'782


FOREIGN RELATIONS, 1950, VOLUME ]1


-than the ITO, is to become the organization in the trade field, the
U.S. delegation at Torquay must be instructed so that the form of an
-organization can be worked out internationally now (without commit-
-ment) for Congressional consideration later.
SRecoommendations
   1. That the ITO be discarded.
   2. That, in seeking renewal of the Trade Agreements Act, the
Administration press for authority to establish an organization under
the General Agreement. (The form and extent of the authority which
-should be sought for the reduction of tariffs will be the subject of
'later recommendations.)
   3. That the Administration also press for passage of the Customs
-Simplification Act, and certain minor legislation, in order to make
the General Agreement fully effective.
   4. That the Administration's decision on the foregoing be kept
strictly confidential pending discussion of the whole program with
the appropriate Congressional leaders.
   A draft memorandum to the President setting forth these recom-
amendations and the reasons for them is attached. (Tab A) 7

  'Not attached, but see the Secretary of State's memorandum to the President,
-November 20, infra.

:394-ITO/12-650
       Memorandum by the Secretary of State to the President

'SECRET                          [WASHINGTON,] November 20, 1950.
  I believe the Administration must reach a decision soon on its
legislative program in the 82nd Congress with respect to the Recip-
rocal Trade Agreements Act and the Charter for an International
'Trade Organization.
  The authority to make tariff concessions under the Trade Agree-
ments Act is scheduled to expire on June 12, 1951. Hearings have been
held on the ITO by the House Foreign Affairs Committee but no
-action will have been taken by the end of the present session.
   Our trade program has been to other countries both a symbol and
a test of our intentions. It has been a symbol of American leadership
in world economic improvement through the better use of human
and material resources. It has been a test of the willingness of the
United States to do its part in making that improvement possible.
  The expansion of trade is an indispensable part of our total effort
to create strength and unity in the free world. Freer trade, economic
development and foreign assistance form together the economic in-
strument through which we hope to build up the military strength