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DEPARTMENT OF STATE

Publication 3731

Commercial Policy Series 122

January 1950

DIVISION OF PUBLICATIONS
OFFICE OF PUBLIC AFFAIRS

SUMMARY ANALYSIS OF THE ITO CHARTER

INTRODUCTION

This document is intended as a guide to the study of the Havana Charter for an International Trade Organization. It contains first, a brief history of the development of the Charter; second, a general statement of the subject matter of the Charter and the relation of its various parts to one another; third, an analysis in some detail, but in non-technical language, of the contents of the Charteris various sections; and, finally, a summary of the major commitments and exceptions in the Charter.

The summary does not cover every paragraph nor refer to every special situation with which the Charter deals. It does, however, attempt to deal with all major points and all points of general application. It takes up the various sections of the Charter in an order different from that in which they appear in the document, for there is a central core to the Charter to which the other parts are related, and if that is understood the significance of the various parts of the document becomes more clear.

II

HISTORY OF THE DEVELOPMENT OF THE CHARTER

Even before the end of hostilities in World War II, people in the United States and other governments were laying plans to secure international agreement on trade policies designed to avoid, so far as possible, the economic conflicts of the inter-war period. In the Atlantic Charter of August 1941, the President of the United States and the Prime Minister of Great Britain enunciated the principle of equal access to the markets and raw materials of the world. In the Lond-Lease Agreements between the United States and other recipients of Lend-Lease aid, beginning with the agreement signed with Great Britain in February 1942, the parties agreed to work together for arrangements, open to all countries of like mind, for the expansion of production, employment and exchange and consumption of goods, the reduction of tariffs, the elimination of tariff preferences, and for the removal of other barriers to the expansion of international trade. When the Bretton Woods Conference concluded its deliberations with a greement on the structure of the Inter

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national Bank and International Monetary Fund, the delegates called upon member nations to continue to work to reduce obstacles to international trade and to facilitate by cooperative effort the harmonization of national policies designed to promote and maintain high levels of employment and progressively rising standards of living.

When the Congress accepted membership for the United States in the Bretton Woods organizations, it expressed its desire that further steps be taken and stated it to be the policy of the United States "to seek to bring about further agreement and cooperation among nations and international bodies as soon as possible on ways and means which will be st reduce obstacles to and restrictions upon international trade, eliminate unfair trade practices, promote mutually advantageous commercial relations, and otherwise facilitate the expansion and balanced growth of international trade and promote the stability of international economic relations".

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In December 1945 therefore, as part of its consistent pursuit of this objective, the United States published its Proposals for the Expansion of World Trade and Employment. The basic ideas of the Charter will be found in the se Proposals. They were developed after months of consideration by an interde partmental committee representing all interested agencies of the Executive Branch of the Government and after intergovernmental consultation.

At the suggestion of the United States delegation, the Economic and Social Council of the United Nations, during its first meeting in February 1946, appointed a committee of eighteen nations to prepare an agenda for an international conference on trade and employment. When this Preparatory Committee met for the first time in London in October 1946, the United States laid before it a Suggested Charter for an International Trade Organization which the Committee adopted as its basic working document.

The Preparatory Committee agreed upon a draft of a Charter at its London meeting. This was published. Public hearings on this draft Charter were held in seven cities in the United State 3. The Senate Finance Committee also held extensive hearings. Many of the suggestions made at the se hearings subse quently were incorporated into the Charter.

A second meeting of the Preparatory Committee was held in Geneva in 1947 at which the London draft was revised. The draft agreed at Geneva was then considered by representatives of fifty-six nations at the Havana Conference which convened

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