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1. Membership. All states members of the Organization should be members of the Conference.

2. Voting. Each member of the Conference should have one vote. Except as may be otherwise specifically provided for, decisions of the Conference should be reached by a simple majority vote. It may be desirable to provide for special voting arrangements with regard to the exercise of certain functions of the Organization.

3. Sessions. The Conference should meet at least once a year. Section D. The Executive Board

The Executive Board should be authorized to take provisional decisions between meetings of the Conference and to exercise such powers as may be delegated to it by the Conference. The Conference should in general be authorized to delegate its powers to the Executive Board.

1. Membership. The Executive Board should consist of not more than eighteen member states, each of which should have one representative. Member states of chief economic importance should have permanent seats. The Conference should elect the states to fill the nonpermanent seats for 3-year terms, one-third of the nonpermanent members retiring every year. The number of nonpermanent seats should exceed the number of permanent seats, but the latter should not be fewer than one-third of the total number of seats.

2. Voting and sessions. The Executive Board should regulate its own procedure. Section E. The Commissions

The Commission on Commercial Policy, the Commission on Business Practices and the Commodity Commission should be responsible to the Executive Board. Each Commission should be given as much initiative and independence of action as may be necessary for the effective discharge of its functions.

1. Membership. The Commissions should be composed of experts appointed by the Executive Board. The terms and other conditions of office of the members of the Commissions should be determined in accordance with regulations prescribed by the Conference. Such terms and conditions need not be uniform, but may vary from Commission to Commission. Pursuant to the reciprocal arrangements with other specialized international organizations contemplated in Section H, paragraph 2, of this Chapter, provision should be made for appropriate representation on the Commodity Commission of the Food and Agriculture Organization of the United Nations and of other specialized international organizations having an important interest in the commodity operations discussed in Chapter. V.

2. Chairmen. The Chairmen of the Commissions should be nonvoting members of the Executive Board and should be permitted to participate, without vote, in the deliberations of the Conference.

3. Voting and sessions. Each Commission should regulate its own procedure, subject to any decisions made by the Executive Board. 4. Functions. The functions of the Commissions should include the following:

a. The Commercial Policy Commission. The Commercial Policy Commission should :

1) Review, and advise the Executive Board regarding, the operation of treaties, agreements, practices and policies affecting international trade.

2) Investigate, and advise the Executive Board regarding, the economic aspects of proposals to waive certain obligations of members in accordance with the provisions of paragraph 5, Section A, of this Chapter.

3) Investigate, and advise the Executive Board regarding, the economic aspects of proposed customs unions.

4) Develop and recommend to the Executive Board, for adoption by members of the Organization, cooperative projects of a technical nature in the field of commercial policy (e. g. standard bases and methods of determining dutiable value, uniform customs nomenclature, and standardization of statistical methods and nomenclature in foreign trade statistics).

5) Develop and recommend to the Executive Board additional programs designed to further the objectives of the Organization in the

general field of commercial policy. 0. The Commission on Business Practices. The Commission on Business Practices should :

1) Inquire into activities on the part of private commercial enterprises which have the effect or purpose of restraining international trade, restricting access to international markets, or of fostering monopolistic controls in international trade.

2) Advise the Executive Board with regard to the recommendations which should be made to members in respect of business divestitures, reorganizations, dissolutions or other remedial actions.

3) Conduct investigations and make recommendations to the Executive Board looking to the promotion and adoption in all countries of codes of fair business practices designed to facilitate and enlarge the flow of international trade.

4) Advise the Executive Board as to the types of information which members should file with the Organization.

5) Facilitate appropriate intergovernmental arrangements for the international exchange of technological information, on a nondiscrimi

natory basis. c. The Commodity Commission. The Commodity Commission should:

1) Investigate commodity problems, including the problem of an international buffer stocks organization or other arrangements which are proposed as a means of promoting solutions to commodity problems.

2) Make recommendations to the Executive Board on appropriate courses of action, including recommendations for the establishment of Study Groups for particular commodities. Such Study Groups should be established by the Executive Board, upon the recommendations of the Commodity Commission, for the purpose of investigating problems with respect to particular commodities. The Study Groups should be composed of representatives of member governments invited to participate by the Executive Board and one or more representatives designated by the Commodity Commission.

3) Make recommendations to the Executive Board as to whether or not a particular commodity is in world surplus.

4) Make recommendations to the Executive Board as to whether an application made by a member for the convening of an intergovernmental conference should be granted.

5) Designate members of the Commission to participate in an advisory capacity in the formulation of intergovernmental commodity agreements.

6) Make recommendations to the Executive Board regarding the application of the commodity agreements under consideration by members.

7) Designate the Chairman and Secretary for any Commodity Council established to administer an intergovernmental commodity agreement.

8) Maintain continuous review of the conduct of the operations of intergovernmental commodity agreements in the light of the terms of the agreements, the commodity principles in Chapter V, and the general welfare; and make recommendations to the Executive Board with regard

thereto. Section F. Industrial and Mineral Unit

The Conference should create an Industrial and Mineral Unit responsible to the Executive Board. The Industrial and Mineral Unit should promote by technical assistance and other appropriate means the expansion of production and trade with regard to fabricated products and with regard to minerals and other primary commodities in respect of which such promotional activities are not under the jurisdiction of the Food and Agriculture Organization. Section G. The Secretariat

The Secretariat, which should be divided into three or more offices, should serve all the organs of the Organization and the Commodity Councils established to administer specific commodity arrangements. It should be headed by a Director-General. Under his authority there should be three or more Deputy Director-General each of whom should be in charge of an office. The Director-General, and on the advice of the Director-General, the Deputy Directors-General, should be appointed by the Conference upon the nomination of the Executive Board. The Director-General should be the chief administrative officer of the Organization and should be an ex officio member, without vote, of the Executive Board. Three Deputy Directors-General should be ex officio members of the three Commissions. The Director-General and the Deputy Directors-General should have

the authority to initiate proposals for the consideration of any organ of the Organization. Section H. Relations with Other Organizations

1. Relations with the United Nations Organization. The Organization should be brought into relationship with the United Nations Organization on terms to be determined by agreement between the Executive Board and the appropriate authorities of the United Nations Organization, subject to approval by the Conference.

2. Relations with other specialized international organizations. In order to provide for close cooperation between the Organization and other specialized international organizations with related responsibilities, the Executive Board, subject to the approval of the Conference, should be authorized to enter into agreements with the appropriate authorities of such organizations defining the distribution of responsibilities and methods of cooperation.

3. Administrative arrangements. The Director-General should be authorized, subject to the authority of the Conference or of the Executive Board, to enter into agreements with other international organizations for the maintenance of common services, for common arrangements in regard to recruitment, training, conditions of service, and other related matters, and for interchanges of staff.

EXHIBIT II

ECONOMIC AND SOCIAL COUNCIL RESOLUTION REGARDING THE CALLING OF AN INTERNATIONAL CONFERENCE ON TRADE

AND EMPLOYMENT The Economic and Social Council, considering it essential that the cooperative economic measures already taken be supplemented by further international measures dealing directly with trade barriers and discriminations which stand in the way of an expansion of multilateral trade and by an undertaking on the part of nations to seek full employment.

1. DECIDES to call an International Conference on Trade and Employment, in the latter part of 1948, for the purpose of promoting the expansion of production, exchange and consumption of goods :

2. CONSTITUTES a Preparatory Committee to elaborate an annotated draft agenda, including a draft convention, for consideration by the Conference, taking into account suggestions which may be submitted to it by the Economic and Social Council or by any Member of the United Nations;

3. SUGGESTS, as a basis of discussion for the Preparatory Committee, that the agenda include the following topics:

(a) International agreement relating to the achievement and maintenance of high and stable levels of employment and economic activity.

(b) International agreement relating to regulations, restrictions, and discriminations affecting international trade.

(c) International agreement relating to restrictive business practices.

(d) International agreement relating to intergovernmental commodity arrangements.

(e) Establishment of an international trade organization, as a specialized agency of the United Nations, having responsibilities in the fields of (b),

(c) and (d) above; 4. REQUESTS the Preparatory Committee, when considering the foregoing items. to take into account the special conditions which prevail in countries whose manufacturing industry is still in its initial stages of development, and the questions that arise in connection with commodities which are subject to special problems of adjustment in international markets;

5. REQUESTS the Preparatory Committee to report to a subsequent session of the Council recommendations regarding the date and place of the Conference and the agenda (including a draft convention) and also what States, if any, not Members of the United Nations, should be invited to the Conference on Trade : nd Employment;

6. APPOINTS as Members of the Preparatory Committee the representatives of the Governments of the following countries: Australia, Belgium, Luxembourg, Brazil, Canada, Chile, China, Cuba, Czechoslovakia, France, India, Lebanon, Netherlands, New Zealand, Norway, South Africa, USSR, the United States of America and the United Kingdom.

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An elaboration of the United States
Proposals for Expansion of World Trade
and Employment prepared by a technical
staff within the Government of the United
States and presented as a basis for public
discussion.

OF

STATE

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Foreword In December 1945 the Government of the United States published and transmitted to other governments for their consideration a document entitled Proposals for Expansion of World Trade and Employment.

These Proposals put forward the idea that there should be established an International Trade Organization of the United Nations, the members of which would agree to conduct their commercial relations in accordance with rules to be set forth in the Charter of the Organization. The Proposals contained suggestions for rules to govern trade barriers, restrictive business practices, intergovernmental commodity arrangements, and the international aspects of domestic employment policies and outlined a suggested structure for the International Trade Organization itself. The governments of several other countries have expressed their general agreement with these suggestions.

In February 1946 the Economic and Social Council of the United Nations, at its first meeting, adopted a resolution calling for an international conference on trade and employment to consider the creation of an International Trade Organization. It also established a Preparatory Committee of 19 countries to arrange for the conference and to prepare a draft Charter for such an Organization. The Preparatory Committee is to meet in London in the fall of 1946.

In preparation for the conference, the Government of the United States has prepared an elaboration of its Proposals in the form of a suggested Charter for the International Trade Organization. Copies of the suggested Charter have been transmitted to the Secretary-General of the United Nations and to the other governments named by the Economic and Social Council to serve on the Preparatory Committee.

The suggested Charter is the work of many persons of competence and experience in the departments and agencies of the United States Government. It is put forward, however, as a basis for discussion and not as a document expressing the fixed or final views of this Government. The draft should clarify possible obscurities and remove any misunderstandings to which the condensed language of the Proposals may have given rise.

W. L. CLAYTON Under Secretary of State for Economic Affairs

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