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UNITED STATES OF AMERICA

OCT 22'47

Foreword

The Draft Charter for a proposed International Trade Organization of the United Nations, contained in this document, was approved on August 22, 1947, at Geneva, Switzerland, by the Preparatory Committee of the United Nations Conference on Trade and Employment, consisting of representatives of 17 nations. This Committee was constituted by the Economic and Social Council of the United Nations by resolution of February 18, 1946, on which date the Council resolved to call the United Nations Conference. The Draft Charter is embodied in the Report of the Second Session of the Preparatory Committee to the Economic and Social Council, presented herewith, which gives an account of the various steps which have been taken by the Preparatory Committee.

In 1945 the United States Government published its Proposals for Expansion of World Trade and Employment (Department of State publication 2411, Commercial Policy Series 79). The principles set forth in the Proposals were elaborated in the form of a Suggested Charter for an International Trade Organization of the United Nations published by this Government in September 1946 (Department of State publication 2598, Commercial Policy Series 93). The Preparatory Committee used the Suggested Charter as a basic document in its discussions at its first meeting in London in October and November 1946. In December 1946 the Department of State published a document, Preliminary Draft Charter for the International Trade Organization of the United Nations (Department of State publication 2728, Commercial Policy Series 98) which has come to be known as the “London Draft”. This document included articles drafted by the Preparatory Committee at its first session in London as well as certain articles from the original United States Suggested Charter on which the Preparatory Committee had taken no action. A drafting committee of representatives of the members of the Preparatory Committee met in New York in January and February 1947 and made further revisions in the Preliminary Draft. The “New York Draft” was the working document of the Preparatory Committee at its Second Session which opened in Geneva on April 10, 1947.

The Department of State is publishing the Preparatory Committee's report for the purpose of facilitating public discussion of the Draft Charter in advance of the United Nations Conference on Trade and Employment which the Economic and Social Council has called to meet at Habana, Cuba, on November 21, 1947.

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REPORT OF THE SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT

(adopted by the Preparatory Committee 22 August 1947)

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I. ESTABLISHMENT OF THE PREPARATORY Nations which might be invited to the ConCOMMITTEE

ference. The relevant sections of this interim The Economic and Social Council at its

report are reproduced in Enclosure i to the First Session resolved on 18 February 1946 to

present Report. The resolutions adopted by

the Economic and Social Council relating to call an International Conference on Trade and

the recommendations in the interim report are Employment for the purpose of promoting

In accordance the expansion of production, exchange aná reproduced in Enclosure 2.

with those resolutions, the United Nations consumption of goods. At the same time the

Conference on Trade and Employment is to be Council constituted a Preparatory Committee

convened on 21 November 1947 at Havana, to elaborate for the Conference an annotated

Cuba. draft agenda, including a draft convention,

The Secon 1 Session of the Preparatory Comtaking into account suggestions which might mittee continued the preparation of the draft be submitted by the Council itself or by any

Charter or convention. The draft adopted by member of the United Nations. The Council also charged the Preparatory Session as a basis for discussion at the World

the Preparatory Committee at the Second Committee with presenting recommendations regarding the date and place of the Conference

Conference appears as Part II of the present

Report. Although the Preparatory Committee on Trade and Employment and which States,

has reached a large measure of agreement on if any, non-members of the United Nations,

the text to be recommended to the full Conshould be invited to the Conference.

ference, it will be noted that the text is accom

panied by a number of notes indicating the 2. STAGES IN THE WORK OF THE PREPARATORY

reservations which have been made and the COMMITTEE

interpretations of the text which are thought

necessary in order to make the exact intention The First Session of the Preparatory Com clear. Some of these latter notes enabled resermittee was held in London from 15 October to vations to be withdrawn. 26 November 1946. In the course of this In view of the fact that changes have been Session, a draft Charter for an International made in the text of the draft Charter as it has Trade Organization was prepared and embodied progressed through the Preparatory Committee, in a report which was distributed as document and particularly in view of the fact that the E/PC/T/33 and published.

order of the articles has been rearranged, the The First Session appointed a Drafting Com- present report contains as Enclosure 4 tables mittee to meet as soon as possible after the setting forth in parallel columns the identifying First Session for the purpose of editing the numbers of comparable provisions in the draft Charter produced in London. The Draft versions of the draft Charter issued by the ing Committee met in New York from 20 New York Drafting Committee and by the January to 25 February 1947 and recorded the Second Session of the Preparatory Committee results of its work in a report which was in order to facilitate a determination of the distributed as document E/PC/T/34 and later relationship between the present text and the published.

earlier version. The Second Session of the Preparatory Com In its present Report, the Preparatory Committee was convened at the European Office mittee has refrained from enunciating in detail of the United Nations in Geneva on 10 April the principles underlying the draft Charter. 1947. During the course of this Session, the It was felt by the Preparatory Committee Preparatory Committee transmitted to the that the observations presented in Part II of Fifth Session of the Economic and Social the Report of the First Session represented a Council an interim report indicating the pro general statement of the guiding principles posed outlines of the annotated draft agenda which have been followed and developed in the and convention which were being prepared for work of the First Session, the Drafting Gomthe full Conference and presenting recommend mittee and the Second Session. Although the ations concerning the date and place of the Report of the Second Session will constitute Conference and the non-members of the United the agenda and basic "working paper" at the

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World Conference, the two earlier reports will associated with all the proceedings and many be regarded as essential parts of the annotation members of the United Nations non-members thereto. It has seemed unnecessary to restate of the Preparatory Committee and some in the two later reports the principles set forth in non-governmental organizations in Category the Report of the First Session or to indicate "A" & sent observers who from time to time at length the alterations which were made gave the Committee the benefit of their views. during the Drafting Committee stage or during the Second Session, in order to take account of new considerations and to reconcile conflicting 4. ELECTED OFFICERS OF THE SECOND. points of view.

SESSION Considering that the objectives underlying the endeavour to set up the I.T.O. would be

Chairman. . . H.E. M. SUETENS (Belgium). promoted if concrete action were taken by the

Vice-Chairmen: Members of the Preparatory Committee (which account for approximately 70% of world trade)

First Viceto enter into reciprocal negotiations directed

Chairman. H.E. Erik COLBAN (Norway). to the substantial reduction of tariffs and other Second Vicebarriers to trade and to the elimination of Chairman. Sir Raghavan Pillai (India). preferences on a mutually advantageous basis,

H.E. Dr. Zdenek AUGENTHALER the governments represented on the Preparatory

(Czechoslovakia). Committee adopted a resolution at the First

Mr. Sergio I. CLARK (Cuba). Session regarding the carrying-out of such negotiations under its sponsorship in connec

Hon. L. D. WILGRESS (Canada). tion with, and as a part of, the Second Session.

Commission A:
The governments represented at the Second
Session of the Preparatory Committee are, at

Chairman. H.Ę. SUETENS (Belgium). the time of the issuance of this report, in the

Vice-Chairmen H.E. M. Erik COLBAN final stages of the negotiations foreseen in the

(Norway). above-mentioned resolution. It is expected

H.E. Antonio DE VILHENA that the concessions resulting from these

FERREIRA BRAGA (Brazil). negotiations, together with such other provi

Commission B : 7 sions as may be appropriate, will shortly be incorporated in a General Agreement on Tariffs

Chairman. Hon. L. D. WILGRESS and Trade. 1

(Canada).

Vice-Chairman M. J. ROYER (France) 3. PARTICIPANTS IN THE WORK OF THE PREPARATORY COMMITTEE

• Colombia, Denmark, Mexico, Peru, Poland and Syria All members of the Preparatory Committee ?,

sent observers to the First Session; Colombia and Mexico

to the Drafting Committee, and the following countries with the exception of the Union of Soviet to the Second Session, in addition to those represented Socialist Republics, took part in the work of at the First Session: the First and Second Sessions and of the Draft

Afghanistan, Argentina, Ecuador, Egypt, Greece,

Iran, Saudi-Arabia, Siam, Sweden, Turkey, Uruguay, ing Committee. The Union of Soviet Socialist

Venezuela, Yugoslavia. Republics indicated that it did not feel able

• The organizations were: to participate in the work of the Preparatory American Federation of Labor, International Cham. Committee as it had not found it possible to ber of Commerce, International Co-operative Allidevote sufficient preliminary study to the

ance, World Federation of Trade Unions. The Interimportant questions which were the subject of

national Federation of Agricultural Producers also

submitted its views on certain points to the Second the Committee's discussion.

Session of the Preparatory Committee. The InterTwo specialized agencies : and two other national Federation of Christian Trade Unions and inter-governmental organizations were actively

the Interparliamentary Union were also invited to

be represented. i In view of the existence of a Customs Union between ? In order to facilitate simultaneous discussion, the Syria and Lebanon, a Syrian delegation has taken part Preparatory Committee at the Second Session in the tariff negotiations and has been regarded as a divided into two commissions, each of which consisted of contracting party in the General Agreement on Tariffs representatives of all Delegations. Commission A, and and Trade.

its sub-committees, prepared texts for consideration by 2 The members are:

the Preparatory Committee relating to the chapters on Australia, Belgium-Luxemburg Economic Union,

Employment and Economic Activity, Economic DevelopBrazil, Canada, Chile, China, Cuba, Czechoslovakia,

ment and General Commercial Policy (with the exception France, India, Lebanon, Netherlands, New Zealand,

of the Articles relating to Subsidies). Similarly, ComVorway, Union of South Africa, Union of Soviet

mission B prepared draft texts relating to the chapters Socialist Republics, United Kingdom, United States

on Purposes, Organization, Restrictive Business Practices of America.

and Inter-governmental Commodity Agreements,

well as the Articles on Subsidies. Each Commission 3 The Food and Agriculture Organization and the International Labour Organization.

established sub-committees for the further study of

individual Articles or groups of Articles (see Enclosure 3). * The International Bank for Reconstruction and All drafts were reviewed at the final plenary meetings of Development and the International Monetary Fund. the Preparatory Committee.

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CHAPTER II. EMPLOYMENT AND ECONOMIC ACTIVITY:
Article 2. Importance of Employment, Production and Demand in Relation to the Purpose of this

Charter .
Article 3 Maintenance of Domestic Employment
Article 4

Fair Labour Standards.
Article 5. Removal of Maladjustments within the Balance of Payments
Article 6. Exchange of Information and Consultation
Article 7. Safeguards for Members subject to External Deflationary Pressure

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CHAPTER III. ECONOMIC DEVELOPMENT:

Article 8. Importance of Economic Development in Relation to the Purpose of this Charter
Article 9. Development of Domestic Resources and Productivity
Article 10. Co-operation for Economic Development.
Article 11. Means of promoting Economic Development
Article 12. International Investment for Economic Development
Article 13

Governmental Assistance to Economic Development
Article 14.

Transitional Measures
Article 15.

Preferential Arrangements for Economic Development.

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CHAPTER IV. COMMERCIAL POLICY:
Section A. Tariffs, Preferences, and Internal Taxation and Regulation :

Article 16. General Most-favoured-nation Treatment . .
Article 17

Reduction of Tariffs and Elimination of Preferences
Article 18. National Treatment on Internal Taxation and Regulation

Article 19. Special Provisions relating to Cinematograph Films
Section B. Quantitative Restrictions and Exchange Controls :

Article 20. General Elimination of Quantitative Restrictions
Article 21. Restrictions to safeguard the Balance of Payments
Article 22. Non-discriminatory Administration of Quantitative Restrictions
Article 23.

Exceptions to the Rule of Non-discrimination
Article 24. Exchange Arrangements
Section C. Subsidies :
Article 25

Subsidies in General
Article 26. Additional Provisions on Export Subsidies
Article 27. Special Treatment of Primary Commodities
Article 28. Undertaking regarding Stimulation of Exports
Article 29.

Procedure
Section D. State Trading :

Article 30. Non-discriminatory Treatment

Article 31. Expansion of Trade
Section E. General Commercial Provisions :
Article 32.

Freedom of Transit
Article 33. Anti-dumping and Countervailing Duties.
Article 34

Valuation for Customs Purposes
Article 35.

Formalities connected with Importation and Exportation
Article 36. Marks of Origin
Article 37

Publication and Administration of Trade Regulations
Article 38. Information, Statistics and Trade Terminology .

Article 39. Boycotts
Section F. Special Provisions :

Article 40. Emergency Action on Imports of Particular Products
Article 41.

Consultation
Article 42.

Territorial Application of Chapter IV Frontier Traffic Customs Unions
Article 43. General Exceptions to Chapter IV.

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CHAPTER V. RESTRICTIVE BUSINESS PRACTICES:
Article 44

General Policy towards Restrictive Business Practices
Article 45.

Procedure with respect to Investigations and Consultations
Article 46. Studies relating to Restrictive Business Practices
Article 47. Obligations of Members
Article 48. Supplementary Enforcement Arrangements .
Article 49.

Domestic Measures against Restrictive Business Practices
Article 50.

Procedure with respect to Services .
Article 51. Exceptions to the Provisions of this Chapter

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