Decision required

1. A decision is required in regard to an invitation from the Secretary General of the United Nations to participate in the United Nations Conference on Trade and Employment due to open in Havana on the 21st November 1947.

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Ireland's Association with developments to date.

6. In preparation for the opening of the First and Second Sessions of the Preparatory Committee, the British Government convened in London meetings of Commonwealth countries and extended an invitation to Ireland to be present at those meetings. Both invitations were accepted and an Irish delegation, therefore, was present at talks which took place in London from the 3rd to the 11th October 1946 and from the 11th March to the 2nd April 1947. Instructions for the delegations to these meetings were approved by the Government on the 1st October 1946 and the 7th March 1947 respectively. The first meeting was concerned primarily with the draft charter which was to come before the First Session of the Preparatory Committee. The Irish delegation at that meeting put forward the views of the Irish Government in regard to certain provisions of the draft charter and, in particular, expressed the concern of the Irish Government at the possibility of the charter impeding the development of native resources and industries by prohibiting or unduly curtailing the use of quantitative restrictions on imports. The second London meeting was concerned primarily with the forthcoming negotiations for the reduction of tariffs and the elimination of preferences and the possible repercussions of these negotiations on the preference margins enjoyed in Great Britain and the Commonwealth group by imports into any of those countries from another. The instructions to the Irish delegation were to ensure that, as far as possible, the right of free entry and the preferences on Irish imports to the British market would be continued and that preferences enjoyed in Commonwealth countries would not be reduced or eliminated. The British delegation undertook, as a result of the discussions in London, to have regard in the negotiations at Geneva to Ireland's position and to her interest in having the existing right of free entry and the existing preference margins enjoyed in the British market maintained, and also to provide or secure adequate compensation for any loss or reduction of preferences suffered by Ireland as a result of the Geneva negotiations.

   Draft Charter

7. The objectives of the Draft Charter of the International Trade Organisation adopted by the Preparatory Committee at Geneva on the 22nd August are set out in Article 1, of which the text is attached.¹ While these objectives include 'industrial and general economic development, particularly of those countries which are still in the early stages of industrial development' and cover the 'enjoyment by all countries on equal terms of access to the markets, products and production facilities which are needed for their economic prosperity and development', the main emphasis in the Charter is on the reduction of tariffs and other barriers with a view to freeing international trade.

   In view of the fact that our industrial development is still in its early stages and of the pre-dominant role which Agriculture plays in our economy we would not a priori favour a scheme such as that contemplated in the draft Charter which would have for aim to open national markets completely to imports of all kinds. It would therefore on the whole be better for this country if the rules governing International trade which the Charter proposes to lay down were not to come into force. On the assumption however that a set of rules of this kind will be adopted internationally and that all states will sooner or later be obliged to subscribe to these rules or be penalised in International trade for failure to do so our primary interest would be to see that the rules interfere as little as possible with our economic policy. From this standpoint the features of the Charter as at present drafted which would give rise to most serious objection are those which provide for the general elimination of quantitive restrictions (Article 13 and Ch. IV. Section 8) and which limit the use of export subsidies (Ch. IV. Section 6). Provisions on these points were of course included in the original US Draft. The Geneva Draft represents a considerable dilution of the original text. It contains a number of clauses relating to industrial development (e.g. Articles 1, 2, 8, 9 and 13.1) which could be invoked to justify the imposition of quantitive restrictions as well as an Article (no. 27) which covers the use of Export Subsidies in respect of primary commodities in certain cases. There are in addition provisions admitting the imposition of protective measures over a transitional (undefined) period (Article 14) and for the purpose of safeguarding a country's Balance of Payments (Article 21).

8. While it would generally speaking be better from the point of view of the interests of this country if the prohibition of quantitive restrictions and export subsidies were even more qualified than is the case in the present Draft Charter it is doubtful whether the provisions in the Charter will be further weakened at Havana. At the closing meetings of the Geneva Session (on the 22nd and 23rd August) the Chairman of the Preparatory Committee expressed the hope that the Charter would not require further substantial alterations apart from completing the Chapters relating to the Organisation (see under).

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ACCEPTANCE OR OTHERWISE OF INVITATION:

12. The arguments in favour of our accepting the invitation to the Havana Conference are primarily two, namely that (i) by attendance at the Conference we could work for modification of the Charter so as to make its terms more acceptable to us, and, (ii) being a candidate for admission to the United Nations, Ireland would, by acceptance of the invitation to participate in this Conference called by the United Nations, show its willingness to co-operate in the work of the United Nations.
13. Arguments against acceptance might be put as follows:-
    • Delegation:
      To play an effective part in the work of the Conference (which, as already indicated, will break up into at least six committees) it would be necessary to send a number of delegates, who would have to be absent from Headquarters for a period of at least several weeks;
    • Non-Voting Rights:
      In view of the decision to confine voting rights to members of the United Nations, Ireland would be present at the Conference in an inferior position. It appears that, in reaching the decision on this matter, the Economic and Social Council was influenced by the con-sideration that to grant the vote to non-members of the United Nations would set a dangerous precedent for other inter-governmental organisations and conferences. To accept an invitation to a Conference at which we would not enjoy voting rights would equally create a dangerous precedent for the countries invited in those conditions.

      We have ascertained the attitude of three of the countries invited to the Conference in the same conditions as Ireland and which are somewhat similarly circumstanced, namely, Italy, Portugal and Switzerland. The Swiss Government accepted 'without enthusiasm'. The Portuguese Government were not disposed to send a delegation but, in deference to the wish expressed by Great Britain and the United States, decided to accept the invitation and to be represented by the Portuguese Chargé d'Affaires in Havana. The Italian Government at first refused the invitation on the ground that they felt that important decisions would be taken at Havana which might seriously affect Italian economy and about which they would have no right to register a vote. Subsequently, however, they accepted the invitation as a result of pressure from Great Britain and the United States. We have been given to understand by the British that they would warmly welcome our presence at Havana - the British delegate, indeed, at the meeting of the Preparatory Committee which dealt with the decision to refuse voting rights to non-members of the United Nations stated that his Government would regard it as a serious matter if we did not attend the Conference, adding that he felt that European countries would be equally disturbed if Switzerland were not present.

14. To the question whether, if we did not send a delegation to Havana our interests would, at least negatively, suffer, (see 12 (i) above) it might be answered that it is almost certain that our particular attitude towards the Charter, especially in so far as concerns the provisions relating to quantitative restrictions, will be shared by other countries. The delegation to the London meeting of October 1946 found that our views in this matter were common to Australia, New Zealand and, to a lesser extent, South Africa. Of the other countries present at the Geneva session a number (including China, India and the Lebanon) entered reservations in regard to the provisions of Article 13. Reference has, of course, already been made to the possibility of its being difficult to secure at Havana any further substantial modification of the Articles in the Geneva draft Charter dealing with quantitative restrictions.
15. If it were felt that it would not be worth while sending a full delegation to the Conference but that it would nevertheless be undesirable, on general policy grounds, to refuse the invitation, a compromise solution would be to accept and confine our representation to sending a delegate for the opening meetings. This delegate could be the Minister Plenipotentiary in Washington or a member of his staff (e.g. the Commercial Attaché).