with increased responsibility vested in the Secretary of Commerce, who is charged with developing foreign and domestic commerce.32

Provisions of Executive Order 10741

Executive Order 10741 (sec. 1) provides that the Trade Policy Committee shall consist of the Secretaries of State, Treasury, Defense, Interior, Agriculture, Commerce, and Labor, or of alternates appointed by them, and designates the Secretary of Commerce or his alternate as chairman. Alternates appointed by the members of the Committee must be officials who are Presidential appointees. The new Committee-like the Interdepartmental Committee on Trade Agreements-is authorized to invite other Government agencies to participate in its activities when matters of interest to them are under consideration. The Executive order specifies, however, that participation by other Government agencies in the activities of the Trade Policy Committee shall be limited to the heads of such agencies, or their alternates who must be Presidential appointees. Members of the Trade Agreements Committee, the functions of which in part are transferred to the Trade Policy Committee, are not required except for the Tariff Commission member-to be Presidential appointees. Moreover, the chairman of the Trade Agreements Committee is the member or alternate from the Department of State, whereas the Trade Policy Committee has as its chairman the Secretary of Commerce or his alternate.

The Executive order provides (sec. 2) that the Trade Policy Committee shall make recommendations to the President on basic policy issues that arise in the administration of the trade agreements program. These recommendations, as approved by the President, shall guide the Trade Agreements Committee in carrying out its functions. The Executive order also provides (sec. 3) that each recommendation of the Trade Agreements Committee to the President, together with the dissent of any agency, shall be transmitted to him through the Trade Policy Committee. After reviewing the recommendations of the Trade Agreements Committee, the Trade Policy Committee shall submit to the President such advice about the recommendations as it may consider appropriate. Before the Trade Policy Committee was established, the interdepartmental committee charged with advising the President on trade agreements and related matters of commercial policy was the Trade Agree

22 White House press release, Nov. 25, 1957 (Department of State Bulletin, Dec. 16, 1957, p. 957).

33

Appointed by the President, by and with the advice and consent of the Senate.

ments Committee.34 The new Executive order does not change the membership of the Trade Agreements Committee, but alters its status and basic functions by providing (1) that the Trade Policy Committee shall make recommendations to the President on basic policy issues that arise out of the administration of the trade agreements program, and (2) that the Trade Policy Committee shall review the recommendations of the Trade Agreements Committee on matters relating to trade agreements before they are transmitted to the President.

Another provision of Executive Order 10741 (sec. 4) directs the Trade Policy Committee to review the escape-clause reports that the United States Tariff Commission submits to the President under the provisions of section 7 of the Trade Agreements Extension Act of 1951, as amended, and to recommend to the President what action, if any, he should take with respect to them. Heretofore, the President, after receiving the Tariff Commission's reports in escape-clause cases, asked the advice of individual departments and agencies of the executive branch of the Government before making his decisions.

Executive Order 10741 (sec. 5) also directs agencies of the Government, when so requested by the Trade Policy Committee, to furnish available information to the Committee for its use in carrying out the functions that the Executive order assigns to it.

Functions and Operating Procedures of the Trade Policy

Committee

On January 10, 1958, the chairman of the Trade Policy Committee announced that the Committee had adopted a statement regarding its functions and operating procedures,35 which the President had approved.

34 Executive Order 10082 of Oct. 5, 1949, establishes (pt. I:1) the Interdepartmental Committee on Trade Agreements and designates it as the agency through which the President shall seek information and advice before concluding a trade agreement. The Executive order provides that the Committee shall consist of a Commissioner of the United States Tariff Commission, who shall be designated by the Chairman of the Commission, and of persons designated from their respective agencies by the Secretaries of State, Treasury, Defense, Agriculture, Commerce, and Labor, and the Administrator for Economic Cooperation (now Director, International Cooperation Administration). Executive Order 10082 also provides for the designation from the foregoing agencies of alternates to act in place of the members of the Trade Agreements Committee when the members are unable to act, and provides that a member or alternate from the Department of State shall be the chairman of the Committee. It assigns (pt. III:12) to the Committee certain specific duties and functions with respect to the operation and administration of the trade agreements program, and authorizes the Committee to consider such other questions of commercial policy as have a bearing on its activities with respect to trade agreements. (For text of Executive Order 10082, see appendix F to this report. Earlier Executive orders relating to the membership, duties, and functions of the Trade Agreements Committee were Nos. 9832 of Feb. 25, 1947 (12 F.R. 1363), and 1004 of Oct. 5, 1948 (13 F.R. 5851).)

35 Memorandum for the President from the chairman of the Trade Policy Committee, Jan. 10, 1958 (U.S. Department of Commerce press release No. G-883, Jan. 13, 1958).

In carrying out the functions assigned to it by Executive Order 10741, the Committee will be concerned with recommendations to the President on the following matters, among others: (1) Tariff negotiations; (2) escape-clause cases; (3) miscellaneous tariff and trade-agreement matters; and (4) policy issues that may arise out of the administration of the trade agreements program. The Committee also adopted a set of operating procedures, and announced that its staff will include an executive secretary, who will be located in the Department of Commerce.

In its statement the Trade Policy Committee announced that it will be responsible for making recommendations to the President as to the initiation and conduct of tariff negotiations. The Committee will review the recommendations of the Trade Agreements Committee regarding the list of articles to be considered for possible concessions in tariff negotiations, and will transmit the list to the President with its comments. The final list of articles that the Trade Agreements Committee recommends for tariff negotiations, together with the proposed tariff concessions that the United States will offer and seek, will be transmitted to the President through the Trade Policy Committee. That Committee will recommend policies with respect to adherence to the Tariff Commission's peril-point determinations; and it will be consulted on the proposed composition and membership of United States delegations to the various sessions and meetings of the General Agreement on Tariffs and Trade.

When it becomes necessary for the United States to modify or withdraw tariff concessions, the Trade Policy Committee will review the recommendations of the Trade Agreements Committee for compensatory concessions to be granted by the United States. Likewise, when other countries modify or withdraw tariff concessions, the Trade Policy Committee will review the recommendations of the Trade Agreements Committee regarding the compensatory concessions that the United States. should seek from those countries, as well as the adequacy of the compensation offered by the countries.

Recommendations that the Trade Agreements Committee makes to the President on trade-agreement negotiations or related matters will be transmitted to the members of the Trade Policy Committee with the request that they inform their chairman of any wishes and views regarding the interest that the Trade Policy Committee should take in such proposals. Should the Trade Policy Committee receive one or more protests or divergent views on a particular subject, the Committee will be convened to discuss the matter. After such discussion, the Committee will prepare a report to the President; the report will embody the Committee's specific recommendations on the matter, as well as the concurring and divergent views of the Committee members.

The Trade Policy Committee will review not only the original escapeclause findings and recommendations of the Tariff Commission, but also

the Commission's periodic reviews of previous escape-clause actions. Hereafter, whenever the Tariff Commission submits an escape-clause report to the President, the executive secretary of the Trade Policy Committee will receive the report and will circulate copies of it to each member of the Committee. After discussing the Commission's report, the Committee will make a report to the President which will include a specific recommendation as to what action he should take.

With respect to its review of miscellaneous tariff and trade-agreement matters (e.g., the operation of the Geneva wool-fabric reservation, and the United States position with respect to voluntary export arrangements by foreign countries), the Committee announced that it will submit to the President its analysis of the issue involved, together with its recommendations.

From time to time, according to the Trade Policy Committee, the Committee will be presented with basic policy problems that arise in the operation of the trade agreements program. Proposals concerning these problems will be circulated to all members of the Committee; the Committee will then promptly hold meetings at the request of any of its members. Among other things, the Committee will review all policyposition papers and instructions prepared for the United States delegations to the annual sessions of the Contracting Parties to the General Agreement on Tariffs and Trade and the meetings of the Intersessional Committee. In its statement of operating procedures, the Committee also provided that the Committee will be convened at the request of any member to discuss any policy issue that may arise in the administration of the trade agreements program.

Chapter 2

Developments Relating to the Operation of the General Agreement on Tariffs and Trade

INTRODUCTION

The General Agreement on Tariffs and Trade (GATT), the most important and most comprehensive agreement that the United States has entered into under the provisions of the Trade Agreements Act, is a multilateral agreement in which the United States and 36 other countries now participate.' The General Agreement consists of two parts: (1) The so-called general provisions, which consist of numbered articles that set forth rules for the conduct of trade between contracting parties,2 and (2) the schedules of tariff concessions that have resulted from the various multilateral negotiations sponsored by the Contracting Parties. On June 30, 1958, the following 37 countries were contracting parties to the General Agreement: Australia, Austria, Belgium, Brazil, Burma, Canada, Ceylon, Chile, Cuba, Czechoslovakia, Denmark, the Dominican Republic, Finland, France, the Federal Republic of Germany, Ghana, Greece, Haiti, India, Indonesia, Italy, Japan, Luxembourg, the Federation of Malaya, the Netherlands, New Zealand, Nicaragua, Norway, Pakistan, Peru, the Federation of Rhodesia and Nyasaland, Sweden, Turkey, the Union of South Africa, the United Kingdom, the United States, and Uruguay.

At the close of the period covered by this report, the General Agreement embraced the original agreement concluded by the 23 countries that negotiated at Geneva in 1947; the Annecy Protocol of 1949, under which 10 additional countries acceded to the agreement; the Torquay Protocol of 1951, under which 4 other countries acceded; and the Protocol of Terms of Accession of Japan, under which that country acceded in 1955. Indonesia, on behalf of which the Netherlands negotiated concessions at Geneva in 1947, became an independent contracting party in 1950. Ghana and Malaya became contracting parties in 1957 after they

1 For the earlier history of the General Agreement, see Operation of the Trade Agreements Program: 1st report, pt. II, ch. 3; 2d report, pp. 19-21; 3d report, pp. 31-32; and 5th report, pp. 23-26.

'The term "contracting parties," when used without initial capitals (contracting parties), refers to member countries acting individually; when used with initial capitals (Contracting Parties), it refers to the member countries acting as a group.