I refer to previous correspondence and, in particular, to your memorandum of 28th July, 1950—287/12/4—relating to the right of the United States of America to prohibit the importation of Australian butter, having regard to the Protocol of Provisional Application of the General Agreement of Tariff and Trade, dated 30th October 1947.

(2)  The Protocol binds certain Governments (including the Australian Government and the United States), to apply provisionally on and after 1st January, 1948, Part II of the General Agreement to the fullest extent not inconsistent with existing legislation. Part II contains provisions directed against prohibitions on importation.

(3)  The earlier attitude of the United States authorities appeared to be that the prohibition was justified as being in accordance with ‘existing legislation’ within the meaning of the protocol. It is noted that no mention of this provision is made in the note dated 11th July, 1950, furnished by the State Department to the Australian Ambassador. Your memorandum does not seek advice on the grounds in fact relied upon in that note, but advice is requested solely upon the point of whether the legislation under which the import of Australian butter is at present prohibited comes within the meaning of ‘existing legislation’ as that phrase is used in the Protocol of Provisional Application.

(4)  The prohibition was first imposed under the authority conferred by the Second War Powers Act 1942 which was originally expressed by Title XV to remain in force only until December 31st, 1944. By subsequent statutes Congress extended the operation of the Act successively to December 31st, 1945, March 31st, 1947 and February 29th, 1948. The last of these extensions was achieved by a Statute which took effect on July 16th, 1947. The Protocol of Provisional Application is dated 30th October, 1947. The operation of the legislation has been subsequently extended for further periods, the most recent of which keeps the legislation in operation until 1st July, 1951.

(5)  The phrase in the Protocol, ‘apply … to the fullest extent not inconsistent with existing legislation’, is capable of at least two different meanings. It may mean either—

1.  that, notwithstanding the terms of G.A.T.T., the contracting Government is free to do anything which it was authorised to do by legislation existing at the time of signing the Protocol; or

2. that the requirements of G.A.T.T. must be complied with unless to do so would bring the contracting Government into conflict with existing legislation.

(6)  On the whole, I am inclined to think that the phrase was intended to bear, and does bear, the latter of these meanings. Indeed I have recently advised other Commonwealth Departments in that sense. I shall examine in paragraphs 12–15 below the effect of this view upon the present matter.

(7)  Assuming, however, (contrary to my own view) that the phrase bears the first of the two meanings set out above, the question of whether or not the prohibition conflicts with the Protocol depends in part on whether the United States legislation authorizing the prohibition at the present time is ‘existing legislation’ within the meaning of the Protocol. ‘Existing legislation’ means, I think, legislation existing at the date of the Protocol, namely, 30th October, 1947. (It is noted that the Chairman at the Third Session of the contracting parties to the General Agreement on Tariffs and Trade held at Annecy, France, in 1949, ruled that ‘existing legislation’ referred to the date of the Protocol, 30th October, 1947).

(8)  The legislation existing on the 30th October, 1947, was due to expire on 29th February, 1948, and apart from any extension thereof, would have ceased to ‘exist’ on that date. The fact that a new subsequent statute has revitalised that which otherwise would have expired on 29th February, 1948, does not, on a strict literal view, alter the fact that the present prohibition is not imposed under the legislation which was in force on 30th October, 1947, as such; and the legislation now in force (by virtue of which the former legislation is present law) is not legislation which was ‘existing legislation’ at 30th October, 1947. In other words, on a strictly literal view, the present prohibition is not in accordance with the law existing on 30th October, 1947, and is, therefore, contrary to the Protocol.

(9)  The views expressed in the preceding two paragraphs are based upon the ordinary rules of construction applied in English Law to the interpretation of Statutes. The same conclusion would appear to follow if American rules of construction, which are broadly similar, were applied, (see for example City of Jonesboro v. Cairo and St. Louis Railroad 1884, 110 US 192, 28 L. Ed. 116) where the term ‘existing legislation’ in the Illinois Constitution of 1870 was held to refer to legislation which was in force at the date the Constitution came into force.

(10)  The rules of construction applied by English Courts to the Interpretation of Statutes are generally regarded as being highly technical in nature and they are not applied mutatis mutandis to the interpretation of treaties or indeed to domestic agreements. The rules of international law for the interpretation of treaties place much more emphasis upon the need to ascertain the true intention of the signatory States and much less weight is given to the literal meaning of the words used in the provisions of the treaty. In particular, preliminary drafts of the treaty, reports of the debates and negotiations at which the treaty was drawn up, subsequent statements by the representatives of the Signatory States as to the intentions of the parties and related matters, which are broadly referred to as travaux preparatoires can be looked at for the purpose of construing the provisions of a Treaty.

(11)  On this broader approach it must be conceded that the United States authorities could well argue that, bearing in mind—

1. the provisional and temporary nature of the international obligations set forth in the Protocol;
2. the consideration that the parties would not wish to modify their domestic policy too drastically in order to fulfil a purely temporary obligation;
3. the fact that the operation of the relevant United States legislation had been thrice extended prior to the date of the Protocol;
4. extension by legislation of the period of operation of executive war-time controls was a common technique in Australia and the United States prior to and at the time of drawing up the Protocol; and
5. in each country, despite the legislative extensions, the operation of the controls would be popularly regarded as continuous,

the maintenance by the United States of the prohibition on the import of Australian butter is not inconsistent with legislation which ‘existed’ at the signing of the Protocol.

(12)  The answer to such an argument is found in the view which I expressed in paragraph 6 above, namely that the true meaning of the phrase appearing in Article 1 of the Protocol is that the requirements of G.A.T.T. must be complied with unless to do so would bring the contracting Government into conflict with existing legislation. In other words the question to be asked is not whether the Government can retain import control without conflicting with ‘existing legislation’ but whether (if ‘G.A.T.T.’ on its true interpretation so requires) it could abandon import control without conflicting with ‘existing legislation’. I think the real point is that the Protocol, which contemplated merely provisional application of G.A.T.T. by agreement between executive governments, stopped short of imposing any obligation on those governments to obtain legislative change in any contracting State. As a corollary, the Protocol did at least intend to impose a full obligation on the executive governments of the contracting States to refrain from taking any positive executive action which would conflict with Part II of G.A.T.T.

(13)  From the material in my possession it would appear that the Statute passed by Congress does not of itself effect a prohibition upon import of Australian butter either by its own express terms or by continuing in force the terms of an executive order made under prior law. The legislation in effect authorises executive action in future to impose such a prohibition. In this connexion, I have noted the order issued by the Secretary of Agriculture dated 6th July, 1949, to continue the prohibition on the import of fats, oils, and rice following on the legislation extending his authority till the 30th June, 1950.

(14)  Upon Public Law 690 coming into operation the Executive Government of the United States, in this case the Secretary of Agriculture, had a discretion to either—

1. refrain from taking any executive action at all;
2. impose a partial prohibition upon the import of butter; or
3. impose a total prohibition upon the import of butter.

In his evidence before the Congressional Committee, the Secretary appears to have stated that he intends to impose only partial prohibition of such imports.

(15)  As I take the view that the Protocol imposes an obligation on the contracting States to refrain from executive action which is in conflict with the provisions of Part II of G.A.T.T., I consider that the Protocol requires the Executive Government of the United States to refrain from issuing any executive order prohibiting the import of Australian butter where such a prohibition conflicts with the provisions of Part II of G.A.T.T.

(16)  On this view of the obligations imposed by the Protocol, Australia could I think argue against the retention of the controls if they are not permitted by G.A.T.T. The State Department Note of 11th July quotes the views of the Senate Banking and Currency Committee as to the applicability of Articles XI, XIX and XX of G.A.T.T. to the import controls. Whether the articles operate to permit these controls is dealt with at some length in the memorandum, dated 14th July, 1950, from the Australian Commercial Counsellor in Washington. Your memorandum did not seek my advice on the application of these Articles and I have not in fact given any detailed consideration to the validity of the United States views. If the counter arguments of the Commercial Counsellor are correct, then the United States cannot, in my view, rely on the Articles mentioned as authorizing the import controls now in question.

[Vol. 39, p. 275]