FOREIGN ECONOMIC AND COMMERCIAL POLICY                  781

   3. An effective trade program requires:

   (a) Renewal of the Trade Agreements Act.
   (b) Passage of the Customs Simplification Act.         (and certain
minor legislation),in order to make the General Agreement on Tariffs
and Trade fully effective.
   (c) The establishment of an organization in the field of trade.
   4. The ITO Charter would have provided the necessary trade orga-
nization. But the ITO is no longer a practical possibility. Moreover,
some of its controversial provisions are no longer necessary because
of actions we have taken in other ways (e.g. Point Four).6 Re-
introduction of the ITO     will engage us in fruitless argument and
end in almost certain defeat or indefinite delay. Either result would
be damaging to foreign policy.
   5. The General Agreement-to which 33 countries are parties-
 contains the same basic trade rules as the ITO, but has no organization.
 Without an organization the Agreement will bog down and become
 unworkable. Congressional approval is required to establish an
 organization.
   6. The choice, therefore, is between either:
   (a) Seeking Congressional approval of both the ITO and renewal
of the Trade Agreements Act; or
   (b) Discarding the ITO and concentrating our legislative efforts
on renewal of the Trade Agreements Act with authority to establish
an organization under the General Agreement.

   7. A decision is needed promptly. The parties to the General Agree-
ment are now meeting in Torquay. If the General Agreement, rather

  5This was a Department of the Treasury-sponsored bill which was introduced
  Into the House of Representatives on May 1, 1950, by Representative Robert
L.
Doughton, Chairman of the House Ways and Means Committee. The Department
of State strongly supported the proposed legislation, for reasons of general
policy stated in a letter of February 8, 1950 from the Secretary of State
to the
Director of the Bureau of the Budget (Pace) :
  i ..For many years a cardinal objective of the foreign economic policy
of
the United States has been the reduction of unnecessary trade barriers. One
important aspect of this problem relates to the simplification of customs
pro-
cedures. In a number of international conferences leading to the formulation
of
the Charter for an International Trade Organization and the General Agreement
on Tariffs and Trade, representatives of this Government took the lead in
preparing and supporting measures for the simplification of customs procedures.
  "All of the amendments to existing laws proposed by the customs bill
are
consistent with the ITO Charter and some of them would be required in order
to carry out certain of our international obligations arising from membership
in the ITO and in order to make fully effective certain provisions of the
General
Agreement on Tariffs and Trade which is now being applied on a provisional
basis. Some of the proposed amendments are needed to enable the United States
to comply with the provisions of Annex 9 of the Convention on International
Civil Aviation." (Lot 57D-284, Box 161, Folder "Customs Procedures")
An annex was attached to this letter, in the form of a memorandum drafted
in the Office of International Trade Policy on January 31, 1950, which dlescribed
in some detail specific changes included in the proposed customs simplification
act For documentation on the Point IV program, see pp. 846 ff.