Appendix 1 APPENDIX UNITED NATIONS NEW YORK
ECA 148/8/03 (3) ' 30 October, 1953.
Dear Sir,
I have been directed by the Secretary-General to draw your attention to the Economic and Social Council Resolution 487 (XVI) of 31 July, 1953, a copy of which is enclosed.
Under paragraph 2 (a) of the Resolution, the comments of your Organisation have been requested on the following reportsNote relating to restrictive business practices:
1 Repor t of the Ad Hoc Committee on Restrictive Business Practices, Economic and Social Council Official Records : Sixteenth Session, Supplement No. 11 (E/2380; E/AC. 37/3).
2 Analysis of Governmental Measures relating to Restrictive Business Practices, Economic and Social Council Official Records; Sixteenth Session, Supplement No. 11A (E/2379 and E/2379/Add. 1 ; E/AC. 37/2 and E/AC. 37/2 Add. 1).
3 Annex C — Texts of National Legislation and Other Governmental Measures Relating to Restrictive Business Practices, Economic and Social Council Official Records; Sixteenth Session, Supplement No. 11B (E/2379/Add. 2; E/AC./37/2/Add. 2).
Copies of these documents have already been circulated to you in the usual manner.
Yours truly,
Signed : ROY BLOUGH,
Principal Director Department of Economic Affairs
The Secretary-General, Council of Europe Strasbourg
UNITED NATIONS ECONOMIC AND SOCIAL COUNCIL
RESTRICTIVE BUSINESS PRACTICES Resolution of 31 July, 1953
The Economic and Social Council,
Noting the report of the Ad IIoc Committee on Restrictive Business Practices and the Secretariat's analysis of Governmental measures relating to restrictive business practices prepared in accordance with Council Resolution 375 (XIII);
Bearing in mind that restrictive business practices in international trade may have harmful effects on the attainment of the higher standards of living, full employment and conditions of economic and social progress and development envisaged in Article 55 of the Charter of the United Nations;
Recognising the necessity of according (Sufficient time to Governments to give thorough study to the proposals of the Ad Hoc Committee, and to the Secretary-General to formulate the report and recommendation called for in paragraph 6 of Resolution 375 (XIII),
1 Commends the Ad Hoc Committee and the Secretariat for the thoroughness and dispatch with which the tasks assigned to them have been executed;
2 Requests the Secretary-General:
a to transmit the ' Committee's report and the Secretariat's analysis to member Governments of the United Nations and of specialised agencies in, the economic field, to the specialised agencies concerned, and to interested intergovernmental organisations and non-governmental organisations, for examination and for any comment they may wish to make;
b to circulate to the foregoing such comments as he may receive, together with such analysis as he deems appropriate;
3 Further requests the Secretary-General to proceed to carry out paragraph 6 of Resolution 375 (XIII) when a sufficient number of Governments have commented on the Committee's report to provide some indication of attitudes towards the report, and to continue to follow, on the basis of information obtained from Governments, the principal legislative, judicial, executive and administrative developments in this field, to summarise relevant information regarding restrictive business practices in international trade which may be contained in official Government documents, and to report thereon to the Council before the Council resumes its consideration of this problem;
4 Decides to resume consideration of this matter not later than the nineteenth session of the Council.
UNITED NATIONS - Restrictive Business Practices -Report of the Ad Hoc Committee on Restrictive Business Practices - Economic and Social Council - Official Records - Sixteenth Session - Supplement N° 11
TABLE OF CONTENTS
I. INTRODUCTION
Terms of reference - 50
Composition and procedure of Committee - 51
II. AMENDMENTS AND INTERPRETATIONS OF THE TEXT OP CHAPTER V OF THE HAVANA CHARTER
The work of the Committee in relation to Chapter V - 54
Objective and standards of the organization : the preamble - 56
Governmental measures bearing on the organization's work - 58
Co-operation with other inter-governmental bodies - 60
Incorporation of other Havana Charter provisions applicable to Chapter V - 61
Clarifying amendments - 62
Substantive amendments - 64
Interpretations - 60
III. INTERNAL STRUCTURE AND PROCEDURES OF AN IMPLEMENTING AGENCY
Basic problems - G7
Representative Body - 69
Executive Board - 69
Staff functions - 70
Preliminary work on complaints - 71
Conduct of investigations - 72
Other staff functions - 74
IV. OTHER PROCEDURAL PROVISIONS
Entry into force - 75
Amendment, withdrawal and termination - 76
European Coal and Steel Community - 76
Scope of the Committee's proposals - 77
The interrelation between restrictive business practices and other barriers to trade - 79
ANNEX
I. Economic and Social Council resolution 375 (XIII) - 82
II. Draft Articles of Agreement - 83
APPENDIX A.
The share in world trade of individual conn-tries - 9S
Introduction
Terms of Reference
1. This report of the Ad Hoc Committee on Restrictive Business Practices is made pursuant to paragraph 4 of Resolution 375 (XIII) of the Economic and Social Council (see Annex I) in which the Council determined that the Committee should prepare and submit to the Council proposals on methods to be adopted by international agreement for implementing the recommendation contained in paragraph 1 of the resolution. In paragraph 1 of the resolution, the Council recommended to States Members of the United Nations that they take "appropriate measures and co-operate with one another to prevent, on the part of private or public commercial enterprises, business practices affecting international trade which restrain competition, limit access to markets or foster monopolistic control, whenever such practices have harmful effects on the expansion of production or trade, on the economic development of under-developed areas or on standards of living".
2. The methods referred to in paragraph 1 wer e to be based on the principles set forth in Chapter V of the Havana Charter for an International Trade Organization, and the proposals of the Committee were also to include provision for continuing consideration of problems of restrictive business practices.
3. The Committee was also instructed to obtain information on restrictive business practices which affect international trade and international economic co-operation generally, and on legislation adopted " and measures taken by individual Member States in connexion with restrictive business practices and with the object of restoring the freedom of competition; and to present to the Council analyses of this information. This phase of the Committee's work is the subject of a separate document
Note.
4. In paragraph 6 of Economic and Social Council resolution 375 (XIII), the Council instructed the Secretary-General to make a report and recommendation as to the organization which could most appropriately implement the proposals of the Committee. Accordingly, in carrying out its obligation to make recommendations as to procedure, the Committee has dealt with certain related matters of internal organization, but has not sought to make recommendations on the problem referred by the Council to the Secretary-General.
Composition and procedure of Committee
5. As established by the Council, the Committee consists of the following Member States : Belgium, Canada, France, India, Mexico, Pakistan, Sweden, United Kingdom of Great Britain and Northern Ireland, United States of America and Uruguay. The Committee elected as its Chairman Mr. Ingvar Svennilson (Sweden) and as its Vice-Chairman Mr. Juan Felipe Yriarte (Uruguay). "When neither the Chairman nor the Vice-Chairman was able to attend, Mr. Emile Thiltges (Belgium) seized as Acting-Chairman.
6. The Committee held seventy-seven plenary meetings, spread over four different sessions, the first session taking place at Headquarters from 29 January to 6 February, 1952, the second at Headquarters from 28 April to 9 Ma3r, 1952, the third in Geneva from 8 to 26 September, 1952, and the fourth at Headquarters from 12 January to 21 February, 1953. During those sessions the Committee also made considerable progress in informal working parties.
7. The resolution establishing the Committee authorized it, in preparing its proposals, to consult with interested Governments, specialized agencies, inter-governmental organizations and non-governmental organizations. The Committee had only limited time in which to consider many technical and complicated issues and draft appropriate articles of agreement. Also, it had to deal with points of an interdependent nature and, in consequence, often found it necessary to revise tentative solutions in the light of its later action on related matters. It was, therefore, thought that to disclose tentative or piecemeal approaches to particular points without reference to related questions would lead to confusion and misinterpretation. Hence most of the Committee's meetings were closed to the public. However, the meetings were open to observers from Governments, intèr-governmental organizations, and specialized. agencies, and provision was made for public meetings at which interested non-governmental organizations were given an opportunity to state their views on the questions being considered by the Committee. The Committee has also made use of written communications received from such organizations.
8. At the conclusion of its first session, the Committee sent letters to Governments and specialized agencies, asking for such documents as would enable it to secure the information relating to restrictive business practices and the legislation thereon which it was directed to obtain under paragraph 5 of the Economic and Social Council resolution. At the same time, nongovernmental organizations were invited to provide similar information. Also, before the third session, the Committee addressed to nongovernmental organizations, for' their comment, a comprehensive list of questions relating to the internal organization and procedures of an implementing agency. The summary records of all the Committee's meetings were regularly distributed to Member States of the United Nations and inter-governmental bodies and agencies. At the conclusion of its third session, the Committee sent a letter to Member States and inter-governmental bodies and agencies specifically drawing their attention to the summary records, and, in particular, to certain documents which embodied the results of its work up to that point and outlined the problems still' before the Committee. It invited comments on its tentative proposals, and on any other matter relating to its work, for consideration at its fourth session.
9. At its first session the Committee discussed in detail the text of Chapter V of the Havana Charter and its rmdeiiying principles. This preliminary examination developed substantive points in respect of which the amendment or clarification of Chapter V appeared to require consideration. At its second session the Committee dealt with these points. At its third session the Committee completed a preliminary revision of Chapter V as a basis for a draft agreement, and, in addition, began the work of drafting articles relating to the internal structure and procedures of the agency which would implement such an agreement. These drafts, as well as documents suggesting solutions to other unresolved problems of internal structure and procedure, were included in the letters referred to in paragraph 8 above. At its fourth session the Committee developed its proposals further and prepared this report, including therein the final revision of the draft articles of agreement (Annex II) which embody these proposals.
10. Thi s report does not purport to interpret or explain all the provisions—not even all the most important ones—set out in the draft articles of agreement. Many of these provisions were taken without substantial change from the text of the Havana Charter. Since their meaning appears to the Committee to be sufficiently clear and since it is always possible to refer to the preparatory documents leading up to the original text of the Havana Charter, the Committee has not thought it necessary to comment on them. The report is essentially confined to setting out and explaining the amendments and additions which the Conimittee has made to the text of the Havana Charter. It is hoped that the explanatory and interpretative material in the report will lead to a better understanding of the reasons for the Committee's proposals.
11. In accordance with the usual practice, members of the Committee have taken part in its work on an ad referendum basis. Members of the Committee have considered themselves as a working group whose function has been to evolve proposals based on Chapter V of the Havana Charter by way of reconciling or seeldng compromises between different views, so far as these could be formulated at the present stage. No Government is committed by participation in the work of the Connnittee to participate in an agency working on the lines proposed, and it is the general xuiderstanding among members that any matter contained in the draft articles of agreement (Annex II)—from the preamble at the beginning to the interpretative note on Article 8 at the end—may be re-opened at any later stage.
amendments and interpretations of the text of Chapter V of the Havana Charter
The work of the Committee in relation to Chapter V
1. Since Chapter V of the Havana Charter formed the basis for the work of the Committee, it will be helpful to review the broad outlines of that chapter before discussing the specific revisions and expansions of the text of Chapter V which are proposed by the Committee.
Note
2. The following broad observations may be made concerning Chapter V of the Havana Charter :
a Chapter V was not intended to stand alone. Its provisions were intended to function as part of a larger international agreement, which would have established an International Trade Organization with comprehensive responsibilities in the fields of employment and economic activity, economic development and reconstruction, commercial policy, inter-governmental commodity agreements and restrictive business practices.
b Restrictive business practices were defined as those which "restrain competition, limit access to markets or foster monopolistic control" ; a list of the practices coming within the scope of the chapter was given ; and provision was made for the possibility of extending the list.
c The conditions in whieh restrictive business practices might be subject to investigation were defined : briefly, they must be practices affecting international trade and carried on by one or more private or public commercial enterprises possessing effective control of trade among a number of countries, and they must have been the subject of a complaint to the organization.
d Th e general undertaking of Members was defined as being to take appropriate measures and co-operate in preventing the restrictive business practices referred to above, whenever such practices were found to have harmful effects on the expansion of production or trade and to interfere with certain other objectives.
e Provision was made for a consultation procedure and an investigation procedure, and separate procedures applicable to services (such as transport and telecommunications) were set forth.
f Provision was made for general studies of restrictive business practices.
g The specific obligations of Members under the Chapter were defined.
3. The Committee's work has led it to propose the expansions, modifications and clarifications of Chapter V which are embodied in the draft articles of agreement set forth in Annex II. The major changes that were made in the draft agreement came about, with one exception, because in the new context reference could no longer be made to the remaining articles of the Havana Charter ; hence certain portions of the rest of the charter have either had to be incorporated in the draft agreement or a different wording substituted. The one exception is the definition of the restrictive business practice relating to the prevention of the development or application of technology (subparagraph 3 (e) of Article 46 of the Charter), the scope of which has been somewhat enlarged.
4. Tho Committee recognized that its assignment was limited to restrictive practices in the field of trade and did not extend to employment policy. The draft agreement, however, would not prevent the organization from evaluating the effects of restrictive business practices upon labour. The impact of such practices on employment might, for example, be invoked in support of or against any complaint being investigated in accordance with the draft agreement.
Objectives and standards of the Organisation The preamble
5. The investigation and consultation procedure s of Chapter V applied only to restrictive business practices alleged to have harmful effects on the expansion of production or trade and to interfere with the achievement of other aims and objectives set forth in Article 1 of the Havana Charter. Article 1 indicated it to be the purpose of the charter to realize the aims set forth in the Charter of the United Nations, particularly the attainment of the higher standards of living, full employment and conditions of economic and social progress and development envisaged in Article 55 of the United Nations Charter. There was also contained in Article 1 of the Havana Charter a pledge to promote national and international action designed to , attain more specific objectives. The aims and objectives thus set forth in the Havana Charter were intended to serve as a frame of reference for all the activities of the proposed International Trade Organization. As such, and by virtue of the reference to Article 1 of the charter in paragraph 1 of Article 46, they would, so far as they were relevant, have served as standards for judging the harmfulness of restrictive business practices. Together with paragraph 2 of Article 46, they would also have formed the basis for determining whether a particular restrictive business practice came within the scope of the investigation and consultation procedures of Chapter V. Accordingly, the Committee felt that the draft agreement should incorporate a preamble inspired by the objectives of the Havana Charter. Although the objectives stated in the preamble are necessarily broad, their inclusion in the draft agreement does not imply that Governments, by adhering to the agreement, would be assuming obligations going beyond those specified in the text of the draft articles which follow the preamble.
6. In order that there should be a reference in paragraph 1 of Article 1 [46] to the preamble of the draft agreement, replacing the original reference to article 1 of the Havana Charter, the Committee amended the last line of this paragraph to read "...whenever such practices have harmful effects on the expansion of production or trade, in the light of the objectives set forth in the Preamble to this Agreement". The function of the objectives stated in the preamble would thus be to provide guidance for the organization in considering whether or not a restrictive business practice had harmful effects. Whenever more than one objective was relevant, each relevant objective would be given appropriate attention. Interested Governments, either when supporting a complaint or when seeking to justify a practice complained of, would be free to determine for themselves in each instance which objectives they believed to be relevant ; and the organization would be bound to take account of the views expressed by each Government. However, in any instance in which no Government considered a particular objective to be relevant to a complaint, there would be no need for the organization to consider that objective. The purpose of the listing of a series of objectives is to assure full examination of pertinent issues, not to enforce analysis of every point in the list, regardless of its relevance.
7. It would also be for each Government to determine what considerations it would put forward as pertinent in the light of any particular objective. For example, if it were alleged that a restrictive practice was harmful because it ran counter to the stated objective of encouraging economic development, industrial and agricultural, an interested Government could decide whether or not it would put forward considerations arising from the economic soundness or otherwise of a projected development.
8. The practices enumerated in paragraph 3 of article 1 [46] of the draft agreement would become subject to investigation when a complaint as to a specific case was presented in accord with certain specified requirements. The question whether these practices had harmful effects upon the expansion of production or trade in the light of the stated objectives would be determined in each instance in accord with the procedures set forth in the draft agreement. There is thus no presumption in the draft agreement that the practices listed in paragraph 3 have harmful effects. Only where harmful effects were established would the draft agreement provide for any remedial action to be taken.
Governmental measures tearing on the organization's work
9. Paragraph 1 of Article 54 of the Havana Charter indicated that the provisions of Chapter V should not be so interpreted as to prevent the -adoption and enforcement by Go- " vernments of any measures in so far as such measures were specifically permitted under other chapters of the Charter. These other chapters were largely concerned with governmental and inter-governmental policies which either (i) were directly permitted by the terms of the Charter itself, or (ii) were permitted under detailed procedures and standards to be applied by the proposed International Trade Organization. It was clear that such policies, and the measures implementing them, might bear on the work of any international agency engaged in the consideration and handling of restrictive, business practices. However, in a draft agreement dealing only with restrictive business practices, it would be inappropriate to retain provisions predicated on a more comprehensive agreement.
10. It was felt that procedures of the draft agreement should not apply to the acts of Governments or inter-governmental organizations or to the statutes and regulations issued by governments. However, the organization should be able to approach member Governments and inter-governmental organizations at any time with respect to such acts, statutes and regulations as might relate to the subject-matter of this agreement, and should be able to bring to their attention, with such observation as it might desire to make, the effect of those acts, statutes and regulations on its work. With one basic qualification, noted in paragraph 22 below, this is the general approach taken in paragraph 1 of Article 9 and paragraph 4 of Article 3.
11. Special difficulties arose, however, in connexion with restrictive business practices which were sanctioned by governmental statutes or regulations. The main problem faced by the Committee in this connexion was the diversity of governmental attitudes with respect to the same restrictive business practice. Thus, for example, one or two Governments might make mandatory a practice which other Governments might variously prohibit, ignore, approve, or subject to different degrees of regulation or sponsorship. Also, Governments have different principles and procedures governing the way in which they require or approve restrictive business practices. To take account of these factors, the Committee made the following changes :
a It added to Article 48 of the Havana Charter (the article dealing with the investigation procedure) a provision expressly exempting from further investigation by the organization restrictive business practices which are specifically required by governmental measures (paragraph 4 of Article 3 [48]). If, however, any practice found to exist in more than one country were not specifically required by governmental measures in all countries in which it occurs, such practice might, in the discretion of the Organization, be further investigated. It was agreed that, where an investigation was discontinued, the organization might avail itself of the procedure for bringing the matter to the attention of the government or inter-governmental body or agency concerned.
b The Committee agreed that, in order to assure adherence to the basic principles of the agreement, a rigorous test should be applied as to the type of governmental intervention that would serve as a basis for the exemption. It therefore concluded that only restrictive business practices "specifically required" by Governments should be exempted from the investigation procedure. By this, it was understood that the text of the governmental measure must be an express requirement of a Member State that commercial enterprises must engage in a specified restrictive practice or practices. The measure itself might take the form either of a law enacted by the legislature of that State or of an order or decree of an executive, administrative or judicial organ of that State. Paragraph 4 of Article 3 is not intended to deal with any measures other than those specifically requiring restrictive business practices, and does not ' apply to any measure taken after a complaint has been filed with the organization under paragraph 1 of Article 3.
Co-operation with other inter-governmental hodies
12. Under paragraph 2 of Article 9 [53] of the Committee's draft, the organization is directed to provide for effective co-operation with other inter-governmental bodies and agencies with respect to restrictive business practices. -The antecedent Havana Charter provision had referred to paragraph 1 of Article 87 of the Charter, pursuant to which the organization, in making co-operative arrangements with other intergovernmental organizations, was to avoid unnecessary duplication of activities, arrange for joint committees and reciprocal representation at meetings, and establish such other working relationship as might be necessary. The substance of paragraph 1 of Article 87 of the Charter was incorporated in paragraph 2 of Article 9. Likewise paragraph 4 of Article 9 contains a provision for consultation and co-operation with non-governmental organizations which is substantially similar to that contained in paragraph 2 of Article 87 of the Havana Charter.
13. A new paragraph 3 was added by the Committee to Article 9 to make it clear that among the inter-governmental bodies or agencies which have responsibility in the • field of restrictive business practices and which possess sovereign powers through a delegation of sovereignty by two or more States, e.g. the European Coal and Steel Community, the relationship of which to the draft agreement is discussed in paragraphs 65 to 67 below. It may be noted at this point that the phrase "inter-governmental organization" has been replaced throughout the draft agreement by "inter-governmental body or agency", because it was felt that the former phrase had acquired too specialized a connotation.
14. One other clarification was effected by Article 9. Paragraph 4 of Article 53 of the Havana Charter, the predecessor of paragraph 2 of Article 9, despite its position in an article dealing with services, was intended to have general application. By regrouping it in Article 9 with the procedure applicable to governmental measures and restrictive business practices pursuant thereto, the Committee has clarified this intention, and Article 20 [54] is limited to matters of interpretation and definition.
Incorporation of other Havana Charter provisions applicable to Clvapter V
15. There were several other places in which pai'ts of the Havana Charter outside of Chapter V seemed to the Committee to be directly applicable, and those provisions were accordingly incorporated in tho revised articles of agreement. Thus, there was incorporated in subparagraph (a) of paragraph 1 of Article 4 [49] a provision corresponding to paragraph 1 of Article 72 of the Havana Charter, authorizing the organization to publish the results of its studies. It was felt that it would be pointless to authorize the organization to conduct studies without arranging for their publication.
16. Sub-paragraph 1 (a) of Article 99 of the charter had stipulated that nothing in the charter should be construed to require a member to furnish any information the disclosure of which it considered contrary to its essential security interests. Furthermore, Chapter V had made no specific provision, under the consultation procedure, for the Organization to obtain information which would enable it to ascertain the results of consultations and conferences undertaken pursuant to that procedure. By adding paragraphs 7 and 8 to Article 5 [50] dealing with the obligations of members, these features were.incorporated in the draft articles of agreement.
Clarifying amendments
17. In its detailed examination of Chapter V of the Havana Charter, and in the course of framing proposals based on Chapter V, the Committee found some language which it felt ought to be clarified by minor verbal changes. These clarifications will be discussed in the order of the articles to which they relate.
18. At the beginning of paragraph 1 of Article 1 [46], provision was made for members to co-operate "with each other" as well as with the organization. Article 46 of the Havana Charter had referred only to co-operation with the organization. The change is consistent with the principle of direct consultation and co-operation 'among Members which is already provided for in Articles 2 [47] and 6 [51], and also with the recommendation of the Economic and Social Council in paragraph 1 of Eesolution 375 (XIII).
19. The French and Spanish language versions of Article 2 [47] and the French version of paragraph 1 of Article 3 [48] were slightly altered in order to establish identity of meaning among the three versions.
20. Paragraph 2 of Article 3 [48] was felt to be an unduly laconic statement of the standard of minimum information required on complaints : in particular, it did not refer the phrase "harmful effects" back to the definition in Article 1 [46]. The Committee therefore amplified this paragraph slightly to make the intention clear.
21. Paragraph 5 of Article 3 [48] in its original Havana Charter formulation had provided that the organization was to "conduct or arrange for hearings on the complaint". This was subject to two objections. First, under paragraph 2 of Article 5 [50], it was for Member States themselves to conduct any necessary investigations to supply the information needed by the organization. The term "hearings" could be interpreted to include investigatory hearings, and it was considered preferable to use language which would avoid this possibility. Secondly, it was felt that the word "hearings" might suggest the use of judicial procedures. Accordingly, the provision was modified to read that members and commercial enterprises involved in a complaint be afforded a "reasonable opportunity to .be heard". A minor clarifying amendment was also made in paragraph 6 of Article 3 [48].
22. The provisions of Chapter V relating to services were subjected to careful scrutiny by the Committee, which reviewed the current status of the specialized international organizations in the field and their competence to handle the subject of restrictive business practices. The changes adopted by the Committee are mainly of a clarifying nature.
a A change was introduced in paragraph 3 of Article 8 [53] in order to enable the organization to obtain needed information, in accoi*-dance, however, with safeguards to members similar to those which appear elsewhere in the Havana Charter. This was done because no satisfactory way could be found to import into this article the broad provisions of paragraph 1 of Article 72 of the Havana Charter.
b In paragraph 1 of Article 8 [53], there was made explicit what was already implied in the Havana Charter provision, namely, that restrictive business practices in the field of services should be subject to the provisions of the article only when they fulfilled the same conditions as those set forth in sub-paragraphs 2 (b) and 2 (c) of Article 1 [46] in relation to such practices in the field of goods, i.e., that they be engaged in by one or more public or private commercial enterprises which possess effective control of trade among a number of countries.
c It was provided in paragraph 2 of Article 8 that members might resort to the special procedure provided for in the article if their interests were "adversely affected" by the harmfui effects of restrictive business practices. The text of the antecedent Havana Charter provision had required that the interests of members be "seriously prejudiced". It was considered anomalous that a requirement of "serious prejudice" be part of a procedure the consequences of which were more limited than those of the procedure pertaining to products. It was also recognized that the question whether a member's interests were either affected or prejudiced would be in any event a matter for individual determination by that member.
d It was specified in paragraph 3 that, in the event of a failure to effect a satisfactory adjustment by consultation when a restrictive business practice in the service field was considered by a member to have harmful effects, and upon a reference of the matter to the organization, the matter should be transferred to the inter-governmental body or agency, if any, "empowered to deal" with that type of problem. The prior Havana Charter provision had merely provided for transfer to the "appropriate" intergovernmental organization, if any. Finally, an interpretative note in the Havana Charter relating to Article 8 [53] was taken over as a note to the draft agreement.
Substantive amendments
23. The Committee examined a number of other suggestions for the amendment of Chapter V; one of the more important of these is discussed in paragraphs 35 and 36. However, only one substantive amendment, of Chapter V was adopted. This, amendment is with respect to sub-paragraph (e) of paragraph 3 of Article 1 [46]. That sub-paragraph had listed as a restrictive business practice "preventing- by agreement the development or application of technology or invention whether patented or unpatented". It was felt that this was too restrictive a formulation, since the practice in question could have harmful effects if engaged in by a single large enterprise. The text adopted by the Committee now defines as a restrictive business practice "preventing by agreement, or coercion the development or application of technology or invention whether patented or unpatented, or withholding the application of such technology with the result of monopolising an industrial or commercial field" (italicized matter represents, new language added by the Committee). It will be noted that this provision does not bring within the definition of restrictive business practices the withholding of technology as such. In the Committee's opinion, a decision by a single commercial entreprise to refrain from the development and commercial application of some technological method does not, in itself, call for investigation and could not be readily investigated. There are, however, unusual cases in which one entreprise imposes its will on another, or in which the control over technology (patented or unpatented) is so far-reaching that a restrictive exercise thereof may create or extend a monopoly of a whole branch of trade. It is only in these cases that the Committee believes that the technological policy of a single entreprise may give rise to complaints which can usefully be investigated in the manner contemplated in the draft agreement.
24. During its fourth session the Committee received a proposal from the Netherlands Government to amend Article 7 [52], which provides that the operation of the draft agreement would not preclude the application by member States of any domestic legislation against restrictive business practices. The amendment proposed by the Netherlands Government would provide that Governments should take no measures under such legislation against enterprises established in another country, in respect of practices coming within the scope of the draft agreement and having no direct bearing on the domestic market of the enforcing country, until either tho practice had been declared harmful by the proposed international agency or agreement had been reached directly between the Governments concerned.
25. The Committee recognized that problems are created for all countries by overlapping jurisdictions and conflicts of laws, and was sympathetic with the desire of the Netherlands Government to find ways of reducing implications which raise serious difficulties of substance; moreover, the question arose whether the matter came properly within the Committee's competence. For these reasons, and having regard to the limited time available to the Committee, most members felt it would not be profitable to pursue the matter.
Interpretations
26. In view of its lengthy discussion of some other points in Chapter V of the Havana Charter, the Committee has thought it desirable to record its interpretation of these points.
27. Article 2 [47] and part of paragraph 1 of Article 3 [48] have to do with the consultative procedure. In the Committee's' view, a member could not, as a matter of right, have recourse to the procedure of consultation unless the member itself, as distinguished from commercial enterprises under its jurisdiction, was affected by a restrictive business practice. "While it would be for the member requesting consultation to decide whether the word "affected" applied in its case, the member receiving the request would • be equally entitled to refuse consultation on - the 'ground that the word "affected" did not apply. In eases where the organization was requested to arrange for consultation, however, it would be for the organization itself to judge whether or not consultation was justified in the sense that the word "affected" applied to a member.
28. Sub-paragraph (a) of paragraph 1 of Article 4 [49] authorizes the organization to conduct studies relating to "general aspects of restrictive business practices affecting international trade". In the Committee's view, the phrase "general aspects of" should be construed as not ruling out the type of study which would help the organization to decide whether to declare as restrictive, under sub-paragraph (g) of paragraph 3 of Article 1 [46], business practices other than those already listed in paragraph 3, or the types of study which would consist in the examination of particular practices in different industries and areas. The organization might also conduct studies relating to particular industries so long as they did not amount to investigations of particular complaints or to a substitution of the study procedure for the investigation procedure of Article 3 [48]. The organization,, at the request of a .Member, might, however, undertake a general study arising out of a complaint which had been filed pursuant to, and was already being investigated under, Article 3 [48].
29. Some question arose, in the course of the Committee's deliberations on the listing of restrictive business practices in paragraph 3 of Article 1 [46], as to the activity of exchange of information among enterprises. The Committee recognized that there was a difference between "restrictive business practices" as enumerated in paragraph 3 {e.g. price-fixing) and the many forms of business behaviour {e.g. exchange of information) which may or may not, according to circumstances, be part of a "restrictive business practice". A number of activities, such as the exchange of information among enterprises, do not in themselves constitute restrictive business practices. The Committee felt, however, that it was not feasible to prepare a list of such activities. Had such a negative approach been adopted, each Government would have asked for particular activities to be inserted in the list and the Committee would have been faced with the necessity of drawing up a long, cumbersome yet inevitably incomplete list. This the Committee did not attempt to do.
International structure and procedures of an implementing agency
Basic problems
1. We now come to an area in which, because the Havana Charter did not contemplate an agency with a competence limited to the field of restrictive business practices, and because of problems peculiar to this field, the Committee developed entirely new provisions. The Committee had been specifically instructed to base its proposals on Chapter V of the Havana Charter, which set forth the principles which should govern international co-operation in the field of restrictive business practices. But neither the Economic and Social Council's resolution nor Chapter V, taken in isolation, contained any indications as to the nature of the agency which would implement these principles or as to the specific internal procedures that should be adopted for considering complaints or carrying out the other functions set out in Chapter V.
2. Paragraph 6 of the Council's resolution instructs the Secretary-General to make a report and recommendation as to the organization which would most appropriately implement the Committee's proposals, and, accordingly, the Committee has not broached this question
Note. Any organization which might ultimately be chosen, however, would necessarily be breaking new ground, and the Committee felt that it might be of help to the Council and the Secretary-General if it set forth proposals, in the form of articles of a draft agreement, for internal arrangements and procedures appropriate to the problems which woitld be encountered by any international agency having to deal with restrictive business practices.
3. A large part of the Committee's work' was devoted to these proposals. The Committee feels that it would unduly lengthen this report and serve no good purpose to set out at length the many possibilities which the Committee has considered and rejected, or the many arguments that were advanced for and against particular arrangements. The following paragraphs, therefore, simply summarize the proposals to which its discussions have led. The Committee feels that whatever is of value in these proposals lies in the fact that they have emerged from full discussions by representatives of ten countries of varied1 problems and interests. It is not to be expected that any country would regard these proposals as entirely satisfactory, but they indicate lines on which it may be possible to resolve different national conceptions.
4. The basic considerations which the Committee sought to bring together in these proposals and which by their nature are difficult to reconcile completely are the following :
a The factual materials needed as a basis for a sound conclusion on the question whether a restrictive business practice has harmful effects (within the meaning of the draft agreement) should be compiled and set out in a spirit of independence and impartiality by persons with experience and knowledge of the issues ; and advice by such persons might be useful at a later stage.
b The arrangements should reflect the fact that vital trading and economic interests of Governments might be involved in the decision of the agency and should therefore include provision for adequate control by the representatives of Governments.
Representative Body
5. The Committee agreed that paramount authority and the final power of decision within the agency should be vested in an organ consisting of the representatives of all Governments adhering to the agreement, i.e., a Representative Body. The Committee has indicated, in Article 10, some of the provisions appropriate to such a Body. While paragraph 3 of the proposed article provides that decisions of the Representative Body would normally be taken by majority vote, the Committee left open the possibility that certain decisions, such as the selection of members of an Executive Board, might be subject to special voting requirements.
Executive Board
6. It also seemed clear that the number of tasks which would have to bo undertaken by the Representative Body would be too great if it tried to do everything itself. The Committee, after examining various views and suggestions, contemplated that important powers would be delegated to an Executive Board,
Note also consisting of governmental representatives but smaller than the Representative Body and able to meet more frequently.
7. The Committee has provided that the size and composition of the Executive Board, including the selection of its members, should be determined by the Representative Body, which should have regard to criteria laid down in the draft agreement (see Article 11). Members of the Board would be drawn from countries of different types of economy and different degrees of economic development, from countries in different geographical areas and from countries of chief economic importance haying regard particularly to shares in international trade. The Committee envisages that in considering different types of economy the Representative Body will have regard not only to distinctions between industrial, agricultural and other types of economy but also to distinctions arising from different degrees of dependence on international trade. As regards the last criterion — "chief economic importance" •—• it was felt that, because of the nature of the subject-matter of the draft agreement, some member Governments would inevitably be subject to heavier requirements, than others, e.g. by way of conducting investigations in. their own countries in order to provide the information needed by the agency and carrying out appropriate action in response to recommendations of the agency. It seemed, therefore, that the composition of the Board should reflect the need to encourage the maximum co-operation from these members. Finally, the composition of the Board should give due weight to each of the criteria so as not to have it unbalanced in any particular direction.
8. The Committee has also provided that the Representative Body should formulate rules and policies governing the decision-making process in the Board and entitling members of the agency who were not members of the Board but who had; a direct concern with a particular case to participate on a suitable basis in the work of the Board on that case.
Staff functions
9. The Committee envisaged two groups of staff functions, to be performed by officials in an executive secretariat and an advisory staff respectively : (a) detailed administrative duties in carrying out the policies of the Representative Body such as are necessarily delegated to a secretariat, and (b) the compilation and analysis of factual material. Provision for delegation of the latter class of activities not only relieves the Representative Body of cumbersome work for which a deliberative group is not suited, but also enables the agency to afford to representatives of Governments, chosen for their broad knowledge of policy, the services of a staff with specialized knowledge of business practices.
Preliminary luorh on complaints
10. The first main function of the agency under the investigation procedure would be to decide whether a complaint presented by a member justified investigation. The Committee agreed that, subject to policies and rules laid down by the Representative Body, various functions in this connexion should be performed by an executive secretary and his staff, e.g. examining complaints, checking the information supplied and requesting Members,1 where appropriate, to furnish supplementary information. Having carried out these preliminary steps, the executive secretary would prepare and transmit to the Representative Body a report advising whether the complaints satisfied prima facie the conditions laid down in the draft agreement, and, if not, the respects in which they failed to do so. He would also advise in his report whether any particular sequence would be appropriate for handling the complaints (see Article 14).
11. It would be for the Representative Body to decide in relation to complaints whether the conditions of the agreement had been satisfied and whether investigations should proceed. The Committee felt that in assigning to particular complaints i^laces in a programme of investigation, the agency should be careful to avoid appearing to lay down an order of importance of restrictive business practices or discriminating between particular complaints. The Committee further provided in the draft agreement that if no member, within... days after the executive secretary had transmitted his advice, had submitted any observation thereon to the Representative Body, the proposals contained in such advice would be regarded as adopted by the Representative Body.
Conduct of investigations
12. After a decision that an investigation was justified, the executive secretary would inform all members of the complaint and request them to supply any necessary additional information. Thereafter there would be three main stages in dealing with a complaint :
a Examining, analysing and setting out the information received ;
b Deciding whether the practice in question has had, has, or is about to have, harmful effects within the meaning of the draft agreement ; and
c Making recommendations in appropriate cases to member Governments as to remedial measures.
13. The Committee agreed that the Representative Body could not itself undertake the burden of detailed examination and analysis of the information and that the work should therefore be delegated. It appeared to the Committee, however, that this work differed in character from that allocated to the executive secretary. In order to ensure careful, objective and impartial investigations and reports, the Committee felt that there would be a need to secure the services of a body of persons of standing, each with wide knowledge of industrial and commercial problems and high competence in evaluating economic factors, and that this body of persons should collectively provide an appropriate balance of experience and familiarity with the economic background of different industries and countries. The Committee considered it important that this body should have a status appropriate to its particular tasks in that it should be given direct contact with the Representative Body. The Committee also believed that its members should be differentiated from the rest of the agency's personnel by special procedures for staffing, to be devised by the Representative Body.
14. Accordingly, the Committee has provided (Article 13) that there be established within the agency an advisory staff under the supcrvision of a director appointed by and responsible to the Representative Body. The director would select the other members of the staff in accordance with standards set forth in the draft agreement and any rules laid down by the Representative Body. He could also recruit consultants, subject to similar standards and rules. One of the standards laid down is that due regard should be had to the desirability of drawing staff from different geographical areas.
15. In carrying out its functions, the advisory staff would act in accordance with any policies and rules prescribed by the Representative Body (Article 15). The main function of the advisory staff would be to examine the available information on a complaint and set out in a report the facts revealed by this information together with such analysis of their effects and significance, in relation to the objectives stated in the preamble to the draft agreement, as would assist the Representative Body to carry out its responsibilities. The director of the advisory staff would organize this work and would arrange for interested parties, if they wished, to be heard by the staff, but without precluding them from being heard by the Representative Body if it and they so desired. The draft articles, like Chapter V of the charter, give the agency no powers to call witnesses, or to seek information directly from business enterprises, and the advisory staff would have no such powers.
16. The responsibility for arriving at conclusions as to the harmfulness of restrictive business practices and for any appropriate recommendations as to remedial action would lie with the Representative Body. The Committee felt, however, that in this connexion, and possibly in others, there would be a place for advice to be given to the Representative Body by the advisory staff, which would presumably have aquired a very detailed knowledge of matters under consideration. The draft agreement accordingly provides that, in addition to its other functions, the advisory staff should be charged with the general task of advising the Representative Body, subject to any limitations which that Body might see fit to lay down.
17. Under the Committee's proposals, as has been seen, decisions as to the harmful effects of a restrictive business practice, and as to remedial measures to be recommended to member Governments, rest with the Representative Body. The report of the advisory staff is intended to supply the facts and interpretative material upon which the Representative Body can base these decisions. It is therefore appropriate to provide (Article 16) that, when such a report has been submitted, the Representative Body may refer it back to the advisory staff, with its observations and, if necessary, a request for it to be clarified, amplified or re-examined. Nothing in the articles of the draft agreement would preclude the Representative Body from employing, if it so desired, a procedure by which a report of the advisory staff would be deemed to have been adopted by the Representative Body if, within a specified time after receipt of the report, no request for rejection or modification thereof has been made by any member of the Representative Body. In the published report of the Representative Body, there would be included, in its entirety, the final report of the advisory staff. (See Article 17).
Other staff functions
18. If the Representative Body decided upon a study pursuant to the provisions of Article 4 [49], the director would arrange for the conduct of the study by the advisory staff within terms of reference prescribed by the Representative Body. Reports of such studies would be prepared for consideration by the Representative Body.
19. In addition to his functions described in paragraphs 49 and 50 above, the executive secretary would also have the following tasks assigned to him :
a The routine work involved in arrangements for consultation and co-operation with other inter-governmental bodies and agencies and with non-governmental organizations ;
b The administrative handling of the "good offices" functions involved in the consultation procedure ;
c Obtaining of information from Governments in connexion with studies relating to restrictive business practices.
Other procedural provisions
1. The Committee has incorporated in its proposals other procedural provisions relating to the entry into force of the draft agreement and to amendment, withdrawal and termination. It has also engaged in discussions as to the scope of its proposals and the inter-action between private and governmental restrictions on trade.
Entry into force
2. The proposed conditions for entry into force of the draft agreement are contained in Article 18. In the last resort, countries, however few, which believed that the agreement would be useful, could bring it into effect by negotiations among themselves. This possibility is recognized in paragraph 3 of the article.
3. The Committee has sought, however, in conformity with the usual practice, to define conditions in which entry into force would automatically take place. This is the purpose of paragraph 2 of Article 18, and in drafting its provision the Committee was governed by the opinion of its members as to the minimum adherence that would produce a widely acceptable and generally effective arrangement. There are alternatives in this paragraph because two principal views were evident in the Committee. One view was to the effect that the agreement would be widely acceptable and generally effective if subscribed to by at least twenty countries, accounting for at least 65 per cent of world trade without any additional qualification. This view is reflected in sub-paragraph (a). The other view was to the effect that the agreement would not be widely acceptable or generally effective unless those twenty or more countries included six countries each accounting for at least 3 per cent of world trade. This view was reflected in sub-paragraph (6). (It may be mentioned that, on the basis of figures published by the Statistical Office of the United Nations, the only countries for which published data of imports and exports were available for 1951 and which accounted individually for 3 per cent or more of world trade were the United Kingdom, the United States, Prance, Canada, Germany, the Netherlands and Belgium, in that order.)
4. Since the conditions of sub-paragraph (a) are necessarily met if the conditions of subparagraph (b) are met, but since the converse is not true, the final sentence of paragraph 2 points out, for the purposes of this article, the right already inherent in any country to stipulate that its instrument of acceptance shall have effect only if the terms of sub-paragraph (b) are satisfied.
Amendment, withdrawal and termination
5. The provisions of the draft article of agreement relating to amendment, withdrawal and termination (Article 19) have been largely patterned on similar provisions in Articles 100 and 102 of the Havana Charter. Only such provisions have been proposed as are considered to be directly relevant to the problem at hand.
European Goal and Steel Community
6. The Committee discussed the problems which might arise by reason of the existence of the European Coal and Steel Community (see paragraph 24 above). It was pointed out that, under the treaty creating the Community, Belgium, France, Germany, Italy, Luxembourg and the Netherlands had relinquished, and the Community had assumed, certain responsibilities concerning the coal and steel industries located in the six States, for the purpose of creating a common market. It was agreed, therefore, that trade within the Community in products subject to the terms of the treaty must, for the purposes of the draft agreement, be regarded as trade within a single national area, and that only trade between the Community and countries outside the Community could be considered as coming within the meaning of the term "international trade" in paragraph 1 of Article 1 [46].
7. Without having had the opportunity to consult the Community, and appreciating the fact that such consultation would eventually be necessary, the Committee envisaged the possibility of dealing with this situation along the following lines. The European Coal und Steel Community would be afforded the opportunity of providing an undertaking that, in the exercise of the powers which the treaty confers upon it and to the extent that such powers permit, it would act in accordance with the obligations which would apply if the Community were a single contracting State to this draft agreement. Thereupon, in accordance with appropriate rules of procedure to be adopted for the purpose, the organization would grant the Community a status under the draft agreement appropriate to the discharge of the obligations which the Community had assumed. The Committee was also of the view that, if the Community agreed to assume such an obligation, some provision would have to state, for purposes of this draft agreement, the division of responsibility between the six member States and the Community, in order that the organization and other signatory States would be clear as to the appropriate authority to which they should turn in dealing with a particular matter.
8. The Committee agreed that it would be desirable to have the participation of the European Coal and Steel Community before more definite proposals on the problem were developed, and recommends therefore that the Economic and Social Council should invite a representative of the Community to participate in any subsequent deliberations on the subject.
Scope of the Committee's proposals
9. Finally, the Committee desires to .draw attention to a basic limitation of its work.
10. As was stated in paragraph 13 above, the Havana Charter provided for an International Trade Organization which would have dealt comprehensively with many problems affecting international trade. The charter did not come into force, and the Committee has been compelled to examine in isolation Chapter V of the charter, which deals with only one of those problems—that of restrictive business practices. This does not mean that the Committee's proposals are intended to bring into being a separate international agency to implement Chapter V. The question as to which organization could most appropriately implement proposals worked out by the Committee was remitted to the Secretary- General in paragraph 6 of the Council's resolution.
11. As indicated in paragraph 11 above of this report, the Committee's proposals are all ad referendum and, because the jurisdictional question described above must remain unresolved for the time being, an added reason exists why some of the Committee's proposals should be provisional. The Committee thinks it may be useful to illustrate this point.
12. (a) Preamble. •— The Committee considered it important to incorporate a preamble in the draft agreement. However, the organization which might be. charged with implementing the agreement might already have some similar statement of objectives. If so, it might be appropriate to revise the Committee's draft Preamble in the light of that statement, keeping in mind the considerations set forth in paragraphs 16 and 17 above.
13. (b) Article 3, paragraph 4; Article 9, etc. — Several of the Committee's proposed amendments and additions to the text of chapter V arise from the fact that references to other parts of the charter would have no meaning in a new draft agreement. Among the Committee's proposals are procedures which may be needed when governmental measures, which are outside the scope of the draft agreement, have a bearing on the work of the proposed agency. There are also procedures for consulting other intergovernmental bodies. The organization under whose jurisdiction the proposed agency might be placed, might, however, have its own procedures with regard to certain governmental measures and its own pre-existing arrangements for consultation with other bodies. This, too, might entail revisions.
14. (c) Internal structure and procedures. — The Committee has made proposals as to the internal working of a restrictive business practices agency. These proposals would need to be reviewed in the light of whatever arrangements might be adopted for establishing such an agency within some wider organization, but without losing sight of the special characteristics of the work to be performed. For example, the Committee has envisaged two officers serving the' agency in different ways—an executive secretary and a director of an advisory staff. The question would arise as to the relationship of these officials to the chief administrative officer of the parent organization and of their staffs to the structure of its general secretariat; The relations between the Representative Body and Executive Board of the agency and representative organs or sub-groups of the parent organization would also have to be worked out.
15. (d) The solution of the jurisdictional issue may also determine the way in which the problem of interaction between restrictive business practices and governmental measures is to be handled (paragraphs 71 et seq).
16. These examples are not necessarily exhaustive.
The inter-relation betiveen restrictive business practices and other barriers to trade
17. While the Committee has not attempted to cover the ground which the Secretary-General will be covering in making his recommendation to the Economic and Social Council on the jurisdictional issue, in the course of its discussions the Committee has touched on this problem, which has a direct bearing on the Committee's work. Some observations arising from the Committee's discussions may usefully throw light on the nature of the problem involved.
18. The expansion of international trade may, in some circumstances, be hindered by restrictive business practices, but it may also be hindered by governmental measures. At times governmental measures and restrictive business practices operate independently and at other times they inter-act in various ways. For example, restrictive agreements may arise as a direct reaction to governmental measures, and sometimes the objective sought through restrictive arrangements could be achieved by analogous governmental measures.
19. The frequency with which these interactions occur may be great or small—this is a matter of conjecture—but whore they do occur an agency dealing solely with restrictive business practices on the lines of Chapter V of the Havana Charter may encounter difficulties. A sound conclusion as to the harmfulness of a restrictive business practice should take account of all the surrounding circumstances, including any governmental action which might have caused the practice. It is possible that, if these interactions were ignored, the agency could not find acceptable and effective solutions. For example there might be no remedy appropriate to a practice unless action were taken at the same time about a related governmental measure. Yet a thorough exploration of such inter-actions would take the- agency outside the scope of Chapter V and into the field of general commercial policy.
20. Some members of the Committee draw the conclusion that the proposed agency would obtain the necessary degree of support only if— as was intended in the original proposal for an International Trade Organization in the Havana Charter—it formed part of a wider body with comprehensive responsibilities in the field of international trade as a whole. In their view, this would allow restrictive business practices to be properly considered side by side with any governmental measures with which they interacted.
21. Some members of the Committee make the further point that only in this way could a reasonable equivalence of obligations be assured as between different Governments. Their argument runs on the following lines. Unduly restrictive policies of Governments often do serious-damage to the industries of other countries. The Governments of those countries might well be unwilling to expose their industries to international investigation of allegedly harmful restrictive business practices — especially if the complaint arose at the instance of a Government whose policy was causing hardship to their industries — unless1 the governmental restrictions which were causing hardship could be investigated under the auspices of a comprehensive international agency. In the absence of some reasonable equivalence of obligations, it would scarcely be possible for the procedures suggested in the draft agreement to command public acceptance in the countries whose industries might be investigated, and this difficulty could not be resolved by loose consultative arrangements between a body dealing with restrictive business practices and other bodies, differently constituted, dealing with governmental restrictions.
22. Other members of the Committee were of the view that the agency would serve a useful purpose, whether or not it was directly associated with an organization dealing with commercial policy. They think that governmental barriers can provide as formidable an obstacle to world trade as restrictive business practices, and they believe that there may be situations in which a close inter-action exists beween the two types of barriers. They believe that the importance of this relationship depends largely on its frequency and they see no basis in past experience for assuming that the problem of inter-action would arise more than infrequently. On the contrary, they feel that the body of cases of restrictive business practices, uncomplicated by issues of governmental action, is sufficiently large and sufficiently important that it readily merits apparatus devoted exclusively to the problem.
23. In any case, these other members point out that Governments have long since come realistically to accept the concept that different types of trade barriers must be dealt with at a different pace and through different organizational arrangements. For example, the International Monetary Fund, which is charged with the problem of dealing with exchange restrictions, was established several years before any organization had been set up to deal with the problem of import restrictions, the close companion of exchange restrictions; and the General Agreement on Trade and Tariffs was established without any parallel organization with respect to restrictive business practices. Both the International Monetary Fund and the General Agreement, in turn, Avere created at a time when no formal arrangements had been developed for continuous consideration of commodity agreements and commodity allocations, problems which are intimately related to trade barrier problems. In each of these fields, notwithstanding their inter-relationships, machinery for international action was developed at its own pace and in its own form. The problems of liaison and consistency of pace have proved far less difficult in actuality than in the abstract. A common core of membership in these groups, supplemented by the enterprise of tho secretariats, by arrangements similar to those provided in Article 9 of the draft agreement, and by a few formal ties, have created a reasonably workable system.
24. No full reconciliation of the views expressed in paragraphs 74 to 77 has emerged from the Committee. In general, however, the Committee is convinced that the arrangements to be adopted, in order to be workable and effective, should take account of the need to secure the willing co-operation of all the countries concerned.
