prior preparation. Therefore, the Charter is a document developed with unusual care and thoroughness.

Second, the Charter represents acceptance by the representatives of 54 nations of the principle of consultation before action, where action affects another's interest, rather than the principle of unilateral action followed by retaliation. It provides for an organization to serve as a conference room for discussion and solution of trade problems and an impartial mediator and arbiter in trade disputes.

I cannot stress too strongly the importance of this combination of agreed principles and the obligation and mechanism of consultation. Each nation can proceed more confidently in reduction of its barriers to trade if it knows that other nations are committed to travel the same road, that it will be consulted before action is taken which may adversely affect its interests, and that it can bring problems up for discussion and public scrutiny in an impartial forum.

The sanctions of this Organization are not the sanctions of force, or of power to direct action by member nations, or of the power to spend money, for it will have no money to spend. But it has sanctions. Its sanctions stem from the voluntary agreement of its members to abide by certain rules, and include the power to bring up for open discussion and public scrutiny cases of failure to abide by that agreement, and the power to release members from their obligations under the charter to another member which is found by the Organization to have failed to abide by its agreement.

Third, the fact of agreement over so wide an area of trade relationships is, as I have said, most remarkable and most heartening. Equally heartening and equally important is the fact that we have this agreement now, while trade patterns and policies are still in the making, and there is still a choice as to the direction in which nations will move. Action now is needed. We cannot afford to wait in the vain hope that at some future time economic conditions will be more favorable to getting a better agreement.

By joining the ITO member nations will accept the principles of nondiscriminatory, competitive, multilateral trade, governed primarily by the forces of the market place. These are the principles in which the United States believes and which it has advocated. Only if these principles are accepted and widely lived up to can the private trader have a real opportunity to conduct his business on a fair, competitive basis. The fact of commitment to these principles will influence every decision of member nations in developing their trade policies. In this way, the charter can have a profound influence on the future course and form of international trade.

It is important to recognize the limitations of the document as well as its advantages. Let me make it clear at once that the charter is not presented to you as a panacea or a cure-all or a final solution to our trade problems. It does not immediately or completely remove all rigid quota controls of trade or all trade discriminations. Obviously it cannot. It is designed to make a beginning and to provide the means of further progress in dealing with the disturbed and difficult conditions which exist today, and in bringing about more normal conditions.

Moreover, since the charter represents the agreement of representatives of 54 nations and is designed as a means of helping them to trade harmoniously with each other, it is not written exactly as the United States, or any other one nation, would have written it. The framers of the charter knew that economic difficulties and differences in national systems and points of view could not be legislated out of exist

ence.

The meaning of the charter is, therefore, not in any automatic guaranty of quick and complete results. It is rather in the fact that it represents agreement on objectives, that, by accepting it, members will agree to take many steps now possible to put those objectives into effect, and that it provides the means for members to take further steps along the right road.

The questions we must ask of the charter are whether it will improve today's trading conditions, whether it sets us in the right direction, and whether we and the world will be better off with it than without it.

I am persuaded that the reopening of the channels of international trade is basic to the building of a prosperous and peaceful world. I am convinced that reopening of the channels of international trade can only be accomplished by cooperative action among a large number of countries. Wide international agreement upon the rules which the charter embodies and wide membership in the Organization which it would establish can make a material contribution to the expansion of international trade. This action obviously cannot be effective without the active participation and support of the United States.

As I said at the opening of my statement, we are the leading exponent of multilateralism, free competition, and private enterprise in the world today. We believe that private enterprise has more to contribute to the world than any other economic system. Therefore, our consistent policy is to put our full energies behind any international effort which can help to create conditions in the world in which the private trader can buy and sell where he pleases and where he thinks it will be to his best advantage.

The ITO is conceived in this central philosophy. It is essentially a limitation upon the exercise by governments of their power to restrict and control trade. It would not abolish all interferences. Of course not. But it would abolish many, reduce others, and limit still others to precisely defined areas. And thereby it can provide a greater opportunity for the private trader.

Other countries are now waiting to see whether the United States accepts or rejects the charter. The choice, therefore, which the Congress is about to make is not only whether the United States will accept membership in the International Trade Organization, but whether there will be an International Trade Organization.

We are engaged in a great cooperative effort with other countries to raise standards of living throughout the world and to achieve political stability and peace. Our effort has many facets-political, economic, financial, military. All are interrelated. Each supports the others.

We are also engaged in a struggle between two ways of life, two systems of thought and philosophy as different as the poles are wide apart. Millions of people are watching this struggle to see which

system and way of life will work the best and do the most to provide a decent life for the individual. To the extent that we can work effectively with other nations of like mind to make our system work, our hand will be strengthened in that struggle. An effective cooperative mechanism in the basic field of trade can immeasurably strengthen us and other freedom-loving nations in our effort to establish the kind of world order in which we can live in peace and pursue our way of life without fear that it will be overthrown.

The ITO charter will be an effective additional means to this end which we all desire. I, therefore, urge the Congress to authorize United States acceptance of membership in the organization which this charter would establish.

Mr. CARNAHAN (presiding). We thank you Mr. Secretary.

Since our chairman, Mr. Kee, Mr. Richards, and Mr. Vorys were required to be at another meeting this morning and since the Secretary must keep another engagement, I would like at this time to present Mr. Thorp who will continue the presentation of this matter. The chairman is expected to return as soon as he gets out of the other meeting. Before making any definite arrangements I would prefer we wait until the chairman returns.

Mr. FULTON. Mr. Chairman, could we on the Republican side thank the Secretary for his statement because this is certainly one instance where the bipartisan foreign policy has been carried out at the base where it was consulted upon before the action was taken. Two members of the Republican side of the committee, Mr. Javits and myself, served as delegates of the United States under the able leadership of Mr. Will Clayton, chairman of the United States delegation at the Havana conference. I think you have given a very able statement. Secretary ACHESON. Thank you. I am indebted to you and Mr. Javits for one of the most helpful analyses of the charter that exists. I want to compliment you both on it. I will return later if the committee wishes.

STATEMENT OF WILLARD THORP, ASSISTANT SECRETARY OF STATE

Mr. THORP. I am going to supplement my statement with some charts and therefore I might want to stand up from time to time. Mr. SMITH. Are your remarks in writing?

Mr. THORP. NO. I am going to speak extemporaneously.

I should like to outline briefly for the committee the importance of foreign trade in our national picture, the main types of problem which we face at the present time, and then in the light of that background talk particularly about the contribution which we feel that the ITO can make.

I am sure it does not need any chart presentation to emphasize the fact that foreign trade is an important part of our operations in the American economy.

(A chart entitled "Foreign Trade is Vital to the United States" was referred to.)

Mr. THORP. This chart indicates a series of items, which you will recognize are important items to us, which come into the United States from other countries. These which are listed here are items which by and large we have to get from other countries.

On the export side are listed a number of items in which the foreign market is a very important part of support for our own economy.

(A chart was referred to entitled "Agriculture Depends on Exports.")

Mr. THORP. What I have just referred to can be shown in the agricultural field by showing for 1948 with respect to various agricultural commodities, the percentage of those commodities which went into foreign markets. Wheat, dried fruits, rice, cotton, lard, and tobacco are all commodities where there is very substantial dependence upon the foreign markets.

(A chart was referred to entitled "Millions of U. S. Jobs Depend on Exports.")