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axations of tariffs and of nontariff measures
vhich tend to impede the access of the less devel-
)ped countries to world markets. And so I would
propose this morning that we take very serious
iccount of this problem and that we try to find
;he ways of giving new impetus to a search for
;olutions.

The United States delegation has put forward a
Iraft resolution which we commend to this body,
[n this resolution we set forth the reasons why it
s necessary for us to seek a solution to the problem
)f finding markets for the less developed coim-
ries. We suggest some guiding principles that
night be followed by the economically advanced
countries in furthering this effort, and we express
;he very specific responsibility which is the part
)f the economically advanced countries in seeking
iuch solution. The decision as to the procedures
;hat should be established to develop concrete pro-
p-ams of action is one which I think we must take
;^ery quickly. I would suggest perhaps that Com-
nittee III might be asked to take steps and make
recommendations that are necessary to strengthen
)ur authority to follow this problem and to de-
velop specific programs.

I would like on behalf of my Government to
jxpress our interest in and our support for the
proposal put forward by the Nigerian delegation,
riiis is a proposal which looks toward the problem
jf access for tropical products specifically. It is
^uite consistent with some initiatives which the
Qnited States Government has itself taken in this
field.

The problem of primary products is of course
only part of the problem. Quite obviously, as
countries move into the early stages of develop-



ment, they are interested in the development of
manufactures, and, as was suggested a moment
ago, the pi'oduction of cotton textiles is almost a
classical example of a labor-intensive manufacture
wliich is adapted to the resources of many less
developed countries. Last summer we had some
experience in trying to find an interim solution to
this problem, and, as you know, the GATT is pres-
ently undertaking to guide a group which is seek-
ing a longer term solution for the textile problem.^
In seeking that solution let me say that, so far
as the United States is concerned, we put great
emphasis on the need for increasing access for the
production of the less developed countries. This
will, I can assure you, be the guiding principle
which the United States Government will follow
in its work in this body. We have not only the
problem of providing access for simple manu-
factures ; we have the broader problem of dealing
with the tarifl' questions so far as they affect the
less developed coimtries, and I think that here we
have to be very clear that the principles of reci-
procity which may govern the dealings between
the economically advanced countries may not be
altogether as faithfully followed as in the dealings
between economically advanced countries and the
less developed countries. There is obviously room
for some flexibility.

Another aspect of this problem which I think
we should all give some attention to is the question
not merely of providing access to markets by the
reduction or elimination of national obstacles in
the form of tariffs, quotas, or the other familiar
paraphernalia of trade restriction, but there should
be a very serious effort on the part of the economi-
cally advanced countries to provide assistance to
the export industries of the less developed coun-
tries, to assist them to improve their production,
and, quite as important, to assist them in improv-
ing their marketing methods. On the part of the
United States Government let me say that we are
prepared to provide technical assistance in this
matter and we feel that this is a situation in which
efforts of this kind can be very fruitful indeed.

Along with this goes the problem of assisting the
less developed countries to meet the sanitary re-
quirements of the economically advanced countries
and to comply with the specifications and require-



' For background, see Hid., Aug. 21, 1961, p. 336 ; Sept
25, 1961, p. 528 ; Nov. 6, 1961, pp. 773 and 776 ; and Nov.
27, 1961, p. 906.



January 1, J 962



ments which have been imposed by these countries
for I'easons of public health or similar reasons.
Here, again, there is a tendency on the part of
some governments to use the sanitary restrictions
as a restrictive device. I may say that this is some-
thing which the United States Government has
tried strenuously to avoid, and I would suggest
that it is not a practice which should be continued
by any of the governments.

These are only some of the problems which I
think it is important for us to give attention to
here tliis morning. Along with the development
of markets for the primary production of the
less developed countries, we have, as I mentioned
a moment ago, the problem of bringing some
stability into the price structure. This also is
something which should, I think, represent a co-
ordinated effort on the part of the economically
advanced countries, and my Government is pre-
pared to work very seriously on this matter
through the appropriate agencies of the United
Nations, the OAS [Organization of American
States], the FAO [Food and Agriculture Organi-
zation], and so on.

These represent a few of the comments which
we would like to make at this point on this very
important problem. We have, as I say, put for-
ward a resolution, and I would hope that this body
might give serious attention to that resolution since
it seems to us to express some veiy useful ideas as
to the appropriate ways and means by which this
very important question can be approached.

STATEMENT BY MR. GUDEMAN, NOVEMBER 29

Press release 874 dated December 11

Trade in Agricultural Commodities

One of the most difficult and fundamental prob-
lems facing us is that of trade in agi-icultural
products. The time is long overdue for us to
come to grips with this problem. The challenge
this problem presents to GATT is basic. Wliat is
at issue is whether countries are prepared to co-
operate in their own and in the common interest.

While great progress has been made in the re-
moval of restrictions on trade in manufactured
items, relatively little progress has been made
as regards trade in agricultural products. Quan-
titative restrictions, state trading, mixing require-
ments, and other devices are still extensively



applied to limit trade in agricultural products.
Tlie third report of GATT Committee II describes
the wide range of restrictive devices employed ia
the agricultural field. The report indicates the
adverse consequences to resource use in the protect-
ing countries, to economic development in the ex-
porting countries, and to the continuance of
GATT as a trade-expansive body if these pro-
tective devices continue. The longer these
restrictions remain, the more deep-seated and en-
trenched they become and the more difficult they
will be to remove.

We are disturbed not only over the existing re-
strictions but also at the tendencies toward even
increased agricultural protectionism. We hope in
particular that the EEC, one of the world'si
greatest agricultural markets, will not adopt poli-
cies or measures insulating the Community from
the world market in agricultural commodities.

We are concerned because of adverse effects noti
only on our own trade but also on trade of other'
countries, notably the less developed countries,
which must have access to markets if their legiti-
mate aspirations are to be achieved.

We are pleased to hear the remarks of other;
speakers recognizing this problem and urging that
a solution to it be found. Wliile it is not clear
what form the solution should take, it is clear
that some form of international approach isi
required.

We welcome therefore the suggestions made by
the representatives of France, of Germany speakn
ing for the EEC, and of other countries, most
recently New Zealand, that this problem be studied
to see what the possibilities for action may be.
We urge that the Contracting Parties establish
procedures for tlie development of proposals to
serve as a basis for the negotiation of practical
measures to permit access to markets for inter-
national commodities. These procedures should
provide for the establishment of such groups as
may be necessary for this purpose. My Govern-
ment would be agi-eeable to beginning this work
with an examination of the possibilities for solu-
tion of the problem of cereals as proposed by the
representative of France. However, it should be
understood at the outset that possible solutions in
any other agricultural commodity where there is
an access problem, not just in wheat, should be
considered.

It should be understood, also, that the United
States could not consider these possible solutions



Department of Stale Bulhtin



as substitutes for a reasonable settlement of the
agricultural issues in the current Geneva tariff
negotiations.

We are not prepared at this time to judge what
is the right solution to the problem of access to
agricultural markets. Indeed there is likely to
be more than one answer. We should like to
emphasize, however, that, whatever the solution
may prove to be, it should be one which will, first,
provide substantially increased access to the
markets of importers of agricultural commodities ;
second, take into account the legitimate interests
of botli importers and exporters; and, third, rest
upon the fundamental principles of the GATT.

The purpose of these remarks has not been to
direct undue criticism at any country or group of
countries but to empliasize the conviction of my
Government that it is imperative to take steps to
free agricidtural trade from many of the restric-
tive devices now impeding this trade. The prob-
lem is not easy to solve, but fundamental problems
rarely are. The very complexity of the whole area
of agricultural trade, and the importance of agri-
cultural production and trade to the social, eco-
nomic, and political fabric of most of our
countries, highlight the urgency of our getting
on with the job.



REPORT OF U.S. DELEGATION

Prpss release 871 dated December 11

New procedures for future tariff reductions,
special measures to achieve broader access to world
markets for agricultural products, and intensified
efforts to expand the export earnings of less de-
veloped countries were the central topics con-
sidered by the Contracting Parties to the General
Agreement on Tariffs and Trade (GATT) at their
19tli session, which ended in Geneva on December
9. Each of these matters has been the object of
intensive study by the Contracting Parties under
their Program for the Expansion of Trade. They
were further considered at the GATT ministerial
meeting on November 27-30, and, in accordance
with decisions adopted by the ministers, the Con-
tracting Parties approved action programs for
intensified efforts to expand world trade.

Meeting from November 13 to December 9, con-
tracting parties and governments associated with
the GATT called a recess in their regular session
so that trade ministers might meet to provide the



necessary additional policy guidance for further
steps to carry forward the GATT's trade expan-
sion program.

Tlie U.S. ministerial representative was Greorgo
W. Ball, Under Secretary of State. Edward
Gudeman, Under Secretary of Commerce, was
vice chairman of the U.S. ministerial delegation.
The chairman of the U.S. delegation to the 19th
session was Joltn W. Evans, U.S. Eepresentative
on the GATT Council of Kepresentatives.

In addition to work related to the ministerial
meeting, the Contracting Parties at their 19th
session dealt with an extensive agenda of some 60
topics, including such matters as regional eco-
nomic arrangements, quantitative import restric-
tions, the application of GATT trading rules to
Japan by all contracting parties, and the welcom-
ing of a new nation — Tanganyika — as the 40th
contracting party to the GATT.

Perhaps the most far-reaching actions taken
by the Contracting Parties, however, were those
directed to ministerial conclusions on the trade
problems identified in the work of the Program
for the Expansion of Trade and the new tasks
arising from these conclusions.

The ministers reaffirmed their confidence in the
General Agreement as the basis for the trading
relationships of their countries and agreed that
steps should be taken to increase its effective ap-
plication in the three fields of action (tariff re-
duction, trade in agriculture, and trade with the
less developed countries) which were submitted
to the ministers for their consideration. The min-
isters adopted four conclusions, together with
recommendations for additional action by the
Contracting Parties :

(1) The multilateral reduction of tariffs on a
most-favored-nation basis should be continued,
but new techniques should be adopted, suited to
the changes that had taken place in world trading
relationships. In this connection one of the
tecliniques most prominently mentioned by min-
isters was some form of across-the-board or linear
tariff negotiation. Accordingly, the Contracting
Parties established a working party on procedures
for tariff reduction, which will meet in the near
future to examine new procedures and techniques
for the further reduction of tariffs on a most-
favored-nation basis.

(2) Having expressed great concern over the
degree and extent of agricultural protectionism,
the ministers requested that the Contracting Par-



January ?, 1962



ties adopt procedures designed to form the basis
for the negotiation of "practical measures for the
creation of acceptable conditions of access to world
markets for agricultural commodities." The Con-
tracting Parties decided that the work would be
coordinated by the GATT Council of Representa-
tives and that a first step would be taken in early
February of 1962 with a preliminary examination
of possibilities for a solution of the problem of
trade in cereal products. The GATT Council is
expected to initiate discussion of other commodi-
ties at its February meeting.

(3) The ministers' discussion of obstacles to the
trade of less developed countries reflected wide-
spread concern that the present rate of growth
of the export earnings of the less developed
countries is not keeping pace with the growth of
their foreign exchange requirements and recog-
nition that aid can be no substitute for trade in
the financing of economic development. Accord-
ingly the ministers adopted a U.S. -sponsored
declaration on promotion of the trade of less
developed countries. The declaration recognizes
the need for a special effort by all governments to
expand the export earnings of the less developed
countries, particularly through providing im-
proved access to markets, and sets forth certain
guiding principles to this end. The ministers
further agreed that their governments should ob-
serve these principles as fully as possible, with the
aim of reducing obstacles to the trade of the less
developed countries in the near future. More-
over, in response to an appeal from the less
developed countries for some concrete measures
of assurance that early progress will be made, the
ministers asked the Contracting Parties to draw
up specific programs of action for the reduction
of trade barriers and to establish procedures for
keeping under review the actions taken by indi-
vidual governments to improve market oppor-
tunities for the less developed countries.

Besides adopting the declaration on the pro-
motion of trade of less developed countries, the
Conti-acting Parties agreed that preliminary
arrangements for future action programs envis-
aged by the ministers would be undertaken at a
meeting of the GATT's Committee III prior to
February. The Contracting Parties also accepted
the conclusion of most of the ministers that the
question of duty-free entry for tropical products
should be given cai-eful consideration.



Finally the ministers considered the situation
resulting from the fact that the GATT was not
being applied to trade relations between Japan
and some of the contracting parties. Some min-
isters expressed the hope that early action could be
taken by the contracting parties concerned to en-
able Japan to participate fuUy in the GATT and
agreed that such action would greatly add to the
effectiveness of the GATT. The United States
strongly supported this conclusion.

Other noteworthy trade policy matters before
the Contracting Parties were regional trading ar-
rangements, mcluding the European Economiei
Community (EEC), the European Free Trade
Association (EFTA), and the Latin American
Free Trade Area (LAFTA) ; programs designed
to eliminate or significantly reduce quantitative
import restrictions still imposed by some contract-
ing parties ; reviews of waivers of GATT obliga-
tions granted to certain contracting parties, in-
cluding the United States; an extension of the^
arrangements for the provisional accession ofl
Switzerland to the GATT; special arrangements
to give newly independent states, chiefly of Africa,
full opportunity to determine their future rela-
tions to the GATT ; a review of the progress Yugo-
slavia has made toward arrangements which would
permit her to apply the GATT's rules of trade
conduct; a request by the United States that thei
Contracting Parties consider the special problem i
of applying the GATT to international trade in
television programs; and a new free-trade area<
established between Sarawak and North Borneo.
Decisions were also taken agreeing to the accession
to the GATT of Israel and Portugal upon thei
completion of certain formalities relating to tariff!
negotiations both countries completed durmg the'
1960-61 GATT tariff conference.

In addition to agreeing upon a program of meet-
ings and the GATT budget for 1962, the Con-
tracting Parties elected their officers for next year.
The new chairman will be W. P. H. Van Ooi-schot
of the Kingdom of the Netherlands. The vice
chairmen will be J. B. Daramola of Nigeria and
J. H. Warren of Canada.

Mr. Evans, chairman of the U.S. delegation to
the 19th session, was assisted by two vice chairmen,
Leonard Weiss, Director, Office of International
Trade, Department of State, and William Dale,
Director, Bureau of International Programs, De-
partment of Commerce; two congressional ad-



8



Department of State Bulletin



visers, Cecil K. King and Herman T. Sclineebeli,
House of Representatives; and a special adviser,
William E. Dowling, Commissioner, U.S. Tariff
Commission. Otlier members of the U.S. delega-
tion were drawn from the Departments of State,
Treasury, Agriculture, Commerce, Interior, and
Labor.^



TEXT OF DECLARATION

] )ECLARATIO?J ON PuOMOTION OF THE TRADE OF LESS-

Developed Countries

1. The Contracting Parties recognize that there is
need for rapid and sustained expansion in the export
earnings of the less-developed countries If their develop-
ment is to proceed at a satisfactory pace. They recog-
nize the magnitude of the tasli before the governments of
those countries in increasing per capita incomes and rais-
ing the standard of living of their peoples. To achieve
these ends, increasing amounts of foreign exchange will
be required for financing the imports needed to sustain
and develop the economy. Although international aid
is now and will continue to be essential in covering these
needs, aid can be no substitute for trade. In the final
analysis, economic development will have to be paid for
from the earnings of the countries concerned.

2. The export trade of the less-developed countries is
not growing at a pace commensurate with the growth of
their foreign exchange needs or with the growth of world
trade generally. The Contracting Parties accordingly
recognize the need for a conscious and purposeful effort
on the part of all governments to promote an expansion
in the export earnings of less-developed countries through
the adoption of concrete measures to this end. The suc-
cess of the efforts of developing countries will depend to
a great extent upon their ability to find the necessary mar-
kets. Accordingly, contracting parties should reduce to
a minimum restrictions inhibiting access to markets for
the export products of the less-developed countries. The
governments of the major industrialized areas, on whose
markets the less-developed countries must necessarily
largely depend, recognize a particular responsibility in
this respect.

3. The Contbactino Parties agree that, if the needs of
the less-developed countries for enlarged and diversified
export trade are to be met, these countries must develop
trade in other than traditional products. They note that
some developing countries already have the investment
and technological resources for the processing of raw
materials and are able to produce eflSeiently some manu-
factured goods. They recognize that it is desirable that
the.se countries and others possessing the necessary ma-
terials and skills be provided with increased opportunities
to sell in world markets the industrial goods which they
can economically produce, and urge that governments give



^ For the members of the U.S. delegations to the minis-
terial meeting and to the 19th session, see Department of
State press release 773 dated Nov. 9.



special attention to ways of enlarging these opportunities.
4. The Contracting Parties recognize that govern-
ments can contribute to the general objectives outlined
above by observing the following principles and taking
into account the following facts regarding tariff and non-
tariff measures affecting access to markets.

(a) Quanlitative restrictions. Governments should
give immediate and special attention to the speedy removal
of those quantitative Import restrictions which affect the
export trade of less-developed countries. Where it Is
necessary for a government to maintain such restrictions
under appropriate provisions of the GATT, it should apply
them in a non-discriminatory manner causing the mini-
mum hindrance to international trade, pursue policies
designed to remove the underlying conditions requiring
the use of such restrictions and, pending their elimination,
give careful and sympathetic consideration to progressive
increases in quotas. Contracting parties which are in
process of moving out of balance-of-payments difficulties
should take particular care that liberalization benefits are
extended in the fullest measure to the trade of less-
developed countries, having regard to the urgent need for
helping these countries attain rapid, self-sustaining
growth.

(b) Tariffs. Governments should give special attention
to tariff reductions which would be of direct and primary
benefit to less-developed countries. In this connexion,
they should consider the elimination of tariffs on primary
products important in the trade of less-developed coun-
tries. They should also consider reducing thofse tariffs
which differentiate disproportionately between processed
products and raw materials, bearing in mind that one
of the most effective ways in which less-developed coim-
tries can expand their employment opportunities and in-
crease their export earnings is through processing the
primary products they produce for export.

(e) Revenue duties. Fiscal charges, whether imposed
as tariff duties or internal taxes, may inhibit efforts
directed towards increasing consumption of particular
products important in the trade of less-developed coun-
tries and, even where applied equally to imports and to
competing domestic products, can be a serious obstacle
to the expansion of trade. The Contracting Parties
appreciate that adjustments in a fiscal system may be a
complex matter, with important financial, economic and
other consequences which have to be taken into account.
Bearing in mind, however, the urgent development needs
of less-developed countries and the current financial and
economic .situation in the industrialized countries mainly
concerned, they agree that the removal or considerable
reduction of revenue duties and fiscal charges in indus-
trialized countries would be a useful contribution to the
foreign exchange earning capacity of less-developed ex-
porting countries.

(d) State trading. Access to markets for products of
the type studied by Committee III should not be unnec-
essarily impeded through the operations of State import
monopolies or purchasing agencies. For many products
exported by less-developed countries, the prices charged



Online LibraryUnited States. Dept. of State. Office of Public CoDepartment of State bulletin (Volume v. 46, Jan- Mar 1962) → online text (page 9 of 101)