FOREIGN ECONOMIC AND COMMERCIAL POLICY


  2. The purposes of Chapter III, relating to economic development
and reconstruction are being fulfilled through the Point Four pro-
gram, through our program of commercial treaties with under-
developed countries, and through the economic development clauses
of the General Agreement on Tariffs and Trade.
  3. The commercial policy rules of Chapter IV are incorporated in
the General Agreement on Tariffs and Trade.
  4. The provisions of Chapter V, looking toward international action
against restrictive business practices, might be added to the General
Agreement later, after an organization is established.
  5. Chapter VI, which provides rules for commodity agreements,
has been in effect since 1947 under an Economic and Social Council
resolution and can be added to the General Agreement under the
presently existing legal powers of the parties to the Agreement with-
out further Congressional authority.
  6. The purposes of Chapter VII, which deals with organizational
matters, would be met by the new organization under the General
Agreement.
  The proposal to establish an organization under the General Agree-
ment will meet with opposition from some of the opponents of the
ITO. But it is likely to be supported, with conviction, by the sup-
porters of the Trade Agreements Act as a means of strengthening the
trade-agreements program. There is also reason to believe that Certain
influential groups which have opposed the ITO, such as the National
Foreign Trade Council and some members of Congress, would sup-
port the addition of appropriate organizational provisions to the
Trade Agreements Act if the ITO were withdrawn.
   In any event, the trade-agreements program is likely to mean a
major battle in the Congress. To get through unimpaired it must be
presented as necessary to the achievement of the broad international
objective of strengthening the free world through an expanding world
economy. This can help to float the program over the shoals of the
opposition of individual protectionist groups.
  It is important that you make an early decision on the proposal
to drop the ITO and establish an organization under the General
Agreement. The 51th Session of 'the parties to the General Agreement
on Tariffs and Trade is now meeting in Torquay, England. This
session will be over in December. If the course of action outlined
above is to be adopted, the United States Delegation to the 5Zth Ses-
sion should be informed immediately in order that it may work out
promptly with the other p~arties to the Agreement the form of a suit-
able organization under the Agreement. Some measure of interna-
tional agreement on this question must be reached now so that concrete
proposals can be available for discussion with Congress early in the
next session.


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