The approach of the gatt (General Agreement on Tariffs and Trade) ‘Kennedy’ Round, and the United Nations Conference on Trade and Development, is an appropriate time to recall the circumstances which surrounded gatt’s foundation.

Between November ’47 and March ’48 the United Nations, with the active support of the British Labour Government, held a Conference at Havana on Trade and Employment. At the Havana Conference delegates from all the principal member countries (including Harold Wilson, the British delegate) agreed to a charter for the proposed International Trade Organization (ito) which was to be one of the main un agencies. In retrospect the Havana Charter can clearly be seen to have offered a solution to many of the major problems which plague the under-developed countries today. Fluctuations and decline in the price of primary commodities has robbed these countries of the development capital they so urgently need and has made nonsense of their attempts to plan and programme industrialization.

The Havana Charter proposed to liberalize and regulate world trade by the reduction of tariffs and artificial barriers, by the negotiation of commodity prices on the basis of equality between producer and consumer, by the setting up of buffer stocks and by other means for dealing with shortages and surpluses without exploitation of either producer or consumer.

The ito Charter recognized that the fundamental problems of world trade could never be solved by laissez-faire free trade, but rather by planning, regulation and agreement between trading partners on a basis of equality. It is therefore not surprising that the ito was torpedoed by the United States, which failed to ratify the Havana Charter.

While the Havana Conference was in progress, the industrial powers were carrying out negotiations at Geneva which led to the setting up of gatt. gatt received immediate us backing, and, based as it was on the principles of 19th-century free trade, enabled the West to retreat thankfully from its Havana commitments.

More than ten years later the eec upheaval caused the major powers to review once again the problems of international trade, and United States trade policy was defined in the Herter-Clayton Report (November ’61).

The Report starts by declaring—‘Two developments since the end of World War II pose the inescapable challenge and the one hope of answering it. The challenge is the Cold War, in which the Soviet Union aims to divide the free industrial nations and at the same time win the underdeveloped countries of the world to Communism. The answer lies in the second development, the European Common Market. The nations of the free world must work together as the Common Market “Six” are doing already.’