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the U. S. S. R., Yugoslavia, and, after 1936, Latvia; and the C. I. B. functioned as its secretariat. These nine countries currently produced 95 per cent of Europe's soft-wood-lumber exports. Neither net-importing countries nor the important overseas lumber exporters, Canada and the United States, were included. Yearly export quotas were assigned, in a total fixed at the highest level of prospective exports, and enforced by export licenses in some countries and by contractual obligations in Sweden and Finland. The E. T. E. C. was credited with restoring congdence in the lumber market, improving relations among leading exporting countries, and promoting substantial improvement in international timber statistics. Its reputation suffered when lumber prices fell in 1938 under the pressure of business recession, and it came to an end soon after Germany invaded Poland. German-dominated agencies superseded these arrangements, and from 1942 the Berlin-centered European Forest and Forest Produets Commission annually fixed production, import, and export quotas for lumber, pulp, and plywood in ten affiliated Axis-dominated and neutral countries. The C. I. B. also ceased to function after most of the European continent was overrun by the Nazis.

BEEF

One highly specialized I, C. A. provided for an International Beef Conference To Regulate the Supply of Beef to the United Kingdom Market, which became nominally effective January 1, 1937.97 This covered all forms of beef and real. edible offals thereof, and live cattle for slaughter. The United Kingdom was clearly the dominant party, but the participating governments eventually included two British Dominions, Erie, and three South American beef exporters. Argentina acceded June 28, 1937, Brazil on December 15, 1937, and Uruguay on January 6, 1939.

The conference--an outgrowth of the Ottawa Agreements of 1932—was designed to protect British beef producers, to give imperial preference to Australian, New Zealand, and Irish producers, to keep non-Empire beef imports into the United Kingdom within bounds consistent with such protection and preference, and to facilitate a smooth flow of beef imports that would permit substantial stability of beef prices in Great Britain. In bilateral agreements with the British government, the others undertook to cooperate to insure the effective operation of the control.

Subject to limitations specified in the agreement, the conference made "recommendations with regard to the total quantities of beef and the various classes of beef to be exported from time to time to the United Kingdom, and to the proportions of those totals to be exported from each country. ...". The quarterly quotas thus unanimously recommended became the basis for export regulations; it was never necessary because of lack of unanimity to refer the decision to the British government. British farmers were represented by a person nominated by their organization and appointed by the British government. British consumers were represented by a Board of Trade official. An Empire Beef Council was set up to consider "matters affecting the well-being of the Empire beef trade ...," and in December, 1938, its scope was broadened and its name changed to Empire Meat Council.

Until the onset of war caused its suspension, this scheme worked well from the standpoint of the protected interests. Beef import prices were stabilized at about 5d. per pound for Argentine chilled quarters. The scheme, of course, permitted discrimination against the cheapest source of supply, Argentina, whose government and producers would have preferred lower prices and larger quotas. The agreement served merely to facilitate some co-ordination of bilateral arrangements, which have continued during the war under the British Ministry of Food.

Evolution of this limited pre-war scheme into a world beef agreement has not been seriously urged. Indeed, it might not be welcomed by either the United Kingdom or the United States--by the United Kingdom because the change might involve breakdown of British domination and modification of the proter tionist features and perhaps raise the price of beef imported into Britain; by the

$The principal basic documents are printed in I. L. 0., 1. 0. C. A.'s, pp. 69-72. See also M. E. Wright, *Organized Marketing of Export Commodities in Australia," Foreign Agricul. ture, IX (November, 1945), 169-71. In correspondence Mr. Wright has withdrawn his statement that in 1938 "the functions of the Beef Conference were extended to include the regulation of mutton and lamb supplies in the British market, and the name of the organi. zation changed to the International Meat Conference." As 'mentioned below, it Fas the Empire Beef Council whose scope and name were altered. 38 The interests of Canada, South

Africa, and the smaller non-Empire producing countries were to be represented by the United Kingdom at their request.

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United States because American beef producers prize their vested interest in the domestic market and would presumably fight any move to introduce Argentine competition. If thorny Argentine American beef questions * and broader issues are ever to rece.ve international consideration, the Food and Agriculture Organization or other agencies will presumably be involved.

WOOL During World War I the British government purchased the entire exportable surpluses of wool from the three important wool-growing Dominions-Australia, New Zealand, and the Union of South Africa. This terminated on June 30, 1920. A severe slump in wool prices in the ensuing months led, early in 1921, to the organization of the British-Australian Wool Realisation Association, Ltd., which undertook to market the accumulated surplus in an orderly manner. The Australian government fixed a minimum reserve price of 8d. (about 15 cents) on wool sold for export from Australia, but wool prices soon recovered, and this arrangement was allowed to expire after six months. B. A. W. R. A. completed its surplus-liquidation task early in May, 1924, to the satisfaction of all concerned. In all it disposed of some eight hundred million pounds (grease basis), of which over two-thirds was Australian wool and most of the rest New Zealand wool.60

In 1936 the three Dominions named co-operated in establishing an International Wool Secretariat in London, which has engaged primarily in research and publicity designed especially to meet threats from synthetic fibers.

Another Imperial Wool Purchase Scheme, based on separate but similar agreements with the Australian, New Zealand, and South African governments, was operative in World War II; and the British government's purchase commitments covered one full season after the end of hostilities. As the end of the war approached, unsold accumulations promised to exceed three billion pounds (grease basis), and total world stocks to be around four billion pounds-equal to a large world clip, and more than double the pre-war annual international trade in wool. Australian wool growers pressed for extension of the wartime purchase commitment and permanent abolition of the auction system of selling wool. A London Wool Conference held in April-May, 1945, produced an excellent report recommending a four-country surplus-disposal and price-stabilization agreement for wool. Publicly announced after VJ-Day, this is in process of implementation.

The new agreement supersedes the wartime arrangements as from July 31, 1945, through 1945–46 will be a transitional season without change in the guaranteed price. The accumulated wool stocks owned by the British government are to be taken over by an incorporated Joint Organization (J. O.) with eight shares, of which four will be held by the British government, two by the Australian, and one each by the New Zealand and South African governments. The board of directors will consist of one government nominee for each share held, an independent chairman jointly appointed by the four governments, and (without voting power) the chairmen of a subsidiary company in each of the three Dominions. J. O. will buy, hold, and sell wool as the agent of the four governments. The auction system is to be shortly restored, but special representatives of the four governments, with the advice of the J. 0. board, are to fix the general level of "reserve" or floor prices on wool before each selling season opens and at other times as may be required. . While it is the obvious intent to liquidate the surplus over a period of years (provisionally estimated at thirteen), J. 0. may in some years be a net purchaser of wool. It remains to be seen what relative importance will be attached to disposal of stocks, the price level, and "reasonable stability" of wool prices. One significant provision reads:

"The International Wool Textile Organization will be invited to nominate representatives to form, with the addition of representatives from major consuming countries not members of the Organization, a Committee to act in a consultative capacity to the board of the Company [J. 0.] from the point of view of wool consumers.'

** See E. B. Shaw, “United States Restrictions on Argentine Beef,Scientific Monthly, LXI (August, 1945), 101-8; and C. L. White, “The Argentine Meat Question," Geographical Revieto, XXXV (October, 1945), 634-46.

40 ('ommonwealth of Australia, Official Year Book, 1925, pp. 680-81 : Primary Producer (Perth, W. A.), March 9, 1944, p. 4; Wright, "Organized Marketing of Export Commodities in Australia," op. cit., pp. 162-64.

This scheme and its operations are perhaps best covered in numerous issues of the * See Commonwealth of Australia, Report and Recommendations of Conference Held in London April-May 1945: Post-roar Wool Realisations (August 30, 1945), and Board of Trade Journal (London), September 8, 1945, pp. 421-23.

PETROLEUM Despite a great deal of international combination and competition in oil, chiefly among corporations but involving some governments, there had been no worldwide oil cartel and no I. C. A. for oil until an Anglo-American interim agreement on crude petroleum and its derivatives was signed on August 8, 1941. This contained a statement of broad principles and provided for an International Petroleum Commission with certain limited powers. It was designed not only to promote the early solution of pressing international problems arising over oil in the Middle East but also to pave the way for a "world oil accord” to be signed by many nations. The underlying purpose has been officially stated to be, in brief, "preventing friction between nations growing out of problems of foreign oil and assuring to all an adequate supply."

Secretary of the Interior Ickes, petroleum administrator for war, went on record in the American Magazine for January, 1944, as favoring an I. C. A. on oil among the big powers :

(1) to share as a postwar responsibility the rehabilitation of war damage to oil facilities in all parts of the world, including Russia, the Dutch East Indies, Rumania, etc.; (2) to make oil supplies available upon fair and equitable terms to all nations and peoples; and (3) to forbid oil supplies to any nation which violates the basic principles of international law as defined by the Cnited Nations at the peace table.

On February 6, 1944, however, he suddenly announced an agreement between the American official Petroleum Reserves Corporation and two American oil companies, under which the United States government would build and maintain a vast pipeline system in the Middle East. This news gave rise to widespread apprehensions both at home and abroad

These apprehensions were quieted by the announcement of the Anglo-American agreement. But the agreement itself was attacked as ambiguous and vague, and American independent oil interests also vigorously protested that it opened the door to highly objectionable cartel regulation. At the request of Secretary Ickes, the National Oil Policy Committee of the Petroleum Industry War Council formulated, and submitted in December, 1944, its proposal for a revised agreement. The official agreement was duly submitted to the Senate for advice as to ratification. Apparently because of the attacks upon it, the Senate Committee on Foreign Relations took no steps to act upon the agreement, and early in 1945 the President formally recalled it for revision.

A thoroughly re-written agreement was signed in London on September 24. 1945, and promptly submitted to the United States Senate. Up to March 1, 1946, no action had been taken upon it. Like its predecessor, the new pact is designed to be the forerunner of a multilateral international petroleum agreement; and the bilateral international petroleum commission for which it provides is conceived as the forerunner of a larger international petroleum council. The revised agreement is more carefully worded to avoid the charge that it is a commoditycontrol agreement or a government-sponsored cartel. The functions of the commission are essentially those of consultation, study, report, and recommendation.

Obviously, the experience in this field to date concerns merely the steps toward an I. C. A. for oil, and even the bilateral agreement may not be in effective operation for several months.

SUMMARY OBSERVATIONS · If one considers the range and volume of commodities entering into internanational trade, the proportion subject to control or substantial influence by intergovernmental commodity agreements was negligible until 1931, slight until 1933. and significant only in 1935–39. At their widest extent in 1937–39, I. C. A. regulated commodities comprised tin, tea, rubber, sugar, beef, lumber, fur seals. north Pacific halibut, whaling, and narcotic drugs. Almost none of these was universal in scope; and I. C. A. controls over sugar, lumber, and whaling were. in fact, especially far from complete. The only 1. C. A.'s that have effectually operated for as long as five years were those for tin, tea, rubber, fur seals, halibut, and drugs.

43 Pertinent among many possible references are Frederick Haussmann, "World on Control: Past and Future," Social Research, IX (September, 1942), 334-55 Hexner, op. cit., pp. 256-62; Herbert Feis. Petroleum and American Foreign Policy ("Food Research Institute, Commodity Policy Studies," No. 3 (Stanford University, Calif., March, 1944]);

and Department of State Bulletin, August 13, 1944, pp. 153-56, January 14, 1946, pp. 102-3. August 5, 1945, pp. 173–75, and September 30, 1945, pp. 481-83.

During the war years most of the existing I. C. A.'s came to be largely superseded by unilateral governmental controls or bilateral arrangements. By the end of 1945, few of the pre-war agreements that continued in nominal existence had been reactivated, the coffee and wheat agreements had virtually ceased to function, specialized new I. C. A.'s for wool and petroleum had only recently been published, one of these was awaiting ratification, and a one-year whaling agreement was in limited force.

The recent official American proposals, already accepted in principle by the British government, are that renewal, modification, and expansion of I. C. A.'s should proceed under a new International Trade Organization and be supervised by its subsidiary Commodity Commission, in harmony with principles to be considered at a forthcoming International Conference on Trade and Employment. The principles under serious discussion would require marked departures from past practices.

Commodity-control I. C. A.'s among a few producing countries under AngloDutch leadership operated continuously in tea, tin, and rubber in several years of the decade preceding World War II. Two of these admitted advisory representation of tin- and rubber-processing industries in the chief importing and consuming countries. All three exercised their export and production controls with a view to price maintenance and achieved limited success in respect of price stability. None seriously tackled the problem of readjusting excess capacity. The schemes tended to shelter high-cost producers and producing countries, and one (rubber) discriminated against small native producers. Radical changes in tin and rubber export quotas entailed marked fluctuations in employment. 'Bufter-stock operations were undertaken only for tin, and these only on a limited scale. The lumber 1. C. A., under the lead of Continental European exporting countries, had limited aims and success.

Commodity-control agreements including numerous exporting and importing countries were established only for wheat (1933) and sugar (1937), with highly disappointing results. Such service as the coffee agreement rendered during the war does not clearly foreshadow success with a corresponding or broader agreement in peacetime. Conservation agreements for specific marine resources and abuse-control agreements for narcotic drugs proved their value, though hardwon achievements in whaling and drug control were limited. Investigatory and consultative agrements such as the coffee agreement has become, as the interim wheat agreement of 1942 has been, and as the petroleum agreement seems designed to behave thus far been tested in peacetime only in the field of marine resources. The short-lived silver agreement was essentially another move to support American silver-producing interests at Treasury expense. The beef agreement was primarily a British-dominated scheme for protecting British and Dominion producers of a commodity of which the Empire is a net importer. The recent wool agreement is a British Commonwealth's undertaking with a commodity of which the Empire is a net exporter. This surplus-disposal I. C. A. is promising in prospect, and its provision for consulting participation seems an improvement on proposals for full-fledged membership by net-importing countries.

Pre-war and wartime experience with I. C. A.'s brings out the great difficulties and delays incident to reaching and rationally revising agreements and their vulnerability to breakdown, especially when numerous countries have important conflicting interests. It reflects tendencies to rely unduly on a favorite restrictive device, export quotas; to be timid in the face of strongly backed nationalistic commodity policies; and to avoid grappling with problems of fundamental economic readjustment.

Recent discussions have tended to focus on I. C. A.'s of the commodity-control type. In the light of experience the conversion of these into desirable and constructive economic institutions appears fraught with considerable difficulties. Other types, in which there has been relatively limited experience, may actually hold more promise.

EXHIBIT XIV

ITO CHARTER AND THE INTERNATIONAL COURT OF JUSTICE In the course of the testimony of Messrs. Phillips, Stinebower, and Terrill of the Department of State at the hearings of the Senate Committee on Finance on the draft ITO Charter, a number of questions were asked concerning the rela

4 See Proposals cited in n. 1.
Source: Food Research Institute, Stanford University.

tion between certain provisions of the Charter and the United States declaration of acceptance of compulsory jurisdiction of the International Court of Justice Senator Millikin requested a memorandum on this subject. The questions asked related to: (1) the extent to which the Department of State favors the provisions relating to the Court in the New York draft of the Charter (article 86, paragraphs 2, 3, and 4); (2) the relation between jurisdiction of the Court under the Charter and the United States reservation as to domestic matters in its declaration accepting jurisdiction of the Court; (3) the jurisdiction of the Court relative to certain matters arising under the Charter which relate to the security interests of the United States; and (4) the giving of advisory opinions by the Court upon matters arising under the Charter. 1. Views of the Department concerning Article 86

As Mr. Stinebower pointed out, it was through a typographical error that paragraphs 2, 3, and 4 of Article 86 of the printed New York draft of the Charter were not bracketed as paragraphs upon which agreement has not yet been reached. As stated by Mr. Stinebower, the Department will press for the deletion from the second and third lines of paragraph 2 of the words “or arising out of its operation". If this change is made the provisions concerning submission of questions to the Court will only cover justiciable issues relating to the interpretation of the Charter itself. 2. Jurisdiction of International Court of Justice on domestic questions

Senator Millikin inquired whether the provisions of Article 86 of the Charter conflict in any way with the reservation as to domestic matters made by the United States in accepting the jurisdiction of the International Court of Justice.

The United States declaration accepting jurisdiction of the Court was made pursuant to the second paragraph of Article 36 of the Statute, which reads:

"The state parties to the present Statute may at any time declare that they recognize as compulsory ipso facto and without special agreement, in relation to any other state accepting the same obligation, the jurisdiction of the Court in all legal disputes concerning:

a. the interpretation of a treaty;
b. any question of international law;

c. the existence of any fact which, if established, would constitute a breach of an international obligation;

d. the nature or extent of the reparation to be made for the breach of

an international obligation." The provisions of Article 86 of the Charter confer jurisdiction on the Court pursuant to the first paragraph of Article 36 of the Statute of the Court, which provides as follows:

"The jurisdiction of the Court comprises all cases which the parties refer to it and all matters specially provided for in the Charter of the United

Nations or in treaties and conventions in force." The jurisdiction of the Court under the United States declaration of acceptance covers a wide field of questions, including among other things, the interpretation of any international agreement to which the United States is or may become a party, and any questions of international law or international obligation of the United States. The intent of the reservation with respect to domestic questions was to provide a safeguard which the Congress deemed necessary to protect the interests of this country in accepting the very broad obligations contained in paragraph 2 of Article 36 of the Court's Statute.

On the other hand, the jurisdiction conferred on the Court under Article 86 of the Charter is confined to the field of questions with respect to the interpretation of the Charter, which will be a specific and known agreement the final test of which will have been submitted for approval to the Congress before it enters into force. Such an acceptance of the Court's jurisdiction within the limited scope of a particular agreement, as is envisaged by Article 86, is not therefore inconsistent with the purpose of the reservation to the acceptance by the United States of the broad jurisdiction of the Court in its declaration,

Such a limited acceptance of the Court's jurisdiction would be in accord with the practice of the United States, which has already accepted the jurisdiction of the Court with respect to the interpretation of particular international agree ments, without making any such reservation as was made in the declaration accepting jurisdiction of the Court generally. Thus, the Congress has approved the constitution of the United Nations Educational, Scientific, and Cultural Organization which provides for the submission to the Court of questions as to

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