560.AL/7–2848
Memorandum of Conversation, by the Chief of the Division of Financial Affairs (Spiegel)
Participants:
| Australian Embassy: | Department of State: |
| Mr. Garside | Mr. Shullaw—BC |
| Mr. Magee1 | Mr. Corse—CP |
| Mr. Phelps—CP | |
| Mr. Lewis—CP | |
| Mr. Spiegel—CP |
Mr. Garside was invited to come to the Department for a discussion concerning the position of the U.S. on the various items on the agenda for the second session of the Contracting Parties of the GATT (see also Deptel No. 169, July 29, to Canberra2).
After a few general comments on what happened at Habana, Mr. Corse began the discussion by saying that because of the very short session that has been planned (ten days), we felt it would be desirable to explain the position the U.S. expected to take on the various items that will be brought up at Geneva.
In explaining point 43 he said that the general provisions of the GATT corresponded to the language of the Geneva and not the Habana Charter, but the GATT provided for supersession of those GATT provisions with the corresponding provisions of the Habana Charter when it comes into force. At Habana proposals had been made to incorporate into the GATT immediately the corresponding Charter provisions. The U.S. opposed complete replacement of all the GATT provisions prior to the coming into force of the Charter, but agreed to replacing Articles XIV and XXIV with the Habana language, which had been done.
He stated that the U.S. position had not changed since Habana, that we are still opposed to complete supercession in advance of the coming into force of the Charter—point 4(a)—but that we would be prepared to consider the replacement of specific Articles—4(b). Mr. Phelps stated that early in June our Embassy at Canberra had discussed this point with Australian officials, who stated that Australia might favor 4(a). Mr. Phelps expressed the hope that Australia would change her position and support that of the U.S.
[Page 929]Point 5 of the agenda is for the purpose of clarifying after the Charter comes into force the relations of Contracting Parties to the GATT who are not members of the ITO with those who are members. Mr. Corse stated that no agreement was reached on this point at Habana and that at the Geneva meeting the U.S. will support the proposal that GATT countries which are not members of the ITO will be governed by the GATT in their relations with ITO countries pending their becoming members of the ITO. Mr. Phelps mentioned the fact that the Department had been informed by our Embassy at Canberra that Australia is in agreement with the U.S. position on this point.
Mr. Corse said that point 6 presents difficulties for the U.S. because of the U.S. domestic situation, i.e., allegations of some Congressmen that the U.S. Executive Branch under GATT is creating a “little ITO” prior to the consideration of the ITO Charter by Congress. Therefore it is difficult for us even to agree to setting up a separate GATT Secretariat to function between meetings because this might be construed as an “international organization”. At Habana the problem was met temporarily by an agreement among the Contracting Parties that all communications between the first and second sessions be addressed to the Chairman of the GATT, (Mr. Wilgress of Canada) in care of Mr. Wyndham White, Executive Secretary, ICITO. He said that the U.S. position on this item is still under consideration.
Point 7 is merely an affirmative report on which of the GATT countries signed the Protocol of Provisional Application, the status of the other protocols pertaining to the GATT, etc.
Mr. Garside asked if at the Geneva meeting the U.S. would be able to state which provisions of the GATT are and which are not inconsistent with existing U.S. legislation. Mr. Corse informed him that we would not be able to do so, although our studies to date have indicated only a relatively few cases where they are inconsistent.
With respect to point 8, it was stated that the U.S. would like to see Chile become a member of the GATT. Mr. Phelps also stated that we had informed the Chileans that we would like to see them come to Geneva prepared to sign the Protocol of Provisional Application, and that if that is not possible the U.S. would be willing to extend the period not to exceed two months beyond the closing date of the second session. This latter point, however, has not been communicated to the Chileans. Mr. Corse added that by this procedure it would be possible for Chile to get about four of the full six months’ delay which it had requested.
In regard to points 9 and 10 Mr. Corse said that the Executive Secretary, Mr. Wyndham White, had sent inquiries to the countries which had participated in the Habana Conference, excepting the Republic of [Page 930] Indonesia, asking them if they were interested in joining the GATT, including in conjunction therewith tariff negotiations. Subsequently we requested our missions in these countries to ascertain the reaction of these countries to Wyndham White’s inquiry, and whether they would be interested in entering into purely exploratory discussions with the U.S. to see if a basis exists for tariff negotiations with this country. Mr. Phelps explained that although we are interested in extending the membership of the GATT, U.S. participation in an early program of tariff negotiations under GATT raises certain problems, in the light of the one year extension of the Trade Agreements Act. He said that if any negotiations are held by the U.S. under the present one year authority, it would be necessary to make the required public announcement not later than the middle of October and preferably in September. Mr. Phelps also mentioned that the Republic of Indonesia had not been approached because the Netherlands-Indies was presently included in the GATT as a part of the Kingdom of the Netherlands.
Mr. Corse said that with respect to points 11 and 12, i.e. renegotiations with Pakistan and Cuba, the U.S. has no position as yet. In any case we could not participate in any such negotiations at Geneva in view of our required domestic procedures of public announcements, hearings, etc. He also explained point 13 by saying that the Netherlands is having some difficulty with Cuba over consular fees.
Point 14 deals with a proposed clarification of the language of certain items in the GATT tariff schedules, none of which, it is believed, would be of direct interest to Australia.
It was pointed out that the U.S. has been interested in point 15 for some time, and that we tried to get a commitment concerning M-F-N treatment for the occupied areas, at both Geneva and Habana. It was explained that as long as Germany, Japan and Korea are under military occupation and the U.S. is pouring money into these areas, the U.S. feels strongly that their exports should get M-F-N treatment. Mr. Corse further explained that after occupation is ended these countries will be on their own feet, but until that time the U.S. will continue to press for M-F-N treatment for them. He agreed that this problem had been partially resolved in the ECA agreements.
Point 16 was also placed on the agenda at the request of the U.S. Mr. Corse said that organic legislation for U.S. trust territories has been submitted to Congress which permits exports from these trust territories to enter the U.S. free of duty and with certain preferences. Since this (i.e., institution of new preferences) is not permitted by the GATT the U.S. proposes to seek a waiver to permit such action under Article XXV of the GATT. On the other hand, under this proposed legislation imports into these territories from all countries including the U.S. would bear the same rate of duty. It was pointed out that [Page 931] our position is analogous to the Australian position with respect to Papua and New Guinea.
Under point 17 the U.S. envisages a relatively informal arrangement between the GATT countries and the IMF. Mr. Phelps said that possibly an exchange of letters between the GATT chairman and the Fund would serve the purpose, and in this exchange it could be spelled out that the IMF would be prepared to consult and make the findings as envisaged under Article XV of the GATT. It was also explained that the GATT requires that special exchange agreements be negotiated between those GATT countries which are members of the Fund and those which are not yet members. Mr. Phelps said that the U.S. would propose that a drafting committee be set up at the second session of the Contracting Parties to deal with this matter, which could report to the third session of the Contracting Parties.
It was stated that we have no definite views as to the date for the third session of the Contracting Parties, point 18. Mr. Corse explained that the GATT provides for a meeting in January, if the ITO Charter has not entered into force, but that it might be desirable to postpone this meeting until a later date. Mr. Phelps mentioned that if a round of tariff negotiations should be scheduled for early next year such postponement would be desirable.
Mr. Corse closed the meeting by saying that we would welcome any comments which the Australians would have to offer, either on the agenda or on any points raised in today’s conversation. Mr. Garside replied that since a copy of the agenda had already been sent to his Government he would report to it by reference to the agenda.
A copy of the agenda which served as a basis for the conversation is attached.4