19. Letter From the Vice Chairman of the Delegation to the Ninth Session of the General Agreements on Tariffs and Trade (Brown) to the Assistant Secretary of State for Economic Affairs (Waugh)1
Dear Mr. Waugh: We have had informal consultations with the Australians, New Zealanders, South Africans, Danes, Italians, British and Canadians with respect to our Section 22 waiver. It is difficult to describe the atmosphere of those discussions.
We met last night in a climate of depression and concern. All of the countries, even I believe the Canadians, though they did not say so, recognize that we will have to get the waiver. Everyone not only feels, but expressed, albeit in moderate and sympathetic terms, a sense of letdown, discouragement, and disappointment that it was necessary for the U.S. to take this position. When they were talking about possible changes in the form of the waiver, they did not take a negotiating position, but rather spoke in terms of appealing to us. Obviously, they will be stiffer in working party and will insist in a number of changes, many of which I think we can properly give them. But last night they were simply bowing to superior strength.
[Page 81]The meeting began with a statement by one delegate that this was the most disagreeable of a whole series of spoonfulls of bad medicine which his country had had to absorb at this meeting and ended with a statement of another that the U.S. had to get a two-thirds vote which meant that only ten countries could vote against the waiver. The delegate asked how they should decide which ones should have the privilege of doing so.
They were all terribly concerned about the effect of the waiver and its open-ended character on the efforts we are all making to limit the use of hard-core quotas2 by European countries. They are finding it increasingly difficult, for example, to see how they can insist on a time limit for the Europeans and none for us.
It is, therefore, clear to me that the biggest contribution we could make to success in dealing with the European hard-core problem in a manner which would satisfy us (we must not forget that those quotas will be imposed mostly on agricultural products and, for example, on coal) and to the improvement of the general US position here, would be if we could accept a time limit, even in the form suggested by DeFelice3 in the draft he sent back to Washington. It is too early yet to say whether this is something that we will have to do to get the waiver, or how great the cost of doing without it will be to us in dealing with the hard-core problem. I therefore do not feel I can put the proposal forward as a matter of absolute negotiating necessity.
I would, however, ask you to consider whether as a matter of general contribution to our relations with all these countries, especially as a matter of relations with Canada, and as a contribution to getting what we want and what the smaller countries of Europe, who feel they are being let down by the U.S., want in dealing with the hard-core problem, we might indicate a willingness to take some form of a time limit. You will recall that you thought of making this suggestion to Wilgress4 when we talked with him and Sharp5 in Paris, but at my suggestion withheld doing so in order that we could [Page 82] use it as a possible negotiating counter here. I think the time has come or will come within a couple of days when, if we were able to make this offer, it would have a striking and very beneficial effect upon the entire atmosphere of this conference and especially upon the outcome of the hard-core problem and the U.S. negotiating position in a variety of matters which are now coming to a head. Against this we must, of course, weigh the political problem which such a time limit might create for us at home. Sincerely yours,
- Source: Department of State, GATT Files: Lot 59 D 563, GATT: Memos, 1955. Official Use Only; Personal. Assistant Secretary Waugh, in Washington at the time, was Chairman of the U.S. Delegation. For a list of the other members, see Department of State Bulletin, November 8, 1954, p. 711.↩
- Contracting parties were authorized under GATT Article XIV to restrict imports from other members as long as these quotas were necessary to correct balance-of-payments deficits. However, at the same time these import quotas often shielded domestic industries which could not compete with less expensive imports. Because the elimination of these restrictions often had an adverse economic impact on the industries involved, several contracting parties supported an amendment to permit the maintenance of these so-called “hard core” quotas once the payments problems which had legitimized them had disappeared.↩
- A. Richard DeFelice, adviser to the U.S. Delegation from the Department of Agriculture.↩
- L. Dana Wilgress, Chairman of the Contracting Parties to the General Agreement of Tariffs and Trade and Canadian Ambassador to the North Atlantic Council.↩
- Mitchell Sharp, Associate Deputy Minister of the Canadian Department of Trade and Commerce.↩