13 League of Nations O. J. 152 (1932)
Commission of Enquiry for European Union

handle is hein.journals/leagon13 and id is 156 raw text is: 152                          League of Nations -  Official Journal               JANVARY 1930
Series of Publications I93i.VII.I7                        Official No. C.8o7.M.398.i931.VII.
[C.E.U.E.56.)
COMMISSION OF ENQUIRY FOR EUROPEAN UNION
REPORT BY THE SPECIAL COMMITTEE APPOINTED TO EXAMINE
THE DRAFT PACT OF ECONOMIC NON-AGGRESSION
The Special Committee set up to .examme the draft Pact of Economic Non-Aggression 1 at
once appreciated the lofty and equitable motives on which this proposal was based, and expressed
its approval of the intentions by which its authors had been guided.
But as soon as the Committee approached the detailed examination of the draft, it realised
the necessity of obtaining exact information as to its scope, its implications and the uncertainties
to which its text might give rise. Accordingly a certain number of questions were put by the
members of the Committee to the Soviet delegation.2
I.
The chief preoccupation of the majority of the members of the Committee was to discover
whether and in what manner it would be possible to draw up between States having such dissimilar
economic. and social systems as the Union of Soviet Socialist Republics and other countries a
Convention which, while taking due account of these differences, would nevertheless be sufficiently
definite to avoid all ambiguity
It was pointed out, in particular, that the consequence of the existence of a foreign trade
monopoly in the Soviet Union was that, notwithstanding an undertaking entered into by the
State to apply equality of treatment to all the other contracting parties, the same State acting
as trader might, at least in theory infringe its undertaking without its being possible for the
injured party to prove any discriminatory intention, since the detrimental situation of which
such party would complain would be a natural consequence of the economic system in force.
It appeared to some that this situation was further aggravated by the fact that the Union
of Soviet Socialist Republics, as a consequence of its economic organisation, was in a position to
encourage exports abroad without, they maintained, paying any attention to the traditional
factor of the cost price of the goods exported, an assertion which the Soviet delegation emphatically
denied. Certain members of the Committee expressed the opinion that negotiations conducted
on a bilateral basis might have some prospect of surmounting the difficulties which appeared to
them insurmountable from the point of view of concluding a collective pact.
To these observations, the authors of the draft replied that, in their view the pact should,
above all, rest on the mutual good faith of the contracting parties. They added that the situation
from the point of the possible intervention of the State in the econonic sphere, which was often
described as the antithesis of the system in force in the so-called capitalist countries, was, in
reality not so different as it appeared at first sight. Recently there had been a growing tendency
in capitalist countries for the State to take charge of the national economic policy which involved
measures such as import and export restrictions, control of the exchanges, Government mono-
polies, etc. Moreover, the authors of the draft pact considered that, despite her special economic
system, the Union of Soviet Socialist Republics was perfectly able to assume an obligation of
non-discrimnation, equvalent to a positive guarantee. They recalled the fact that their country
had, on several occasions, been led to promulgate laws prohibiting the purchase of goods in a
particular country by way of reprisals. In undertaking not to discriminate, the Soviet Union
would have to refrain from promulgating such laws of exclusion in future, and this would constitute
a guarantee for all the other siguatory States.
Moreover, the delegates of the Union of Soviet Socialist Republics pointed out that purchases
abroad were made on the basis of a general plan, prepared by the Government, by State com-
mercial orgamsations, which, in the absence of special instructions, were to be guided solely by
commercial principles, and would therefore buy in the market which happened to be the most
advantageous in each particular case.
I See document C.354.M.r53.I93LVII.
2 The Minutes of the session contain a summary of these questions prepared by the Secretariat, and the reply
of the Soviet delegation.

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