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Where commodity agreements involve the regulation of production or the quantitative control of exports or imports of a primary commodity or the regulation of prices, they can only be entered into if certain additional conditions are met. (Article 61).
Those conditions are that one of two types of findings must be made through a commodity conference, or by general agreement among Members particularly interested in the commodity. The first is that a surplus of a primary commodity has developed, or is expected to develop, which is so burdensome as to cause or threaten serious hardship, and that it is impossible to prevent this hardship by relying on the normal operation of market forces, since a substantial reduction in price would not readily lead either to a significant increase in consumption or to a significant decrease in production. (Article 62 (a)) These circumstances arise from time to time in the case of agricultural commodities. The second type of finding is that widespread unemployment must have developed or be expected to develop which, in the absence of specific governmental action, would not be corrected by normal market forces in time to prevent widespread hardship to workers, because a substantial reduction in the price of the commoditiy does not readily lead to significant increase in consumption but rather to reduction of employment, and because the areas where the commodity is produced do not afford alternative employment opportunities for the workers involved. (Article 62 (b)) The se circumstances arise from time to time in the case of certain minerals.
Commodity control agreements must be designed to a ssure the availability of adequate supplies at fair prices. They must give as many votes to countries interested mainly in imports as to those interested mainly in exports. They must provide, where practicable, for measures designed to increase consumption. They must seek to permit production to expand in areas where it can be carried out with the greatest economy. And countries participating in such an agreement must formulate and adopt programs of internal economic adjustment designed to ensure all practicable progress during the life of the agreement toward conditions that will obviate the necessity for its renewal. (Article 63)
The life of such a greements is not to exceed five years, renewable for not to exceed five years. (Article 65)
These rules do not apply to agreements to conserve natural resources or to allocate commodities in short supply (Article 70, (2) and (3)), or to agreements dealing with health, fisheries, migratory birds, or vild animals (Articlé 70 (1)).
Detailed provision is made for the administration of such agreements by commodity councils (Article 64), for the periodic review of their operation by the Organization (Article 65), and for the settlement of disputes (Article 66). If any agreement existing at the time the Charter comes into force is found to be inconsistent with its rules, it must be modified (Article 68), and if the Organization finds that an agreement is not operating in accordance with these rules, it must be terminated or revised (Article 65, (3)).
Any agrooment negotiated by the United States pursuant to this Chapter would be submitted to the Congress for its approval.
4. CHAPTER II - EMPLOYMENT AND ECONOMIC ACTIVITY
(Article 2 - 2)
From the beginning of the Charter project, in the original United States Proposals for the Expansion of World Trade and Employment, it was recognized that the offectiveness of offorts to reduce trade barriers aná to eliminate discrimination in international trade would be nullified if thero was not in the world a large and reasonably stable demand for the products of international trade, A Chapter on Employment and Economic Activity was therefore included, which gives the Organization little specifically to do in the field of employment and industrial stability, but contains certain specific commitments for member countries and states certain considerations which the Organization is required to keep in mind in the exercise of its other functions.
In this Chapter Members recognize that the avoidance of unemployment or under-employment must depend primarily on internal measures taken by individual countries (Article 2 (2)), but that the avoidance of unemployment is not of domestic concern alone. It is also a necessary condition for the expansion of international trade (Article 2 (1)), for under conditions of serious unemployment, demand for
all kinds of products, imported as well as domestic, declines. In undertaking to maintain employment, production and demand, Members are obligated to adopt mea sures which are consistent with the other objectives and provisions of the Charter and to seek to avoid measures which would have the effect of creating balanceof-payments dirriculties for others. (Article 3 (2)). In seeking to balance their external payments and receipts, they must have due regard to the desirability of employing methods which expand rather than contract international trade. (Article 4 (2)).
Since the avoidance of unemployment is not of domestic concern alone, the Charter recognizes that measures taken by individual countries should be supplemented by concerted action under the sponsorship of the Economic and Social Council of the United Nations (Article 2 (2)), and requires Members and the Organization to participate in arrangements made or sponsored by that body for the collection, analysis and exchange of information, studies about the international aspects of population and employment problems and in consultation with a view to concerted action on the part of government and intergovernmental organizations in order to promote employment and economic activity (Article 2 (3), 5).
The objective of employment policy is stated (Article 2 in words taken from the United States Employment Act
as the provision of "useful employment opportunities for those able and willing to work".
The specific commitment taken by each Member in the field of employment is that it shall take action designed to achieve and maintain full and productive employment and large and steadily growing demand within its own territory through measures appropriate to its political, economic and social institutions. (Article 3) It should be noted that the employment contemplated is to be Wproductive as well as "full", thus avoiding the concept of pure make-work policy. It is also to be noted that no power is conferred on the Organization or any of its Members to question the propriety of measures taken by any other Member to this end, as those measures are specifically described as those which the Member deems to be appropriate to its own particular institutions.
Article 4 recognizes that a persistent and extensive lack of balance in the trade of a major nation may be an
important factor in the balance-of-payments difficulties of other nations. It commits all Members concerned, the Members having the favorable trade balance as well as those Members having balance-of-payments difficulties, to use their best efforts and make their full contribution toward a solution of the problem,
Article 6 recognizes that a serious or abrupt decline in the effective demand of other countries may have serious repercussions for individual Members and may require them to take certain measures to protect their own economy. The Organization is directed to keep this in mind in making the decisions required of it by the other parts of the Charter.
Finally, in Article 7, Members recognize that all countries have a common interest in the achievement and maintenance of fair labor standards related to productivity and in the improvement of wages and working conditions as productivity may permit. They recognize that unfair labor conditions, particularly in production for export, create difficulties in international trade and, accordingly, each Member agrees to take whatever action may be appropriate and feasible to eliminate such conditions within its territory.
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ECONOMIC DEVELOPMENT AND RECONSTRUCTION
( Articles 8-15)
The Chapter opens with the recognition that the Industrial and general economic development of all countries, particularly those as yet relatively undeveloped, contributes to economic balanco, expands international trade, improves opportunities for employment, and raises levels of real income.
Accordingly, Members undertake, within their respective territories, to take action designed progressively to develop their industrial and other economic resourcos, and to raise standards of productivity through measures consistent with the Charter. (Article 9) The choice of what action each Member will take 1s entirely for it to decide,
Article 10 provides for cooperation between the Mombers and by the Organization with the Economic and Social Council of the United Nations and other appropriato intergovernmental organizations for the promotion of industrial and general economic development and the reconstruction of countries whoso economies have boon devastated by the war. It directs tho Organization, at the request of any Member, to study the Members' resources and potentialities, to assist in formulation of plans for its development and to give advice with respect to carrying out such plans.
Article ll recognizes the importance to economic development of adequate supplies of capital, equipment, technology and managerial skills. Members agree to cooperato in providing or arranging for the provision of such facilities. Members able to provide au ch facilities agree not to impose any unreasonable or un justifiable impediments which would prevent other Members from obtaining them on equitable terms, and Members receiving them agree to take no unreasonable or un justifiable action injurious to the rights or interests of nationals of other Members in the enterprises, skills, capital, arts or technology which they havo supplied.
The Organization 18 au thorized to make recommendations for and promo to bilateral or multilateral agreements designed to facilitate the interchange of