The Council also requested the Preparatory Committee 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. The U. S. S. R., which was a member of the Council, voted in favor of this resolution. In preparation for the first session of the Preparatory Committee, which was scheduled by the Secretary-General of the United Nations to be held in London beginning on October 15, 1946, the various agencies within the United States Government interested in this field collaborated in the preparation of a Suggested Charter for an International Trade Organization, based upon the Proposals. This Suggested Charter was made public in September 1946, after months of intensive preparation. (More discussion of the background of the Conference is contained in Section 14 on pages 55 to 62.) II. AGENDA Other than formal matters, such as election of officers, adoption of rules of procedure, etc., the agenda of the first session of the Preparatory Committee was based upon the resolution of the Economic and Social Council quoted above (page 2). However, in setting up the working committees, the Preparatory Committee made the following changes: Topic (a), which was assigned to Committee I, was changed to read "International agreement relating to the achievement and maintenance of high and steadily rising levels of effective demand, employment and economic activity"; A new topic, which was assigned to a Joint Committee of Committees I and II, was inserted as follows: "International agreement relating to industrial development"; Topic (e) was amended to read "Establishment of an international trade organization as a specialized agency of the United Nations having appropriate responsibilities in the above field"; Topic (b) was assigned to Committee II; Topic (e), as amended, was assigned to Committee V. The agenda for the session, in its original form as submitted by the Secretariat, is contained in Appendix A, attached hereto. The last few items on this document were left for the second session of the Preparatory Committee scheduled to meet in Geneva on April 8, 1947. III. PARTICIPATION Delegations representing seventeen of the eighteen governments, mentioned in Section I were present when the Conference convened on October 15, 1946. A joint delegation represented the Governments of Belgium and Luxembourg. Also present at the Conference were representatives of certain of the specialized agencies of the United Nations. These included the Food and Agriculture Organization, the International Labor Organization, the International Bank for Reconstruction and Development, and the International Monetary Fund. Nongovernmental organizations included the International Chamber of Commerce, International Cooperative Alliance, World Federation of Trade Unions, and the American Federation of Labor. The following members of the United Nations sent observers to the Conference: Colombia, Denmark, Poland, Peru and Mexico. IV. UNITED STATES DELEGATION President Truman designated Mr. Clair Wilcox, Director of the Office of International Trade Policy, Department of State, as chairman of the United States Delegation, and Mr. Harry C. Hawkins, Counselor for Economic Affairs, American Embassy, London, England, as vice-chairman. The delegates to the Conference were: Lynn R. Edminster, Vice Chairman, United States Tariff Commission; John W. Gunter, U. S. Treasury Representative, American Embassy, London, England; John H. G. Pierson, Consultant on Employment Policy, Bureau of Labor Statistics, Department of Labor; Robert Schwenger, Special Assistant to the Director, Office of Foreign Agricultural Relations, Department of Agriculture; Frank Shields, Chief, Policy Formulation Staff, Department of Commerce. The Advisers were: Willis C. Armstrong, Adviser on State Trading, Commercial Policy Division, Department of State; Edmund H. Kellogg, Division of International Organization Affairs, Department of State; Donald D. Kennedy, Chief, International Resources Division, Department of State; John M. Leddy, Adviser on General Commercial Policy, Division of Commercial Policy, Department of State; Robert P. Terrill, Associate Chief, International Resources Division, Department of State. Mr. J. Robert Schaetzel, Special Assistant to the Director, Office of International Trade Policy, Department of State, was designated as Technical Secretary, and Mr. Basil Capella, Division of International Conferences, Department of State, was Secretary of the Delegation. V. TRAVEL The United States Delegation left LaGuardia Airport, New York City, at one p. m., October 11, and arrived at the London airport at one p. m., October 12. As the main work of the Conference, with the exception of the Final Plenary Session, was completed by November 23, the majority of the members of the Delegation returned to the United States on that date via the SS America. VI. CONFERENCE ARRANGEMENTS All meetings of the Conference took place at Church House, Dean's Yard, Westminster, S. W. I., London. The temporary London office of the United Nations is also headquartered at Church House, thereby facilitating administration of the Conference. Members of the United States Delegation were situated at the Mount Royal Hotel, Marble Arch, during the entire period of the Conference. The Mount Royal Hotel is a comparatively new hotel which, of course, assured each member adequate living facilities and comfort. The Mount Royal Hotel is located only two blocks from the Embassy canteen, which provided good meals at a reasonable cost. The main office of the United States Delegation was located at the American Embassy. A second office was maintained at Church House for the convenience of the delegates while attending committee meetings. VII. OPENING PLENARY SESSIONS The sessions were inaugurated by a speech by Sir Stafford Cripps, President of the United Kingdom Board of Trade, as a representative of the host Government. In his speech he stated: that it was necessary to avoid the economic chaos and the blocking of channels of trade which had occurred after the last war; that it will be necessary for nations to give up some of their sovereignty in the economic field; that, in the opinion of the United Kingdom, the fundamental idea in this field was that it must be both the policy and the duty of each separate nation to provide for full employment and to avoid the "exporting" of unemployment; and finally, that although risks must be taken in the field of international trade, it would not be possible to divert trade from its old channels unless there was some assurance that new channels would be created. Mr. Wilcox, Chairman of the United States Delegation, discussed the proposed trade organization as the final major step in setting up of the United Nations international framework. He named the five principles on which he felt that all nations must agree: (1) that existing barriers to trade should be substantially reduced; (2) that international trade should be multilateral rather than bilateral and the avoidance of political considerations in the field of trade; (3) that futernational trade should be non-discriminatory; (4) that stabilization policies and trade policies should be consistent; and finally, (5) that the rules of international commerce should be so drafted that they would apply with equal force to all nations regardless of their different types of economies. Mr. Wilcox referred to the need both of the United States, and of all other countries, to increase their imports and exports. He also referred to the desire of the United States to aid in the early industrialization of the less developed sections of the world on a sound basis. Senhor da Silva, of Brazil, stressed the correction of economic inequalities throughout the world, and the need for a positive policy for the industrialization of the less developed countries. Dr. Coombs, of Australia, stated that there were five principles which his country considered to be basic in the field of international commerce, as follows: (1) that each government should ensure full employment to its citizens; (2) that member governments of the Organization should make it possible for their people to use their foreign exchange to buy goods from other countries or to invest in foreign development schemes: (3) that member governments should develop their economic resources; (4) that member governments must act to prevent violent fluctuations in prices in primary commodities; and (5) that the rules governing international trade and the structure of the Organization must be such as to assist member governments to fulfill their obligations. Mr. Le Bon (Belgium-Luxembourg) spoke of the sympathy of those Governments with the United States Charter, and discussed the proposed customs union with The Netherlands which he cited as evidence of the sympathy of his Government with the United States principles. Mr. McKinnon, of Canada, said that his Government was in agreement with the United States objectives and felt that they would, by expanding trade, bring about ever increasing employment opportunities. Senor Bianchi (Chile) referred to the dependence of his country upon international trade, particularly in raw materials and semi-manufactured products. He referred to the necessity for stabilization in the prices of these products and to the need to increase production and to bring about industrialization in the under-developed countries. Mr. Augenthaler, of Czechoslovakia, referred to the dependence of his country upon international trade and to the dislocations which his country had suffered as a result of the war. He said that Czechoslovakia would need a certain period for recuperation and that, although she must develop her trade with the U. S. S. R. and the countries in Central and Southern Europe, she would also attempt to further her relations with the Western countries. Mr. King, of China, stated that account must be taken of the varying degrees of economic development in different countries and that the elimination of trade barriers must have regard to the progress of economic recovery from war devastation and to a long-term policy of creating a balanced internal economy. Senor Alvarez, of Cuba, referred to certain principles including the following: (1) that the working conditions of the laboring class must be improved in connection with the improvement of trade; (2) that diversification of employment must be encouraged and to that end adequate means of protection must be adopted; (3) that the preferential tariff arrangement affecting Cuba should not be suppressed automatically and that real wages and social protection for the working classes should be considered: and (4) that commodity councils should come into being independently of the Trade Organization. Mr. Colban (Norway) was in full agreement with the United States objectives and particularly with the elimination of quotas. M. Alphand (France) pointed out the agreement of his country with the United States Proposals, but described the devastation of his country as a result of the war and stated that it would be necessary for his country to retain quantitative controls for an interim period until she could restore her pre-war position. He compared his country to an under-developed country in this respect. Mr. Nehru (India) took a strong position with respect to the development of backward countries. He stated that Indian development must stress rapid industrialization, a planned economy, and the equal sharing of the fruits of progress among all the people. He stated that his country must retain its power to revulate its trade relations with other countries by means which would be both effective and economical. Mr. Hakim (Lebanon) stressed the need of his country for an industrial rather than an agricultural economy. Full employment would not be enough and employment must be made more productive. For this objective, Lebanon would need tariff protection, the importation of capital goods and possibly regional preferences in order to develop regional markets for new industries. Dr. Speekenbring (Netherlands) stressed the need for stability in the prices of primary products and expressed the strong support of his country for the United States objectives. Mr. Campbell (New Zealand) stated that the principles must be made sufficiently flexible to cover the needs of under-developed countries. Mr. Brennan (South Africa) expressed his Government's agreement with the United States principles and stated that they must be made more flexible. Mr. Marquand (United Kingdom) expressed again his country's interest in full employment and their belief that while the freeing of trade from trade barriers is essential it was also necessary to supplement this with provisions for the development of under-developed countries. VIII. ORGANIZATION OF THE PREPARATORY COMMITTEE A. GENERAL M. M. Suetens, of Belgium, was elected Chairman of the Preparatory Committee at its first plenary session on October 15, 1946. The first and second vicechairmen were, respectively, H. E. Zdenek Augenthaler, of Czechoslovakia, and H. E. Senor Alberto Inocente Alvarez, of Cuba. M. Suetens and Mr. Augenthaler serves as a committee on credentials. The Heads of Delegations met periodically, under the chairmanship of M. Suetens, to review and guide the Preparatory Committee's work. B. COMMITTEES The following main committees were established: A drafting sub-committee made up of delegates from Australia, Vice Chairman: Dr. A. B. Speekenbrink, of The Netherlands. Sub-Committees of Committee II: The Procedures Sub-Committee, including delegates from Canada, Chile, Cuba, France, India, the United Kingdom, and the United States, which considered Articles 8, 18, 29, 30, and 33 of the U. S. Suggested Charter and the procedures for the proposed multilateral trade agreement negotiations among Members of the Preparatory Committee. The Technical Sub-Committee, with representatives of all delegations, which considered Articles 9-17 and Article 32. The Sub-Committee on Quantitative Restrictions and Exchange Control, with delegates of Australia, Brazil, France, India, the United Kingdom, and the United States, which considered Articles 19-24. The Sub-Committee on Subsidies on Primary Products, including delegates from Australia, Brazil, Canada, The Netherlands, the United Kingdom, and the United States, which considered Article 25. The Sub-Committee on Subsidies on Manufactured Products, made up of delegates of India, the United Kingdom, and the United States, which considered Article 25. The State-trading Sub-Committee, including delegates from China, Czechoslovakia, New Zealand, the United Kingdom, and the United States, which considered Articles 26, 27, and 28. This sub-committee was assisted by a small Sub-Committee on Marketing Boards, made up of delegates of The Netherlands, South Africa, and the United States. (3) Committee on Restrictive Business Practices (Committee III): Vice-Chairman: Senor Don Higinio Gonzalez (Chile). Sub-Committees of Committee III: A drafting sub-committee made up of delegates of the United Kingdom, Canada, India, Belgium, and the United States. (4) Committee on Intergovernmental Commodity Arrangements (Committee IV): Chairman: Mr. J. R. C. Helmore (United Kingdom). A Drafting Committee, including the Chariman and Vice-Chairman and delegates from Australia, Canada, Cuba, France, The Netherlands, the United Kingdom, and the United States. An ad hoc sub-committee; composed of the Vice-Chairman and the delegates of Cuba, The Netherlands, and the United States, was appointed to meet with representatives of the International Chamber of Commerce. (5) Committee on Administration and Organization (Committee V). Vice-Chairman: Senor Helbo de Burgos Cabal (Brazil). Sub-Committees of Committee V: From time to time the subject matter of various articles of the U. S. Suggested Charter were referred to special ad hoc sub-committees composed of those members who had taken the most active part in discussions of the articles in the full Committee. (6) Joint Committee (of Committees I and II) on Industrial Development: Chairman: Mr. H. S. Malik (India). Vice-Chairman: Mr. Wunsz King (China) and Dr. H. C. Coombs (Aus tralia). Membership: Representatives of all delegations. Sub-Committees of the Joint Committee: A drafting sub-committee consisting of Delegates from Australia, Brazil, China, France, India, the United Kingdom, and the United States. |