APPENDIX 46 May 29, 1944 60 Summary: Tentative Program for Dealing 1. The United States should advocate, in discussions with other nations, the adoption of a co-ordinated program by which each nation undertakes to prohibit the most restrictive cartel practices which burden international trade. 2. International conventions and national laws about patents, trade marks, and company organizations should be amended or supplemented to make such restrictive cartel practices more difficult. 3. Restrictive programs undertaken for such purposes as the furtherance of international security, the conservation of natural resources, the protection of public health and morals, or the relief of insupportable distress during the application of constructive measures to shift resources from over-developed industries into more productive uses should be agreed upon between governments rather than between private interests. 4. To facilitate the development and administration of this program, there should be established an International Office for Business Practices as outlined in appendix A.“ Comment 61 These proposals are based upon conclusions that the typical effects of cartels are to reduce output, raise and stabilize selling prices, increase profit margins, reduce employment, and protect high cost members; and that through such activities cartels reduce employment and investment opportunities, hinder the development of liberal policies in international trade, delay the readjustment of dislocated industries, and sometimes thwart national policies or serve as the instrument of aggressive governments. The claims that cartels help preserve balance in international payments and that they can help solve problems of economic readjustment are regarded as unfounded. It is recognized that pressures to organize cartels arise in large part from depressions, trade barriers, and unbalanced over-expansion of particular industries, and that the success of a program directed against cartel restrictions must depend in large part upon successful policies for coping with such matters. o Paper from the Special Committee on Private Monopolies and Cartels, considered by the Post-War Programs Committee on June 2, 1944. en Not printed. APPENDIX 47 November 1945 62 Proposals for Consideration by an International Conference on Trade and Employment A. NEED FOR INTERNATIONAL ECONOMIC COOPERATION 1. Collective measures to safeguard the peoples of the world against threats to peace and to reach just settlements of disputes among nations must be based not only on international machinery to deal directly with disputes and to prevent aggression, but also on economic cooperation among nations with the object of preventing and removing economic and social maladjustments, of achieving fairness and equity in economic relations between states, and of raising the level of economic well-being among all peoples. 2. Important contributions have already been made toward the attainment of these objectives. The Food and Agriculture Organization of the United Nations has been established. An International Monetary Fund to maintain reasonable exchange stability and facilitate adjustment in the balance of payments of member countries, and an International Bank for Reconstruction and Development to provide financial resources on a cooperative basis for those purposes are awaiting the action of governments required for their establishment. 3. In order to reach the objectives of the Atlantic Charter and Article VII of the mutual-aid agreements, it is essential that the cooperative economic measures already taken or recommended be supplemented by further measures dealing directly with trade barriers and discriminations which stand in the way of an expansion of multilateral trade and by an undertaking on the part of nations to seek full employment. 4. Cooperative action with respect to trade and employment is indispensable to the success of such other measures as those dealing with monetary and exchange stability and the flow of investment capital. Effective action in regard to employment and to trade barriers and discriminations must, therefore, be taken or the whole program of international economic cooperation will fail, and an economic environment conducive to the maintenance of peaceful international relations will not be created. B. PROPOSALS CONCERNING EMPLOYMENT Since high and stable levels of employment are a necessary condition for an enlarged volume of trade, and since problems of trade and employment are to be considered jointly at an international conference, the following propositions are advanced. 1. It is recognized that: Governing Principles a. In all countries high and stable employment is a main condition for the attainment of satisfactory levels of living. b. The attainment of approximately full employment by the major industrial and trading nations, and its maintenance on a reasonably assured basis, are essential to the expansion of international trade on which the full Made public by the Secretary of State, Dec. 6, 1945. prosperity of these and other nations depends; to the full realization of the objectives of all liberal international agreements in such fields as commercial policy, commodity problems, restrictive business practices, monetary stabilization, and investment; and, therefore, to the preservation of world peace and security. 2. Domestic programs to expand employment should be consistent with realization of the purposes of liberal international agreements and compatible with the economic well-being of other nations. 3. It is recognized that the adoption of the Bretton Woods Agreements and of measures to reduce restrictions on trade will contribute substantially to the maintenance of productive employment. 4. The United Nations have pledged, in the Charter of the United Nations Organization, to take joint and separate action in cooperation with the Organization to achieve the economic and social purposes of the United Nations, including higher standards of living, full employment, and conditions of economic and social progress and development. Effectuation of Aims There should be an undertaking that: 1. Each of the signatory nations will take action designed to achieve and maintain full employment within its own jurisdiction, through measures appropriate to its political and economic institutions. 2. No nation will seek to maintain employment through measures which are likely to create unemployment in other countries or which are incompatible with international undertakings designed to promote an expanding volume of international trade and investment in accordance with comparative efficiencies of production. 3. Signatory nations will make arrangements, both individually and collaboratively under the general sponsorship of the Economic and Social Council of the United Nations Organization, for the collection, analysis, and exchange of information on employment problems, trends, and policies. 4. Signatory nations will, under the general sponsorship of the Economic and Social Council, consult regularly on employment problems and hold special conferences in case of threat of widespread unemployment. C. PROPOSALS CONCERNING AN INTERNATIONAL TRADE ORGANIZATION Need for an International Trade Organization 1. Measures designed to effect an expansion of trade are essential because of their direct contribution to maximum levels of employment, production and consumption. Since such expansion can only be attained by collective measures, in continuous operation and adaptable to economic changes, it is necessary to establish permanent machinery for international collaboration in matters affecting international commerce, with a view to continuous consultation, the provision of expert advice, the formulation of agreed policies, procedures and plans, and to the development of agreed rules of conduct in regard to matters affecting international trade. 2. It is accordingly proposed that there be created an International Trade Organization of the United Nations, the members of which would undertake to conduct their international commercial policies and relations in accordance with agreed principles to be set forth in the articles of the Organization. These principles, in order to make possible an effective expansion of world production, employment, exchange, and consumption, should: a. Provide an equitable basis for dealing with the problems of governmental measures affecting international trade; b. Provide for the curbing of restrictive trade practices resulting from private international business arrangements; and c. Govern the institution and operation of intergovernmental commodity arrangements. Proposed International Trade Organization There follows an outline of the principles which it is proposed should be incorporated in the articles of the Organization. CHAPTER I Purposes The purposes of the Organization should be: 1. To promote international commercial cooperation by establishing machinery for consultation and collaboration among member governments regarding the solution of problems in the field of international commercial policies and relations. 2. To enable members to avoid recourse to measures destructive of world commerce by providing, on a reciprocal and mutually advantageous basis, expanding opportunities for their trade and economic development. 3. To facilitate access by all members, on equal terms, to the trade and to the raw materials of the world which are needed for their economic prosperity. 4. In general, to promote national and international action for the expansion of the production, exchange and consumption of goods, for the reduction of tariffs and other trade barriers, and for the elimination of all forms of discriminatory treatment in international commerce; thus contributing to an expanding world economy, to the establishment and maintenance in all countries of high levels of employment and real income, and to the creation of economic conditions conducive to the maintenance of world peace. CHAPTER II The original members of the Organization should be those countries participating in the Conference on Trade and Employment which accept membership. CHAPTER III General Commercial Policy Section A. General Commercial Provisions Members should undertake: 1. To accord to products imported from other members treatment no less favorable than that accorded to domestic products with regard to matters affecting the internal taxation and regulation of the trade in goods. 2. To provide, for products in transit through their territories, coming from or going to other members, freedom from customs and transit duties, from unreasonable transit charges, and from discriminatory treatment of all kinds. 3. To subscribe to a general definition of the circumstances under which antidumping and countervailing duties may properly be applied to products imported from other members. 4. To give effect, as soon as practicable, to agreed principles of tariff valuation designed to assure the use of true commercial values as a basis for assessing duties, and to cooperate with other members and with the Organization in working out internationally acceptable valuation procedures of a standardized character. 5. To give effect, as soon as practicable, to agreed principles looking toward the simplification of customs formalities with a view to eliminating unnecessary requirements which afford an indirect protection to domestic products. 6. To eliminate excessive requirements regarding marks of origin in so far as they affect products imported from other members. 7. To refrain from governmentally financed or organized boycotts or campaigns designed to discourage, directly or indirectly, importation or consumption of products of other members. 8. To provide for adequate publicity regarding laws and regulations affecting foreign trade, and to maintain or establish national tribunals of an independent character to review and correct administrative customs action. 9. To transmit to the Organization appropriate trade information and statistics. 10. To cooperate with the Organization and with other members in carrying out or implementing the articles of the Organization. Section B. Tariffs and Preferences 1. Import tariffs and preferences. In the light of the principles set forth in Article VII of the mutual aid agreements, members should enter into arrangements for the substantial reduction of tariffs and for the elimination of tariff preferences, action for the elimination of tariff preferences being taken in conjunction with adequate measures for the substantial reduction of barriers to world trade, as part of the mutually advantageous arrangements contemplated in this document. As an initial step in the process of eliminating tariff preferences it should be agreed that: a. Existing international commitments will not be permitted to stand in the way of action agreed upon with respect to tariff preferences. b. All negotiated reductions in most-favored-nation tariffs will operate automatically to reduce or eliminate margins of preference. c. Margins of preference on any product will in no case be increased and no new preferences will be introduced. 2. Export tariffs and preferences. Export duties should be open to negotiation in the same way as import duties. Members should undertake not to impose or maintain export duties which differentiate by reference to the destinations to which the goods are exported. 3. Emergency action. Commitments with regard to tariffs should permit countries to take temporary action to prevent sudden and widespread injury to the producers concerned. Undertakings for reducing tariffs should therefore contain an escape clause to cover such contingencies. Section C. Quantitative Trade Restrictions 1. General elimination of quantitative restrictions. Except as provided for elsewhere in this Chapter, members should undertake not to maintain any |