Special Message to the Congress Transmitting the Charter for the International Trade Organization.

To the Congress of the United States:

I submit herewith, for the consideration of the Congress, the Charter for an International Trade Organization, prepared by a conference of the United Nations which met in Havana in 1948, together with a memorandum from the Secretary of State.

The Charter is designed to do two things: to establish a code of international conduct to guide nations in dealing with the fundamental problems of world trade, and to create an agency, within the framework of the United Nations, to help implement this code.

We have learned through bitter experience how necessary it is for nations to approach jointly the task of improving the conditions of world trade.

During the 1930's many nations acted independently, each attempting to gain advantage at the expense of others. The result was a vicious circle--with restrictions by one nation provoking more serious restrictions by other nations in retaliation. The end result was a tremendous drop in the volume of international trade which made the general depression worse and injured all countries.

Since the recent war, though some nations have again acted unilaterally, there has been a general resolve to prevent the vicious circle of restrictions and to achieve progressively freer trade. To gain this objective, action by many nations is necessary. No one nation alone, and no small group of nations, can have enough impact on the network of obstructions that has been built up.

The United States program of reciprocal trade agreements has been a shining beacon of cooperative action to reduce tariff barriers, and it is vitally necessary that the Reciprocal Trade Agreements Act be extended in full force.

But it is clear that trade agreements alone are not enough. These agreements do not touch certain important obstacles to the expansion of world trade. Subsidies, cartels, and many other devices have important effects in limiting trade or creating disadvantages for one country as compared with another. What is needed is cooperative action to attack the whole range of obstacles that stand in the way of broadening international trade.

The Havana Charter is a major step toward achieving that objective. It was agreed upon by the representatives of fifty-four nations after more than two years of preparatory study and negotiation.

The Charter establishes an international organization, which is essential to continuous and effective international cooperation in the field of trade. The nations accepting membership in the International Trade Organization commit themselves to abide by fair and liberal principles of trade. They agree to take no action which may injure another nation without first making a genuine effort to reach a constructive solution through consultation either directly between themselves or through the Organization. They agree to work together continuously to achieve progressively greater trade and to settle differences with respect to national policies that affect the flow of international commerce.

The Charter is the most comprehensive international economic agreement in history. It goes beyond vague generalities and deals with the real nature of the problems confronting us in the present world situation. While it does not include every detail desired by this Nation's representatives, it does provide a practical, realistic method for progressive action toward the goal of expanding world trade.

The United States can be proud of its leadership in this constructive action to help the nations of the world work their way out of the morass of restriction and discrimination that has gripped international trade ever since the first world war. The alternative to the Charter is economic conflict and shrinking international trade.

This Charter is an integral part of the larger program of international economic reconstruction and development. The great objectives of the European recovery program will be only partially realized unless we achieve a vigorous world trading system. The economic advancement of underdeveloped areas likewise depends very largely upon increasing the international exchange of goods and services. Thus the Charter is an effective step toward improved standards of living throughout the world, toward the growth of production, and toward the maintenance of employment and economic stability. It is fundamental to the progressive, expanding world economy so vital to the increasing welfare and prosperity of the people of the United States.

The great structure of international cooperation that is being erected through the United Nations must rest upon a solid foundation of continuous cooperation in economic affairs. The Charter for an International Trade Organization is a necessary part of that foundation, along with the special arrangements that have been made in the fields of money and credit, transportation and communications, food and agriculture, labor and health.

As an essential forward step in our foreign policy, I recommend that the Congress authorize the United States to accept membership in the International Trade Organization.

HARRY S. TRUMAN