Conflicts of Principle in Drafting a Trade Charter

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IN September 1946, our Department of State presented a "Suggested Charter" for an International Trade Organization of the United Nations. A Preparatory Committee of the United Nations Conference on Trade and Employment, on which 17 countries (Soviet Russia abstaining) were represented, met in London in October and November 1946, discussed this Suggested Charter, and issued a new draft and a covering Report. The Charter was further revised at Lake Success. A second meeting of the Preparatory Committee is in process at Geneva at the time of writing, and the countries represented are negotiating reciprocal reductions of tariffs as well as working on the text of the Charter. The process of reciprocal negotiation of tariff reductions is later to be extended to the countries not represented at the London and Geneva meetings of the Preparatory Committee. In the fall of 1947 a full International Conference on Trade and Employment is scheduled to take place, when a definitive draft of the Charter is to be submitted to the member governments of the United Nations.

It is my purpose here to examine the issues of principle dealt with in the Charter as revised at London and in those American suggestions which at London were left for later consideration. The proposed Charter covers a great deal of ground, and it is possible to raise questions of principle with respect to most of its provisions. Attention will be confined here, however, to what seem to be five of the most important issues. These can be briefly formulated in five questions: (1) What level of trade barriers should be the goal for the postwar period? (2) Should trade barriers be, in general, non-discriminatory as between foreign countries? (3) Are ordinary tariffs preferable to, or less objectionable than, quantitative import restrictions such as import quotas? (4) Can international commitments with respect to the form and extent of trade barriers be made consistent with comprehensive national economic planning? (5) Can an international trade code be devised which can effectively bridge the gap between free-market economies and state-trading economies and will be acceptable to both?

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