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RESTRICTEDECONOMICCONSEILE/PC/T/95ANDECONOMIQUE5June1947SOCIALCOUNCILETSOCIALORIGINAL:ENGLISHSECONDSESSIONOFTHEPREPARATORYCOMMITTEEOFTHEUNITEDNATIONSCONFERENCEONTRADEANDEMPLOYMENT.
ReporttoCommissionAbytheSub-CommitteeonChapterIIICHAIRMAN:Dr.
Lokanathan(India)1.
AtthefifthmeetingofthePreparatoryCommitteeinExecutiveSessionaSub-committee,consistingofrepresen-tativesofAustralie,Belgium,Cuba,IndiaandtheUnitedStatesofAmerica,wasappointedteconsiderfurtherthedrafttextofarticles3-5inthelightofthevariousamendmentswhichhadbeenproposedandoftheviewswhichhadbeen-expressedontheexistingtext.
AtthetenthmeetinginexecutiveSessionthePreparatoryCommitteeinstructedthesameSub-comitteetoexaminealsotheproposedamendmentsintheotherarticlesofChapterIII.
ItwasindicatedthatthemeetingsoftheSub-committeebrighti-eattendedbyrepresenta-tivesofotherinterestedDelegations,endthat,inparticular,theSub-committeeshouldheartheviewsofthoseDelegationsnotincludedinitsmembershipwhichhadproposedamendments.
2.
TheSub-committeeheldtenmeetingsandreachedagreementontheattachedtextwhichisrecommendedtoCom-.
missionJforconsiderationandapproval.
IntransmittingthistextinthetwoworkinglanguagestheSub-committeeassumes*thatetalaterstagetheFrenchandEnglishlanguageversionsoftheentireCharterwillbereviewedtoensurethattheyarestrictlycomparableinmeaning.
3.
InitsdiscussionstheSub-committeehasgivenconsiderationtothevariousproposedamendmentscontainedindocumentE/PC/T/W.
87Rev.
1andtotheviewsexpressedintheExecutiveSessionsofthePreparatoryCommitteeatwhichthoseproposalswerediscussed.
TheSub-committeehasalso-takenaccountoftheamendmentssubsequentlyproposedindocu-mentsE/PC/T/W.
60Rev.
1,111,113,115and133.
Inthe.
courseofitsworktheSub-conmmitteehashadthebenefitofconsultationwithrepresentativesoftheDelegationsofCzechoslovakia,theNetherlands,NewZealand,theUnionof:SouthAfrica,theUnitedKingdom,andrepresentativesof.
theInternationalLaborOrganization,theInternationsl-BankforReconstructionandDevelopmentandtheInternationalMoneteryFund.
LrepresentativeoftheDelegationofFrenceparticipatedinthediscussionsoftheSub-compitteetoassistinthepreparationofavalidFrenchlenguagetextandtorepresenttheviewsofhisDelegationontheamendmentswhichithadproposed.
UNITEDNATIONSNATIONSUNIESE/PC/T/95page24.
Althoughtherevisionswhichhavebeenmadeinthetexthaveleenmninlyofndraftingcharacterrequiringnoexplanation,oncertai4,pintstheSub-co.
mitteedesirestarecordthejustificationfor:changesmadeandelsotheobservationsoftheSub-com=itteeorofindividuallùelega-tionsrelatingtethepresentdrafttext.
5.
ConcerningcertaintermswhichoccuretseveralplacesinthetitlesandinthetextitwillbenotedthettheSub-committeehessoughttoachievesubstantialuniformitywithoutunduerepetition.
TheSub-committeehaspreferredthedescription"lorgeendsteadilygrowinr"tothevoriouqalternativeexpressionsusedoriginallyinthetexttadescribetheobjectiveinrespectofdemand.
Thisdescrip-tionisnotrepeatedinfullthrou-houtthetextsinceitappearedto;theSub-comnitteethatifthe'expressionwereusedintheprincipalinstancesitwouldaeapparentfromthecontextthatthedescriptionwasimpliedintheotherinstances.
Similarly,although"demand"isexplicitlydescribedes"effective"onlyinthefirstendlestinstancesinwhichthewordoccurs,itseemedtetheSub-committeethatthedescriptionwasclearlyimpliedinallotherinstanceswithoutrequiringitsrepetitionthroughout.
TheSub-committeeolsoconsidereditdesrabletoadd"production"*to"demand'"onrd"xemplymenti,therelhytakingmorecompleteaccounttofrelatedaspectsofeconomicactivitywithoutdivertingthemainemShesis'ftheChapterfromemployment.
*6.
InconnectionwiththeterminologynowproposedinthisdrafttextofChapterIIItheSub-committeewouldpointoutthedesirabilitynfexamining'thelanguageofChapterI,whenitcomesupforconsideration,totakeaccount.
otheseproposedchangesintheinterestofconsistenoy.
7.
TherepresentativecfCzechoslovakiasuggestedthatthetermreallincome"mightappearinChapterIIIinordertogiveamoreprecisecontenttotheexpression"effectivedenaend"sinceinhis-iewitwasconceivablethateffectivedemandmightgrowwithoutentailin.
gacorres-pondinggrowthintherealinconeofal'sectionsofthecommunity.
TheSub-committeeconsidersthatthelanguagewhichithasproposedforChapterIIIisinharmonywiththisgeneralobjectiveendtskesappropriateaccountofit.
8.
Concerningtheprooosedtexto1ofindividuelarticlestheSub-cDminitteesubnitsthe-obsorvat'ons:'Article39.
TheSul'-committeehastakenthelibertyofproposingarevisioninithe.
versionoftheamcndmenttoparagraph1-mhichhadbeenproposedbytheDelegetionofNewZealandandapproveddhythePreparetcryCommitteeatitsfourthExecutive,Session.
ItseemedtetheSub-comzitteethatthereferencetoe"therealizationofthep;s-poseeor.
theCharter.
.
.
.
endfOrtheexpansion)fir'ernGtionrJltrude"mightbeopento'themisinterpretationrthettheexponsienofinternationaltradewesnotoneofthepurp-)sesoftheCharter.
ThetextproposedbytheSub-coinmitteeisintendedteremovethispossibleambiguitywhilereteioing'thesubstanceoftheoriginalemendzent,10.
Thereferenceinparegrrph.
taactionsupplementingdomesticmeasureshasbeenrevisedaftertakingaccount'fremarksmadebytherepresentativesofCubaFndtheUnitedStatesofLmericaconcernizi3authorityvestedinth3EconmicE/PC/T/;`5Page3andSocialCouncilndtheremarksortheNatharlandsreprewen-tativerelatingtocrncertedactih)n.
.
I.
TheSub-co)mmitteehasglsore-worledslightlytheamendent,nawappesrinZasparacret>.
3Z,whichhae-bbenproposedbytheDelcastion)fCubuendadQptzdbythePreparatoryCommittee,inordertamaketheIlexchangoofinfnrmati5nnndviews"specif'i-callyepplicabletothesubjectoftheChapter,i.
e.
"thefieldordeploymentend'ecinamraic.
ctivity".
12.
.
WithreferencetDtheedditionelparagrephwhiohtheDelegatiénn'Yl{Cubeh.
rdproposedforinsertionetthebeginningof'-Article3therepresentativecfCubesu2gestedthattheSub-oa2mitteerecoimendtothePreparato'ryC.
,=itteathattiereportoftheSacondSessiin.
relctinct-.
)thisChapter.
mightcontainenobservationtothea'ffeectthHt:"TheMembersrec;ognizetheinterdependenceofdemand,prilductianender-ploymert.
iitheachievementendmain-tenancenfec-inznicfundsncinlprogress.
Theyaloarecog-nizethotthedevel.
-pmentofdénand,productionendempLoyoentisprirariiytheresponsibilityorgovernments,inthedischargeofwhiche1lse6tinsri'societyDmustcoi)perste,"13.
Thectherembersof.
theSub-o.
ainritteeexpressedtheviewthatthepointsraisedbytheproposaloftherepresentativeorCubewerealreadyc.
overeclinthepresenttextoftheChapter.
In.
.
tieoiroumstancestherepresentative.
)fCubadidnotpresehisproposed.
14.
Therepresentativeo!
Czechoslovskieinquiredwhetherthewords"ableendwillingtowork,eseemployedinparazraph1ofthises'ticle,could'beinterpreted'asIncludingnotonlythosewhoareetthepresenttLeablesndwillingtirworkbutalsothose.
whomightbecomesoifacountrywereteofrerindu6emznts,suohasvocationaltrainingendguidance.
ItwastheviewortheSub-aom-mitteethatthisinterpretationwasnotinconsistentwiththeintentionofthsarticle,whichdeFlswiththeachievementendmain-tencnceaofcpp)artunitiestowerkforthoseableandwillingtodoau,whatevertheirnu=ber.
.
Article415.
TherepresentativeifNewZeelandinformedtheSub-oommitteethethisDelegation.
wouldprefernottndiscusstheamend-mentwhichithadproposedinArticle4(E/PC/T/W.
113)uritilarticle33endrelatedpertsctthe.
Charter.
hadbeendiscussed.
Heindicatedtha.
t.
.
inthe.
meantimeetheNewZealendDlegeationswould±'eserveitspositioninrespectorArrtible4andtht*subsequently.
his.
Delegatiahnmightwishtoreopenthequestion-iffurtheramenad-*ngthatarticle.
-.
-15.
W.
ithrefurencetothewirds"otherpurposes",whichapper-inthepresenttexteswellasintheearlierversionsofthisarticle,thereprJo,.
t'tiveofCzechoslo:akiainquiredwhetheritwasclesrthatthepurpcsosmentionedarecohiinedtothosestatedinChapterI;ndd.
snotextendtaotherinoidentai"purposes"wh.
ichrairhtappearelsewhereintheCharter.
-TheSub-o.
ommo=itteeconsiders.
thatthesewords.
reiertothepurposessetforthin.
ChapterI,.
.
elthnuzhit.
recognizesthatsuohgenera).
pur-posesmaybementionedorelaboratedinotherchapters.
TheSub-oommitteesuggeststhetwhenthescopeofthepurposestobein-oludedinChepterIisuneerdiscussion.
11othersectionso!
theChartershouldbeexe1rinedtaensurethetailpurposesmentioned'ntheCharterareèaveredcomprehensivelyinthatchapter.
TheSub-committeedi.
netconsideritwithinitscompetencetodeterminewhetheritweuldbe2esirableorfeasibleto'assigenyorderofprecedencetntheverinuspurposesoftheCharter.
E/PC/T/95page4Article517.
ItwillbenotedthattheSub-Commi'tteeproposestheadditionofasentencetoArticle5reterring'specifioajlytothe:InternationalLaborOr&aniz'Ftion.
'TheSub-Conumitteeconsideredthevariousalternativeversionsofthesentencewhichhadbeenproposed'tocoverco-operationwith'!
theappro-priateinter-governmientalorganizations".
InthelightofthediscussionbothinthePreparatoryComzxitteeandihtheSub-committeeitseemedapropriatetoincludeareferencetotheILO.
Thoinclusion.
ofthisreferencewouldtake'appropriateaccountotthespecialpositionoccupiedbythatOranizationinthisfieldwithoutexcludingco-operationwithanyotherorganizationwhoseactivitiesextendtothesubjectsdealtwithintheArticle.
18.
TherepresentativeoftheUnionofSouthAfricadiscussed.
withtheSub-CommitteetheamendmentproposedbyhisDelegation.
InthediscussionitappearedthattheprincipaldifferencebetweentheproposedamendmentandtheversionasrevisedbytheSuu-coLuaitteearoseovertheuseofsuchexpress-ionsas"fairlaborstandards"and"sub-standardconditionsoflabor"inthelatterversion.
TheSub-committeeappreciatedthedifficultyindefiningsuchtermsprecisely.
TiseSub-committeeconsidered,however,thatsuchterms,whenrelatedtoproductivityastheyareinthet6xt,arevalidandusefulcon-cepts,particularlywhenaccountistakenofthepr'oeressachievedbytheILOandotherbodies.
ingivingconcretenesstothoseterms.
OneofthemainreasonsleadingtheSub-comritteotorecommendtheretention'ofthesetermsisthattheyexplicitlyrecognizetheexistenceofarelationshipbetweenunfairoompe-titionininternationaltradeandconditionsoflabor,parti-cularlyintheexportindustries,whensucheonditionscan,beshowntobebelowacceptedmini.
iumstandards.
;Article619.
TheSub-coramitteehasproposedanumberofchangesinArticle6atteranexaminationofth;amendixientsproposedbytheDelegationsofê.
ustralia,France,the-UnitedRKingdomandtheUr.
itedSt_.
tesofMnerica.
TheSub-coEiitteeconsidersthattherevisedversionofthisarticledescribesmorepreciselythantheprevioustextthesituationwhichitisintendedtocoverandthattheresponsibilitiesofi_bersinsuchasituationaremoreclearlystated.
Inadditiontocertaindraftingchanges,theSub-coramitteewoulddrawattentiontotl)esiLnifi-oantalterationsproposedinthetext.
20.
TnceSub-con±itteehasreplacedthewords"fundamentaldisequilibrum"bytheexpression"persistentmaladjustment'withinthebalanceofpayments".
IntheviewoftheSub-comm-itteetheterm"fundamentaldisequilibriumr"wasnotsatisfa-toryforthereasonthatitappearsinthéArticlesoeAgreementoftheIutcrnationalo.
enetaryFr;ciuwithaspecialmeaningwhichmightnotbealwaysapplicabletotheconditions.
:envisaeedinthisparagraph.
21.
Byaraladjustnientwithinacountry'sbalanceofpaymentstheSub-coeumitteeintendstoretertoeasituationinE/PC/T/95page5whichanabnormalor.
undesirablrelationshipexistsbetweenthedifferentitezswhichmxi:eupthatbalanceandinparticularwhereabalanceisachievedonlybeiueansofanunduerove'nLentofitemsofthetypewhichenterintoaionetaryreserves.
22.
Thecharacterisati'enofthestateOfaffairsasoneinwhichthepersistentiualadjustiiieért"isamajorfactorinasituationinwhichotherMezbersareinvolvedinbalanceq'pay-mentsdifficulties"isintendedtostress,firstly,thatbalance.
oftpaymentsdiffioultiesarciiotnecessarilycausedbymalad-justuiitowithI'nanothercountry'sbalanceofpayments,and,secondly,tNatt1wArticlcisintended,toapplyonlywhenthepe.
rsistntmaladjustiaentisamajorfactorinthesituation,23.
Tho'Sub-co=mitteehasexpandedthephraseintheformertext,"handicapthemirnmaintainingemployment".
to!
handicapthezincarryingouttheprovisionsofArticle4with-outresorttotraderestrictionss"!
ThischangeisdesignedtonaakeitclearthatthepurposeoftheArticleisGhatsuitableactionshouldbetakensathatMembersriaybeablenotLerelytopursuetheobjectiveofmaintaining.
employment,productionanddemand,butalsotodosowithoutresortingtotraderestr-ictionsasai±eansofresmedyingStheirbalanceofpayments.
di±'fioulties.
24.
Thewords"togetherwithappropriateactionoanthe:partoftheother,%enebersconcerned"havebeenaddedtomakeitclear.
thatal.
le-bers.
involvedinthesituationhavearespon-Sibilitytoetake.
whatactiontheyappropriatelycanto-assistinoveréorirngZthedifficulties.
-.
25;Therearevariousieansby-whichsituationsofthiskindcanb.
ecorrected,sou;tofwhichhavebeenindicatedingddtionEonpage5cftheReportoftheFirstSession(E/PC/T/33)Itseenisdesirable,however,thatwhereverpossible,methodswhichexpandratherthancontractinternationaltradeshouldbeWpnloyed.
-Withthisconsiderationinnmind,theSub-aolizzitteehassuggestedtheadditionofthesecondparagraphofthis.
Article.
Articles7and826.
ItwillbenotedthattheorderofArticles7and8halsbeen.
reversed.
Thisre-arrangementofthe.
extresultedfromtheSub-coninxittee'sdiscussiongrowingoutofamendmentsproposedbytherepresentativesufFranceandtheNetherlands.
bhe-textproposedbylrancewithrespecttoSafeguardsforMemberssubject.
toExternalDeflationaryPressureprovidedfortheconveningofaninter-,,overnmentalconferencebytheOrganization.
insuchasituationaiid,whereaMemberconsideredthattherehadbeenunreasonabledelayinthisprocedure,per-mittedthatmembertotakeemergencyaction,whichwouldhavetobewithdrawnifsubsequentlydisallowedbytheOrganization.
TheIgetherlandsamendmentsuggestedthataffectedniembersmightneedtotakeaction"separatelyorirnconjunctionwithotherMembers".
27.
ThefirstconclusionoftheSub-comiitteeincon-'sideringtheseproposalswasthattheChaptershouldbestrengthenedbyprovidingthattheOrSanizationshouldinitiateE/FC/T/95page6consultationsarieongitsiviembersifanurgentsituationaroseinvolvingtheinternationalspreadofadeclinein*uployuient,.
productionanddemand.
nasesruiGhtariseinwhichthecontent-platedarrungeeentsforconsultationandplanningofconcertedactionundertheauspicescftheEconoluicandoocia1Couincilwouldinvolveunduedelay,thusleadingteafurtherdeterior-ationofthepositionoftheivenbersaffectedandincreasingthelikelihoodCftheiradoptingrestrictivemeasuresofdefense.
Itwasthereforefeltthat,consistentlywiththeauthorityoftheOrganizationunderArticle61(b)tofauilitateconsultationamongLemrbersonallquestionsrelatingtetheprovisionsoftheCharter,anewparagraphshouldbeaddedtethearticledealingwithConsultationandExchangeof'Jnfor.
zatian,permittingtheOrganizationitselfteinitiateconsultationsinsuchasituatiorx.
Itlsoappearedlogical,at.
thispoint,tetrans-poseKr'ticles7and8,inorderteemphasizefurtherthedesi-rabilityofseekingconsultationforthepurposeofresolvingeconomicdifficultieswhereverpossiblewithoutresortterc'ccascfromCharterobligations.
28.
.
Withthesechangesmade,itwasagreedthatthenewArticle8(foriierlyarticle7)sijouldberetainedwithoutamend-ment.
TheSub-,orlaitteenotedthefactthat"theprovisionsofthisCharter"referredteinthisArticleincludeclausesinArticles26,28,30,34,35,52ctnd66.
ItrecoGnizedinthisconnectionthataseriousorabruptdeclineinexternaldemandmightconstitutea"situation.
.
.
whichhastheeffectofnulli-fyingorimpairinganyobjectofthis'.
harter"withinthemean-ingofparagraph2ofarticle35,orthe"exceptionalciroums-tances"'referredtoinparagraph3ofarticle66.
IttooknoteoftheintentionofthePreparatoryfionLnnitteeusexpressedintheReportoftheoFirstSession(S/Pu/T/_),particularlyinSectionFonpage5,paragraphs4(b)and4(c)(i)onpa'eil,paraeraphs3(1)onpage15andStctionD.
2onpage22,teinsurethattherebeadequatesafeguardsintheChartertemeetsituationsreferredteinarticle8,butterecommendnpn-restrictivesolutionsforsuchsituationsifpossibleeitherthroughtheOrgani2ationorthroughtheassistanceofotherinternationalbodies.
TheSub-co:.
ai.
tteeendorsestheseviewsandreconmendsthatthevariousartis1esreferredtobere-examinedteensurethatthedraftingadequatelymeetstheserequirements.
Italsosuggeststh&tconsiderationbe6iventoinsertingin,orannexin(bte,thefinalreportoftheSecondSessionareferencetetheinter-zelationshipbetweenLL'ticle8andtheother-èrticlesinquestion.
E/PC/T/95page7ANNEXURETOTHEREPORTOFTHESUBCOMMITTESONCHJPTERIIICHAPTERfIIE*VPLOYfiENTMNDECONOMICACTIVITYArticle3.
nlmD-ortanceof2milovnent,ProductionandDemendinRelationtothePurjos6sOfthisCharter,1.
TheMembersrecoegnisethattheavoidanceorunemploymeUtorunder-employmentthroughtLeachievementandmaintenanceineachcountryoeusefulemployurentopportunitiesforthoseableandwillingtoworkandofalargeandsteadily'growingVolumeoproductionandeffectivedemandforCoodsandservicesisnotetdomesticconcernalone,butisalsoanecéssaryconditionrortheroalizationofthepurposesofthisCharter,includingtheexpansionoeinternationaltruCe,andthusforthewell-b6ingofallotheroountr4es.
2.
Membersagreethatr-hilatheavoidanatofunemploymentorunder-employtlintmustdependprimarilyondomesticmeasures,suchmessulresshouldbesupplementudbyconcortedactionunderthesponsorshipoftheEconomicandSocialCounciloetheUnitcdNationsincollaborationwiththeappropri&tointergovernentalorganizations,eaohofthesebodiesactingwithinitsrespectiveephereandconsistentlywiththetermsandpurposesofitsbasioinstrument.
3,Membersfurthermoreagreethrtttheregularexc'.
iengofInformationandviewsaniongMeiabersisindispensabletorsuocess-tulce-operationinthefieldoeemploymentandecamnoicactivityandshouldbefacilitatedbytheOrganization.
Artiole4.
MaintenanceofDou;esticEmployxent.
1.
EachMiemberohailtekeactiondesignedtoaobieveandMaintainfullandproductiveemployiLentandlargeandsteadilygrowingdemandwithinitsownjurisdictionthroughLeasurtscappropriatetoitspolitical,economicandsocialinstitutions.
2.
Measurestosustainemployent,productionanddemsndahallbaconsistentwithth.
eot4erpurposesandprovisionsoethisCharter.
Membersshallseek.
toavoivizeasurfswhichwouldhavetheeftecrofcreatingbal&.
rlce-ot-paymentscifficulti6sforotherMembers.
.
ArtiQle5,.
FairLabourStanderds.
BachMember,recognsinEthetallcountrieshaveaoo=oninterestintheaclhieveraentendmaintenanceoffcirlabourstandards,relatedtoproductivity,shalltEkewhateveractionr.
aybeappropriateendfeasibletoeliainetesub-standerdconditionsoelabourinproductiontorexportbndeenerallythroughoutitsJuriediction.
MemberswhicharealsemembersottheInternationalLabourOrganizationshallce-operatewiththutorgenizetioningivingetteottothisundertaking.
E/PC/T/95page8Article6RemovalofMalFdiustmentswithintheBela~nceotPaynients.
1.
Intheeventth.
tapersistentealedjustraentwithinaMembersbalanceofpeyxntsisiamajorf1'ctorinasituationinwhichothermembersareinvolvedinbElanceorpayLentsdificulties*whichhandicapthaeinccrryingoutthe'provisionsof'Artiole4withoutresorttotraderestrictions,theMeibershell.
rakeitsfullcontribution,togetherviithappropriateactiononthepartoftheotherMeimbtrsconcrnGd,toviardscorrectingthesituation.
2.
ActioninaccordLncewiththisArticleshallbetakenwithdueregardtothedesirabilityofeuipltyinginethodswhiohexpandratherthancontractinternationaltrede.
Artiole7.
-Exohanpec-'InformationandC,nsultation.
1.
TheMembersandtheorganizationshallparticipateinarrangeementsnadeorsponsoredbytheEc:nomc.
endSocialCounciloftheUnitedNotions,includingaEriangementswitsappropriateinteroverniaentclorgenizEtiona:(a)Forthesystematiccollection,,analysisandeshangeofinformationondoiaesticemploymentproblems,trendsendpolicies,includingLsfaraspossibleinformationrelatingtonationalincoie,demandandthebalanceofpayments;(b)ForoonsultationwithaviewtoconcertedactiononthepartGfgovernLlentsandintergovernmentel*organizationsinthefieldoI'employmentpolicies.
2.
TheOrganizationshll,'ifit'considersthettheurgencyofthesituationsoroquires,initiateconsultationsamong.
Memberswithreviewtotheirte.
kingappropriatexLeesures.
against.
theinternationalspreadoI"adeclineinemployamnt,prod\iotionordemand.
Article8.
Sategu.
r.
sforMembersSubJeottaExternalDeflationary'Pressure.
TheOrganizationshaklh.
veregerd,'intheexerciseofLtsiunotionsCsdefinedelsewhereinthisChartor,t.
otheneedufMemberstotakeactionwithintheprovisionsorthisCharter;tosafeguardtheireconomiesagainstdeflationerypressureintBteeveentOfaseriousorabruptdeclineirithe.
olffectiveeercondotothercountries.