the Draft Chapter VI and had been ampliied to point the way to their implementation in agreements. The United Kingdom believed that the present Chapter VI represented a fair balance between the interests of producig and consuming countries. The Chapter provided a guide to intelligent international conduct in dealing with any serious commodity problems arising in the future. The delegate for Argentina (Mr. T. USSHER) raised the question as to the possibility of interpretation of the speeches into Spanish. The CHIRMAN regretted that it had not been possible to carry out the anticipated arrangements regarding simusltaneous interpretation for this meeting and referred to the Rules of Procedure on the subject of working languages. After some discussion it was decided in view of the circumstances to adjourn the meeting and to endeavour to arrange simultaneous interpretation for the next meeting of the Committee. The meeting rose at 5.45 p. m.

GATT Library

zg769ng6368

Summary Record of the Third Meeting : Held at Lake Success, New York, on Wednesday, 22 January 1947 at 10:40 a.m

United Nations Economic and Social Council, January 22, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

22/01/1947

official documents

E/PC/T/C.6/10 and E/PC/T/C.6/1-20

https://exhibits.stanford.edu/gatt/catalog/zg769ng6368

zg769ng6368_90230036.xml

GATT_156

United Nations Nations Unies RESTRICTED ECONOMIC CONSEIL E/PC/T/C. 6/10 AND ECONOMIQUE 22 January 1947 SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH DRAFTING COMMITTEE OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT SUMMARY RECORD OF THE THIRD MEETING Held at lake Success, New York, on Wednesday, 22 January 1947 at 10:40 a.m. The CHAIRMANhJMW, opgninG thecdisiosslan of Article 13, "Gnmerrnetal. Assistance to Emceonovilop eDeemnt, " stated that suggested modificnatios wie contained.dinu ecmeEnt BPC/T/C.61/W.land.doecumntPC E/nT/C.61/W.l MrDARK. AARNDIA (A) wished KnNtoow whether the expression "economic factorsow"r tads the end of Acrtile 1P2, gararaph 13 (a) as suggested by the United Statesleg deation barred claims which were not strictly economic. 4LE. I;YUNITED teATEdT=) agreed that the word "economic" should be deleted. Mr.HA C_'G.G HINA(I) doubted whether his Government would accept the wording "sjJcJet to such limitations and conditions as the Organization my impose" in Pagrrpaah 13 (b) and suggested deletion of the phrase. Mr. ACKLI EUNITED KINGDOMX=I KfL)OM) did not find that expression objectionable and felt tchat the fcuItative -haractpr of the Provision was clear. S (A2UHTRlLSA (AUSSALIr stated that he considered the word " onditions" tow be too t vte ande preferred it should be omitted. .Mr. IITEDLY(UTETNDSTA72 supported by ITHhMr. NADSM (CAIM considered that inclusion of the word "conditions" was intendead to mke the provisrion moe flexHible. e proposed to substitute "or" nfor "ad" but nvld.gr ta-, to delete the expression. HMKIr. LAM NCNE,(EO) recalling that in case of disagreement an alternative readingg miht be submitted., egsuZsted the following modification: "relefromase obligations in connection with regional arrangements." /LMr. EDDY E/PC/T/C. 6/10 Page 2 Mr. LEDDY (UNITED STATES) said that in view of the discussion which had taken place, he was. prepared to agree to the omission of the phrase "and conditions." Mr. LOYEZ FRESQUET (CUBA) proposed the creation of an ad hoc sub- committee to redraft Article 13 to be composed of all Members who had. entered reservations. The CHAIRMAN considered that the ad hoc sub-committee should be composed of the representatives of the United States, United Kingdom, Australia, China, Cuba, Chile, France, as well as of any other representatives interested. After Mr. LOPEZ FRESQUET (CUBA) had pointed out that India and Lebanon should be added, Mr. BREBNER (NEW ZEALAND) indicated that his delegation was also involved. Since, however, the list of countries concerned included practically all members of the Committee it seemed futile to create an ad hoo, sub-committee. Mr. SEACKLE (UNITED KINGDOM) thought that the Secretariat should be asked to prepare a text embodying the results of the discussion. The Committee would consider that text at a later stage. This suggestion was adopted. Mr. ADARKAR (INDIA) pointed out that according to the Report of the First Session "obligation" in Article 12 (3) (b), applied only to obligations arising out of tariffs negotiations and that the reference to Chapter V should be confined to Articles 24, 31, 32 and. 33. Mr-. LEDDY (UNITED STATES) and. Mr. SMITH (CANADA) felt, however, that this interpretation was too restrictive. It was agreed that the wording prepared in London should. be preserved and a note made in the Drafting Committee's Report that the majority of the Comtittee understood the negotiations referred to in Article 13 (3) (a) not to ba confined solely to negotiations pursuant to Articles 24, 31, 32 and 33, but to include also other negotiations under Chapter V. /In response Page 3 In response to an enquiry by the Chairman, Mr. ADARKAR (INDIA), Mr. WAXIM (LEBANON) and Mr. LCPEZ FRESQUET (CUBA) stated that they maintained the reservations they had made in London upon Article 13. Mr. LOPEZ FRESQUET (CUBA) also stated that his reservation included both pargraphs 3 and 4 of Section I of Part II of the Report of the Mr. HAKIM (LEBANON) stated that he considered the Drafting Committee should prepare an alternative text to cover his reservation. Mr. ADARKAR (INDIA) and Mr. LOPEZ FRESQUET (CUBA) agreed that alternative texts should be prepared to over all reservations. Mr. LOREZ FRESQUET (CUBA) announced that the alternative text which had been submitted by Mr. ADARKAR (INDIA) was acceptable to him. The CHAIRMAN MIW druler! that those delegations wishing to embody reservations ernin adlativse text sprhould epare such texts to be considyered b mmkithe ottee. Dis ssfion o,Chapte re V -.-eral CommercPolpial cy HAIRMANTheF fHe Zerrdd to ocument E/PC/T/.C.6/W8 which contained the Secretariatgg's souestins. HACKLhr SNETE(AUKINGMMD M) proposed that "Miebers", the last word in parRraaph 11 ofArticle 14, should be cghaned to "Member countries recspeetivly." This was agreed.. W.HRNATC H(NACED felt that paragraph (2) of Article 14 was basically unfair. Cnhiha ad never used preferences and was now expected tog aree not to use ethm.ow Hever this aapragrph preserved a privileged position -r otherc _untries whoh bd.rpTviously employed.preferences. MMrT. SIANADA( 3) poite&d out to Mr.N AIUHINGE IA) that preferences wouldgrG beadually abolished in toto. He proposed to insert oarapiapn grh 2 (a) of Article 14 the words between two or more of the territories comprised in Annexure A. " -. SKLEACUNITED KINGJO (Cw) agreed to that suggestion, adding that "India" should iIbenserted after, "Iredlan" and that the heading "Countries /of theBritish E/PC/T/C. 6/10 Page 4 of the British Commonwealth of Nations" should be deleted in Annexure A. Mr. NAUDE (UNION OF SOUTH AFRICA) wished to change "and" to "including" in the phrase "The Union of South Africa and South-West Africa" in Annexxre A. Mr. ALVAREZ (CHILE) in principle accepted paragraph (2), but wished to state for the record that he did not completely agree with the provision as it stoode.- Preferences between neighboring countries were a long- standing policy of the American continent and had been agreed upon in many Pan-American conferences. Therefore the matter did not concern Chile alone but a great number of countries. He wished to reserve the right to raise the question again in Geneva or at the world Trade Conference, Mr. SMITH (CANADA) raised the question as to whether "neighboring" should be interpreted as "contiguous." Mr. LOPEZ FRESQUET (CUBA) understood. "neighboring as meaning "with common frontiers, " but Mr. ALVAREZ (CHILE) felt that such an interpretation. would be too restrictive, while Mr. LECUYER (FRANCE) draw attention to the fact that the French version used the word. "voisin." Mr. CHANG (CHINA) restated his position concerning this paragraph and reserved his position. Discussion upon Article 14 was then closed.It was agreed that the next meeting of the Committee should be at 10:30 a.m. on Thursday; 23 January 1947.

GATT Library

yp684rp4873

Summary Record of the Third Meeting : Held at Lake Success on 11 February 1947, 2:45 p.m

United Nations Economic and Social Council, February 11, 1947

United Nations. Economic and Social Council, Preparatory Commission of the Conference on Trade and Employment Drafting Committee, and Sub-Committee on Tariff Negotiations

11/02/1947

official documents

E/PC/T/C.6/67 and E/PC/T/C.6/61-72

https://exhibits.stanford.edu/gatt/catalog/yp684rp4873

yp684rp4873_90230130.xml

GATT_156

United Nations Nations Unies RESTRICTED ECONOMIC CONSEIL E/PC/T/C.6/67 AND ECONOMIQUE 11 February 1947 SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH DRAFTING COMMITTEE OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT' UMMARY RECORD OF THE THIRD MEETING *- .,,D. ,, 'el& at DnW1Succeua:o 13.Febr:4ry 3.47, 2.-5 p.m. . B. N. ADARKAR)* j. HAIRMAN opened the continuation of the sison asi= of the Gezral Agrnemont -r Tasiffd -nt Trade by stating the broad principwhs vtich MiGht guide the Somub-Cmittee hn tbess disions.na. As a general rule, tfhe ollowing three categories of articles should mot be inclu de dintGe OenerAg Jmmereent: 1Articles of the Chartew Wcith laid down obligations concerning ,1reldomey stic piol.y, 2A .rticles thi Impmeeentaonmc of which was dependent on the existence d the Oag-nizati.n- 3; Articlewh :ich provided for a certain period of grace before Srovisions are being put intof efect. Mae Sub-Commiettedi UscusdeC the question wcimh Chapters of the Charter ot-uld be incorporatednim the nemeral Agreenmet dn. which should rm0=arlit .fht3eeclc.aartiopresented i Ia _t tentavew' draft by thenUrited Kinom- Delgsate (C./WA.40). Itw:s the general feeling that certain Chapters of the haritri ouil b-e includedby r eference nu the Declaration, -to be pnpenetd to the General Aremement, if the Declramtion woud& state in efinite terms that the ar ties to-the Genera lgAreemet w-oud&" observeiIn heirimutuaalr eaetins, wthin hte scopeoft h;e auhboriyt of each such G -r m n - - - f/oven et, E/PC/T/C.6/67 Page 2 Government, the principles and provisions" embodied in these various Chapters. The CHAIRMAN suggested that a small drafting group including the Delegates for Australia, Brazil, France, the United Kingdom and the United States should examine the draft Declaration in conjuncition with the paper prepared by the Secretariat (C.6/65) and report to the Sub-Committee. The Sub-Committee approved the inclusion of the following Chapters of the Charter in the Declaration, with the understanding that if a certain Chapter was incorporated in any form in the Declaration, all reservations made by Delegates were automatically included: Chapter I. (Purposes) after completion; Chapter III. (Employment, Effective Demand and Economic Activity) with the exception of Article 4 which should be incorporated in the General Agreement. Mr. LEDDY (United States) reserved the, position of his Government on the question of the inclusion of Article 4 in the General Agreement. He explained that, though his Government fully subscribed to the provisions of this Article, the inclusion in the General Agreement was outside the executive authority and required action by legislative body; Chapter IV. (Economic Development), except Article 13 which would be incorporated in the General Agreement; . - CIaater VT. (Restrictive Business Practices);+ IIentInterI. (ihtei-Goverommodity ArranAwit; s)ragement): reference vaa made to the Resolution rsf the Fiat Session of the Preparatory Commitrt ea(Repo pnge 48, A)nexure 9}. III. -ter Vr. (iona, izatoh)) rweference as made to the United States ?Per 8j.6/W'56)---: -:.=.- .: The Daki6ates Norwayina, Crechoslovslka and o wished to restrict the contents of the General wireementmoto articles dealing-vith the wst- favorred-n-tion treatmentwhnd tariffs and preferences, Vaich usually formed /part E/PC/T/C.6/67 Page 3 part of commercial treaties. The question may be raised again in connection with the United States paper (C.6/W.58). The CHAIRMAN thanked the Delegates for the United Kingdom and the United States for the preparation of the document mentioned in the discussion. Next meeting: 12 February, 2:45 p.m.

GATT Library

yb953zz1272

Summary Record of the Third Meeting : Held at the Capitol, Havana, Cuba, on 2 December 1947 at 10.30 a.m

United Nations Conference on Trade and Employment, December 2, 1947

Committee III: Commercial Policy

02/12/1947

official documents

E/CONF.2/C.3/SR.3 and E/CONF.2/C.3/SR.1-16

https://exhibits.stanford.edu/gatt/catalog/yb953zz1272

yb953zz1272_90190216.xml

GATT_156

United Nations Nations Unies CONFERENCE CONFERENCE E/CONF.2/C.3/SR.3 ON DU 2 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH~~~~~RGM . LI COIE III: COMMERCIAL POLICY MESTINU FRCRDOF THE THERD E2 eld at the Capitol, Havana, Cuba, on 2 December 19.7 at 10.30 a.m. Chairman: Mr. D. L WIIESS (Canada) 1. N LECTION OF VICE-CHAIUMA' The CMAD.Y announced that vr Water Muller (Chile), elected Vice-Chairman at the previous meeting, was unable to serve, and called for nominations to fill this office. On the ERnomination of Mr. LLAS (Colombia)O, supported by Mr. MRESCO (Argentina) and Mr. PARRA (Mexico), thMe CHAIRMAN declared r. Puig (Ecuador) unanimously elected as Vice-Chairman. 2. GENERAL DISCUSSION The CHIRMAN asked for an expression of general views regarding Chapter IV, suggesting that insofar as was feasible, in view of the inter-relation of the various chapters of the Chfarter, delegates conine their observations to this Chapter. M. IERAS (Colombia) believed it might be useful'i some member of the Preparatory Comittee would clarify certain pIoints in Chapter V2 in particular the use of customs tariffs for the uproteaction of indstry nd agriculture. Some objections had been made to the present text on the grounds that it did not offer reasonable protection,s but it had been aid that this protection was offered in 1Articles 13 and 4 of Chapter III. Those articlesmentioned protective measures which seemed to be contrary-to the principles of the Chartn er. The questiowas whether tariffs, with respect to which no contractual obligations had been assumed under Article 17, would be subect to Articles 13 and 14 or would be subject to adjustment by the' member without limitations. Mr. RYDER (United States of America) stated it was the intention that any mem ber .would be free to impose or to increase tariffs on any product not bou. nd under Article 17' However, there did exist under Article 17 nf obligation to negotiate a general reduction of tariffs. Article 13 provided relief in those instances in which it would not otherwise be available under thecharter, ! ' /Mr. LLERAS /M E/CONF.2/C.3/SR.3 Page 2 Mr. LLERAS (Colombia), while appreciating the explanation, suggested that it would be useful to include in Article 17 some reference to the need of certain countries to maintain reasonable protection of industry through customs tariffs, particularly as a guide to the future tariff committee. The protection of industry by means of tariffs would bring about healthier economies because tariffs were a more stable measure than quantitative restrictions, were simpler from an administrative point of view and were less discriminatory. Mr CHAVEZ (Peru) shared the point of view expressed by the representative of Colombia, and indicated that his delegation had submitted an amendment to Article 17. Mr. LLORENTE (Philippine Republic) while agreeing to the doctrine of the Charter for normal times, felt that until his country was in a more normal position economically, it would be difficult for it to follow such rules. He believed in full protection for infant industries including other means of protection than tariffs. An expanded multilateral trade, was the effect and not the cause of an improved domestic economy. The removal of barriers would serve to bring about an expansion of multilateral trade only if it did not conflict with national plans for development. He believed further that any organization established to regulate international trade should not be a super-state with power to enforce economic sanctions. Such sanctions should be applied only when a country provoked a state of war and then only with the unanimous concurrence of all member States. Mr. BLUSZTEIN (Poland) felt that the provisions of Chapter IV were the most important of the Draft Charter since they affected the entire scope of international trade and national economy. He quoted from the informal summary of the ITO Charter (E/CONF.2/INF. 8, Page 9) which stated in general terms that Chapter IV is concerned with the reduction or elimination of barriers to international trade, and with stimulating international trade on a multilateral basis. This was based on the idea that if the restrictions to international trade, particularly since 1930, were reduced it would effect increased employment, etc. He did not feel this was a realistic thesis. The application of quantitative restrictions and bilateral agreements was the result, not the cause, of the economic crisis. As a matter of fact, .these restrictions had permitted countries to maintain their foreign trade, and since the end of this war most countries had indulged in bilateral agreements because of insufficient reserves and credits. He therefore, could not share the opinion of the delegation of France expressed in plenary session that the current lack of balance in international payments was due largely to the isolation of Eastern Europe. His country had trade agreements with all but /three countries E/CONF.2/.C .3/SR.3 Page 3 three countries of Western Europe and was presently negotiating a new trade agreement with France. With regard to the provisions on Article 22, he believed it right and proper that non-discrimination in quantitative restrictions should apply in the circumstances covered by Article 20, but it was inadmissible that it should apply in the case of balance of payments difficulties covered by Article 21. His delegation could not agree to the statement in the informal summary of the ITO Charter (E/CONF.2/INF.8) that state trading bodies "tend to be more susceptible to political considerations in buying and selling than are private businesses." He felt that the Draft Charter represented a vote of no confidence in state enterprises, in which he could not join. His elegation hoped that both these points would be reconsidered. Mr. PEREZ (Dominican Republic) felt that the second paragraph of Article 16 was unaceptable and that countries such as his would suffer most from preferential treatment clauses. His country could not accept this, position and would ask that the preferential arrangements sanctioned by Article 16 be eliminated or revised too eliminafte u onfavourable effects of existing preferences.The reduction made recently in the tariffs of the Dominican Republic should be taken into account in any future negotiations for reduction of tariffs. Mr. LAROSA(Italy) approved the brave commercial policies of the Charter in attempting to effect protection only through tariffs. Such a principle presupposed a balanced equimlibrium which must await emergence from the of war. One problem facing Italy was the barriers to migration of Italian labour which in turn affected the volume of remiittances received. ' '''- ' As an exporter of "luxury" products, Italy was concerned with the ng toplttion of Artic2 i( (b) relative t"esential" products. Some special rct000ule was to permit countries aed by this situation to reachgation resa fair soviio .u T hub Italian deleserved the right tosbmit an amehnsdregard.met to dee-it interests in tisi RAOiawiic)ts basis ae ChprdJV 8.as the siaof -e iffre 'onion becousen the lesscountries ,ynstrializedse 0CS,whch compripd tthreoe-fouand s ofie hwrld,dustrillizediay nsaaxshwhicbiglyncourria ich ineto ed oserket n osurpluses.This conflictlic would nont exist if Chapter IV did otpl apy to alike.n Iternational trawde as restrainnd -ot by high tarsiff quantitative restrictions and exchange control, but bhy te lack of purchasing power. The reduction of tariff woumd -ean the paralysis of economic development of the less - /±ndaustrialized- E/CONF.2/C.3/SR.3 Page 4 industrialized countries and would lead to a still further lowering of purchasing power. This was his reason for objecting to the principle of the reduction of tariffs as the basis of the Charter as well as to the ITO having the power to force members to commence tariff negotiations. On the other hand, his delegation was prepared to negotiate on a voluntary basis. Mr. BULL (Canada) stressed the danger in further broadening existing preferential tariff systems since that would be contrary to Article 1 paragraph 4 of the Charter and would be a retreat from the gains already accomplished by the General Agreement on Tariffs and Trade. Important concessions embodied in Article 15 had already been made for undeveloped countries, and Article 42 provided for customs unions. Canada had accepted with regret the existing exceptions to Article 20, particularly paragraph 2 (c) (i), and could not approve of any further weakening of these provisions. Mr. ZORLU (Turkey) stated that if existing preference systems were allowed to be maintained under Article 16, similar treatment would have to be requested by those countries formerly grouped in the Ottomen Empire. Since the Treaty of Lausanne the countries of the Middle East had been faced with difficulties due to the breaking up of this economic entity which they had tried to remedy. If preferences were permitted for some, they should be for all. Mr. PUIG (Ecuador) stated that there were two opinions apparent in the conference; those of the great industrial powers versus those of the non-industrial countries whose products were limited to agriculture and raw materials. The elimination of tariffs or discriminatory treatment would leave small countries without protection and would reduce their sources of revenue for important public works essential to the furthering of economic development. Mr. CHANG (China) stated that countries were in varying stages of development and that to apply the same set of rules to all produced an unequal incidence. Highly industrialized countries were in a better position to accept such a code. The Charter should state general principles and should avoid cumbersome details requiring a large bureaucracy for their administration. Perhaps it would be wise to review the Charter at the end of three or five years rather than ten since alI countries were undergoing constant changes. Mr. COREA (Ceylon) re-emphasized the importance his country attached to the provisions concerning quantitative restrictions as they related to the purpose of the ITO outlined in Article 1. The provisions of Article 20 would in effect freeze the less developed countries at their present level, procluding the /attainment E/CONF. 2/C.3/SR.3 Page 5 attainment of the objectives of Article 1, particularly an increase in the standard of living. Subsidies and tariffs were of limited. value as protective devices and in his opinion some provision for the use of quantitative restrictions for protective purposes must be made. All through -the Charter escape clauses were provided to meet the needs of particular countries. If that were true, some consideration should be given to the large group of countries who sought relief from Article 20 until they could attain comparative economic status. His delegation had in mind. certain amendments on that point. The CHAIRMAN pointed out that amendments which would permit the use of quantitative restrictions for economic development were being considered by Committee II and that while he recogiized the difficulties in view of the inter-relation of the provisions of the Charter, he requested members to confine their statements Insofar- as possible to Chapter IV. Mr. BAHGAT (Egypt) cited paragraph 2 of Article 17 which provides for certain action should a member fall to carry out its obligations under paragraph 1. The terms of this paragraph as drafted threatened the economic:: existence of under-developed countries. A further problem would be created - for Egypt by the loss of revenue from tariffs. Article 17 should be re-drafted so as to allow for a reasonable transition period for the economic development of smaller, less industrialized countries, before requiring such meber states to negotiate tariff reductions. * Mr. JIMENEZ ( El Salvador) stated that a distinction should be made between tariffs imposed to eliminate competition and those of a fiscial nature necessary for revenue purposes in sma1l, under-developed countries. A special situation existed in the Central American countries with respect to preferences and he believed Article 16 should include an escape clause for this group. The CHAIRMAN announced that the general discussion would be concluded,,. at the next meeting, after which a detailed examination of the Chapter would. be begun on the basis of the provisional edition of the Annotated. Agenda which would be circulated Wednesday morning. The next meeting would be held on Wednssday, 3 December, at 10.30 a.m. The meeting rose at 12.45 p.m.

GATT Library

vf312rf0660

Summary Record of the Third Meeting : Held at the Capitol, Havana, Cuba, on 6 December 1947 at 3.00 p.m

United Nations Conference on Trade and Employment, December 8, 1947

General Committee

08/12/1947

official documents

E/CONF.2/BUR/SR.3 and E/CONF.2/BUR/SR.1-12

https://exhibits.stanford.edu/gatt/catalog/vf312rf0660

vf312rf0660_90180211.xml

GATT_156

United Nations Nations Unies CONFERENCE CONFERENCE E/CONF.2/BUR/SR. 3 ON DU 8 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH.L- ERAE4COMMITTEEaI1 SUMM RECORD OF THE THIRD MEETINlIqG Held at the Capitol, Havana, Cuba, on 6 December 1947 at 3.00 p.m. Acting irman: Nr.M.i MaUETENS Sla(giu-egm), FirstceiPcwsrdeeient 1. COMPOSITION OF SUB-COMMIETTES. (Note by the Executive Secretary, dmonue t E/CONF. 2/BUR. 8) (a) Paragraph (d) Mr. BETETA(Mexico), Chairman ofI CommitteI IT stated that he had been asked by the Chilean delegation to express the view that participation in the debates of sub-committees should be open to any delegation. PH. ILIP (France) suggested that the Chilean point might be met by slightly altering the drafting. TEXECUTIVE SECRETRETARY explained that the sentence had been worded in thianms ner in order to ensure that normally and subject to the provisions of Rule 54 only the members of the -subcommittees took part in their woark nd MWr.GR ILESS (Canada), Chairman of CommitteeI,I} suppored the Executive Secretary in the need for restricting participation in sub-committees in order to keep them as small working gro.ps, He suggested slightly altered wording It was agreed to change the sentence so as to read "Such observers may participate inu the discssion on the invitation of the Chaairmn of the Sub-Committee after they have submitted a request to be heard lodged in accordance with Rule 54". : (b) Para(raph c) A WILCOX.(Unitegd States)gesugGsted that the wording of this parah saep.eemed to imply the inclusion of only such delegationst as ook part in debates. It was agreed to make the paragraph read "In nominating sub-committees the Chairmanconcerned shall have regard to the adequate representation of all points of view".. Mr. WX (ILCOUnited States) suggested athe.dvisability of setting up large numbers of sub-committees with very limited terms of reference. HAKIM LLee (banon) E/CONF.2/BUR/SR . 3 Page 2 Mr. HAKIM (Lebanon), Chairman of Committee V agreed with this point In general but thought that in the case of certain Chapters it was not desirable to set up more then one subcommittee. Mr. WILGRESS (Canada), Chairman of Committe III, suggested that Mr. Wilcox' s point was more applicable to Committees II, III and VI than to the others and that it was well to bring it to the attention of the Chairmen of the various committee but not necessary to include it In a document. 2. NON-GOVERNMENTAL ORGANIZATIONS The EXECUTIVE SECRETARY stated that it Was desirable to have an early understanding of the rights and role of non-governmental organizations in the Conference. 1. The Rules of Procedure grant them the same rights as they are given by the Economic and Social Council, i.e. to be represented at public meetings, to present views in writing to the Conference on any matters on the agenda and to be consulted by the Conference whenever it considers such consultation to be useful. The right recently granted to place items on the provisional agenda might be regarded as abrogated in this Conference as none of the non-governmental organizations have availed themselves of the right and the Agenda has been passed by the Conference. 2. Regarding the submission of proposals by non-governmental. organizations, the Executive Secretary explained that the Secretariat would mention the proposals in the annotated agendas and the Chairman could ask whether any delegation wished to support the amendment and if so whether the committee wished to consult with the non-governmental organization. If not, the debate should proceed with no discussion of the amendment, If on the other hand, any explanation were desired, it should be limited to any explanation that might be necessary to supplement the material included in the written communication. Mr. AUGENTHALER (Czechoslovakia), Vice-President, stated that he was not in favour of participation by non-governmental organizations in the discussion, which should be limited to any delegation wishing to support such proposals. Mr. PHILIP (France) agreed with this and questioned the inclusion of such amendments in the annotated agendas since the submission of amendments was solely the right of the governments represented on the Conference. Mr. COLBAN (Norway), Chairman of Committee VI and Mr. HAKIM (Lebanon), Chairman of Committee V, agreed with Mr. PHILIP. Mr WILCOX (United States) pointed out that at the First and Second /Sessions E/CONF. 2/BUR/SR. 3 Page 3 Sessions of the Preparatory Committee, delegations had insisted that full opportunity for consultation would be granted to non-governmental organizations at the World Conference where it had not been possible in the preparatory stages and felt that the suggestion of the Executive Secretary contained adequate safeguards. Mr. PHILIP (France) stated that the difference did not arise so much on the form of consultation but on the submission of amendments and that a clear legal distinction had to be made between the right of delegations to submit amendments and the right of non-governmental organizations which was only to present proposals to the Conference.. The EXECUTIVE SECRETARY stated that in the annotated agendas it. was not proposed to reproduce the texts of the proposals but only to refer to the fact that they had been made end note the document in which they appeared. Mr. COLBAN (Norway), Chairman of Committee VI stated that while he was very happy to consult with non-governmental organizations, he wished it made quite clear that this was a conference of governments and that the right of non-governmental organizations to consultation did not go beyond that of submitting their views. The CHAIRMAN felt that this distinction was in fact quite clear and... that the proposals and suggestions of non-governmental organizations would never be considered as amendments. 3. CENTRAL DRAFTING COMMITTEE. (Note by the Executive Secretary, document E/CONF.2/BUR.8). Mr. PHILIP (France) felt that when texts were being considered by the Central Drafting Committee a member of the committee concerned should be Present. The EXECUTIVE SECRETARY said that this raised the question of the terms of reference of the Drafting Committee. He felt that these should be strictly limited to checking cross references, clearing up. small points of draftin aAnd punctuation and especially ensuring the identity f the text in the different languages. The Drafting Committee should have no authority. to make changes in the text nor to reopen discussions on substance. Any anomalies found in the text should be referred back to the Conference with whom the final decision would rest in any case. In reply to a question of Mr. AUGENTHALER's the CHAIRMAN explained that there would probably be no Legal Committee. Mr. DEDMAN (Australia), Chairman of Committee I, supported by Mr. BETETA (Mexico), Chairman of Committee II, considered it advisable. to have separate drafting committees for the various committees in order /to find E/CONF.2/BUR/SR.3 Page 4 to find proper expression for the exact meaning intended by the members of the committee. Mr. COLBAN (Norway), Chairman of Committee VI, preferred a central and objective drafting committee in order to make the text clear and consistent. Mr. GUTIERREZ (Cuba) supported this view but agreed with Mr. Philip on the need for the co-operation either of members of the secretariat or of the committees concerned with the various chapters. Mr. STUCKI (Switzerland), Vice-President, was in favour of a Central Drafting Committee but did not feel that this should exclude the setting up of separate drafting committees by the principal Committees in order to prepare their reports. He hoped that there would be no confusion between working sub-committees to reconcile views and drafting committees which should only work on the text once such a uniformity of view had been reached. The CHAIRMAN stated that there was evident agreement on a central drafting committee and suggested that the creation of other drafting committees be left to the discretion of the various chairman. Mr. WILCOX (United States) suggested that amendments of a purely drafting character could be sent directly to the Central Drafting Committee leaving amendments of a substantive nature to the committees. The CHAIRMAIN agreed that this should be done immediately upon the creation of the committee. Mr. COLBAN questioned whether the establishment of official texts in all five working languages would not be too heavy a task for the Central Drafting Committee. The EXECUTIVE SECRETARY replied that the secretariat would of course provide the translations but If it was considered necessary to establish texts in other than the working languages and in the event of difficulties of interpretation or precise phraseology the Central Drafting Committee would be the only body competent to establish such an official text. 4. Mr. GUTIERREZ (Cuba) raised the question of the report of the Credentials Committee and said that he understood it to have decided not to report on the Nicaraguan credentials but to refer this question to the plenary session. He wondered whether this could not be considered in The General Committee. The EXECUTIVE SECRETARY explained that this matter had not been placed on the agenda of this meeting as he had wished first to discuss it with the President of the Conference and the Chairman of the Credentials . Committee. He believed that the Credentials Committee was only empowered /to ascertain Page 5 to ascertain whether the credentials were in the proper form but not to inquire into the status of the government issuing such credentials and that there was no question as to the form of the Nicaraguan credentials. The CHAIRMAN supported the Executive Secretary and stated that the same question arose with regard to the Indonesian Republic's credentials which were found to be in the proper order but that the Credentials Committee had no authority to inquire into the political status of either. 5. Mr. BETETA (Mexico), Chairman of Committee II stated that he had been asked by some delegations to raise two points in the General Committee: 1. That the pressure of committee meetings was too heavy and made it difficult for small delegations to find time for consultation. They therefore proposed three instead of four meetings of main committees daily. 2. The time limit for the submission of amendments. The EXECUTIVE SECRETARY, in reply to the second point, said that the time limit was not, of course, a rigid one. Mr. HOLMES (United Kingdom) while sympathizing with the difficulties of smaller delegations, pointed out that the larger ones had similar difficulties and that he would not be in favour of reducing the number of meetings. As far as amendments were concerned, as any amendment could result in counter amendments there could, of course, be no absolute rule. Mr. CHARLONE (Uruguay) suggested that the question of submission of amendments by smaller delegations unable to meet the deadline could be met by agreeing to take no definite vote on any question before 11 December. The CHAIRMAN considered any action on this unnecessary as the likelihood of any committee arriving at that stage before 11 December was extremely remote, The EXECUTIVE SECRETARY pointed out that the pace of the Conference to date had been relatively leisurely and that there would shortly be a series of sub-committee meetings. It would be impossible to arrange a schedule to permit all delegations to attend all meetings. Mr. WILCOX (United States) proposed that no meetings be held on the following Tuesday to give delegations time to study the annotated agendas. This was agreed. Mr. AUGENTHALER (Czechoslovakia), Vice-President, proposed that all speeches be limited to three minutes. It was felt that this was better left at this stage to the discretion of the various chairmen. The meeting rose at 5.45 p.m.

GATT Library

xs486nf2237

Summary Record of the Third Meeting : Held at the Capitol, Havana, Cuba on Monday, 1 December at 10.30 a.m

United Nations Conference on Trade and Employment, December 2, 1947

Second Committee: Economic Development

02/12/1947

official documents

E/CONF.2/C.2/SR.3 and E/CONF.2/C.2/SR.1-17

https://exhibits.stanford.edu/gatt/catalog/xs486nf2237

xs486nf2237_90180437.xml

GATT_156

United Nations Nations Unies UNRESTRICTED E/CONF.2/C.2/SR.3 CONFERENCE CONFERENCE 2 December 1947 ON DU ORIGINAL: ENGLISHE TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI SECND COMMMITTEE : ECNOOMIC DVELLOMENTPEMENTOP RECORD OF THE THIRX MEETINGDMARYRESY ECF HEEEETTE THIRD MING Held at the Capitol, Havana, Cuba on Monday, 1 December at 10.30 a.m. Chairman: Mr. Ramon BEA (Mexico) AlUde meeting and invitiscussion of Chapter III of the Draft Charter. Mr. COOMBS (Australia) expressed the opinion that unless full employment, access to foreign exchange resources, and economic development in backward countries were attained, existing conditions would be frozen and trade barriers could not be removed. He emphasized that it was more important for the highly industrialized countries of the world to take action rather than to write a perfectly worded Charter which could remain a dead letter. He appealed to then to resolve the apparent conflict between stability and expansion by increasing industrial production, and ttyo impleme rthe Charte which action would be in their own interest. A relatively insignificant rise in the standards of living of the Asiatic and Pacific peoples alone could keep the workers of these industrialized countries busy for many years. Mr. MONGE (Peru) felt that too much emphasis had been given in Chapter III to production and that not enough attention had been paid to the needs of the consumer in underdeveloped countries. The London draft (E/PC/T/33) contains certain clauses to safeguard the standards of living and the working wages in underdeveloped countries, which, however, had not been incorporated in the present Draft. His delegation would present amendments regarding the principles of international investments similar to those adopted in the London draft. Mr. KN (Burma) endorsed the Australian statement and expressed general agreement with Articles 8 to 11, but he wantedà definite time limit attached for implementation. With reference to Article 12 he advocated adequate safeguards against the interference of foreign investors in the internal political affairs of the underdeveloped countries. Calling attention to certain types of foreign investment which naturally tended to be monopolies, (e.g. mining), he stated that the provisions of Article 49 of the Draft were /insufficient to E/CONF.2/C.2/SR.3 Page 2 insufficient to afford adequate protection, and suggested that Article 12 should contain a provision to deal with nopolistic foreign investments. uniform standards should be worked out by all underdeveloped countries for the fair return of foreign capital invested within their borders in exchange for the granting of non-discriminatory status. Provision should also be made for foreign firms to open their accounts to the local government authorities, if so requested. He felt that Article 13 was cumbersome and should be simplified. His delegation would take action to this effect by means of an amendment. Mr. KOJEVE (France) agreed with the Australian statement and called attention to the fact that the French Union included a number of undeveloped areas. Mr, MELANDER (Norway) agreed with the general principles of the Chapter and Article 12 but said that he would propose certain amendments later. Mr. d'ANNA, (Italy) supported Article 8 and emphasized the special interest of Italy in world prosperity, since his country was dependent upon foodstuffs from abroad for which it could pay only with the products of its skill ed manpower or with the proceeds of the tourist trade. Italy faced greater problems than other countries because of its excess population, among which unemployment had already set in and because of the lack of raw materials and war devastation, his Government had already on its own initiative. adopted measures to implement the provisions, of Article 12 and was in general agreement with its principles. . Mr. TIAS(New Zealand) felt that peoples with low living standards, despite the rich natural resources of th,eir countries were a threat to the prosperity of more highly developed countries and that therefore the industrialized countries in their own interest had to support the atttempts of the underdeveloped ones to develurop their resoced res. This worequire large .oig investments but: h questiogned the rinhtof nany foreig- investorVhther a private citizen or a governmint, toi operate Ananother country without the governments expressed approval. The ri nationalghts to inquirfe, into air terms of foreign investments should be safeguarded e qually inthe case of governnment to govnvernment aie is ttm centsndnhease of private direct investments. The government of the country in which ts wereinvestmen m adve wouldhae to retain the rig ht to seethat its own resources were rot unduly depleted and to sinsurethi no investment should be allowed to be made unless it was first approved by thene governmt.The s of Artaprovsipnicle 12 were insufficient .to ass Hisure this. delegation would later propose an amendment to correct th.is aspect - -- ,a LIEU (Cbin) ENF.2/C.2/SR.3 Page 3 Mr. LIEU (China) supported the remarks made, by the representatives of Australia, Burma, Peru and New Zealand and asked for more definite provisions in Chapter III. Mr.NOVOA (Mexico) felt that the Charter placed too much emphasis on regulations and not enough on economic development. However, it was undesirable to refer to the role of the International Bank for Reconstruction and Development in connection with Chapter III as that institution had its own principles of operation. Mr. JIMENEZ (El Salvador) recalled the bad experience of his country owing to the disregard by foreign investors of national sovereignty and of the maintenance of proper living standards and wages for its workers. A greater reciprocity should be attained between the safeguarding of the investments and the standards of living. Nationalization was an expedient to which underdeveloped countries resorted only as a matter of self-protection Their only power to safeguard themselves in any other way was often only theoretical. Mr. MORESCO (Argentina), Mr. SHAMMA (Lebanon) and Mr. BLAZEJ (Czechoslovakia) agreed with the Chapter III in principle and said that they would speak at greater length in the discussion of individual articles. Mr. ZAYED (Egypt) agreed with Articles 11 and 12 and stated that his country welcomed foreign investors who were always treated on equal terms with its own nationals. To Article 12, paragraph 2, sub-paragraphs (a) and (b he suggest the addition of a rider that transfer or compensation should be subject to the legislation of the country concerned. Further amendments to Articles 3 and 15 would be submitted by his delegation, in the latter ase to insure preferential treatment as among members of the Arab League. Mr. DJEBBARA EhBARA (Syria) considered the wording of Article 13 inadequate as presenting too many loopholes and almost inviting countries to adopt the impeditT mentsiwas designed to avoid. A moreve br posiapparoach ws needed that would show clearly that the adoption ofmp such idiments was prohibited and co-operation was mandatory. Foreign investors were accorded the same rights in his country as nationals and all safeguards were given to their investments. INAMr. FAA(Uruguay) agreed with the previous speaker regarding the vssaguethene of wording on Article 13. He fatelt th the same uncertainty existed in Artic le 14and was even more serious, as the notification clause ofthiayrtwy ds auld tend to make implementation impossible and his delegation could therenfore ot acce.pt it ' ' /Article 15 should E//CONF.2/C.2/SR.3 Page 4 Article 15 should state the principle of preferential agreements only; a vote of two-thirds should not be necessary. Paragraph 2 was unnecessary. All that was required was a reference in Article 15 to Article 42. He considered that Article 12 as now drafted conflicted with the Uruguayan legal code. Uruguay could not give special rights or protection to foreign capital because the Constitution stipulated the equal treatment of foreign and local investors. Article 12 should be changed to a simple declaration of principles. Mr. HAIDER (Iraq) was of the opinion that the new Organization should be in a position to assist war devastated and underdeveloped countries to a greater extent than had been envisaged by the Charter as drafted. More study of Article 12 was needed in order to safeguard and facilitate capital investment if the national interest of the country concerned was not to be disregarded. The provisions of Article 14 would work to the detriment of those countries which might wish to enforce restrictions at a date later then the signing of the Charter. Underdeveloped countries could not now foresee all, the problems that might arise and Article 14 would place them at a very disadvantageous position as compared with the industrialized nations. Mr. ARAUJO (Colombia) suggested the adoption by the Organization of more practical solutions for a system of financial co-operation, for example through the avoidance of international double taxation, the study of natural resources and technical, agricultural and industrial development to implement the Charters principles. The lack of expert technical advice was the crucial point, since commercial enterprises in the developed countries, which possessed these skills, were often opposed to development in other countries. Co-operation between governments therefore was more promising. Multilateral agreements on tariffs and taxation had been proposed before, e.g. by the League of Nations, but had never given practical results, The flow of international capital, interrupted since 1930, should be stimulated again by multilateral agreements which would eliminate double taxation. If capital were taxed only in the country in which it was invested, this would be a powerful incentive to underdeveloped countries, and at the same time would compensate them for the other obligations which they would accept under the Charter. His delegation would present a number of amendments to Chapter III to this effect. Mr. HURTADO (Venezuela) took exception to the rigidity of the provisions of most of the Articles and remarked that Articles 10 to 12 would not oblige the greater or more industrialized countries to assist the weaker or less industrialized countries. He supported the suggestions of the representative of Colombia and regarding Article 12, also those of Uruguay. /He reserved the E/CONF.2/C .2/SR.3 Page 5 He reserved the position of his delegation to Articles 12 and 14, in the feeling that they promoted unequal treatment of countries. Mr. GUTIERREZ (Cuba) recalled the efforts made by his delegation during the preparatory work for the inclusion of Chapter III in the Charter. He invited the members of the Conference to study the discussions that had taken place in London and Geneva, in order to realize that the present text included only the points on which all countries had agreed. Their own effort to improve their lot would prove more important to the underdeveloped countries than any attempt to write a perfect legal document. The great possibilities in Articles 10 and 11 could be achieved only if national action by all countries would implement them. He felt that matters which were properly the concern of other international bodies should not be discussed here, Article 13 was very important inasmuch as it would permit members to take certain measures which previously had been prohibited. He invited everybody to adopt a more co-operative attitude in accepting a compromise wording. The CHAIRMAN summarized some of the outstanding points made in the meeting and stated that it seemed to him that the general principles of the Chapter me twith approval. Accordingly he inquired whether Article 8 might not be approved forthwith. After a short discusison in which Mr. COMES (Australia), Ar. NOVOA (Mexico), Mr. LIEU (China), Mr. GUIMERREZ (Cuba), Mr. ARAUJO (Colombia), Mr. MONGE (Peru) and Mr. CREA OPm (Ceylon) pa-icipated it was decided to postpone the examination of the text article by article until the next meeting. The meeting rose at 12.50 p.m.

GATT Library

wy405bn0372

Summary Record of the Third Meeting : Held at the Capitol,Havana, Cuba, Wednesday, 3 December 1947, at 10.30 a.m

United Nations Conference on Trade and Employment, December 3, 1947

Fourth Committee: Restrictive Business Practices

03/12/1947

official documents

E/CONF.2/C.4/SR.3 and E/CONF.2/C.4/SR.1-15

https://exhibits.stanford.edu/gatt/catalog/wy405bn0372

wy405bn0372_90190673.xml

GATT_156

United Nations Nations Unies CONFERENCE CONFERENCE UNRESTRICTED ON DU E/CONF.2/C.4/SR. 3 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI 3 December 1947 ORIGINAL: ENGLISH FOURTH COMMITTEE: RESTRICTIVE BUSINESS PRACTICES SUMMARY RECORD OF THE THIRD MEETING Held at the Capitol, Havana, Cuba, Wednesday, 3 December 1947, at 10.30 a.m. Chairman: Mr. C. CHALONE (Uruguay) 1. GENERAL DISCUSSION The CHAIRMAN, opened the meeting, and declared that all meetings until the end of the present week would be devoted to the general discussion of Chapter V, reminding the delegates that the time for the submission of amendments was 6 December. . . . Mr. HaEGOR (Canada)Charlfter expressing -stisfaction that Mr.' ealne htad meetd heairmens hif tye Coxm~itee madeageneral'surve of the discussions in Geneva regarding Chapter V. -- B nisntoed out jktn;hatChapt;er V as it etadenw s a Zoitroductt. delegatea a num ber of countries representing al)lontinents and different economies helped in drafting it. Itrecognizes the necessity of preventive, as well as remedial, action. The oor ganization'oe st upo couldan nctorer any country 't tke -ay spfic remeould be f deil acti on. Each nation w deto act-in way which I would consider appropriate, but it would be required to explain why it hiheTot acted ohe ITO.n any decIsontaken by't Theroasurgent need for the tcype of joint actioni aled for in ChapterV. -cag ale a nationul cod ot protecctuld oitself - it. oi cly btee type protected by e of international co-operation now proposed. The delegation of Canada bad no reservations or amendments to submit to Chapter V. It regarded the Draft Charter as a substantial basis for effective action and its principles adnd policies woul be endorsed wholeheartedly bya the Government nda Parliament of Cnada. Mr falssevainguid o ) ,ntepaaka,eopf ordntred, requt that Spanish be used as a third wlangorking uahege mmof t Coittee and, in that connection, referArred to5 ticle 3of the draft rules of procedure. PMr.rge CAma(Asitinrmupsorted mthes rfeark3o the representative of El Salvador. E/CONF.2/C.4/SR. 3 Mr. COLBAN (Norway) pointed out that Article 53 had been included in the draft rules of procedure to enable committees to simplify their procedure and save time. Mr. MONGE (Peru) pointed out that the acoustics of Committee Room C were not satisfactory and that if some other arrangement was not made be would have to support the delegate of El Salvador. The CHAIRMAN informed the Committee that within the next forty-eight hours it will be possible to hold the meetings of Committee in a room provided with simultaneous interpretation and suggested that in the meantime it would be helpful if representatives would speak clearly, and would deliver their speeches standing. The Chairman's suggestion was accepted. Mr. ALCAR (Mexico) emphasized that there should be equal treatment of all nations, and said that Chapter V contained three main points which were outlined in Article 44. It would be necessary, in dealing with the Chapter to clarify that part referring to the obligation of Nember States. No State should suffer because its legislation had laid down certain systems involving restrictive measures. The delegation of Mexico would not accept ary measure which was contrary to its own legislation. It would therefore have to submit amendments to Chapter V and to request clarification on certain points. Referring to the question of monopolies, Mr. Alcar pointed out that they could do great harm to the development of international trade. However, it should be made clear in Chapter V that in mentioning monopolies reference was not being made to organizations of interest to a State or of a social nature. Mr. CAMPS (Argentina) in presenting the Argentine amendments to this Chapter, contained in document E/CONF.2/11/Add.3, explained that they dealt with three main points. In the first place, his delegation fully agreed that in private trade restrictive practices should be avoided. With regard to public enterprises, the case was a little different, because the higher interests of the respective States came into consideration. In eliminating from this Chapter all mention of public enterprises, it should be borne in mind that public enterprises did not have the aim of limiting international trade, and were therefore not restrictive. In Argentina there existed an organization known as the IATI whose object was not to limit international trade, but to organize and co-ordinate international exchanges, and to implement the Argentine programme of co-operation in world reconstruction. He stated that if the Argentine amendments were not adopted, /his delegation E/CONF.2/C. 4/SR.3 Page 3 his delegation would have to formulate a general reservation with regard to Chapter V. In the second place, the amendments dealt with the power of decision given to new Organization, and did not apply only to Chapter V. The delegation of Argentina acknowledged the competence of the new Organization to deal with studies and investigations and its right to formulate recommendations, but considered that the States Members should retain the right to make final decisions. In the third place, the amendments dealt with procedure with respect to services. There were two points with regard to this which he wished to raise. Firstly, the Argentine legislature provided that telecommunications and posts, telegraphs and telephones belonged to the State. Secondly, the banking system was being reorganized. The Central Bank had been nationalized and a State guarantee of deposits in private banks had been introduced, which was tantamount to nationalization. Moreover, all means of transportation were in process of being nationalized. Mrs. KILROY (United Kingdom) recalled that during the London discussions there had been considerable divergence of opinion on this Chapter, and these divergences might persist if the matters continued to be discussed on a theoretical basis. While some condemned and others approved of restrictive practices in theory, the delegation of the United Kingdom took a middle view. She thought it was the general view of the delegates present that if these practices militated against the objectives which they were gathered together to further, harm was being done. Chapter V followed this line and neither condemned nor approved, but provided for investigation are the lodging of complaints. With regard to the summary of the Chapter which had been circulated she wished to make it clear that it was only accepted as a summary by the delegation of the United Kingdom. Any amendments would be made on the basis of the official text. The meeting rose at 12.15 p.m.

GATT Library

js284tc0450

Summary Record of the Third Meeting : Held at the Capitolio, Havana, Cuba on Tuesday 2 December 1947 at 4.00. pm

United Nations Conference on Trade and Employment, December 2, 1947

First Committee: Employment and Economic Activity

02/12/1947

official documents

E/CONF.2/C.1/SR.3, E/CONF.2/C.1/C/1-4, and C.1/SR.1-13

https://exhibits.stanford.edu/gatt/catalog/js284tc0450

js284tc0450_90180273.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE ON DU 2 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH FIRST COMMITTEE: EMPLOYMENT AND ECOMIC ACTIVITY SUMMARY RECORD OF THE THIRD MEETING Held at the Capitolio, Havana, Cuba on Tuesday 2 December 1947 at 4.00. pm. Chairman : Mr. DEDMAN (Australia) GENERAL DISCUSSION ON CHAPTER II OF THE DRAFT CHAPTER Mr. PIERSON (United States of America) pointed out that for some years many countries had recognized the importance of maintaining full employment, not only as a question of domestic policy but because of its effect on foreign trade and on the well being of other countries. To Australia should go a large share of the credit for advocating the desirability of full employment in international discussions on trade. The United States Government had taken, and would continue to take, an affirmative position with regard to that question . It had been included among the proposals for the expansion of trade, issued. by the United States in 1945, and had formed part of the draft charter submitted by them to the Preparatory Committee in September 1946. The United States had also enacted domestic legislation on the question in the form of the Employment Act of 1946. It could be agreed that in general the means to full employment were primarily a domestic concern, buh tiat they should be consistent with the other provisions of the Charter including those relating to the reduction of trade barriers. . In Lonon the Australian and United Kingdom delegations had been instrument. in having included inChapteriII the concept of co-operatlon ments within the al of, maladeenents.ssmenhe balance of paymsft8. A second substantial addition to the original draft appeared as Aric e7 in which by reference toother provisions of the Charter, the need of countrieBto srfeguard their economies against deflationaxy pressure was recognized. , third substantiad adds, waswn concerning fair labour standar4 wasmade during the London and Geneva meetings at the suggestion of the Cuban representative It wastclear that ITO should not duplicate :he work of atever tmovet m should take mwveovever.actiwas feasible to reomv /substandard E/CONF.2 /C.1/SR.3 Page 3 set forth in Chapter IV would. only be acceptable and possible if world economic conditions were to be reascrsbly stable. If a major industrialized country failedito maintain employment or to utilize available current earnings of foreign exchange, crises would result ant it would be impossible for others to fulfil the obligations concesning commercial policy. In London, attention had been gvien to the kinds of internatinal action which could be taken to alleviate a world-wide econmic decline and suggestions had, been sent to the Economic and Social Council for study by one of its subsidiary bodies. No report had been received from the Council an dhe propoed that its attention again be drawn to the urgency of the questio nand to th dedsirability of haingv at least a preilminayr report. r. M4ACELLLETIS(Italy) could not help feeling that the Prepartaory. ComiItteehbad concentrated its attention too exclusively on trade expansion tor that Wa n o -the ony -or the decisive factor which had to b t aken nito consideration. The equilibrium of any econonm was dependent upon a just ratio between capital resources an copur, without which it would be impossible to ensure a free flow of godos and commodities. Acountry wwith surplus manpower and insufficientreesources coul only maintain astabl eeconomy by encouraging emgriatio,n by inoreasing investment,s or yb establishing trade restrictions. .r " Apt-ee- trsn,t- i Italy ahad. population of 4 6 aiion aons- n te whirloy-Wh could only maintain between d 40n an0 millions anth 5- adeqsate .tandard of living : -; It might =a- be practicabla to devise a solution to thlt problem now, phasize Conr eence shouls on sasize thwas onethat such a-solution vaponQ . of its &ima. ; - -- - Mr.ATSQNNew Zealand), pointed out that in underdevqloed countries a rise in the leye:f damad would result in a rise inAprdactia, b - f that in the rabeeloe& regi the ind of production )c9Uld& othe most ars'few pts ver, the long term and that even: in pIemot st dasvel opeddountiei tndrd f living was not as high s, itcoul. be In mary cases mand, waseffective way of raising the level of deand, wa;- tb iogh a more -qitable distribution of wealth and.:nme. The C0er;a iad md o at fll employment and that employment.hd-t-Qn produa-rhkiwawouldwaircome.rant a fair share of, te. ntiona Inm.I=,. The ITO ba't-qvork fowards =re -equal standards of labour i- it wished to ty.effectv. w p. -. - - :- Each mebs concerninger of ITO should submit its government's proposallering inffulation l mpidedlnt"--et^ itto the exchjige -ormz.prov Z-indil -t6.hasihoud-be -ai on he urget ned for, that Informa o aid dteshould be set for its submission. a. Itson E/CONF.2/C.1/SR. 3 Page 4 Mr. Datson expressed the view that the use of trade devices should be Judged by their results. Only in cases where the application of quantitative restrictions had effecta contrary to the objectives of the Charter should a Member be penalized for using them. Mr. ROYER (France) drew attention to the fact that as the preliminary discussions in London, Geneva and New York continued, the focus of attention slowly shifted towards the social and sociological implications of a charter on trade and employment. . He agreed with the Australian representative that the Chapter on cOMMal p could oily be implimented if a minlmun state of economic equilibrium existed. It had to be realized in that connection that the maJor industrilized powers had a great responsibility for only if they daintainof dohigh level ^ Demand, could the dependent economies achieve economic nequilibrium. May eloquent statements had been made in that respect .y Various.representatives- .e supported the suggestion of the Australian representative to make a further request for a report from the Economic and Social Council. ITO would have to work in close relationship with the Council, but it would have to be recognized that the former had both the right and the duty to intervene, when international trade was seriously affected or threatened. The Chartr did not recommend solutions concerning employment conditions in individual countries but if anf state should sail in that respect if would incur a large responsibility. It was essential to reassert the necessity for fair labour standards and for co-operation with the ILO in that respect. The balance of payments would have to be readjusted so that there existed international equilibrium. Another fundamental point to be taken into consideration was that countries which fdced econodic crises couli not be forced to obey the regulations concerning quantitative restrictions. As regards that question, the countries concerned eould have to roach an understanding concerning common progress. Chapter II of the Charter could perhaps be more clearly drafted, but as a comprom se'text it was generally satisfactory. Mr. PARRMA (Mexico), said that the general principles of the Charter were acceptable but that certain of its provisions were mutually cTntradictory. She aims of Chapter II did not coincide with certain other portions of the Charter, and in his opinion, it should be strengthened so as to recognize the unqualified right of countries to maintain full employment. Tde MeZican Ddlegation woel& submit a s'ries of amendments to bring the Charter more into honformity wite the economec policy of M*xico and to ensure /greater protection E/CONF. 2/C.1/SR. 3 Page 5 greater protection and uniformity concerning the standard of living of agricultural and industrial workers. Mr. PEREZ (Dominican Republic) stated that his country could not undertake to maintain full employment so long as it was not in a position of equality with respect to its natural markets. It seemed to him, that the principle of inequality was being consecrated in the Charter and yet as long as no equality existed in the Carribean, the Dominican Republic would be unable to improve its economic position and depressions would continue to take place. Mr. SHACKLE (United Kingdom) drew attention to the high importance which his Government attached to the provisions set forth in Chapter II. Even daring the war, the Coalition Government had felt the subject to be of great importance and had issued a White Paper setting forth an employment policy. He agreed with the Australian representative as to the essential link between Chapter II and other portions of the Charter, in particular the chapter on commercial policy. He also agreed with Mr. Coombs that the attention of the Economic and Social Council should again be drawn to the request for a report on the subject of the Preparatory Committee draft resolution on employment. Mr. FER (Turkey) expressed warm support for the principles contained in Chapter II for they could provide the foundation of a new social structure Full employment and the increase of production were essential for the achievement of higher standards of living, as had. been laid down in Article 55 of the United Nations Charter and in the Philadelphia Declaration of ILO. The ITO Charter outlined both a practicable and comprehensive plan for the establishment of satisfactory economic conditions. In Turkey one of the functions of the State was to ensure a job for every citizen who was able to and wanted to work. Turkey was attempting to increase productivity in order to raise the standard of living. The meeting rose at 5.50 p.m.

GATT Library

wg296jn0718

Summary Record of the Third Meeting in Executive Session Held on Thursday, 8 May 1947 at-10.30 a.m. in the Palais des Nations, Geneva

United Nations Economic and Social Council, May 8, 1947

United Nations. Economic and Social Council and Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment

08/05/1947

official documents

E/PC/T/EC/SR.2/3 and E/PC/T/EC/SR. 2/1-21

https://exhibits.stanford.edu/gatt/catalog/wg296jn0718

wg296jn0718_90210056.xml

GATT_156

UNITED NATIONS NATIONS UNIES RESTRICTED ECONOMIC CONSEIL E/PC/T/EC/SR. 2/3 8 May 1947. AND ECONOMIQUE ORIGINAL: ENGLISH. SOCIAL COUNCIL ET SOCIAL SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT. Summary Record of the Third Meeting in Executive Session Held on Thursday, 8 May 1947 at-10.30 a.m. in the Palais des Nations, Geneva. Chairman: H.E. Erik Colban. In opening the meeting the CHAIRMAN stated that documents T/45/Rev.1, dealing with consultation with non-governmental organizations in Category A and T/60, Report on Credentialo, had been distributed to delegations and would be discussed at the next meeting in Executive Session. Delegates would receive document t/59 relating to the base dates and a paper containing an amendment to the Rules of Procedure, and these would also be discussed at the next meeting. He said that this meeting had been convened for the purpose of discussing Articles 15 - 23 and 37 of the Draft Charter; only this morning numerous proposed amendments had been distributed in addition to those put forward by the United States and Canada (W.23 and W.24 of 6 May). Delegates had received also an annotated agenda, W.28, for the discussion of the Articles in question. He drew attention also to W.29, distributed that morning, containing proposals by the Cuban Delegation for the amendment of Article 15 and putting forward for discussion two important questions, namely the general purposes of the Charter and the E/PC/T/EC/SR.2/3 page 2 status of bilateral trade agreements in relation to the proposed General Agreement. The Chairman expressed the opinion that it would be difficult for the Committee to discuss these documents until members had had more time to study them. Mr. FAIVOVICH (Chile) suggested that the logical order for the discussion of the Charter would be to begin with Chapter I and to examine the Articles in the order in which they appear He said that many Articles of the first four Chapters had a direct bearing upon Chapter V and that therefore discussion of the latter could not have a satisfactory outcome unless the first four Chapters had been previously examined. In any event, he urged that Article 14 should be discussed before the Committee proceeds with the technical articles of Chapter V. The CHAIRMAN suggested that possibly there was some misunderstanding regarding the plans which had been decided upon at a previous meeting; it had been the intention of the Committee to examine the technical Articles, which had been drafted in New York, so as to give them the same status as that enjoyed by the rest of the Charter, but without endeavouring to establish the final wording of these Articles,. Mr. GUTTERREZ (Cuba) agreed with the delegate for the Unite States that consideration of the technical Articles should be postponed until delegates had had an opportunity to study the documents distributed. Further, he suggested that the Committee should examine first of all those parts of the Charter which had a direct bearing upon, and were essential to, the tariff negotiations. He accepted the Chairman's explanation but considered nevertheless that preliminary general talks were required. He read to the Committee certain. sections E/PC/T/EC/SR.2/3 page 3 of the Cuban Delegations's memorandum, W.29, which had been distributed that morning, and referred in particular to certain differences of opinion which had already arisen in the tariff negotiations regarding the status of existing trade treaties If and when the proposd General Agreement on tariffs and trade comes into force. The CHAIRMAN, In reply to the last point in the Cuban Delegates remarks, suggested that the Secretariat, with the help of interested delegates, should prepare a paper and also a draft paragraph for insertion in the General Agreement for consideration by the Committee. In reply to a suggestion that this problem should be referred to the Tariff Negotiations Working Party, the Chairman stated that he would prefer to keep the tariff and the Charter deliberations separate, but of course the Secretariat would consult with the Working Party. He then suge-ested that a start might be made at this meeting on the discussion of Article 15. Dr. HOLLOWAY (South Africa) said that he had enquired at a previous meeting whether on this occasion technical Articles were to be discussed in detail, and the reply had been in the negative; he could not understand 'therefore why it was now proposed to proceed with a detailed examination of the provisions of these Articles. Mr. FAIVOVICH (Chile) stated that he would not object to an examination at the present time of Articles 15 - 23 and 37 on the understanding that no final decisions would be made and that there would be a further opportunity to discuss these Articles when the whole Charter is examined. He insisted, however, that the discussion of Chapter V should begin with Article 14. E/PC/T/EC/SR. 2/3 page 4 The Chairman said that he agreed with the views expressed by the South African delegate and accordingly he suggested that the Committee should consider the technical Articles as a group and should regard them as the outcome of a continuation of the work of the Technical Sub-committee in London; the Committee might take note of the work that had been done and might accept these Articles as a part of the Draft Charter for eventual consideration with all the other sections; if this were done the Committee could then pass to a general discussion of the Charter as suggested by the Delegtes for Cuba and Chile. He then asked the Chairman of the Tariff Negotiations Working Party, who had originally suggested that the technical Articles should be examined prior to the general talks on the Charter on 15 May, whether he had any comment to make. Mr. WILGRESS (Chairman, Tariff Negotiations Working Party) traced the history of the discussions on these technical Articles and stated that in the view of his Working Party these Articles, ln view of their bearing on the tariff negotiations, should be examined by the Preparatory Committee prior to the commencement of the Charter talks on 15 May, so that all Articles of the Charter should have the same status. Mr. COOMBS (Australia) suggested that aIl the amendments now proposed to these technical Articles should be referred to the Technical Sub-Committpe for examinRtion and report. Mr. HOLMES (United Kingdom) agreed with the Australian Dele-rate that these articles should be referred to a Technical Sub-Committee or working Party. He suggested that in future a definite agenda should he provided -for each meeting, and he drew attention to Rule 24 of the Rules of Procedure (Annexure 4 E/PC/T/EC/SR.2/3 page 5 to the Report of the First Session) which provides that all proposed resolutions, amendmenta etc. shall be distributed at least twenty-four hours before the meeting at which they are to be considered. The CHAIRMAN stated that the Committee appeared to be in agreement that the technical Articles and all the proposed amendments should be referred to a Technical Sub-Committee on which all delegations would be represented, and suggested that the first meeting be held on the following day, 9 May, at 10.30 a.m. and that the Sub-Committee should decide upon its rules of procedure. In reply to further questions and suggestions, the CHAIRMAN stated that the Committee which would examine these Articles should be looked upon as a Working Party rather than as a Technical Sub-Committee, and that members of this Working Party should be prepared to discuss all matters, including political questions, arising out of the Provisions of these Articles. Before the conclusion of the meeting, Mr. COLBAN was elected Chairman of the Working Party and Mr. SHACKLE Vice- Chairman. The Committee decided that Articles 19, 20, 21 and 22 should constitute the Agenda for the first meeting.

GATT Library

fb185bm1014

Summary Record of the Third Meeting Sub-Committee on Administration : Held at Lake Success on 27 January at 2:45 p.m

United Nations Economic and Social Council, January 27, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

27/01/1947

official documents

E/PC/T/C.6/19 and E/PC/T/C.6/1-20

https://exhibits.stanford.edu/gatt/catalog/fb185bm1014

fb185bm1014_90230052.xml

GATT_156

United Nations Nations Unies RESTRICTED ECONOMIC CONSEIL 27 January 1947 AND ECONOMIQUE ORIGINAL:ENGLISH SOCLAL COUNCIL ET SOCIAL DRATING COMMITTEE OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT SUMMARY RECORD OF THE THIRD MEETING SUB-COMMITTEE ON ADMINISTRATION Held at Lake Success on 27 January at 2:45 p.m. Chairman: Mr. Alamilla 1. Miscellaneous The Brazilian delegate stated that the Summary of the Second Meeting E/PC/T/C.6/11 on page 2 did not state entirely correctly the Brazilian position in regard to the United States Draft for weighted voting. The CHAIRMAN requested the Brazilian delegate to hand to the Secretariat his own formulation of the Brazilian position which would be reproduced by the Secretariat as a Corrigendum to E/PC/T/C.6/11. In regard to the United Kingdom proposals for weighted voting the CHAIRMAN requested the United Kingdom delegation to submit a complete draft article on voting based on the United Kingdom weighting schedule. 2. Clarifioftion c? VDrious Prafts The CHAIRMAN stated that themSub-Conmittee was now in possession of five drafts for Article 68 and that he would add in due course the Cuban draft as a sixth proposal regarding Article 68. He then, invited the delegaCasaof Ganeda, Belgium and Brazimmarize the principles uponupon which their drafts rticlecle 68 were based, to familiarize the Sub- Conmittee with the principal ideas contained in these drafts. The Canadian delegate explained that Canada was not adverse to the principle of weighted voting in the Conference, but, supported the /principle E/PC/T/C.6/19 Page 2 principle of one Member - one vote for the Executive Board. Canada stands ready to support the United States formula for weighted voting on issues regarding balance of payments questions. Canada is of the opinion that the wide range of the economic importance of countries should call for three groups of Members of the Executive Board rather than for only two groups of permanent and non-permanent Members. In case that the USSR should join the Organization a permanent seat on the Executive Board should. fall to the USSR and in this case the possibility of increase in. membership on the Executive Board to sixteen or seventeen Members should be envisaged. The Belgian delegate explained that under 'the Belgian Draft the USSRwould have a permanent seat under paragraph. 1, sub-paragraph (b) of the Belgian formulation. Belgium supports the principle of rotation for membership in the Executive Board and the principle of three groups of Executive Board Members. The Brazilian delegate commented on the Brazilian draft of Article 68 and explained the principles underlying this draft. No weighted voting is envisaged by Brazil and a principle of "rotation within groups, by election" is provided for Countries would fall strictly within their geographical groups, without regard to political or politico-economic ties to other countries; by application of this. principle, colonies would have access to the Executive Board under their geographical group without regard. to the mother country. The CHAIRMAN then, introduced the Cuban draft and explained that it provided for three classes of countries with a view to facilitate membership in the Executive Board for countries joining the ITO in the future, who would expand total membership in the Organization to a larger number than the one presently envisaged. The Cuban proposal provided for pure rotation without any election and for a range principle in the number of seats on the Executive Board as opposed to the principle of a fixed number for such seats. /3. Debate E/PC/T/C.6/19 Page 3 3. Debate on the Secretariat Draft of Article 68 in the Formulation of the Second WorkingPaper Paragraph1The Committee discussed the number of seats on the Executive Board in the Secretariat's draft. Upon the motion of South Africa the CHAIRMAN took a vote of the Sub-Committee on the issues of how many seats should be on the Executive Board and how these seats should be divided between permanent and non-permanent Members of the Board. In the absence of the delegate from Netherlands the Sub-Committee voted five to four for a number of eighteen seats on the Board. On the distribution of seats between permanent and non-permanent Members, five Members of the 'Sub-Committee voted for nine permanent and nine non-permanent Members while four delegates voted for twelve non-permanentto six permanent Members. The Sub-Committee agreed upon a motion of the United -States delegate that paragraph 1. of the Secretariat's draft should be accepted with a proviso that a Board membership of eighteen, with further alternatives of nine to nine, or twelve to six permanent end non-permanent Members should be contained in the text in square brackets. The Canadian delegate moved to include other considerations than geographical distribution in the last words of paragraph 1, and will suit to the Secretariat his own formulation of such a clause. Pargaph 2: The Sub-Committee discussed the clause "chief economic importance" and the problem whether a schedule of economic importance should be appended to paragraph 2, or Whether the determination of "chief economic importance" should be passed on to the conference. Peragraph3: Canada objected to the principle of non- eligibility for re-election and eight Members of the Sub-Committee voted for acceptance of this principle while two voted for re-eligibility. Upon enquiry of the CHAIRMAN, the Sub-Committee stated that the Secretariat's draft was to be considered as a substitute for alternatives two and three of Article 68 in the London Draft Charter while the :e Brazilian Drafi Is to be considered as a substitute for ehs fourth alternative of Article 68. /Canada E/PC/T/C,6/19 Page 4 Canada moved to retain in the Secretariat's draft the provision for possible expansion of the Executive Board in conformity with the last sentence of paragraph 1 in the third alternative of the London Draft Charter. The Sub-Committee agreed to the following solution of this issue: a fact-note is to be added to Article 68 in the formulation of the Secretariat, indicating that in case of an Executive Board consisting of fifteen Members, the Executive Board could be enlarged up to a number of eighteen Members by a decision of the Conference taken with a two-third majority of its Members. The meeting was adjourned to Wednesday, 29 January at 2:45 p.m.

GATT Library

hx431qp5177

Summary Record of the Third Plenary Meeting : Held at the Capitol, Havana, Cuba, on Wednesday, 26 November 1947 at 10.30 a.m

United Nations Conference on Trade and Employment, November 26, 1947

26/11/1947

official documents

E/CONF.2/SR.3 and E/CONF.2/SR.1-21

https://exhibits.stanford.edu/gatt/catalog/hx431qp5177

hx431qp5177_90180126.xml

GATT_156

United Nations Nations Unies UNRESTRICTED E/CONF.2/SR.3 CONFERENCE CONFERENCE 26 November 1947 ON DU ORIGINAL: ENGLISH TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI SUMMARY RECORD OF THE THIRD PLENARY MEETING Held at the Capitol, Havana, Cuba, on Wednesday, 26 November 1947 at 10.30 a.m. President: Mr. Sergio I. CLARK (Cuba) 1. ADOPTION OF RULES OF PROCEDURE WITH THE EXCEPTION OF RULES 30-33 INCLUSIVE (document E/CONF.2/2/Rev.3 with Addenda 1 and 2) The PRESIDENT called for comments on the proposals of the delegations of Chile and Norway to insert a new rule 54. Mr. MULLER (Chile) suggested that the words "It is recommended that" should be inserted at the beginning of the new rule 54 proposed by his delegation. The Rules of Procedure with the addition of a new rule 54 as amended above were adopted unanimously. Mr. STINEBOWER (United States of America), although not desirous of proposing an amendment to rule 45, wished it to be recorded that his delegation would always vote in favour of meetings of the plenary and. committees being held in public. Mr. Wyndham WHITE (Executive Secretary) drew attention to an comission- in the French text of rule 13 of the rules of procedure (E/CONF. 2/2), which should. read: "Si un vice-pr?sident de la Conf?rence est empech? d'assister à une s?Tance du Bureau ou obli?T de s'absenter pendant une ?Tance du Bureau, il peut ...........'' 2. APPOINTMENT OF A CREDENTIALS COMMITTEE (document E/CONF.2/9) On the proposal of the PRESIDENT, Mr. Vilhena Ferreira BRAGA (Brazil) was elected Chairman of the Credentials Committee. 3. ADOPTION OF PROVISIONAL AGENDA (document E/CONF.2/1 and 10) Approved. 4. ESTABLISHMENT OF PRINCIPAL COMMITTES (document E/CONF.2/1) On the proposal of the PRESIDENT, IT WAS DECIDED to establish six main Committees with the following assignment of subjects: /Committee I E/CONF.2/SR.3 Page 2 Committee I - Employment and Economic Activity Committee II - Economic Development Committee III - Commercial Policy Committee IV - Restrictive Business Practices Committee V - Inter-Governmental Commodity Agreements Committee VI - Organization 5. ELECTION OF CHAIRMEN OF THE PRINCIPAL COMMITTEES On the proposal of the PRESIDENT, the plenery meeting then resolved itself into consecutive meetings of the six main committees for the purpose of electing the Chairmen of those committees. (For proceedings see documents E/CONF.2/C.1/SR.1, E/CONF.2/C.2/SR.1, E/CONF.2/C.3/SR.1, E/CONF. 2/C.4/SR.1, E/CONF.2/C.5/SR.1, E/CONF.2/C.6/SR.1). 6. ELECTION OF VICE-PRESIDENTS OF THE CONFERENCE The plenary meeting having resumed the PRESIDENT proposed for election as First Vice-President, Mr. Max SUETENS (Belgium), as Second Vice-President, The Hon. C. H. BHABHA (India), and as Vice-Presidents: Mr. Luis D. TINOCO (Costa Rica), Dr. Z. AUGENTHALER (Czechoslovakia), Mr. Anis AZEN (Egypt), Mr. W. NASH (New Zealand) which was approved unanimously. The President stated that a proposal for the election of an additional Vice-President would be made in due course. 7. ELECTION OF REMAINING ELECTED MEMBERS OF THE GENERAL COMMITTEE The following four additional elected members were proposed: Mr. Wunsz KING (China), Mr. Andre PHILIP (France), Mr. A. G. BOTTOMLEY (United Kingdom), Mr. William L. CLAYTON (United States of America). This was unanimously approved. 8. GENERAL DISCUSSION Mr. DEDMAN (Australia) recalled that the Australian Government had already participated as a member of the Preparatory Committee in the preparation of the Draft Charter. There was an essential need to create conditions in which it would no longer be necessary to impose barriers. conditions Australia had sought for the inclusion in the Charter of comprehensive : obligations relating to the maintenance of employment and to the development of less industrialized countries. The success of ITO would depend largely on the acceptance of those obligations, particularly by the major economic powers of the world. The Australian Government did not consider that the Draft Charter was a perfect instrument, and would submit some amendments arising out of reservations already made in Geneva. His delegation would also submit suggestions on matters concerning which no specific recommendation had been made by the Preparatory Committee. Australia was anxious to benefit from the experience of all those countries whose views would be heard for the /first time, E/CONF.2/SR.3 Page 3 first time, and it was hoped that a Charter would be drawn up which would enable all countries of the world to deal with their own peculiar problems, to raise their own standards of living, and finally to contribute, with the aid of ITO, to an expansion of world trade. (For fuller text see Pres- ralease ITO/33). Mr. LLERAS (Colombia) thought that the Preparatory Committee has made great efforts in reconciling divergent interests, and that the Draft Charter was superior in scope to anything so far achieved in international economic relations. Colombia's approach would be a constructive one and any observations would only be made with a view to clarification of certain measures. His delegation would not insist on points of secondary importance, but would inflexibly defend those questions of vital importance to Colombia which could not be sacrificed. It would not be sufficient to lay down rules and regulations which could in no way change world economic conditions. His delegation attached great importance to the implementation of Chapter III of the Charter, in particular paragraph 1 of Article 10, the present text of which was inadequate: the promotion of industrial and economic development must be made effective. His delegation would submit specific amendments to Article 13, which should define the right of nations to safeguard their own agriculture and industry in particular circumstances. Mr. Lleras went on to say that the special measures adopted to help the industrial nations of Europe should not be denied to those nations which had never known prosperity. General well-being would be more stable and more equitable if the standard of living of certain backward countries was higher. He thought that under-developed countries should have the right to establish or maintain reasonable measures of protection. as an exception and on more flexible lines than as at present provided under the Charter. Any undertaking to reduce Colombian tariffs should take currency depreciation into account. His delegation would submit an amendment to Article 17 based on Section E 3, of the London Report and Articles 1 and 6 of the General Tariff Agreement. He felt that the procedure laid down in Chapter VI on the protection of primary commodities was complex and difficult. It was essential to clarify Article 18, paragraph 2, in order to extend its provisions tocover price-fixing and quota-fixing. The safeguarding of primary product prices was essential to certain economies, and the conclusion of agreements on such subjects should be made simpler. The Charter was wrong in treating the position of producers and consumers as identical since a rise in prices might mean little to the consuming country but be vital for the producer. The Colombian delegation would submit specific amendments to the relevant clauses of the Charter. /The Colombian E/CONF.2/SR.3 Page 4 The Colombian delegation thought that Article 4 should be implemented in order to make it effective. The ITO should be empowered to enforce fair labour standards and enable countries to defend themselves from competition with countries of sub-standard conditions. As regards voting, Colombia could not accept a system under which undertakings were put into effect by a multiple vote. The precedent of the International Monetary Fund was irrelevant. In conclusion, he felt that the major economic Powers had an immense responsibility, and it rested on them as to whether the Conference would be a landmark in international co-operation or whether the Charter would merely provide a legal structure to cloak the egotistic policies previously followed. Mr. BOTTOMLEY (United Kingdom) said that the United Kingdom had participated from the beginning in the endeavour culminating in the present Conference - an endeavour which owed so much to the initiative of the United States of America. The Conference did well to meet at the present time to found an international trade organization. International trade was necessary to all and had greatly enriched the world. Even where living standards were lowest, they were far higher than they had been fifty or one hundred. years ago. Nearly ninety per cent of the goods produced in the world were consumed in the country of their production, and only ten per cent were traded abroad, but it was that ten per cent which very largely determined whether conditions of boom or of slump, or of prosperous stability, prevailed in the world as a whole. Strong emphasis had rightly been laid in the Draft Charter on the maintenance by all countries of a high level of employment and demand by means which would help, not hinder, other countries in doing the same. The employment provisions of the Draft Charter, together with other suitable measures of international co-operation, should contribute much, to reduce the risk of any country pursuing a policy which created a major depression. But how could other countries protect themselves should such a depression occur in any one country? High tariff walls and import restrictions could be built round borders, and then, when the volume of international trade was halved or quartered, there might be a fierce struggle by each country to increase its relative share: of that greatly reduced trade. There was a more effective way. That way was to live as a community, to set up a Parliament or a council to make and, where necessary, to revise, a set of laws and to privide the means for interpretation and enforcement of those laws. /It was primarily E/CONF.2/SR.3 Page 5 It was primarily to bring into being that concept of security against economic disorder through international agreement and co-operation that the present Conference was being held. Mr. Bottomley was confident that they would succeed in that task for all had the strongest of motives for desiring success. Much experience was gained in.London and at Geneva regarding the difficulties which. each type of economy fedred might arise in reconciling their own legitimate economic interests with the interests of the world as a whole. The success achieved in reaching a solution had been demonstrated to the world by the substantial and comprehensive reductions in tariff barriers contained in the General Agreement on Tariffs and Trade. Countries participating in that Agreement were ready to extend. those reductions to other countries. The world was now experiencing, in its acutest form, the economic aftermath of six years of war. The United Kingdom was at present suffering severely from the immediate difficulties in international trade and finance. The Government had been compelled to ask people to produce more goods on lover rations and with emptier shops. The next year or two would be hard and unpleasant for the people of the United Kingdom, but there was no doubt whatsoever that they would pull through. They were no less determined to play their part in rebuilding the mechanism of multilateral trade. The prosperity of all great trading nations depended just as much on British stability, expansion and multilateralism in world trade as on their own. The United Kingdom delegation was glad to be meeting in Havana with friends from so many countries with the aim of ensuring and furthering general prosperity. (For fuller text see Press release ITO/29). Mr. COPPOLA D'ANNA (Italy) said his country had gladly accepted the invitation to take part in the present Conference. Imports and exports were an absolute necessity to Italy. Italy could not do without a steady development of her industrial activities, lacking essential raw materials and having to import them from abroad, as well as a certain amount of foodstuffs, an ample flow of exports was necessary to pay for those imports. The Italian Government could accept the aims set forth in Article I of the Draft Charter without discussion, but better ways and means for securing them might be suggested in the general debate. Referring to the question of the votes to which each Government would be entitled at the Conference, and to that of the allocation of seats on the Executive Council, Mr. Coppola d'Anna said that his delegation was of the opinion that the differences in the economic importance of the various /countries should be. E/CONF.2/SR .3 Page 6 countries should be taken into consideration. In the case of Italy consideration should be given to her very special economic and demographic position. In the matter of the treatment to be given to non-member countries, the Preparatory Committee had limited itself to proposing alternative solutions. Two of those would cause serious embarrassment to more than one country desirous of joining in ITO. Having to discriminate against countries not members of ITO would be a serious hindrance to a country wishing to become a member of the new organization. Mr. Ceppala d'Anna felt that the composition of the Committee on Customs Tariffs gave rise to serious apprehensions. Against its decisions the Draft Charter provided no appeal. The Preparatory Committee, at its first and second sessions, had introduced marked improvements in the original project. The Italian delegation wished to make its modest contribution to the work of the. Conference so that the Charter on Trade and Employment might secure the aims it was pursuing. (For fuller text see Press release ITO/25) . Mr. BETETA (Mexico) pointed out that the Conference on Trade and Employment was meeting at a time when the world tended to divide itself into two large groups with diverse ideologies. The Conference should find the cause of the sickness, the fears and disorganization which afflicted the world and so ensure that democratic regimes which allowed and encouraged private initiative would continue and improve, giving to the great working majorities of all countries a higher standard of living, greater economic and social security and sufficient stimulus to improve the production of goods and services. Mr. Beteta emphasized that the purposes of the Charter were accepted by all, but how were those purposes to be harmonized and arranged in their proper order? It would be necessary to study the nature of international trade barriers and to find the reason which made their establishment necessary. Obstacles to international trade were of two classes; the first was established as an emergency measure in order to obtain equilibrium in the balance of trade. The second, deriving from the necessity for protecting agriculture or industry of some countries against those of others, had for a long time been forms of balancing diverse economic conditions. An effective way of making restrictions unnecessary, namely a remedy for the maladjustment from which a country was suffering, should be sought. In Mr. Beteta's opinion there was only one remedy - increased-production. Through increased production a country could meet its needs without excessive imports, would have exportable surpluses with which to pay for the imports it continued making and thus balance its foreign trade. /Of the E/CONF.2/SR.3 Page 7 Of the objectives sought by the Conference the economic development of all nations was the most important. Experience had shown that the industrialization of a country, by raising the standard of living of its people and widening the possibilities of employment, created a new purchasing power since it converted workers into consumers. A strong desire for industrialization was compatible with and very close to ever-increasing international trade. The Draft Charter was of a negative quality since it sought rules and methods of .abolishing trade restrictions instead of accentuating the positive solutions of the problem, i.e. the economic development of all peoples and the international co-operation required to bring that about. The negative aspects of the Charter had aroused misgivings among the working classes and industrialists of the less developed nations. They feared that the fundamental purpose of the Charter was to wipe out trade barriers - even if in so doing it brought ruin to existing industries - instead of being that of promoting international trade through the harmonious growth of the economies of all nations. It was indispensable to realize the differences which existed in the economies of the debtor and of the creditor countries. When negotiations for the lowering-of tariffs were discussed, the application of general principles would become very unjust if the discrepancies existing in the: economic conditions of countries were not taken into consideration. No country was more obliged, in its own interest, to reduce Customs tariffs, quotas and other restrictions on trade, than were the creditor countries which should return to the world the purchasing power it had lost and without which international trade would be paralyzed. The Draft Charter proposed a reduction of tariffs which would discourage foreign investment in countries which were in a state of incipient development, and would make difficult the payment of investments already made.. Thus, there was a discrepancy between two of the purposes of the Charter - that of facilitating foreign investments and that of reducing Customs tariffs. The problem must not be considered solely from the point of view of imports and exports, but from a wider one - that of international economic co-operation. In order to make a universal reduction of tariffs equitable, a real equilibrium of tariffs should be sought in such a way that all reductions would start from a comparable base. Industrialization led to a higher standard of living. It was not sufficient to speak, as was done in the Charter, of an equality of access to markets and of the need of arriving at agreements on primary commodities. /Thought should be E/CONF.2/SR .3 Page 8. Thought should be given to similar agreements with respect to manufactured goods which had to be acquired by the producers of raw materials - that was not mentioned in the Draft Charter. If there were no control in the field of manufactured articles an unequal situation would arise by which a country producer of raw materials would find its production watched over, and perhaps controlled by international organizations, while there would exist absolute freedom of prices and conditions in the trade of manufactured articles, which would have to be obtained in an open market where no attempt had been made to keep prices and conditions from fluctuating. Countries with an incipient industrialization which believed.they possessed the necessary conditions for improving it, such as raw materials, domestic markets, trained workers, capacity to absorb modern techniques. and the all-powerful desire for a higher standard of living, would not be content with a freezing of the economy of the world which would ensure that each country remained in the state of development it had been able to attain and could not aspire to higher levels. Mr. Beteta stressed that the economies of the world should be co-ordinated. Every effort should be made to remove excessive restriction brought about by the emergency situation. It should not be forgotten that nothing was possible without a sound economy in each country. Such an ideal could not be attained without international help which would her the growth of every country and would co-ordinate and harmonize the just aims of all. (For fuller text see Press release ITO/32). The PRESIDENT announced that the meeting of the Sub-Committee on Voting planned for that afternoon would be postponed until 4.00 p.m. on Thursday. The General Committee would meet at 4.30 p.m. on 26 November. . The meeting rose at 12.30 p.m.

GATT Library

hp593jy5662

Summary Record of the Thirteenth Meeting : Held at Lake Success on 4 February 1947 at 2:45 p.m

United Nations Economic and Social Council, February 4, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

04/02/1947

official documents

E/PC/T/C.6/40 and E/PC/T/C.6/37-55

https://exhibits.stanford.edu/gatt/catalog/hp593jy5662

hp593jy5662_90230089.xml

GATT_156

United Nations Nations Unies RESTRICTED E/PC/T/C. 6/40 ECONOMIC CONSEIL 4 February 1947 AND ECONOMIQUE ECONOMIQUE ORIGINAL: ENGLISH SOCIAL COUNCIL ET SOCIAL DRAFTING COMMITTEE OF THE PREPARATORY COMMITTE OF THE UNITED NATIONS CONFERENCE ON TRADE. AND EMPLOYMENT SUMMARY RECORD OF THE THIRTEENTH MEETING Held at Lake Success on 4 February 1947 at 2:45 p.m. Chairman: H.E.M. Erik Colban 1. In opening the meeting, the Chairman directed the attention of the Committee to the observations of the Secretariat on the work progress, as contained in E/PC/T/C.6/W.44. Upon the Chairman's suggestion, the Committee resolved, to extend the mandate of the Sub-Committee on Administration to cover the whole of Section E of Chapter VIII, with the possibility envisaged that in case of necessity, the mandate of the Sub-Committee on Administration may have to be extended to cover the whole of Chapter VIII. 2. Articles 34 and 35. The Sub-Committee took a second reading of Articles 34 and 35 in the formulation of E/PC/T/C.6/28/Rev.1 and approved this formulation with the following changes in Article 35: change "state trading operation" in Paragraph 1, line 5, to "state trading operations". Insert between the worms "particular" and "business enterprises", the words "private or state" in the tenth line of Paragraph 1. In the notes to Article 34 on Page 3 of E/PC/T/C.6/28/Rev.1, the second sentence of Paragraph 1 to Article 34 is to substitute "CANADA" for "CHILE". 3. Article 40. Paragraph (d). The Sub-Committee approved the text as contained in E/PC/T/C.6/W.35. / STRALIph Ce) AMMEUZA'S motion to insert the word "available" between the words "all" and "information" nn the first lime of this /paragraph E/PC/T/C.6/40 Page 2 paragraph was approved, while the AUSTRALIAN motion to have line 2 read "practices in question exist and have or are about to have had the effect" was defeated" with the Committee accepting the CANADIAN draft of this line. The Delegate of CZECHOSLOVAKIA inquired whether paragraph (c) of Article 40 envisaged that the I.T.O. had as one of its first steps to notify and seek information from the government whose nationals were alleged to engage in restrictive business practices. After the Delegate of FRANCE subscribed to this meaning of paragraph (c), the Chairman, with approval of the Committee, ruled that this was the meaning of paragraph (c), Paragraph (f). The AUSTRALIAN motion to substitute the word "determination" for "findings" in the first line of this paragraph was referred to the Legal Drafting Sub-Committee. The Delegates of the NETHERLANDS and BELGIUM objected to the insertion of the words "or are about to have" and the Committee decided to produce two alternative drafts in this respect, showing the words "or are about to have" in square brackets. The BRAZILIAN Delegate, requested to have the record show that only three Delegations sustained a reservation against the CANADIAN text. The AUSRALIAN Delegate also suggested two alternative drafts for the words "or are about to have." in paragraph (e) but the Committee defeated this motion after the NETHERLANDS had seconded the CANADIAN text. The BELGIAN Delegate pointed out that his objection to the inclusion of the controversial words in paragraph (f) was not due to the desire to defend restrictive cartel practices, but merely to his belief that this constituted a change in substance beyond the purview of the Drafting Committee. Paragraph (h). The UNITED. STATES Delegate in expanding upon the text submitted by the UNITED STATES Delegation in E/PC/T/C.6/W.28 suggested the /following E/PC/T/C .6/4o Page 3 following formulation for this paragraph: "preparee and publish, as expeditiously as possible after enquiries have been discontinued, terminated or completed, reports on all complaints dealt with under sub -paragrph (d), showing fully the findings, decisions, or other conclusions reached the reasons therefor, and any action which Members have been requested to take..". CANADA and CUBA supported the UNITED STATES text. CHINA moved for deletion of the word "discontinued" in the last line of Article 40 as contained in E/PC/T/C.6/W.28 but the Committee defeated this motion. The UNITED KINGDOM Delegate moved to substitute the words "provisionally or finally closed" in lieu of "terminated" in the last line of this paragraph, as contained in E/PC/T/C.6/W.28, and the UNITED STATES and CANADA supported this motion. The Committee approved the UNITED STATES text as contained in E/PC/T/C.6/W.28 with the change suggested by the. UNITED KINGDOM. The AUSTRALIAN motion to delete the words "to any person" in the ninth line was approved by the Committee. Paragraph (i). The Committee approved this paragraph in the formulation of E/PC/T/C.6/W.35 with substitution of the word "purposes" for the word. "'results" in the second to last line. 4. Article 41. The UNITED STATES motion to change the words "shall-be authorized" in the first line to the words "is hereby authorized" was tentatively approved with the request to the Legal Drafting Sub-Committee to decide whether the word "may" would not be preferable. The Committee approved paragraphs (a), (b) and (c) in the formulation of E/PC/T/C.6/W.35. 5. Article 42. Paragraph 1, sub-paragraph (b). The UNITED KINGDOM Delegate queried whether the new definition in Article 39 does not obviate the reference to Article 39 anld this query was referred to the Legal Drafting Sub-Committee. /with the E/PC/T/C .6/40 Page 4 With the UNITED STATES supporting the CANADIAN draft, the Committee agreed to show alternative drafts with the words "or to be about have" in the second to the last line to be shown in square brackets. The motion of the UNITED STATES Delegate to insert after the words "any practices" in the seventh line, the words "within its jurisdiction" for a second time, was unanimously over-ruled. - The UxED RIDOM Delegate moved to" nretain the clause `iA e light of its obligations under Article 39, in considering the initiation of action". ERLANDSFRA1E and the N -nded. thi motion while the UNITD STATES,' IUBRki and. BEI0Ged for the -deleion of this clause, and the Commi ttee agreed to approve the CANAwDIAN draft ith this clause deleted. .Pragraph 2,The Conmittee referred the Secretariat's request to substitute the words "prepare and provide" for the words "prepare" to the Lega Draftimm,ng Sub-Cottee for an analysis of the question whether preparation was not covered in paraagraphs 4 nd thu unnecessary in this paragraph. Pr.agraph 3,After CANADA withdrew the deletion of this.h,jparagrapas suggeshted in te CANAftDIAN dra,m the Comittee approLved the ond.ron text Pa-rep . The UNIKINGDOMTED ICMGegatpe 6suPored UNITED the"tWITESE formulation contained in E/PCT/W/C .6.28 and explained theums circtances under which this clause had been agreed upon ein th last session of CoittIIee of the FirSst Oesioznof tPhe.a epsrtorym Comittee. The motion of teheDlegates of CAN ADA and thNITe UED STATES to substitute the word "or" for "" andbetweeun sb-pgararaphs (aa) nd (b) wcaas rriedhile, w the motion of NEW ZEALAND to substitute thoe wrd "or" for twhe o"rd and" Line in 3 of sub-paragraph (b) was defeated. After the Delegates of ZEALAND, BELGIUM and. RANCFfIxpressed that .h"t .di not- . object tothe UNITED STATES formulat,ion but had to serve - f~~~~~~~~~~~~~~rsuerve E/PC/ T/C. 6/40 Page 5 reserve their position because they considered the UNITED STATES' text as a change in substance, the Committee approved the formulation contained in E/PC/C.6/W.28, deciding to insert a comma after the word "disclose" in the third line of sub-paragraph (b). Paragraph 5, The AUSTRALIAN motion to refer the reference to Article 40, paragraph (g) to the Legal Drafting Sub-Committee was carried and the London text with this qualification was approved. Paragraph 6. The Secretary drew the attention of the Committee to the fact that the reference to conferences failed to refer to conferences in accordance with Article 40, paragraph (a) and Article 41, paragraph (c). The Committee, upon the motion of the UNITED STATES, CANADA and the MA DS, approved the addition of these references to the text, while the UNITED KINGDOM reserved its position on this addition. With the UNTED KINDOM disssntiug, the Committee was in general agreement that the failure to refer to conferenees mentioned in Article 40, paragraph (a) end Article 41, paragraph (c), was a mere drafting oversight in London and that it was never intended to exclude partiipation in such conferences from the obligations of Members. 6. Article 43. The London text of paragraphs 1 and 2 was approved, and the Secretary's suggestion to add the words "or intendingi to participate" after the word "participating" in paragraph 2 was approved. The Committee adjourned for 5 February 1947 at 10:30 a.m.

GATT Library

hj849fx8252

Summary Record of the Thirteenth Meeting : Held at the Capitol, Havana, Cuba, Tuesday, 23 December 1947 at 4.00 p.m

United Nations Conference on Trade and Employment, December 23, 1947

Second Committee: Economic Development

23/12/1947

official documents

E/CONF.2/C.2/SR.13 and E/CONF.2/C.2/SR.1-17

https://exhibits.stanford.edu/gatt/catalog/hj849fx8252

hj849fx8252_90180452.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/C.2/SR.13 ON DU 23 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL:ENGLISH SECOND COMMITTEE: ECONOMIC DEVELOPMENT SUMMARY RECORD OF THE THIRTEENTH MEETING Held at the Capitol, Havana, Cuba, Tuesday, 23 December 1947 at 4.00 p.m. Chairman: Mr . ABELLO (Philippines) CONTINUATION OF GENERAL DISCUSSION OF ARITICLE 12 Mr. DUNAWAY (Liberia) described the legal status of foreign investments in Liberia. He favoured a general code of equity and fair play for such investments along the lines of Article 11 and the first paragraph of Article 12. It did not seem feasible to include detailed rules of conduct to govern the Member states and private investors as in paragraph 2. He felt the policies of the several states and the forms of investment were too varied to be harmonized in one document. He thought. the New Zealand amendment expressed a right inherent in any sovereign state, but had no objection to it. The United States proposal to compel a Member state to negotiate about a loan seemed a fruitless proposal as no Member state could demand the right of investment in another state or demand that another State invest in it. The ITO should not be responsible for supervising investments or disputes arising about them, but could render assistance by furnishing information on the legal status of foreign investments. The effect of the amendment of Ceylon concerning the status of existing investments was not clear. If it was in anticipation of repudiation of contracts it would certainly not enhance the investment of private capital in Member countries. Mr. HEIDENSTAM (Sweden) agreed, with the views of the United Kingdom that there was a lack of ciaptal all over the world for foreign investments and that investors were shy of investing abroad. Furthermore, governments in some countries restrained direct foreign investments because of foreign exchange stringency. Article 12 was important because of the necessity of Providing "moral" security to investors and should be retained. Underdeveloped countries trying to do away with the Article were defeating their own interests. - The CHAIRMAN stated that the general discussion had shown wide differences of opinion and the need for referring Article2 1to sub-committee /for revision E/CONF.2/C.2/SR.13 Page 2 for revision. Before such referral he invited a discussion of proposed amendments, paragraph by paragraph. Paragraph 1 Mr. USMANI (Pakistan) was in general agreement with the spirit of Article 12 but felt that the language must be changed to remove the apprehensions of countries shy about receiving foreign investments. He revised his first amendment to Article 12 changing the term "economic exploitation" to read "exploitation" to avoid interpretative problems. If exploitation through foreign investments was not to be permitted it should be clearly stated, directly, since the reference to "national policy" in paragraph 1 might not fully cover all forms of exploitations. The second amendment of Pakistan to paragraph 1, sought to avoid the use of superlatives which might imply the idea of preferential treatment for foreign capital as opposed to national capital. Mr. NOVOA (Mexico) proposed to re-word the last sentence of paragraph 1 of Article 12 and to delete paragraph 2. To be approved by the Mexican delegation this Article must be consistent with the legislation of his country, which determined which investments were ,acceptable to it, This idea was already contained in the first sentence of paragraph 1, but it would be desirable to repeat it. Mr. COREA (Ceylon) explained that his amendment to paragraph was not intended to shut out investments, but to make it clear that Article 12 did not force investments on countries not desiring them. When investments were made without approval they might have no relation to the economic plan of the undeveloped country. In answer, to the remarks of the representative of Liberia., he felt there was not intention in his amendment to repudiate. existing investment contracts. He agreed with the proposal of Uruguay to delete paragraph 1 and substitute a paragraph stressing the general importance of foreign investments for economic development. If this amendment found. no support in the Sub-Comittee he would favour deleting the last sentence. Mr. de LEON BELLOC (Argentina) explained that the purpose of the: Argentine amendment was to prevent commitments greater thanth e county could possibly fulfill. He felt it should be left to the countries neednig foreign investments to provide security and opportunity for such investments as they were the mos interested parties. If the Argentine amendment were not adopted Argentina would support the proposals of Venezuela to delete the last sentence of paragraph 1. Mr. FARINA (Uruguay) said that since all economically underdeveloped countries were interestoed in investments coming to their countries they should not prevent foreign capital c.oming to help their economyThe Uruguayan amendment sought to stress the desirability of such investment. /Mr. AMINI (Afghanistan) E/CONF.2/C.2/SR.13 Page 3 Mr. AMINI (Afghanistan) Supported the New Zealand amendment to paragraph 1. Mr. DJEBBARA (Syria) stated that certain existing investments might contain contractual agreements which discriminated against national interests. If the amendment of Ceylon meant that such contracts might be modified that would be just and he supported it. If not, he asked that the problem should be studied more thoroughly in Sub-Committee. Mr. LLOSA (Peru) stressed the importance of foreign investments in contributing to economic development and wished the Sub-Committee to take into account the amendments which were intended to prevent such investments from becoming a basis for interference in domestic affairs. Mr. NOVOA (Mexico) proposed deletion of paragraph 2 because detailed standardization of rules for foreign investments was not practicable. He supported the Mexican proposal for an additional provision in Article 12 embodying the "Calvo doctrine" under which a foreign investor was considered subject only to the laws of the country in which the investment was located a not under the legal protection of his own government. This principle was embodied in the Constitutions of several Latin-American countries. The proposed new paragraph 3 in the Mexican amendment was consistent with the statement of the United Kingdom delegate. Mexico was prepared to co-operate in the establishment of companies with mixed foreign and domestic capital as envisaged in paragraph 3 of present Article 12. , !w Mr. de LEON B2IC rgentina) could not agree with the proposed. deletion of paragraph 2 as proposed by the United States because the bilateral ne8)dOnt poosd woullH no bebHetwueen equals. Re spport the recognition of the Calvo Doctrine, as proposed by Mexico. Mr. RUBIN (United States) replying to the remarks of Mexico and Argentina staite tli' UnItedStates did not approve the Calvo doctrine. The United. States Government enteertained rpresentatiognn by forei governments on behalf of their nationals who had investments in the United States. ChMr. IW )sympathized with other capital importing countries and supported the remarks of the representatives of Mexico, Argentina and Uruguay. He opposed the principle of national treatment and supported the Argentina ament to paragraph 2, which he wished to have retained. Deletion of Paragraph 2 ld lwoueave the whole situation uncertain. HEILPERINMrR (Ii ntatiernonal Chamber ofm Comerce) supported the deletion of paragraph 2 ofArticle 12 ande th footnote to Article 12. He felt foreign investments would remain predominantly private and, therefore, the private investour mst be induced to venture abroad.ra Pagraph 2 of Article 12 went far to destroy the purepos of the ArticlIe. f paragraph 2 was not deleted it would be better to have no Article 12. . BLAZE,EICzechoskiovkiaeea E/CONF.2/C.2/SR.13 Page 4 Mr. BLAZEJ (Czechoslovakia) felt that all of paragraph 2 was important. If it should be deleted the delegation of Czechoslovakia would revise its position. It was decided to set up a Sub-Committee to consider Article 12, the representatives of the following countries to be members of such a Sub-Committee: Australia, Brazil, Canada, Ceylon, Czechoslovakia, Egypt, India, Mexico, Netherlands, New Zealand, Sweden, United Kingdom, United States of America, Venezuela. 2. ARTICLE 13: GENERAL DISCUSSION Mr. FARINA (Uruguay) said his delegation could not support the contention that assistance given by Governments of under-developed countries to their industries and agriculture should be restricted, if it involved protective measures. Uruguay was a small country aid more than once had had to supply such assistance to its agriculturists and cattle breeders who were threatened by restrictions imposed by the countries buying from them. He drew attention to the Uruguayan amendment to paragraph 1 which proposed recognition that governmental assistance was required for the establishment, development of reconstruction of industry and agriculture and not merely of particular industries or branches of agriculture. Mr. LIEU (China) said that his Government would have difficulty in carrying out the provisions of the Article as at present drafted. In building up her economy an undeveloped country might wish to take urgent steps involving protective measures to assist industries to develop, and if the matter had first to be submitted to the ITO, such a country might suffer great damage to its economy while awaiting a decision by the Organization. If, however, a Member complained about the effects of a measure taken, the Member imposing the measure would be under obligation to furnish an explanation of his action. Mr HLA MAUNG (Burma) said the amendment proposed by his delegation was intended to improve and speed up teh procedure to be followed when a member of the ITO, in the interests of its programme of development or reconstruction, considered it desirable to adopt any non-discriminatory measures which would conflict with Chapter IV. Mr. AKASAT(Turkey) said that Articles 13 and 15 contained very strict provisions, and the Turkish delegation considered that governments of undeveloped countries should have the right to impose measures to protect their growing industries without prior consultation with the ITO. The effect of measures could not be judged in advance. If such governments had first to consult with ITO, and then await the Organization's decision, the industries which they sought to protect might suffer severely. /Mr. de LEON BELLOC (Argentina) E/CONF.2/C.2/SR.13 Page 5 Mr. de LEON BELLOC (Argentina) emphasized the importance of not establishing a super-organization. The functions of ITO should, be those set out in Article 69. It should be left to individual states to take decisions concerning their commercial policy. Mr. GUTTERREZ (Cuba) said that the economically under-developed countries had to be given just opportunities to establish protective measure. However, when such measures were inconsistent with the provisions of the Charter, there would have to be consultation with the ITO. In a spirit of compromise, the Cuban delegation in Geneva, had accepted the principle of prior consultation. During periods of crises, however, a country had to be allowed the right of establishing measures without prior consultation. The CHAIRMAN suggested a plan of work, whereby Article 13 would be discussed not paragraph by paragraph but by groups of amendments. After such discussion Article 13 would be referred to a Sub-Committee for further consideration. At the suggestion of Mr. GUTIERREZ (Cuba) the Chairman stated that his proposed plan of work could be circulated as a document. Mr. CARCIA-OLDINI (Chile) drew attention to the necessity of knowing the fate of other Articles of the Charter before it would be possible to arrive at a satisfactory decision concerning Article 13. He hoped that consideration in Sub-Committee could be delayed to that end. The Meeting rose at 7.05 p.m.

GATT Library

xd354tt8106

Summary Record of the Thirteenth Meeting (IIIa) : Held at the Capitol, Havana, Cuba, Wednesday, 17 December 1947, at 4.00 p.m

United Nations Conference on Trade and Employment, December 18, 1947

Third Committee: Commercial Policy

18/12/1947

official documents

E/CONF.2/C.3/SR.13 and E/CONF.2/C.3/SR.1-16

https://exhibits.stanford.edu/gatt/catalog/xd354tt8106

xd354tt8106_90190231.xml

GATT_156

United Nations Nations Unies UNRESTRICTED E/CONF.2/C.3/SR.13 CONFERENCE CONFERENCE 18 December 1947 ON DU ORIGINAL: ENGLISH TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI THIRD COMMITTEE: COMMERCIAL POLICY SUMMARY RECORD OF THE THIRTEENTH MEETING (lIla) Held at the Capitol, Havana, Cuba, Wednesday, .17 December 1947, at 4.00 p.m. Chairman: Mr. L. D. WILGRESS (Canada) The CHAIRMAN read a communication from the Vice-Chairman announcing his re-call to Ecuador, and suggested that election of a Vice-Chairman should take place at the next meeting. Replying to a procedural point raised by Mr. GUTIERREZ (Bolivia), the CHAIRMAN suggested that since the matter concerned Committe III(b), it might be raised at the next meeting. 1. ARTICLE 18 (COMPLETION OF FIRST READING) Paragraph ? Mr. FERRERO (Peru) asked that a corrigendum be issued to the Summary Record of the eleventh meeting: the Chairman actually stated that..."conflict would not arise...." He suggested to add a new provision to paragraph l (see document E/CONF.2/C.3/6/Add.2). Mr. SAENZ (Mexico) asked whether exemption from taxes for economic development was excluded from Article 18. If they were prohibited under paragraph l, his delegation would offer amendments; if not, the paragraph was acceptable. Mr. LEDDY (United States of America) stated that exemptions from taxes such as income, profits, etc., designed to facilitate development, were outside the scope of Article 18. 'To tax imports, directly or indirectly, and not to tax a like domestic product, in order to protect development, was not permissible under Article 18. It would be possible, however, under the Chapter on Economic Development, according to its provisions, just s as other actions could be taken under Chapter III which were contrary to hCaptre IV. Mr. SENZA (Mexico) state dthtai f the Committee shared the lnterpertation that exemptions from taxes not on goods,w ere allowed under Article 18, but exemptions from imports duties on raw materials were not allowde, his delegation would reserve its position and submit aemndments; the previous records would, accordingly, need to be revised. - /LEDMr. DY E/CONF.2/C.3/SR.13 Page 2 Mr. LEDDDY (United States of America) said there was nothing in Article 18 to prevent a country from exempting from duties raw materials which would enter into a domestic product: Article 18 dealt with internal taxes. On a further question by Mr. SAENZ (Mexico) as to whether exemptions from import duties were allowable under Article 18 for raw materials which competed directly with domestic products, Mr. LEDDY (United States of America) replied in the affirmative. The CHAIRMAN noted that with that explanation, it would not be necessary to alter the record of the previous meeting. There were no comments on paragraphs 2 and 3. Paragraph 4 Replying to a question by Mr. COREA (Ceylon), Mr. LEDDY (United States of America) said that the dates mentioned in paragraph 4 (b) were alternative dates, chosen as more normal than the war-years, and were prior to negotiations. Mr. COREA (Ceylon) felt that 4 (b) discriminated against countries which had no mixing or processing regulations on either of the dates mentioned, but which might in the future desire to introduce them; his amendment proposed the deletion of that sub-paragraph for that reason. Mr. CHANG (China) supported the statement of the representative of Ceylon. Paragraph 4 (b) seemed to provide for an indefinite prolongation of regulations in force on those dates. Mr. MacCARTHY (Ireland) believed that paragraph 3 (a) referred to mixing of identical commodities and 3 (b) of substitutable commodities; if a regulation in force in Ireland requiring the mixing of imported maize with a proportion of domestic wheat was compatible with paragraph 3 (b), he would oppose its deletion. There were no comments on paragraph 5. 2. ARTICLE 19 Mr. AUGENTHALER (Czechoslovakia) proposed the deletion of Articles 19 because of the special character of films: the subject could best be dealt with by UNESCO and the United Nations. If, however, the Article remained, the Geneva drafting was acceptable. Mr. LECUYER (France) said that some provision was needed regarding the practical aspects of film regulations and Article 19 was acceptable, although be agreed in principle with the representative of Czechoslovakia. Mr. MELANDER (Norway) agreed that films should be considered on a different basis from goods. Article 19 did not cover the whole problem; further measures should be included to safeguard the cultural importance of a domestic film industry. /Mr. PELLIZA E/CONF .2/C .3/SR .13 Page 3 Mr. PELLIZA (Argentina) stated that the deletion of sub-paragraph (c) was proposed to avoid the freezing, at 10 April 1947 levels, of screen quotas reserved for domestic films. Mr. LEDDY (United States of America) said that the date mentioned related to discriminatory allocation of time to foreign film of different origin. Sub-paragraph (c) would not apply to Argentina since it had no preferential arrangements of this kind. Mr. PELLIZA (Argentina) replied that the right to institute or modify screen quotas should be maintained. Mr. SHACKLE (United Kingdom) stated that the amendments submitted by his delegation were drafting changes in the English text, corresponding to the text of the General Agreement on Tariffs and Trade. Mr. NASH (New Zealand) thought it was desirable to separate the _ commercia flrom the artistic aspects of films. It was agreed to refer the amendments to Articles 18 and 19, with the exception of the proposed Article 18 (a), to sub-cmomittee A;w ith no change in the composition of that sub-committee. The HCIRAANM read out the recommendations of the General Cmomittee concerning expediting the work of the Conference (E/CONF.2/16) and announced that the Committee would nwo take up discussion of Section E on the basis of document E/CONF.2/C.3/10. - It was agreed to postpone discussion of Article 32 pending clarification of some points ensuing from existing conventions. 3. NF ARTICLE 33 (E/CO.2/C.3/10) Parappn Mr. FrMUET (Cuba) stated that the Cuban amendment to .Aticle 33. (item 10) proposed a total revision of the present concept, which appeared to countenance dumping: athep first pargrah would condemn dumping; the second would. define dumping-- without definition it would be difficult to establish counteracting measures, and might lead to loose i.nterpretation Any discrimination of priaces between mrkets of different countries should be defined as dumping, including high-price as well as low-price, dumping. There Gould be freedom to take counter measures; ITO should be notified, but action should not bea deferred. Pragraph 4 of the amendment would Preplace the resent paragraph 2; the gparesent pararphsw 3,d 4 and 5 oul become 5, 6 and 7 in the amendment and the prresent paragaph 6 would be deleted. The Charter should not protect one of the worst forms of trade aggression, the most destructive to under-developed countries. Mr. FFFO0 Pru) endorsed the statement of the representative of Cuba, /Mr. DJEBBARA E/CONF.2/C.3/SR.13 Page 5 production in foreign markets at lower prices than those of production in the country of origin. However, he had never heard of high-price dumping before. The sub-committee's attention should be drawn to the great difference in profit which was made on different goods. If the Cuban definition were adopted, freight and other charges would constitute dumping. The same would apply to sales at world market prices of goods whose domestic price was controlled in order to keep the cost of living low. Mr. BLUSZTAJN (Poland) stressed the necessity for a precise definition of dumping, the condemnation of which should be absolute. Dumping should not, however, be confused with legitimate competition, and action should be directed against those suppliers who determined the level of prices, not those who followed them. Mr. LAMSVELT (Netherlands) pointed out that a definition of dumping was extremely difficult. The article should not permit countries to take measures against any sales at low prices on the pretext that they were dumping. Mr. LEDDY (United States of America) agreed that predatory dumping was reprehensible said should be condemned. However, all sales effected at prices lower than the domestic price were not necessarily motivated by evil intent, or uneconomic, or damaging. He thought that Article 33 provided, an adequate and accurate definition of dumping. The Article provided a suitable mechanism to combat dumping and recognized the legitimacy of counter-measures. Whilst willing to consider a new draft providing a more positive approach to the problem, he thought it essential to retain safeguards against the use of anti-dumping measures in unjustifiable circumstances. Mr. LECUYER (France), supported by Mr. LA ROSA (Italy), agreed that the present text should be strengthened. Any definition of dumping should exclude normal commercial practices. Anti-dumping measures should be limited to simple compensation. Mr. BAHGAT (Egypt) pointed out the disastrous effects, in spite of additional duties, of Japanese imports on the cotton industry of Egypt before the war. Mr. MULLER (Belgium) stated that Belgium was ready to accept provisions which would condemn unfair practices, but attached equal importance to the prevention of unjustified counter-measures. He understood dumping to mean the sale of products under conditions and with the intent to damage international trade and normal production. Mr. BROWN (Canada) considered that injury to the production of the imparting country was an essential criterion of dumping, and it was therefore undesirable to make an unconditional condemnation of dumping. The Charter provided sufficient scope for each country to counteract jumping which /threatened E/CONF.2/C.3/SR .13 Page 6 threatened its domestic industries. Determination of the existence of dumping should be made by the adversely affected country and not by the exporting nation. Moreover, ITO should not be charged with the responsibility of pre-determining particular instances of dumping. Mr. AUGENTHALER (Czechoslovakia) agreed in regard to the need for precise definition, although out of 147 complaints examined by the United States Tariff Committee in 1919 only 21 had been found to be dumping in the technical sense. Certain practices, apparently considered as dumping, actually came under Article 40. Mr. LA ROSA (Italy) supported the remarks of the delegate of France. Mr. MORTON (Australia) pointed out that definition of dumping had. so far proved impossible. Australia had an elaborate anti-dumping legislation, but since 1931 it had not once been found necessary to impose anti-dumping duties. Article 33 fully covered the case. Paragraph 5 Mr. SEIDENFADEN (Denmark) thought that the Organization should be guardian of the legitimate interests, of smaller countries. Article 33 should be replaced by a strong simple provision condemning dumping. Instead of permitting the use of anti-dumping duties, all cases of dumping should be brought before the Organization. It was agreed to refer Article 33, including the footnotes to the sub-committee. 5. ARTICLE 34 - VALUATION FOR CUSTOMS PURPOSES (First Reading) Mr. PELLIZA (Argentina) stated that his delegation was not opposed to the principle of Article 34, but in Argentina they had an official list of tariff values which was more advantageous to importers than either specific or ad-valorem tariffs. The proposed system would require a specialized staff within the consular service which it would take time to organize. Argentina might accept the principles of valuation of paragraph 3 insofar as they were consistent with the system in force in Argentina. Paragraph 4 was also acceptable and so was paragraph 6, which was in conformity with the actual practice in Argentina. Paragraph 3 Mr. MULLER (Chile) explained that his amendment was designed to include the adjustment of "actual value" to price fluctuations. Mr. GONZALEZ (Uruguay) stressed the need for a consolidation of values, which would facilitate the calculation of customs duties. The second proposal was a drafting amendment. Replying to a question by Mr. HOLLOWAY (Union of South Africa) the Chairman stated that the General Committee had ruled that, where possible, interpretative footnotes should be dropped, or else their substance embodied /in the relevant E/CONF.2/C.3/SR.13 Page 7 in the relevant Articles. The sub-committee would take the views of the General Committee into consideration. Mr. SHACKLE (United Kingdom) thought that the footnotes were often necessary for the interpretation of the text, and would be difficult to embody in all cases. He was convinced that the second note to paragraph 3 should be retained in some way or another. Replying to a question by Mr. BAHGAT (Egypt) as to whether an increase of freight, insurance and other charges over and above the export price would conflict with Article 34, Mr. MORTON (Australia) replied in the negative. New Paragraph 6 Mr. GONZALEZ (Uruguay) called attention to an error in the French text of his amendment (document C.3/1/Add.7). He felt that traders had the right to consult appropriate customs authorities in regard to the tariffs applicable to merchandise. It was agreed to refer Article 34 to the sub-committee. The meeting rose at 7.20 p.m.

GATT Library

hv522hv1718

Summary Record of the Thirteenth Meeting in Executive Session held on Wednesday, 4th June, 1947, at 2.30 p.m. in the Palais des Nations, Geneva

United Nations Economic and Social Council, June 5, 1947

United Nations. Economic and Social Council and Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment

05/06/1947

official documents

E/PC/T/EC/SR.2/13 and E/PC/T/EC/SR. 2/1-21

https://exhibits.stanford.edu/gatt/catalog/hv522hv1718

hv522hv1718_90210067.xml

GATT_156

UNITED NATIONS NATIONS UNIES ECONOMIC CONSEIL RESTRICTED AND ECONOMIQUE E/PC/T/EC/SR.2/13 5th June, 1947 SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH. SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT Summary Record of the Thirteenth Meeting in Executive Session held on Wednesday, 4th June, 1947, at 2.30 p.m. in the Palais des Nations, Geneva. Chairman: H.E. Mr. ERIK COLBAN (Norway). Mr. L.D. WILGRESS (Canada), Chairman of the Tariff Negotiations Working Party, presented the Sixth Report (document E/PC/T.84 and 84(a)) . He drew attention to the fact that, up to and including 31st May which was the date fixed for the completion of the first stage of the Tariff Negotiations, i.e. the holding of initial meetings between the varicus pairs of countries, 91 initial meetings had been held, 2 would be held in the following week and 9 others requiring the participation of the Chilean Delegation would be held in t e near future but no dates had yet been fixed. Refering to Annex 'E' and the decision at the previous meeting that when agreement is reached in the tariff negotiations between two countries the fact of agreement might be published but without the disclosure of information concerning the tariff rates agreed upon, Mr. S.L. HOLMES (United Kingdom) suggested that it should be made clear by the Executive Secretary, when announcing that negotiations had been concluded, that although an agreement had been reached its terms would be subject to review when all the negotiations were concluded and would be subject to approval by the governments concerned. The E/PC/T/EC/SR.2/13 page 2. delegate for the UNITED STATES mentioned that same delegations, including his own, had authority to give final approval to agreements, but the delegate for AUSTRALIA mentioned that in the case of his dolegation tho agreement reached would require the approval of the Australian Parliament as well as the Government; he doubted, therefore, whether any information concerning the termination of negotiations should be published and he said that, so far as he was concerned, he would have to wait until all his negotiations were concluded before reporting that any one of them had reached completion. The delegate for SOUTH AFRICA said that, if the information that negotiations had been completed were to be withheld, the two countries concerned would not be able to put their agreement into force immodiately oven though they might wish to do so. Other delegates, however, stressed the multilateral aspect of the present negotiations. On the suggestion of the CHAIRMAN it was agreed to refer Annex 'E' back to the Working Party for further consideration in the light of the comments by various delegates. with the exception of Annex 'E', the Report of the Working Party was approved.

GATT Library

tr298nn6106

Summary Record of the Twelfth Meeting : Held at Lake Success on 3 February 1947 at 10:30 a.m

United Nations Economic and Social Council, February 4, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

04/02/1947

official documents

E/PC/T/C.6/37 and E/PC/T/C.6/37-55

https://exhibits.stanford.edu/gatt/catalog/tr298nn6106

tr298nn6106_90230084.xml

GATT_156

United Nations Nations Unies RESTRICTED ECONOMIC CONSEIL E/PC/T/C.6/37 AND ECONOMIQUE 4 February 1947 SOCIAL COUNCIL ET SOCIAL SOCIAL COUNCIL RIGINA~: ENGLISHS DRFTINGG CMMIUTTEE OF HEE RPEPRATTORY CMMITTEE OF HET NITEI NATION~ CONFERENCEEON,TRADM ANDPEMPLOYMENTN SUMARYMRECORD CF1THEI WELFTHJ ETTING Held at Lake Success on 3February 9547 at10:30 a.m. -Chaimnan: HE., M.Eriik CLIBAN 1. Draft mendmennts and Observations Submitted (a)Mobdifications proposed by the Delg*ate for the United States (doumeentE/.PC/T/C;6/W.28); (b) M odifications proposed by the DelgJate for Canada (documentE /PC/T/C.6/W.35); (c) Secreterait remarks on Artileb 39 documentE:/Cc/T/C.6/W.38). 2. Consideration of Article3,9 The Cmm~ittee debated the Canadian modifications ofprargGraph 1 as contained in E/PC/T/C .6/W. 35 an apYproved unanmously the fllowingj wording for the first three lines of pargraaph 1: M`embers agree to aeke appropriate measures, n dividually or through the Organization or in both ways, to prevent business practices affectng* internationaltfraes, which restrain competition,limit ,.:. The Delegate of the UnitedKXingdo mproposed tha ppaagrarph 1 shoudl : stress thalytgon -oods and-not services aalling .4; within thepurvoiew f Article 3y9, b inserting after the sw"ord affecinin internationaa e"sd,', whe vo"ds Tin goods", andby inserting in graa_=aph 2 after 'he words "grazaraph 1", wthe o"ds 4as regards the type of practices covered'. Theian D$l=Oelegate referred to the reservation of the - - I=dan Delegation in London regar ding the'xoclusionfc sarvices end. sustsined thie reservation. The Delegates from Brazil,.Chile, Cuba and . - /South Africa E/PC/T/C. 6/37 page 2 South Africa supported this reservation. The Cuban Delegate pointed out that the opinion that services were excluded under the terms of reference of the Preparatory Committee was erroneous and that services would fall legitimately within the purview of the work of the Preparatory Committee. He objected to the view that itwas necessary to request anopinion of the Economic and Social. Council in this respect. The Delegate of France proposed the retention of the London text, without the addition of the words "ingoods", proposed by the United Kingdom Delegate, as the majority formulation of the Drafting Committee, whereas a different text providing for the inclusion of services in Article 39 should be submitted to the Second Session of the Preparatory Committee as an alternative formulation. The Delegate from Canada supported. this motion which was approved by the Committee. The Brazilian Delegate referred to Brazil's suggestion at the First Session of the Preparator.y Committee to include a mention of economic development in paragraph 1. He wished to direct attention to the fact . that the reference to Article 1 in pararaph 1 of Article 39 refers to Article 1 in its new formulation which includes economic developments - one of the purposes of the Organization and. not to Article 1in the formulation of the United States Draft Charter which did not contain - economic development. The Chairman took. note hf tbis observation.. The Delegate of India objecoed t. the deletion of oths "add" Ibne&thb maintenance, in all countrfes ok high s eveliof reao e"cdm&1 as suegestAd In document E/PC/T/C.6,W.35; and after the Canadilagn Diwate iithdrew his ~~ respective motion, it was approved to retain thds. wor&s The Delegate of the Knited Xingdom moved to awd a.ne- sentenae to pAr1graph I aws:ollovs' SSueh uractices are hereafter in this Chapter" and in Article r6 desctibed ricpi rct4vebusiness pract,ce"' aid bhi motwon vas cerridd.- graphareh 2, saragrupb-pah (a) - - - The Cn zit banee de batedni-arapraph 2 oa-t&egs.of -e U.hd Statejs proposal E/PC/T/C.6/37 Page 3 proposal (document E/PC/T/C.6/W.28), after the Canadian Delegate expressed his preference of this formulation over the one suggested in ' documeEnt /PC/T/C.6/W.35. The Delegates of Brazil and Cf na Cbmrrence to tiher ertservt ionsreg ardingthei icoluso n oi pbcli eentepribe sin asb-psaragraph(a) 'nd saustienedeth~e ieservations. - ; The Delegate of ithe UnttesSupon query. fo8pq o the Delefrgmate o alaNdew £plaened eaxiaidtthe dele tio"of :*naeronal"tjin u al e clause "rintenational combination" did nioitenatal chaongmea ingf eun wass ba merelyg sugeste d derinoe to provide cfosir oicysteewen beeragran pa1phs and 2 and in rorde it elime inatpossible ambiguity heof t word " international " in this connection. The iCommttee debated whether thedefini tionof public ecoM ial enterprises in sub-paragraph (a) cliieiueQdOnerpsesrie.n -cwiqh rthee is effective crontol su o4dborinatevernmen gotao bfd es-such as inlipalitiesan eiagerdek o hasne ffrozhe purposse of lc~aifiationc hile rdsvo"effeclivee- go vrnmentnoontol5"to effective e ublici ont6o." e hFer:ch Deeloate pointed out tahb the investigatlo nprcedu~ie, provided for in Article 40, shoul donly follow upon a spciecci c omplaint in accordance with Article 40 and not sa a consequenc oef sutdiseu derrtaken by the rgOnizzatoni according too rttclea41 and movde to nsiert aftre the words subjeect toinv stigatiio"n the clusea "in acordancec wi ht the proceureewith trespect to omcplainst provdide by htes ubsequent Artcleis-" of thisa Chrp"te. -- -e . ; sThe uditoed Staagtes hDeword "legsat'move&t chF- 'rb uboquent' in t Thehis cgliseo to tianiteebt"w 6f theh iAtk Kingdobe Delegate- foiar aCd zecdcelvgatak n&h giumDsu or Bel'iorted tfhe motion o -, the FTnch Delegante. The CanuadiauDehelega tte qvrieddno wther-is .oul . unpdv~- of l3det'rwanization er tnvesstigb dOpon its owwnn-gCnfe ucii he iommitneitatalsded to s~X~ptdthciUnited .e~ates formulat0on& Te ozii~ of parhagrapaddih on pfu2he clause suggested by the Frenchclauseje, wit /Delegate E/PC,T/C,6/37 - Page 4 Delegaae end to refto bth hqe sueoti6nlfmliMitation ofethrganization's8 a investigative authority in tRe ort&of etD.aftingrtomg Cmit.tee agraagMph 3 Th6 Delegate of the United Sts explained e& that tceange segguacested in pgraasrph 3, sub-pgrazraph (c) dcoumenttit E/PCC./,W./1;28s daaQue tn ad observation on the parf oelgium i= at the Firstsseewion of the PrrpaiatorymmCoaittee t hatboycott constitutad en espellaf:eprpreehensible case of discrimination, the Belgian Delegate stated that his cgan0e took full acnouzt ofeth srecpeotive Belgian observation and supported. the United-States text; and themm Coittee approved, this new formulation of paraphgrh 3, sub-agarjraph (c). Spb-naragrsphee3(O) and (f) The Cuban Dealegate quer iedthe difference between the cases of sub-paragrsphd (e) and (f), and the Delegate of thnme ited States expnaired that the c aseof sub-paragraph (e) had in mind the suppression of invention or techngyo&' by msr=` in order to protect their capital investment in recesses and prcduots rendered obsolete by new technology. The CanadiDn ]elegate suggested the substitution of the wo"d Ulimiting" for "suppressing" bwt vithdrew this motiwn 'hen the United States Dglesate pointed out that this would eak& it an offense if mires were not introducing ew technology at i t-me when it wasoecinomllaftyjunJustified. The Committee approved the formulation sf aub-paragraph (e) as Contained in the Setar-taiat drafocument EntE/PC/T/CW6/w.38 with these addition of the wor"os or development" after the word. "apclidationn afd sub-paragrapfh () in tCe Ganidian murimlation oocume=-ent E/PCCT/O.6/W.35. Spa-mgraprajh 3)(dj - The Cubae DNlegate queried whether this sparagrarraph included also limitation :f exports,dani the Cinadian Delegate poidteA but thatcsudh limitotirn of exporwoul oid fall under sua-pgraxraphs (b) or (c). /3. Article 40 E/PC/T/C.6/37 Page 5 3. Article4O - . The Comittee debated Article 4an dn the basis of"the Cea3ian draft 35)cument EP'C/ian e0 .a). Thegested lni D~leghte sug a partial redroft of suggestion'nd upln the t Setmoi of the Delegate frok the rman ed uested -tbe Cbidasn reqi*t et the Australian Delegate to submit a redr ftfor;tbh second -reading of this Article. Paragaph (a) Thi Lnadladiw udstitution of the Var` "ularifwc" for "pertict im" uas unaniaus1y approved; Paraiah (b) - -: The leiegate froi Franue explained that the present formalation of this paragraph contained the da-gor that private persons or organizations ,ould be allowedmhe right of dingct complaint in natters affectiwn the Jurisd~intl an>legielation of sovere"gn states. The word "permnssione wo wlt oay call for a kpnd gf Visafi6hout a state acce-tinG responsibility for suchwcichlaints. AFfench redraft,;'hcih will be submitted to the Committee, suwstit-tes for ch" s reasonwohe Pord "assistante for the 'trd permissions". The srited gni- iEuDpoetea thi' motion ard the Beldgate of Belgium,' secondingwthe motion, referred to the vo"d "approval" for "permission* in the second palt of the London report.-.- che Ohal!ma obhad been made in sndon.eservation ba e in Loon. The tdiandit Dbegat e sug"gsted tlo sirustitute the-'rd 1'prova1"fol "permision" ar&tbW ±i" States"Delvgate pointed& out that goVernments might tot iami to eadaitify themselves w1th cirtdn complaints and yet r nationalsudLe wtan to omprant thHiiLthtright of c6laint. Se suggested ion" in lieu of "permission" " i and the or2ed thnaian~zo Deegte, sup ert I motien . '. ' The Dgestede of tllowingedormulationugSpSt6 thefool~vn' f bral4aion submitted by a Member on its own behalf or -i be or /in behalf E/PC/T/C.6/37 Page 6 in behalf of any affected person, organization or business entity, within that Member's jurisdiction"- The Canadian Delegatee6xprsrsed he& vewi that the United iEngdom sgigestionwvould involve a change in substnce, namely lthe principle tha a country would have to adopt the case of private persons or organizations, a principle which was definitely not envisaged at the First Session of the Preparatory Committee. The Delegates of Belgium and Chile supported the formulation of the Delegate from the United Kingdom and the United. States Delegate, with the support of the Delegate of France moved to retain the Canadian formulation with the substitution of the word "authorization" for "permission", while the United Kingdom formulation should be reported as an alternative to the Second Session of the Preparatory Committee. With the support of the Delegates of Canada and China this motion was carried. The United States Delegate also stressed that the provision for the appearance of private persons or organizations in hearings before the Organization, as provided for in Article 40, sub-paragraph (d), would contain an inconsistency with the United Kingdom formulation and suggested to include a reference to this point in the Committee's report to the Preparatory Committee. Paragraph (d) The Delegate of the United Kingdom pointed out that the insert, suggests in the fourth line of the Canadian draft, of this paragraph, would involve The possibilityy of the Organization conducting direct investigations in the territory of Member countries. For this reason, he moved for the deletion of this insert and was supported by the Delegate of Czechoslovakia. The Delegate of Canada tentatively suggested to resolve this difficulty by changing the beginning of paragraph (c) in the following manner: "Consider and request each Member concerned .." This change was tentatively approved pending a second reading. The Committee adjourned to 4 February 1947 at 10:30 a.m.

GATT Library

js878hr5665

Summary Record of the Twentieth Meeting held at Lake Success on 12 February 1947 at 10:30 a.m

United Nations Economic and Social Council, February 12, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

12/02/1947

official documents

E/PC/T/C.6/73 and E/PC/T/C.6/73-85/CORR.1

https://exhibits.stanford.edu/gatt/catalog/js878hr5665

js878hr5665_90230138.xml

GATT_156

United Nations Nations Unies ECONOMIC CONSEIL AND ECONOMIQUE 12 February 1947 SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH DRAFTING COMMITTEE OF THE PREPARAT0RY COMMTTEE OF THE UNITED NATIONS CONFERENCE 0N TRADE AND EMPLOYMENT SWMMARY RECORD OF THE TWENTIETH MEETING HELD AT LAKE SUCCESS ON 12 FEBRUARY 1947 AT 10:30 a.m. Chairman: H.E. Erik COLBAN 1. The Chairman directed the attention of the Drafting Committee to the formulation of Article 27 as contained in E/PC/T/C.6/61, and the Committee agreed to this text and decided to mention the Chilean amendment (E/PC/T/C. 6/W. 61) in its report. 2. Discussion of the Tentatively Agreed Articles (Documents E/PC/T/C.6/52, E/PC/T/C. 6/54. and E/PC/T/C. 6/60) . On the suggestion of. the United States Delegate it. was agreed to bring a minor change to Articles 52, 55, and -58. The -United.-States Delegate suggested furthermore certain changes to Article .60; he was of the opinion that the definition of a primary commodity was meaningless and that it should be left to the Organization to decide what a primary- commodity was. He proposed. therefore, that at least a part of paragraph 1 of. Article 60 should. be omitted and paragraph3 of- Article 52. should. be enlarged to clarify 'the conditions under which a commodity agreement could be concluded with reference to related, substitute and synthetic products. As to -paragraph. 3, he .was of the opinion that the definition of. an. inter-governmental commodity. arrangement, as it stood, was too broad and. therefore dangerous and could be omitted also, the reference .to.the "purchase and sale of a commod ity falling, under- Section E of Chapter V" could be included among the exceptions contained in Article 59. He also proposed the deletion of paragraph 4, because he considered it redundant as the definition of regulatory agreements was already contained in Section C of Chapter VII. /The United States E/PC/T/C.6/73 Page 2 The United-States Delegate thought that in case paragraph 4 was retained the words "export or import of a commodity" should be changed to "trade". As to paragraph 1, the Committee decided to retain all of it and to include a note in the Report to the effect that the Uhited States Delegate opposed it or parts of it. As to paragraph 2, the Cuban Delegate was of the opinion that it should be retained because it does not only deal with the territorial application of the provisions, but, also and. mainly with the definition of "a Member" as applied to Charter VII and as distinct from the rest of the Charter. The Committee decided to retain paragraph 2. The CHAIRMAN was of the opinion that paragraph 3 was superfluous and proposed its.deletion. .The United Kingdom Delegate was of the opinion that a definition of inter-governmental commodity arrarngements should be retained and the Delegate for the Netherlands considered this a matter of substance and objected. strongly to the deletion of paregraph 3. The Delegate for Cuba seconded the Netherlands and United Kingdom's suggestions. The Delegate for Chile- suggested that paragraph 3 be put.into brackets and a note be -made in the Report.. It was decided by the Committee to establish an ad. hoc Sub-Committee to discuss the problem presented by paragiaph 3 and; the CHAIRMAN nominated the Delegates of Canada, Cuba, the Netherlands, the United States and. United Kingdom to participate in the work. Paragraph 4 of Article 60 was left as it stood. 3. Discussion of Paragraph 3 of Article 53 as - Drafted, by the Informal Group of Delegates from Canada, Cuba and France and the United States. The Delegate. for Canada stated that the Sub-Committee dealt with the following two problems: /1. The .transfer E/PC /T/C. 6/73 Page 3,. 1. The transfer of the text to Artile 53; and 2. The text itself. As to the transfer. of the text to Article 53, the Delegate for Canada stated that the Sub-Ccmmittee has unanimously approved of It. The Delegates for Australia and New Zealand wished to put the paragraph in square brackets to make It clear that.in their opinion the transfer represented a change in substance.: .However, as the majority of the. Commaittee felt that no change in substance was involved, it was decided to include the text in -Article 53. without the square brackets and to note in the Report the- views expressed by the.Delegates., for Australia and New Zealand As ,to the, second.question namely; the change. in the text itself, the Delegate for New Zealand asked whether if in. a. given agreement a -country which is primarily a producer-consumer Joins as an importer, this fact would mean that all-.the other importers will have a smaller voice. The Delegate for Canada answered in the affirmative. The Delegate for the Netherlands stated that, the previous text which. stated simply "an appropriate voice"-was broader than the present draft which really alters equality between the two categories. - The Delegate for Canada stated that the detailed negotiations .concerning this matter should be left-to each individual agreement, and. suggested the following change in text which would allow a .splitting of the votes; i.e., the -replacement of the words "within one or the other category" by the words "within one or both categories". .:. The Delegate.for France stated that. the representation of producer- consumer countries cannot be settled within the limits of the Charter. The main thing in his opinion was to .avoid a third category which might upset. the.balance infavour of either importers or exporters, The question of including a country like France in; either one of the two categories, should be'left to' individual negotiations, /After scme E/PC /T /C ./73 Page 4 After some discussion, it was decided to accept the text of paragraph 3, Article 53, as it was presented by the Sub-Ccmittee with the small change suggested by the Canadian Delegate. 4. Discussion of Additional Paragraph of Article 52 for inclusion in the Repcrt The. Cuban Delagate was of .the opinion that If this text. were to be. included. in the Report,. dt. should ba clearly stated that this would be. done upon suggestion of the FAO representative.. .... The Delegate. for:the United Kingdom..asked whether this additional. paragraph was meant to. be a substitute or.an addition to paragraphs. 1 and 2 of Article :52- The FAO Observer answered. that it was an addition. The Delegate for.the Netherlands stated. that commodity agreements may be necessary even-when there is no prospect.for a:burdensome surplus.. He mentioned the case of rice.,. - commodity. now-in short supply which . nevertheless will be the subject of a Study Group in the near.:future and a Conference. in the latter part of the year. If :the paragraph. suggested is not included In Article 52 it might necessitate the draftig of a new. Charter for FAO. . - - The .CHAIRMAN closed.the- discussion stating that -the Report may include the proposed text -of paragraph 3, and. the -fact that the -suggestion from the FAO representattve- met with sympathy on the part of. certain Delegates, but, was not discussed In detail is to the substance by the full Committee.. 5. Administrative Sub -committee The Committee decided to refer.. the..United. Kingdom note on provisions for..two thirds majority in the Draft Charter (E/T/0.6/w.64) to the Administrative Sub-Committee, and to refer also Article 76 to this Sub-Committee; In-order to avoid undue overburdening of the Adminstrative Sub-Ccmmittee, the Chairman moved that the Administrative Sub-Committee. should deal ony with Articles 75, 76 and 77 whilst the full Committee would deal with the other Articles contained in Section E of Chapter VIII. /6, First Reading E/PC/T/C .6/73 Page 5 6. First Reading of Articles 72 to 81. inclusive. The Committee approved Articles 72 and 73 in the formulation of the London text. With regard to Article 73, paragraph 5, the South African Delegate pointed out that this provision seemod redundant in view of the provisions of Article 81, paragraph 2 and moved, with the support of Australia for the deletion of this paragraph. The United States Delegate felt it advisable to retain this paragraph, and the Observer from the FAO suggested that the Committee include in its report a note with reference to this paragraph and Article 81, paragraph 2, stressing the itportance for close working relations between the ITO end FAO. The CHAlRMAN Pointed out that there was no necessity for reference to any specific intergovernmental organization since relations with intergovernmental organizations in general were fully covered in the Charter. The Committee decided to' include the note suggested by the FAO Observer in its report with the mention that this note had been suggested by the FAO. The-Committee approved the London text of paragraph 1 of Article 79. With regard to paragraph 2, the Committee discussed the authority of the Director-General to initiate proposals for the consideration of the Organization and decided to substitute for the words "shall have authority to", the word "may". The last sentence of Paragraph 2 was changed to read "He shall present through the Executive Board an annual report to the Conference on the work of the Organization and in consultation with the Executi've Board prepare the annual budget for submission to the Conference". The Committee approved the London text of Article 80, paragraph 1, and on the motion of the Canadian Delegate, decided to delete the last three lines of paragraph 2 after the word "agenciess". Article 81. The Australian Delegate moved to delete the words in the second sentence of paragraph 1 "by the Director General and", because /it was E/PC/T/C:6/73 Page 6 it was unrealistic to assume that such negotiations would be conducted by the Director-General. The Delegate of. France expressed the opposite view, pointing out that it, must be. designated which organ or official of the ITO would have to sign such agreements The United States Delegate moved to substitute "agreement with the Economic and Social Council of the United Nations" for "with the United Nations" but withdrew this motion when the Australian and Chilean Delegates argued against the change. The Commiittee approved the London text, deleteing the word "an" before the word "agreement" in the fifth line of paragraph 1, and decided to note the Australian proposal for deletion of the words ."by the Director- General and" in its report. Pararagraphs 2, 3 and 4 were approved in the formulation of the London text with the Committee deciding to transpose the last sentence of paragraph 2 to follow immediately the first sentence of paragraph 2. Thi meeting was adjourned until Thursaday,13 February 1947 at 10:30 a.m.

GATT Library

jb033mf5224

Summary Record of the Twenty-Eighth Meeting : Held at Lake Success on 24 February 1947 at 10:30 a.m

United Nations Economic and Social Council, February 24, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

24/02/1947

official documents

E/PC/T/C.6/106 and E/PC/T/C.6/104/REV.1-107

https://exhibits.stanford.edu/gatt/catalog/jb033mf5224

jb033mf5224_90230195.xml

GATT_156

United Nations Nations Unies ECONOMIC CONSEIL E/PC/T/C.6/106 AND ECONOMIQUE 24 February 1947 SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH DRAFTING COMMITTEE OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT SUMMARY RECORD OF THE TWENTY-ElGHT MEETINGI" -ld at Lake Success on 24 Febureyr 1947 at 10:30 a.m. Chairman:H.E. Erki CLOBAN 1. The HAIRMAN moved discussion on Chapa.r VII of the Draft Report concerning inter-govermnenail -commodtiy arrangements . As a result certain changes have been made both in the text of the Chapter and in the commentaries. (a) Cahgnes in the Text: i n the suggestion of the Austrliian delegate it was decided to replace the presnzt title of Section A "General Consideration"' by "nTter-govermnental Commodity Arrangements in General" and to omit the prseent Section B altogether and accordingly to change Section C and D to SectionB3 and C respectively. In Article 52 itwvas decided t ' include the word primary " in the ifrst -line of sub-paragraph (a) which ocw reads as follows: a burdensome surpuas of aprimrary cmmoodiyt has developed... " w-odiingof msubp~aragraph (c-) f Art.icle 53 was ch_ged in order to :clarifs its meanitng rvz itaha :Individua3 countries who are at .the same time- oprducer3. Aan consmu-re =ight accordingt tt leir interests side either with the Ccnsmere or:-eit the producers, it: being 3nderstood-tahto ne countr_y cannot eide Nith both.-* The othecr hgasne brought to the textwere minor drafting change s andill w e bn icorrpoate d inthef alinrR ept.or (b)hanges Mm ade in t commentarieshe,- - - ..i The Committee decided to achange the wording of the first nd t- .rth" E/PC/T/C .6/106 Page 2 fourth general comments....It was agreed to omit the comment referring - to Article: 52). sub-paragraph-(a) altogether.-- As to the suggested o- - additional paragraph of Article 52 it was decided ato stte in the, Report that this question was raised byF the AO Observer., and to add that it was recognized that the matter wa s onefor consideration in Geneva. With regard to sub-paragraph (e) of Article. 53,. tmhe Cmmittee decided on thge s gestion of thae Cubn delegate to include in the Report the following sentence: "It was felt that the phrase substantial progress toward solution of the. pr"oblem should cover e agree ment. formulated to impede a deterioration of the situation. 2 THAIRMANhe C moved the discussion of Dthe raft Report of the Drnaftig Committee (E//PC/TC.6/97). dealing with Chapter V, General Commercial Policy, Articles 814-3. LMr. ACARTE (Executive Secretary) stated that after thme Comittee had dealt with this Chapter and decided upon amendments a new corrected mieographed document. will be issued before the end of the -eek for most of the delegates to take home with them. The confidential character of the Report was again stressed. T this meetginCArticles 14-2a7 ed 37 were discussed.- The text of the Articles waas dopted with nmior verbal changes and rrectconios.. . ' In paragraph 2(a) of Article 18 three alternative texts were introduced, of1 t'\irepreents the wording from the UnitedD States Iraft Carter, i-mn oat-ept to clarify and define for purposes of tariff valuation the expression "actual value". The delegates indicated whether or not their reservations and obisnservat o were maintained. - The C ommentary elaboratewdby the Secretariat as adopted with certain changes, deletiwons and additions,-hich will be incorporated in the revised P.eport. , * - The Committee adjourned at 11:30 p.M

GATT Library

pt102dj4776

Summary Record of the Twenty-Fifth Meeting : Held at Lake Success on 18 February 1947 at 10:30 a.m

United Nations Economic and Social Council, February 18, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

18/02/1947

official documents

E/PC/T/C.6/91 and E/PC/T/C.6/85/REV.1-92

https://exhibits.stanford.edu/gatt/catalog/pt102dj4776

pt102dj4776_90230162.xml

GATT_156

United Nations Nations Unies RESTRICTED E/PC/T/C.6/91. ECONOMIC CONSEIL 18 February 1947 AND ECONOMIQUE ORIGINAL : ENGLISH SOCIAL COUNCIL ET SOCIAL DRAFTING COMMITTEE OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT SUMMARY RECORD OF THE TWENTY-FIFTH MEETING ni m. Heldc Laeon Su February 1947 a 10: 0 a.m./,o -:90alm3 . Ch. E.a Erik COLBANirman E r '...CO- :. - - sracusignof -he Re t ofe Ad Hoc D.aftinSub.Committee for the ReE/drat 6/W.8rticle 61 i Docw t 'Pj/ .M. 0. -- Pare~rphs i.2, 3 nd -a geierecepted without any chn. <As reards p4araph 5,Afr th ewDelogate for South ;ia-4as Of the opinion that: he. ordAs euonomym oar efefors" were inneceessry icia ue eh the idea was cmplTit:nte whole text. The Delegame forethed hiu prefe eKci ngdon exprCssehTi' pirne for nntaiiin the woidi in the texpression to to gsive ex ir to tQ: cesity for avoi lication in the womerk o f ianntaeir-sgoverennt1'-orz.ton Itn was agreed to maitain the text. : :. : : RAs rt tegardsbanAreleicle 57 of the Lond± Bepothe Cue D1gate thought that the additioanof a new parca agraph we unnecessary eid out of plaes ArticlM 57 referred to the obliunctions of Hembers and not to the. fictions Of the Organization. - The Delegate for Austidc usta thatthe:.reaon for the snalmion of at the Orarnizagraph vas to enre thnt't gra-ion had functions -ithat fmmield., It wasincluoddecid6dgb te Co nitee not to x the sugestion.mde x, n tthe hewpaprrgunder1 sc AeCicas 1 pa:abgrph i. o'ftile 6l. covered the idea conprones in the Australian ITopoaal. As tno the "new Article 14" muetionEd at the eWd of docment Z/PC/T/C.6/f.80, the De3egate for Austr&aning explained that its meni was to add the sentence to the end of paragraph 2 of Article 11 (paragraph 3 of the London Report). /i was E/PC/T/C.6/91 Page 2 It was decided by the Committee to add this sentence to paragraph 2 and not to include it in square brackets. The Delegate for South Africa was of the opinion that it' there were to be headings before each Article, this might lead to misinterpretations. The CHAIRMAN answered that great care has been taken in the drafting of the headings of each Article and that probably, in accordance with international treaty custom only' the most .important headings will be left in the Charter after the meeting of the Plenary Conference, 2. Discussion of the Tentative Proposal by the United Kingdom Delegation on Paragraph 1 of Article 1. The Delegate for the United. Kingdom stated that he would like: to replace the word "rising" by the word "stable" in sub-paragraph (b) and the Delegate for New Zealand wanted to replace "high, -by the word. "higher" in sub-paragraph (a) in order to make it conform to the Charter of the United Nations. The Delegate for China wanted to delete the first line of sub-paragraph (c). The CHAIRMAN was of the opinion that the first line of sub-paragraph (c) should rrmeain because the avoidance. ofsSlumps and bocms was one of the most Important tasks of the ITO. The Deeeogate for the United States offered to replace the first line of sub-:paragraph (c) by the words "to contribute to a balanced and stable xpaending world economy" The Delegate for the United Kingdom and the CHARIMAN expressed their preference for the text as it sotod in the United Kingdom draft. The Delegate for Cuba wished to replace the words "full employment" by "f ull and productive employment" in sub-paasgraph a') because it covered better the position. of under-developed countries. /The Delegate E/PC/T/C.6/9I Page 3 The Delegate for Belgium pointed out that the meaning of "full and productive employment" was spelt out in Chapter ITI and the Committee agreed to leave the text as it stood in the United Nations Charter: "full employment". The Delegate for India was opposed to the replacement of the word "rising" by the word "stable' in sub-paragraph (b) because he felt that for many countries the demand and income will have to be rising end not stable. He thought that the word "stable" had a static implication whereas the word "rising" implied a dynamic force. The Delegate for the United Kingdom answered that the word "stability" was used here together with the word "high" end therefore could not be interpreted as preventing progress. As income and demand cannot readily go on rising after a certain point, this concept implies a fall in the level of Income and demand. On the insistance of the Delegate for India, he proposed the words "high and steadily rising levels". The relegate for Belgium supported the Indian Delegate, stating that rising levels of demand and income are of great importance to many countries and that both the idea of progress and of security should be included in the text. It was agreed to include in the text the idea suggested by the Delegate for the United Kingdom end also to replace the word "high" by the word "higher" in sub-paragraph (a). 3. Discussion of Article 1 as contained in Document E/PC/T/C.6/78 of the Administrative Sub-Committee It was agreed by the Committee to replace paragraph 1 of Article I by the United Kingdom draft, to bring a slight drafting change into paragraph 5 and to delete paragraph 6. 4. Discussion of the Note Presented by the Delegation of the United Kingdom concerning provisions for two-thirds majorities (Document E/PC/T/C.6/W.64) The Delegate for the United. Kingdom explained that it was the opinion of /his Delegation E/PC/T'/C.6/91 Page 4 his Delegation that both types of provisions for two-thirds majorties may be worth keeping in the Charter. Where rapid decisions are required. the second. type, namely "two thirds of the Members present and voting" could be applied, whereas in important cases formula 1 - "two-thirds of the Members" should be applied. The Australian Delegate pointed out that the first formula precludes a Member from abstaining as this counts as a negative vote, whereas formula 2 allows a Member to be neutral. He stressed the importance of maintaining both types of voting. The United States Delegate stated that these two formulae applied not only to the two-thirds rule, but also to the simple majority rule. He agreed with the Australian Delegate that the general rale both in simple majority and in two-thirds majority cases should be "Members present and voting". The Chairman closed the discussion by asking that the Report should state the way in which the United Nations solved this problem. The New Zealand Delegate pointed out that the United. Nations Charter provides as a general rule for "two-thirds of the Members present and voting". The United States Delegate pointed out the difficulty of deciding which type of voting was required for the different issues. He therefore suggested that the general rule should. be to vote by simple majority, and only in questions relating to amendments should. the two-thirds rule apply. The United Kingdom Delegate was of the opinion that there ware some highly important decisions (e.g. the Impairment Article) where a two -thiris majority would act as a safeguard against hesty decisions. The Delegates for Brazil and Cuba were of the opinion that this whole problem was closely related to that of voting and therefore the discussion should be postponed until the Geneva meeting.- 5. Discussion of Chapter II of the London Draft Charter The Executive Secretary pointed out that at an earlier stage it had been decided. to ransfer this part to Chapter VIII. on Organization. Concorning paragraph I of Article 2, the Indian Delegate suggested. the /deletion E/PC/T/C.6/91 Page 5 deletion of the date "31 December". This was agreed by the Committee. Paragraphs 2 and 3 were accepted as they stood. The Executive Secretary asked whether Article 2 could not be blended with Article 88, as the subjects of both were closely related. The United States Delegate was of the opinion that Article 2 should become the first Article of Chapter VIII. It was decided. by the Committee to leave the Article at the place where it stood in the London Charter,. The South African Delegate asked whether the Economic and Social Council in its Resolution used the words United. Nations Conference". The Executive Secretary answered that in the Resolution the words "International Conference" were used. As to the query of the Chilean Delegate on the position of non-Members, the Executive Secretary stated that the Resolution of the Economic and. Social Council provide that the Preparatory Committee shall report to the Council concerning the states not Members of the United Nations to be invited to the Conference on Trade and Employment 6. Discussion of the Draft of Article 64, if Weighted Voting is Adopted, Suggested by the United Kingdom Delegation (Document E/PC/T/C.ó/W. 3/Add.) The United Kingdom Delegate stated. that this document had been dealt with by the Administrative Sub-Committee, and the Chairman decided that Article 64 as drafted. by the United Kingdom Delegation would be included in the draft Charter without brackets and with a footnote stating that a comparison with Article 68 should be made. It was decided by the Committee that in order to expedite the work, the.legal Drafting Sub-Committee would. deal only with points specifically referred to it, that is, concerning Chapters VI and VII. The Executive Secretary stated that the Secretariat is writing the Report an the basis of the. text a approved by the legal Drafting Sub-Committee, and will present that Report to the fu11 Committee for Its approval. 7. The Re-draft of Article 67 as Proposed. by the United States Delegation (Document E/PC/T/C.6/W.78) was accepted, and on the suggestion of the Executive Secretary the word "Interim" was omitted. from the title. The Committee adjourned at 12:30 until 19 February at 10:30.

GATT Library

zk546jh5272

Summary Record of the Twenty-First Meeting : Held at Lake Success on 13 February 1947 at 10:30 a.m

United Nations Economic and Social Council, February 14, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

14/02/1947

official documents

E/PC/T/C.6/81 and E/PC/T/C.6/73-85/CORR.1

https://exhibits.stanford.edu/gatt/catalog/zk546jh5272

zk546jh5272_90230147.xml

GATT_156

United Nations Nations Unies RESTRICTED ECONOMIC CONSEIL E/PC/T/C. 6/81 AND ECONOMIQUE 14 February 1947 ORGININAL: ENGLISH SOCIL COUNCIL ET SOCIAL DRAFTING COMMITTEE OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT SUMMARY RECORD OF THE TWENTY-FIRST MEETING Hold at Lake Success on 13 February 1947 at 10:30 a.m. Chairman: H. E. Erik COLMAN 1. Second Reading of Articles In opening the meeting the CHAIRMAN observed that Artitcle 32, paragraph 1, sub-paragraph (b) was being worked on by an ad hoc Drafting Sub-Committee and that the full Committee would be debating this text after receipt of the report from the ad hoc Sub-Commttee. The Committee then approved in second reading Articles 62, 63 and 65, as contained in document E/PC/T/C.6/66, and referred them for final consideration to the Legal Drafting Sub-Committee. / 2. First Reading of Article 82 to Article 89 inclusively The Committee approved in first reading the London text of Article 82, 83 and 84. Article 85 The Delegate for France observed with regard to paragraph 1, that he had received instructions from his Government, indicating that the recent text of. paragraph 1, was incompatible with the provisions of the new French Constitution. This paragraph would have to be redrafted in Geneva in a manner which would make it acceptable under the terms of the new French Constitution. The Delegates for Cuba and United Kingdom pointed out that paragraph 1 /was not E/PC/T/C. 6/81 Page 2 was not concerned with ratification, which is dealt with in paragraph 2; however, the words "become effective" might be misleading, because they can be interpreted as involving ratification. The Delegate for the United States explained that Article.85 actually concerned two quite different cases: the first one, dealt with in paragraph. 1, concerned amendments which did not involve either fundamental changes in the Charter or any new obligations of Members; in this case no ratification was provided for but simply acceptance by a two-third majority of the Members of the Organizaticn; the second, dealt with in paragraph 2, concerned fundamental changes in the Charter or new obligations; in this caae, ratification is required. The Delegate for the United Kingdom observed that this difference should be clearly expressed in the text and the Delegate for France moved to note the French reservation in the Report of the Committee. The Committee agreed to note the French reservation in its Report and approved the motion of the Delegate for the United Kingdom to insert the words "subject to the provisions of paragraph 2" preceeding the first word in the London text of paragraph 1. With regard to paragraph 2 the Committee agreed to delete the first line of the London text and upon the motion of the Delegate for the United Kingdom, decided to .change the last sentence as follows: "in the absence of a determination that a contracting state not accepting an amendment shall be obliged to withdraw from the Agreement, such contracting state shall, notwithstanding the provisions of paragraph 1 of Article 89, be free to withdraw from the Agreement upon the expiration of six months from the date on which written notice of such withdrawal is received by the Secretary-General of the United Nations." The Committee felt that this text, as contained in the United States Draft for a-general agreement on Tariffs and Trade, document E/PC/T/C.6/W. 58, expressed the intention of this clause more clearly than the london text. The Committee approved. the London text of paragraph 3. /Article 86 E/PC/T/C.6/81 Page 3 Article 86 The Delegate for the United Kingdom explanied the underIying idea of the United.Kingdom redraft of Article 86, as contained in document E/PC/T/C.6/W.63 as follows: the United Kingdom holds that it is imperative for the Organization to be master in its own house and to be able to name final rulings and determinations. These determinations call for the exercise of discretion and for rulings on economic subjects on the basis of economic reasoning. In this respect there exists a wide difference between normal commercial treaties, whose character is basically static while the character of the Charter is intrinsically dynamic. The determinations and rulings of the Organization do not form a legitimate object for the review of any court of justice or of the economic chamber of each a court. Judgments of a court call necessarily for the exercise of legal judgment, but not for independent economic evaluation. The term "justiciable issues" in Article 86 of the London Report is quite unclear. According to the views of the United Kingdom the subjects of nullification and impairment and of interpretation and settlement of disputes belong together, and for this reason the United Kingdom draft of Article 86 has fused the provisions of Articles 35, paragraph 2, and Article 86. The Committee decided that this was a substantive matter of the highest importance which would have to be referred to the Second Session of the Preparatory Committee. For this reason it was agreed to put paragraphs 2-4 inclusive of the London draft into square brackets and to include in the final Report of the Commttee a note on the United Kingdom position on the basis of the precis which will be submitted by the Delegate for the United Kingdom .to the Secretariat. The Delegate for France submitted that, whereas he agreed with the Delegate for the United Kingdom about the lack of clarity of the term "justiciable issues", he had to disagree with the substance of the remarks of /Mr. SHACKLE Page 4 Mr. SHACKLE. He felt that there should be a possibility for preview of decisions of an as yet untried Organization. Every young democracry needs two chambers, so that the upper chamber may review the decisions of the lower chamber. He reserved for himself the right to submit a redraft of Articie 86 which might be acceptable to the Committee. It must the kept in mind that without a possibility of review, a paradoxical situation might develop by which Members of the ITO might be parties to disputes and at the same time as Members of the Executive Board, be judges in the same as disputes. To the observation of the Delegate for Lebanon that there is a tendency to overburden the International Court of Justice with jurisdiction over disputes or many new interrnational agencies and its Members the CHAIRMAN remarked that his personal observation had led him to believe that the International Court was at present not overburdened. The Executive Secretary (Mr. LACARTE) directed the attention of the Committee to the instructions to the Drafting Sub-Committee as continued in the London Report, on page 26; Section 6, paragraph (i) and to document E/PC/T/CV/33/Rev-1, page 6 and Appendix III, which instructed the Drafting Sub-Committee to consider the problem of arbitration in the light of the observations which had been made by the Delegates for the Netherlands, Belgium and France on the subject of arbitration. After the Delegate for Cuba had remarked that the change of Article 86 as proposed by the Delegate for the United .Kingdom involved a very major point of substance which should be left to the Second Session of the Preparatory Committee, the CHAIRMAN ruled to adhere to the London text and to refer the decision on Article 86, the question of arbitration and the United Kingdom redraft of Article 86 to the Second Sessicn of the Preparatory Committee. The Committee approved this course and decided to change paragrap 1 as follows: "Texts of this Charter in the official languages of the United. Nations shall be ragarded as equally authoritative". /Article 87 E/PC/T/C .6/81 Page 5 Article 87 The Committee approved the United Kingdom's suggestion to substitute the words "organs of the Organization" for "Conference" in the sixth line of this Article, because the intention of the paragraph was to preclude defaulting Members of the Organization from voting not only in the Conference, but also in the Executive Board or any other organs of the Organization. The Committee changed the title of this Article to read: "Miscellareous Provisions". Article 33 The Committee considered the suggestions of the Secretraiat, as contained in document E/PC/T/C.6/71. Paragraph 1 of the London text was approved. A discussion ensued over the meaning of the word acceptancee". The Delegates for Australia and Lebanon expressed their approval of the Secretariat's redraft, while the Delegate for the United Kingdom remarked that this formula night be confusing and that the main point was covered by the provision for the depositing of a formal instrument with the United Nations. The Delegate for Chile seonded this opinion and the Committee approved the London text of paragarph 2. With respect to paragraph 3, the Delegate "or the United Kingdom expressed his preference for the original text as contained in Article. 73 of the United States Draft Charter, insofar as it referred to all governments which have deposited their acceptance, regardless of their representation at the United Nations Confererce on Trade and Employment. The Delegate for the United States observed that re-insertion of the text of Article 78 of the United States Draft Charter would also call for adequate change in paragraph 2. The Delegate for the United Kingdom, seconded by the Delegate for Brazil moved to note in the Report this discussion and to direct the attention of the Second Session of the Preparatory Committee to this issue. The Committee approved the London text and agreed to include the note suggested by the Delegate for the United Kingdom in its Report. /With regard E/PC/T/C .6/81 Page 6 With regard to paragraph 4, the Delegate for Cuba remarked that it was rect~~~~~~~~~~~~~~~~~~~~~~~~*- torfe'rZf incorrect to refer. only to overaeas territories and the Delegate for Fsrnce crncurred, stressing the fect that some Fiench overseas territories; such as AMger, are considered Metropolitan France. The Delegate for France suggested to refer.mmithe matter to the Legal Drafting Sub-Coittee, while the Delegate for the .nited States suggested the substitution of the words "such other territories"ommir "overseas territories". After the Cc~ittee had approved this substituticn. and referredommagrarp4 to the Legal Drafting Sub-Ccziniee, the Executive Secretvxy, (Mr. IACAmIiEE) directed the attention of the Comttee ommto instz-icns to the :Crfting Sub1,citee (document E/PC/T/CV/33/Rev.l,, page 7) with reference to the r servations of Australia, France and. the Xetherls.ds. Aticle 8 ' The Delegate "orithe United. Ki-ndom explained that In his opinion a reandence paragrapic'e 24, paragra-h 3 -d. 35, arLgrah 2 -was necessary in pa-agraph 1. The Coitzee decided to insert the words: "subject to the rrcvisicns of Articls 24, paragraph 3, and Article 35, paragraph 2" at the bezining of ragaph 1. The Delegate for the Un-ted St tes observed that a clause should. be oicudee providing for the exmlsio-n of Members who consistently neglected their obligations under the terms of the Charter similar to the respective case __ the United Naticn Charter. oTheDelegate for the United Kingdc queried whether it might not be good to I.nolde aMproviso obligating withdrawing Iembers to pay their contributions to the Orarganzation. * z C=IIAIT considered both provisions unnecessary and the Delegates nor the UIited States and the Jrited Kingdom did not insist whereupon the Ccitee aproved, paragraphs 2 and 3 in accordance with the London text. os-n ac ordance -wiDraa pnc-oal-Commhe ad hoc L'-ftirg Sub.-Cosittee for IArticie 60, E/PC/T/C.6/31 Page 7 Article 60, paragraph 3, the Committee agreed to insert in Article 59) paragraph 1, 4th line, after the words "in short supply" the words "or an agreement made in accordance with the provisions of Section E of Chapter V...", and to delete these words from paragraph 3 of Article 60. The meeting was adjourned until 14 February 1947, 10:30 a.m.

GATT Library

hf199ry5015

Summary Record of the Twenty-Fourth Meeting : Held at Lake Success, on 17 February 1947 at 10:30 a.m

United Nations Economic and Social Council, February 18, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

18/02/1947

official documents

E/PC/T/C.6/90 and E/PC/T/C.6/85/REV.1-92

https://exhibits.stanford.edu/gatt/catalog/hf199ry5015

hf199ry5015_90230161.xml

GATT_156

United Nations Nations Unies RESTRICTED ECONOMIC CONSEIL E/PC/T/C.6/90 AND ECONOMIQUE 18 February 1947 SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH . RAFTING COMMITTEE OF THE FREPPARAORY COMMITTEEa F THE UITED D NATIONS CONERFECE TRNADE ND EMDLOPYMNTE UMM;RY RECORD OF THE TWENTY-FOURTH MEETING Held at Lake Success, on 17 February 1947 at 10:30 a.m. Chairman: M.E. Erik COLBAN 1. Corrections The Delegate for South Africa requested the following correction in document E/PC/T/C.6/84 on page 3 under Article 16, third paragraph: substitute the following words for paragraph 3: "Page 14, text 16:5. The Delegate for the Union of South Africa stated that the Sub-Committee had expressed the view that the preferential rail rates granted. in South Africa were compatible with the, Draft Charter if these products did not compete with imported products. He agreed. that this conclusion need not be included in the report of the Drafting Committee". 2. Second Reading of Articles 82 to 89, inc. The Committee agreed on the text of Articles 82 to 87 in the formulation of E/PC/T/C.6/80 in second reading. The Chairman explained that he had. been misunderstood regarding the heading of Article 87 and that the original headirng of the London draft "payment of contributions" should be restated in lieu of "miscellaneous provisions". The Delegate for Cuba suggested to use as heading merely the word. "Contributions" and this suggestion was referred to the Lega1 Drafting Sub-Committee. With regard to Article 89, the Committee agreed to insert in the second line of paragraph'1 between the words "Article 35"' and "any Member" the words "and paragraph 2 /of Article E/PC/T/C.6/90 Page 2 of Article .85", and to insert between the words "self-governing" and. "in their respect" in the fourth line, the words "at the time". 3 Consideration of the Report of the Economic and Employment Commission _ Tocument E/255) In view of the recommendation of the Committee with regard to the "Resoluation regarding IndustriaI development submitted. by the Preparatory Commission" (E/255), pages l4, 15 and 16, Item D), the Chairman suggested. to retain paragraph 3 of Article 11. The Delegate for the United States suggested. to have an asterisk and a footnote which would, refer to the report of the Economic and Employment Commission. The Chairman preferred. to leave paragraph 3 of Article 11 in square brackets with a reference to the Economic and Employment Commision's report in the commentary to Article 11. The Delegate for Belgium pointed out the importance of the chapter on employment and economic stability of the Report of the 'Economic and Employment Comission for the fature work of the International Trade Organization. The situation would in principle be the same as that existing in matters relating to econcmic development. 'The Sub-Committee set up by the Economic and. employment Commission would. surely deal with the general aspect of the problem involved. and their co-ordination. Specialized. agencies would. be left -to deal with particular problems falling within their scope. Practical arrangements to avoid overlapping (notably as to commodity arrangements) can'be left until the sub-comittee on employment and. economic stability and. the International Trade Organization start their work. One point should, however, be given immediate consideration.. The Secretariat of the Economic and Employment Commission is to examine methods of presenting the multilateral aspects of balance of payments problems (document E/255, page 9). This is of immediate practical-importance as he understands this work has started or will start very soon. : . ' X/The multilateral E/PC/T/C.6/90 Page 3 The multilatera1 supects of world trace. (and the payments deriving therefrom) are no complex they they are difficult. to grsop as a whole. On the other hand, inappropriate action to re-cotablish equilibrium in ibriu= in fapaymente would i.to woi .drnae onneznntmal mtradmese uh no;'Itan necesry. Thh tecl icaj. ds ethoB presented. y theomicncnd aployme.Osyznt ssionCo:=Aeeodumenb E*=t 255 permitô te elact tSdhefeifrent psoezeblz arnemites,ol king ini.to accntat the network of-internationalerotazions ab ahole a end, not only ths cutiationfoJ- s vgln~e cnoryty in relation to othecru ontes3g. ThewilliU, etfhrefo, bin iepessenable to permit the alicpcation of the re yomplext, pvosiaions oArJttie oa 262, 7 and825 of the Charter in theeeoot ssibl! mannee. r e Del)gaeote for Belgm,u, ehcreforep rrosee3 that the Secretariat I'therepsnaratory mmiznteeo shod -4 keep in contacw vith the creearaxiat of thE occnomicnaad Empymruent moUssimion, so as to be able to report at e ao nGeeva sessionnacy pgrSse 3 dmae in this maetor. Thiw s agra!eed upon. TheHA RMAAJN sgegaetodhtbat l le Mmbers of ehr Draftingommitteette slo Lde pbeo in couwh vith tbeirvernmen.;lts redirg-n3 the conuin ed& kort of the Ecmioian eEmpl=21enoymtmm Coission aidsItz SubmCoimittees and instructed. the Secretary tolfowloNethsse devemeop-nants d to report to the Second Session in Geneva on the deopmlc)ents in sthe r3spect. 4. chnical eaISubmmCo=ittRs neport The Delegate for Canasa Sesggdste the lfwoloiwgr -oding ofrag paraph 5 of Article: 20 mber'esgraGee to work in co-operationhtlzough thOr Zgiznzation tar&id thgr Gaauel imin.ratnio ofnnecescarsmyarkingne-of-origin raqrimenents. ThOrgaCrnization is authorized tio nsvetag-ta end rommnwend to mb~m mea mseuridtrocted to thisndn. including the adoption of sehadesJo of genal&' cegoeorsee of productw vhich ah-l1 not ia eny case beeqc-uired to be marked to indicateh íter rig±4in. E/PC/T/C .6/90 origin. With a view to furthering this work, the Organization is autorized to investigate 'and recommend. to Members descriptions of categories of products in respect of which marking, requirements operate to restrict trade in a degree diaproportionate to any proper purpose to be served." The Delegate for Czechoalovakia requested the change of the word. "gradual in the second line of the United States working paper on Article 20, paragraph 5 to the phrase: "as sanly as possible". The CHAIRMAN suggested the substitution of the word "early " for "gradual" and the Delegate for Czecheslovakis approved this formulation. The Committee agrreed to adopt the Canadian formuls, nerely changing the wording 'gradual' in the first sentence to "early". This new text is to replace the ceveral altarnatives for this text in the Technical Sub-Committe Report in document E/PC/T/C.6/55/Rev.1. 5. Consideration of the Second Report of the Administrative Sub-Committee. (Document E/PC/T/C.6/8). In spacing the discussion on Article I in the formulation of this document, Dr. ALAMILLA as the Chairman of the Administrative Sub-Committee, referred to Australia's motion to change the phrase: "of' high levels of productive employment "of full and productive employment and high levels of effective demand ..". The Dalegate for Australia explained that the working "full and productive employment ' had been employed in Article 4 of the Charter and that it was only logical to use the same wording in Article I and the Delegate for New Zealand saconded- the Australian motion. I.- /A disconusci E/PC /T/C. 6/90 A discussion on the merits of the phrases "full and productive employment" on the one hand, and "high levels of productive 'employment" on the other hand, ensued, in which the Delegate for the 'United States pointed out that full employment was a controversial phrase and that two different terms had been employed, one fell end productive employment in Article 4, the other, "avoidance of unemployment or under-employment" in Article 3, paragraph 1, and that, consequently, the clause drafted by the Sub-Committee presentsid a fortunate compromise formulation. The Delegate for Belgium seconded. the United States" position and -declared himself for the avoidance of too specific phraseology in Article 1. He pointed to the fact that full employment meant to him the highest employment forthcoming under conditions of the highest possible national real income. 'The Delegate for lndia' also seconded the United States' position and exprossed his preference for the Sub-Committee draft. The Delegate for the United Kingdom pointed to the fact that the phrase, "full employment" had 'been used in the United States Charter and is repeatedly to be found in the Economic and Social Council Resolutions and in the Report of the Economic and Employment Commission. The Delegate for Australia suggested that if a 'non too specific formulation was to be applied in Article 1 then also the clause "and the eiimination of all forms of discriminatory treatment ..". was too specific. The Delegate for Brazil expressed his preference for more general expressions and referred to Brazil 's suggestion in the Administrative Sub-Committe to replace the phrase "for the reduction' of tariffs....in international commerce" by a more general one; He mentioned that Chile had been seconding Brazil" in the Adminitrative Sub-Committee and stated that although he didn't feel very strongly on the subject, he would have to insist on the substitution of a more -general formula for the clause on tariff reduction if full employment were to be substituted for high levels of productive employment. /The Delegate E/PC/T/C..6/90 Page 6 The Delegate for Chile seconded the mortion of Brazil. The Delegate for India.;advocated a compromise solution, and the Delegate for Australia-suggested that the wording "high levels of productive employment" was weaker than either the wording in Article. 3 or Article 4. He could not stated for at weakening of a full employment objective that was clearly spelled out and agreed upon in the United Nations Charter as well as ill the First Session of the Drafting Committee , ' The Delegate for South Africa seconded the United States' position. A number of compromise formulas were suggested by various Delegations such as "highest levels of employment", "maximum levels of employment", avoidance of unemployment and under-employment", "to co-operate in the fullest reasure for the achievement of productive employment." The Delegate for South Africa moved. for the retention of the Sub-Committee'3 text and to put the Australian reservation into the commentary. The Chairman suggested the retantion of the Sub-Committee text and to include the Australian and New Zealend reservation, while the Delegate for Australia, seconded by New Zealand moved to show the Australian formulation as an alternative text. When the Chairman agreed to set out the Australian formulation as an alternative draft, the Delegate for the United. Kingdom requested the Committee to consider that -the disagréement on this suibject might have gave repercussions if it were to become known and for this reason the report should be kept as confidential document. He then suggested to leave Article l, as not falling under the terms of reference- of- the Drafting Committee, completely open, and not to refer to, it in. the report at all but to refer to the text of the Administrative Sub-Committee and to the discussion on this text in a seperate particularly confidential, report.. "The Delegate for New Zealand seconded the United Kingdom motion and the Chairman ruled to defer any decision on the subject for the next meeting of the Committee. on . ot :ha Ccmzittee. ~~~~~~~ ,. .Th : .at E/PC/'T'/C.6/90 Page 7 The Delegate for Brazil requested to include in the next discussion of Article I also the Brazilian motion to substitute a more general clause and the Chairman ruled that the discussion on Article 1 would cover the whole text of Article 1. 6. Consideration of Articles 74, 75, 76 and 77 The Committee then proceeded to consider Articles 75 and 77 on the basis of document E/PC/T/C.6/78, and Article 76 on the basis of document E/P /T/C.6/W.74 and E/PC/T/C.6/W.67 and Article 74 on the basis of the working paper of the Administrative Sub-Committee. 7. Article 74 The Committee approved as suggested by the Administrative Sub-Committee to add the following sentence to Article 74: "The Commission shall consult with each other as necessary for the exercise of their functions". 8. Article 76 The Delegate for the United States explained that he had deleted "the conducting of studies" clause, which had been included in the Australian draft of Article 76, because all actions of the Commission are subject to the approval of the Executive Board and a specific mention was unnecessary on that account. After the Delegate for Australia had declered himself satisfied with this explanation, the Committee approved Article 76 in the formulation.of the United States' proposal (E/PC/T/C.6/W.74) which is to replace the London text of Article 76. 9. Article 77' Dr. ALAMIILLA explained the use of square brackets in paragraph 2 of Article 77 as indicating that- the .Sub-Committee had felt that the receipt of studies or requests for studies would clearly have to be routed through the Executive Board.. A discussion ensued on the appropriateness of the word 'receive' in paragraph 2 and the Delegate for the United -Kingdom suggested to delete /the first E/PC/T/C.6/90 Page 8 ^ ' " 2 : .. *, -: . - . s quitee firpt - cl; ly a ofasaragraph s q2u unneceseary on the lset clause startir. h the words "ito` -er ;.. . shoful'd e etaineed. The Delegate for the United Kingdommn sexnressed doubts whether the Coisiox *- . "4 should be authorized "to exercise functions of the Organization". Th3ensuing discuessomm ssioneslaeru:Edr th question whether the Co=siin as bodies of wxperts would: have any executive functions Whatsoever or whether they Bwere to be confined to advise tes kecutive'fard while all executive functions woBuld have to be exercised. by the Executive oard. The Delegate for the Uit+d thingdom gave the Co=4ittee to consider whe~er it would not be nece ay tommntrust at least the Chairmen of the Corcissions with certain executive functions since it we not visualized. that the Executive Board would', sit in permanent session. The Chairman suggested. the deletion also of the last sentence of paragraph 2, with the lelagate for Cuba referring to the fact that certain definpaite functions such gns in Article 54., ragraph 4 were assised to the Cotmissoons. The Delegea or the United Kingdcm suggested. larification in the texTof the Charter that all executive functions were to be vested in the Executive Board while the Delegate for the United States, referring to the schedule on page 21 of tha London report., suggested to retain the text of the Admtistrative Sub-Coomittee and to note the discussion cn the subordination of iomnissions to the ExecutiLe BLLoard In the comentary. Dr. AiAMIA expressed hieonsent to the deletion of theiwhon e of paragraph 2 and the Chalr=m ruled., to note I the reiort tmhe conception mmof the Draftlng Comittee that'Coiisions are rely advisory bodies of experts without any executive powers. - With regard o paragnaph 3, the Desegate for the Uaited Kingdom ^uggested! that "activities" was not aegrool ter m and that it should b- epiacedby . functions and eduties". He aleo observed that ther was a difference in the tera-aused in Artinal a ad 77aend.tthe Cairmau ruledto in;truc the Iegel Drafting St-s 75ttee to review Articlea ,, to 77 i:nthio espect snd to ensurfe that dentical urrdimg or-identicai meaning was to be used Ln all these Articles. /Tb Committee E/PC/T/C. 6/90 Page 9 The Committee agreed. to delete paragraph 4 as adequately covered in the reformulation of Article 74, and to replace in paragraph 1 the word "soling" with the words "dealing with". 10. Article 75. The Committee decided to delete-the word. "specific" in the third line of paragraph 1 and, deleting the reference to specific Articles, to substitute the words "functions under this Charter" as the ending of paragraph 1. With respect to paragraph 2, the Delegate for Belgium objected. to the words "existing" and "investigate", pointing out that this clause was contrary to the spirit of the Charter which approved. of customs unions. Belgium, based on the experiences of its two customs unions, was of the opinion that customs unions were very highly beneficial institutions and objected. strongly to any "investigations of existing customs unions". The Delegate for France seconded the Belgian position and pointed out that in this form, paragraph 2 was in any case incomplete because if there were to be any special reference to customs unions then there ought to be a similar special reference to preferential arrangements. He felt that the subject of paragraph 2 was adequately covered in paragraph 1. With the DeleGationls of Chile and the Netherlands seconding the Franco-Belgian position, the Committee agreed to delete paragraph 2. Regarding paragraph 3, the Delegate for India queried the meaning of "co-operative projects' and the Delegate for the United States explained that it referred to matters considered in the Technical Sub-Committee, but that a deletion of this reference would be acceptable to him. The Committee agreed to delete tae last phrase of paragraph 3, starting with the words "including co-operative projects' paragraph 4 was delete& in Tiev of its subject being adequately covered in Article 74. In discussing the future agenda of the Committee, the still open question of Article 24 was touched. upon and the Delegate for the United Kingdom explained his opinion that the issue of Article 24 would in /any case E/PC/T/C. 6/90 Page 10 any case- come up at later stages of the Preparatory Committee The Committee was adjourned to 18 February 1947 at 10:30 p.m. .. . ,?. . . 4 , 1 , , , I .. . . . . ., . . . . " , . . J. ? t , . :, " - , I- " -. . , . , ? I . ? 'N. . , , ,, 1, - ,

GATT Library

gd694zq8283

Summary Record of the Twenty-Ninth Meeting : Held at Lake Success on Tuesday 25 February 1947 at 10:30 a.m., 3:00 p.m. and 7:00 p.m

United Nations Economic and Social Council, February 25, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

25/02/1947

official documents

E/PC/T/C.6/105 and E/PC/T/C.6/104/REV.1-107

https://exhibits.stanford.edu/gatt/catalog/gd694zq8283

gd694zq8283_90230194.xml

GATT_156

United Nations Nations Unies E/PC/T/C.6/105 25 February 1947 ECONOMIC CONSEIL ORIGINAL: ENGLIS AND ECONOMQUE SOCIAL COUNCIL ET SOCIAL ~~- t _. -r DRTIRANGRY COMMITTEE OC=NTTZOF TEPREPMTOW 00*ME NFERENCE ON 1 DE ANDNATIOEMPNSYM,ETNS COMM LO SOF THE TWENTY-NINTH MEETINGE T Y- TIG - Held at Lake Succe o Tuesday^ 25 Februa 1947 at 10:300 a.m., 3:00 p.m. and 7:Q0 .m. ChgirnNo: a. rik COLBAN (oprwey) The Cmittee ccontin of nued the disCuBso ohe Draft Report of the Drat/ig Cmittee7 (EPC/XT/C6/9T). Mr. EDDY (Uwnited States).ished to reserve the position of his govaernment on pargraph 4 of Article 15. Aarticles 28-36 nd 3 - Article 28, paragrah 3. The reference to article VIIITof -he Articles of Aeement of the Intewar maneational Monetary Fund vqd ore precise by the insertion of the reference to Sectio Vns 2, 3 and 4 of ArticleIII. The Representative ofary the International Monet Fund pointed out that he was unable, at the present stage, to.express an opinion on the implications of 8 arasaph 1.of Article 3on Articles 26, 28 and- 9.. The C CAnea this sta shinoluld be tcuudRed in the eort. Article 30.KL Mr(. SHACEKingdom) wished to make a point .United e.:. relaarly ting particullrX to the treatmt otexport subsidies uner -the ;- a enenral agreement o Tariffs and Trwade.hat, The point va t&L icular insofar as psrtir countfiry does nokt givea! rm underaeing - ' abstsidies, an fra eport:subpid~.hat fact would iinevitaby be taken nto- er countries, such as the United Kingdom, in decidingIm Songileration bye._Utlte& _gdo- In -decdi4 country concerned.Z;Vbiwt .tariff - concessions the cold gAn to . . - - . in the- The CHAMNruled -hat this statement BhOnA -geco-dedhIn- inures of the ieti3, /Article 32. H E/PC/T/C. 6/105 Page 2 Article 32 was discussed on the basis of the draft (E/PC/T/C.6W.86) presented by the ad hoc Sub-Committee composed of the Delegates for Ceuada, Chile, Czechosloyakia, New Zealand, tiited. Kingdom and United States. Mr. EDDY explained that the wording of this Article expressed general principles only; the technique of negotiating-price margins might not be practicable in the case of.export monopolies. . The Cmomittee adopted ths txet of this Article as drafted by the ad hoc Sub-oCmmittee and decided to put into square brackets the words "form Members" in paragraph 3 for consideration at the Second Session, because it was felt that it could not have been intended to exclude imports from non-Members. Considering the implications of Chapter VI (Restrictive Business Practices) on Articles 32 and 33, the Committee decided that it was not racticable to include in these artiicles 'rivisions corresponding to those applying to private monopolies. The Committee decided that the Commentary should be worded along these lines. Article 32. The word "solely" in paragraph 3 was replaced by "mainly". Article 33. It was decided to include this Article, as given in the United States Draft Charter, in square brackets in the text of the Charter. Article 35. A number of delegates suggested the insertion of the words "without preudicing the legitmate business interests of particular private or state trading enterprises" in paragraph 1 after the words such information as will". Mr. BAYER (Czechoslovakia) was strongly in favour of the inclusion of these words which,.he thought, expressed the intentions of the First Session. M. LECUYER (France) wished to have the text of the First Session restored. THE CHAIRMAN ruled that these views should be recorded in the Commentary eotary tb the Aicle. , .;_- -. ., . ., 3 /Article 36. Page 3. . Article 36 The Committee decided to incert in the ecAre g*his.tll ~t..cl~e. the wording from ouenUnited United Draft tary o±fthbevP Qrt,the yo United Statese I>re4 Charter.ed tiscsssed.porecortthefact -tha this Artic hpL-dt been Bdiu Mmr. LACA? (txehefuti Secretary) .~ nrm .the Coitee tha t! . SeconFirst, d Session. differed in ccter. frothe. Ci',smuch -as :tal- d be carried on and the Generalgnegotitions be veilVe t lbe cai Genesal d. it would be necessary Agreement qn0at4ffs en -T e .ouald .be siq-necessaryti,, eor egord Bto producedg e, bat the delegate t SoconI Sessjion doed mental powers. Theapprprate credeni 4! tho formp;L gopmental pohese. Secretary on the arrivacredentials should b1 p.d.A xith te.xeetihe arri rof th-e deleg'/ ates at ne d d nlot sepo .th S~etaryenera1l sa Oc at Lake Succes* . . . . ; ?. ;h The Executve Sec tary pugeete,4and t8 C tee 4ppredj: hat- a press release shoq~d % t at dispos8e0-, of a: prssivSng a £ul pxiingcture of the work ofthDra4tig Co itteeithout quotin the tezt!-q of the Reortp.... .- * '' e f stated t jt it migBhtnot be-possibe- t. vdppI the j~itea with as many copies of the mimeographed report as they might wish, and': regretted that no air-mai edit n-o the;;prtse prt.could e- producd. The meeting wasju e .3*:00,.. . The Comittee revitthRe.pot on hapter VI -docimen E7POVC6/8 d onThe Delegate of South, 4c9 Vith0rew. i3.esiatiom, asrecordei on3 interestedpae3under. Item -t1 j7-~-a tlt~ise biu~to U tr pseed that Soutjai Arfic greatly inteested ''ctsthe il ln c . ermio p n Zfpter..-9 tiit St in the matter. t - A discussion ensued on the issue whether n;' 39, raVah25(a), -, -eeod4 I . thevords"blic-or-Trivate.immels4te3rprises!!..hObuld .s.6 ~~~ - .-.3 _ 1... ZON ,# «>*s X c';~ The Delegate of -ndn , J dvo &e.thr li ong bent1e9 Intention of the-t ot- to: * :.' r /discrmirnte Page 4 discriminate between public and Private and for this reason the words "public -or" should be inserted before private commercial enterprises." The Delegate of the United). States seconded this view vrhil h'te Degaeelt of the UniteKd ingmdo, pointed out that the case evsiteed by the aCeadian Delegaet4was so rare in actual life that it idd not warant inertion of thesew rods. The Committee agreed to nisret thewords "public or" "pulilic or 'betwemethe word "inore" and. "private" in the first aids second linee f Article '3, paragraph 2 (a) and the Deelenitjt f thl6 t~rKingdom, hi'erdingv Misreseriaton, announced. tion is nte'tito raiisse this jue at the Second Session. gatThe Delee of Chile consider that the changes in paragraph 2 of Article 39 constituted a substantive amendment and preferred to epressinal position in this 'his fe' ihin' this matter at the Second Session. With hregard fto Item 1 of te Speciic Comments to Article 40, paragraph1 (bJ pRepage 9 of the 'so, the Delegate of France moved for the deletion of this note and seconded the text proposed by the United-ngdom Delegate, as spelled out in the second paragraph of tis.note. - With 'spj to the text. of Article .1 paragraph 1 (b), third line, the Delegate of wthe United xinemi eserved his position vth mine -egsrdri; -th i £he ordL"dezziiie-appropa action", suggesting trdhis to 'be eplaced. by-the woI"in deciding as to". . -- oittoe d- dded a- commentary numbe 6f:'chag in the do=ent ragraph 1 (b) of Article 40, deleted theleof 'ricl&'li.O, espec±aly s l0, deleted-the general comments of doAticles 4l and 42, and changed parts of the Ouments of Artile 4l r ph gr ; the CHAIRMANIn isbass~i~4'the dzeft Thr2ft and. Trade AgreemenN cumentaXt*inad-- thiae Vas o iiecestY t'o go referring t document as &.ewotkIt34;paer to ec e sner as it had .been decided: for the eprt'o the dinitati Sub-C ttee. /The Executive Secretary E/PC/T/C .6/105 Page 5 The Exeoutive Secretary was instructed, according to his .judgment, to slightly edit the introduction rotchton to te' Tariff aAd Trade Pgreement for theo piusrpublication ose f t puiciation in he Report.. The Comittee then proceeded to review the VIIIReport on Chapter v document E/P/tC.6/104. mThe text of a nuber of Articles which had been changed by the Legal Drafting Sub-Committee, was reoviewed and the Cmmittee approved; these texts in second reading. On the motion of the Delegate of the United States the text of Article 76 was changed and made consistent with the text of Articles 75 and 77. With respect to oArticle 70 the Cmmittes discussed the desirability to ake provision for the manner in which the fEexunction of theXcutive Board will be exercised while the Board is not in Session. The Delegate of the United States yadvocated a ver broad provisionin this respect, while the Delegate of Brazil referreidn to the proviso in the Articles of Agreement in the International Fund, according to which the Board of Directors is presumed to be always in Session.. Aft er the Delegateof South Africa expressed himself against opening a debate on this issue in the Drafting Commmittee, the Comittee decided to refer this question to the Second. Session and to insert a note to this oeffect in thAe Cmmeentary of rticl 70. The Comitteen decided on a umber of changes in the Commentary to- Chapter VIII. and deleted several comments which were felt to be unnecessary The Delegate of the United States expresRseNd to the CHAIMA on behalf of the Committee and himself the great appreciation and admiration the Cmittee fel in t-fr the waHAIRMAN hy% lch the CEA} bad discharged his diffi cult duties,. andfor the firm and yet flexible and understanding mahnn er1 wbi be, adpoducted the -rocedings; The Delegate of also Sousth Afri als* xpesaed. to the ExecutiLACARTEve Secretay r.. -ACARPE) .Committee ithe preciation of the.tte. for. the work done by the.Secretariat throughout ommittee.ithe Session of the Drafting tee. - /The CRAIMAN- E/PC/T/0.6/105.,6..6'iO5 Page 6'. expressed his gratitude for the work done by the-T :he. CEAP.tor -tit¢aie &669:V4oi mittee reviewed the work andch tzize~xd~tt~s~aiR><->e S~teXA9:e - ; nd closed the Session of theaChievemen~t-of thsing Godv;teclb& :t@ - t ~~~~~~~~~~~~Z Z D CS 1;el* !... :;....s ;: < .-. ..w.!8t e , : 5-;.wf .-b.. _ot .~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~l, . .. `Z : _', +- r,,F.* t 't .,> ,^ i '.%,*-t. ¢ , - ,.8 -* **_,- i _.'ti N L;VNTi- IC~~~~~~~~~. ',- , ,,,;,f-, :.2 . 1§ Z,_ 2. * ........... * ..s .;i l *;*s .' ; . .. .. ;; 3fi+. .:'t.t-s,:.................... ;. _ s; ... :t.li-C. ( , , , ;: ;:.i 1 ' X ** ;g;* ;> -;* ; +*-* t.;

GATT Library

zy184jv1962

Summary Record of the Twenty-Second Meeting : Held at Lake Success, 13 February 1947, at 2:45 p.m

United Nations Economic and Social Council, February 15, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

15/02/1947

official documents

E/PC/T/C.6/83 and E/PC/T/C.6/73-85/CORR.1

https://exhibits.stanford.edu/gatt/catalog/zy184jv1962

zy184jv1962_90230149.xml

GATT_156

United Nations Nations Unies RESTRICTED ECONOMIC CONSEIL E/PC/T/C.6/83 AND ECONOMIQUE 15 February 1947 SOCIAL COUNCIL ET SOCIAL ORIGNAL: ENGLISH DRAFTING COMMITTEE OF THE PREPARORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON T R ADE AND EMPLOYMENT SUMMARY RECORD OF THE TWENTY-SECOND MEETING Held at Lake Sucess, 13 February 1947, at 2:45 p.m. Chairman: Dr. Guillcrmo AIAMILIA Corrections The Delegate for FRANCE remarked that a typographical eror had occurred by using the word qualitative" is document E/PC/T/C.6/57, paragraph 2, line 2, instead of "quantitative" and requested to correct this error. 2. Discussion of Article 77 The CHAIRMAN stated. that the functions of the CommodityComm ission could be dealt with by-two methods; First, the spelling out in detail of all its functions as in the Secretariat's draft and., secondly, referring to the Articles in Chapter VII as the draft. by the NETHERLANDS Delegation. He stated that his preference was a compromise between the two. It was decided, therefore to continue the discussion of the Draft by the NETHERLANDS Delegation and to check it for completeness with the Secretariat' s Draft. The Delegate for CUBA stated that he wanted it made clear in paragaph 1 that the investigation of commodity problems was the function of the Commodity Council once it is established and therefore it should be clearly understood that the. words "arrangements proposed" applied to situations where a Commodity Council is not yet established. The Delegate for the United States answered that the fuctions of the Commodity Commission do not cease once the Commodity Council is established; e.g. the Charter specifies that the Commission shall receive the reports made by the Council, that It will advise the Executive Board on the E/PC/T/C.6/83 Page 2 continued participation of Members is existing arrangements inconsistent to the objectives of the Charter. Furthermore, in commodity arrangements of a non-regulatory nature there will not always be a Council and therefore the Commodity Commission will have to carry out the functions of a Commodity Council. The F.A.O. Observer asked whether the present wording of paragraph 1 meant that the Commission may investigate any commodity problems or only those which may in the near future lead to commodity arrangements. He stated that there are already agencies constantly investigating certain agricultural commodities and therefore the broad language of paragraph 1 mightgive use to useless duplication. The Delegate for the UNITED STATES answered .that the relations between F.A.O. and the Commodity Commission of ITO will be worked out by negotiations between the two Organizations. It was decided by the Committee to replacethe words."proposed arrangements" by the word "proposals" and to maintain the rest of the paragraph as it stood. The CHAIRMAN stated that he would like to see a specific paragraph in Article 17 stating as a function of the Commodity Commission the carrying out of actual administrative arrangements for the establishment of study groups referred ta in Article 48, paragaph 2. The Delegates for the NETHERLANDS and the UNTIE D STATES stated that in their opinion administrative arrangements should not be spelled out, and it was decided by the Committee to follow the -opinions of these two delegates. As to paragraph 2, the Delegate for the NETHERLANDS was of the opinion that to receive studies and requests for studies from specialized agencies, should be of the competence of the Executive Board and not of the Commodity Commission. He stated that an Organiziation like the World Food Board was composed of about the same number of government /representatives E/PC/T/C.6/03 Page 3 if th W orld Food direct would direct dealings with the Executive Board. The CAIRMAN stated that this was a substantive change and therefore not be done in the Sub-Committee but that the attention of the Members of the Comm iittee would be called to this problem and it was decided to put the sentence referring to this question within square brackets . The Delegate for the NETHERLANDS asked that the word "0rganization" in paragraphs 4,5, 6 nd 7 of Article 54 shouldbe replaced by the words "Commodity Commission", as it is the Commodity-Commission which exercises the functions of the.0rganization in these cases. It was pointed out by some Members of the Sub-Committee that Article 50 of the Charter spcified that specialized agencies are entitled to ask that a study of .a prmiary commodity be made by the Orgenization, but, that no mention was made of the fact -that the Origanization might ask a specialized agency to make a study. As to paragraph 3 (Paragraph 2 of the Netherlands paper) it was decided to keep it with minor drafting changes. As to paragaph 4 of the Netherlands draft, it was decided to delete it as the Subject matter was included in paragraph. 2. As to paragraph 5, the Delegate for the UNITED STATES was the opinion that the.specific mention of Articles 61and 66 should not be made in this connection, and it was decided to change this paragraph to read to consult as necessary with the- as other commission of the Orgaization". The Sub-committee decided to suggest to the Comittee the addition of a paragraph to Article 74 in order .to clerify the inter- relationship of the Organization.within theirspecial in regard to advice or to the.Organization itself to assist it the exercise of its function." /The Delegate m/PC/T/C.6/83 Page 4 The Delegate for the NETHERLANDS reiterated the fact that a co-operation between theCommisson and other Speciailzed Acencies was neessaryand it was decided that this should be done by the theExecutve Board 3. Discussion of Article 75 The Sub-Committee discussed Article 75 on.the basis of a draft suggested by the UNITED STATES Delegation. The Sub-Committee discussed. whether the Commission on Commercial Policy should be entitled to investigate and advise the Executive Board also with regard to the commercial policy aspects to regulatory commodity agreements. It was suggested that in that respect consultation between the Commercial Policy Commission and the Commodity Commission should take place and that the details might be left to the judgment of the Organization. The Delegate for the NETEHRLANDS wished to stress that all commissions wiIl be on the same level and that the Commercial Policy Commission will not be superior to any of the other ccmmissions. The Sub-Comittee decided to delete paragraph 1 cf the United States Draft and to combine paragraphs 1 and 2 as set out in paragraph 1 of Article 75 in the formulation of Document E/PC/T/C.6/78. The Sub-Committee. discussed the meaning of paragraph 3 of the United States Draft and the Delegate for the UNITED STATES explained that this draft referred primarily to the case of Article 38, paragraph 3. It was questioned whether the words``economic aspects" were appropriate and whether it would not be preferable to use the words "commercial policy aspects." While the CHIEAN Delegate pointed out that the term ``Economic aspects" was too wide and that it would be preferable to have the reference to Article 38, paragraph 3, the CHIRMAN explained that paragraph 3 (after the fusion of original paragraphs 1 and 2 - now paragraph 2) would becoverd by paragraph 1 if, it were limited to Article 38, paragraph 3. The Delegate for FRAME moved for leaving thispararaph 1, And to change.the word '.'proposed" in some manner in order to make clear that it did not refer only to the case of Article 38, paragraph 3. After the Delegate for BEIGIUM had moved for deletion of this paragraph,.and the /Delegates E/PC/T/C .5/03 Page 5 Delegates for the UNITED STATES and the NETHERLANDS for retention, the CHAIRMAN suggested to insert before "proposed" the words 'existing and" . While the Delegate for the NETHERLANDS exprssed belief that this would contain a substantive change, the Delegates for the UNTED STATES, UNTIED KINGDOM, CUBA, CANADA and FRANCE, with the Delegate for BRAZIL abstaining, supported the CHAIRMAN proposal and the Ccmmitte agreed to insert these words. With regard to paragraph 4 (now 3) of the United States Draft, the Delegate for BRAZIL queried the meaning of the words "cooperative projects" and the Delegate for the UNITED STATES explained their meaning as involving plens for standardization and similar co-operative undertakings. The COMMITEE decided to add as a new fourth paragraph the same clause for mutual consultation which had been approved for Article 77, and approved the text of Article 75 as set out in document E/PC/T/C.6/78. Upon the request of the Secretary, the Sub-Committee expressed its approval to have the text of Articles 1, 75 and 77 reproduced as a Committee paper without a formal Sub-Committee Report in this respect. The meeting was adjourned until 17 February 1947 at 2:45 p.m.

GATT Library

bf985xs5703

Summary Record of the Twenty-Second Meeting : Held at Lake Success on 14 February 1947 at 10:30 a.m

United Nations Economic and Social Council, February 15, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

15/02/1947

official documents

E/PC/T/C.6/84 and E/PC/T/C.6/73-85/CORR.1

https://exhibits.stanford.edu/gatt/catalog/bf985xs5703

bf985xs5703_90230151.xml

GATT_156

United Nations Nations Unies RESTRICTED E/PC/T/C.6/84 ECONOMIC CONSEIL 15 February 1947 4 AND ECONOMIQUE ORIGINAL: ENGLISH SOCIAL COUNCIL ET SOCIAL DRAFTING COMMITTEE OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT SUMMARY RECORD OF THE TWENTY-SECOND MEETING Held at Lake Success on 14 February 1947 at 10:30 a.m. Chairman: H.E . ErOk ANLBIA 1. SecRnd Peading of Articles 66, 69, 70. 71, 72, 73, 74, 78, 79, 80 and 81 ThemComnittee approved in second reading Articles 66, 69, 70, 71, as fo-iulated in documEnt B/PC/T/C .6/68 and Alticles 72, 73, 74, 78, 79, 80 and 81 as formulated in docume/t EiPC/T/C.6/70. With respect to Article 74, the Delegate for Nehel~thedsrlan remarked thrthe Administrative SuboCcmmittee in its tenth meeting had decided upon a new text of Article 74,' different from the one contained indocument B//T/C.6/.6/70. The CHRI3MAN ruled that Article 74 will be reconsidered by the Committee at ths eame time when Articles 75 and 77 in the fmrnulation of the Administrative Sub-Committee will be taken up for debate. 2. The Delegate for Brazil, on behalf of the Chairman of the Administrative Sub-Comittee, requested th ttthe United Kingdom's note on provisions for two-third'maja3ority in the draft Charter, (document E/PC/T/C.w/V.64) which have been referred to the Administrative Sub-Committee, should be removed from thegaGenda of theub-Committ -ee and instead considered by the full mmO ittee, in order tonab-Rlehe S Sub-Committee to finish its work in its Mexm meeting. TheHAIRMAN pointm[ed out that he did nowant t the Sub-Committee tmanzke y W elaraoate reviewe of document E/PC/T/C.6/W.64 but, merely requested the /cpin'on E/PC/T/C.6/84 Page 2 opinion of the Sub-Committee on this note. However, if it should be impossible for the Administrative Sub-Committee to deal with this matter in its next meeting, the full Committee will discuss this note in the course of the following week. The Sub-Committee then proceeded to the consideration of the Report of the Technical Sub-Committee, document E/PC/T/C.6/55 - Revision 1. It was decided that the comments in this Report which changes in texts should be deleted. All reservations were maintained except those mentioned as withdrawn below. Certain new reservations were made during this meeting and are indicated below. Comments and decisions taken with respect to the Technical Sub-Committee's Report are given below by Article and paragraph: Article 15 - National Treatment on Internal Taxation and Regulation Page 3, Comment 15:1. The first paragraph at the top of page 3 was deleted at the suggestion by the Delegate for the Union of South Africa. Page 3, Comment 15:2, last paragraph: The reservation by the Delegate for Cuba applies to the entire Article, not only to paragraph 2. Page 4, text 15:3, line 15. The Delegate for the United States suggested that a period be placed after "concurs" and that the rest of this sentence be deleted. However, this proposal did not meet with general acceptance of the Committee and the paragraph was approved without change. The Delegate for the United States did not press for this deletion. Page 5, Comment 15:3. The Delegates for Brazil, the Netherlands and the Union of South Africa maintained their reservations made at the First Session as to mixing requirements as they felt that the amendment to this paragraph does not adequately meet their objections to the original text. The Delegate for Cuba joined in this reservation. The Delegate for Czechoslovakia suggested that a second proviso be added in this paragraph, permitting the establishment of new requirements (of the kind here considered) in the future if the Organization concurs that the requirements are less restrictive of international trade than other /measures E/PC/T/C.6/84 Page 3 measures permissible under the Charter. He also reserved his position on the last sentence of this paragraph. Page 8, text 15:5. Add to the end of paragraph in square brackets: "[or for use in production of goods for sale.]" The Delegate for Brazil wished that new paragraph be added providing for a date of entry into force of this Article. Article 16 - Freedom of Transit The Committee approved of alternative text B (referring to goods and meals of transport) to be presented to the Second Session. The Delegate for Chile preferred test A which refers to goods only. Page 9, text 16:1. The last sentence of this paragraph pertaining to the operation of aircraft was the subject of some discussion. The Delegates for Australia and Belgium suggested deletion of this sentence. It was decided that the sentence be retained but the matter might be again brought up at the Second Session. Page 14, text 16:5. The Delegate for the Union of South Africa stated that the preferential rail rates granted to certain-products of contiguous territories of the Union of South Africa were compatible with this paragraph since these products did not compete with imported products. It was agreed that his statement should not be included in the report. Page 15, comment referring to the whole of Article16. The Delegate for Chile withdrew his reservation. Article 17. Anti-dumping and Countervailing Duties Page 16, Comment 17:1, last paragraph on the page. The Delegate for 'd'lgdted,,u,.et'nte Czechoslovakia associated himself with the other delegates suggesting the addition of"by moreinhan five percent" In this paragraph. x Pg , eon=ent 17:, third paragraph on this page. The Delegate for I3indiawwithw his suggestion that the definition of margins of dumping be left to the Org4nization. - -- Pagdu 18, Commnt 17:2 . .he -efinition:of countervailing uty*-iven at /the top E/PC/T/C .6/84 Page 4 the top -of page 18 was added to the text of paragraph 2 of Article 17. Page 20, Comment 17:5. Second paragraph on this page should read: "The Delegate for Brazil suggested the deletion of this paragraph." Pages 20 and 21, suggested new paragraph 7 of Article 17. The Delegates for New Zealand and the Union of South Africa supported this Australian amendments It was decided to include the suggested paragraph in the commentary of the Report. Article 18 - Tariff Valuation Page 23, text 18:2 (a). It was decided to discuss this sub-paragraph at a later meeting. Page 23, Comment 18:2 (b). The words "customs duty or" were inserted in square brackets before "internal" in the second line of the text of this sub-paragraph. The Delegate for China reserved his position on this sub-paragraph as well as on 2 (c), as both affect the customs revenue of China. Article 19 - Customs Formalities Pege 25, text 19:1, line 10. For "mimizing" read "minimizing". Article 20 - Marks of origin Pages 29 and 30, Alternatives A end B. The Delegate for the United States will prepare an alternative text that might be acceptable generally to the Committee, for consideration at a subsequent meeting. Page 32, text 20:7, Alternatives A and B. The Committee decided to forward Alternative A as the generally agreed text of this paragraph, Alternative B till be given in the commentary of the Report for further consideration at the Second Session. The Delegate for Cuba pointed out that at the First Session the Cuban Delegation had submitted amendments to this Article (of documents E/PC/T/C.2/15 or E/PC/T/C.2/W.33). Article 21 - Publication and Administration of Trade Pegulations - Advance Notice of Restrictive Regulations /Page 34, EPC/T/C.6/84 Page 5 Page 34, text 21:1, The square brackets were deleted in the last two lines of this text. The similar phrase in square brackets in paragraph 2 of Article 35 will be discussed on its own merits. The Committee will resume discussion of the Report of the Technical Sub-Committee commencing with Article 22, at its next meeting. Page 36, text 21:2, line 7: for "of inter alia,", read, "inter alia, od". Page 37, cement 21:2, line 8: for "minister" read "Minister". Page 37, text 21:3, line 17: for "therefore" read "therefor".

GATT Library

bp489md8022

Summary Record of the Twenty-Second Meeting(III b) : Held at the Capitol, Havana, Cuba, on Tuesday, 31 December .1947, at 4.30 p.m

United Nations Conference on Trade and Employment, December 31, 1947

Third Committee: Commercial Policy

31/12/1947

official documents

E/CONF.2/C.3/SR.22 and E/CONF.2/C.3/SR.17-31

https://exhibits.stanford.edu/gatt/catalog/bp489md8022

bp489md8022_90190249.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF. 2/C.3/SR.22 31 December 1947 ON DU TRADE AND EMPLOYMENT ENGLISH COMMERCE ET DE L'EMPLOI ORIGINAL: THIRD COMMITTEE: COMMERCIAL POLICY SUMMARY RECORD OF THE TWENTY-SECOND MEETING (III b) Held at the Capitol, Havana, Cuba, on Tuesday, 31 December 1947, at 4.30 p.m. Chairman: Mr. L. D. WILGRES (Canada) (Reference:E/CONF.2/C.3/7) 1. Article 23 - Exceptions to the Rule of Non-Discrinination - (first reading) Upon the proposal of Mr.AUGENTHALER (Czechoslovakia) and Mr. BLUSZTAJN (Poland) it was agreed to consider first the amendments to Article 23 submitted by the delegations of France (item 74), Argentina (item75) Czechoslovakia (item 76) and Belgium and Chile (item 77). ITEM 74 Mr. ROYER (France) stated that the text of the French proposal was to be found in Article 14, paragraph 6 of the General Agreement, and should be incorporated into the Charter so as to avoid any disparity in the two texts. The purpose was to provide a general exemption from the provisions of Article 22 until 1 January 1949 with the possibility of extension throughout the transition period. There were certain clauses in Article 23 which might lead to legal miscontruction; the French delegation therefore reserved the right to submit certain drafting amendments in sub-committee. Mr. THOMPSON-McCAUSLAND (United Kingdom) supported the French proposal, but suggested that the question of the date be considered by the sub-committee. Mr. THOMPSON-McCAUSLAND (United Kingdom) considered that the statement by the representative of Argentina at previous meeting in support of his amendment warranted careful attention. However, the terms of the amendment which would allow the transition period of Article 22 to extend until all member of the ITO became members of the lnternational Monetary Fund, were unacceptable to his delegation since it would award to a single member a power over all. Mr. GUERRA(Cuba) opposed the Argentine amendment. /ITEM 76. E/CONF.2/C.3/SR.22 Page 2 ITEM 76 Mr. AUGENTHALER (Czechoslovakia) stated that in Geneva his delegation had reserved its position on Article 23, because in their opinion it departed from reality. A disequilibrium would always exist in the sense that some countries would be rich and others poor and even widespread equilibrium would not help a country a substantial part of whose trade was with countries in balance of payments difficulties. Article 23 assumed incorrectly that goods sold in one market could readily be sold in another; it ignored the inevitable consequences of weak currenc'es. Economic policy was nowadays largely concerned with maintaining the level of general economic activity. Since a full employment policy would be frustated by wide flnotuations in the volume of international trade, it was inevitable that countries should seek to stabilize the volume of their imports by means of long-term bilateral agreements. Article 23 should be closely related to the provisions of the Articles of Agreement of the International Monetary Fund, particularly with regard to Article XIV of the Fund Agreement which dealt with the transitional period. The New York text of Article 28 was preferable to Article 23 of the Draft Charter but even that should be simplified. Mr. FORTHOMME (Belgium) said that the general reservation made by Belgium in Geneva to Article 23 was a corollary to the reservation to Article 21. The statements by the representatives of France and Czechoslovakia emphasized the error of laying down detailed rules and exceptions applicable to this difficult problem. The Belgian delegation would have preferred to see Articles 23 and 24 deleted, as well as Article 21, whose wide exceptions could be corrected only by supporting the Netherlands amendment. The levels of prices mentioned in sub-paragraph (i) were impossible criteria to apply and both this sub-paragraph and sub-paragraph (ii) should be deleted. Mr. BRONZ (United States of America) said that Article 23 might not be ideally drafted but exceptions should be carefully framed in order to eliminate discrimination at an early date. The considerations presented by the representative of Belgium should be studied by the sub-committee. As to the question of hard and soft currencies mentioned by the representative of Czechoslovakia it was to be hoped that the Fund would realize the goal of general convertibility, which would help to remove the causes of the imposition of quanititative restrictions. The clauses of paragraph 2 (b) (i) and (ii) were devised to prevent bilateralism from becoming self-perpetuating. Mr. de VRIES (Netherlands) supported the statements by the representative of Czechoslovakia and Belgium though he too hoped for an eventual return to /multilateralism. E/CONF.2/C.3/SR. 22 Page 3 multilateralism. Article 23 had not yet had sufficient consideration; paragraph 1 (c) was particularly obscure; the sub-committee should provide a better and clearer draft. Mr. BLUSJTAJN (Poland) said that it should be openly recognized that the currencies of the majority of countries were not convertible and that as long as there were difficulties in balance of payments, the rules of Article 22 were impossible of application. The concept of disequilibrium was nebulous and vague. A return to multilateratism at the present time would only result in a further depletion of reserves already low. Paragraph 1 should state that as long as the Fund could not ensure stable convergibility, members should be allowed to use certain practices not permitted by Article 22. The criterion of Article 23 should be that a country should be allowed to discriminate if by so doing it could maintain a higher level of imports than would otherwise be possible. He agreed with the representative of Belgium concerning sub-paragraphs (i) and (ii) Without multilateralism the criterion of price alone was not sufficient: payment considerations, for example, were also important. It' was not always true that goods moved freely to countries with strong currency. Paragraph 3 was not useful since dates chosen arbitrarily could not be adhered to. Attention should be concentrated on redrafting paragraphs1 na d2. Mr. NASH (New Zealand) said that there were sufficient resources in the world to satisfy the world demand for goods but that the problem of production had not yet been solved. The maintenance of full employment wuol adsiss tin eliminatin gdiscriimnation by sustaining demand. Some countries discriminated againsth ard currency areas for non-economic reasons but the Ohartre should make povriison for non-discrimination as a long-term aim. Inasmuc,h however, as disequilibrium would prevail for some time the value of prio rcontracts for long-range planning should not be underestimated. Those who spoke scathingly about planned economies should remember that the Charter itself was a plan to bring some order into the economic world. The symptoms of the disequilibrium were the surpluses and shortageswh ich existed in different parts of the world. The countrie wsith surpluses for export would run into serious difficulties unless they were willing either to make investments on a sufficient scale or to take the goods of others when they were available, in order that the countriesw ith shortages mihtg pay for their imports. Orders for goods should go where the money was available to pa yfor them. - - Mr. ST. (Stzerland) did not agree withtthe rpresentative- of New alZealand. ho wnted to apply on an international sce' he political' philosophy of national planIg Rhih had had such good results' i his 'ow'-- country. The Ideal was to have multilateral international trade, subject to /international E/CONF.2/C.3/SR.22 Page 4 international control, but the Charter recognized that this was impossible at the present time. Articles 21, 22, 23 and 24 attempted to set forth certain principles and also certain exceptions. In them discrimination was condemped, but it was also recognized that it might be justified in certain cases; the whole structure gave cause for misgiving. Article 21 might be necessary but it was too much to ask a country to accept this article when fatal consequences might result. With reference to Article 22, he said it was unreasonable to expect a Member not to give a large quota to a country more of whose currency was at the Member's disposal than to that country whose currency theMember possessed to a lesser extent. The currencies of both the United States and Switzerland were at the moment in short supply. It was impossible to erect a satisfactory barrier against discrimination. Exporters in countries possessing a strong currency such as the Swiss franc would be faced with serious dangers, and the methods proposed to counteract them were not satisfactory. Switzerland had therefore safeguarded her exports by the only means she could visualize - with bilateral agreements. He did not share the views of the delegates of Czechoslovakia and Belgium but admitted the compelling force of their arguments. PARAGRAPH 1 (a) (Item 62) The amendment of Uruguay was referred to the Sub-Committee. (Item 63) The representative of Mexico withdrew his amendment. (Item 64) Mr. WOLD (Norway) reminded the Committee that the provisions of Article 23 and particularly paragraph 1ought to enter into force either simultaneously with the whole Charter or, if the French amendment were accepted, on 1 January 1949, or at such later date as might be fixed ader that amendment; but the Article should be based on conditions of world trade at present. World trade, disorganized by the war, had been re-established by bilateral agreements. These arrangements might be harmful in the long run, but they had been the only means to be applied in Continental Europe. He hope that the reconvertibility of currencies would be established, but this would take years; Article 23 recognized that fact. The ArticIe, and every amendment, must aim at an increase in the general volume of world trade. The word "substantially" in Sub-paragraphs (b) (i) and (ii), might suggest more than 25%. The Amendment of Norway stressed the real element, which was the relation of import to export prices. As a of result the inflation which many countries were today experiencing, Norway ad had to fix her export prices to cover the cost of production in other countries. This was itself undesirable, but the primary causes lay not in foreign /trade but in E/CONF .2/C. 3/SR .22 Page 5 trade but in the domestic economies concerned. The world "appreciably" in sub-paragraph (b) (ii) required definition. Present agreements between European countries included hard currency goods as well as soft currency goods, perhaps to a certain extent on a discriminatory basis both as regards quantities and prices. These must be considered as a whole. There was danger in this sub-paragraph. These were also the problems suggested by the representatives of Czechoslovakia and New Zealand as to long term contracts which might not involve any element of discrimination at the time the agreements were being carried out, but which might involve discrimination in the course of time. Appropriate wording should be found to cover this problem as well. In both respects the individual conditions of world trade at the present time should be borne in mind. Mr. BRONZ (United Sstates of America) agreed with the representative of Norway in this last respect, but said it would not be desirable to perpetuate all the present-day practices of world trade. The Norwegian amendment would give an entirely different meaning to Paragraph 1. When a country discriminated, it prevented the import either of the cheapest or of the most desirable goods Sub-paragraph (i) simply provided that the differences in price would not be too great. The Norwegian amendment recognized the differences in price in soft and hard currency areas, but would merely be a test of whether a country was making a good bilateral bargain. Referring to sub-paragraph (ii), the representative of itzerland had stated that a country would have to get imports by using the currency it had. The example given was not representative of the prevailing situation. Apart from the sterling balances, there were no large holdings on inconvertible currency that had any effect on world trade. Paragraph (ii) said in effect that a country was not justified in discriminating simply to use the soft currency which it had acquired by its owm export policy. It was designed to lead towards multilateralism by encouraging countries, which preferred to sell their products in soft currency, to secure the maximum in hard currency before asking for the right to use in a discriminatory manner a soft currency acquired through the operation of a bilateral agreement. It might be true that two countries could with mutual advantage exchange products not readily saleable in the world market but this raised the question of how far bilateralism was to be allowed to spread. Mr. WOLD (Norway) said that a strict definition of the word "substantial" would rob Norway of its trade with certain countries. But it was not the aim of his amendment to prevent the gradual abolition of discriminatory practices. Perhaps the Sub-Committee could find an appropriate wording which would cover the situation. /Mr. ROYER (France) E/CONF.2/C.3/SR. 22 Page 6 Mr. ROYER (France) believed the advice of the representative of Switzerland should be taken, and the matter considered from a more realistic standpoint. He stressed the difficulty in drafting, particularly Paragraph 1 (b) (i) and (ii). The United States did not take into account the conditions of exchange in Europe. It was not true that countries were interested particularly in selling their products on a soft market, and unfortunately there were not many strong markets at the present time. Bilateral trade treaties should be terminated as soon as possible but could not be at the moment. Mr. SAHLIN (Sweden) said that he assumed the world "reasonably" in sub-paragraph (b) (ii) referred to conditions of free competition and took into account the normal interests of traditional markets. . RTHOHOM (BeMEMr. m) pointed out that his country had inconvertible currency holdings of 300 mlllion dollars. Mr.R BONZ (United States of America) stated that in London there had been a specific clause corresponding to Article 23, providing that countries which had accumulated inconvterible currency before a givdatee oul wd be allowed todiscriminate in order to get rid of it. Such aclause cou ldbe -rnerituceodd, setting cut-off dates to limit the use of such balanc eosfr discriminatory purposes if acquired in the futu.re . FMrORTHOMME (Belgium) hoped there would be further dissscusion otn he subject in the Sub-Committee. . . - Mr. BLUZTkJ(Poland) stressed that he did not approve of the provisions of Para'h 1 (b) (i) and (ii) and would like them eliminated unless other factors related to trade were to be taken into consideration. In rprginciple he wa8n :corp tctheec Nonrweiantatement;. the -raqic. of bilateral negotiations implied n alsoot only price considerations, but involved the elat o of the entire range of exchangeable products. - Mdr. 'I00NX40AtIND .(Kihe accumulation of an inconvertible currency was not the only case where discrimination emight b advantageous. A country might seize the opportunity to export, or might by long custom have exported, to a market which could not at the present time pay in convertible currency. Such a couuld hntry woave to take careful thought as to how itwould dispose its power to exp ort andits resulting power to. im port Itwould not be faced by the prfoblem o inconvertible icsu brrewinc opeo,uut thprtnities, which tthe Chaerpter at rtmed ttoegulae and dTefine, he whole subject was more ctoamplex hn h ad beentwhhought en the original proposal were drawn up. -- . :. /The propax; E/CONF.2/C .3/SR .22 Page 7 The proposal of NORWAY was referred to the Sub-Committee (Item 65) The representative of the UNITED KINGDOM withdrew his amendment in its present form because at the present time it would be advantageous to increase payments in convertible currency. The present draft covered not only direct earnings of convertible currencies but also those cases in which a country, though its own currency was inconvertible, was willing to pay in convertible currency. The United Kingdom did not wish to rule out the latter category, but the first was the most beneficial. The meeting rose at 6.30 pm.

GATT Library

ps829fd3509

Summary Record of the Twenty-Seventh Meeting : Held at Lake Success on 20 February 1947 at 10.30 a.m

United Nations Economic and Social Council, February 20, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

20/02/1947

official documents

E/PC/T/C.6/96 and E/PC/T/C.6/93-97

https://exhibits.stanford.edu/gatt/catalog/ps829fd3509

ps829fd3509_90230170.xml

GATT_156

United Nations Nations Unies E/PC/T/C.6/96 20 February 1947 ECONOMIC CONSEIL ORIGINAL: ENGLISH AND ECONOMIQUE .. ; SOCIAL COUNCIL. ET SOCIAL F THE PREPARATORY COMMITTEE THE UNITED OF 2 iRATW OATI0TDE N EMPLOYMENTAW, MAD' F ke duccess e"Sixccesson20 February 1947 .t. 0.30 pzm,, H.EiEman: BL. trik COIBAN - e. The CmAIaMN intdioduced r for da seceond reaing'thenvtse4Secrsariat paper . ' -- :, hPlDraftingan of Work of the Second.eesxo" C/oC/TC.63J2evl). e Ia t CExecutiveapproved, after eXjanations given by Mr. LACM!E .(&ec; Seetary); a additions and changes aS. s-ais ' original daft (ES/1 ?/C /88. Mr. LACAaR:S preferredd to -spagraph I, of- Enclosure 2 nd strmssed shot the Secretarit will provide all comnitteer Of a general character with iull services. . - Mr. ILEDY (United States) r+mirded the CoditteO that *t vas saeed to co sider both this paper and the communication bfrc the 'rench Govensment .to the Assistant Secretary-General for Eonom AffairY:1a conidfen;ti1t. documpnts. If the rd t"c dient3.a vs not_ used. 4t4.;egard. to such Tapers, avilathese documents should be' as scbet" -th woud b. madde sa'aale ~~~~~~r ..~ tee..and. .! t te only to member governmos& the p not ti°j a yer governments or obsra ; -. <' The Canim ggested. and thComittee apprcvw. thlat copof document jPC/T/C,6j7/ev.1 shuld bc forwarded_.to .gVerVF enS tbrog u he delegations and alis dlrectly : h Tbcutive Sccretpqy- and that apy conmant made by governments would be communicated to other governments. heC 1~fi c d t E/PC/T qq/95x.contg the Report of theo Drati~ng Oomeittee on h~tSr III t~loyme.-X.ftectiye. Demand and Economic Activity". /Section A: Section A: General Comment. At the suggestion of Mr. PHILLIPS (Australia), the word. "more" was inserted in line 4 between 'ought" and "logically". The Committee adopted Section A with the above change. Article .3. Dissatisfaction was expressed with regard to the title of this Article. At the suggestion of Mr..GUERRA (Cuba) the title was amended to read "Importance of Employment in Relation to the Purposes of the Charter". The word "Charter was substituted for "Organization" in the last line in paragraph 1 of Article 3. The Committee approved the text of Article 3 and the comment (paragraphs 2 and 3). on this Article. . Article 1. The text and comment were approved by the Committee. Article 5. The-words "the referred" in line 6 of the comment were replaced by the word that". Mr. T. T. CHANG (China) maintained the reservation made in London in. connection with Article 5, As the Chinese reservation does not appear in the London Report, he thought it must have been overlooked and referred to the London verbatim records of the Sub-Committee of Committee I. The Committee approved the text of Article 5 and the respective comment. Article 6. The EXCUTIVE SECRETARY stated that, according to the decision of the Legal -Drafting Sub-Committee at its meeting last night, the London..text of this Article was maintained. He also-drew attention to some changes in this text carried out by the Drafting Committee and the Legal Drafting. Sub-Committee which might not be considered as affecting the substance of the Article. In the course of the discussion, it was pointed out that the, London text was interpreted in a different way by different delegates . The Drafting Committee decided, however, to. adopt the London text without any comment, leaving the question of interpretation to the application of this Article to concrete cases . Article 7. The French Delegate, referring to. document E/PC/T/C.6/W.24 submitted by his Delegation, expressed the view that, as a serious decline .in effective page 3 in effective demand has effects comparable in all respects to those of a crisis of overproduction, Article 7 should establish a procedure similar to that laid down in Chapter VII with a view to meeting crises of overproduction in certain commodities. Mr. LEDDY (United States), referring to paragraph 4(b) on page 11 of the London Report, pointed out that after thorough discussion, this matter was adequately taken care of at the First Session by the considerable broadening of Article 35. The Drafting Committee approved the text of Article 7. It was agreed that the Secretariat should insert in the commentary a note expressing the point raised by the French Delegation and that in the mineographed Report this note should be accompanied by a reference to document E/PC/T/C.6/W.24. Article 8. The Committee approved this Article after having decided to insert the words "and the Organization" between "Members" and "shall" in its first line. The next meeting will be on Monday 24 February at 10.30 a.m. Correction In document E/PC/T/C.6/94, the last line on page 1 and the first six lines on page 2 should be deleted and substituted by the following: "With regard to paragraph 3, Mr. BAYER (Czechoslovakia) pointed out that he had no instructions from his government which would permit him to accept any extension in substance beyond the text agreed upon in London and amended, in the first two lines, by the Drafting Committee in New York, "Although he admitted that the present language of the second proposal using the words 'legally entitled' were somewhat better than the vague term is in a position', he took this cpportunity to explain the possible difficulties which might arise in the future Mr.PAKER mentioned that for instance his government, though not controlling the operations of firms which work for export, was excluding inefficient and inexperienced small exporters, so as to ensure proper conduct of international trade. /He wished Page 4 He wished to have his position recorded in te final Report. "Mr.WHITE (New Zealand) preferred Alternative A and reserved the position of his government."

GATT Library

wp272cj6000

Summary Record of the Twenty-Sixth Meeting : Held at Lake Success on 1 February 1947 at 10:30 a.m

United Nations Economic and Social Council, February 19, 1947

United Nations. Economic and Social Council and Preparatory Commission of the Conference on Trade and Employment Drafting Committee

19/02/1947

official documents

E/PC/T/C.6/94 and E/PC/T/C.6/93-97

https://exhibits.stanford.edu/gatt/catalog/wp272cj6000

wp272cj6000_90230166.xml

GATT_156

ECONOMIC CONSEIL E /PC/T/C.6 /94 AND ECONOMIQUE 19 February 1947 SOCIAL. COUNCIL ET SOCIAL ORIGINAL: ENGLISH DRAFTING COMMITTEE OF THE PREPARATORY COMMITTEE OF THE I .UNNED IATIOCONFERECE O N TRAND EMPLOYMENT - ECORD PM BC01 WENTY-SIXTH MEET-NSI=THEETIGTX Held at Lake Success on 1 Fob uary -1947.at 1 :30 a.m. - C.ai.mKn: H,LE/NErik COIBII -- - - ' . .r ,. - Tge CHPMIM introduced, cementt, -//T/c. 6/6 -iving the agreed texts or no comment. 5, e CHAIRMA N0 vhicb cal for.no> cement.' - Thu.C. 2 ruled ao the Desogate for Australia, vho wished.-tQ raise came points on Articles he l=d 60Draftuld 4o sC Umthe meeting of tITsIegal Trefting Sub-comnittee. Artlcle..31 P~Eawph3.: The Ad Hoc: Sub-Cocttee (coposex. of the Delegates for Chile, Czechoslovakia, rance, New Zealand, United Kingdm and' United States) reported that it hah reached aGreement- that this paragrap~r should be amended to. read as -olows. . - - . - - t'IT-hi shell apply toany enterprise, organ-or agency in ;hich. there is effective control by-a member goyerment - r~ati,... .''*- * . . or.whose.- trading yperati ns a .Member government exercises ' efctVe ctrol 'by virte. of- the apeoiul w exclusive privileges - - .~_antedtc the-. e!ters se,- *, *: . - .- .-- er..- p . e_~ or over Fo.e trading operations a.governent Its, vmer the... aneemen~ts providins fr-the special or excl-usve prf.-ils granted - to t --priss- 3sgly ~ttle4to exercise effec.c=x trol. Mr. BAYER (Czechoslovakia) pointed ut -that hi-C.a. noa -nstuctions from- /his government E/PC/T/C.6/94 Page 2 his government but that he preferred the second alternative which included. the words ""legally entitle"%-He explained that his government, though not controlling the exports, asw selecting efficient and experienced xeportrse so as to ensure proper conduct fo international trade. Mr. HIWT E, (New Zealand) also preferre - thesecond, altrnative an reserved the position of his 6governmen ' Mr. AVAR!EZ(<Chile) preferred the London textaen . reserve , the position of his government on the howd.rf.t- eho Draftingommittttee agreed to include both alternative texts in the Report for consideration of the Second Session. ThCHAIRMAN Tr introduce .th"P Plaof f Work of the Second Sessio ": (:CPc/C/c.6/88) which was elaboiepterlby-the Secretariat in compliance with -.a previous request of thD Prafing.goCmocittee. I:n the discuson z. of this peaer, MLECUYERM (France) referred to the letter oislS;February.addressed. by the French Delegation to the Assistant Secretary-General for Ecomicc Affairs deali g' with the aeme subject end explained that the governments of France, Belgitmf United Kindom oand .United States agree . on the textocf the comumnication. M. -Lecuyer stressed that this document was not intended to modify the Londion deopion on -the 7-procedure for conducting mutilateral tariff negotiations, but shcui- eplify and. complete it.* Ho requested the delegates to cossnmicate the document to their respective gover=ents. Pesferrin& to pages 2 of doc ntCi6/88: i-. SEA.ACn (United. Kingdom) fel that the representatives of mcn-governmental agencies; invited. to the Second Sessionz might not be in the position to pkrticipate in emy large degree in: the work of the Second. Sessim since it can be visua.Uzed -that most meotingbinii1 be. In.private and d.uments will'be.-restricted.- It was- decided that the Secretasa sh6uIdj whew ~tr coni, ng by. letter the c-blbd invitations, 'acquaint th o t zatins vith the natm'e of the- discussions n Gen' va.J - A4L-. LACARE E/PC/T/C.6/94 Page 3 Mr. LACARTE (Executive Secretary) reminded the delegations of the utmost urgency of ending over to the Secetariat customs tariffs and lists of requested concessions and asked them to approach their governments in that respect. It was very important, he said, that the goverments should be able to see these documents well ahead of the Geneva meeting and issue instructions to their delegations. He proposed to hand over to the delegates present in Iake Success customs tariffs etc., available to the Secretariat, so that they might turn them over to their respective governments when reaching their countries. Mr. LEDDY (United States) informed the Chairmn that the United States have completed the list of requests of reductions of customs tariffs. Mr. BAYER pointed out that Czechoslovakia was now adjusting her specific customs tariffs to the depreciated currency, but that there would be no change in the structure of the tariff itself.He informed the Chairman that during the occupation the Germans had burned all copies of the tariff and that his government encountered great difficulties in compilng a new edition. Mr. QURESHI (India), in a personal statements, expressed the view that perhaps some countries might have been misled by press reports to believe that the Geneva meeting was to be postponed. He suggested that an authoritative statement be issued. about the Second Session. Several other delegates voiced the same views and Mr. LACARTE suggested that a press release would be issued. confirming the date of the Second Sessicn. Mr. LEDDY informed the Chairman that he was authorized to state that his government was prepared to enter into negotiations on customs tariffs at the Second Session. in the ensuing discussion of the time table of the Second Session, the Delegates for United Kingdom, Australia, Czechoslovakia ,and New Zealand wished that the London decision should be adhered to, i.e. that the first four weeks of the Second Session should be devoted to tariff negotiations and /that the discussions E/PC/T/C.6/94 that the discussions of the Charter should begin on 8 May . . DDY Lf felt that some provislons of tharterrzt incorporated in the General Agreement should rivelSe some se - agreement concurrently with tha toriff negotiate . MU JWANT IBTlgium) mgreareed with this, and tghhout that these provisions s should be Indicated to the goverments before the SecoFd Seasiq. The CHAEM did not share the apprehension of same delegthates wlll . regardgramm to rhe proe fot Geneva. He. felt sure that eaco, would iln youlJA. provide, at the beginning of the Session, ofuacial with the .i?th.e;, : relevant chapters of the Charter which would form eagegrran. bAck ourd. of tariff negotiations. He,suggested .aand theommittfting CovIttee apprped, that an Aom Hoc Sub-Ccmisttee, comp ed of ths .Delegstra for Auatirlia,. Brazil, France, United Kingdom and United Std s oshoul ccnsider;.the Secretariat's. paper (E/PC/T/C.6/88) an redrpft it. for ,resentativernments gog~pmqnts. concerned. , . . , . Mr. LEDDY suggested. kat this docgmqnt he counication from the French goumentsvernment should be regarded as confidential doc,.r The Ccittee then discussed Draft Ge.;er Agrepment andProtocol (E P on/C.6/85) as revised by the Sb-onmttea on. Tariff Negotiations. Mr. uments nfoimed t e heairmna thet the Dociuzents.Off4ce of' t, , , . - Secretariat could. have the Report printed ov b0 March It it ss handed to the on 26 February. he Documents 0 ver cjld not rint restr icte4.d~document. Tha C1 0A ,eqlated. the.E ecgutive Secretar_ t ensure that,. regardless of the views of the Documents Office the Report be printed. al,lso suggested that besides the Report (including the GenerZ, Agreement) eement alone hould be a spe.cia.3 report made £f .the Getr Al emgt*alqne, for the convenience of the o .<. ; .. ', ., ,, . The ,C E , P sugget.d that referuce.!to of e.e hu3 entincluded in thQ .head solArtplsof e Gnerali * - .. /on the suggestion- Stage 5 on the suggestion of Mr. SHACKLE it was agreed that the corrected draft General Agreement (E/PC/T/C.6/85) should not pass through the Legal Drafting Sub-Comittee, but that only its legal and formal clauses should be considered by that Sub-Committee. Mr. LEDDY suggested, and the Committee approved, sing throughout the General Agreement the expression "purposes of the Charter" instead of the language "purposes of the Organization" . The draft General Agreement and the Protocol (E/PC/T/C.6/85) were approved, in second reading as corrected and amended.

GATT Library

rd556mh6471

Summary Record of Third Meeting : Held at the Capitolio, Havana, Cuba on Tuesday 2 December 1947 at 4.00 p.m

United Nations Conference on Trade and Employment, December 2, 1947

First Committee: Employment and Economic Activity

02/12/1947

official documents

E/CONF.2/C.1/SR.3, E/CONF.2/C.1/C/1-4, and C.1/SR.1-13

https://exhibits.stanford.edu/gatt/catalog/rd556mh6471

rd556mh6471_90180272.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/COF.2/C.1/SR.3 ON DU 2 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL : ENGLISH FIRST COMITTEE: EMPLOYMENT AND ECONOMIC ACTIVITY SUMMARY RECORD OF THIRD MEETING Held at the Capitolio, Havana, Cuba on Tuesday 2 December 1947 at 4.00 p.m. Chairman: Mr. DEDMAN (Australia) GENERAL DISCUSSION ON CHAPTER 1I OF THE DRAFT CHARTER Mr. PIERSON ( United States of America) pointed out that for some years many countries recognized the importance of maintaining full employment, not only as a question of domestic policy but because of its effect on foreign trade and on the well-being of other countries. To Australia should.go a large share of the credit for advocating the desirability of full employment in international discussions on trade. The United States Govrnment had taken,and would continue to take, an affirmative position with regard to that question. It had bee included among the proposals for the expansion of trade, issued by the Unted States in 1945, and had formed part of the draft charter submitted by them to the preparator Committee in September 1946. The United States had. also enacted domestic legislation on the question in the form of the Employment Act of 1946. It could be agreed that in general the means to full employment were primarily a domestic concern, but that they should be consistent with the other Provisions of the Charter including those relating to the reduction of trade barriers. In London, the Australian and United Kingdom delegations. had been instrumental in having included in Chapter II the concept of co-operation in the removal of, malad justments within the balance of payments. A second substantial addition to the original draft appeared as Aruicle 7, in which by reference to .oher provisions of the Charter , the need of countries to safeguard. their econoniry against deflationary pressure was recognized. .. . . . A third substantial additioas maden concerning fair labour standrds, W" during teLondon and.Geneva meetings at the suggestion of the Cuban representative, It was clear that ITO should not duplicate :the work of ILO,move that members should takmovee whatever action was feasible, to re /substandard

GATT Library

sy049yh4253

Summary Record of Tweleth Plenary Meeting : Held at the Capitol, Havana, Cuba, on Wednesday, 31 December 1947 at 3.45 p.m

United Nations Conference on Trade and Employment, December 31, 1947

31/12/1947

official documents

E/CONF.2/SR.12 and E/CONF.2/SR.1-21

https://exhibits.stanford.edu/gatt/catalog/sy049yh4253

sy049yh4253_90180139.xml

GATT_156

United Nations Nations Unies CONFERENCE CONFERENCE UNRESTRICTED ON DU E/CONF.2/SR.12 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI 31 December 1947 ORIGINAL: ENGLISH SUMMARY RECORD OF TWELFTH PLENARY MEETING Held at the Capitol, Havana, Cuba, on Wednesday, 31 December 1947 at 3.45 p.m. President Mr. Sergio I. CLARK (Cuba) 1. APPROVAL OF THE REPORT OF THE CREDENTIALS COMMITTEE (E/C0NF.2/C .7/1/Rev.1). The report was approved without comment. 2. RECOMMENDATION OF THE GENERAL COMMITTEE REGARDING A CENTRAL DRAFTING COMMITTEE (E/CONF.2/21 & Corr.1) The Recommendation was accopted without comment. 3. GENERAL MEETINGS OF COMMITTEES AND SUB-COMMITTEES Mr. AUGENTHALER (Czechoslovakia) protested against simultaneous meetings of Committees, particularly Committees II, III and VI, and was supported by the representatives of Poland, Syria and Chile, the latter requesting that sub-committee meetings should not be scheduled on the same day as their main committees. Mr. MUELLER (Chile) also requested that the Order of the Day include information as to sub-committee reports to be presented. The CHAIRMAN stated that the matter would be submitted to the General Committee; the Secretariat would take note of the request Concerning the Order of the Day. LANGUAGES Mr. JIMENEZ (El Salvador), supported by the representatives of Argentina, Venezuela, Mexico and the Dominican Republic, requested interpretation into Spanish in sub-committees to facilitate the work of the Conference. It was not proposed that Spanish be a full working language, but interpretation into Spanish in sub-committee would be of great assistance to the representatives of Latin America who did not know English or French well enough to follow discussions. The delegation of Argentina had for that reason reserved its right to return in full Committee to all matters discussed by the joint Sub-Committee of Committees II and III. /Mr. COLBAN (Norway) E/CONF. 2/SR. 12 Page 2 Mr. COLBAN (Norway) stated that if there were any change in the present procedure, consideration should be given to the twenty-five delegations who spoke languages other than the working languages. Mr. WUNSZ KING (China) reiterated the position of his delegation: if the present Rule of Procedure were modified, the Chinese delegation reserved its right to-insist on Chinese being included as a working language. Mr. GAZDAR (Pakistan) was opposed to any extension of working languages which would retard the work of the Conference. The CHAIRMAN requested the representative of El Salvador to submit a written amendment to the relevant Rule of Procedure, which would be studied by a sub-committee. OBSERVANCE OF NEW YEAR'S DAY Mr. MUELLER (Chile) supported by the representatives of Cuba and El Salvador, proposed that 1 January be declared a non-working day. The representatives of Pakistan, the United Kingdom, the United States of America and the Netherlands spoke against the proposal. It was decided by vote of thirty to eleven that 1 January should be a holiday. The meeting rose at 4.25 p.m.

GATT Library

hk752km3399

Summary Record of Twelfth Meeting : Held at the Capitol, Havana, Cuba, on Monday 22 December 1947, at 10.30 a.m

United Nations Conference on Trade and Employment, December 22, 1947

Second Committee: Economic Development

22/12/1947

official documents

E/CONF.2/C.2/SR.12 and E/CONF.2/C.2/SR.1-17

https://exhibits.stanford.edu/gatt/catalog/hk752km3399

hk752km3399_90180451.xml

GATT_156

United Nations Nations Unies UNRESTRICTED ONFOERENCE 22 December 1947 ON DU ORIGINAL: ENGLIH RADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI SECOD COMMITTEE: SECONOMI CEVDELOMPENT RECROD OF TWELEFTH MEEINGY Held at the Capitol, Havana, Cuba, on Monday 22 December 1947, at 10.30 a.m, hairman: Mr. ABELLO (Philippines) CONTINUATTION OF GENERAL DISCUSSION ON ARTICLE 12 Mr. GOMEZ ROBLES (Guatemala) recognized the importance of international investment in the promotion of economic development. However, there had been certain detrimental foreign investment in the past which had retarded economic development. It was essential for a country to reserve the right to participate in certain activities to its own nationals. The Guatemalan delegation was of the opinion that a provision should be included in paragraph 2, to deal with undesirable and unexpected inflows or outflows of capital which could have serious deflationary or inflationary effects. Guatemala was not in favour of the deletion of the Article, but preferred the Mexican amendment to the original text, as it more appropriately dealt with the problems which could arise in connection with international investment. Mr. TINOCO (Costa Rica) stated that foreign investment should be fostered so as to give equal consideration to the interests of capital- exporting and capital-importing-countries. Paragraph 1 contained safeguards of the interests of capital-Importing countries, but paragraph. 2 would alarm prospective investors without increasing the rights of capital-importing countries. For that reason he was inclined to suppor -the suggestion of the United States representative to delete the paragraph. He would also favu·ur the insertion of an obligation on the part of the states concerned to negotiate bilateral agreements regarding the investment of capital, as suggested by the United States. Paralleling this should be an obligation to negotiate agreements for thee limination of doublte-axation. Paragraph 3 should be retained. /Mr. GARCIALD 0INI (Chile) E/CONF.2/C.2/SR .12 Page 2 Mr. GARCIA OLDINI (Chile) drew attention to the mutual lack of confidence which presently characterized relations between potential capital-exporting and capital-importing countries, thus immobilizing the flow of foreign investment. While paragraph 2 seemed quite acceptable to capital-importing countries it might be necessary to state that it would not always be possible for countries to treat foreign capital on an equal basis with national capital. Under the United States amendment, the provisions of paragraph 2 which were favourable to underdeveloped countries would be withdrawn in favour of bilateral negotiations. As negotiations between a powerful and a weak country would make for the disadvantage of the latter, particularly since capital was badly needed, he was not enthusiastic about the United States proposal. He felt, however, that it might be modified to include safeguards for capital-receiving countries. Article 12 was one-sided and should be amended to stress the obligation of countries with favourable balances of payments on current account to promote the movement of capital to regions which were badly in need of it. It also would be desirable to ensure the adequate participation of national capital in the financing and administration of enterprises. Finally, it would be appropriate for the Organization to set up local bodies to collect information and establish contact between countries with capital to export and those which were eager to receive it. Mr. HURTADO (Yenezuela) said that except for reasons of national security the legislation of his country did not discriminate between the treatment of foreign and domestic capital. The final sentence of paragraph 1, however, was unacceptable to his delegation. International agreement could not be based on vague provisions which might expose countries to outside pressure regarding matters of domestic policy which affected 'foreign investments. Paragraph 2 (a) set forth certain safeguards but did not cover all cases and therefore a more complete list of principles would need to be laid down in connection with the international agreement on foreign investments which might be concluded under Article 11, paragraph 3. The Venezuelan delegation would be unable to accept the deletion of paragraph 2 without amendment of the last sentence of paragraph 1. It was also opposed to certain provisions of paragraphs 2 (a) (iii) and (iv) involving a principle of consultation which was in contradiction to the Venezuelan Constitution. Mr. MONGE (Peru) had proposed no amendments but supported the amendments of Argentina, Chile end Venezuela. Ie favoured the retention of Article 12 in some form because its general effect was to encourage foreign investment, /The last sentence E/CONF. 2/C .2/SR. 12 Page 3 The last sentence of paragraph 1 should be deleted and paragraph 2 should be retained, although the rights of consultation included in paragraphs 2 (a) (iii) and (iv) should be modified because they encroached on the sovereignty of States. If the Committee voted to delete paragraph 2 Peru would support the Venezuelan proposal to delete the last sentence of paragraph 1. Mr. COOMBS (Australia) said that, at the outset of the Geneva discussions, the Australian delegation had opposed the inclusion in the Charter of an Article of the type of Article 12. The Government of Australia, considering that foreign investments involved political questions, wished to keep itself free to deal with foreign investments in accordance with its national policies. As finally drafted, however, Article 12, together with its footnotes, protected the essential rights of countries receiving investments, and Australia was prepared to accept Article 12 in its present form. Referring to the amendment proposed by the delegation of the United States of America, Mr. Coombs said that his delegation would have to reserve judgment until it was clear how the essential protection of capital- importing countries now embodied in paragraph 2 would be maintained if the obligations contained in that paragraph were replaced by a general obligation to "enter into" and "carry out" negotiations. An Article relating to investments should make it clear that an investment must be acceptable to the country receiving it, and that the rights of a Government to resume national ownership of an investment by transfer to its own nationals or by transfer to itself as a Government, were aential -requirements. The Australian dewegation Cou be wiltSling to.alepart in any redrafting of Article 12 which might be considered necessary. DZINSKI B3U K (Poland) supported the views expressed by the representative of Australia, and shared the opinion of the representative of France that Article 12, as at present drafted, was an, acceptable expression of principles governing international private investments. He supported the amendments submitted by the delegatiCons of zechoslovakia, New Zealand and of Denmark, but could not agree with that submitted by the delegation of the United States of America. If paragraph 2 of Article 12 were deleted, the delegation of Poland would supporto the prposal made by the delegation of India that the whole of Article 12 should be deleted. - /Mr. TRADtLI (Syria) E/CONF .2/C. 2/SR.12 Page 4 Mr. TRABOULSI (Syria) supported the amendment submitted by the delegation of India, since he felt that Article 11 contained adequate provision for the fair treatment of foreign capital. If, however, the Committee felt that the general principles of international investment were not sufficiently clearly laid down in Article 11, then the delegation of Syria would suGgest that Article 12 should be redrafted in accordance with the proposals contained In the amendments submitted by the delegations of Czechoslovakia and Venezuela, and that paragraph 2 be deleted. U NYUN (Burma) said that usurious foreign loans to agriculturists in his country had shown that the nationals of capital-importing countries rather than foreign investors, were in need of protection. The Government of Burma would have to study the effect of existing foreign investments on its general economy before it could commit itself to undertakings which miGht not be in the best interests of that economy. The delegation of Burma considered that the general provisions of Article 11 were sufficient safeguard for foreign investors and endorsed the proposal of the representative of India that Article 12, as at present drafted, should be deleted. If that Article were retained, the delegation of Burma would suggest that the obligations to be imposed on countries receiving investments should be confined to future investments and should. have no relation to existing ones. Mr. PERRY (Canada) pointed out that the delegation of Canada had not submitted any amendment to Article 12 although it was not completely satisfied with the form which that Article assumed in the Geneva draft. His country offered the widest opportunities for foreign investment and the greatest security for existing and future investments, as called for In paragraph 1, but there were other international obligations which might require that control should be imposed temporarily upon the volume of capital funds flowing out of a country. Reference in paragraph 2 to the International Monetary Fund made it clear that the commitments accepted in Article 12 were to be regarded as complementary to, and not competitive with, the obligations accepted under the Articles of Agreement of that Fund. Referring to the Amendment submitted by the delegation of the United States of America, he said his delegation saw some merit in implementing paragraph 1 by bilateral negotiations. It considered, however, that Article 12 should be studied very carefully in Sub-Committee and, if necessary, redrafted Mr. de VRIES (Netherlanda) considered that Article 12 should be read in conjunction with the other Articles of the Charter relating to economic development. The amendment proposed by the United States of America that international investments should be covered only by bilateral agreements /did not take E/CONF .2/C .2/ SR .12 Page 5 did not take sufficient account of the interests of third countries, which were better protected by the present paragraph 2. If no provision were made to safeguard third countries, new preferences with respect to the treatment of foreign investments might creep in to the detriment of the most-favoured- nation treatment which members of ITO should extend to one another under the Charter. Mr. THOMPSON-McCAUSLAND (United Kingdem) agreed with the remarks of the representative of Chile regarding the barriers of mistrust which separated potential investors from the potential fields of investment. This reflected the new concept that the primary purpose of foreign investment was to enable underdeveloped countries to plan and build up a balanced economy. Under these conditions private enterprise did not now have the predominant say as to the manner in which the investment should be carried out. Governments on both sides intervened. The delegation of the United Kingdom felt that no legislative action by an international organization could give confidence to private enterprise in the field of International investment. Although it sympathized with the proposal of the United States delegation that paragraph 2 in its present form should be deleted, the delegation of the United Kingdom supported the remarks of the representative of Australia that the Charter should lay doown the principles or which negotiations regarding investments should be conducted. Any suggestion that negotiations should be carried out under compulsion to reach a conclusion should be removed from whatever text might finally be agreed upon. The delegation of the United Kingdom would be willing to serve on any Sub-Committee set up to consider the matter. The CHAIRMAN said the general discussion of Article 12 was terminated. At the next meeting, to be held on 23 December at 4.00 p.m., Article 12 would be considered paragraph by paragraph and there would be a general discussion of Article 13. The meeting rose at 1.10 p.m.

GATT Library

gd749cc3294

Summary Record of Twelfth Meeting (III.b) : Held at the Capitol, Havana, Cuba Tuesday,16 December 1947,at 10.30

United Nations Conference on Trade and Employment, December 16, 1947

Third Committee: Commercial Policy

16/12/1947

official documents

E/CONF.2/C.3/SR.12 and E/CONF.2/C.3/SR.1-16

https://exhibits.stanford.edu/gatt/catalog/gd749cc3294

gd749cc3294_90190229.xml

GATT_156

United Nations CONFERENCE ON TRADE AND EMPLOYMENT Nations Unies CONFERENCE DU COMMERCE ET DE 'EMPLOI NRESTRICTED . . .~~~~~~~~~~ THMMERCIAL POLICYIRD COMl'TM: ALL. SIZITWTLFTH MEETING (III).biiiARY MOOD OFE NWMfl gld.at theba Capitol, Havana, Cul Tueeay, 16 Dec a.m.ember 1947, -t 10.30 ChILGRESS (Canada)ilairman: Mr. L. D.(Ca& RICMD E/COUF/C.o3SR.12 16 DeceeC 147 L'EMPLOI QOMIAL: 3MGLISH T m. * . b) da)~~~~~~~~~ 1. AWTNICLEGEMRAL SIMlnaOF QUANTITATVE RSTRICTIOVS (Jst rading). Completion of discussion of proposed amendments 2/Cand Geneva draft notes docentt /C7.2/C3 The CHAIRMAN, referring to his remarks at the previous meeting, said that in addition to the sub-committee to be set up to deal with proposals in relation to Articles 20 and 22, a sub-committee would also be established to consider Articles 21, 23 and 24 after discussion on Article 24 was finished. He emphasized the Iportance of Article 20, pointing out that it was one of the basic Articles of the draft Charter. Mr. FdISMA(Camza felt that a ll would agree that paragraph'1 f Article 20a, which called for the ellmintion of quantitative restrictions, was the most important single principle contained in the draft Charter. In the past quantitative restrictions and quotas had been the greatest barrier to the free flow of international commerce and, if permitted in the future, should be carefully controlled by the ITO. Articles 13 and 14 of the draft Charter recognized that, in a. limited number of cases, quantitative restrictiowayns might be a more effective aY7 of encouraging economic development than other forms of protection permitted by the Chartser. Those restrictions might alo be enforced temporarily by- country which found itaien a serious balance of payments situation. Paragraphs 2 and. 3 of Article 20 and Article 43 also provided for departures from the principle that quantitative restrictions should be elimiitd.' So far as agicultural and fishery products were concerned the CeaDla delegation vold. accept the compromise contained in the' daft Charter. It feelt homwever, that the mahanisnprovided. for in Chapter VI of the draft Charter should be given a fair trial before a country was permitted E/CONF.2/C. 3/SR .12 Page 2 permitted to depart from the basic principles regarding quantitative restrictions. The Committe should examine all amendments to Article 20 with extreme care as in them lay the possibility of so modifying the basic principles of the Charter as to make it almost worthless' Mr. MARTIN (United States of America) considered that the Charter should contain a strong provision against the use of quantitative restrictions, and should allow the minimum of absolutely necessary exceptions. The United States representative had enumerated at a meeting of the Preparatory Committee in Geneva the many and powerful objections to their use. It had. been stated that those who had drafted the Charter had taken care of their own needs by permitting quantitative restrictions in the circumstances in which they now employed them. That was not so. The United States of America had never extensively resorted to that system of protection and certain quantitative restrictions now existing would have to be abolished by that country when the ITO Charter came into force. He agreed with the reprosentatives of Australia, Norway and the United Kingdom that certain exceptions would have to be made in the case of primary products, but those exceptions could not be extended to include Industrial products. The representative of' Venezuela had stated at the meeting g of 13 December, that as the majority of the members of the Committee appeared to favour the broadening of exceptions permitting quantitative restrictions it could be taken that the Committee approved of exceptions. This was not soa und conclusion. Mr. D'ASCOLI (Venezuela) said the representative of the United States of America had misinterpreted his speech. Hhe ad intended to point out that in spite of the vote which had been taken in CommitteIII e it dha not generally pronounced itself against the amendments to Article 20. Iht ad Only voted on a question of procedure, i.e. as to whether the amendments .should.e b dealt with byom,mttee Cmittee III or by any other organ to which it might be submitted. Ven Zla had never supported a po licy of- uantitative restrictions. He had. agreed with amendments such as that submitted by the representative of Cuba because he considered them Just. TRMANhe CHAI said that all members of the Committee would hagree tat the vote taken on 13 December was a vote on a question of procedures. Any points of difference regarding amendments to Article 20 would be submitted to a sub-committee whose task it would be to reconcile the various points of view and to grereeach aemnt. /Mr. COREA E/CONF.2/C 3/SR.12 Page 3 Mr. COREA (Ceylon) stated that the theory expressed by several representatives that world trade was handicapped by quantitative restrictions would be a sound argument if all States had reached a stage of equal economic development. This, however, was not so and in his opinion Article 20 conflicted with the basic purposes of the Charter laid down in Article 1. The under-developed countries should be allowed to develop and should be permitted to impose quantitative restrictions. Small countries possessing the necessary raw material had to have recourse to certain protective measures in order to improve their production but the imposition of a higher customs tariff was not always possible because it meant increasing the cost to the consumer. With the aid of quantitative restrictions the undar-developed countries would be able to raise their standard of living, thus leading to a greater demand for consumer goods manufactured and exported by the highly industrialized countries. If the proposal made by his delegation that Article 20 should be deleted was considered too sweeping, a clause might be added to Article 21 stating that certain under-developed countries should have the right to impose quantitative restrictions to improve their economic position. Mr. SEIDENFADEN (Denmark) agreed with the remarks of the representatives of Canada and of- the United States of America. It would be necessary to retain quantitative restrictions for some time to come but the Danish delegation would have preferred to see those escape clauses in the draft Charter and those new amendments which related to the transition period included in an annex in order to emphasize that they were of a temporary character only. Mr. MLLRER (Chile) supported the remarks of the representative of Ceylon. After briefly reviewing the. problem of foreign exchange with which his country was faced, he emphasized that it was necessary to have a provision in the Charter protecting the legitimate rights of countries with incipient economies to develop their industries. Mr. LLORENTE PR1T (Philippines), referring to the remarks of the representative of the United States that certain quantitative restrictions would be abolished by that country if the ITO Charter came into effect, said that the Philippines would in that case be seriously affected. He mentioned the agreement regarding sugar, and said the Philippines would be. helpless to enforce its rights in connection with that agreement. He agreed with the remarks of the representative of Ceylon that if all countries enjoyed the sane degree of economic development there would be no need for quantitative restrictions but, as long as that was not the case, those restrictions were necessary. /eferring E/CONF.2/C.3/SR.12Page 4 Referring to the great help which his country had received from the United States of America, Mr. Llorente said the Philippines had followed the tariff policy laid down by the latter state for their fiscal needs only. Pointing out that the Philippines had a tobacco industry which could potentially compete with any other in the world, he said it was necessary to have quantitative restrictions to protect that industry. Mr. CHARLONE BPI (Uruguay) appreciated the views of the United States representative but said that countries which depended on exports for twenty five to seventy per cent of their national income, as did certain of the Latin-American republics, were in a better positjijudn to dge the or nequtaned tive restrictions. The greatest part of 'Uruu'ays chasuring power was based on the export of a very few products and the working fo the Ottawa Convention had in the past made it essential for her to ban non-essentila imports in order to conserve foreig exchaang.exchee At the present time it was clear that the post-war transitional period would be prolonged and that no existing institution could correct the present disequilibrium. It would be very difficult for Uruguay to accept the Charter in its present form since the prohibition of quantitative restrictions would do incalculable damage to her nascent industries. ERAA Mr.. LIRS (Colombia), recognized that quantitative restrictions were not t y oofest wabfprotecting industry nor the best system for international trade and that their use might lead to grave political consequences, both irnally and externally; nevertheless quotas were necessary in exceptional cases either ooto ptenct mmiimu price and mes wammege progras or to correct disequilibrium in the balance of payments or to change the composition of a countr'n s foreigtrade. Even though Articles 13 and 14 contemplated such measures, they did not offer adequate safeguards; and Article 20 should therefore provide for ote.se,fquantitative restrictions under international control for' mred annctuproducts as well as for agriculture and fisheries-, EZANS(Iran) N MrZA) agreed with tshe rtspreentaCeytivesn o lonCe1on ad Chile that quantitative restrictions should be used to combat unfavourable balance of payments a nerd to protectw industries. Quotas were sometimes the only protectin against the practice of dumping. His country would not use quantitative restrictions to flood the world with product but rather to allow t he iprocessingof ts own raw materials for domestic consumption. CA(RTHY Mr. MAMYreland) agreed with tthe vbrevpresenati of Ceylon; the smalle r countrieswere attempting to re-adjust their economies by the development of industry. Quantitative restrictions offered the necessary /aguard E/CONF. 2/C.3/SR.12 Page 5 safeguard where tariffs were not suitable, and some amendment to that effect should be made to Article 20. Mr. BRIGNOLI (Argentina) agreed with the representative of Uruguay; Article 20 discriminated against smaller countries and should be amended to correct this insurmountable barrier to industrial development. Mr. RODRIGUEZ (Brazil) stated that paragraphs 1, 2(a) and 2(b) were acceptable, but that 2(c) should include provision for industrial products. The use of quantitative restrictions vas sometimes the only method of achieving full employment and diversification. Mr. ADARKAR (India) asked for patience and understanding on the part of larger countries towards those who sought provision for quantitative restrictions, not for discriminatory purposes, but as an instrument of national planning. A stabilization scheme for primary products would require restriction of imports if the domestic price were to be fixed at a level higher than the foreign price and the provisions of Chapter VI and of Article 43 were inadequate to deal with such a case. Mr. AUGENYHALER (Czechoslovakia) agreed with the representative of the Philippines that bilateral arrangements were not necessarily an obstacle to world trade, but may be in accord with the purposes of the Charter. Replying to the question of Mr. MULLER (Chile) as to whether the proposals of Chile (Item 1), Argentina (Item 2) and Ceylon (Item 26) would be dealt with definitively under Article 13 by Committee II, the CHAIRMAN stated that that was the decision of Committee III. However, should Committee II decide that the Chilean proposal did not come within the framework of Article 13, it would be referred back to Committee III. The meeting rose at 1.15 p.m.

GATT Library

rx488bx6807

Summary record of Twentieth Meeting (III a) : Held at the Capitol, Havana, Cuba Tuesday 30 December 1947 at 4.00 p.m

United Nations Conference on Trade and Employment, December 31, 1947

Third Committee: Commercial Policy

31/12/1947

official documents

E/CONF.2/C.3/SR.20 and E/CONF.2/C.3/SR.17-31

https://exhibits.stanford.edu/gatt/catalog/rx488bx6807

rx488bx6807_90190247.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/C.3/SR.20 ON DU 31 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPL0I ORIGINAL: ENGLISH THIRD COMMITTEE: COMMERCIAL POLICY SUMMARY RECORD OF TWENTIETH MEETING (III a) Held at the Capitol, Havana, Cuba Tuesday 30 December 1947 at 4.00 p.m. Chairman: Mr. L. D. WILGRESS (Canada) 1. Composition of Sub-Committee C. The CHAIRMAN announced that the delegation of Norway because it did not include any technical experts had asked to be excused from membership of the Sub-Committee on Article 32 through 39. The Sub-Committee had recommended that the delegation of South Africa should be appointed to Sub-Committee C to replace Norway. The recommendation was approved. 2. Reference of Article 42 to Joint Sub-Committee of Committees II and III. The CHAIRMAN announced that the Joint Sub-Committee of Committees II and III had recommended that all the proposals on Article 42 should be referred to the Joint Sub-Committee of Committees II and III. This required a reconsideration of the Committee's decision to divide the proposals on Article 42 into two groups, namely, those concerning new preferential arrangements and those concerning customs unions. In the opinion of the Joint Sub-Committee these two problems were inseparable. It was agreed to refer to the Joint Sub-Committee also proposals on Article 42, which had originally been referred to Sub-Committee D. 3. Composition of Sub-Committee A. Mr. MELANDER (Norway), asked that a member of the Norwegian delegation be included on the Sub-Committee on Articles 16, 17, 18 and 19. Norway was particularly interested in Article 18 and 19 and wished to participate in the discussion of these Articles. Mr. SEIDENFADEN (Denmark) , said that the Danish delegation was mainly interested in Articles 16 and 17. He suggested Denmark might relinquish membership on Sub-Committee A when the discussion of these Article was concluded. It was agreed that the representative of Norway would take the place of the delegate for Denmark in Sub-Committee A when Articles 18 and 19 came to be discussed. The meeting rose at 4.10 p.m.

GATT Library

mn407ry8329

Summary Record : Second Meeting in Executive Session hald on Tuesday. April 2, 1947, at 10.00 a.m. in the Palais des Nations. Geneva

United Nations Economic and Social Council, April 22, 1947

United Nations. Economic and Social Council and Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment

22/04/1947

official documents

E/PC/T/EC/SR2/2 and E/PC/T/EC/SR. 2/1-21

https://exhibits.stanford.edu/gatt/catalog/mn407ry8329

mn407ry8329_90210054.xml

GATT_156

UNITED NATIONS NATIONS UNIES ECONOMIC CONSEIL Restricted AND ECONOMIQU E/PC/T/EC/SR2/2 22 April 1947 SOCIAL COUNCIL ET SOCIAL SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT. SUMMARY RECORD. Second Meeting in Executive Session hald on Tuesday. April 2, 1947, at 10.00 a.m. in the Palais des Nations. Geneva. Chairman: Mr. Max SUETENS (Belgium) . The CHAIRMAN referred to document E/PC/T/40 and propesed, and the meeting approved, tie election of the following five Vice-Chairmen of the Scond Session of the Preparatory Committee: Mr. COLBAN (Norway), Dr. AUGINTHALER (Czachoslovakia), Sir Raghvan PILLAI (India), M. CLARK (Cuba) and Mr. WILGRESS (Canada) . In the case of absen of the Chairman, Mr. Colban will take the chair as first Vice-Chairman, with Sir Raghavan Pillai as second. Vice-Chairman. Mr. COLBIN (Norway) and, Mr. MALLia (India - in the absence of Mr. Pillai) thanked of the honour afforded to them and their colleagues. Mr. de LONGEAUX (France) made a statement explaining the new customs tariffs of France and the territories of the French Union (Document to be circulated). Mr. REAGAN (United States) pointed out what in some case the new French tariff imposed duties from 2 to 10%, sometimes even 20% on goods which hitherto were duty-frre. In other cases the old rates wexe multiplied by from 2 to 20 times. In these inetances no quotas wee in operatoin before the war. These Page 2 E/PC/T/EC/SR.2/2 things would no doubt be clarified in the course of the nogotiat and in this respect the United States Delegation looked to the general statement of M. do Longeaux who pointed oout that the propsed level of proection was equivalent to that of 1938. It their apprach to the negoiations with the French delegation. the United States delegates felt that they should look accordingly to the equivalent of the level of 1938. Mr. de LONGEAUX replied that all cases would be looked into during the negotiation. The number of higher duties was not to large. In some cases it was necessary to bring the rates of dut of the new tariff into harmony with each other and that might acc for higher duties. The grouping of goods in the new tarifif had. been rearranged and also new products and new methods of product recontly introduced, had to be taken into account. Mr. REAGAN pointed out that the cases he had in mind, were rather numerous. Mr. NASH (New Zealand) wished to see the statement of M. de Longeaux in print and take up the discussion after further study. Mr. SPEEKENBINK (Netherlands) , and M. FORTHOMM (Belgium), pointed, out that in the new tariff of the Belgium-Luxemburng- Netherlands Union protection afforded. by the quota system was not taken into consideration and an average, between the old Belgian and Neitherlands tariffs was adhered to. The meeting adjuoned at 12.40 p.m., and was resumed at 3 p Dr. AUGENTHLER made a statement on the, new Czcchslovak customs taiff which was handed to he delegations a few days earlier (document to be circulated ). Mr. SPEEKENBRINK asked if the, coefficient of 1,7, mentioned. by Mr. Augenthaler, was to be changed if prices of goods should drop in the future. E/PC/T/EC/SR.2/2 Page 3 Mr. AUGENEALES replied that the coefficient was established at such a low figure so as to abtucipate future reductions of prices. The CHAIRMAN invited discussion of the Report by the huc Woking Party on Tariff Negotiations (E/PC/T/47 Rev.1). Party, Mr. Wilgress, concured, to delete the word "only" in lines 6 of paragraph 2, page G of the document, so as not to weaker that obligation of the delegations to make lists f offers avaialable to other delegations. Subject to this amonument the Report was adopted.

GATT Library

cm792nq2873

Summary Record : Seventeenth Meeting in Executive Session held on Wednesday, 18 June 1947, at 2.30 p.m. in the Palais des Nations, Geneva

United Nations Economic and Social Council, June 21, 1947

United Nations. Economic and Social Council and Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment

21/06/1947

official documents

E/PC/T/EC/SR.2/17.Corr.1 and E/PC/T/EC/SR. 2/1-21

https://exhibits.stanford.edu/gatt/catalog/cm792nq2873

cm792nq2873_90210072.xml

GATT_156

RESTRICTED UNITED NATIONS ECONOMIC NATIONS UNIES CONSEIL E/PC/T/EC/SR.2/17.Corr.1 AND ECONOMIQUE 21 June 1947 SOCIAL. COUNCIL ET SOCIAL Original: FRENCH SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT SUMMARY RECORD Seventeenth Meeting in Executive Session held on Wednesday, 18 June 1947, at 2.30 p.m. in the Palais des Nations, Geneva. CORRIGENDUM Page 10: Replace the penultimate paragraph by the following: Mr FORTHOMME .(Belgium) invited by the Chairman to reply to the discussion, said it was a mistake to think that the luxury of disunity could be afforded in times of assured security. The danger which constantly threatened us was disunity itself. Therefore, the Charter should be an in- strunent for mutual aid between nations."

GATT Library

cc750qy5416

Summary Record : Seventeenth Meeting in Executive Session Held on Wednesday, 18th June 1947, at 2.30 p.m. In the Palais des Nations, Geneva

United Nations Economic and Social Council, June 18, 1947

United Nations. Economic and Social Council and Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment

18/06/1947

official documents

E/PC/T/EC/SR.2/17 and E/PC/T/EC/SR. 2/1-21

https://exhibits.stanford.edu/gatt/catalog/cc750qy5416

cc750qy5416_90210071.xml

GATT_156

UNITED NATIONS NATIONS UNIES RESTRICTED E/PC/T/EC/SR.2/17 ECONOMIC CONSEIL 18 June, 1947 AND ECONOMIQUE ORIGINAL: ENGLISH SOCIAL COUNCIL ET SOCIAL SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT SUMMARY RECORD Seventeenth Meeting in Executive Session Held on Wednesday, 18th June 1947, at 2.30 p.m. In the Palais des Nations, Geneva. Chairman: Mr. Max SUETENS (Belgium) STATEMENT ON AMENDMENTS TO CHARTER BY DELEGATION FOR BELGIUM AND LUXEMBURG. The CHAIRMAN recalled the statement by the Delegate for Belgium at the meeting of the Executive Committee on 9 June, which had since been issued as document E/PC/T/90 of 10 June; at that meeting it had been decided to hold a special meeting of the Executive Committee to give delegates an opportunity of expressing their views. The Chairman called on the Delegate for the Netherlands as the first speaker. Mr. GOTZEN (Netherlands) said that although his Delegation could not agree with all the comments in the Belgian statement, they did in a general way share the grave feeling of uneasiness with regard to the tendency to weaken the original principles of the Charter; this uneasiness had been caused by various amendments proposed with the intention of confirming certain privileges and even creating new privileges; in this connectIon he referred to the amendments proposed on Articles 14, 15 and 24. Mr. Gotzen mentioned particularly the Australian comment on paragraph 1(c) of Article 24 which appeared to suggest that this paragraph was thought to be superfluous; on the contrary, E/PC/T/EC/SR. 2/17 page 2. the Netherlands Delegation regarded this paragraph as one of the pillars of the Charter, for it was of primary importance that the binding of low tariffs or of tariff free treatment should be recognised as an important concession. Further, the Netherlands Delegation had entered the discussions of the Second Session on the understanding that their acceptance of the clauses on quantitative restrictions would be counter-balanced by substantial reductions in tariffs and margins of preference, but if the results of the tariff negotiations were not satis- factory ln accordance with this multilateral principle his Delegation would have to reconsider their position. Dr. COOMBS (Australia) said that the statement by the Belgian Delegation appeared to be based upon a partial reading of the Charter. He referred to the statement by the Delegatee for the Netherlands relating to aragraphp 1(c) of Artileu 24 and said that itw;as not practicable to lay ocwn in advance any rule on the value to be attached. to the binding of a low duty, as this could only be appraised in relation to the items under discussion, but he would agrecthat the ebindig" of a low duty on articles previously subject toimport tquotas should carry a high negotiating value and hewoiuld accept this view both in principle and in practice. Secondly, Dr. Comrbs referred to problems of primary producers and to the view, apparently held in smie quarters, that the pursuit of stability of prices Is in the interests of the producers only; on the contrary, he believed that stability of price of staple commodities is also in the interests of importing countries, and for this reason he had urged equal representation of Importing and exporting countries on the bodies to be set up under Chapter VII. E/PC/T/EC/SR.2/17 Page 3. Dr. Coombs expressed the opinion that it was a mistake to concentrate attention either on the general rules in the Charter or on the exceptions to those rules; it was necessary to look at both and to see why it had bean found desirable to provide exceptions to the rules. There appeared to be two reasons for this; firstly, there were differing political philosophies and means must be found for them to work together, and secondly, it could not be assumed that the world would not again be faced by widespread economic difficulties which would render impracticable the strict observance of any general rules. He said the exceptions would not necessarily be applied, but they had been provided in the Charter to ensure against the possibility of world economic crises. Dr. Coombs said he was in sympathy with the statement of principles embodied in the Belgian statement, and he referred specifically to the 5 points enumerated on the 5th page of that statement; he said "the spirit of freedom" is a part of our philosophy, but, In addition to freedom from restraint, positive opportunity must be provided, and it was for this reason that he had supported the measures embodied in Chapters III, IV and VII; he could agree with the desire to strive towards "freer trade" If this could be confidently expected to lead to a fuller use of the world's resources, but he thought it desirable first of all to create the conditions in which freer trade would lead to that result; "equality in the means of action and defence" should embrace the idea of measures appropriate to needs and to the dangers to which countries might be exposed; referring to the 5th point regarding "orderly and balanced development' he said there were obviously great differences in the interests of many countries and it was possible that the growth of industry in one might be detrimental to the established Industries of another. E/PC/T/EC/SR. 2/17 page 4. Finally, Dr. Coombs said that the Charter could be either a banner of hope or a set of chains. If it were given a sectional interoretation and regarded as a legal document from which particular clauses might be extracted according to the cir- cumstances of the moment there would be a danger of being bound b its chains. He said that recognition should be given in the Charter to an economy of the Belgian variety, but other economies must also be recognised and he was not without hope that the Chari in its present form was capable of doing this. mr. WILGRESS (Canada) Said that his Delegation shared the apprehensions of the Belgian Delegation; they had always realised that the Charter would have to be a compromise between differing forms of economic organisation and between the circumstances of the more highly developed and less developed countries; they thought that in London a workable compromise had been achieved and that during the Second Session the Charter would be perfected without radical alterations of substance. In this respect, however their expectations were not being fulfilled. Mr. Wilgress mentioned particularly the position of agricultural exports which would benefit little from the Charter because of the many escape clauses which provide for the con- tinuation of extreme protectionism and draw unjustifiable and invidious distinction between agricultural and other products; the removal of quantitative restrictions necessarily included some appropriate exceptions, but many additional exceptions were now proposed and if these were accepted only the barest shred of the general rule would remain, Also, suitable provision must be made for state trading but some of the amendments were of such a nature that if they were adopted state trading countries would E/PC/T/EC/SR. 2/17 page 5. be placed in an advantageous position. The provisions deal- ing with state subsidies appeared to be more noteworthy for the escape clauses which they contained then for the principles they cnunciated and could have relatively little effect. The Canadian Delegation were prepared to envisage exceptions to the general rules which might help in the rapid development of the less developed economies, but unfortunately great emphasis had been placed upon purely protective devices for the promotion of this development and thsi was entirely unrualis- tic even from the point of view of the under-developed countries. Mr. Wilgress said that Canada had always been prepared to consider the reduction or elimination of preferences as a part of a reciprocal and mutual adventageous rnultilateral agreement, but his Delegation were now concerned about the relatively slow progress being mude in most of hte tariff negotiationss frm. which theyecxeccecd to dr-ivegenerral eceufits, and ei appealed for a greaecr deeErmination to complete tec negotiations by the tarett ate,. Further, h eecerredd to the tendency to postpone awwkard decisions by eavingé problems to be settled by the Organization; the draft Charter was nwi filled with references to difficult and complex matters, following upon themultiplicationsn ofecxceptions frmr ece.ral principles, and whilst a certainflexibilityt must be provided tei result might be thtz suchass burdenwrould be placed upon the Ogjanization that thewvhoeu schemewvould be unwoka-ble. Mr. AUENTHALERU (CzechoslovekA8) said that he could understandvery well what it meantn t oet a small eUrritorial unit lie BelgSium, seocialisnrg in the processige industries E/PC/T/EC/SR. 2/17 page 6 and dependent upon imports of raw materials and foodstuffs. The difference between their ideas and those of the Belgian Delegation was due to the different points of view from which the problems were considered; he thought the reasons for the numerous escape clauses lay in the memories of pre-war depression and the absence of the optimism of 1916. In his view the trade restrictions imposed before the war were not the cause but rather a consequence of the contraction of international trade and only in a world where employment was stable could free trade develop to the extent envisaged ln the Charter. Mr. Augenthaler suggested that the world could not achieve economic and social stability without control of economic activities. It could not be assumed in respect of state trading or private enterprise; activities that the govern- ment would pursue a policy of either free trade or protection; neither a controlled economy nor stete trading was in fact an obstacle to expansion of world-trade - on the contrary, the means of economic control could be more favourable to expansion of world trade then the means used by countries which did not actively interfere with economic development. At the present time there were many problems obscuring the issues and if the formulas of the past were applied to future forms of economic life great damage might be done. Therefore, it was best to wait and work out detailed rulas to apply to individual cases as they come before the Organization. Mr. WU (China) said that the statement of the Belgian Delegation maintained that the discussion of the Charter tended to establish a status of privilege for the under develope E/PC/T/EC/SR.2/17 Page 7 and war devastated countries, but whilst China was relatively under developed and had been devastated by war she did not appear to receive any special privileges and was called upon to make a great sacrifice in granting unconditional most favoured nation treatment and national treatment. China reaised however, that international agreement must be based on the spirit of compromise and mutual concessions and sacrifices. Mr. WEBB (New Zealand) expressed substantial agreement with the remarks of the Australian and Czechoslovak Delegates. He referred to the last paragraph of the belgian steatment and said that the "weapons" there referred to were in fact "controls", the results of which depended upon intentions. He said no good could come from outlawing the use of economic controls of from endeavouring to establish liberal trade for all countries and all products; while liberal trade had manifestly conferred many benefits there were many economic problems which it could not solve. Between the two wars the fluctuations in the prices of primary products were greater than in the case of manufactured goods, with the result that today there was hardly a country dependent upon primary commodities which did not engage in some degree of state marketing. Similarly, he said, liberal trade has failed to solve the problems of the under- developed countries and development had been lamentably slow where the liberal policy had been applied Mr. Webb said that in the Charter there was a conflit of opinions; there were provisions which favoured or opposed the restoration of liberal trade. If an attempt were made to force the liberal trade policy on all countries the Organization would not come into being, or if it were established it would fail. E/PC/T/EC/SR. 2/17 page 8 Mr. WILCOX (United States) said that it was well to pause for stock-taking after two months of discussion. He was very concerned with the progress of the Session. In his view the tariff negotiations and the Charter talks were closely bound together, but the negotiations had proceeded slowly; 93 negotiations had been initiated but only 5 had proceeded beyond 10 meetings, and each of these Involved the United States Delegation; in 8 others there he.d been file meetings or more and the United States was involved in 5 of these. He could not believe that much progress was being made by the pairs of countries that had not held 5 meetings. He was very concerned with this situation, and urged the Delegations to speed up their negotiations in order that the target date might be kept. Mr. Wilcox said that some Delegations ha declared their inability to accept Chapter V unless Chapters III, IV and VII were incorporated In the Charter; the United States Delegation had accepted that decision as a basis for the tariff negotiations, but the compromise worked both ways and the balance must be preserved. Some amendments had been proposed which would destroy the whole edifice and the United States Delegation must stand against them. He agreed with the New Zealand Delegate that the London text was not sacrosanct and compromises must be accepted, but it was necessary to restore the balance of interests which had been achieved in London. He said that his Delegation recognised the existence of free and controlled economies and also the different needs of developed and under-developed countries, but whereas the New Zealand Delegate said that the balance E/PC/T/EC/SR.2/17 page 9 must not be tipped towards liberal trade he would urge that it must not be tipped in the other direction. He agreed with the views of the Belgian, Netherlands and Canadian Delegates that some of the recent developments lead in the wrong direction, but there was no cause for alarm - the Session would succeed because all Delegates knew that no-one could afford to allow it to fail. Mr. HELMORE (United Kingdom) said it was essential for the world economy for a long time to come that the Charter should take account of the trading position of the United Kingdom. If this were not done the world would no doubt adjust itself eventually to the changes that would be rendered inevitable but the process would be an uncomfortable one. He recalled that the trade discussions had begun with the Atlantic Charter and the Lend Lease Agreement, and he quoted the following statement from the original proposals published jointly in December 1945 by the United States and United Kingdom governments. "Equally, the Government of the United Kingdom is in full agreement on all important points in these proposals and accepts them as a basis for international discussion, and it will, in common with the United States Government, use its best endeavours to bring such discussions to a successful conclusion, in the light of the views expressed by other countries". Mr. Helmore agreed that the London draft was not sacrosanct, but at the London meeting they had been within sight of a successful conclusion; that success possibly had encouraged delegates now to go too far in proposing changes to E/PC/T/EC/SR. 2/17 page 10 suit their particular needs. It would be necessary to sign the general agreement on tariffs and trade fairly soon and while no-one would be completely satisfied the choice would be between success or failure, and if it was feature, as he said previously, everyone would suffer. Finnally, Mr. Helmore expressed the view that the statement by the Belgian Delegation took an unduly gloomy view of the present state of the Charter discussions. Mr. BARADUC (France) said that France as well as the United Kingdom, Belgium and the Netherlands was vitally interested in international trade and had equally taken part in the development of the policy expressed in Article VII of the Lend Lease Agreement. While in agreement with the Belgian view the objectives must be Approached gradually and he had full confidence in the ability of the Committee to create a Charter which would be acceptable to all. Mr. FORTHOMME (Belgium) invited by the Chairman to reply to the discussion, said It was at tImes of supposed safety that nations began to disagree. The real danger threatening the work of the Committee '"as a cleavage of opinion and if the Committee were to succeed there would have to be united effort. The CHAIRMAN in concluding the meeting said It had been clearly recognised that national economies were not uniform and that vast areas were undeveloped. Therefore a simple Charter with provision for flexibility was required and he urged the Delegations to strive for the completion of the Charter which everyone recognised as necessary.

GATT Library

jb199bm9677

Summary Record : Seventh Meeting in Executive Session held on Wednesday, 21 May 1947, at 3 p.m. at the Palais des Nations, Geneva

United Nations Economic and Social Council, May 21, 1947

United Nations. Economic and Social Council and Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment

21/05/1947

official documents

E/PC/T/EC/SR.2/7 and E/PC/T/EC/SR. 2/1-21

https://exhibits.stanford.edu/gatt/catalog/jb199bm9677

jb199bm9677_90210060.xml

GATT_156

UNITED NATIONS NATIONS UNIES RESTRICTED ECONOMIC CONSEIL E/PC/T/EC/SR.2/7 AND ECONOMlQUE 21 May 1947 SOCIAL COUNCIL ET SOCIAL SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT. SUMMARY RECORD Seventh Meeting in Executive Session held on Wednesday, 21 May 1947, at 3 p.m. at the Palais des Nations, Geneva. Chairman: M. Max Suetens (Belgium) The CHAIRMAN invited further Speakers on the amendment to Article 14:2(c) presented by the Delegations of Chile, Lebanon and Syria (E/PC/T/W.27). Mr. HOLMES (United Kingdom) agreed with the views expressed in the meeting this morning by Mr. GUERRA (Cuba) and thought that perhaps the Chilean case made might be met under Article 38:4. As it stood the amendment was altogether too wide. The date provided in Article 14:2(c), July 1st 1946, was a very late date and no doubt provided for the possible survival of the maximum of preferences. Mr. WINTHROP EROWN (United States) stressed that his Delegation sympathised with the objectives of the development of under-developed countries, but he considered that the Chilean amendment was inconsistent with the spirit with which this Conference had approached the problem of preferences. Mr. McCARTHY (Australia) considered the Cnilean proposal too sweeping because it opened new possibilities for the creation of preferences. If countries wished to pursue a policy of development they should do so under the supervision E/PC/T/EC/SR.2/7 Page 2. of the Organisation and according to critoria set up by it. Mr. WILGRESS (Canada) thought that international co- operation was important for further development of under- developed countries. Preferences were only one of the means to foster economic development. Paron VAN DER STRATEN-WAILLET (Belgium) thought that the aims sought by the under-developed countries could be achieved by applying Article 38:4. The CHAIRMAN stated that all Delegations which had spoken so far agreed that it would be dangerous to introduce a permanent exception to the most-favoured-nation clause. Mr. ANGEL FAIVOVICH (Chile) in replying to the remarks of former Speakers thought that his amendment would not introduce new discrimination. On the contrary Article 14:2(c) contributes to discrimination between countries with preferential systems, and those who do not apply preferences, thus the Charter seemed to be going towards a system of complete inequality. He did not consider his proposal radical, and thought that, if the possibilities provided for in his amendment were not given to under-developed countries, the latter would be kept in the role of suppliers of raw material which would be a grievous error. He informed the Committee that he had just had news from his Foreign Minister informing him that a trade agreement had been concluded with Czechoslovakia which included the mutual provision that exception to the most-favoured-nation clause was made for the benefit of contiguous countries. Mr. Meussa MOBARK (Lebanon) referred to the preferential agreements between former parts of the Ottoman Empire after 1918. and asked the representative of the United Kingdom if the E/PC/T/EC/SR.2/7 page 3. meaning of Article 14 was that special agreements between Lebanon, Transjordania and Palestine should lose their force. He recalled that though the most-favoured-nation clause had been encumbent on all Members of the League of Nations the countries of the Near East were allowed to make preferential arrangements. He proposed to refer the amendment to a Drafting Sub-Committee. Mr. NATHAN (France) stated that in principle he was not in favour of new customs preferences and that Article 14 must remain as it stands. On the other hand the possibility might be discussed if Article 38 would give satisfaction to the case mentioned in the amendment. Mr. HOLMES (United Kingdom) thought that the creation of a new preferential system would be rather like introducing a new and very substantial customs tariff as a preliminary to the present tariff negotiations. Answering the question of Mr. Moussa MOBARAK he explained that the preferential system existing in the Near East was covered by Article 14:2(c). Mr. WINTHROP BROWN (United States) denied that the provisions of Article 14 or any provisions of the Charter should be deemed to represent any effort by highly industrialised nations to maintain a predominant position. The problem of economic development was recognised as an extremely important and vital question. In his opinion discriminations in inter- national trade should be liminated for all nations. The provisions of Article 13 and 38 even as they stand now meet the problem out forward in the amendment of Chile, Syria and the Lebanon. Mr. ANGEL FAIVOVICH (Chile) doubted whether Article 14 as it stands was not conceived in the interests of highly E/PC/T/EC/SR.2/7 page 4. industrialised countries. If the Conference did not want to consider realities and actual needs it would do injustice by closing the door on the legitimate of under-developed countries and might lead to jeopardising its objectives. Mr. MINOVSKY (Czechoslovakia) explained that the preferential clause was inserted in the trade agreement between Czechoslovakia and Chile at the request of the Chilean representatives. He did not have the actual text but referred to a clause of the commercial treaty of 1938 between Czechoslovakia and the United States. Mr. CHWANG (China) was in full sympathy with the position of under-developed countries and suggested that paragraph 2 of Article 14 should be transferred to an article which covers general exceptions. The CHAIRMAN asked the Chilean Delegate if he would accept the proposition made to him, i.e. to withdraw his amendment to Article 14 and take up the question later in connection with Articles 13 and 38. Mr. ANGEL FAIVOVICH (Chile) asked for some time to consider this proposal, and Mr. Meussa MOBARAK (Lebanon) associated himself with this request. The meeting rose at 6.05 p.m.

GATT Library

ws939bb9648

Summary Record : Sixteenth Meeting in Executive Session held on Monday, 16 June 1947, at 2.30 p.m. in the Palais des Nations, Geneva

United Nations Economic and Social Council, June 16, 1947

United Nations. Economic and Social Council and Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment

16/06/1947

official documents

E/PG/T/EC/SR.2/16 and E/PC/T/EC/SR. 2/1-21

https://exhibits.stanford.edu/gatt/catalog/ws939bb9648

ws939bb9648_90210070.xml

GATT_156

UNITED NATIONS ECONOMIC AND SOCIAL COUNCIL CONSEIL ECONOMIQUE ET SOCIAL E/PG/T/EC/SR.2/16 16 June 1947 ORIGINAL: ENGLISH SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT. Summary Record Sixteenth Meeting in Executive Session held on Monday, 16 June 1947, at 2.30 p.m. in the Palais des Nations, Geneva. Chairman: Hon. L. D. WILGRESS (Canada) Report of the Tariff Negotiations Working Party. The CHAIRMAN invited the Executive to approve the Report of the Tariff Negotiations Working Party on the progress of Tariff Negotiations (document E/PC/T/91 of 9 June 1947). The Report was approved without discussion. The meeting closed at 2.45 p.m. NATIONS UNIES RESTRICTED

GATT Library

fr218sx7332

Summary Record : Sixth Meeting in Executive Session held on Wednesday, 21st May 1947 at 10.30 a.m. at the Palais des Nations, Geneva

United Nations Economic and Social Council, May 21, 1947

United Nations. Economic and Social Council and Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment

21/05/1947

official documents

E/PC/T/EC/SR.2/6 and E/PC/T/EC/SR. 2/1-21

https://exhibits.stanford.edu/gatt/catalog/fr218sx7332

fr218sx7332_90210059.xml

GATT_156

UNITED NATIONS NATIONS UNIES RESTRICTED ECONOMIC CONSEIL E/PC/T/EC/SR.2/6 AND ECONOMIQUE SOCIAL COUNCIL ET SOCIAL 21 May 1947 SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT SUMMARY RECORD Sixth Meeting in Executive Session held on Wednesday, 21st May 1947 at 10.30 a.m. at the Palais des Nations, Geneva. Chairman: M. Max Suetens (Belgium) The CHAIRMAN referred to the amendment presented by the Delegations of Chile, Syria and the Lebanon (E/PC/T/W27) and asked the Chilean Representative to comment on this proposal. M. ANGEL FAIVOVICH (Chile) submitted that in some cases it was important to introduce certain exceptions which would permit a quick development of industrial life of underdeveloped countries. His amendment dealt with exceptions from the Most- Favoured-Nations clause for the benefit of neighbouring countries which are underdeveloped. It is true that Article 14;2(c) provided for such exception, but this would not cover the problem which was to allow such exceptions in the future. There are a number of treaties in existence between neighbouring Latin-American countries and also in other parts of Europe. The adoption of the Chilean proposal would not substantially prejudice international trade in the rest of the world. He did not consider it right that preferences which were in force up to a certain date should be allowed to continue, but that new arrange- ments of that kind should not be permitted. The present tariff negotiations could not give good results to countries in a similar P.T.O. E/PC/T/EC/SR.2/6 page 2 position to Chile. The Delegate did not think that his amend- ment carried with it the danger of forming opposing blocs. Mr. HASSAN JABRARA (Syria) associated himself with the statement of the Delegate for Ghi'le and pointed out that after the first world war preferential arrangements between the forme parts of the Ottoman Empire were established.. Mr. FERREIRA BRAGA (Brazil) thought that the Chilean proposal is not in agreement with the principles of the Charter Universal cooperation was more important than regional or national cooperation and the provisions of the Charter must be in harmony with the general opinion of all members. The Beazi ian Delegation was therefore in favour of adhering to the text of Article 14;2(c) as it stands. Mr. NATHAN (France) was unable to support the amendment presented by Chile, Syria and the Lebanon, and thought that provisions of Article 38 if made more flexible would give satisfaction to the three countries. He was prepared to prese amendments to Article 38 when it was discussed. Mr. GUERRA (Cuba) considered the amendment too general and sweeping. He referred to the obligation to enter into negotiations under Article 24 for the elimination of preference The amendment 'would create new preferences whereas only such old preferences as remained after the negotiations were allowed to stay. These new preferences would not be subject to negotia Mr. J.T. CHIWANG (China) supported the views expressed by the Cuban Delegate. The meeting rose at 12.45 p.m.

GATT Library

km831xx7904

Summary Record : Tenth Meeting in Executive Session held on Friday, 23 May at 3.00 p.m. at the Palais des Nations, Geneva

United Nations Economic and Social Council, May 27, 1947

United Nations. Economic and Social Council and Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment

27/05/1947

official documents

E/PC/T/EC/SR.2/10 and E/PC/T/EC/SR. 2/1-21

https://exhibits.stanford.edu/gatt/catalog/km831xx7904

km831xx7904_90210064.xml

GATT_156

UNITED NATIONS NATIONS UNIES RESTRICTED ECONOMIC CONSEIL E/PC/T/EC/SR.2/10 27 May 1947 AND ECONOMIQUE ORIGINAL: ENGLISH SOCIAL COUNCIL ET SOCIAL SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT. SUMMARY RECORD Tenth Meeting in Executive Session held on Friday, 23 May at 3.00 p.m. at the Palais des Nations, Geneva. CHAIRMAN: M. Max Suetens (Belgium) The Committee approved the arrangements for consultation with non-governmental organizations in Category A as set forth in document E/PC/T/45 Rev. 1. The Committee received and approved the report on credentials contained in document E/PC/T/60. The Committee considered and approved the amendment to the rules of procedure proposed in document E/PC/T/49 limiting to sessions of the full Preparatory Committee the requirement that verbatim records be provided. Article 7 M. ROYER (France) opened the discussion on Article 7 with an explanation of the proposal which had been presented by the Delegation of France for amending that article (see document E/PC/T/W60 and amendment 1). He explained that the amendment had been inspired by the need for providing certain relaxations of the generally rigid rules in the event that a general crisis develops threatening to dislocate the normal course of inter- national trade. He maintained that the amendment did not threaten the effectiveness of the Charter since the continuation of any measures adopted was expressly subordinate to approval E/PC/T/EC/SR.2/10 Page 2 by the Organization. He declared that provisions elsewhere in the Charter was not such as to render the proposed amendment unnecessary, since under the provisions already contained in the Charter section could be taken only after a crisis had already complicate the system of international exchange. He examined, in this connection, paragraphs 1, 2 and 5 of Article 26, Article 34 and paragraph 2 of Article 35 and found them inadequate to cope with the sort of crisis that he had in mind. In the presence of such a crisis, he maintained, governments right take measures more excessive than those permitted under the proposed amendment. He interpreted the amendment as provising for concerted action to limit such protective measures to reasonable proportions. He considered that it was also important to insert in the Charter the provision for convening an emergency conference in such circumstances. Mr. MARTINS (Brazil) expressed the support of his Delegation for the amendment. Mr. LOKANATHAN (India), while not taking a definite position in respect of the amendment, expressed the view that the objective of the amendment might be covered already in the present draft of the Charter, particularly in Article 26. He drew the attention of the Committee to an amendment which the Indian Delegatoin would propose to Article 25 concerning safeguards against the effects of inflationary pressure. Mr. DEUTSCH (Canda) expressed his concern lest the second paragraph of the amendment proposed by the Delegation of France might open the way to independent action by individual countries to an extent which would threaten the Charter. He considered that the situation referred to in the proposed amend- ment was probably already covered in paragraph 2 of Article 35. If necessary, that article could be amended to cover the situation specifically. He considered it important that the type of procedure set forth in Article 35 should be employed in such cases. Mr. HEIMORE (United Kingdom) considered that the retention of the article in its original form was desirable. E/PC/T/EC/SR.2/10 page 3 In his judgment the various aspects of the matter dealt with in the proposed amendment were covered in Articles 26, 28,30, 34, 35, 52, 66 (paragraph 3) and in various other undertakings to which many member governments had subscribed. He considered that the retention of the original article would have the value of providing a general directive for guidance in carrying out the specific provisions set forth elsewhere in the Charter. Mr. TANGE (Australia) asked for a clarification or defi- nition of the phrase "after consulting the Organization" in the proposed amendment expressed the view that protective action should be determined by the Organization and should not have an indiscriminate effect but should be directed against the source of the difficulties. He thought it desirable to establish some procedure similar to thet provided in Article 35. Mr. WILCOX (United States) indicated that his Delegation had decided to withdraw its original proposal that the subject of this article should be dealt with elsewhere than in Chapter III. M. JUSSIANT (Belgium) considered that sore specific provision relating to remedies against deflationary pressure should be made. He mentioned, in particular, that the proposal for call- ing emergency conferences might be retained with advantage. M. NATHAN (France) indicated that the amendment could be revised to cover inflationary as well as deflationary pressure to take account of the views expressed by the representative of India. He reiterated the view of his Delegation that the other articles of the Charter did not make adequate provision for meeting a serious and abrupt decline in external demand as a result of deflationary pressure from other countries. Mr. GOTZEN (Netherlands) explained that the amendment proposed by the Netherlands Delegation was intended to make clear that concerted as well as separate or independent action was permissible. E/PC/T/EC/SR.2/10 page 4 The CHAIRMAN proposed that, as the general discussion had been completed, the various suggested amendments would be referred to the Sub-committee presided over by Mr. LOKANATHAN (India) . The Sub-committee would be expected to consider whether the article should be retained in Chapter III and, if so, to draft a text of such an article. He requested the Sub- committe to consult with the Netherlands Delegation concerning its amendment. The Committee accepted the proposed procedure. Article 8. The CHAIRMAN noted that no amendments had been submitted relating to this article and proposed that the Committee should accept it in its present form subject to any alterations which may be required to take account of changes made in other articles. The CHAIRMAN announced that Commission A would hold its first meeting on Tuesday to commence the discussion of Chapter IV. The meeting rose at 5.45 p.m.

GATT Library

vf252ts3814

Summary Record : Twelfth Meeting in Executive Session held on Tuesday, 3 June 1947, at 2.30 p.m. at the Palais des Nations

United Nations Economic and Social Council, June 3, 1947

United Nations. Economic and Social Council and Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment

03/06/1947

official documents

E/PC/T/EC/SR.2/12 and E/PC/T/EC/SR. 2/1-21

https://exhibits.stanford.edu/gatt/catalog/vf252ts3814

vf252ts3814_90210066.xml

GATT_156

UNITED NATIONS NATlONS UNIES RESTRICTED E/PC/T/EC/SR.2/12 ECONOMIC CONSEIL 3 June 1947 AND ECONOMIQUE SOCIAL COUNCIL ET SOCIAL Original: English SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOMYMENT SUMMARY RECORD Twelfth Meeting in Executive Session held on Tuesday, 3 June 1947, at 2.30 p.m. at the Palais des Nations. Chairmen: H. E. Mr. Erik Colban (Norway). The Committee unanimously approved the Fifth Report by the Tariff Negotiations Working party (T/79 and T/79a). Mr. L. D. WILGRESS as Chairman of the Working Party raised the question (in connection with document T/84a, Annex E) if it would be considered advisable to publish the fact that the negotiations between Czechoslovakia and the Union of South Africa had been terminated. Dr. J. E. HOLLOWAY (Union of South Africa) pointed out that there were still certain minor points to be settled in the negotiations referred to. Consequently the Committee decided to postpone the publication until notice had been received from the parties concerned. With regard to the principle of publicetion, the Committee decided that if agreement was reached in the tariff negotiations of a given teem, this fact might be published when the two parties concerned had given notice of the agreement. No inform- ation should be given, however, on the tariff rates agreed upon.

GATT Library

vh329ht2870

Summary Record : Twentieth Meeting in Executive Session held on Monday, 7 July 1947 at 2.30 p.m. in the Palais des Nations, Geneva

United Nations Economic and Social Council, July 7, 1947

United Nations. Economic and Social Council and Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment

07/07/1947

official documents

E/PC/T/EC/SR.2/20 and E/PC/T/EC/SR. 2/1-21

https://exhibits.stanford.edu/gatt/catalog/vh329ht2870

vh329ht2870_90210075.xml

GATT_156

UNITED NATIONS NATIONS UNIES RESTRICTED ECONOMIC CONSEIL E/PC/T/EC/SR. 2/20 7 July 1947 AND ECONOMIQUE ORIGINL: ENGLISH SOCIAL COUNCIL ET SOCIAL SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT Summary Record Twentieth Meeting in Executive Session held on Monday, 7 July 1947 at 2.30 p.m. in the Palais des Nations, Geneva, Chairman: Mr. Max SUETENS (Belgium) Agenda Item 1. Draft Report by the Preparatory- Committee of the United Nations Conference on Trade and Employment to the Economic and social Council (E/PC/T/117) and Addendum. Mr. E. WYNDHAM WHITE (Executive Secretary) presented the Report, suggesting that it covered adequately all the matters with which the Economic and Social Council had charged the Preparatory Committee with one possible exception: the draft Convention which the Council had requested the Committe to prepare along with an annotated draft agenda for the World Conference would not be available by the time this report was submitted to the Council. Since it would, of course, be ready considerably in advance of the World Conference, he suggested that the Committee had nevertheless fulfilled the spirit, if not the letter, of the mandate, If necessary, a pro forma meeting of the Council could be held before the World Conference to receive the text of the Charter as completed at the Preparatory Committee stage. The CHAIRMAN opened the discussion on the Draft Report. E/PC/T/EC/SR. 2/20 page 2 Part . - Introduction. Paragraph 1: Establishment of the -Preparatory Committee. No comment, Paragraph 2: Stages in the work of the Proparatory Committee. No comment. Paragraph 3: Participants in the work of the Proparatory Committee. Mr. J.R.C. HELMORE, (United Kingdom) proposed the deletion of the first sentence on page 3, "The Soviet Union did not participate in the work of the Drafting Committee or of the Second Session." Mr. P. BARADIIC (France) suggested that the word "The" at the beginning of the second sentence on page 3 be changed to "Two" in view of the fact that there were certain specializedalized agencies not represented at this Conference. Part gBmm endations of the Preparatory -mmit Reoa of the Praparatory Corimittee. Paragraph 1. annotafted Draft aenda and Convention 'r the Conference on Trade and Employment. Mr. C. WILCOX (United States) preferred that Chapter headirngs be indicated in substance rather than precisely in view of the United States proposal, which had not yet been acted upon, to rearrange the Chapters of the Charter and to include in one heading al ethe general and non-substantiva provisions. ParagWwraph 2: Date and place of theorld Conference on Trade and iuLploymcnexure . Er. E. WHNDI-. 'IVJITxecutive Secretary) called the attentieeoEn of the Commit particularly to the footnote to Annexure C which had been added by the Secretariat as suggested by the Chairman's Committee. E/PC/T/EC/SR. 2/20 page 3 Dr. H.C. COOMBS (Australia) suggested that additional information of a practical character night be included in the footnote, for example, the number and approximate size of delegations and office accomnodation requirements, etc., in order to help clarify the reasons for the Committee's decisions as to date and place. Mr. E. WYNDEAM WHTE (Executive Secretary) doubted that it was appropriate to include such information, though useful, -in a report which was primarily one of principle, and suggested alternatively that a supplementary document be prepared which could be referred directly by the Council to a technical sub-committea. Dr. Coombs agreed. in response to an enquiry from Dr. A.B. SPEEKENBRINKI (Netherlands) , the Chairman stated that it had been agreed in principle to send a representative of scnd -a representative of the Preparatory Committe to present thee Committee's Report to th Economic and Social Council but that the appointment had not yet been made. Paragraph 3: Invitation eof Non-Members of the Unitd Nations to thoConfarnce (and îSnxure D). Mr. J.P.D. JOQI.SEZealand) expressed the view that representatives of Germany, Japan-and Korea should be attached as observers to the Delegations of the control authority countries rather than act directly as representatives of the countries concerned. Mr. C. NLC0X United StateaAs) explained thuthe recaommegndation regrdin representation of Germany, Japan and Korea, which had been drafted by the Delegates for France, the United Kingdom and the United States, had been deliberately left obscure with respect to: E/PC/T/EC/SR. 2/20 page 4 (a) who the appropriate authorities in Germany, Japan and Korea were; (b) who was qualified to represent them, and (c) in what capacity they should attend the World Conference. While wishing to call the Economic and Social Council's attention to this problem, they regarded the Council as a more appropriate body than the Preparatory Committee to decide these essentially political matters. Part C - The General Agreement on Tariffs and Trade. Dr. J.E. HOLLOWAY (South Africa) proposed that the words "mutually advantageous" should be deleted from the fourth line and inserted after the word "preferences" in the fifth line. Dr. H.C. COOMBS ( .ustralia) proposed, on the grounds that the present wording of paragraph 3 assumed certain conclusions which had not yet been reached by the Committee, amending this paragraph as follows: "It is expected thath!lt the concessions resultifrom theset ng negotiations, together with such other provisionsm as ay be appropriate, will, at the end of the Second Sesssion, be incorporated in a General ement.;ILTarif.fs nd Trade." The Report to the Economic and Social Council was adopted, subject to certain redrafting by the Secretariat in the light of the Committee's discussion. Agenda Item 2. Report of the Second Session (E/PC/T/116). Mr. E. C0LBAN (Norway) suggested that the question of whether explanatory notes should be treated differently from reservations, which had been raised in Commission B, should be referred to the Charter Steering Committee. E/PC/T/EC/SR .2/20 page S Mr. E. WYNDHAM THITE (Executive Secretary) pointed out that the Secretariat's proposals had already been generally agreed to by the members of the Charter Steering Committee. Furthermore, the point raised by Mr. Colban was the major point of principle which this paper was designed to establish. It was not intended to include reservations in the explanatory notes. Explanatory notes which would be relegated to an appendix were intended to prevent reservations or interpretations which might by confused with the agreed text. The Secretariat had hoped that the Committee would give a clear mandate both as to the form of the Report and the explanatory notes, and had suggested that the notes should explain how the text was arrived at, not interpret the text. Dr. J. E. HOLLOWAY (South Africa) pointed out that a number of texts had already been accepted in the Working Party on Technical Articles and in Commission A on the assumption that explanatory notes would be inserted to interpret these texts. If this were not the case, it vas possible that some Delegations would insist on some of the explanatory material bein: inserted in the text. Dr. Holloway indicated that he might wish to revert to this matter at a later date. Mr. J. R. C. HELMORE (United Kingdom), supported by Mr. E. COLBAN (Norway), favoured limiting the explanatory notes to those which were essential in the opinion of any Delegation for the removal of a reservation. His suggestion was that the Report should consist of a brief introduction; and (b) the Draft Charter, together with reservations and those explanatory notes necessary to enable people not to E/PC/T/EC/SR.2/20 page 6 maintain reservations. In addition, there should be published a document - not a report of the Preparatory Committee - containing selected working papers of the Preparatory Committee. Dr. H. C. COOMBS (Australia) suggested that the presentation of the Report in this form would be facilitated by the inclusion in the introduction of a reference to the Report of the First Session and the fact that it still provided a basis for the work of the Conference, thus obviating the necessity of producing a similar resort at this Session. The Secretariat's note on the Report of the Second Session was adopted, with the suggestions made by Mr. Helmore and Dr. Coombs. Agenda Item 3. Consultation with Non-Governmental Organizations in Category A. Note by the Executive Secretary (E/PC/T/113) Mr. E. WYNDHAM WHITE (Executive ITE (Excutive Secretairy) asked the Committee's instructions on (a) membership of the mConsultative Comittee: and e c(b) ho-xz tc mion with the non-governmental organizations more effective, on both of which points suggestions were made in the paper submitted. As for the first point, it was suggested that the membership be expanded to include all Delegations, from which panel representwatives ould be selected for each meeting. As for the secon d pwoint ghit!as Egested that the Consultative Committee should report to the Preparmatory Comittee on points made by the non-governmental organizations on parts of the Charter covered in Sub-Committee reports already adopted. E/PC/T/EC/SR.2/20 page 7 When the Preparatory Committee had considered this Report, the Consultative Committee and the Secretariat would then be in a position to reply authoritatively to the non- governmental organizations. Every effort should be made to take into consideration the suggestion of the non- governmental organizations on particular points before the relevant reports had been acted upon. t was suggested that the Preparatory Committee instruct the sub-committees to take in account these. suggestions, together with the Consultative Committee's comment thereon. If this were done, the Preparatory Committee, in considering reports of sub-committees, would also be dealing with suggestions made by the non-governmental organizations, thus automatically supplyin, to the Cecretariat the material with which they could reply to the non-governmental organizations. Dr. H. C. COOMBS (Australia) and Mr. J. R. C. HELMORE (United Kingdom) supported the Executive Secretary's proposals, with one amendment, proposed by Mr. Helmore, that the Consultative Committee for each meeting should consist of four or five rather than seven members of the Preparatory Committee panel. Dr. J. E. HOLLOWAY (South Africa), supported by Mr. E. COLBAN (Norway) objected to the implication that consultation had been unsatisfactory because the authoritative views of the Pre-oaratory Conmittee on the points raised by the non-governmental organizations had not been brought to their attention. In his view, non-governmental organizations E/PC/T/EC/SR.2/20 page 8 were not entitled to insist on receiving replies from the Preparatory Committee, but only to submit their suggestions. Mr. E. WYNDHAM WHITE (Executive Secretary) explained that it had been his intention merely that the Consultative Committee should be in a position to explain knowledgeably to the non-governmental organizations what had taken place in the Preparatory Committee. The note on consultation with non-governmental organization in Category A was adopted with the amendment proposed by the United Kingdom Delegate. Agenda Item 4. Verbatim Reports, Note by the Executive Secretary. Mr. A. FAIVOVICH (Chile), M. P. BARADUC (France), M. F. LIEDEKERKE (Belgium ), Mr. A. V. FERREIRA, BRAGA (Brazil) and Mr. S. MINOVSKY (Czechoslovakia) favoured the first alternative set out in this paper. Dr. H. C. COOMBS (Australia) favoured the second alternative. Mr. C. W WILCOX (United States), supported by Mr. E. COLBAN (Norway) , agreed that the first alternative should be adopted in vie:; of the support expressed therefor, but proposed that each verbatim report should indicate that the only authentic text was that in the original language. The .Committee agreed to adopt the first alternative proposal in the Note .by the Excecutive Secretary, with the suggestion made by the United States Delegate.

GATT Library

by171ry7608

Summary Record : Twenty-first Meeting in Executive Session held on Friday, 8th August 1947, at 10.30 a.m. in the Palais des Nations, Geneva

United Nations Economic and Social Council, August 9, 1947

United Nations. Economic and Social Council and Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment

09/08/1947

official documents

E/PC/T/EC/SR/21 and E/PC/T/EC/SR. 2/1-21

https://exhibits.stanford.edu/gatt/catalog/by171ry7608

by171ry7608_90210076.xml

GATT_156

RESTRICTED ECONOMIC CONSEIL E/PC/T/EC/SR/21 AND ECONOMIQUE 9 August 1947 SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT SUMMARY RECORD Twenty-first Meeting in Executive Session held on Friday, 8th August 1947, at 10.30 a.m. in the Palais des Nations, Geneva Chairman: M.M.Suetens (Belgium) The Brazilian Tariff In opening the Meeting the CHAIRMAN announced that it had been convened for the purpose of discussing the statement on the adjustment of the Brazilian Customs Tariff, which had been circulated. by the Brazilian Dele- gation in document E/PC/T/151 and 151 Corr.1. He called upon the Brazilian Delegate to explain the statement. Mr. A. BRAGA (Brazil) said that the statement which his Delegation had distributed sufficiently explained the adjustment which was being effected in the Brazilian Tariff, and clarified the circumstances and the situation which his Government wished to correct; further, the schedule attached to the statement showed clearly the effects of the adjustment. Mr. Braga said that he had with him two experts on the Brazilian Tariff who would be pleased to give any information that might be required. The CHAIRMAN enquired whether Delegates wished to ask any questions concerning the Brazilian statement, and UNITED NATIONS NATIONS UNIES E/PC/T/EC/SR/21 page 2 when no Delegate indicated a desire to speak Mr. O. PARANAGUA (Brazil) said that possibly the silence of the Delegates was an indication that the statement was self-explanatory, but he would be pleased, nevertheless, to give any further information Delegates might require. Mr. S.L.HOIMES (United Kingdom) enquired whether the proposed 40 increase in the duty rates would apply to items in the tariff which were not included in the present tariff negotiations. Mr. PARANAGUA said that the re-adjustment which was being made. ` in items under n '- was fully in accord with Armexure 10 of the Report of the First Session; on alloIle on all he Brazalian Government would be free to maked b, froc to djustment it might desire, since there wouldrhq@ dsr, j: of dution not negotiated.o t rLe otm c nited Kingdom) said that in that case other n that case o id not know quite where they stood, since it stood, since apossible increase in duties not negotiatedties not nego was nothe 40%. d eteo te'e-O;. Thrfor, his Delegation might owishg tiations of o ask fr neot a larger range of items. (Brazil) sMr. ?{,;Lf.Gt neither the Brazilian Goent nor any other government could be expected to makent Cxpected to malce tariff duties whicvh werenot negotiateed wDrD nct negotiaed ed.ld not b . - then asked for information r erma.i.on concerning the tipreciation mentioned in the statement.d in thc sta DRYGUES (Brazil)US{i ('3razi eaid that tho depreciation ney began in 1934. the depreciation had progressedon hEîd prog rsr sore yes.r, but thu value of the currency wlized. stabized. E/PC/T/EC/SR/21 page 3 In reply to a question by Dr. SPEEKENBRINK (Netherlands) Mr. Paranagua explained that the conversion of "specific" duties into "ad valorem" had taken account of the depreciation of the currency but the Government had not allowed in addition for changes in the price level as it could have done. M. P.A. FORTHOMME (Belgium) agreed that the proposed increase in the tariff was not contrary to the procedural memorandum of the First Session, since the latter had foreseen the need for tariff adjustments to compensate for currency depreciations; it might seem strange, however, that the Brazilian Government only now proposed to make the adjustment but there appeared to be good reasons for this arising from the fact that the changes in the value of the currency had occurred during the war, and that this was the first opportunity since the end of the war to make the adjustment. Mr. E. McCARTHY (Australia) inquired whether it was the intention of the Brazilian Government to make a further adjustment now in order to take account of the changes in price level in the case of duties which were adjusted in 1945. In reply Mr. PARANAGUA said that, whereas an adjustment in the duty on wool had been made in 1945, the adjustments contemplated in the memorandum of procedure referred only to the period 1946/47. However, in cases of individual commodities if some adjustment had already been made racently consideration would be given to such earlier adjustments in determining the adjustment required now. M. LECUYER (France) said that the French Delegation supported the views of the Belgian Delegation: if all the principles involved were debated there would be long arguments; he thought that it should be acknowledged that the Brazilian tariff had lost much of its protective effect and therefore the E/ PC/ T/EC/SR/ 21 page 4 proposed increase should not be allowed to interrupt the negotiations. He. said it might be necessary, however, for the French Delegation to extend its requests for tariff concessions. Mr. J.P.D. JOHNSEN (New Zealand) enquired whether the 40% increase would apply to items included in the lists of offers of tariff concessions already made by the Brazilian Delegation, and in reply Mr. PARANAGUA recalled that all lists of offers issued by his Delegation included footnotes containing a reservation; therefore, the possibility of a re -adjustment had been known to all Delegations with which they were negotiating. Dr. SPEEKENMRIRK (Netherlands) urged the Committee not to lose sight of the fact that it was their purpose to bring about a liberalization of trade, and he asked whether it was not desirable to have generally some guarantee against large increased in duties not negotiatede. Mr. T.K. RE`S (United Kingdom) put three questions to the Brazilian Delegate: (1) would the Brazilian Delegation have any objection to receiving additional requests for concessions; (2) would currency depreciation be the only factor determining increases in the duties on non-negotiatad items; and (3) did the Brazilian Delegation intend to retain freedom to increase also the various supplementary duties. M4r. 0. PARANAGUA (Brazil) said that the point raised by Mr. Speekenbrink goes far beyond the subject discussed at this meeting; delegations are making no obligations to bind the rates of their own tariffs - if governments wished to do that an Entirely new question is raised. As for the future tariff policy of the, Brazilian Government he said that it was impossible to know the future of currencies or what adjustments E/PC/T/EC/SR/ 21 page 5 of tariffs might be required by circumstances. Further he said that the additional duties to which the United Kingdom delegate had referred were fiscal dues with no protective intention and no commitment concerning these was expected of the governments participating in the tariff negotiations. M. P.A. FORTHOMME (Belgium) said that he wished to support the opinions and suggestions of Mr. Speekenbrink and suggested that possibly deIegations might reaffirm their intentions to - _.. derately their freedom in respect of non-Jo t of non- negotiatod itcms. the question raised by Mr. Speekenbrink and oekonbrink a Mr. ForCHAIRMAN agreed that extensiveJthome, the changes in tariestrey the f'tuld dostue of ter but if anythe Char La governmentout a substantial alterationa brought a in the level ofated duties, other governments could requeste non-negot conn terms of Article 35.sultation i Mr.te BROWN (Uofnide Statese Anring to themrica) rfer tatement said that his delegation recognises that:Lon rocogC ent of spesific duties may be rendered necessary by nocesssary preciation; his delegation had some qualms about a qualms abo t now which follows from a depreciation which began n whin 4n 193L, but they evertheless impressed with the remarkstho re whicheen made in support of the plan and were prepared to red to accepteadjustment. He said that his delegation wouldlegati have to examine the effecthe f 'ihct r^'qmTlt on their negotiations razil but he was confidentr that a th B-z satisfactory arrangement becreached.ould QUHART Mr, nadaUUsaid that be recognised that zCarn8 Brazil's tariff wasarti not pnrV 'igh and that there wasw -ary a good case for rement; it was true that the lists of th2t t E/PC/T/EC/SR/21. Page 6 offers made by Brazil were qualified by a footnote but Document E/PC/T/151 provided the first indication that the proposed advance would be 40% if a readjustment of this magnitude were to be made it would be necessary for the Canadian Delegation to reconsider and perhaps modify their list of requests. Mr. REES (United Kingdom) said that he was not certain whether the Brazilian Delegate had given an answer to all of his questions. Whereupon Mr. PARANAGUA said that they could make no comment regarding the treatment of additional requests that might be submitted - it was a matter of negotiation. Referring to Mr. Rees's second question he said that the duties not negotiated would not be bound and they could be increased or even reduced; it was the spirit of the Charter that large increases should not be effected but future conditions could not be foreseen. Mr. RPDRIGUES added a comment on Mr. Rees's third question to the effect that it had been decided to dis- continue the discro,omatpru cpmsi,[topm tax: that an attemnt is being .made to abolish the 25 ad valorem tax; and that the general additional tax of 105 on the amount of duty was imposed primarily for revenue purposes.y for revenue r!:posesB of the fist question raisedst que-rbioan rr ised by the United Kingdo, eelegate and ethatsscd the opinion ,;h: certainly have the right to make new and all dAegations ld cer houghg of course the hte aditional rauo she Brazilian delegation would be under no obmeet ligation to those requests. A Mr. -ARéNAGUhe ould accent the ruling that otherr ucolled' a deleStions be allowed to revise their requests to Brazil, but could not recoggnise the riht of any delegation to receive concessions relatirequests with ng tompensation./o without Theh CHAIRMed up the results of the . tnn summaresults of the the delegates who had participatedelugates wha had partici- the legitimate character of the acxtion iria'te character o the E/PC/T/EC/SR/21. Page 7 proposed by the Brazilian Government but had reserved their right to modify the request that had been made by their delegations for concessions in the Brazilian tariff and further the Brazilian Delegate had accepted this position subject to a qualification that no concession should be expected without compensation. Mr. A. BRAGA (Brazil) said that this was an important decision for all delegations it has increased the Confidence of his delegation in the goodwill of the Conference which would ensure the success of the Charter and of the proposed Organization. Further he said that his Delegation would now be able to sped up its negotiations. In reply the CHAIRMAN said that no decision and no resolution had been taken; the Committee had merely discussed the Brazilian Tariff as it had previously discussed the tariffs of France and of the Belgium-Luxembour--Netherlands Union; members of the Committee had merely expressed their opinion. Mr R.L. FRESQUET (Cuba) said that he was pleased with the result Of the discussion and that the Cuban Delegation might haire a similar problem. Mr. BROWN (United States of America) said it was not clear what was meant by the remark of the Cuban Delegate and he wondered whether Mr. Fresquet would care to elaborate. Mr. FRESQUET (Cuba) said that in due time and in the proper manner all interested parties would learn of the problem to which he had referred and in order to avoid taking up more time he would not discuss it on this occasion. The Meeting rose at 12.50 p.m.

GATT Library

fr862cs9959

Summary Report of the First Meeting : Held on 21 January 1947 at 2:45 p.m

United Nations Economic and Social Council, January 21, 1947

United Nations. Economic and Social Council, Preparatory Commission of the Conference on Trade and Employment Drafting Committee, and Sub-Committee on Voting and Executive Board Membership

21/01/1947

official documents

E/PC/T/C.6/5 and E/PC/T/C.6/1-20

https://exhibits.stanford.edu/gatt/catalog/fr862cs9959

fr862cs9959_90230028.xml

GATT_156

United Nations Nations Unies UNRESTRICTED E/PC/T/C .6/5 ECONOMIC CONSEIL 21 January 1947 AND ECONOMIQUE ORIGINAL -ENGLISH SOCIAL COUNCIL ET SOCIAL DRAFTING COMMITTEE OF THE PREPARATORY COMMITTEE OF THE INTERNATIONAL CONFERENCE ON TRADE AND EMPLOYMENT SUB-COMMITTEE ON VOTING AND EXECUTIVE BOARD SUMMARY REPORT OF THE FIRST MEETING Held on 21 January 1947 at 2:45 p.m. 1. After the opening of the meeting through the Executive Secretary, Mr. Lacarto, the Sub-Committee elected the Delegate for Cuba, Sonor Guillerme Alamilla as its Chairman. The Chairman suggested that the work of the Sub-Committee be opened with the discussion of Article 64, so that the Sub-Committee might try to find a drafting solution for the problem of weighted voting. The BRAZILIAN Delegate expressed doubts whether this Sub-Committee or the Drafting Committee as a whole was entitled to deal with this subject inasmuch as the question of weighted voting entailed differences of a substantive nature. The majority of the Sub-Committee, however, held that the Drafting Committee as well as the Sub-Committee was within its terms of reference in dealing with the subject and that its objective was to try to present at least a narrowing down of the alternatives which had been elaboratod in London. After presentation on the part of the UNITED KINDOM Delegate of a proposal for weighted voting, the Sub-Committee decided to defer debate on weighted voting to a later date in order to enable all those Delegations intending to present proposals of their own to submit such proposals in writing for previous study on the part of the Sub-Committee. /2. Debate E/PC/T/C.6/5 Page 2 2. Debate on Article 68 (Membership on the Executive Board). Upon the suggestion of the Chairman, the Sub-Committee proceeded to confine the debate to the issue of the number of seats on the Executive Board and to the distribution of these seats between permanent and non-permanent members. The Sub-Committee entered into this debate with the understanding that such discussion did not entail any acceptance of the principle of permenent seats on the Executive Board, but merely used the principle of permenent seats and the further principle of "one country, one vote" as a working hypothesis. In view of the fact that the London alternatives of Article 68 provided for either 15 or 20 seats on the Executive Board, the Sub-Committee proceeded with an attempt to arrive at a compromise formula. The UNITED KINGDOM Delegate suggested a membership of the Executive Board of 17 or 18 members, while the UNITED STATES Delegate favoured, a smaller Board with a membership of not more than 15 members. -The Representative of the INTERNATIONAL MONETARY FUND explained the system used in the Internationai Fund under the Article of Agreement, under which 12 directors represent a membership of altogether 42. The UNITED KINGDOM raised the question whether the members of the Executive Board should represent their countries on this Board or should act as representatives of the Organization. Upon consultation of the text of Article 68 in all alternatives, the Sub-Committee agreed that the persons on the Executive Board would serve as representatives of their countries and not of the Organization. In order to gradually eliminate conflicting drafts, the Chairman suggested a discussion on the fourth alternative of Article 63 with a view to eliminating this draft, which radically differs from the three other alternatives. The BRAZILIAN Delegate pointed out that the statistical work of the /League E/PC/T/C.6/5 Page 3 League of Nations proves beyond doubt the existence of geographical trade groups and that for this reason the fourth alternative could not be eliminated. ; The UHILD STAM-S Deeegate, supported by the CEIIEAN Delegat& and by the otaitmazi argued that the principle of r nation contained in the other alternatives would in itself tend to provide for adequate geographical distribution without tying the hands of the Organization too strongly by application obua rigiE formula of geographical distri-otion. He also pointed (nt thaw yhe spirit of the Charter was to get ava7 from trading blocs and are.s and not contrlbute to their formation, The BRAZIIIAN Delegate reserved his position pending receipt of instructions from his Government. The SCuTH AFRICAX Dolegate pr6poczd a formulation similar t- the one of the Unitad Naaions Charter in resarC to the Economic cnd Social Council, boy inserting a clause that due reoar6. shuld be paid to adequate geo,aphical distributBiondin the membership of the Executive 3arc. The RAZIAN Delegate e_'eed to such a formulation if provisions uere included which allowed forBa cdarge in permanent seats on the 3oarS inhaccordance with future chan,.s in t:e economic importance of member countries. The IMTD STATES Delegate proposed a formulation whereby the Executive Board is always to include the six countries of chief economic . . . . . ipcrt-sce. he -UAZ7LADI legate accepte;. ths formulation contingent. uo instructions frc his Government and.provided agreement could be reached on the number of permaent seas3 on the Boa,;. Au extended diacuss'on ena-ed on the total ;c-ber vf seas on the Executive Board anion th3,raticbet;.en per.Tnen-eand non-permanent seats, with the majority of the Sub-Coritee advocating the principle that the non-permanent members of the Board should always be a majcrity over permanent /3osri E/PC/T/C.6/5 Page 4 Board members. The Delegates for BELGIUM, CHILE, and NETHERLANDS, and the Chairman, as Delegate of CUBA, expressed their preference for the smallest possible number of permanent seats notwithstanding their sustained objection to the principle of permanent seats as such. Upon express restatement on the part of the Chairman that the discussion proceed on the assumption of "one country, one vote" and on the assumption of permanent and non-permanent seats as working hypotheses, this Sub-Committee agreed to report to the full Committee on a compromise proposal of an Executive Board consisting of 15 members with 9 non-permanent and 6 permanent members. The UNITED KINGDOM Delegate reserved her consent pending further consideration of the matter, and the BRAZILIAN Delegate reserved his position pending the arrival of instructions from his Government. The UNlTED STATES Delegate suggested a draft whereby the Conference would be authorized to review in the future (every five or ten years), the economic importance of the member countries for the determination of permanent seats on the Executive Board. These provisions ought to be drawn up in similar fashion to these in the I.L.O. Charter. The Secretariat in co-operation with Mr. Kollogg of the UNITED STATES Delegation might be able to produce a tentative draft on this basis for the consideration of the Sub-Committee. After the UNITED STATES Delegate announced his intention to present a proposal on weighted voting, the meeting was tentatively adjourned until Thursday afternoon, 23 January 1947.

GATT Library

cg197qw4198

Summery Record : First Meeting In Executive Session held on Wednesday, 16th April, 1947, at 10.30 a.m. at the Palais des Nations, Geneva

United Nations Economic and Social Council, April 28, 1947

United Nations. Economic and Social Council and Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment

28/04/1947

official documents

E/PC/T/EC/SR.2/1 and E/PC/T/EC/SR. 2/1-21

https://exhibits.stanford.edu/gatt/catalog/cg197qw4198

cg197qw4198_90210052.xml

GATT_156

NATIONS UNIES NATIONS UNIES ECONOMIC CONSEIL RESTRICTED AND ECONOMIQUE E/PC/T/EC/SR.2/1 SOCIAL COUNCIL ET SOCIAL 28th April, 1947. SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT SUMMERY RECORD First Meeting In Executive Session held on Wednesday, 16th April, 1947, at 10.30 a.m. at the Palais des Nations, Geneva. Chairman: M. Max Suetens (Belgium). 1. The CHAIRMAN called an Mr. Paymans (Netherlands) to give a brief explanation of the new Netherlands - Belgium- Luxembourg tariff referred to by the representatives of these countries at the Plenary Session (document being circulated). 2.Before beginning his explanation, Mr. PAYMANS advised that the Belgium-Luxembourg and the Netherlands Delegations were ready to rely to lists of requests for tariff concessions already received from other member countries and based on the old tariff, unless members having submitted requests wished first to re-examine their lists in the light of the new tariff''. On the other hand, the two delegations intended to base their offers of concessions on the new tariff. 3. Mr. PAYMEAN explained that the Convention between Belgium-Luxembourg and the Netherlands consisted only in the application by the two partners of the same tariff on imports from a third country and in the exemption from E/PC/T/EC/SR.2/1. page 2. import duties of goods in mutual traffic. This did not represent a complete customs union but only the first stage. It was anticipated that the second stage - unification of other duties and taxes - and the third stage - economic Union with free traffic - would be achieved ultimately. The new tarriff was not simply an amalgamation of the previously existing tariffs, but a new systematically tariff with ad valorem rates., with a few exceptions. The level of the new rates was betvween that of the previous Netherlands rates, which were higher, and that of the previous Belgian rates, which were lower. In most cases an average between the two rates had been taken. In no case did the new tariff rates exceed the highest rate applied by either of the partners in 1939. . Finally, the new tariff conformed to the principles of the draft Charter. 4. Dr. SPEKENBRINK (Netherlands) explained that lists of reguests for tariff concessions had been submitted by Netherlends-Belgium-Luxembourg on behalf of all the customs territories of the Union, i.e. Netherlands-Belgium- Luxembourg, Netherlands East Indies, Surinam, Curacap and .the Belgian Congo... On the other hand, separate lists of offers of concessions would be submitted for these five different customs territories. 5. Mr. JOHNSON (New Zealand) asked: (a) whether goods from the Netherlands-Belgium- Luxembourg Union would have free entry into the Netherlands East Indies? E/PC/T/EC/SR. 2/1 page 3. (b) whether rates specified in the new schedule would apply generally, superseding rates fixed under existing agreements? 6. In reply to M.r. Johnson's first, question, Mr. GOTZEN (Netherlands) said that the goods from the Netherlands- Belgium-Luxembourg Union would not have free entry into the Netherlands East Indies since the N.E.I. had always been a separate customs territory and. was expected to remain so. Dr. SPEEKENBRINK (Netherlands) added that they were faced by the problem that Congo products had been accorded free entry into Belgiun, and consequently into the Netherlands under the new customs Agreement. Netherlands East Indies products had not had free entry into the Netherlands. In order to solve this problem, they might have to accord free entry to products of the Netherlands East Indies (or Indonesia) entering the Netherlands-Belgium--Luxembourg Customs Union as in the case of Congo products. Mr FORTHOMME (Belgiuim) reaffirmed their attention to maintain free entry of those goods from the Congo which previously had been admitted freely to the Belgo-Iuxembourg Union, although some temporary measures might be required due to the difficulties caused by the Netherlands adherence to the Union. 7. Dr. SPEEKENBRINK (Netherlands) replied to Mr. Johnson's second question that, since the new combined tariff would be the basis for current negotiations, it would remain to be seen at the conclusion of negotiations whether there was still any reason to refer to previously existing agreements. Mr. FORTHOMME (Belgium) added that E/PC/T/EC/SR. 2/1 page 4. member countries with which members of the Union had existing agreements could put forward their demands during current negotiations and that any such demands would be taken into account whenever possible. 8. Mr. HOLMES (United Kingdom) asked.: (a) on what basis the calculations had been made when converting the specific Belgian rates to ad valorem rates for the purpose of combining the tariffs for 1938? In a number cf cases the new tariff appeared to be, at any rate, as high as the higher of the two previous tariffs; (b) was it the intention that member countries submitting requests on Belgium-Luxembourg and on the Netherlands, based on the previous tariffs, should endeavour to submit a single list of requests based on the new combined tariff? 9. In reply to the first question, Mr. FORTHOMME (Belgium) said that the conversion from specific to ad valorem rates was based on 1939 prices and rates effective in 1939, although these were checked against 1936, 1937 and 1938 rates and prices,. In most cases the incidents did not vary. The general principle adopted in determining the new rates had been that the new rate should represent a mean between the two previous rates. As to the second question, Mr. FOTHOMME indicated that, it was their intention to examine lists of requests submitted and attempt to amalgamate them into one list on which they E/PC/T/EC/SR.2/1 page 5. could base their offers of concessions. If, on the other hand, delegations wished to revise their own lists of requests in the light of the new consolidated tariff it was open to them to do so. Dr. SPEEYENBRINK and Mr. FORTHOMME both assured the Committee that their Delegations would maintain close co-operation with negotiating teams of other member countries whether Netherlands-Belgium-Luxembourg revised the lists of requests on them., or whether the respective negotiating teams revised their own lists. 10. The CHAIRMAN suggested to the Committee that it would be useful to establish a small Working Party of experts to study and report as soon as possible to the Chairman's Committee the results of the questionnaire sent to all Heads of Delegations asking the dates on which Delegations would submit their lists of requests and offers. He proposed that the Working Party be composed of Mr. Wilgress (Canada), Mr. Hawkins (United States), Mr. Holmes (United Kingdom), Dr. Speekenbrink (Netherlands) and M. Baraduc (France). The Committee agreed the Chairman's proposals. 11. The Meeting rose at 11.45 a.m.

GATT Library

py408ck6060

Summery record of the First Meeting : Held at the Capitol, Havana, Cuba, Wednesday, 26 November 1947, at 10.45 a.m

United Nations Conference on Trade and Employment, November 26, 1947

Fifth Committee: Inter-Governmental Commodity Agreements

26/11/1947

official documents

E/CONF.2/C.5/SR.1 and E/CONF. 2/C. 5/SR. 1-15

https://exhibits.stanford.edu/gatt/catalog/py408ck6060

py408ck6060_90200082.xml

GATT_156

United Nations CONFERENCE ON TRADE AND EMPLOYMENT Nations Unies CONFERENCE DU COMMERCE ET DE L'EMPLOI UNRESTRICTED E/CONF. 2/C. 5/SR. 1 26 November 1947 ORIGINAL: ENGLISH FIFTH COMMITTEE INTER-GOVERNMENTAL COMMODITY AGREEMENTS SUMMRY RECORD OF THE FIRST MEETING Held at the Capitol, Havana, Cuba, Wednesday, 26 November 1947, at 10.45 a.m. The Comittee met at 10.45 a.m. under the acting Chairmanship of the President of the Conference, (Mr. Sergic I. Clark). Mr. George Hakim (Lebanon) was unanximously elected Chairman of the Committee. The Committee adjourned at 10.50 a.m.

GATT Library

bd118kp5203

Tariff Negotiation Procedures

United Nations Economic and Social Council, April 10, 1947

United Nations. Economic and Social Council and Preparatory Committee of the International Conference on Trade and Employment

10/04/1947

official documents

E/PC/T/36 and E/PC/T/34-44

https://exhibits.stanford.edu/gatt/catalog/bd118kp5203

bd118kp5203_92290040.xml

GATT_156

UNITED NATIONS ECONOMIC CONSEIL AND ECONOMIQUE SOCIAL COUNCIL ET SOCIAL RESTRICTED E/PC/T/ 36 APRIL 10, 1947 ORIGINAL: ENGLISH PREPARATORY COMMITTEE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT TARIFF NEGOTIATION PROCEDURES There is transcribed here below the text of a telegram circulated to members of the Preparatory Committee by the Secretariat on March 20 last, at the request of the United Kingdom Government. KINDLY BRING FOLLOWING TO ATTENTION YOUR GOVERNMENT BEGINS HAVE HONOUR TRANSMIT FOLLOWING VIEWS ON TARIFF NEGOTIATION PROCEDURE AT SECOND SESSION PREPARATORY COMMITTEE UNITED NATIONS CONFERENCE TRADE AND EMPLOYMENT RECEIVED FROM UNITED KINGDOM WITH REQUEST FOR CIRCULATION TEXT BEGINS PROCEDURE SET OUT SECTION F SECOND STAGE OF PROCEDURAL MEMORANDUM FORMING ANNEXURE TEN OF REPORT OF FIRST SESSION PREPARATORY COMMITTEE APPEARS TO PRESUPPOSE THAT BY OPENING OF SECOND SESSION EACH COUNTRY REPRESENTED ON COMMITTEE WILL HAVE RECEIVED LISTS OF REQUESTS ON IT FROM EVERY MEMBER. THIS HAS NOT BEEN FULFILLED IN THE EVENT AND WE OURSELVES HAVE RECEIVED FEW SUCE REQUESTS FROM OTHER COUNTRIES SO FAR. EVEN IF IT PROVES THAT BY 10 APRIL LISTS OF REQUESTS SO FAR AS WE ARE NATIONS UNIES CONCERNED ARE COMPLETED, THER3 IS CLEiRLY AlLREiDY TOO SHORT AN INTERVAL BETWEEN NOW AND THEN FOR US TO HAVE FINISHED OUR EXAMINATION OF THE REQUESTS AND TO HhVE FORMULATED OUR REPLIES TO THEM. AS WILL HAVE BEEN SEEN FROM COMMUNICATION MADE TO SECRETARIAT ON 24 FEBRUARY WE OURSELVES, LIKE SEVERAL OTHER COUNTRIES, ATTACH GREAT IMPORTANCE TO NEGOTIATIONS BEING FACILITATED BY EARLY EXCHANGE OF REPLIES TO REQUESTS. WHILE WE STILL BELIEVE THAT PROCEDURE CONTEMPLATED IN PROCEDURAL MEMORAJDUM IS THE BEST AND THAT IT SHOULD BE OPEN TO ANY COUNTRY WHICH IS PREPARED TO FOLLOW IT TO DO SD, WE FEEL TRHT IN CIRCUMSTANCLU OUTLINED ABOVE, SOME DEIARTURE FROM THAT PROCEDURE IS INEVITABLE AND VIEW WE HAVE REACHE IS AS FOLLOWS. oLT OPENING OF SECOND SESSION WE SHALL BE PREPARED VITH REPLIES TO REQUESTS RECEIVED FROM ANY COUETTRIES WHOSE LISTS HAVE BEEN IN OUR HANDS A REASONABLE TIME. WE SHOULD PROPOSE EITHER TO DRAW UP COMBINED LIST OF OFFERS BASED ON SUCH REQUESTS OR INDIVIDUAL LISTS OF OFFERS FOR INDIVIDUAL COUNTRIES WHOSE REQUESTS WE SHALL BY THEN HAVE !EEN ABLE TO CONSIDER IN THE N-CESSARY DETAIL. WE SHOULD PROPOSE, SUBJET TO RECIPROCITY, TO MA.I THIS COMBINED LIST OR SUCH INDIVIDUAL LISTS AVAILABLE TO EACH OF THE OTHER COUNTRIES WITH 'HOM WE ARE THUS IN A POSITION TO DEAL AND WE SOULD ALSO BE PREPARED TO COIMUNICATE LIST OR LISTS OF UNITED KINGDOM OFFERS TO UNITED NATIONS SECRETARIAT. IT MUST HOWEVER BE UNDERSTOOD TRAT IN NEW CIRCUM- STANCES AS WE SEE THEM THIS COMMUNICATION OF LIST OR LISTS EITHER TO SECRETARIAT OR ANY INDIVIDUAL COUNTRY WILL BE SUBJECT TO PROVISO THhT TPF= SHOULD NOT BE CIRCULATED TO OTHER MEMBERS OF PREPARATORY COUMITTEE UNTIL WE OURSELVES FEEL IN A POSITION TO AUTHORIZE SUCX MORE GENERAL RELEASE. AT THIS STAGE, THEREFORE, LIST OR LISTS MUST NOT BE COMMUNICATED BY RECIPIENT TO AMY OTHER PAW7L -_., ..- F<.w .ELEASE WOULD ALSO BE SUBJECT TO RECIPROCITY AND GENERALLY SPEAKING WE SHOULD NOT AUTHORIZE IT IN ANY CASE UNTIL SUCH TIME AS WE ARE ABLE TO GIVE OUR PEPIY TO REQUEST OF COUNTRY CONCERNED. TEXT ENDS ENDS TRYGVE LIE SEC RETARYGENERAL

GATT Library

cw739qz5051

Tariff Preferences

United Nations Conference on Trade and Employment, December 24, 1947

Joint Sub-Committee of Committees II and III on Tariff Preferences

24/12/1947

official documents

E/CONF.2/C.23/A/3, E/CONF.2/C.23/A/1-15, and C.26/A/1-24

https://exhibits.stanford.edu/gatt/catalog/cw739qz5051

cw739qz5051_90180393.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/C.2&3/A/3 ON DU 24 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH SECOND AND THIRD COMMITTEES JOINT SUB-COMMITTEE OF COMMITTEES II AND III TARIFF PREFERENCES The proposals and amendments referred to the Sub-Committe by Committees II and III are contained in the following documents: 1. Proposals on Article 15 in the Revised Annotated Agenda for Committee II, E/CONF.2/C.2/9. 2. The proposals on Article 16 in the Revised Annotated Agenda for Committee III (Section A of Chapter IV), E/CONF.2/C.3/6, and in E/CONF.2/C.3/6/Add.1. 3. The proposals on Article 42 in the Revised Annotated Agenda for Committee III (Section F of Chapter IV), E/CONF.2/C.3/11. The items in the following Agenda do not appear in the same order as in the Annotated Agendas; they have been rearranged for convenience in discussion, the new arrangement being based on the context of the proposals and the supporting statements. Four of the proposals were supported by statements which were not reproduced in the Annotated Agendas, namely: Afghanistan and seven other Delegations (C.3/1/Add.28), Burma (C.3/1/Add.47), El Salvador (11/Add.10) and Guatemala (C.3/1/Add.31). AGENDA I. REASONS AND JUSTIFICATION FOR NEW PREFERENTIAL SYSTEMS (a) "Adjacent Countries" 1. The Delegation of Argentina proposes (11/Add.3) the deletion of the reference to "frontier traffic" in paragraph 2 (a) of Article 42, thus leaving "advantages accorded by any Member to adjacent countries" as exceptions to Chapter IV. 2. The Delegation of Colombia proposes (C.3/1/Add.10) that Colombia, Ecuador and Venezuela be treated as "neighbouring countries" by an Annex under paragraph 2 (d) of Article 16. 3. The Delegation of Costa Rica proposes (11/Add.16) that Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua be treated as "neighbouring countries" by an Annex under paragraph 2 (d) of Article 16. /(b) "Same Economic E/CONF.2/C.2&3/A/3 Page 2 (b) "Same Economic Region" 4. The Delegations of Afghanistan, Egypt, Greece, Iran, Iraq, Lebanon, Syria and Turkey propose (C.3/1/Add.28) that "such preferences as may be put into force between the countries of the Near and Middle East", including Transjordan, should be exempted from the provisions of paragraph 1 of Article 16. 5. The Delegations of Lebanon and Syria propose (11/Add.14) that the provisions of paragraph 1 of Article 16 should not prevent "the conclusion of regional preferential tariff agreements desired to develop production in, and promote trade between, Members belonging to the same economic region". 6. The Delegation of Burma proposes (C.3/1/Add.47) that the provisions of paragraph 1 of Article 16 should not apply to "such preferences as may be put into force, or such regional arrangements as may be made, among the countries of South East Asia". 7. The Delegation of El Salvador proposes (11/Add.10) that the provisions of paragraph 1 of Article 16 should not apply to "such bilateral or multilateral preferences as are now in force between the countries of Central America, including Panama, or may be granted in the future". (c) "Complementary Economies" . 8. The Delegation of Argentina purposes. (11/Add.3) that the provisions of paragraph 1 of Article 16 should not apply to "any advantage, favour, privilege or immunity granted by a Meny pror to aVroduct originating in or deastanoiner for another Member country, provided that the Members concerned from ormfa group of complemontary ecocenemies -oparating on a compensatory basls and on a basis of equuylit,,urther , tee DeheaeDegation of Argentina proposes (11/A)dd.3 theition aon onf a ew sub-paragraph to gara'raph 2 of A rticl e 42to exempt from the provisions of C"a"ter "V ta group of complementaryneco-omie-s cooperating on a compenryatoy basis and on the basis of equality of treatment". (d) "Historical, Cultural and Economic Ties" 9. The Delegation of Turkey proposes (11/Add. 25) that the provisions of paragraph 1 of Article 16 sdhoul not a pplyto "such reciprocal erencest'estwee scuntriesp ormererlpart' o otheOttol6ma Empire and detached from it on 24 July1 923 as ar settforth in treaties cocluded by nTurkey." D. The Delegationoof Egypt proposes (C.3/1/Add.50) that the exceptions under paragraph 2 of Article 16 should be extended /to include E/CONF.2/C.2&3/A/3 Page 3 to include "preferences contemplated under agreement between Members of the Arab League". 11. The Delegation of Iraq proposes (C.3/1/Add.46) that a new paragraph be added to Article 42 exempting from the provisions of the Charter special arrangements with respect to economic relations between Members of the Arab League. 12. The Delegations of Bolivia (C.3/1/Add.33), Ecuador (C.3/1/Add.1) and Guatemala (C.3/1/Add.31) propose that the exceptions to m.f.n. treatment under paragraph 2 of Article 16 be extended to include preferential tariff systems which may be negotiated among Latin American countries. (e) "Economic Development" (i) Removal of Prior Approval 13. The Delegations of Argentina (11/Add.3), Chile (C.2/6/Add.4) and Venezuela (C.2/6/Add.18) propose the deletion of the second sentence in the first paragraph of Article 15 so as to remove the control of the Organization over the use of preferential arrangements for development purposes. With the same intent, the Delegation of Argentina would delete the second and third sentences of paragraph 2, while the Delegation of Chile would substitute "This statement shall be communicated by the Organization to all Members." The Delegation of Venezuela would rewrite paragraph 2 so as not to require the submission of a written statement to the Organization until after the preferential arrangement had been concluded; this statement would then be transmitted to other Members and any Member which considered that its trade was substantially damaged could communicate its views to the Organization and the procedure set forth in Article 13 would then apply. 14. The Delegation of Chile (C.2/6/Add.4) proposes to insert a new paragraph after paragraph 1 of Article 15 exempting from the provisions of paragraph 1 of Article 16 "preferences enforced between adjacent countries whose economic or industrial development is inadequate or backward....in order to apply industrial processes which are of special and reciprocal interest to them and to provide them with a sound and adequate basic market". (ii) Voting on Prior Approval /15. The E/CONF.2/C.2&3/A/3 Page 4 15. The Delegation of Ecuador would substitute (C.2/6/Add.21) a simple majority for the two-thirds affirmative vote required by paragraph 1 of Article 15. 16. At Geneva, the Delegation of Brazil entered a reservation on Article 15 (Geneva Report, page 16) pending a decision on the question of voting requirements. (f) Formation of a "Free Trade Area" 17. The Delegations of Lebanon and Syria propose (11/Add.14) the addition of a new sub-paragraph in paragraph 2 of Article 42 exempting from the provisions of Chapter IV "the formation of a free trade area by the conclusion of a free trade agreement involving the substantial elimination of tariffs and other restrictive regulations of commerce between Members belonging to the same economic region." II. TEMPORARY PREFERENCES FOR FIVE YEARS FOLLOWED BY A CUSTOMS UNION OR ELIMINATION BY NEGOTIATION 18. The Delegation of Czechoslovakia proposes (C.3/6/Add.1) the addition of a new paragraph to Article 16 exempting from the provisions of paragraph 1 "new preferential arrangements concluded between two or more countries belonging to the same economic region and designed to promote production or reconstruction in those countries", provided that within. five years the parties to the arrangements shall either decide to form a customs union or begin to reduce and finally eliminate the preferences in accordance with Article 17. III. PREFERENCES BETWEEN THE UNITED STATES AND CUBA 19. The Delegation of Peru proposes (11/Add.22) the deletion of sub-paragraph (c) of paragraph 2 of Article 16. The same proposal is made by the Delegation of Dominican Republic (C.3/1/Add.32) which gives as an alternative the extension of this sub-paragraph to provide that the preferences granted by the United States to Cuba should be enjoyed also by the Dominican Republic. The Delegation Hoiti proposes (C.13//Add.29) that this sub-paragraph be extended to cover all preferences among countries in the Caribbean area. IV. TERRITORIES CONNECTED BY COMMON SOVEREIGNTY 20. The elegation of Portugal. (C.13/1/Add.55) proposes a new Annex under paragraph 2 (b) of Article 16 to exempt from M.f.n. treatment the preferences in force exclusively among Portugese territories. /V. SPECIAL E/CONF.2/C.2&3/A/3 Page 5 V. SPECIAL REGIMES 21. The Delegation of Italy proposes (11/Add.18) to exempt from the provisions of paragraph 1 of Article 16 the special regime existing between the Republic of Italy and the Republic of San Marino and the State of the Vatican City, and the special regime which may be established between Italy and the Free Territory of Trieste. VI. DRAFTING AMENDMENTS 22. The Delegation of Chile proposes (C.3/1/Add.6) that the words "with the exception of the arrangements contemplated in Article 15" be added to paragraph 1 of Article 16. 23. The Delegation of the United Kingdom proposes (11/Add.8) an amendment intended to elucidate a point of substance, namely; that the word "by" where it first occurs in the first proviso in paragraph 2 (b) of Article 42, be replaced by the words "at the institution of".

GATT Library

qv334zf6371

Tariff Preferences Agenda for Fifth Meeting : To be Held, Friday, 2 January 1948, 10.30 a.m. Conference Room J

United Nations Conference on Trade and Employment, December 31, 1947

Joint Sub-Committee of Committees II and III on Tariff Preferences

31/12/1947

official documents

E/CONF.2/C.23/A/7, E/CONF.2/C.23/A/1-15, and C.26/A/1-24

https://exhibits.stanford.edu/gatt/catalog/qv334zf6371

qv334zf6371_90180397.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/C.2&3/A/7 ON DU 31 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH SECOND AND THIRD COMMITTEES JOINT SUB-COMMITTEE OF COMMITTEES II AND III TARIFF PREFERENCES AGENDA FOR FIFTH MEETING To be Held, Friyday, 2 January 1948, 10.30 a.m. Conference Room J ARTICLE 15 - PREFERENTIAL ARRANGEMENTS FOR ECONOMIC DEVELOPMENT (Reference E/CONF.2/C.2/9, paes 61 to 63). Continuation of discussion of the amendments proposed on Article 15 (see document E/CONF.2/C.2&3/A/6) DEUXIEME ET TROISIEME COMMISSIONS SOUS-COMMISSION MIXTE DES DEUXIEME ET TROISIEME COMMISSIONS PREFERENCES TARIFAIRES ORDER DU JOUR DE LA CINQUIEME SEANCE qui es tiendra le vendredi 2 janvier 1948 ? 10h.30 Salle des Conéfrences J ARTILCE 15 - ACCORDS REFERENTIELS EN VUE DU DEVELOPPMENT ECONOMIQUE (cf. Document E/CONF.2/C.2/9, pages 53 à 55). Suite de la discussion des amendements proposés relativement ? l'article 15. (cf . Document E/CONF.2/C. 2&3/A/6) .

GATT Library

dn744jp1206

Tariff Preferences Agenda for Fourth Meeting : To be Held, Tuesday, 30 December 1947, 10.30 a.m., Conference Room J

United Nations Conference on Trade and Employment, December 29, 1947

Joint Sub-Committee of Committees II and III on Tariff Preferences

29/12/1947

official documents

E/CONF.2/C.23/A/6, E/CONF.2/C.23/A/1-15, and C.26/A/1-24

https://exhibits.stanford.edu/gatt/catalog/dn744jp1206

dn744jp1206_90180396.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/C0NF.2/C.2&3/A/6 ON DU ORIGINAL :ENGLISH TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH SECOND AND THIRD COMMITTEES JOINT SUB-COMMITTEE OF COMMITTEES II AND III TARIFF PREFERENCES AGENDA FOR FOURTH MEETING To be Held, Tuesday, 30 December 1947, 10.30 a.m., Conference Room J ARTICLE 15 - PREFERENTIAL ARRANGEMENTS FOR ECONOMIC DEVOLOPMENT (Reference E/CONF.2/C.2/9, pages 61to 63) Paragraph 1 1. The delegations of Argentina and Chile propose the deletion of the second sentence so as to remove the control of the Organization over the use of preferential arrangements for development purposes. 2. The delegation of Ecuador would substitute a simple majority for the two-thirds affirmative vote required in the second sentence. New Paragraph 3. The delegation of Chile proposes to insert a new paragraph after paragraph 1 exempting from the provisions of paragraph 1 of Article 16 "preferences in force between adjacent countries whose economic or industrial development is inadequate or backward.... in order to apply industrial processes which are of special and reciprocal interest to them and to perovide them with a sound and adequate basic market". Paragraph 2 4. The delegation of Argentina would delete the second and third sentences, while the delegation of Chile would substistute "This statement shall be communicated by the Organization to all Members". 5. The delegation of Venezuela would delete the second sentence of paragraph 1 and would rewrite paragraph 2 so as not to require the submission of a written statement to the Organization until after the preferential arrangement has been concluded; this statement would then be transmitted to other Members and any Member which considered that its trade was substantially damaged could communicate its views to the Organization and the procedure set forth in Article 13 would then apply. /General E/CONF.2/C .2&3/A/6 Page 2 General 6. At Geneva, the delegation of Brazil entered a reservation on Article 15 pending a decision on the question of voting requirements.

GATT Library

vk771rh5139

Tariff Preferences Agenda for the Second Meeting : To be Held, Saturday, 27 December 1947, 4.00 p.m., Conference Room J

United Nations Conference on Trade and Employment, December 26, 1947

Joint Sub-Committee of Committees II and III on Tariff Preferences

26/12/1947

official documents

E/CONF.2/C.23/A/4, E/CONF.2/C.23/A/1-15, and C.26/A/1-24

https://exhibits.stanford.edu/gatt/catalog/vk771rh5139

vk771rh5139_90180394.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF.2/C.2&3/A/4 ON DU 26 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ENGLISH - FRENCH SECOND AND THIRD COMMITTEES JOINT SUB-COMMITTEE OF COMMITTEES II AND III TARIFF PREFERENCES AGENDA FOR THE SECOND MEETING To be Held, Saturday, 27 December 1947, 4.00 p.m., Conference Room J REASONS AND JUSTIFICATION FOR NEW PREFERENTIAL SYSTEMS Consideration of proposals contained in document E/CONF.2/C.2&3/A/3. DEUXIEME ET TROISIEME COMMISSIONS SOUS-COMMISSION MIXTE DES DEUXIEME ET TROISIEME COMMISSIONS PREFERENCES TARIFAIRES ORDRE DU JOUR DE LA DEUXIEME SEANCE qui se tiendra le samedi 27 d?cembre 1947 à 16 heures, salle J. MOTIFS ET JUSTIFICATION DE NOUVEAUX SYSTEMS PREFERENTIELS. Examen des propositions qui figurent dans le document E/CONF.2/C.2 & 3/A/3.

GATT Library

gt254xz7336

Tariff Preferences Agenda for Third Meeting : To be Held, Monday, 29 December 1947, 10.30 a.m., Conference Room J

United Nations Conference on Trade and Employment, December 27, 1947

Joint Sub-Committee of Committees II and III on Tariff Preferences

27/12/1947

official documents

E/CONF.2/C.23/A/5, E/CONF.2/C.23/A/1-15, and C.26/A/1-24

https://exhibits.stanford.edu/gatt/catalog/gt254xz7336

gt254xz7336_90180395.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CONF. 2/C.2&3/A/5 ON DU 27 December 1947 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH SECOND AND THIRD COMMITTEES JOINT SUB-COMMITTEE OF COMMITTEES II AND III TARIFF PREFERENCES AGENDA FOR THIRD MEETING To be Held, Monday, 29 December 1947, 10.30 a.m., Conference Room J ARTICLE 15 - PREFERENTIAL ARRANGEMENTS FOR ECONOMIC DEVELOPMENT (Reference E/CONF.2/C.2/9, pages 61 to 63) Paragraph 1 1. The delegations of Argentina, Chile and Venezuela propose the deletion of the second sentence so as to remove the control of the Organization over the use of preferential arrangements for development purposes. 2. The delegation of Ecuador would substitute a simple majority for the two-thirds affirmative vote required in the second sentence. New Paragraph 3. The delegation of Chile proposes to insert a new paragraph after paragraph 1 exempting from the provisions of paragraph 1 of Article 16 "preferences in force between adjacent countries whose economic or industrial development is inadequate or backward....in order to apply industrial processes which are of special and reciprocal interest to them and to provide them with a sound and adequate basic market". Paragraph 2 4. The delegation of Argentina would delete the second and third sentences, while the delegation of Chile would substitute "This statement shall be communicated by the Organization to all Members". 5. The delegation of Venezuela would rewrite paragraph 2 so as not to require the submission of a written statement to the Organization until after the preferential arrangement has been concluded; this statement would then be transmitted to other Members and any Member which considered that its trade was substantially damaged could communicate its views to the Organization and the procedure set forth in Article 13 would then apply. /General E/CONF.2/C.2&3/A/5 Page 2 General ' 6. At Geneva, the delegation of Brazil entered a reservation on Articgle g15 pendin a decision on the question of voting requirements.

GATT Library

tc229kd1095

Tariff Preferences Agenda : To be Held, Friday, 26 December 1947, 4.00 p.m., Conference Room C

United Nations Conference on Trade and Employment, December 24, 1947

Joint Sub-Committee of Committees II and III on Tariff Preferences and Joint Sub-Committee of Committees II and III

24/12/1947

official documents

E/CONF.2/C.23/A/2, E/CONF.2/C.23/A/1-15, and C.26/A/1-24

https://exhibits.stanford.edu/gatt/catalog/tc229kd1095

tc229kd1095_90180392.xml

GATT_156

United Nations Nations Unies UNRESTRICTED CONFERENCE CONFERENCE E/CON.2/C .2&3/A/2 24 December 1947 ON DU ENGLISH - FRENCH TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH SECOND AND THIRD COMMITTEES JOINT SUB-COMMITTEE OF COMMITTEES II AND III TARIFF PREFERENCES AGENDA To be Held, Friday, 26 December 1947, 4.00 p.m., Conference Room C 1. Election of Chairman. 2. Other organizational business. Consideration of Sub-Committees Agenda as set forth in document E/CONF.2/C.2&3/A/3 DEUXIEME ET TROISIEME COMMISSIONS SOUS-COMISSION MIXTE DES DEUXIEME ET TROISIERE COMMISSIONS PREFERENCES TARIFAIRES ORDRE DU JOUR de la seance qui se tiendra le vendredi 26 dTcembre 1947 à 16 heures dans la salle de Commission C 1. Election du PrTsident 2. Questions diverse d'ordre intTrieur 3. Examen de l'ordre du Jour de la Sous-Cormlission, conformTment au mandat figurant dans le document E/CONF.2/C.2&3/A/3

GATT Library

yn624hd3267

Tariff Preferences : Notes on First Meeting, held on Friday, 26 December 1947

United Nations Conference on Trade and Employment, December 26, 1947

Joint Sub-Committee of Committees II and III on Tariff Preferences and Joint Sub-Committee of Committees II and III

26/12/1947

official documents

E/CONF.2/C.23/A/W.1, E/CONF.2/C.2/D/W.1-3, C.23/A/W.1-3, and C.26/A/W.1-29

https://exhibits.stanford.edu/gatt/catalog/yn624hd3267

yn624hd3267_90180339.xml

GATT_156

United Nations Nations Unies RESTRICTED CONFERENCE CONFERENCE E/CONF.2/C .2&3/A/ CONFERECE DU W .1 TRADE AND EMPLOYMENT COMMERCE ET DE L'EMPLOI 26 December 1947 ORIGINAL: ENGLISH SECOND AND THIRD COMMITTEES JOINT SUB-COMMITTEE OF COMMITTEES II AND III TARIFF PREFERENCES Notes on First Meeting, Held on Friday, 26 December 1947 1. ELECTION OF CHAIRMAN Mr. S. Sahlin was unanimously elected Chairman of the Sub-Committee. 2. THE SUB-COMMITTEE'S AGENDA The Committee discussed the order of work proposed in the Agenda prepared by the Secretariat (document E/CONF.2/C.2&3/A/3) containing the proposals and amendments relating to new preferential arrangements affecting Articles 15, 16 and, 42. Several changes in the order of work were agreed. upon. 3. ARTICLE 42 The Sub-Committee reviewed the decision of Committee III to refer to this Sub-Committee the proposals on Article 42 which concerned new preferential arrangements, and to the Sub-Committee on Section F of Chapter IV the proposals relating to customs unions, and came to the conclusion that it would be preferable for one Sub-Committee to examine all the proposals on Article 42 since those affecting customs unions were closely related to those on preferences. Accordingly, the Chairman of the Sub-Committee was asked to discuss with the Chairman of Committee III the possibility of referring all the proposals on Article 42 to this Sub-Committee. 4. FRONTIER TRAFFIC The Sub-Committee discussed the proposal of the delegate of Argentina to delete the reference to "frontier traffic" from paragraph 2 (a) of Article 42, thus leaving "advantages accorded by any Member to adjacent countries" as exceptions to Chapter IV. This discussion is to be continued at the next meeting.

GATT Library

jm672nc4963

Tariff preferences : Notes on Second Meeting, held on Saturday, 27 December 1947

United Nations Conference on Trade and Employment, December 27, 1947

Joint Sub-Committee of Committees II and III on Tariff Preferences and Joint Sub-Committee of Committees II and III

27/12/1947

official documents

E/CONF.2/C.23/A/W.2, E/CONF.2/C.2/D/W.1-3, C.23/A/W.1-3, and C.26/A/W.1-29

https://exhibits.stanford.edu/gatt/catalog/jm672nc4963

jm672nc4963_90180340.xml

GATT_156

United Nations CONFERENCE ON TRADE AND EMPLOYMENT Nations Unies RESTRICTED CONFERENCE E/CONF. 2/C .2&3/A/ CONFERENCE W. 2 DU 27 December 1947 COMMERCE ET DE L'EMPLOI ORIGINAL: ENGLISH SECOND AND THIRD COMMITTEES JOINT SUB-COMMITTEE OF COMMITTEES II AND III TARIFF PREFERENCES Notes on Second Meeting, Held on Saturday, 27 December 1947 Chairman: Mr. S. SAHLIN (Sweden) Order of Work The Sub-Committee discussed the order in which the proposals referred to it should be considered and decided to take them in the order in which the Articles appear in the Charter, commencing at the next meeting with Article 15.