CAB129-35 — Page 40

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ANNEX A

Page 40

TEXT OF PRESIDENT TRUMAN'S MESSage to CongRESS

"I submit herewith, for the consideration of the Congress, the Charter for an International Trade Organisation prepared by a conference of the United Nations which met in Havana in 1948, together with a memorandum from the Secretary of State. The Charter is designed to do two things: to establish a code of international conduct to guide nations in dealing with the fundamental problems of world trade, and to create an agency, within the framework of the United Nations, to help implement this code.

We have learned through bitter experience how necessary it is for nations to approach jointly the task of improving the conditions of world trade. During the 1930's many nations acted independently, each attempting to gain advantage at the expense of others. The result was a vicious circle, with restrictions by one nation provoking more serious restrictions by other nations in retaliation. The end result was a tremendous drop in the volume of international trade which made the general depression worse and injured all countries.

Since the recent war, though some nations have again acted unilaterally, there has been a general resolve to prevent the vicious circle of restrictions and to achieve progressively freer trade. To gain this objective, action by many nations is necessary. No one nation alone, and no small group of nations can have enough impact on the network of obstructions that has been built up.

The United States' programme of reciprocal trade agreements has been a shining beacon of co-operative action to reduce tariff barriers, and it is vitally necessary that the Reciprocal Trade Agreements Act be extended in full force. But it is clear that trade agreements alone are not enough. These agreements do not touch certain important obstacles to the expansion of trade. Besides, cartels and many other devices have important effects in limiting trade or creating disadvantages for one country as compared with another. What is needed is co-operative action to attack the whole range of obstacles that stand in the way of broadening international trade.

The Havana Charter is a major step towards achieving that objective. It was agreed upon by the representatives of fifty-four nations after more than two years of preparatory study and negotiation.

The Charter establishes an international organisation which is essential to continuous and effective international co-operation in the field of trade. The nations accepting membership in the International Trade Organisation commit themselves to abide by fair and liberal principles of trade. They agree to take no action which may injure another nation without first making genuine effort to reach a constructive solution through consultation, either directly between themselves or through the organisation. They agree to work together continuously to achieve progressively greater trade and to settle differences with respect to national policies that affect the flow of international commerce.

The Charter is the most comprehensive international economic agreement in history. It goes beyond gue generalities and deals with the real nature of the problems confronting us in the present world situation. While it does not include every detail desired by this nation's representatives, it does provide a practical, realistic method for progressive action toward the goal of expanding world trade.

The United States can be proud of its leadership in this constructive action to help the nations of the world work their way out of the morass of restriction and discrimination that has gripped international trade ever since the first World War. The alternative to the Charter is economic conflict and shrinking inter- national trade.

This Charter is an integral part of the larger programme of international economic reconstruction and development. The great objectives of the European recovery programme will be only partially realised unless we achieve a vigorous world trading system, The economic advancement of under-developed areas likewise depas 409fargely upon increasing the internationalexchange of goods and services. Thus, the Charter is an effective step toward the growth of produc- tion, and toward the maintenance of employment and economic stability. It is

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funda Pagtal4o the 36ogressive, expanding world econorPagevith lotɓ36increasing welfare and prosperity of the people of the United States. The great structure of international co-operation that is being erected through the United Nations must rest upon a solid foundation of continuous co-operation in economic affairs.

The Charter for an International Trade Organisation is a necessary part of that foundation, along with the special arrangements that have been made in the fields of money and credit, transportation and communications, food and agriculture, labour and health.

As an essential forward step in our foreign policy, I recommend that the Congress authorise the United States to accept membership in the International Trade Organisation."

This Annex contains:—

ANNEX B

STATEMENTS ON THE CHARTER

(1) The joint statement by the United States and the United Kingdom issued at the same time as the United States "Proposals for consideration by an International Conference on Trade and Employment."

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(2) An extract from the statement by the Prime Minister in the House of

Commons on 6th December, 1945, regarding the Proposals (Cmd. 6709).

(3) An extract from the statement by Mr. S. L. Holmes, Acting Leader of the United Kingdom Delegation, at the Final Plenary Session of the United Nations Conference on Trade and Employment at Havana on 23rd March, 1948.

(4) An extract from the statement by the President of the Board of Trade in

the House of Commons on 15th April, 1948.

1. Joint statement by the United States and the United Kingdom regarding the understanding reached on Commercial Policy

6th December, 1945.

The Secretary of State of the United States has made public to-day a docu- ment setting forth certain "Proposals for consideration by an International Conference on Trade and Employment." These proposals have the endorsement of the Executive branch of the Government of the United States and have been submitted to other Governments as a basis for discussion preliminary to the holding of such a conference.

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.

The two Governments have also agreed upon the procedures for the inter- national negotiations and implementation of these proposals. To this end they have undertaken to begin preliminary negotiations at an early date between themselves and with other countries for the purpose of developing concrete arrangements to carry out these proposals, including definitive measures for the relaxation of trade barriers of all kinds.

These negotiations will relate to tariffs and preferences, quantitative restric- tions, pubsidies, State trading, cartels and other types of trade barriers treated in the document published by the United States and felt36bove. The negotiations will proceed in accordance with the principles laid down in that document.

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2. Extræage042ṭof 36ement by the Prime Minister in tRagoue of 3'6hn

on 6th December, 1945

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The Secretary of State of the United States has made public to-day a document setting forth certain Proposals for consideration by an International Conference on Trade and Employment.' These proposals have the endorsement of the Executive branch of the Government of the United States and have been submitted to other Governments as a basis for discussion preliminary to the holding of such a conference. 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.

The two Governments have also agreed upon the procedure for the inter- national negotiations and the implementation of these proposals. To this end, they have undertaken to begin preliminary negotiations at an early date between themselves and with other countries, for the purpose of developing concrete arrangements to carry out these proposals, including definitive measures for the relaxation of trade barriers of all kinds. These negotiations will relate to tariffs and preferences, quantitative restrictions, subsidies, State trading, cartels and other types of trade barriers treated in the document published by the United States and referred to above. The negotiations will proceed in accordance with principles laid down in that document

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3. Extract from the Statement by Mr. S. L. Holmes, Acting Leader of the United Kingdom Delegation, at the Final Plenary Session of the United Nations Conference on Trade and Employment at Havana on 23rd March, 1948

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It will be within the knowledge of many delegations here that the Government of the country which I represent have felt it necessary to weigh most carefully the question whether they could authorize me to sign this Final Act. As I have explained on other recent occasions, the signature of an instrument of this sort on behalf of the United Kingdom of Great Britain and Northern Ireland is something to which, according to our tradition in these matters, no mean significance attaches. The Government of the United Kingdom much regret that neither in its general balance nor in its detailed provisions is the Draft Charter wholly satisfactory to them.

The Government believe that the Charter as now drawn goes too far in the relaxation of control over quantitative restrictions for developmental purposes and that closer control would, in the end, have helped, and not hindered, the countries at whose insistence these provisions have been redrafted. But still less satisfactory to the Government of the United Kingdom is the final form of the article providing for new preferences. We believe the contribution we have made towards general agreement and in fulfilment of the original Proposals from which this Charter sprang, by way of limiting and providing for the reduction and even the elimination of preferences we enjoy, to be a very considerable contribu- tion. Yet at the same time as we are to accept these provisions we have been asked to accept another provision opening up the prospect of a new range of preferences in the interests of economic development on the accidental basis of geography. In accordance with the footnote to the article, however, the Organisa- tion is not bound by a narrow interpretation of region in its study of new preferences which conform to the purposes and the terms of the article, provided a sufficient degree of economic integration exists between the countries concerned. I am now in a position formally to withdraw my reservation on this article. But I must make it clear that the Government of the United Kingdom will look to the Organisation to interpret the article, with the footnote forming part of it, as authority equitably to consider such proposals as might be put forward for new preferences between particular component territories of our economic group. They will expect supp preferences with the same end in

such proposals to be considered on the same basis as proposals

covered ye countries. This they regard as the object of the footnote.

Beween other

They will feel it

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necessary to watfly be administration of this article very acarefullyf 506that there is no unfairness between the treatment of the British Commonwealth and that of other economic groups.

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I must also refer to the article dealing with exceptions to the rule of non- discrimination. This has provided one of the most difficult and complicated problems of the conference. The matter is one of vital concern to countries like our own, whose economies have been subjected to such violent strains in the achieve- ment of common victory in a long and terrible war. For some years to come, such countries will require latitude to depart from the strict rule of non-discrimination. This, in a certain measure, is provided by the article in question. The United Kingdom, in common, we believe, with many other countries, will need to make full use of this latitude in the efforts which, at the cost of great sacrifices to her people, she is now making to secure another victory and to bring nearer the common aims behind the Charter of restoring convertibility and full multilateral trade. Without the United Kingdom, one of the world's greatest markets and one of the world's greatest exporters, those aims could not be achieved. This article is designed to meet the immediate position; we shall have to take full advantage of its provisions.

I have emphasised the fact that signature of the Final Act of this Conference on behalf of the United Kingdom is a decision not taken lightly by the Govern- ment of my country; it is a decision the importance of which will not, I hope, be lost on the other countries here represented. But, while it signifies that my Government intend to recommend this Charter in due course to the Parliament of the United Kingdom, their ability to do so when the time comes will necessarily depend upon circumstances not fully within their own control. These will include in particular the general balance of payments position in which the United Kingdom then finds herself and also finds other countries upon which her economy largely depends and whose economies depend largely upon her own.

4.-Extract from Statement by the President of the Board of Trade in the House of Commons on 15th April, 1949

I have made available in the House to-day the documents resulting from this Conference. One of these papers reproduces the text of the Havana Charter of the International Trade Organisation which was authenticated by the Final Act of the Conference. Apart from certain points to which the United Kingdom Delegate made reference in the final plenary sessions of the Conference, the effect of the Charter generally does not materially differ from the Geneva draft, which has already been laid before Parliament as Cmd. 7212, but hon. Members will no doubt wish to have the opportunity to study it. Although His Majesty's Government hope in due course, if circumstances are favourable, to recommend the Charter to Parliament with a view to acceptance, it is not their intention to do this in the immediate future.

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