of the draft Charter not dealt with primarily by Committee IV:

1. The Organization would contain a Commodity Commission of experts, which would initially perform most of the functions of the Organization with regard to commodity arrangements, would keep all commodity arrangements under continuous surveillance, and would prepare recommendations regarding those arrangements.

2. The Commodity Commission would be coordinated with a Commercial Policy Commission and a Business Practices Commission, and the work of the three would be under the Executive Board of the Organization. The Executive Board would make recommendations regarding commodity arrangements to governments, to the Conference of the Organization, or to other international organizations.

3. The Organization would name non-voting members of all study groups, commodity conferences, and commodity councils.

4. The Organization would invite other competent specialized agencies to name non-voting members to those commodity bodies. Since a large number of the commodities encountering special difficulties are expected to be agricultural, the Food and Agriculture Organization is specially mentioned in the commodity chapter in this connection. The Food and Agriculture Organization might also be invited to name a member of the Commodity Commission and of the Interim Co-ordinating Committee for International Commodity Arrange

ments.

5. Commodity councils and other policy bodies. associated with individual commodity agreements would be composed of representatives of governments whose instructions would presumably be consistent with those of the representatives of the same governments on other commodity councils and on the policy bodies of the Organization, the Food and Agriculture Organization, and other United Nations bodies. Governments would agree to conform with the recommendations of the Organization as concerned their participation in commodity arrangements.

The Committee was aware of the importance of the fact that the commodity conferences and commodity councils would be composed of fully accredited representatives of governments. Agreements reached in such bodies would not be easily suscep

tible of modification in the light of subsequent findings or recommendations of an expert commission or of an international secretariat. For this reason a large part of any coordination and integration accomplished at the international level would have to be achieved through representatives of the Organization, the Food and Agriculture Organization, or other competent organizations sitting with the various commodity policy bodies. Such representatives should, therefore, be persons of the highest quality as to experience, reputation, and capability. This consideration is also of importance in staffing the Commodity Commission and the Interim Co-ordinating Committee for International Commodity Arrangements. The latter would function as a preparatory group for the Commodity Commission. The influence of capable international representatives in intergovernmental commodity deliberations can be an important factor in obtaining a maximum expansion of trade and consumption and the most expeditious arrangements for bringing about necessary shifts in production.

Differences Between the U.S. Draft Charter and the Preparatory Committee Charter for an International Trade Organization

The most noticeable difference between the two charters is organizational in character. In the Preparatory Committee draft a sharp distinction is drawn between intergovernmental commodity arrangements broadly interpreted and the narrower intergovernmental commodity agreements which regulate production, trade, or prices. Accordingly the general objectives and principles for all intergovernmental commodity arrangements and the techniques for studying and solving difficult commodity problems are set forth. These are followed by special provisions relating specifically to intergovernmental commodity agreements regulatory in character. The Preparatory Committee Charter provides that such agreements must conform not only to the general principles for arrangements but also to a set of special principles which appropriately relate to regulatory agreements only.

The objectives in the Preparatory Committee Charter are broader in scope than those originally presented in the U.S. draft. The moderation of extreme price fluctuations, the protection of natural resources from unnecessary exhaustion, and

Committee V of the London meeting, to which were assigned the organizational aspects of the ITO charter, accepted the United States suggested draft charter as a basis for its discussion. It developed agreed texts on all the articles involved except those dealing with voting, the method of composition of the Executive Board, and the specific functions of the Commissions. The questions of voting and composition of the Executive Board were fully discussed and referred to the Interim Drafting Committee," which is now engaged in drawing up alternative draft texts in light of these discussions.

Membership and Functions

The liberal provisions of the United States draft concerning membership were accepted with an amendment permitting the admission of new members by the Conference of the International Trade Organization without the prior approval of the Executive Board.

Two significant changes were made in the article on functions of the Organization. First, the above-mentioned function of the Organization to develop and to obtain general acceptance of conventions and agreements designed to assure just and equitable treatment for foreign enterprises was considerably broadened. The Committee gave a very broad interpretation to the scope of these agreements and provided that members must either accept them or explain to the Organization within a period of 18 months their reasons for non-acceptance. Secondly, the Committee laid particular stress upon the need for cooperation and avoidance of overlapping between the International Trade Organization, the United Nations, and the other specialized agencies. A special clause was added setting up the achievement of economy of effort. among the various organizations as a function of the Organization. Committee V left open the question of what functions the Organization should assume in the field of economic development and industrialization, pending the decision of the Economic and Social Council on this matter. The Conference

The Committee adopted substantially the provisions of the United States draft as to the Conference. However, the provision under which the

"The Interim Drafting Committee was set up by the Preparatory Committee to edit the texts agreed at London and to prepare alternative drafts as to those portions

Conference may provide for the possibility of waiver in exceptional circumstances of the obligations of members was extended to cover all obligations assumed under the charter and not solely those in the field of commercial policy. This was done as a result of the concern expressed by certain delegations as to the possibility that many of the obligations under the charter might prove unreasonably onerous, especially during the transition period. The Committee also suggested that the Conference, in allocating the budget of the Organization, should follow the principles adopted by the United Nations, in the absence of some other agreed arrangements. It was recognized that this question might be affected by the eventual decision in the matter of weighted voting which is covered in the next section.

Voting and Executive Board Membership

No agreed text was arrived at as to the method of voting in the Conference. The majority of the delegations were in favor of the principle that each country should have one vote, which is the rule in the General Assembly of the United Nations. They argued that this is the most democratic system; that a small country may be relatively as vitally affected by a decision in the realm. of foreign trade as a large country; that the Conference might be the last resort of a small country in serious difficulties in the field of trade, and it should have an equal voice in the discussion of those difficulties; that weighted voting would tend to submerge the interest of the many underdeveloped countries; that special provisions as to voting are already contained in the charter to cover special cases (for example, in the case of commodity agreements where consumer interests are given an equal vote with producer interests); and, finally, that the development of a workable formula acceptable to the large number of nations whose membership is desired would be nearly impossible. On the other hand, the minority of delegations who did not regard weighted voting with disfavor argued that the interest of different countries in the field of trade varied greatly; that the Organization cannot succeed without the active support of the major trading nations, who are a numerical minority among the nations of the world; that it is possible to measure degrees of importance in such a specialized field as that of foreign trade; that there are precedents for this system in the International Fund and Bank; and,

finally, that it would be improper to give to a country representing wide colonial territories throughout the world the same vote as a small country confined to narrower regional interests.

As to the related subject of possible permanent seats to be allocated to the major trading nations on the Executive Board, there was a disposition on the part of a majority of the members to favor some sort of arrangement of this kind, but no general agreement as to its terms. Various factors were advanced, some of which were also mentioned in connection with weighted voting. These included economic importance, political importance, geographical considerations, population and economic potentialities, national income, and the relative importance to any country of its international trade. One suggestion, which gained considerable sympathy, would make the holders of 6 of 15 seats eligible for reelection, while the other 9 seats would rotate. It was suggested that this would mean in practice that the major trading powers would get special recognition.

The Committee failed, also, to agree as to the size of the Board. Some delegations argued for 15 as a maximum while others wished as many as 20

seats.

The Executive Board

The United States draft provisions as to the Board were altered in two significant ways. First, the Board's control over the Commissions was strengthened by the provision that it should supervite their activities rather than merely review them. Secondly, specific provision was added under which a member of the Organization, not a member of the Board, must be invited to participate in its discussion of matters of particular and substantial concern to it.

The Commissions

The Committee devoted a considerable amount of its time to the question of the nature, functions, and composition of the Commissions. Many of the delegates feared that they might be competitive to the Secretariat, and it was suggested that they should be made subordinate to the Director General. The United States view was, however, finally accepted. It was agreed that the Commissions should be composed of individual experts of the highest possible prestige and ability whose services would probably not be available to the Organization if they were to be members of the Secretariat. It would be the function of the Sec

retariat to gather and marshal information for the Commissions and to supply all the necessary technical and clerical personnel. The Director General would always be conversant with their activities through his right (or that of his deputies) to participate in all the Commissions' deliberations and to initiate any proposal for their consideration. In the light of these considerations the Committee agreed that it would not be necessary or desirable to make the Commissions subordinate to any body other than the Executive Board, made up of the representatives of governments.

Many delegates felt that the Commission members should be invited to serve on a part-time basis so that prominent men in important positions in member countries might be persuaded to act on the Commissions and might, at the same time, be able to maintain intimate contact with the problems of their respective countries. While it was agreed that this would be desirable and possible in many cases, it was also felt that in other cases the work of the Commissions would probably constitute a full-time job.

Thus, the provisions of the United States draft were not substantially changed. Conditions of service on the Commissions are to be covered by regulations to be prescribed by the Conference in the light of operating experience. It was suggested that the Conference, in so prescribing, should consider the desirability of providing that the chairman of each Commission should serve permanently so as to assure continuity. The desirability of fair geographical distribution in the selection of members was also pointed out.

The Secretariat

In this connection, Committee V again stressed the danger of overlapping between the various international bodies in the international economic field and pointed out the necessity of using common services so far as possible.

The authority of the Director General over the Secretariat was increased by removing the United States suggestions concerning special reference to the functions of Deputy Directors General and by leaving a maximum of discretion to the Director General himself. The Committee also incorporated the provision in the United Nations Charter with respect to geographical distribution, but decided against inclusion of any provision confining membership in the Secretariat to nationals of member countries.