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specified in section 2 except that if the head of the department making the contract finds that in respect to some particular articles, materials, or supplies it is impracticable to make such requirement or that it would unreasonably increase the cost, an exception shall be noted in the specifications as to that particular article and a public record made of the findings which justified the exception.
(b) Failure of contractors, etc. to comply with the foregoing provision shall bar them from receiving public work or public building contracts for a period of three years. Section 4
Effective upon enactment (March 3, 1933).
(b) of the Farm Credit of 1937 (50 Stat. 703, 707) provides that the “Buy American" Act (U. S. C. 41:10a-c) shall not be deemed to apply to any lease, purchase, sale, deed, conveyance, or contract authorized or made by a district farm credit board, Federal land bank, Federal intermediate credit bank, production credit corporation, or bank for cooperatives under the Farm Credit Act.
OTHER SUPPLEMENTARY ACTS
EMERGENCY RELIEF APPROPRIATION ACT OF 1935 (49 STAT. 115, 119)
(a) The acquisition of articles, materials, and supplies for the public use, with funds appropriated by this joint resolution, shall be subject to the provisions of section 2 of title III of the Treasury and Post Office Appropriation Act, fiscal year 1934; and all contracts let pursuant to the provisions of this joint resolution shall be subject to the provisions of section 2 of title III of such Act.
(b) Any allocation, grant, or other distribution of funds for any project, Federal or non-Federal, from the appropriation made by this joint resolution, shall contain stipulations which will provide for the application of title III of such Act to the acquisition of articles, materials and supplies for use in carrying out such project.
UNITED STATES HOUSING ACT OF 1937 (50 STAT. 888, 891) Section 6
(c) The use of funds made available for the purposes of this Act shall be subject to the provisions of section 2 of title 3 of the Treasury and Post Office Appropriation Act for the fiscal year 1934 (47 Stat. 1489), and to make such provisions effective every contract or agreement of any kind pursuant to this Act shall contain a provision identical to the one prescribed in section 3 of title 3 of such Act.
ACT OF JUNE 7, 1939 FOR THE ACQUISITION OF CERTAIN STRATEGIC AND CRITICAL
MATERIALS (53 STAT. 811, 812) Section 5
Purchases under this Act shall be made in accordance with title III of the Act of March 3, 1933 (47 Stat. 1520), but a reasonable time (not to exceed one year) shall be allowed for production and delivery from domestic sources and in the case of any such material available in the United States but which has not been developed commercially, the Secretary of War and the Secretary of the Navy may, if they find that the production of such material is economically feasible, direct the purchase of such material without requiring the vendor to give bond.
AN ACT TO PROMOTE THE DEFENSE OF THE UNITED STATES (55 STAT. 31) Renders the “Buy American" Act inapplicable to the manufacture or acquisition of certain defense articles.
STRATEGIC AND CRITICAL MATERIALS STOCKPILING ACT (60 STAT. 596, 397) Section 3
The Secretary of War and the Secretary of the Navy shall direct the Secretary of the Treasury, through the medium of the Procurement Division of his Department, to
(a) make purchases of strategic and critical materials with due regard to the objectives set forth in section 1 of this Act and pursuant to the determinations as provided in section 2 hereof, which purchases (1) shall be made, so far as is practicable, from supplies of materials in excess of the current industrial demand and (2) shall be made in accordance with title III of the Act of March 3, 1933 (47 Stat. 1520), but may be made without regard to section 3709 of the Revised Statutes. A reasonable time (not to exceed one year) shall be allored for production and delivery from domestic sources and in the case of any such material available in the United States but which has not been developed commercially, the Secretary of War and the Secretary of the Navy may, if they find that the production of such material is economically feasible, direct the purchase of
such material without requiring the vendor to give bond; (Edwin Kennerly, Federal Law Section, March 19, 1947.)
GENERAL AGREEMENT ON TARIFFS AND TRADE (TRADE AGREEMENT) During the hearings before the Senate Committee on Finance on the charter for an International Trade Organization, it was asked (1) why is it proposed to conclude at Geneva a multilateral trade agreement rather than a series of bilateral trade agreements; and (2) what provisions does the United States consider should be included in the trade agreement.
A. MULTILATERAL CHARACTER OF PROPOSED AGREEMENT There are a number of reasons for the multilateral character of the projected agreement: 1. Broader trade benefits for United States exports
A series of bilateral trade agreements between the United States and each of the 17 other countries meeting at Geneva would involve (a) tariff concessions by the United States on products of which each of the other countries is a principal supplier of imports into the United States and (b) tariff concessions by the United States on products of which each of the other countries is a principal supplier of imports into that country.
A main objective of the multilateral agreement is to assure that tariff concessions will also be made by the other countries on products of which they are principal suppliers to each other. In the case of a large number of these products, the United States is a secondary supplier and will benefit from the concessions made on them.
It will be observed from the foregoing that the multilateral character of the proposed agreement does not call for concessions by the United States over a broader range of products than would be the case if the United States entered into bilateral agreements with each of the other 17 countries. At the same time, it would bring about concessions on a far greater range of products of interest to United States exporters than would be obtained if the project were confined to bilateral agreements between the United States and each of the others. 2. Facilitation of quota elimination
The establishment of a system of world trading in which private enterprise can operate calls for the condemnation of import quotas. The multilateral character of the proposed agreement, by assuring broad and simultaneous action directed to the reduction of tariffs, the elimination of preferences, and the relaxation of other trade barriers, will facilitate agreement on provisions to condemn the use of quotas, subject to closely defined and safeguarded exceptions.
3. Establishment of legal basis for adherence by other countries
The aim at Geneva, in connection with the charter and to an appropriate extent in the trade agreement, is to develop a code of commercial conduct by which all countries can be guided, thus assuring the pursuit of sound commercial policies throughout the world and not merely by the countries at the Geneva meeting. A series of bilateral trade agreements would be unlikely to provide a suitable and equitable standard for others and would not create a legal basis for international adherence. 4. Withholding of trade benefits from countries which do not cooperate
The view has been advanced by the United States (see article 36 of the draft charter for International Trade Organization originally put forward by the United States) that after the charter also has entered into force the countries negotiating at Geneva should no extend the benefits of their trade concessions to other countries which are unwilling to make a fair contribution in return. This rule is equitable only if the "contribution" demanded is approximately the same for all countries. The best way to assure equality of contributions is through a multilateral agreement embodying general provisions applicable to all parties. 5. Reversal of present trend toward trade regimentation
Over and above these considerations, each important in itself, is that concerted action by a number of important countries, covering a broad area of trade, is required in order to reverse the present trend throughout the world toward trade restrictionism, discrimination, and regimentation.
If the United States should attack this problem alone and by a series of bilateral agreements, the rest of the world may be hardened into a bilateral mold and our hope for a multilateral trading system would be lost. The program put forward by the United States is an attempt to stay the trend apparent in the rest of the world and reverse it. War has disrupted economies and greatly strengthened movements toward collectivism and regimentation. Only decisive action-on a broad front-can promise to make headway in the other direction. 6. Preservation of substantive commercial policy provisions of ITO charter
It should be pointed out that many of the more important provisions of chapter V (commercial policy) of the draft charter for an International Trade Organization would probably need to be deleted in the event that the arrangements reached at Geneva were not of a multilateral character. If common provisions on substantive commercial policy matters cannot be reached in conjunction with tariff negotiations, it would probably be impossible to obtain agreement on the inclusion of such provisions in the charter itself, and that part of the charter which is of most importance to the United States would accordingly fall.
The actual tariff bargaining at Geneva will be essentially through bilateral negotiations, on a selective, product-by-product basis, and decisions on particular concessions will be reached in discussions between pairs of countries, to which one or two other countries might be admitted where they have a direct and important interest. The results could be written down in a series of bilateral documents (136). The United States would be a party to 17 of these. The agreement of the United States would be necessary for what was in the 17 agreements to which it was a party but not what was in the 119 agreements to which it was not a party. The advantage to us of the multilateral document is that we would be influencing the character of the trade arrangements between other countries. The multilateral document thus enables us to attack the very things that are most prejudicial to our trade which we could not otherwise control as effectively.
If the meeting at Geneva were not multilateral, the other nations would not in fact meet and arrange this sort of program at all. Their present agreements are evidence of what they would do-what they would be forced to do. It is only by getting them all together at once that we can get agreement on a pattern of trading in which the United States system of trading can thrive.
B. PROVISIONS PROPOSED FOR INCLUSION IN GENERAL AGREEMENT ON TARIFFS AND TRADE
(TRADE AGREEMENT) 1. Limitations of provisions
It may be stated at the outset that there is no intent to obligate the United States in the trade agreement beyond the authority of the Executive power.
2. General nature of provisions
The substantive provisions which the United States will propose for inclusion in the trade agreement are based upon similar provisions in existing trade agree ments under the Trade Agreements Act, with appropriate adaptations, and other analogous provisions which it will be suitable to include in a trade agreement. 3. Specific provisions proposed for inclusion
The following are the specific provisions which the United States will propose for inclusion in the proposed trade agreement, subject to such changes which further study or the course of negotiations may indicate would be desirable (all references are to the draft general agreement on tariffs and trade, printed as part III of the New York Report of the drafting committee of the preparatory committee of the International Conference on Trade and Employment):
Article 1.-Tariff treatment: This article provides for most-favored-nation treatment as to tariff duties, customs administration and the treatment of imported articles. Similar provisions have been included in United States trade agreements in the past.
Article 11.-National treatment on internal taxation and regulation. This article provides for nondiscrimination between imported and domestic products in the application of internal taxes and regulations. Similar provisions covering taxation have been included in United States trade agreements in the past.
Article III.- Freedom of transit. This article provides for freedom of transit for goods and means of transport through the territories of the contracting counties. Similar provisions have in the past been included in United States treaties and also to some extent in commercial agreements.
Article IV.-Antidumping and countervailing duties. This Article regulates the use of antidumping and countervailing duties and is in general based on United States law. The Article is desirable because it affords protection against the misuse of these types of duties for the purpose of offsetting the tariff concessions provided for in the schedules to be annexed to the trade agreement. Some provisions on these matters have been included in United States trade agreements in the past.
Article VI.-Customs formalities : Under this article the parties to the agree ment undertake to review their customs laws and regulations with a view to simplifying customs formalities at the earliest practicable date. In view of the hampering effects of excessive customs formalities on trade, the article is appropriate for inclusion in a trade agreement.
Article VII.—Publication and administration of customs regulations; advance notice of restrictive regulations: This article requires publication of trade regulations and the giving of advance notice in the case of administrative rulings which increase duties or raise other customs barriers. Similar provisions have been included in trade agreements in the past.
Article VIII.-Schedules of concessions on particular products: This article is a technical one necessary to make the schedules of tariff concessions an integral part of the agreement. Similar provisions have been included in United States trade agreements in the past.
Articles IX, X, XI, XII and XIII.—These articles deal with quantitative restrictions and exchange controls. They are highy important in protecting the tariff concessions of the agreement against impairment. They are an elaboration of provisions included in United States trade agreements in the past adapted to the multilateral character of the proposed agreement and broadened to assure more effective benefits for United States exports.
Article XIV.-General undertaking regarding subsidies: This article recognizes that subsidies may have injurious effects on trade. In such cases the article provides for consultation between the interested parties with a view to discussing the possibility of limiting the subsdy. The article is an appropriate one for inclusion in a trade agreement because of the possible effects of subsidies on international trade. The article does not require any change in United States laws.
Article XV.-Nondiscriminatory administration of state-trading enterprises : This article extends the principle of equality of treatment to the operations of state-trading enterprises in their foreign trade. Similar provisions have been included in United States trade agreements in the past.
Article XVII.-Government assistance to economic development: This article provides in effect that a country party to the agreement may withdraw a conces.
sion granted under the agreement for the purpose of aiding an infant industry, if (a) a majority of the other countries party to the agreement consent and (b) if the other countries party to the agreement whose trade would be substantially affected also consent. This article is appropriate for inclusion in a trade agreement, just as the so-called escape clause in article XVIII, is appropriate.
Article XVIII.—Emergency action on imports of particular products: This article would permit a country party to the agreement to withdraw a concession granted under the agreement if necessary to prevent serious injury to domestic producers. If the other countries party to the agreement disagree with this action they could then suspend the concessions that they had granted in exchange for the concession withdrawn by the first country. If the privileges of the article are abused-for example: if concessions are withdrawn to set up a new industry or to promote the expansion of an industry and not to protect domestic producers against harm-then the other parties may suspend concessions over and above those which might be equivalent to the concessions withdrawn by the first country.
Provisions similar to those in article XVIII, including necessarily the right of counterwithdrawal of concessions, have been included in United States trade agreements in the past. Under Executive Order No. 9832 inclusion in future trade agreements entered into by the United States, of such provisions permitting the withdrawal of concessions is made mandatory.
Article XIX.-Consultation, nullification, or impairment: This article provides for consultation among the countries party to the agreement on matters affecting its operation. It also covers the eventuality that some situation may arise, or that some party to the agreement may violate the agreement, directly or indirectly, which would have the effect of nullifying or impairing the agreement. In serious cases of this kind the other parties could agree that they, or any of them, would be free to suspend the concessions they have made under the agreement. Any party affected by such suspension could then withdraw from the agreement on short notice-60 days.
Provisions similar to those in article XIX, including the right of withdrawal of concessions, have been included in United States trade agreements in the past.
Article XX.-General exceptions: This article excepts from the agreement such measures as sanitary regulations, traffic in arms, certain security matters, and the like. These exceptions are based on those usually included in United States trade agreements in the past.
Article XXI.-Territorial application, frontier traffic, customs unions: This article makes the agreement applicable to the customs territories of the parties and provides for exceptions (largely from the nondiscrimination provisions) for advantages granted to facilitate frontier traffic between adjacent countries or to give effect to a customs union. Similar provisions have been included in United States trade agreements in the past.
Article XXII.-Interim Trade Committee: The purpose of this article is to provide a way in which the parties to the agreement can meet and discuss its operation. Certain of the provisions of the agreement--notably those designed to safeguard the exception for balance-of-payments restrictions against abuse make it desirable for all parties to meet and determine how the provisions are to apply in a particular case. The “Interim Trade Committee" .is simply a formal way of describing the parties to the agreement when they meet together. The committee would not be an “organization" in the usual sense of that term. It would have no elaborate functions, staff, or general international responsibilities. Conceivably the same results could be obtained by eliminating article XXII in its present form and simply providing that representatives of the contracting parties shall meet from time to time or when necessary to determine the application of the agreement in particular cases. The description of the contracting parties as a "committee" is merely a matter of convenience.
Article XXIII.-Amendment and termination : Some provision for amendment of the agreement is necessary and appropriate, particularly in view of the fact that several of the provisions of the agreement are also proposed for inclusion in the charter for an International Trade Organization on which action is to be taken at a later date. The Department of State believes that the provisions of article XXIII of the New York draft are not entirely satisfactory and will probably wish to suggest a new formulation.