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World Conference, the two earlier reports will be regarded as essential parts of the annotation thereto. It has seemed unnecessary to restate in the two later reports the principles set forth in the Report of the First Session or to indicate at length the alterations which were made during the Drafting Committee stage or during the Second Session, in order to take account of new considerations and to reconcile conflicting points of view.

Considering that the objectives underlying the endeavour to set up the I.T.O. would be promoted if concrete action were taken by the Members of the Preparatory Committee (which account for approximately 70% of world trade) to enter into reciprocal negotiations directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of preferences on a mutually advantageous basis, the governments represented on the Preparatory Committee adopted a resolution at the First Session regarding the carrying-out of such negotiations under its sponsorship in connection with, and as a part of, the Second Session. The governments represented at the Second Session of the Preparatory Committee are, at the time of the issuance of this report, in the final stages of the negotiations foreseen in the above-mentioned resolution. It is expected that the concessions resulting from these negotiations, together with such other provisions as may be appropriate, will shortly be incorporated in a General Agreement on Tariffs and Trade. 1

3. PARTICIPANTS IN THE WOrk of the
PREPARATORY COMMITTEE

All members of the Preparatory Committee 2, with the exception of the Union of Soviet Socialist Republics, took part in the work of the First and Second Sessions and of the Drafting Committee. The Union of Soviet Socialist Republics indicated that it did not feel able to participate in the work of the Preparatory Committee as it had not found it possible to devote sufficient preliminary study to the important questions which were the subject of the Committee's discussion.

Two specialized agencies and two other inter-governmental organizations were actively

1 In view of the existence of a Customs Union between Syria and Lebanon, a Syrian delegation has taken part in the tariff negotiations and has been regarded as a contracting party in the General Agreement on Tariffs and Trade.

2 The members are:

Australia, Belgium-Luxemburg Economic Union,
Brazil, Canada, Chile, China, Cuba, Czechoslovakia,
France, India, Lebanon, Netherlands, New Zealand,
Norway, Union of South Africa, Union of Soviet
Socialist Republics, United Kingdom, United States
of America.

3 The Food and Agriculture Organization and the International Labour Organization.

4 The International Bank for Reconstruction and Development and the International Monetary Fund.

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In order to facilitate simultaneous discussion, the Preparatory Committee at the Second Session divided into two commissions, each of which consisted of representatives of all Delegations. Commission A, and its sub-committees, prepared texts for consideration by the Preparatory Committee relating to the chapters on Employment and Economic Activity, Economic Development and General Commercial Policy (with the exception of the Articles relating to Subsidies). Similarly, Commission B prepared draft texts relating to the chapters on Purposes, Organization, Restrictive Business Practices and Inter-governmental Commodity Agreements, as well as the Articles on Subsidies. Each Commission established sub-committees for the further study of individual Articles or groups of Articles (see Enclosure 3). All drafts were reviewed at the final plenary meetings of the Preparatory Committee.

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Importance of Employment, Production and Demand in Relation to the Purpose of this
Charter.

CHAPTER II.

Article 2.

Article 3.

Maintenance of Domestic Employment

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ECONOMIC DEVELOPMENT:

Article 8. Importance of Economic Development in Relation to the Purpose of this Charter
Article 9. Development of Domestic Resources and Productivity
Co-operation for Economic Development

Article 10.

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Article 20.
Article 21.

Article 22.

Article 23.

General Elimination of Quantitative Restrictions
Restrictions to safeguard the Balance of Payments
Non-discriminatory Administration of Quantitative Restrictions
Exceptions to the Rule of Non-discrimination

Article 24. Exchange Arrangements

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Frontier Traffic

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Customs Unions

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CHAPTER V.

RESTRICTIVE BUSINESS PRACTICES:

Article 44.

General Policy towards Restrictive Business Practices
Procedure with respect to Investigations and Consultations
Studies relating to Restrictive Business Practices

Article 45.

Article 46.
Article 47.

Article 48.

Article 49.

Obligations of Members

Supplementary Enforcement Arrangements

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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Article 64.
Article 65.

Relations with Inter-governmental Organizations

Article 66.
Article 67.

CHAPTER VII.

Section A.
Article 68.

Obligations of Members regarding Existing and Proposed Commodity Agreements
Territorial Application .

Exceptions to Provisions relating to Inter-governmental Commodity Agreements

THE INTERNATIONAL TRADE ORGANIZATION:

Structure and Functions:

Membership.

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Section G.

Other Organizational Provisions:

Article 84.

Relations with Other Organizations .

Article 85.

Article 86.

Article 87.

International Responsibilities of the Director-General, Staff and Members of Commissions
International Legal Status of the Organization

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Status of the Organization in the Territory of Members
Contributions

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INTERPRETATION:

Article 88.

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Reference to the International Court of Justice
Miscellaneous Provisions

CHAPTER IX. GENERAL PROVISIONS:

Article 93 Relations with Non-Members

Article 94. General Exceptions

Article 95. Amendments

Article 96. Review of the Charter

Article 97. Withdrawal and Termination

Article 98. Entry into Force and Registration

Article 99. Territorial Application

Article 100. Deposit of Texts

Annexes pertaining to Paragraph 2 of Article 16:

Annex A

Annex B

Annex C

Annex D

Annex E

Annex F

Appendix

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CHAPTER I

PURPOSE AND OBJECTIVES

Article 1.

RECOGNIZING the determination of the United Nations to promote peaceful and friendly relations among nations,

THE STATES parties to this Charter undertake in the fields of trade and employment to cooperate with one another and with the United Nations

For the Purpose of

REALIZING the aims set forth in the Charter of the United Nations, particularly the attainment of the higher standards of living, full employment and conditions of economic and social progress and development, envisaged in Article 55 (a) of that Charter.

TO THIS END they pledge themselves, individually and collectively, to promote national and international action designed to attain the following objectives:

1. To assure a large and steadily growing volume of real income and effective demand, to increase the production, consumption and exchange of goods, and thus to contribute to a balanced and expanding world economy.

2. To foster and assist industrial and general economic development, particularly of those

countries which are still in the early stages of industrial development, and to encourage the international flow of capital for productive investment.

3. To further the enjoyment by all countries, on equal terms, of access to the markets, products and productive facilities, which are needed for their economic prosperity and development.

4. To reduce tariffs and other barriers to trade and to eliminate discriminatory treatment in international commerce.

5. To enable countries, by increasing the opportunities for their trade and economic development on a mutually advantageous basis, to abstain from measures which would disrupt world commerce, reduce productive employment or retard economic progress.

6. To facilitate through the promotion of mutual understanding, consultation and cooperation the solution of problems relating to international trade in the fields of employment, economic development, commercial policy, business practices and commodity policy.

ACCORDINGLY they hereby establish the INTERNATIONAL TRADE TRADĚ ORGANIZATION through which they shall co-operate as Members to achieve the purpose and the objectives set forth in this Article.

CHAPTER II

EMPLOYMENT AND ECONOMIC ACTIVITY

Article 2.

Importance of Employment, Production and Demand in relation to the Purpose of this Charter.

1. The Members recognize that the avoidance of unemployment or under-employment through the achievement and maintenance in each

country of useful employment opportunities for those able and willing to work and of a large and steadily growing volume of production and effective demand for goods and services is not of domestic concern alone, but is also a necessary condition for the realization of the general purpose and the objectives set forth in Article I of this Charter, including the expansion of international trade, and thus for the well-being of all other countries.

2. The Members recognize that, while the avoidance of unemployment or under-employment must depend primarily on domestic measures, such measures should be supplemented by concerted action under the sponsorship of the Economic and Social Council of the United Nations in collaboration with the appropriate inter-governmental organizations, each of these bodies acting within its respective sphere and consistently with the terms and purposes of its basic instrument.

3. The Members recognize that the regular exchange of information and views among Members is indispensable for successful cooperation in the field of employment and economic activity and should be facilitated by the Organization.

Article 3.

Maintenance of Domestic Employment.

1. Each Member shall take action designed to achieve and maintain full and productive employment and large and steadily growing demand within its territory through measures appropriate to its political, economic and social institutions.

2. Measures to sustain employment, production and demand shall be consistent with the other objectives and provisions of this Charter. Members shall seek to avoid measures which would have the effect of creating balanceof-payments difficulties for other countries.

Article 4.

Fair Labour Standards.

Each Member, recognizing that all countries have a common interest in the achievement and maintenance of fair labour standards related to productivity, shall take whatever action may be appropriate and feasible to eliminate sub-standard conditions of labour in production for export and generally throughout its territory. Members which are also members of the International Labour Organization shall cooperate with that organization in giving effect to this undertaking.

Article 5.

Removal of Maladjustments within the Balance of Payments.

I. In the event that a persistent maladjustment within a Member's balance of payments is a major factor in a situation in which other Members are involved in balance-of-payments difficulties which handicap them in carrying out the provisions of Article 3 without resort to trade restrictions, the Member shall make its full contribution, while appropriate action shall be taken by the other Members concerned, towards correcting the situation.

2. Action in accordance with this Article shall be taken with due regard to the desirability of employing methods which expand rather than contract international trade.

Article 6.

Exchange of Information and Consultation.

1. The Members and the Organization shall participate in arrangements made or sponsored by the Economic and Social Council of the United Nations, including arrangements with appropriate inter-governmental organizations: (a) for the systematic collection, analysis

and exchange of information on domestic employment problems, trends and policies, including as far as possible information relating to national income, demand and the balance of payments.

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