given to new forms and methods of industrial cooperation suggested by interested firms and organizations. They agreed to examine ways and means for the application of customs and fiscal facilitation for goods assigned to, and resulting from, cooperation projects within the provisions of customs legislation in force in the two countries.

The two sides "positively evaluated" the development of mutual financial and credit relations, particularly cooperation between the Export-Import Bank and the Bank Handlowy of Warsaw. The two countries are to examine methods for achieving progress in creating reciprocal trade facilities, including ways of resolving administrative, tax, visa, and customs problems which may arise, and will facilitate access, as appropriate, to information concerning actual and potential markets, operation of business offices, trade promotion and other endeavors which contribute to the development of trade and economic cooperation.

The two sides agreed to continue to work through the Joint American-Polish Trade Commission in developing economic cooperation.

Customs Cooperation

The 1971 Customs Convention on the International Transit of Goods was approved by the Senate on January 21, 1974. The agreement, known as the ITI Convention, will enter into force three months after five of the states members of the Customs Cooperation Council, the United Nations or its specialized agencies have signed without reservation of ratification, or have deposited their ratifications or accessions.

The purpose of the Convention is to facilitate international transport, particularly by international containers, and to provide the mechanics of customs control necessary for such transport. The Convention establishes an international system of guarantees operated through a network of guaranteeing associations covering the territories of the Contracting Parties to the Convention. Each association stands jointly and severally liable for the payment of import duties and taxes with persons using the guarantee system. The validity of the guarantee is limited only by time and not to specific loads or consignments of goods as is the case under the "carnet" system.

The Convention provides for the use of a standard document in English or French accompanying the shipment for the entire journey. The declaration can be used by itself or its manifest portion can be replaced by any acceptable commercial document. The Convention applies where a transport operation involves a journey by sea or air, or across the territory of a non-contracting party. It covers the transport of goods by all relevant means of transport approved under Cus

toms seal, including lighters unladen from LASH-type vessels, and provides for the mutual acceptance of Customs seals.

Shippers and carriers are not obligated to use the ITI system in place of any other procedure for a particular shipment. They are free to choose whichever system is most advantageous under the circumstances.

For the full text of the Convention, see Senate Exec. P, 93d Cong., 1st Sess., July 23, 1973; see also Senate Exec. Rept. No 93-27, 93d Cong., 1st Sess., Dec. 17, 1973. As of Dec. 31, 1974, the Convention had not yet been ratified by the United States.

83

International Economic Assistance and
Development

General Economic Development

The United Nations General Assembly, on May 1, 1974, adopted without vote at its Sixth Special Session a Declaration and Program of Action on the Establishment of a New International Economic Order (A/RES/3201 and 3202 (S-VI)). Ambassador John Scali, United States Representative to the United Nations, made a statement to the General Assembly on May 1 subsequent to the adoption of the Declaration and Program. The following are excerpts from his statement:

There are provisions in the Declaration and the Special Program to which the United States Government cannot lend its support. I will deal here only with our most important reservations.

Perhaps the most difficult subject which the Declaration of Principles addresses is that of permanent sovereignty over natural resources. It will be recalled that this problem was successfully dealt with by the General Assembly in 1962, when, in a meeting of minds of developing and developed countries, widespread agreement was achieved on the terms of Resolution 1803 (XVII). The United States Delegation regrets that the compromise solution which Resolution 1803 (XVII) embodies was not reproduced in this Declaration. If it were, on this count the United States would gladly lend its support. Resolution 1803 (XVII) provides, among other things, that, where foreign property is nationalized, appropriate compensation shall be paid in accordance with national and international law; it also provides that foreign investment agreements by and between states shall be observed in good faith. By way of contrast, the present Declaration does not couple the assertion of the right to nationalize with the duty to pay compensation in accordance with international law. For this reason, we do not find this formulation complete or acceptable. The governing

international law cannot be and is not prejudiced by the passage of this resolution.

The United States does not support the provisions of the Declaration which refer only to the exertion of economic pressure for some ends, but which do not condemn generally the exercise of economic pressure. In this respect, the Declaration contrasts unfavorably with that of this Assembly on Principles of International Law concerning Friendly Relations and Cooperation Among States. Nor does the United States support the provisions of the resolution that refer to restitution and full compensation for exploitation of and damage to certain resources and peoples.

Neither can the United States accept the idea of producer associations as a viable means of promoting development, or of fixing a relationship between import and export prices. Artificial attempts to manage markets which ignore economic realities and the legitimate interests of consumers as well as producers run the risk of political confrontation on the one hand and economic failure on the other.

I also wish to make mention of that part of the Declaration dealing with the regulation and supervision of the activities of multinational corporations. The United States is of the view that multinational corporations must act as good corporate citizens of the states in which they operate, and that multinational corporations are subject to the regulation and supervision of the countries in which they operate, but such regulation and supervision must be non-discriminatory and otherwise conform to the norms of international law.

The Program of Action has too many objectionable features, from our point of view, to permit a detailed listing and explanation in a brief statement. Among these features are the emphasis on marketing arrangements for primary products which exclude the interests of consumers, and the impractical proposals to establish artificial and fixed price relationships between prices of exports and imports of developing countries. Our skepticism about commodity agreements is well known, but we are prepared to consider them on a case-by-case basis. The current GATT negotiations and other actions we support can increase the trade of developing countries, but it is out of the question for us to allocate a specified share of our market for the developing countries. We object to the Assembly's making recommendations now on the provisions related to the link between SDRS [Special Drawing Rights] and development finance, the provisions to reform the international financial institutions, and subsidization of interest payments and other involved questions that should be left to the International Monetary Fund.

U.N. Doc. A/PV.2229, May 1, 1974, pp. 41-50; Press Release USUN-44 (74), May 1, 1974; Dept. of State Bulletin, Vol. LXX, No. 1822, May 27, 1974, pp. 569-572. See also Ch. 4, §5, supra, pp. 188-189. The text of the Declaration is as follows:

569-769-75- -33

The General Assembly

Adopts the following Declaration :

Declaration On The Establishment Of A New International Economic Order We, the Members of the United Nations,

Having convened a special session of the General Assembly to study for the first time the problems of raw materials and development, devoted to the consideration of the most important economic problems facing the world com munity,

Bearing in mind the spirit, purposes and principles of the Charter of the United Nations to promote the economic advancement and social progress of all peoples.

Solemnly proclaim our united determination to work urgently for

The Establishment Of A New International Economic Order based on equity, sovereign equality, interdependence, common interest and cooperation among all states, irrespective of their economic and social systems which shall correct inequalities and redress existing injustices, make it possible to eliminate the widening gap between the developed and the developing countries and ensure steadily accelerating economic and social development and peace and justice for present and future generations, and, to that end, declare:

1. The greatest and most significant achievement during the last decades has been the independence from colonial and alien domination of a large number of peoples and nations which has enabled them to become members of the community of free peoples. Technological progress has also been made in all spheres of economic activities in the last three decades, thus providing a solid potential for improving the well-being of all peoples. However, the remaining vestiges of alien and colonial domination, foreign occupation, racial discrimination, apartheid and neo-colonialism in all its forms continue to be among the greatest obstacles to the full emancipation and progress of the developing countries and all the peoples involved. The benefits of technological progress are not shared equitably by all members of the international community. The developing countries, which constitute 70 percent of the world's population, account for only 30 percent of the world's income. It has proved impossible to achieve an even and balanced development of the international community under the existing international economic order. The gap between the developed and the developing countries continues to widen in a system which was established at a time when most of the developing countries did not even exist as independent states and which perpetuates inequality.

2. The present international economic order is in direct conflict with current developments in international political and economic relations. Since 1970, the world economy has experienced a series of grave crises which have had severe repercussions, especially on the developing countries because of their generally greater vulnerability to external economic impulses. The developing world has become a powerful factor that makes its influence felt in all fields of international activity. These irreversible changes in the relationship of forces in the world necessitate the active, full and equal participation of the developing countries in the formulation and application of all decisions that concern the international community.

3. All these changes have thrust into prominence the reality of interdependence of all the members of the world community. Current events have brought into sharp focus the realization that the interests of the developed countries and those of the developing countries can no longer be isolated from each other, that there is close interrelationship between the prosperity of the developed countries and the growth and development of the developing countries, and that the prosperity of the international community as a whole depends upon the prosperity of its constituent parts. International cooperation for development is the shared goal and common duty of all countries. Thus the political, economic and social well-being of present and future generations depends more than ever on cooperation between all members of the international community on the basis of sovereign equality and the removal of the disequilibrium that exists between them.

4. The new international economic order should be founded on full respect for the following principles:

(a) Sovereign equality of states, self-determination of all peoples, inadmissibility of the acquisition of territories by force, territorial integrity and noninterference in the internal affairs of other states;

(b) The broadest cooperation of all the states members of the international community, based on equity, whereby the prevailing disparities in the world may be banished and prosperity secured for all;

(c) Full and effective participation on the basis of equality of all countries in the solving of world economic problems in the common interest of all countries, bearing in mind the necessity to ensure the accelerated development of all the developing countries, while devoting particular attention to the adoption of special measures in favor of the least developed, land-locked and island developing countries as well as those developing countries most seriously affected by economic crises and natural calamities, without losing sight of the interests of other developing countries;

(d) The right to every country to adopt the economic and social system that it deems to be the most appropriate for its own development and not to be subjected to discrimination of any kind as a result;

(e) Full permanent sovereignty of every state over its natural resources and all economic activities. In order to safeguard these resources, each state is entitled to exercise effective control over them and their exploitation with means suitable to its own situation, including the right to nationalization or transfer of ownership to its nationals, this right being an expression of the full permanent sovereignty of the state. No state may be subjected to economic, political or any other type of coercion to prevent the free and full exercise of this inalienable right;

(f) The right of all states, territories and peoples under foreign occupation, alien and colonial domination or apartheid to restitution and full compensation for the exploitation and depletion of, and damages to, the natural resources and all other resources of those states, territories and peoples;

(g) Regulation and supervision of the activities of transnational corporations by taking measures in the interest of the national economies of the countries where such transnational corporations operate on the basis of the full sovereignty of those countries;

(h) The right of the developing countries and the peoples of territories under colonial and racial domination and foreign occupation to achieve their liberation and to regain effective control over their natural resources and economic activities;

(i) The extending of assistance to developing countries, peoples and territories which are under colonial and alien domination, foreign occupation, racial discrimination or apartheid or are subjected to economic, political or any other type of coercive measures to obtain from them the subordination of the exercise of their sovereign rights and to secure from them advantages of any kind, and to neo-colonialism in all its forms, and which have established or are endeavoring to establish effective control over their natural resources and economic activities that have been or are still under foreign control;

(j) Just and equitable relationship between the prices of raw materials, primary products, manufactured and semi-manufactured goods exported by developing countries and the prices of raw materials, primary commodities, manufactures, capital goods and equipment imported by them with the aim of bringing about sustained improvement in their unsatisfactory terms of trade and the expansion of the world economy;

(k) Extension of active assistance to developing countries by the whole international community, free of any political or military conditions;

(1) Ensuring that one of the main aims of the reformed international monetary system shall be the promotion of the development of the developing countries and the adequate flow of real resources to them;

(m) Improving the competitiveness of natural materials facing competition from synthetic substitutes;