THE GENERAL AGREEMENT ON TARIFFS AND TRADE
The Governments
of the Commonwealth of Australia, the Kkingdom of Belgium, the United States of
Brazil, Burma, Canada, Ceylon, the Republic of Chile, the Republic of China,
the Republic of Cuba, the Czechoslovak Republic, the French Republic, India,
Lebanon, the Grand-Duchy of Luxemburg, the Kingdom of the Netherlands, New
Zealand, the Kingdom of Norway, Pakistan, Southern Rhodesia, Syria, the Union
of South Africa, the United Kingdom of Great Britain and Northern Ireland, and
the United States of America:
Recognizing that
their relations in the field of trade and economic endeavour should be
conducted with a view to raising standards of living, ensuring full employment
and a large and steadily growing volume of real income and effective demand,
developing the full use of the resources of the world and expanding the
production and exchange of goods,
Being desirous of
contributing to these objectives by entering into reciprocal and mutually
advantageous arrangements directed to the substantial reduction of tariffs and
other barriers to trade and to the elimination of discriminatory treatment in
international commerce,
Have through
their Representatives agreed as follows:
PART I
Article I
General
Most-Favoured-Nation Treatment
1. With respect
to customs duties and charges of any kind imposed on or in connection with
importation or exportation or imposed on the international transfer of payments
for imports or exports, and with respect to the method of levying such duties
and charges, and with respect to all rules and formalities in connection with
importation and exportation, and with respect to all matters referred to in
paragraphs 2 and 4 of Article III,* any advantage, favour, privilege or
immunity granted by any contracting party to any product originating in or
destined for any other country shall be accorded immediately and
unconditionally to the like product originating in or destined for the
territories of all other contracting parties.
2. The provisions
of paragraph 1 of this Article shall not require the elimination of any
preferences in respect of import duties or charges which do not exceed the
levels provided for in paragraph 4 of this Article and which fall within the
following descriptions:
(a) Preferences
in force exclusively between two or more of the territories listed in Annex A,
subject to the conditions set forth therein;
(b) Preferences
in force exclusively between two or more territories which on July 1, 1939,
were connected by common sovereignty or relations of protection or suzerainty
and which are listed in Annexes B, C and D, subject to the conditions set forth
therein;
(c) Preferences
in force exclusively between the United States of America and the Republic of
Cuba;
(d) Preferences in
force exclusively between neighbouring countries listed in Annexes E and F.
3. The provisions
of paragraph 1 shall not apply to preferences between the countries formerly a
part of the Ottoman Empire and detached from it on July 24, l923, provided such
preferences are approved under paragraph 5) The authentic text erroneously
reads "sub-paragraph 5 (a)".
of Article XXV,
which shall be applied in this respect in the light of paragraph 1 of Article
XXIX.
4. The margin of
preference* on any product in respect of which a preference is permitted under
paragraph 2 of this Article but is not specifically set forth as a maximum
margin of preference in the appropriate Schedule annexed to this Agreement
shall not exceed:
(a) in respect of
duties or charges on any product described in such Schedule, the difference
between the most-favoured-nation and preferential rates provided for therein;
if no preferential rate is provided for, the preferential rate shall for the
purposes of this paragraph be taken to be that in force on April 10, l947, and,
if no most-favoured-nation rate is provided for, the margin shall not exceed
the difference between the most-favoured-nation and preferential rates existing
on April 10, 1947;
(b) in respect of
duties or charges on any product not described in the appropriate Schedule, the
difference between the most-favoured-nation and preferential rates existing on
April 10, 1947.
In the case of
the contracting parties named in Annex G, the date of April 10, 1947, referred
to in sub-paragraph (a) and (b) of this paragraph shall be replaced by the
respective dates set forth in that Annex.
Article II
Schedules
of Concessions
1. (a) Each
contracting party shall accord to the commerce of the other contracting parties
treatment no less favourable than that provided for in the appropriate Part of
the appropriate Schedule annexed to this Agreement.
(b) The products
described in Part I of the Schedule relating to any contracting party, which
are the products of territories of other contracting parties, shall, on their
importation into the territory to which the Schedule relates, and subject to
the terms, conditions or qualifications set forth in that Schedule, be exempt
from ordinary customs duties in excess of those set forth and provided therein.
Such products shall also be exempt from all other duties or charges of any kind
imposed on or in connection with the importation in excess of those imposed on
the date of this Agreement or those directly and mandatorily required to be
imposed thereafter by legislation in force in the importing territory on that
date.
(c) The products
described in Part II of the Schedule relating to any contracting party which
are the products of territories entitled under Article I to receive
preferential treatment upon importation into the territory to which the
Schedule relates shall, on their importation into such territory, and subject
to the terms, conditions or qualifications set forth in that Schedule, be
exempt from ordinary customs duties in excess of those set forth and provided
for in Part II of that Schedule. Such products shall also be exempt from all
other duties or charges of any kind imposed on or in connection with
importation in excess of those imposed on the date of this Agreement or those
directly or mandatorily required to be imposed thereafter by legislation in
force in the importing territory on that date. Nothing in this Article shall
prevent any contracting party from maintaining its requirements existing on the
date of this Agreement as to the eligibility of goods for entry at preferential
rates of duty.
2. Nothing in
this Article shall prevent any contracting party from imposing at any time on
the importation of any product:
(a) a charge
equivalent to an internal tax imposed consistently with the provisions of
paragraph 2 of Article III* in respect of the like domestic product or in
respect of an article from which the imported product has been manufactured or
produced in whole or in part;
(b) any
anti-dumping or countervailing duty applied consistently with the provisions of
Article VI;*
(c) fees or other
charges commensurate with the cost of services rendered.
3. No contracting
party shall alter its method of determining dutiable value or of converting
currencies so as to impair the value of any of the concessions provided for in
the appropriate Schedule annexed to this Agreement.
4. If any
contracting party establishes, maintains or authorizes, formally or in effect,
a monopoly of the importation of any product described in the appropriate Schedule
annexed to this Agreement, such monopoly shall not, except as provided for in
that Schedule or as otherwise agreed between the parties which initially
negotiated the concession, operate so as to afford protection on the average in
excess of the amount of protection provided for in that Schedule. The
provisions of this paragraph shall not limit the use by contracting parties of
any form of assistance to domestic producers permitted by other provisions of
this Agreement.*
5. If any
contracting party considers that a product is not receiving from another
contracting party the treatment which the first contracting party believes to
have been contemplated by a concession provided for in the appropriate Schedule
annexed to this Agreement, it shall bring the matter directly to the attention
of the other contracting party. If the latter agrees that the treatment
contemplated was that claimed by the first contracting party, but declares that
such treatment cannot be accorded because a court or other proper authority has
ruled to the effect that the product involved cannot be classified under the
tariff laws of such contracting party so as to permit the treatment
contemplated in this Agreement, the two contracting parties, together with any
other contracting parties substantially interested, shall enter promptly into
further negotiations with a view to a compensatory adjustment of the matter.
6. (a) The
specific duties and charges included in the Schedules relating to contracting
parties members of the International Monetary Fund, and margins of preference
in specific duties and charges maintained by such contracting parties, are
expressed in the appropriate currency at the par value accepted or
provisionally recognized by the Fund at the date of this Agreement. Accordingly,
in case this par value is reduced consistently with the Articles of Agreement
of the International Monetary Fund by more than twenty per centum, such
specific duties and charges and margins of preference may be adjusted to take
account of such reduction; provided that the CONTRACTING PARTIES (i.e.,
the contracting parties acting jointly as provided for in Article XXV) concur
that such adjustments will not impair the value of the concessions provided for
in the appropriate Schedule or elsewhere in this Agreement, due account being
taken of all factors which may influence the need for, or urgency of, such
adjustments.
(b) Similar
provisions shall apply to any contracting party not a member of the Fund, as
from the date on which such contracting party becomes a member of the Fund or
enters into a special exchange agreement in pursuance of Article XV.
7. The Schedules
annexed to this Agreement are hereby made an integral part of Part I of this
Agreement.
PART II
Article
III* National Treatment on Internal Taxation and Regulation
1. The
contracting parties recognize that internal taxes and other internal charges,
and laws, regulations and requirements affecting the internal sale, offering
for sale, purchase, transportation, distribution or use of products, and
internal quantitative regulations requiring the mixture, processing or use of
products in specified amounts or proportions, should not be applied to imported
or domestic products so as to afford protection to domestic production.*
2. The products
of the territory of any contracting party imported into the territory of any
other contracting party shall not be subject, directly or indirectly, to
internal taxes or other internal charges of any kind in excess of those
applied, directly or indirectly, to like domestic products. Moreover, no
contracting party shall otherwise apply internal taxes or other internal
charges to imported or domestic products in a manner contrary to the principles
set forth in paragraph 1.*
3. With respect
to any existing internal tax which is inconsistent with the provisions of
paragraph 2, but which is specifically authorized under a trade agreement, in
force on April 10, l947, in which the import duty on the taxed product is bound
against increase, the contracting party imposing the tax shall be free to
postpone the application of the provisions of paragraph 2 to such tax until
such time as it can obtain release from the obligations of such trade agreement
in order to permit the increase of such duty to the extent necessary to
compensate for the elimination of the protective element of the tax.
4. The products
of the territory of any contracting party imported into the territory of any
other contracting party shall be accorded treatment no less favourable than
that accorded to like products of national origin in respect of all laws,
regulations and requirements affecting their internal sale, offering for sale,
purchase, transportation, distribution or use. The provisions of this paragraph
shall not prevent the application of differential internal transportation
charges which are based exclusively on the economic operation of the means of
transport and not on the nationality of the product.
5. No contracting
party shall establish or maintain any internal quantitative regulation relating
to the mixture, processing or use of products in specified amounts or
proportions which requires, directly or indirectly, that any specified amount
or proportion of any product which is the subject of the regulation must be
supplied from domestic sources. Moreover, no contracting party shall otherwise
apply internal quantitative regulations in a manner contrary to the principles
set forth in paragraph 1.*
6. The provisions
of paragraph 5 shall not apply to any internal quantitative regulation in force
in the territory of any contracting party on July 1, 1939, April 10, 1947, or
March 24, l948, at the option of that contracting party; provided that
any such regulation which is contrary to the provisions of paragraph 5 shall
not be modified to the detriment of imports and shall be treated as a customs
duty for the purpose of negotiation.
7. No internal
quantitative regulation relating to the mixture, processing or use of products
in specified amounts or proportions shall be applied in such a manner as to
allocate any such amount or proportion among external sources of supply.
8. (a) The
provisions of this Article shall not apply to laws, regulations or requirements
governing the procurement by governmental agencies of products purchased for
governmental purposes and not with a view to commercial resale or with a view
to use in the production of goods for commercial sale.
(b) The
provisions of this Article shall not prevent the payment of subsidies
exclusively to domestic producers, including payments to domestic producers
derived from the proceeds of internal taxes or charges applied consistently
with the provisions of this Article and subsidies effected through governmental
purchases of domestic products.
9. The
contracting parties recognize that internal maximum price control measures,
even though conforming to the other provisions of this Article, can have
effects prejudicial to the interests of contracting parties supplying imported
products. Accordingly, contracting parties applying such measures shall take
account of the interests of exporting contracting parties with a view to
avoiding to the fullest practicable extent such prejudicial effects.
10. The
provisions of this Article shall not prevent any contracting party from
establishing or maintaining internal quantitative regulations relating to
exposed cinematograph films and meeting the requirements of Article IV.
Article IV
Special
Provisions relating to Cinematograph Films
If any
contracting party establishes or maintains internal quantitative regulations
relating to exposed cinematograph films, such regulations shall take the form
of screen quotas which shall conform to the following requirements:
(a) Screen quotas
may require the exhibition of cinematograph films of national origin during a
specified minimum proportion of the total screen time actually utilized, over a
specified period of not less than one year, in the commercial exhibition of all
films of whatever origin, and shall be computed on the basis of screen time per
theatre per year or the equivalent thereof;
(b) With the
exception of screen time reserved for films of national origin under a screen
quota, screen time including that released by administrative action from screen
time reserved for films of national origin, shall not be allocated formally or
in effect among sources of supply;
(c)
Notwithstanding the provisions of sub-paragraph (b) of this Article, any
contracting party may maintain screen quotas conforming to the requirements of
sub-paragraph (a) of this Article which reserve a minimum proportion of screen
time for films of a specified origin other than that of the contracting party
imposing such screen quotas; provided that no such minimum proportion of
screen time shall be increased above the level in effect on April 10, 1947;
(d) Screen quotas
shall be subject to negotiation for their limitation, liberalization or
elimination.
Article V
Freedom
of Transit
1. Goods
(including baggage), and also vessels and other means of transport, shall be
deemed to be in transit across the territory of a contracting party when the
passage across such territory, with or without trans-shipment, warehousing,
breaking bulk, or change in the mode of transport, is only a portion of a
complete journey beginning and terminating beyond the frontier of the
contracting party across whose territory the traffic passes. Traffic of this
nature is termed in this article "traffic in transit".
2. There shall be
freedom of transit through the territory of each contracting party, via the
routes most convenient for international transit, for traffic in transit to or
from the territory of other contracting parties. No distinction shall be made
which is based on the flag of vessels, the place of origin, departure, entry,
exit or destination, or on any circumstances relating to the ownership of
goods, of vessels or of other means of transport.
3. Any
contracting party may require that traffic in transit through its territory be
entered at the proper custom house, but, except in cases of failure to comply
with applicable customs laws and regulations, such traffic coming from or going
to the territory of other contracting parties shall not be subject to any
unnecessary delays or restrictions and shall be exempt from customs duties and
from all transit duties or other charges imposed in respect of transit, except
charges for transportation or those commensurate with administrative expenses
entailed by transit or with the cost of services rendered.
4. All charges
and regulations imposed by contracting parties on traffic in transit to or from
the territories of other contracting parties shall be reasonable, having regard
to the conditions of the traffic.
5. With respect
to all charges, regulations and formalities in connection with transit, each
contracting party shall accord to traffic in transit to or from the territory
of any other contracting party treatment no less favourable than the treatment
accorded to traffic in transit to or from any third country.*
6. Each
contracting party shall accord to products which have been in transit through
the territory of any other contracting party treatment no less favourable than
that which would have been accorded to such products had they been transported
from their place of origin to their destination without going through the
territory of such other contracting party. Any contracting party shall,
however, be free to maintain its requirements of direct consignment existing on
the date of this Agreement, in respect of any goods in regard to which such
direct consignment is a requisite condition of eligibility for entry of the
goods at preferential rates of duty or has relation to the contracting party's
prescribed method of valuation for duty purposes.
7. The provisions
of this Article shall not apply to the operation of aircraft in transit, but
shall apply to air transit of goods (including baggage).
Article VI
Anti-dumping
and Countervailing Duties
1. The
contracting parties recognize that dumping, by which products of one country
are introduced into the commerce of another country at less than the normal
value of the products, is to be condemned if it causes or threatens material
injury to an established industry in the territory of a contracting party or
materially retards the establishment of a domestic industry. For the purposes
of this Article, a product is to be considered as being introduced into the
commerce of an importing country at less than its normal value, if the price of
the product exported from one country to another
(a) is less than
the comparable price, in the ordinary course of trade, for the like product
when destined for consumption in the exporting country, or,
(b) in the
absence of such domestic price, is less than either
(i) the highest
comparable price for the like product for export to any third country in the
ordinary course of trade, or
(ii) the cost of
production of the product in the country of origin plus a reasonable addition
for selling cost and profit.
Due allowance
shall be made in each case for differences in conditions and terms of sale, for
differences in taxation, and for other differences affecting price
comparability.*
2. In order to
offset or prevent dumping, a contracting party may levy on any dumped product
an anti-dumping duty not greater in amount than the margin of dumping in
respect of such product. For the purposes of this Article, the margin of
dumping is the price difference determined in accordance with the provisions of
paragraph 1.*
3. No
countervailing duty shall be levied on any product of the territory of any
contracting party imported into the territory of another contracting party in
excess of an amount equal to the estimated bounty or subsidy determined to have
been granted, directly or indirectly, on the manufacture, production or export
of such product in the country of origin or exportation, including any special
subsidy to the transportation of a particular product. The term
"countervailing duty" shall be understood to mean a special duty
levied for the purpose of offsetting any bounty or subsidy bestowed, directly,
or indirectly, upon the manufacture, production or export of any merchandise.*
4. No product of
the territory of any contracting party imported into the territory of any other
contracting party shall be subject to anti-dumping or countervailing duty by
reason of the exemption of such product from duties or taxes borne by the like
product when destined for consumption in the country of origin or exportation,
or by reason of the refund of such duties or taxes.
5. No product of
the territory of any contracting party imported into the territory of any other
contracting party shall be subject to both anti-dumping and countervailing
duties to compensate for the same situation of dumping or export subsidization.
6. (a) No
contracting party shall levy any anti-dumping or countervailing duty on the
importation of any product of the territory of another contracting party unless
it determines that the effect of the dumping or subsidization, as the case may
be, is such as to cause or threaten material injury to an established domestic
industry, or is such as to retard materially the establishment of a domestic
industry.
(b) The
CONTRACTING PARTIES may waive the requirement of sub-paragraph (a) of this
paragraph so as to permit a contracting party to levy an anti-dumping or
countervailing duty on the importation of any product for the purpose of
offsetting dumping or subsidization which causes or threatens material injury
to an industry in the territory of another contracting party exporting the product
concerned to the territory of the importing contracting party. The CONTRACTING
PARTIES shall waive the requirements of sub-paragraph (a) of this paragraph, so
as to permit the levying of a countervailing duty, in cases in which they find
that a subsidy is causing or threatening material injury to an industry in the
territory of another contracting party exporting the product concerned to the
territory of the importing contracting party.*
(c) In
exceptional circumstances, however, where delay might cause damage which would
be difficult to repair, a contracting party may levy a countervailing duty for
the purpose referred to in sub-paragraph (b) of this paragraph without the
prior approval of the CONTRACTING PARTIES; provided that such action
shall be reported immediately to the CONTRACTING PARTIES and that the
countervailing duty shall be withdrawn promptly if the CONTRACTING PARTIES
disapprove.
7. A system for
the stabilization of the domestic price or of the return to domestic producers
of a primary commodity, independently of the movements of export prices, which
results at times in the sale of the commodity for export at a price lower than
the comparable price charged for the like commodity to buyers in the domestic
market, shall be presumed not to result in material injury within the meaning
of paragraph 6 if it is determined by consultation among the contracting
parties substantially interested in the commodity concerned that:
(a) the system
has also resulted in the sale of the commodity for export at a price higher
than the comparable price charged for the like commodity to buyers in the
domestic market, and
(b) the system is
so operated, either because of the effective regulation of production, or
otherwise, as not to stimulate exports unduly or otherwise seriously prejudice
the interests of other contracting parties.
Article VII
Valuation
for Customs Purposes
1. The
contracting parties recognize the validity of the general principles of
valuation set forth in the following paragraphs of this Article, and they
undertake to give effect to such principles, in respect of all products subject
to duties or other charges* or restrictions on importation and exportation
based upon or regulated in any manner by value. Moreover, they shall, upon a
request by another contracting party review the operation of any of their laws
or regulations relating to value for customs purposes in the light of these
principles. The CONTRACTING PARTIES may request from contracting parties
reports on steps taken by them in pursuance of the provisions of this Article.
2. (a) The value
for customs purposes of imported merchandise should be based on the actual
value of the imported merchandise on which duty is assessed, or of like
merchandise, and should not be based on the value of merchandise of national
origin or on arbitrary or fictitious values.*
(b) "Actual
value" should be the price at which, at a time and place determined by the
legislation of the country of importation, such or like merchandise is sold or
offered for sale in the ordinary course of trade under fully competitive
conditions. To the extent to which the price of such or like merchandise is
governed by the quantity in a particular transaction, the price to be
considered should uniformly be related to either (i) comparable quantities, or
(ii) quantities not less favourable to importers than those in which the
greater volume of the merchandise is sold in the trade between the countries of
exportation and importation.*
(c) When the
actual value is not ascertainable in accordance with sub-paragraph (b) of this
paragraph, the value for customs purposes should be based on the nearest
ascertainable equivalent of such value.*
3. The value for
customs purposes of any imported product should not include the amount of any
internal tax, applicable within the country of origin or export, from which the
imported product has been exempted or has been or will be relieved by means of
refund.
4. (a) Except as
otherwise provided for in this paragraph, where it is necessary for the
purposes of paragraph 2 of this Article for a contracting party to convert into
its own currency a price expressed in the currency of another country, the
conversion rate of exchange to be used shall be based, for each currency
involved, on the par value as established pursuant to the Articles of Agreement
of the International Monetary Fund or on the rate of exchange recognized by the
Fund, or on the par value established in accordance with a special exchange
agreement entered into pursuant to Article XV of this Agreement.
(b) Where no such
established par value and no such recognized rate of exchange exist, the
conversion rate shall reflect effectively the current value of such currency in
commercial transactions.
(c) The
CONTRACTING PARTIES, in agreement with the International Monetary Fund, shall
formulate rules governing the conversion by contracting parties of any foreign
currency in respect of which multiple rates of exchange are maintained
consistently with the Articles of Agreement of the International Monetary Fund.
Any contracting party may apply such rules in respect of such foreign
currencies for the purposes of paragraph 2 of this Article as an alternative to
the use of par values. Until such rules are adopted by the Contracting Parties,
any contracting party may employ, in respect of any such foreign currency,
rules of conversion for the purposes of paragraph 2 of this Article which are
designed to reflect effectively the value of such foreign currency in
commercial transactions.
(d) Nothing in
this paragraph shall be construed to require any contracting party to alter the
method of converting currencies for customs purposes which is applicable in its
territory on the date of this Agreement, if such alteration would have the
effect of increasing generally the amounts of duty payable.
5. The bases and
methods for determining the value of products subject to duties or other
charges or restrictions based upon or regulated in any manner by value should
be stable and should be given sufficient publicity to enable traders to
estimate, with a reasonable degree of certainty, the value for customs
purposes.
Article VIII
Fees
and Formalities connected with Importation and Exportation*
1. (a) All fees
and charges of whatever character (other than import and export duties and
other than taxes within the purview of Article III) imposed by contracting
parties on or in connection with importation or exportation shall be limited in
amount to the approximate cost of services rendered and shall not represent an
indirect protection to domestic products or a taxation of imports or exports
for fiscal purposes.
(b) The
contracting parties recognize the need for reducing the number and diversity of
fees and charges referred to in sub-paragraph (a).
(c) The contracting
parties also recognize the need for minimizing the incidence and complexity of
import and export formalities and for decreasing and simplifying import and
export documentation requirements.*
2. A contracting
party shall, upon request by another contracting party or by the CONTRACTING
PARTIES, review the operation of its laws and regulations in the light of the
provisions of this Article.
3. No contracting
party shall impose substantial penalties for minor breaches of customs
regulations or procedural requirements. In particular, no penalty in respect of
any omission or mistake in customs documentation which is easily rectifiable
and obviously made without fraudulent intent or gross negligence shall be
greater than necessary to serve merely as a warning.
4. The provisions
of this Article shall extend to fees, charges, formalities and requirements
imposed by governmental authorities in connection with importation and
exportation, including those relating to:
(a) consular
transactions, such as consular invoices and certificates;
(b) quantitative
restrictions;
(c) licensing;
(d) exchange
control;
(e) statistical
services;
(f) documents,
documentation and certification;
(g) analysis and
inspection; and
(h) quarantine,
sanitation and fumigation.
Article IX
Marks
of Origin
1. Each
contracting party shall accord to the products of the territories of other
contracting parties treatment with regard to marking requirements no less
favourable than the treatment accorded to like products of any third country.
2. The
contracting parties recognize that, in adopting and enforcing laws and
regulations relating to marks of origin, the difficulties and inconveniences
which such measures may cause to the commerce and industry of exporting
countries should be reduced to a minimum, due regard being had to the necessity
of protecting consumers against fraudulent or misleading indications.
3. Whenever it is
administratively practicable to do so, contracting parties should permit
required marks of origin to be affixed at the time of importation.
4. The laws and
regulations of contracting parties relating to the marking of imported products
shall be such as to permit compliance without seriously damaging the products,
or materially reducing their value, or unreasonably increasing their cost.
5. As a general
rule, no special duty or penalty should be imposed by any contracting party for
failure to comply with marking requirements prior to importation unless
corrective marking is unreasonably delayed or deceptive marks have been affixed
or the required marking has been intentionally omitted.
6. The
contracting parties shall co-operate with each other with a view to preventing
the use of trade names in such manner as to misrepresent the true origin of a
product, to the detriment of such distinctive regional or geographical names of
products of the territory of a contracting party as are protected by its
legislation. Each contracting party shall accord full and sympathetic
consideration to such requests or representations as may be made by any other
contracting party regarding the application of the undertaking set forth in the
preceding sentence to names of products which have been communicated to it by
the other contracting party.
Article X
Publication
and Administration of Trade Regulations
1. Laws,
regulations, judicial decisions and administrative rulings of general
application, made effective by any contracting party, pertaining to the
classification or the valuation of products for customs purposes, or to rates
of duty, taxes or other charges, or to requirements, restrictions or
prohibitions on imports or exports or on the transfer of payments therefor, or
affecting their sale, distribution, transportation, insurance, warehousing
inspection, exhibition, processing, mixing or other use, shall be published
promptly in such a manner as to enable governments and traders to become
acquainted with them. Agreements affecting international trade policy which are
in force between the government or a governmental agency of any contracting
party and the government or governmental agency of any other contracting party
shall also be published. The provisions of this paragraph shall not require any
contracting party to disclose confidential information which would impede law
enforcement or otherwise be contrary to the public interest or would prejudice
the legitimate commercial interests of particular enterprises, public or
private.
2. No measure of
general application taken by any contracting party effecting an advance in a
rate of duty or other charge on imports under an established and uniform
practice, or imposing a new or more burdensome requirement, restriction or
prohibition on imports, or on the transfer of payments therefor, shall be
enforced before such measure has been officially published.
3. (a) Each
contracting party shall administer in a uniform, impartial and reasonable
manner all its laws, regulations, decisions and rulings of the kind described
in paragraph 1 of this Article.
(b) Each
contracting party shall maintain, or institute as soon as practicable,
judicial, arbitral or administrative tribunals or procedures for the purpose, inter
alia, of the prompt review and correction of administrative action relating
to customs matters. Such tribunals or procedures shall be independent of the
agencies entrusted with administrative enforcement and their decisions shall be
implemented by, and shall govern the practice of, such agencies unless an
appeal is lodged with a court or tribunal of superior jurisdiction within the
time prescribed for appeals to be lodged by importers; provided that the
central administration of such agency may take steps to obtain a review of the
matter in another proceeding if there is good cause to believe that the
decision is inconsistent with established principles of law or the actual
facts.
(c) The
provisions of sub-paragraph (b) of this paragraph shall not require the
elimination or substitution of procedures in force in the territory of a
contracting party on the date of this Agreement which in fact provide for an
objective and impartial review of administrative action even though such
procedures are not fully or formally independent of the agencies entrusted with
administrative enforcement. Any contracting party employing such procedures
shall, upon request, furnish the CONTRACTING PARTIES with full information
thereon in order that they may determine whether such procedures conform to the
requirements of this sub-paragraph.
Article XI*
General
Elimination of Quantitative Restrictions
1. No prohibitions
or restrictions other than duties, taxes or other charges, whether made
effective through quotas, import or export licences or other measures, shall be
instituted or maintained by any contracting party on the importation of any
product of the territory of any other contracting party or on the exportation
or sale for export of any product destined for the territory of any other
contracting party.
2. The provisions
of paragraph 1 of this Article shall not extend to the following:
(a) Export
prohibitions or restrictions temporarily applied to prevent or relieve critical
shortages of foodstuffs or other products essential to the exporting
contracting party;
(b) Import and
export prohibitions or restrictions necessary to the application of standards
or regulations for the classification, grading or marketing of commodities in
international trade;
(c) Import
restrictions on any agricultural or fisheries product, imported in any form,*
necessary to the enforcement of governmental measures which operate:
(i) to restrict
the quantities of the like domestic product permitted to be marketed or
produced, or, if there is no substantial domestic production of the like
product, of a domestic product for which the imported product can be directly
substituted; or
(ii) to remove a
temporary surplus of the like domestic product, or, if there is no substantial
domestic production of the like product, of a domestic product for which the
imported product can be directly substituted, by making the surplus available
to certain groups of domestic consumers free of charge or at prices below the
current market level; or
(iii) to restrict
the quantities permitted to be produced of any animal product the production of
which is directly dependent, wholly or mainly, on the imported commodity, if
the domestic production of that commodity is relatively negligible.
Any contracting
party applying restrictions on the importation of any product pursuant to
sub-paragraph (c) of this paragraph shall give public notice of the total
quantity or value of the product permitted to be imported during a specified
future period and of any change in such quantity or value. Moreover, any
restrictions applied under (i) above shall not be such as will reduce the total
of imports relative to the total of domestic production, as compared with the
proportion which might reasonably be expected to rule between the two in the
absence of restrictions. In determining this proportion, the contracting party
shall pay due regard to the proportion prevailing during a previous
representative period and to any special factors* which may have affected or
may be affecting the trade in the product concerned.
Article XII*
Restrictions
to Safeguard the Balance of Payments
1.
Notwithstanding the provisions of paragraph 1 of Article XI, any contracting
party, in order to safeguard its external financial position and its balance of
payments, may restrict the quantity or value of merchandise permitted to be
imported, subject to the provisions of the following paragraphs of this
Article.
2. (a) Import
restrictions instituted, maintained or intensified by a contracting party under
this Article shall not exceed those necessary:
(i) to forestall
the imminent threat of, or to stop, a serious decline in its monetary reserves,
or
(ii) in the case
of a contracting party with very low monetary reserves, to achieve a reasonable
rate of increase in its reserves.
Due regard shall
be paid in either case to any special factors which may be affecting the
reserves of such contracting party or its need for reserves, including, where
special external credits or other resources are available to it, the need to
provide for the appropriate use of such credits or resources.
(b) Contracting
parties applying restrictions under sub-paragraph (a) of this paragraph shall
progressively relax them as such conditions improve, maintaining them only to
the extent that the conditions specified in that sub-paragraph still justify
their application. They shall eliminate the restrictions when conditions would no
longer justify their institution or maintenance under that sub-paragraph.
3. (a)
Contracting parties undertake, in carrying out their domestic policies, to pay
due regard to the need for maintaining or restoring equilibrium in their
balance of payments on a sound and lasting basis and to the desirability of
avoiding an uneconomic employment of productive resources. They recognize that,
in order to achieve these ends, it is desirable so far as possible to adopt
measures which expand rather than contract international trade.
(b) Contracting
parties applying restrictions under this Article may determine the incidence of
the restrictions on imports of different products or classes of products in
such a way as to give priority to the importation of those products which are
more essential.
(c) Contracting
parties applying restrictions under this Article undertake:
(i) to avoid
unnecessary damage to the commercial or economic interests of any other
contracting party;*
(ii) not to apply
restrictions so as to prevent unreasonably the importation of any description
of goods in minimum commercial quantities the exclusion of which would impair
regular channels of trade; and
(iii) not to
apply restrictions which would prevent the importations of commercial samples
or prevent compliance with patent, trade mark, copyright, or similar
procedures.
(d) The
contracting parties recognize that, as a result of domestic policies directed
towards the achievement and maintenance of full and productive employment or
towards the development of economic resources, a contracting party may
experience a high level of demand for imports involving a threat to its
monetary reserves of the sort referred to in paragraph 2 (a) of this Article.
Accordingly, a contracting party otherwise complying with the provisions of
this Article shall not be required to withdraw or modify restrictions on the
ground that a change in those policies would render unnecessary restrictions
which it is applying under this Article.
4. (a) Any
contracting party applying new restrictions or raising the general level of its
existing restrictions by a substantial intensification of the measures applied
under this Article shall immediately after instituting or intensifying such
restrictions (or, in circumstances in which prior consultation is practicable,
before doing so) consult with the CONTRACTING PARTIES as to the nature of its
balance of payments difficulties, alternative corrective measures which may be
available, and the possible effect of the restrictions on the economies of
other contracting parties.
(b) On a date to
be determined by them,* the CONTRACTING PARTIES shall review all restrictions
still applied under this Article on that date. Beginning one year after that
date, contracting parties applying import restrictions under this Article shall
enter into consultations of the type provided for in sub-paragraph (a) of this
paragraph with the CONTRACTING PARTIES annually.
(c) (i) If, in
the course of consultations with a contracting party under sub-paragraph (a) or
(b) above, the CONTRACTING PARTIES find that the restrictions are not
consistent with provisions of this Article or with those of Article XIII
(subject to the provisions of Article XIV), they shall indicate the nature of
the inconsistency and may advise that the restrictions be suitably modified.
(ii) If, however,
as a result of the consultations, the CONTRACTING PARTIES determine that the
restrictions are being applied in a manner involving an inconsistency of a
serious nature with the provisions of this Article or with those of Article
XIII (subject to the provisions of Article XIV) and that damage to the trade of
any contracting party is caused or threatened thereby, they shall so inform the
contracting party applying the restrictions and shall make appropriate
recommendations for securing conformity with such provisions within the
specified period of time. If such contracting party does not comply with these
recommendations within the specified period, the CONTRACTING PARTIES may
release any contracting party the trade of which is adversely affected by the
restrictions from such obligations under this Agreement towards the contracting
party applying the restrictions as they determine to be appropriate in the
circumstances.
(d) The
CONTRACTING PARTIES shall invite any contracting party which is applying
restrictions under this Article to enter into consultations with them at the
request of any contracting party which can establish a prima facie case
that the restrictions are inconsistent with the provisions of this Article or
with those of Article XIII (subject to the provisions of Article XIV) and that
its trade is adversely affected thereby. However, no such invitation shall be
issued unless the CONTRACTING PARTIES have ascertained that direct discussions
between the contracting parties concerned have not been successful. If, as a
result of the consultations with the CONTRACTING PARTIES, no agreement is
reached and they determine that the restrictions are being applied
inconsistently with such provisions, and that damage to the trade of the
contracting party initiating the procedure is caused or threatened thereby,
they shall recommend the withdrawal or modification of the restrictions. If the
restrictions are not withdrawn or modified within such time as the CONTRACTING
PARTIES may prescribe, they may release the contracting party initiating the
procedure from such obligations under this Agreement towards the contracting
party applying the restrictions as they determine to be appropriate in the circumstances.
(e) In proceeding
under this paragraph, the CONTRACTING PARTIES shall have due regard to any
special external factors adversely affecting the export trade of the
contracting party applying the restrictions.*
(f)
Determinations under this paragraph shall be rendered expeditiously and, if
possible, within sixty days of the initiation of the consultations.
5. If there is a
persistent and widespread application of import restrictions under this
Article, indicating the existence of a general disequilibrium which is
restricting international trade, the CONTRACTING PARTIES shall initiate
discussions to consider whether other measures might be taken, either by those
contracting parties the balance of payments of which are under pressure or by
those the balance of payments of which are tending to be exceptionally
favourable, or by any appropriate intergovernmental organization, to remove the
underlying causes of the disequilibrium. On the invitation of the CONTRACTING
PARTIES, Contracting Parties shall participate in such discussions.
Article XIII*
Non-discriminatory
Administration of Quantitative Restrictions
1. No prohibition
or restriction shall be applied by any contracting party on the importation of
any product of the territory of any other contracting party or on the
exportation of any product destined for the territory of any other contracting
party, unless the importation of the like product of all third countries or the
exportation of the like product to all third countries is similarly prohibited
or restricted.
2. In applying
import restrictions to any product, contracting parties shall aim at a
distribution of trade in such product approaching as closely as possible the
shares which the various contracting parties might be expected to obtain in the
absence of such restrictions and to this end shall observe the following
provisions:
(a) Wherever
practicable, quotas representing the total amount of permitted imports (whether
allocated among supplying countries or not) shall be fixed, and notice given of
their amount in accordance with paragraph 3 (b) of this Article;
(b) In cases in
which quotas are not practicable, the restrictions may be applied by means of
import licences or permits without a quota;
(c) Contracting
parties shall not, except for purposes of operating quotas allocated in
accordance with sub-paragraph (d) of this paragraph, require that import
licences or permits be utilized for the importation of the product concerned
from a particular country or source;
(d) In cases in
which a quota is allocated among supplying countries the contracting party
applying the restrictions may seek agreement with respect to the allocation of
shares in the quota with all other contracting parties having a substantial
interest in supplying the product concerned. In cases in which this method is
not reasonably practicable, the contracting party concerned shall allot to
contracting parties having a substantial interest in supplying the product
shares based upon the proportions, supplied by such contracting parties during
a previous representative period, of the total quantity or value of imports of
the product, due account being taken of any special factors which may have
affected or may be affecting the trade in the product. No conditions or
formalities shall be imposed which would prevent any contracting party from
utilizing fully the share of any such total quantity or value which has been
allotted to it, subject to importation being made within any prescribed period
to which the quota may relate.*
3. (a) In cases
in which import licences are issued in connection with import restrictions, the
contracting party applying the restrictions shall provide, upon the request of
any contracting party having an interest in the trade in the product concerned,
all relevant information concerning the administration of the restrictions, the
import licences granted over a recent period and the distribution of such
licences among supplying countries; provided that there shall be no
obligation to supply information as to the names of importing or supplying
enterprises.
(b) In the case
of import restrictions involving the fixing of quotas, the contracting party
applying the restrictions shall give public notice of the total quantity or
value of the product or products which will be permitted to be imported during
a specified future period and of any change in such quantity or value. Any
supplies of the product in question which were en route at the time at
which public notice was given shall not be excluded from entry; provided
that they may be counted so far as practicable, against the quantity permitted
to be imported in the period in question, and also, where necessary, against
the quantities permitted to be imported in the next following period or
periods; and provided further that if any contracting party customarily
exempts from such restrictions products entered for consumption or withdrawn
from warehouse for consumption during a period of thirty days after the day of
such public notice, such practice shall be considered full compliance with this
sub-paragraph.
(c) In the case
of quotas allocated among supplying countries, the contracting party applying
the restrictions shall promptly inform all other contracting parties having an
interest in supplying the product concerned of the shares in the quota
currently allocated, by quantity or value, to the various supplying countries
and shall give public notice thereof.
4. With regard to
restrictions applied in accordance with paragraph 2 (d) of this Article or
under paragraph 2 (c) of Article XI, the selection of a representative period
for any product and the appraisal of any special factors* affecting the trade
in the product shall be made initially by the contracting party applying the
restriction; provided that such contracting party shall, upon the
request of any other contracting party having a substantial interest in
supplying that product or upon the request of the CONTRACTING PARTIES, consult
promptly with the other contracting party or the CONTRACTING PARTIES regarding
the need for an adjustment of the proportion determined or of the base period
selected, or for the reappraisal of the special factors involved, or for the
elimination of conditions, formalities or any other provisions established
unilaterally relating to the allocation of an adequate quota or its
unrestricted utilization.
5. The provisions
of this Article shall apply to any tariff quota instituted or maintained by any
contracting party, and, in so far as applicable, the principles of this Article
shall also extend to export restrictions.
Article XIV*
Exceptions
to the Rule of Non-discrimination
1. A contracting
party which applies restrictions under Article XII or under Section B of
Article XVIII may, in the application of such restrictions, deviate from the
provisions of Article XIII in a manner having equivalent effect to restrictions
on payments and transfers for current international transactions which that
contracting party may at that time apply under Article VIII or XIV of the
Articles of Agreement of the International Monetary Fund, or under analogous
provisions of a special exchange agreement entered into pursuant to paragraph 6
of Article XV.*
2. A contracting
party which is applying import restrictions under Article XII or under Section
B of Article XVIII may, with the consent of the CONTRACTING PARTIES,
temporarily deviate from the provisions of Article XIII in respect of a small
part of its external trade where the benefits to the contracting party or
contracting parties concerned substantially outweigh any injury which may
result to the trade of other contracting parties.*
3. The provisions
of Article XIII shall not preclude a group of territories having a common quota
in the International Monetary Fund from applying against imports from other
countries, but not among themselves, restrictions in accordance with the
provisions of Article XII or of Section B of Article XVIII on condition that
such restrictions are in all other respects consistent with the provisions of
Article XIII.
4. A contracting
party applying import restrictions under Article XII or under Section B of
Article XVIII shall not be precluded by Articles XI to XV or Section B of
Article XVIII of this Agreement from applying measures to direct its exports in
such a manner as to increase its earnings of currencies which it can use
without deviation from the provisions of Article XIII.
5. A contracting
party shall not be precluded by Articles XI to XV, inclusive, or by Section B
of Article XVIII, of this Agreement from applying quantitative restrictions:
(a) having
equivalent effect to exchange restrictions authorized under Section 3 (b) of
Article VII of the Articles of Agreement of the International Monetary Fund, or
(b) under the
preferential arrangements provided for in Annex A of this Agreement, pending
the outcome of the negotiations referred to therein.
Article XV
Exchange
Arrangements
1. The
CONTRACTING PARTIES shall seek co-operation with the International Monetary
Fund to the end that the CONTRACTING PARTIES and the Fund may pursue a
co-ordinated policy with regard to exchange questions within the jurisdiction
of the Fund and questions of quantitative restrictions and other trade measures
within the jurisdiction of the CONTRACTING PARTIES.
2. In all cases
in which the CONTRACTING PARTIES are called upon to consider or deal with
problems concerning monetary reserves, balances of payments or foreign exchange
arrangements, they shall consult fully with the International Monetary Fund. In
such consultations, the CONTRACTING PARTIES shall accept all findings of
statistical and other facts presented by the Fund relating to foreign exchange,
monetary reserves and balances of payments, and shall accept the determination
of the Fund as to whether action by a contracting party in exchange matters is
in accordance with the Articles of Agreement of the International Monetary
Fund, or with the terms of a special exchange agreement between that
contracting party and the CONTRACTING PARTIES. The CONTRACTING PARTIES in
reaching their final decision in cases involving the criteria set forth in
paragraph 2 (a) of Article XII or in paragraph 9 of Article XVIII, shall accept
the determination of the Fund as to what constitutes a serious decline in the
contracting party's monetary reserves, a very low level of its monetary
reserves or a reasonable rate of increase in its monetary reserves, and as to
the financial aspects of other matters covered in consultation in such cases.
3. The
CONTRACTING PARTIES shall seek agreement with the Fund regarding procedures for
consultation under paragraph 2 of this Article.
4. Contracting
parties shall not, by exchange action, frustrate* the intent of the provisions
of this Agreement, nor, by trade action, the intent of the provisions of the
Articles of Agreement of the International Monetary Fund.
5. If the
CONTRACTING PARTIES consider, at any time, that exchange restrictions on
payments and transfers in connection with imports are being applied by a
contracting party in a manner inconsistent with the exceptions provided for in
this Agreement for quantitative restrictions, they shall report thereon to the
Fund.
6. Any
contracting party which is not a member of the Fund shall, within a time to be
determined by the CONTRACTING PARTIES after consultation with the Fund, become
a member of the Fund, or, failing that, enter into a special exchange agreement
with the CONTRACTING PARTIES. A contracting party which ceases to be a member
of the Fund shall forthwith enter into a special exchange agreement with the CONTRACTING
PARTIES. Any special exchange agreement entered into by a contracting party
under this paragraph shall thereupon become part of its obligations under this
Agreement.
7. (a) A special
exchange agreement between a contracting party and the CONTRACTING PARTIES
under paragraph 6 of this Article shall provide to the satisfaction of the
CONTRACTING PARTIES that the objectives of this Agreement will not be
frustrated as a result of action in exchange matters by the contracting party
in question.
(b) The terms of
any such agreement shall not impose obligations on the contracting party in
exchange matters generally more restrictive than those imposed by the Articles
of Agreement of the International Monetary Fund on members of the Fund.
8. A contracting
party which is not a member of the Fund shall furnish such information within
the general scope of section 5 of Article VIII of the Articles of Agreement of
the International Monetary Fund as the CONTRACTING PARTIES may require in order
to carry out their functions under this Agreement.
9. Nothing in
this Agreement shall preclude:
(a) the use by a
contracting party of exchange controls or exchange restrictions in accordance
with the Articles of Agreement of the International Monetary Fund or with that
contracting party's special exchange agreement with the CONTRACTING PARTIES, or
(b) the use by a
contracting party of restrictions or controls in imports or exports, the sole
effect of which, additional to the effects permitted under Articles XI, XII,
XIII and XIV, is to make effective such exchange controls or exchange
restrictions.
Article XVI*
Subsidies
Section A n Subsidies in General
1. If any
contracting party grants or maintains any subsidy, including any form of income
or price support, which operates directly or indirectly to increase exports of
any product from, or to reduce imports of any product into, its territory, it
shall notify the CONTRACTING PARTIES in writing of the extent and nature of the
subsidization, of the estimated effect of the subsidization on the quantity of
the affected product or products imported into or exported from its territory
and of the circumstances making the subsidization necessary. In any case in
which it is determined that serious prejudice to the interests of any other
contracting party is caused or threatened by any such subsidization, the
contracting party granting the subsidy shall, upon request, discuss with the
other contracting party or parties concerned, or with the CONTRACTING PARTIES,
the possibility of limiting the subsidization.
Section B n Additional Provisions on Export Subsidies*
2. The
contracting parties recognize that the granting by a contracting party of a
subsidy on the export of any product may have harmful effects for other
contracting parties, both importing and exporting, may cause undue disturbance
to their normal commercial interests, and may hinder the achievement of the
objectives of this Agreement.
3. Accordingly,
contracting parties should seek to avoid the use of subsidies on the export of
primary products. If, however, a contracting party grants directly or
indirectly any form of subsidy which operates to increase the export of any
primary product from its territory, such subsidy shall not be applied in a
manner which results in that contracting party having more than an equitable
share of world export trade in that product, account being taken of the shares
of the contracting parties in such trade in the product during a previous
representative period, and any special factors which may have affected or may
be affecting such trade in the product.*
4. Further, as
from 1 January 1958 or the earliest practicable date thereafter, contracting
parties shall cease to grant either directly or indirectly any form of subsidy
on the export of any product other than a primary product which subsidy results
in the sale of such product for export at a price lower than the comparable
price charged for the like product to buyers in the domestic market. Until 31
December 1957 no contracting party shall extend the scope of any such
subsidization beyond that existing on 1 January 1955 by the introduction of
new, or the extension of existing, subsidies.*
5. The
CONTRACTING PARTIES shall review the operation of the provisions of this
Article from time to time with a view to examining its effectiveness, in the
light of actual experience, in promoting the objectives of this Agreement and
avoiding subsidization seriously prejudicial to the trade or interests of
contracting parties.
Article XVII
State
Trading Enterprises
1.* (a) Each
contracting party undertakes that if it establishes or maintains a State
enterprise, wherever located, or grants to any enterprise, formally or in
effect, exclusive or special privileges,* such enterprise shall, in its
purchases or sales involving either imports or exports, act in a manner
consistent with the general principles of non-discriminatory treatment
prescribed in this Agreement for governmental measures affecting imports or
exports by private traders.
(b) The
provisions of sub-paragraph (a) of this paragraph shall be understood to
require that such enterprises shall, having due regard to the other provisions
of this Agreement, make any such purchases or sales solely in accordance with
commercial considerations,* including price, quality, availability,
marketability, transportation and other conditions of purchase or sale, and
shall afford the enterprises of the other contracting parties adequate
opportunity, in accordance with customary business practice, to compete for participation
in such purchases or sales.
(c) No
contracting party shall prevent any enterprise (whether or not an enterprise
described in sub-paragraph (a) of this paragraph) under its jurisdiction from
acting in accordance with the principles of sub-paragraphs (a) and (b) of this
paragraph
2. The provisions
of paragraph 1 of this Article shall not apply to imports of products for
immediate or ultimate consumption in governmental use and not otherwise for
resale or use in the production of goods* for sale. With respect to such
imports, each contracting party shall accord to the trade of the other
contracting parties fair and equitable treatment.
3. The
contracting parties recognize that enterprises of the kind described in
paragraph 1 (a) of this Article might be operated so as to create serious
obstacles to trade; thus negotiations on a reciprocal and mutually advantageous
basis designed to limit or reduce such obstacles are of importance to the
expansion of international trade.*
4. (a)
Contracting parties shall notify the CONTRACTING PARTIES of the products which
are imported into or exported from their territories by enterprises of the kind
described in paragraph 1 (a) of this Article.
(b) A contracting
party establishing, maintaining or authorizing an import monopoly of a product,
which is not the subject of a concession under Article II, shall, on the
request of another contracting party having a substantial trade in the product
concerned, inform the CONTRACTING PARTIES of the import mark-up* on the product
during a recent representative period, or, when it is not possible to do so, of
the price charged on the resale of the product.
(c) The
CONTRACTING PARTIES may, at the request of a contracting party which has reason
to believe that its interest under this Agreement are being adversely affected
by the operations of an enterprise of the kind described in paragraph 1 (a),
request the contracting party establishing, maintaining or authorizing such
enterprise to supply information about its operations related to the carrying
out of the provisions of this Agreement.
(d) The
provisions of this paragraph shall not require any contracting party to
disclose confidential information which would impede law enforcement or
otherwise be contrary to the public interest or would prejudice the legitimate
commercial interests of particular enterprises.
Article XVIII*
Governmental
Assistance to Economic Development
1. The
contracting parties recognize that the attainment of the objectives of this
Agreement will be facilitated by the progressive development of their
economies, particularly of those contracting parties the economies of which can
only support low standards of living* and are in the early stages of
development.*
2. The
contracting parties recognize further that it may be necessary for those
contracting parties, in order to implement programmes and policies of economic
development designed to raise the general standard of living of their people,
to take protective or other measures affecting imports, and that such measures
are justified in so far as they facilitate the attainment of the objectives of
this Agreement. They agree, therefore, that those contracting parties should
enjoy additional facilities to enable them (a) to maintain sufficient
flexibility in their tariff structure to be able to grant the tariff protection
required for the establishment of a particular industry* and (b) to apply
quantitative restrictions for balance of payments purposes in a manner which
takes full account of the continued high level of demand for imports likely to
be generated by their programmes of economic development.
3. The
contracting parties recognize finally that, with those additional facilities
which are provided for in Sections A and B of this Article, the provisions of
this Agreement would normally be sufficient to enable contracting parties to
meet the requirements of their economic development. They agree, however, that
there may be circumstances where no measure consistent with those provisions is
practicable to permit a contracting party in the process of economic
development to grant the governmental assistance required to promote the
establishment of particular industries* with a view to raising the general
standard of living of its people. Special procedures are laid down in Sections
C and D of this Article to deal with those cases.
4. (a)
Consequently, a contracting party, the economy of which can only support low
standards of living* and is in the early stages of development,* shall be free
to deviate temporarily from the provisions of the other Articles of this
Agreement, as provided in Sections A, B and C of this Article.
(b) A contracting
party, the economy of which is in the process of development, but which does
not come within the scope of sub-paragraph (a) above, may submit applications
to the CONTRACTING PARTIES under Section D of this Article.
5. The
contracting parties recognize that the export earnings of contracting parties,
the economies of which are of the type described in paragraph 4 (a) and (b)
above and which depend on exports of a small number of primary commodities, may
be seriously reduced by a decline in the sale of such commodities. Accordingly,
when the exports of primary commodities by such a contracting party are
seriously affected by measures taken by another contracting party, it may have
resort to the consultation provisions of Article XXII of this Agreement.
6. The
CONTRACTING PARTIES shall review annually all measures applied pursuant to the
provisions of Sections C and D of this Article.
Section A
7. (a) If a
contracting party coming within the scope of paragraph 4 (a) of this Article
considers it desirable, in order to promote the establishment of a particular
industry* with a view to raising the general standard of living of its people,
to modify or withdraw a concession included in the appropriate Schedule annexed
to this Agreement, it shall notify the CONTRACTING PARTIES to this effect and
enter into negotiations with any contracting party with which such concession
was initially negotiated, and with any other contracting party determined by
the CONTRACTING PARTIES to have a substantial interest therein. If agreement is
reached between such contracting parties concerned, they shall be free to
modify or withdraw concessions under the appropriate Schedules to this
Agreement in order to give effect to such agreement, including any compensatory
adjustments involved.
(b) If agreement
is not reached within sixty days after the notification provided for in
sub-paragraph (a) above, the contracting party which proposes to modify or
withdraw the concession may refer the matter to the CONTRACTING PARTIES which
shall promptly examine it. If they find that the contracting party which
proposes to modify or withdraw the concession has made every effort to reach an
agreement and that the compensatory adjustment offered by it is adequate, that
contracting party shall be free to modify or withdraw the concession if, at the
same time, it gives effect to the compensatory adjustment. If the CONTRACTING
PARTIES do not find that the compensation offered by a contracting party
proposing to modify or withdraw the concession is adequate, but find that it
has made every reasonable effort to offer adequate compensation, that
contracting party shall be free to proceed with such modification or
withdrawal. If such action is taken, any other contracting party referred to in
sub-paragraph (a) above shall be free to modify or withdraw substantially
equivalent concessions initially negotiated with the contracting party which
has taken the action.*
Section B
8. The
contracting parties recognize that contracting parties coming within the scope
of paragraph 4 (a) of this Article tend, when they are in rapid process of
development, to experience balance of payments difficulties arising mainly from
efforts to expand their internal markets as well as from the instability in
their terms of trade.
9. In order to
safeguard its external financial position and to ensure a level of reserves
adequate for the implementation of its programme of economic development, a
contracting party coming within the scope of paragraph 4 (a) of this Article
may, subject to the provisions of paragraphs 10 to 12, control the general
level of its imports by restricting the quantity or value of merchandise
permitted to be imported; provided that the import restrictions
instituted, maintained or intensified shall not exceed those necessary:
(a) to forestall
the threat of, or to stop, a serious decline in its monetary reserves, or
(b) in the case
of a contracting party with inadequate monetary reserves, to achieve a
reasonable rate of increase in its reserves.
Due regard shall
be paid in either case to any special factors which may be affecting the
reserves of the contracting party or its need for reserves, including, where
special external credits or other resources are available to it, the need to
provide for the appropriate use of such credits or resources.
10. In applying
these restrictions, the contracting party may determine their incidence on
imports of different products or classes of products in such a way as to give
priority to the importation of those products which are more essential in the
light of its policy of economic development; provided that the
restrictions are so applied as to avoid unnecessary damage to the commercial or
economic interests of any other contracting party and not to prevent
unreasonably the importation of any description of goods in minimum commercial
quantities the exclusion of which would impair regular channels of trade; and provided
further that the restrictions are not so applied as to prevent the importation
of commercial samples or to prevent compliance with patent, trade mark,
copyright or similar procedures.
11. In carrying
out its domestic policies, the contracting party concerned shall pay due regard
to the need for restoring equilibrium in its balance of payments on a sound and
lasting basis and to the desirability of assuring an economic employment of
productive resources. It shall progressively relax any restrictions applied
under this Section as conditions improve, maintaining them only to the extent
necessary under the terms of paragraph 9 of this Article and shall eliminate
them when conditions no longer justify such maintenance; provided that
no contracting party shall be required to withdraw or modify restrictions on
the ground that a change in its development policy would render unnecessary the
restrictions which it is applying under this Section.*
12. (a) Any
contracting party applying new restrictions or raising the general level of its
existing restrictions by a substantial intensification of the measures applied
under this Section, shall immediately after instituting or intensifying such
restrictions (or, in circumstances in which prior consultation is practicable,
before doing so) consult with the CONTRACTING PARTIES as to the nature of its
balance of payments difficulties, alternative corrective measures which may be
available, and the possible effect of the restrictions on the economies of other
contracting parties.
(b) On a date to
be determined by them* the CONTRACTING PARTIES shall review all restrictions
still applied under this Section on that date. Beginning two years after that
date, contracting parties applying restrictions under this Section shall enter
into consultations of the type provided for in sub-paragraph (a) above with the
CONTRACTING PARTIES at intervals of approximately, but not less than, two years
according to a programme to be drawn up each year by the CONTRACTING PARTIES; provided
that no consultation under this sub-paragraph shall take place within two years
after the conclusion of a consultation of a general nature under any other
provision of this paragraph.
(c) (i) If, in
the course of consultations with a contracting party under sub-paragraph (a) or
(b) of this paragraph, the CONTRACTING PARTIES find that the restrictions are
not consistent with the provisions of this Section or with those of Article
XIII (subject to the provisions of Article XIV), they shall indicate the nature
of the inconsistency and may advise that the restrictions be suitably modified.
(ii) If, however,
as a result of the consultations, the CONTRACTING PARTIES determine that the
restrictions are being applied in a manner involving an inconsistency of a
serious nature with the provisions of this Section or with those of Article
XIII (subject to the provisions of Article XIV) and that damage to the trade of
any contracting party is caused or threatened thereby, they shall so inform the
contracting party applying the restrictions and shall make appropriate
recommendations for securing conformity with such provisions within a specified
period. If such contracting party does not comply with these recommendations
within the specified period, the CONTRACTING PARTIES may release any
contracting party the trade of which is adversely affected by the restrictions
from such obligations under this Agreement towards the contracting party
applying the restrictions as they determine to be appropriate in the circumstances.
(d) The
CONTRACTING PARTIES shall invite any contracting party which is applying
restrictions under this Section to enter into consultations with them at the
request of any contracting party which can establish a prima facie case
that the restrictions are inconsistent with the provisions of this Section or
with those of Article XIII (subject to the provisions of Article XIV) and that
its trade is adversely affected thereby. However, no such invitation shall be
issued unless the CONTRACTING PARTIES have ascertained that direct discussions
between the contracting parties concerned have not been successful. If, as a
result of the consultations with the CONTRACTING PARTIES no agreement is
reached and they determine that the restrictions are being applied
inconsistently with such provisions, and that damage to the trade of the
contracting party initiating the procedure is caused or threatened thereby,
they shall recommend the withdrawal or modification of the restrictions. If the
restrictions are not withdrawn or modified within such time as the CONTRACTING
PARTIES may prescribe, they may release the contracting party initiating the
procedure from such obligations under this Agreement towards the contracting
party applying the restrictions as they determine to be appropriate in the
circumstances.
(e) If a
contracting party against which action has been taken in accordance with the
last sentence of sub-paragraph (c) (ii) or (d) of this paragraph, finds that
the release of obligations authorized by the CONTRACTING PARTIES adversely
affects the operation of its programme and policy of economic development, it
shall be free, not later than sixty days after such action is taken, to give
written notice to the Executive Secretary) By the Decision of 23 March 1965,
the CONTRACTING PARTIES changed the title of the head of the GATT secretariat
from "Executive Secretary" to "Director-General".
to the
Contracting Parties of its intention to withdraw from this Agreement and such
withdrawal shall take effect on the sixtieth day following the day on which the
notice is received by him.
(f) In proceeding
under this paragraph, the CONTRACTING PARTIES shall have due regard to the
factors referred to in paragraph 2 of this Article. Determinations under this
paragraph shall be rendered expeditiously and, if possible, within sixty days
of the initiation of the consultations.
Section C
13. If a
contracting party coming within the scope of paragraph 4 (a) of this Article
finds that governmental assistance is required to promote the establishment of
a particular industry* with a view to raising the general standard of living of
its people, but that no measure consistent with the other provisions of this
Agreement is practicable to achieve that objective, it may have recourse to the
provisions and procedures set out in this Section.*
14. The
contracting party concerned shall notify the CONTRACTING PARTIES of the special
difficulties which it meets in the achievement of the objective outlined in
paragraph 13 of this Article and shall indicate the specific measure affecting
imports which it proposes to introduce in order to remedy these difficulties.
It shall not introduce that measure before the expiration of the time-limit
laid down in paragraph 15 or 17, as the case may be, or if the measure affects
imports of a product which is the subject of a concession included in the
appropriate Schedule annexed to this Agreement, unless it has secured the
concurrence of the CONTRACTING PARTIES in accordance with provisions of
paragraph 18; provided that, if the industry receiving assistance has
already started production, the contracting party may, after informing the
CONTRACTING PARTIES, take such measures as may be necessary to prevent, during
that period, imports of the product or products concerned from increasing
substantially above a normal level.*
15. If, within
thirty days of the notification of the measure, the CONTRACTING PARTIES do not
request the contracting party concerned to consult with them,* that contracting
party shall be free to deviate from the relevant provisions of the other
Articles of this Agreement to the extent necessary to apply the proposed
measure.
16. If it is
requested by the CONTRACTING PARTIES to do so,* the contracting party concerned
shall consult with them as to the purpose of the proposed measure, as to
alternative measures which may be available under this Agreement, and as to the
possible effect of the measure proposed on the commercial and economic
interests of other contracting parties. If, as a result of such consultation,
the CONTRACTING PARTIES agree that there is no measure consistent with the
other provisions of this Agreement which is practicable in order to achieve the
objective outlined in paragraph 13 of this Article, and concur* in the proposed
measure, the contracting party concerned shall be released from its obligations
under the relevant provisions of the other Articles of this Agreement to the
extent necessary to apply that measure.
17. If, within
ninety days after the date of the notification of the proposed measure under
paragraph 14 of this Article, the CONTRACTING PARTIES have not concurred in
such measure, the contracting party concerned may introduce the measure
proposed after informing the CONTRACTING PARTIES.
18. If the
proposed measure affects a product which is the subject of a concession
included in the appropriate Schedule annexed to this Agreement, the contracting
party concerned shall enter into consultations with any other contracting party
with which the concession was initially negotiated, and with any other
contracting party determined by the CONTRACTING PARTIES to have a substantial
interest therein. The CONTRACTING PARTIES shall concur* in the measure if they
agree that there is no measure consistent with the other provisions of this
Agreement which is practicable in order to achieve the objective set forth in
paragraph 13 of this Article, and if they are satisfied:
(a) that
agreement has been reached with such other contracting parties as a result of
the consultations referred to above, or
(b) if no such
agreement has been reached within sixty days after the notification provided
for in paragraph 14 has been received by the CONTRACTING PARTIES, that the
contracting party having recourse to this Section has made all reasonable
efforts to reach an agreement and that the interests of other contracting
parties are adequately safeguarded.*
The contracting
party having recourse to this Section shall thereupon be released from its
obligations under the relevant provisions of the other Articles of this
Agreement to the extent necessary to permit it to apply the measure.
19. If a proposed
measure of the type described in paragraph 13 of this Article concerns an
industry the establishment of which has in the initial period been facilitated
by incidental protection afforded by restrictions imposed by the contracting
party concerned for balance of payments purposes under the relevant provisions
of this Agreement, that contracting party may resort to the provisions and
procedures of this Section; provided that it shall not apply the
proposed measure without the concurrence* of the CONTRACTING PARTIES.*
20. Nothing in
the preceding paragraphs of this Section shall authorize any deviation from the
provisions of Articles I, II and XIII of this Agreement. The provisos to
paragraph 10 of this Article shall also be applicable to any restriction under
this Section.
21. At any time
while a measure is being applied under paragraph 17 of this Article any
contracting party substantially affected by it may suspend the application to
the trade of the contracting party having recourse to this Section of such
substantially equivalent concessions or other obligations under this Agreement
the suspension of which the CONTRACTING PARTIES do not disapprove;* provided
that sixty days' notice of such suspension is given to the CONTRACTING PARTIES
not later than six months after the measure has been introduced or changed
substantially to the detriment of the contracting party affected. Any such
contracting party shall afford adequate opportunity for consultation in
accordance with the provisions of Article XXII of this Agreement.
Section D
22. A contracting
party coming within the scope of sub-paragraph 4 (b) of this Article desiring,
in the interest of the development of its economy, to introduce a measure of
the type described in paragraph 13 of this Article in respect of the
establishment of a particular industry* may apply to the CONTRACTING PARTIES
for approval of such measure. The CONTRACTING PARTIES shall promptly consult
with such contracting party and shall, in making their decision, be guided by
the considerations set out in paragraph 16. If the CONTRACTING PARTIES concur*
in the proposed measure the contracting party concerned shall be released from
its obligations under the relevant provisions of the other Articles of this
Agreement to the extent necessary to permit it to apply the measure. If the
proposed measure affects a product which is the subject of a concession
included in the appropriate Schedule annexed to this Agreement, the provisions
of paragraph 18 shall apply.*
23. Any measure
applied under this Section shall comply with the provisions of paragraph 20 of
this Article.
Article XIX
Emergency
Action on Imports of Particular Products
1. (a) If, as a
result of unforeseen developments and of the effect of the obligations incurred
by a contracting party under this Agreement, including tariff concessions, any
product is being imported into the territory of that contracting party in such
increased quantities and under such conditions as to cause or threaten serious
injury to domestic producers in that territory of like or directly competitive
products, the contracting party shall be free, in respect of such product, and
to the extent and for such time as may be necessary to prevent or remedy such
injury, to suspend the obligation in whole or in part or to withdraw or modify
the concession.
(b) If any
product, which is the subject of a concession with respect to a preference, is
being imported into the territory of a contracting party in the circumstances
set forth in sub-paragraph (a) of this paragraph, so as to cause or threaten
serious injury to domestic producers of like or directly competitive products
in the territory of a contracting party which receives or received such
preference, the importing contracting party shall be free, if that other
contracting party so requests, to suspend the relevant obligation in whole or
in part or to withdraw or modify the concession in respect of the product, to
the extent and for such time as may be necessary to prevent or remedy such
injury.
2. Before any
contracting party shall take action pursuant to the provisions of paragraph 1
of this Article, it shall give notice in writing to the CONTRACTING PARTIES as far
in advance as may be practicable and shall afford the CONTRACTING PARTIES and
those contracting parties having a substantial interest as exporters of the
product concerned an opportunity to consult with it in respect of the proposed
action. When such notice is given in relation to a concession with respect to a
preference, the notice shall name the contracting party which has requested the
action. In critical circumstances, where delay would cause damage which it
would be difficult to repair, action under paragraph 1 of this Article may be
taken provisionally without prior consultation, on the condition that
consultation shall be effected immediately after taking such action.
3. (a) If
agreement among the interested contracting parties with respect to the action
is not reached, the contracting party which proposes to take or continue the
action shall, nevertheless, be free to do so, and if such action is taken or
continued, the affected contracting parties shall then be free, not later than
ninety days after such action is taken, to suspend, upon the expiration of
thirty days from the day on which written notice of such suspension is received
by the CONTRACTING PARTIES, the application to the trade of the contracting
party taking such action, or, in the case envisaged in paragraph 1 (b) of this
Article, to the trade of the contracting party requesting such action, of such
substantially equivalent concessions or other obligations under this Agreement
the suspension of which the CONTRACTING PARTIES do not disapprove.
(b)
Notwithstanding the provisions of sub-paragraph (a) of this paragraph, where
action is taken under paragraph 2 of this Article without prior consultation
and causes or threatens serious injury in the territory of a contracting party
to the domestic producers of products affected by the action, that contracting
party shall, where delay would cause damage difficult to repair, be free to
suspend, upon the taking of the action and throughout the period of
consultation, such concessions or other obligations as may be necessary to
prevent or remedy the injury.
Article XX
General
Exceptions
Subject to the
requirement that such measures are not applied in a manner which would
constitute a means of arbitrary or unjustifiable discrimination between countries
where the same conditions prevail, or a disguised restriction on international
trade, nothing in this Agreement shall be construed to prevent the adoption or
enforcement by any contracting party of measures:
(a) necessary to
protect public morals;
(b) necessary to
protect human, animal or plant life or health;
(c) relating to
the importations or exportations of gold or silver;
(d) necessary to
secure compliance with laws or regulations which are not inconsistent with the
provisions of this Agreement, including those relating to customs enforcement,
the enforcement of monopolies operated under paragraph 4 of Article II and
Article XVII, the protection of patents, trade marks and copyrights, and the
prevention of deceptive practices;
(e) relating to
the products of prison labour;
(f) imposed for
the protection of national treasures of artistic, historic or archaeological
value;
(g) relating to
the conservation of exhaustible natural resources if such measures are made
effective in conjunction with restrictions on domestic production or
consumption;
(h) undertaken in
pursuance of obligations under any intergovernmental commodity agreement which
conforms to criteria submitted to the CONTRACTING PARTIES and not disapproved
by them or which is itself so submitted and not so disapproved;*
(i) involving
restrictions on exports of domestic materials necessary to ensure essential
quantities of such materials to a domestic processing industry during periods
when the domestic price of such materials is held below the world price as part
of a governmental stabilization plan; provided that such restrictions
shall not operate to increase the exports of or the protection afforded to such
domestic industry, and shall not depart from the provisions of this Agreement
relating to non-discrimination;
(j) essential to
the acquisition or distribution of products in general or local short supply; provided
that any such measures shall be consistent with the principle that all
contracting parties are entitled to an equitable share of the international
supply of such products, and that any such measures, which are inconsistent
with the other provisions of the Agreement shall be discontinued as soon as the
conditions giving rise to them have ceased to exist. The CONTRACTING PARTIES
shall review the need for this sub-paragraph not later than 30 June 1960.
Article XXI
Security
Exceptions
Nothing in this
Agreement shall be construed
(a) to require
any contracting party to furnish any information the disclosure of which it considers
contrary to its essential security interests; or
(b) to prevent
any contracting party from taking any action which it considers necessary for
the protection of its essential security interests
(i) relating to
fissionable materials or the materials from which they are derived;
(ii) relating to
the traffic in arms, ammunition and implements of war and to such traffic in
other goods and materials as is carried on directly or indirectly for the
purpose of supplying a military establishment;
(iii) taken in
time of war or other emergency in international relations; or
(c) to prevent
any contracting party from taking any action in pursuance of its obligations
under the United Nations Charter for the maintenance of international peace and
security.
Article XXII
Consultation
1. Each
contracting party shall accord sympathetic consideration to, and shall afford
adequate opportunity for consultation regarding, such representations as may be
made by another contracting party with respect to any matter affecting the
operation of this Agreement.
2. The
CONTRACTING PARTIES may, at the request of a contracting party, consult with
any contracting party or parties in respect of any matter for which it has not
been possible to find a satisfactory solution through consultation under
paragraph 1.
Article XXIII
Nullification
or Impairment
1. If any
contracting party should consider that any benefit accruing to it directly or
indirectly under this Agreement is being nullified or impaired or that the
attainment of any objective of the Agreement is being impeded as the result of
(a) the failure
of another contracting party to carry out its obligations under this Agreement,
or
(b) the
application by another contracting party of any measure, whether or not it
conflicts with the provisions of this Agreement, or
(c) the existence
of any other situation
the contracting
party may, with a view to the satisfactory adjustment of the matter, make
written representations or proposals to the other contracting party or parties
which it considers to be concerned. Any contracting party thus approached shall
give sympathetic consideration to the representations or proposals made to it.
2. If no
satisfactory adjustment is effected between the contracting parties concerned
within a reasonable time, or if the difficulty is of the type described in
paragraph 1 (c) of this Article, the matter may be referred to the CONTRACTING
PARTIES. The CONTRACTING PARTIES shall promptly investigate any matter so
referred to them and shall make appropriate recommendations to the contracting
parties which they consider to be concerned, or give a ruling on the matter, as
appropriate. The CONTRACTING PARTIES may consult with contracting parties, with
the Economic and Social Council of the United Nations and with any appropriate
inter-governmental organization in cases where they consider such consultation
necessary. If the CONTRACTING PARTIES consider that the circumstances are
serious enough to justify such action, they may authorize a contracting party
or parties to suspend the application to any other contracting party or parties
of such concessions or other obligations under this Agreement as they determine
to be appropriate in the circumstances. If the application to any contracting
party of any concession or other obligation is in fact suspended, that
contracting party shall then be free, not later than sixty days after such
action is taken, to give written notice to the Executive Secretary) By the
Decision of 23 March 1965, the CONTRACTING PARTIES changed the title of the
head of the GATT secretariat from "Executive Secretary" to
"Director-General".
to the
Contracting Parties of its intention to withdraw from this Agreement and such
withdrawal shall take effect upon the sixtieth day following the day on which
such notice is received by him.
PART III
Article XXIV
Territorial
Application n Frontier Traffic n Customs Unions and Free-trade Areas
1. The provisions
of this Agreement shall apply to the metropolitan customs territories of the
contracting parties and to any other customs territories in respect of which
this Agreement has been accepted under Article XXVI or is being applied under
Article XXXIII or pursuant to the Protocol of Provisional Application. Each
such customs territory shall, exclusively for the purposes of the territorial
application of this Agreement, be treated as though it were a contracting
party; provided that the provisions of this paragraph shall not be
construed to create any rights or obligations as between two or more customs
territories in respect of which this Agreement has been accepted under Article
XXVI or is being applied under Article XXXIII or pursuant to the Protocol of
Provisional Application by a single contracting party.
2. For the
purposes of this Agreement a customs territory shall be understood to mean any
territory with respect to which separate tariffs or other regulations of
commerce are maintained for a substantial part of the trade of such territory
with other territories.
3. The provisions
of this Agreement shall not be construed to prevent:
(a) Advantages
accorded by any contracting party to adjacent countries in order to facilitate
frontier traffic;
(b) Advantages
accorded to the trade with the Free Territory of Trieste by countries
contiguous to that territory, provided that such advantages are not in conflict
with the Treaties of Peace arising out of the Second World War.
4. The
contracting parties recognize the desirability of increasing freedom of trade
by the development, through voluntary agreements, of closer integration between
the economies of the countries parties to such agreements. They also recognize
that the purpose of a customs union or of a free-trade area should be to
facilitate trade between the constituent territories and not to raise barriers
to the trade of other contracting parties with such territories.
5. Accordingly,
the provisions of this Agreement shall not prevent, as between the territories
of contracting parties, the formation of a customs union or of a free-trade
area or the adoption of an interim agreement necessary for the formation of a
customs union or of a free-trade area; provided that:
(a) with respect
to a customs union, or an interim agreement leading to a formation of a customs
union, the duties and other regulations of commerce imposed at the institution
of any such union or interim agreement in respect of trade with contracting
parties not parties to such union or agreement shall not on the whole be higher
or more restrictive than the general incidence of the duties and regulations of
commerce applicable in the constituent territories prior to the formation of
such union or the adoption of such interim agreement, as the case may be;
(b) with respect
to a free-trade area, or an interim agreement leading to the formation of a
free-trade area, the duties and other regulations of commerce maintained in
each if the constituent territories and applicable at the formation of such
free-trade area or the adoption of such interim agreement to the trade of
contracting parties not included in such area or not parties to such agreement
shall not be higher or more restrictive than the corresponding duties and other
regulations of commerce existing in the same constituent territories prior to
the formation of the free-trade area, or interim agreement as the case may be;
and
(c) any interim
agreement referred to in sub-paragraphs (a) and (b) shall include a plan and
schedule for the formation of such a customs union or of such a free-trade area
within a reasonable length of time.
6. If, in
fulfilling the requirements of sub-paragraph 5 (a), a contracting party
proposes to increase any rate of duty inconsistently with the provisions of
Article II, the procedure set forth in Article XXVIII shall apply. In providing
for compensatory adjustment, due account shall be taken of the compensation
already afforded by the reduction brought about in the corresponding duty of
the other constituents of the union.
7. (a) Any
contracting party deciding to enter into a customs union or free-trade area, or
an interim agreement leading to the formation of such a union or area, shall
promptly notify the CONTRACTING PARTIES and shall make available to them such
information regarding the proposed union or area as will enable them to make
such reports and recommendations to contracting parties as they may deem
appropriate.
(b) If, after
having studied the plan and schedule included in an interim agreement referred
to in paragraph 5 in consultation with the parties to that agreement and taking
due account of the information made available in accordance with the provisions
of sub-paragraph (a), the CONTRACTING PARTIES find that such agreement is not
likely to result in the formation of a customs union or of a free-trade area
within the period contemplated by the parties to the agreement or that such
period is not a reasonable one, the CONTRACTING PARTIES shall make
recommendations to the parties to the agreement. The parties shall not maintain
or put into force, as the case may be, such agreement if they are not prepared
to modify it in accordance with these recommendations.
(c) Any
substantial change in the plan or schedule referred to in paragraph 5 (c) shall
be communicated to the CONTRACTING PARTIES, which may request the contracting
parties concerned to consult with them if the change seems likely to jeopardize
or delay unduly the formation of the customs union or of the free-trade area.
8. For the
purposes of this Agreement:
(a) A customs
union shall be understood to mean the substitution of a single customs
territory for two or more customs territories, so that
(i) duties and
other restrictive regulations of commerce (except, where necessary, those
permitted under Articles XI, XII, XIII, XIV, XV and XX) are eliminated with
respect to substantially all the trade between the constituent territories of
the union or at least with respect to substantially all the trade in products
originating in such territories, and,
(ii) subject to
the provisions of paragraph 9, substantially the same duties and other regulations
of commerce are applied by each of the members of the union to the trade of
territories not included in the union;
(b) A free-trade
area shall be understood to mean a group of two or more customs territories in
which the duties and other restrictive regulations of commerce (except, where
necessary, those permitted under Articles XI, XII, XIII, XIV, XV and XX) are
eliminated on substantially all the trade between the constituent territories
in products originating in such territories.
9. The preferences
referred to in paragraph 2 of Article I shall not be affected by the formation
of a customs union or of a free-trade area but may be eliminated or adjusted by
means of negotiations with contracting parties affected.* This procedure of
negotiations with affected contracting parties shall, in particular, apply to
the elimination of preferences required to conform with the provisions of
paragraph 8 (a)(i) and paragraph 8 (b).
10. The
CONTRACTING PARTIES may by a two-thirds majority approve proposals which do not
fully comply with the requirements of paragraphs 5 to 9 inclusive, provided
that such proposals lead to the formation of a customs union or a free-trade
area in the sense of this Article.
11. Taking into
account the exceptional circumstances arising out of the establishment of India
and Pakistan as independent States and recognizing the fact that they have long
constituted an economic unit, the contracting parties agree that the provisions
of this Agreement shall not prevent the two countries from entering into
special arrangements with respect to the trade between them, pending the
establishment of their mutual trade relations on a definitive basis.*
12. Each
contracting party shall take such reasonable measures as may be available to it
to ensure observance of the provisions of this Agreement by the regional and
local governments and authorities within its territories.
Article XXV
Joint
Action by the Contracting Parties
1.
Representatives of the contracting parties shall meet from time to time for the
purpose of giving effect to those provisions of this Agreement which involve
joint action and, generally, with a view to facilitating the operation and
furthering the objectives of this Agreement. Wherever reference is made in this
Agreement to the contracting parties acting jointly they are designated as the
CONTRACTING PARTIES.
2. The
Secretary-General of the United Nations is requested to convene the first
meeting of the CONTRACTING PARTIES, which shall take place not later than March
1, 1948.
3. Each
contracting party shall be entitled to have one vote at all meetings of the
CONTRACTING PARTIES.
4. Except as
otherwise provided for in this Agreement, decisions of the CONTRACTING PARTIES
shall be taken by a majority of the votes cast.
5. In exceptional
circumstances not elsewhere provided for in this Agreement, the CONTRACTING
PARTIES may waive an obligation imposed upon a contracting party by this
Agreement; provided that any such decision shall be approved by a
two-thirds majority of the votes cast and that such majority shall comprise
more than half of the contracting parties. The CONTRACTING PARTIES may also by
such a vote
(i) define
certain categories of exceptional circumstances to which other voting
requirements shall apply for the waiver of obligations, and
(ii) prescribe
such criteria as may be necessary for the application of this paragraph.) The
authentic text erroneously reads "sub-paragraph".
Article XXVI
Acceptance,
Entry into Force and Registration
1. The date of
this Agreement shall be 30 October 1947.
2. This Agreement
shall be open for acceptance by any contracting party which, on 1 March 1955,
was a contracting party or was negotiating with a view to accession to this
Agreement.
3. This
Agreement, done in a single English original and a single French original, both
texts authentic, shall be deposited with the Secretary-General of the United
Nations, who shall furnish certified copies thereof to all interested
governments.
4. Each
government accepting this Agreement shall deposit an instrument of acceptance
with the Executive Secretary to the Contracting Parties, who will inform all
interested governments of the date of deposit of each instrument of acceptance
and of the day on which this Agreement enters into force under paragraph 6 of
this Article.
5. (a) Each
government accepting this Agreement does so in respect of its metropolitan
territory and of the other territories for which it has international
responsibility, except such separate customs territories as it shall notify to
the Executive Secretary) By the Decision of 23 March 1965, the CONTRACTING
PARTIES changed the title of the head of the GATT secretariat from
"Executive Secretary" to "Director-General".
to the
CONTRACTING PARTIES at the time of its own acceptance.
(b) Any
government, which has so notified the Executive Secretary5) under the
exceptions in sub-paragraph (a) of this paragraph, may at any time give notice
to the Executive Secretary5) that its acceptance shall be effective in respect
of any separate customs territory or territories so excepted and such notice
shall take effect on the thirtieth day following the day on which it is
received by the Executive Secretary5)
(c) If any of the
customs territories, in respect of which a contracting party has accepted this
Agreement, possesses or acquires full autonomy in the conduct of its external
commercial relations and of the other matters provided for in this Agreement,
such territory shall, upon sponsorship through a declaration by the responsible
contracting party establishing the above-mentioned fact, be deemed to be a
contracting party.
6. This Agreement
shall enter into force, as among the governments which have accepted it, on the
thirtieth day following the day on which instruments of acceptance have been
deposited with Executive Secretary) By the Decision of 23 March 1965, the
CONTRACTING PARTIES changed the title of the head of the GATT secretariat from
"Executive Secretary" to "Director-General".
to the
Contracting Parties on behalf of governments named in Annex H, the territories
of which account for 85 per centum of the total external trade of the
territories of such governments, computed in accordance with the applicable
column of percentages set forth therein, The instrument of acceptance of each
other government shall take effect on the thirtieth day following the day on
which such instrument has been deposited.
7. The United
Nations is authorized to effect registration of this Agreement as soon as
Article XXVII
Withholding
or Withdrawal of Concessions
Any contracting
party shall at any time be free to withhold or to withdraw in whole or in part
any concession, provided for in the appropriate Schedule annexed to this
Agreement, in respect of which such contracting party determines that it was initially
negotiated with a government which has not become, or has ceased to be, a
contracting party. A contracting party taking such action shall notify the
CONTRACTING PARTIES and, upon request, consult with contracting parties which
have a substantial interest in the product concerned.
Article
XXVIII*
Modification
of Schedules
1. On the first
day of each three-year period, the first period beginning on 1 January 1958 (or
on the first day of any other period* that may be specified by the CONTRACTING
PARTIES by two-thirds of the votes cast) a contracting party (hereafter in this
Article referred to as the "applicant contracting party") may, by
negotiation and agreement with any contracting party with which such concession
was initially negotiated and with any other contracting party determined by the
CONTRACTING PARTIES to have a principal supplying interest* (which two
preceding categories of contracting parties, together with the applicant
contracting party, are in this Article hereinafter referred to as the
"contracting parties primarily concerned"), and subject to
consultation with any other contracting party determined by the CONTRACTING
PARTIES to have a substantial interest* in such concession, modify or withdraw
a concession* included in the appropriate schedule annexed to this Agreement.
2. In such
negotiations and agreement, which may include provision for compensatory
adjustment with respect to other products, the contracting parties concerned
shall endeavour to maintain a general level of reciprocal and mutually
advantageous concessions not less favourable to trade than that provided for in
this Agreement prior to such negotiations.
3. (a) If
agreement between the contracting parties primarily concerned cannot be reached
before 1 January 1958 or before the expiration of a period envisaged in
paragraph 1 of this Article, the contracting party which proposes to modify or
withdraw the concession shall, nevertheless, be free to do so and if such
action is taken any contracting party with which such concession was initially
negotiated, any contracting party determined under paragraph 1 to have a
principal supplying interest and any contracting party determined under
paragraph 1 to have a substantial interest shall then be free not later than
six months after such action is taken, to withdraw, upon the expiration of
thirty days from the day on which written notice of such withdrawal is received
by the CONTRACTING PARTIES, substantially equivalent concessions initially
negotiated with the applicant contracting party.
(b) If agreement
between the contracting parties primarily concerned is reached but any other
contracting party determined under paragraph 1 of this Article to have a
substantial interest is not satisfied, such other contracting party shall be
free, not later than six months after action under such agreement is taken, to
withdraw, upon the expiration of thirty days from the day on which written
notice of such withdrawal is received by the CONTRACTING PARTIES, substantially
equivalent concessions initially negotiated with the applicant contracting
party.
4. The
CONTRACTING PARTIES may, at any time, in special circumstances, authorize* a
contracting party to enter into negotiations for modification or withdrawal of
a concession included in the appropriate Schedule annexed to this Agreement
subject to the following procedures and conditions:
(a) Such
negotiations* and any related consultations shall be conducted in accordance
with the provisions of paragraph 1 and 2 of this Article.
(b) If agreement
between the contracting parties primarily concerned is reached in the
negotiations, the provisions of paragraph 3 (b) of this Article shall apply.
(c) If agreement
between the contracting parties primarily concerned is not reached within a
period of sixty days* after negotiations have been authorized, or within such
longer period as the CONTRACTING PARTIES may have prescribed, the applicant
contracting party may refer the matter to the CONTRACTING PARTIES.
(d) Upon such
reference, the CONTRACTING PARTIES shall promptly examine the matter and submit
their views to the contracting parties primarily concerned with the aim of
achieving a settlement. If a settlement is reached, the provisions of paragraph
3 (b) shall apply as if agreement between the contracting parties primarily
concerned had been reached. If no settlement is reached between the contracting
parties primarily concerned, the applicant contracting party shall be free to
modify or withdraw the concession, unless the CONTRACTING PARTIES determine
that the applicant contracting party has unreasonably failed to offer adequate
compensation.* If such action is taken, any contracting party with which the
concession was initially negotiated, any contracting party determined under
paragraph 4 (a) to have a principal supplying interest and any contracting
party determined under paragraph 4 (a) to have a substantial interest, shall be
free, not later than six months after such action is taken, to modify or
withdraw, upon the expiration of thirty days from the day on which written
notice of such withdrawal is received by the CONTRACTING PARTIES, substantially
equivalent concessions initially negotiated with applicant contracting party.
5. Before 1
January 1958 and before the end of any period envisaged in paragraph 1 a
contracting party may elect by notifying the CONTRACTING PARTIES to reserve the
right, for the duration of the next period, to modify the appropriate Schedule
in accordance with the procedures of paragraph 1 to 3. If a contracting party
so elects, other contracting parties shall have the right, during the same
period, to modify or withdraw, in accordance with the same procedures,
concessions initially negotiated with that contracting party.
Article
XXVIII bis
Tariff
Negotiations
1. The contracting
parties recognize that customs duties often constitute serious obstacles to
trade; thus negotiations on a reciprocal and mutually advantageous basis,
directed to the substantial reduction of the general level of tariffs and other
charges on imports and exports and in particular to the reduction of such high
tariffs as discourage the importation even of minimum quantities, and conducted
with due regard to the objectives of this Agreement and the varying needs of
individual contracting parties, are of great importance to the expansion of
international trade. The CONTRACTING PARTIES may therefore sponsor such
negotiations from time to time.
2. (a)
Negotiations under this Article may be carried out on a selective
product-by-product basis or by the application of such multilateral procedures
as may be accepted by the contracting parties concerned. Such negotiations may
be directed towards the reduction of duties, the binding of duties at then
existing levels or undertakings that individual duties or the average duties on
specified categories of products shall not exceed specified levels. The binding
against increase of low duties or of duty-free treatment shall, in principle,
be recognized as a concession equivalent in value to the reduction of high
duties.
(b) The
contracting parties recognize that in general the success of multilateral
negotiations would depend on the participation of all contracting parties which
conduct a substantial proportion of their external trade with one another.
3. Negotiations shall
be conducted on a basis which affords adequate opportunity to take into
account:
(a) the needs of
individual contracting parties and individual industries;
(b) the needs of
less-developed countries for a more flexible use of tariff protection to assist
their economic development and the special needs of these countries to maintain
tariffs for revenue purposes; and
(c) all other
relevant circumstances, including the fiscal,* developmental, strategic and
other needs of the contracting parties concerned.
Article XXIX
The
Relation of this Agreement to the Havana Charter
1. The
contracting parties undertake to observe to the fullest extent of their
executive authority the general principles of Chapters I to VI inclusive and of
Chapter IX of the Havana Charter pending their acceptance of it in accordance
with their constitutional procedures.*
2. Part II of
this Agreement shall be suspended on the day on which the Havana Charter enters
into force.
3. If by
September 30, 1949, the Havana Charter has not entered into force, the
contracting parties shall meet before December 31, 1949, to agree whether this
Agreement shall be amended, supplemented or maintained.
4. If at any time
the Havana Charter should cease to be in force, the CONTRACTING PARTIES shall meet
as soon as practicable thereafter to agree whether this Agreement shall be
supplemented, amended or maintained. Pending such agreement, Part II of this
Agreement shall again enter into force; provided that the provisions of
Part II other than Article XXIII shall be replaced, mutatis mutandis, in
the form in which they then appeared in the Havana Charter; and provided
further that no contracting party shall be bound by any provisions which did
not bind it at the time when the Havana Charter ceased to be in force.
5. If any
contracting party has not accepted the Havana Charter by the date upon which it
enters into force, the CONTRACTING PARTIES shall confer to agree whether, and
if so in what way, this Agreement in so far as it affects relations between such
contracting party and other contracting parties, shall be supplemented or
amended. Pending such agreement the provisions of Part II of this Agreement
shall, notwithstanding the provisions of paragraph 2 of this Article, continue
to apply as between such contracting party and other contracting parties.
6. Contracting
parties which are Members of the International Trade Organization shall not
invoke the provisions of this Agreement so as to prevent the operation of any
provision of the Havana Charter. The application of the principle underlying
this paragraph to any contracting party which is not a Member of the
International Trade Organization shall be the subject of an agreement pursuant
to paragraph 5 of this Article.
Article XXX
Amendments
1. Except where
provision for modification is made elsewhere in this Agreement, amendments to
the provisions of Part I of this Agreement or the provisions of Article XXIX or
of this Article shall become effective upon acceptance by all the contracting
parties, and other amendments to this Agreement shall become effective, in
respect of those contracting parties which accept them, upon acceptance by
two-thirds of the contracting parties and thereafter for each other contracting
party upon acceptance by it.
2. Any contracting
party accepting an amendment to this Agreement shall deposit an instrument of
acceptance with the Secretary-General of the United Nations within such period
as the CONTRACTING PARTIES may specify. The CONTRACTING PARTIES may decide that
any amendment made effective under this Article is of such a nature that any
contracting party which has not accepted it within a period specified by the
CONTRACTING PARTIES shall be free to withdraw from this Agreement, or to remain
a contracting party with the consent of the CONTRACTING PARTIES.
Article XXXI
Withdrawal
Without prejudice
to the provisions of paragraph 12 of Article XVIII, of Article XXIII or of
paragraph 2 of Article XXX, any contracting party may withdraw from this
Agreement, or may separately withdraw on behalf of any of the separate customs
territories for which it has international responsibility and which at the time
possesses full autonomy in the conduct of its external commercial relations and
of the other matters provided for in this Agreement. The withdrawal shall take
effect upon the expiration of six months from the day on which written notice
of withdrawal is received by the Secretary-General of the United Nations.
Article XXXII
Contracting
Parties
1. The
contracting parties to this Agreement shall be understood to mean those
governments which are applying the provisions of this Agreement under Articles
XXVI or XXXIII or pursuant to the Protocol of Provisional Application.
2. At any time
after the entry into force of this Agreement pursuant to paragraph 6 of Article
XXVI, those contracting parties which have accepted this Agreement pursuant to
paragraph 4 of Article XXVI may decide that any contracting party which has not
so accepted it shall cease to be a contracting party.
Article XXXIII
Accession
A government not
party to this Agreement, or a government acting on behalf of a separate customs
territory possessing full autonomy in the conduct of its external commercial
relations and of the other matters provided for in this Agreement, may accede
to this Agreement, on its own behalf or on behalf of that territory, on terms
to be agreed between such government and the CONTRACTING PARTIES. Decisions of
the CONTRACTING PARTIES under this paragraph shall be taken by a two-thirds
majority.
Article XXXIV
Annexes
The annexes to
this Agreement are hereby made an integral part of this Agreement.
Article XXXV
Non-application
of the Agreement between Particular Contracting Parties
1. This
Agreement, or alternatively Article II of this Agreement, shall not apply as
between any contracting party and any other contracting party if:
(a) the two
contracting parties have not entered into tariff negotiations with each other,
and
(b) either of the
contracting parties, at the time either becomes a contracting party, does not
consent to such application.
2. The
CONTRACTING PARTIES may review the operation of this Article in particular
cases at the request of any contracting party and make appropriate
recommendations.
PART IV*
TRADE
AND DEVELOPMENT
Article
XXXVI
Principles
and Objectives
1.* The
contracting parties,
(a) recalling
that the basic objectives of this Agreement include the raising of standards of
living and the progressive development of the economies of all contracting
parties, and considering that the attainment of these objectives is
particularly urgent for less-developed contracting parties;
(b) considering
that export earnings of the less-developed contracting parties can play a vital
part in their economic development and that the extent of this contribution
depends on the prices paid by the less-developed contracting parties for
essential imports, the volume of their exports, and the prices received for
these exports;
(c) noting, that
there is a wide gap between standards of living in less-developed countries and
in other countries;
(d) recognizing
that individual and joint action is essential to further the development of the
economies of less-developed contracting parties and to bring about a rapid
advance in the standards of living in these countries;
(e) recognizing
that international trade as a means of achieving economic and social
advancement should be governed by such rules and procedures n and measures in
conformity with such rules and procedures n as are consistent with the
objectives set forth in this Article;
(f) noting that
the CONTRACTING PARTIES may enable less-developed contracting parties to use
special measures to promote their trade and development;
agree as follows.
2. There is need
for a rapid and sustained expansion of the export earnings of the
less-developed contracting parties.
3. There is need
for positive efforts designed to ensure that less-developed contracting parties
secure a share in the growth in international trade commensurate with the needs
of their economic development.
4. Given the
continued dependence of many less-developed contracting parties on the
exportation of a limited range of primary products,* there is need to provide
in the largest possible measure more favourable and acceptable conditions of
access to world markets for these products, and wherever appropriate to devise
measures designed to stabilize and improve conditions of world markets in these
products, including in particular measures designed to attain stable, equitable
and remunerative prices, thus permitting an expansion of world trade and demand
and a dynamic and steady growth of the real export earnings of these countries
so as to provide them with expanding resources for their economic development.
5. The rapid
expansion of the economies of the less-developed contracting parties will be
facilitated by a diversification* of the structure of their economies and the
avoidance of an excessive dependence on the export of primary products. There
is, therefore, need for increased access in the largest possible measure to
markets under favourable conditions for processed and manufactured products
currently or potentially of particular export interest to less-developed
contracting parties.
6. Because of the
chronic deficiency in the export proceeds and other foreign exchange earnings
of less-developed contracting parties, there are important inter-relationships
between trade and financial assistance to development. There is, therefore,
need for close and continuing collaboration between the CONTRACTING PARTIES and
the international lending agencies so that they can contribute most effectively
to alleviating the burdens these less-developed contracting parties assume in
the interest of their economic development.
7. There is need
for appropriate collaboration between the CONTRACTING PARTIES, other
intergovernmental bodies and the organs and agencies of the United Nations
system, whose activities relate to the trade and economic development of
less-developed countries.
8. The developed
contracting parties do not expect reciprocity for commitments made by them in
trade negotiations to reduce or remove tariffs and other barriers to the trade
of less-developed contracting parties.*
9. The adoption
of measures to give effect to these principles and objectives shall be a matter
of conscious and purposeful effort on the part of the contracting parties both
individually and jointly.
Article XXXVII
Commitments
1. The developed
contracting parties shall to the fullest extent possible n that is, except when
compelling reasons, which may include legal reasons, make it impossible n give
effect to the following provisions:
(a) accord high
priority to the reduction and elimination of barriers to products currently or
potentially of particular export interest to less-developed contracting
parties, including customs duties and other restrictions which differentiate
unreasonably between such products in their primary and in their processed
forms;*
(b) refrain from
introducing, or increasing the incidence of, customs duties or non-tariff
import barriers on products currently or potentially of particular export
interest to less-developed contracting parties; and
(c) (i) refrain
from imposing new fiscal measures, and
(ii) in any
adjustments of fiscal policy accord high priority to the reduction and
elimination of fiscal measures,
which would
hamper, or which hamper, significantly the growth of consumption of primary
products, in raw or processed form, wholly or mainly produced in the
territories of less-developed contracting parties, and which are applied
specifically to those products.
2. (a) Whenever
it is considered that effect is not being given to any of the provisions of
sub-paragraph (a), (b) or (c) of paragraph 1, the matter shall be reported to
the CONTRACTING PARTIES either by the contracting party not so giving effect to
the relevant provisions or by any other interested contracting party.
(b) (i) The
CONTRACTING PARTIES shall, if requested so to do by any interested contracting
party, and without prejudice to any bilateral consultations that may be
undertaken, consult with the contracting party concerned and all interested
contracting parties with respect to the matter with a view to reaching
solutions satisfactory to all contracting parties concerned in order to further
the objectives set forth in Article XXXVI. In the course of these
consultations, the reasons given in cases where effect was not being given to
the provisions of sub-paragraph (a), (b) or (c) of paragraph 1 shall be examined.
(ii) As the
implementation of the provisions of sub-paragraph (a), (b) or (c) of paragraph
1 by individual contracting parties may in some cases be more readily achieved
where action is taken jointly with other developed contracting parties, such
consultation might, where appropriate, be directed towards this end.
(iii) The
consultations by the CONTRACTING PARTIES might also, in appropriate cases, be
directed towards agreement on joint action designed to further the objectives
of this Agreement as envisaged in paragraph 1 of Article XXV.
3. The developed
contracting parties shall:
(a) make every
effort, in cases where a government directly or indirectly determines the
resale price of products wholly or mainly produced in the territories of
less-developed contracting parties, to maintain trade margins at equitable
levels;
(b) give active
consideration to the adoption of other measures* designed to provide greater
scope for the development of imports from less-developed contracting parties
and collaborate in appropriate international action to this end;
(c) have special
regard to the trade interests of less-developed contracting parties when
considering the application of other measures permitted under this Agreement to
meet particular problems and explore all possibilities of constructive remedies
before applying such measures where they would affect essential interests of
those contracting parties.
4. Less-developed
contracting parties agree to take appropriate action in implementation of the
provisions of Part IV for the benefit of the trade of other less-developed
contracting parties, in so far as such action is consistent with their
individual present and future development, financial and trade needs taking
into account past trade developments as well as the trade interests of
less-developed contracting parties as a whole.
5. In the
implementation of the commitments set forth in paragraph 1 to 4 each
contracting party shall afford to any other interested contracting party or
contracting parties full and prompt opportunity for consultations under the
normal procedures of this Agreement with respect to any matter or difficulty
which may arise.
Article
XXXVIII
Joint
Action
1. The
contracting parties shall collaborate jointly, with the framework of this
Agreement and elsewhere, as appropriate, to further the objectives set forth in
Article XXXVI.
2. In particular,
the CONTRACTING PARTIES shall:
(a) where
appropriate, take action, including action through international arrangements,
to provide improved and acceptable conditions of access to world markets for
primary products of particular interest to less-developed contracting parties
and to devise measures designed to stabilize and improve conditions of world
markets in these products including measures designed to attain stable,
equitable and remunerative prices for exports of such products;
(b) seek
appropriate collaboration in matters of trade and development policy with the
United Nations and its organs and agencies, including any institutions that may
be created on the basis of recommendations by the United Nations Conference on
Trade and Development;
(c) collaborate
in analysing the development plans and policies of individual less-developed
contracting parties and in examining trade and aid relationships with a view to
devising concrete measures to promote the development of export potential and
to facilitate access to export markets for the products of the industries thus
developed and, in this connection, seek appropriate collaboration with governments
and international organizations, and in particular with organizations having
competence in relation to financial assistance for economic development, in
systematic studies of trade and aid relationships in individual less-developed
contracting parties aimed at obtaining a clear analysis of export potential,
market prospects and any further action that may be required;
(d) keep under
continuous review the development of world trade with special reference to the
rate of growth of the trade of less-developed contracting parties and make such
recommendations to contracting parties as may, in the circumstances, be deemed
appropriate;
(e) collaborate
in seeking feasible methods to expand trade for the purpose of economic
development, through international harmonization and adjustment of national
policies and regulations, through technical and commercial standards affecting
production, transportation and marketing, and through export promotion by the
establishment of facilities for the increased flow of trade information and the
development of market research; and
(f) establish
such institutional arrangements as may be necessary to further the objectives
set forth in Article XXXVI and to give effect to the provision of this Part.
ANNEX A
List
of Territories referred to in Paragraph 2 (a) of Article I
United Kingdom of
Great Britain and Northern Ireland
Dependent
territories of the United Kingdom of Great Britain and Northern Ireland
Canada
Commonwealth of
Australia
Dependent
territories of the Commonwealth of Australia
New Zealand
Dependent
territories of New Zealand
Union of South
Africa including South West Africa
Ireland
India (as on
April 10, 1947)
Newfoundland
Southern Rhodesia
Burma
Ceylon
Certain of the
territories listed above have two or more preferential rates in force for
certain products. Any such territory may, by agreement with the other
contracting parties which are principal suppliers of such products at the
most-favoured-nation rate, substitute for such preferential rates a single preferential
rate which shall not on the whole be less favourable to suppliers at the
most-favoured-nation rate than the preferences in force prior to such
substitution.
The imposition of
an equivalent margin of tariff preference to replace a margin of preference in
an internal tax existing on April 10, 1947 exclusively between two or more of
the territories listed in this Annex or to replace the preferential
quantitative arrangements described in the following paragraph, shall not be
deemed to constitute an increase in a margin of tariff preference.
The preferential
arrangements referred to in paragraph 5 (b) of Article XIV are those existing
in the United Kingdom on 10 April 1947, under contractual agreements with the
Governments of Canada, Australia and New Zealand, in respect of chilled and
frozen beef and veal, frozen mutton and lamb, chilled and frozen pork and
bacon. It is the intention, without prejudice to any action taken under
sub-paragraph (h)) The authentic text erroneously reads "part I (h)".
of Article XX,
that these arrangements shall be eliminated or replaced by tariff preferences,
and that negotiations to this end shall take place as soon as practicable among
the countries substantially concerned or involved.
The film hire tax
in force in New Zealand on 10 April 1947, shall, for the purposes of this
Agreement, be treated as a customs duty under Article I. The renters' film
quota in force in New Zealand on April 10, 1947, shall, for the purposes of
this Agreement, be treated as a screen quota under Article IV.
The Dominions of
India and Pakistan have not been mentioned separately in the above list since
they had not come into existence as such on the base date of April 10, 1947.
ANNEX B
List
of Territories of the French Union referred to in Paragraph 2 (b) of Article I
France
French Equatorial
Africa (Treaty Basin of the Congo) For imports into Metropolitan France and
Territories of the French Union
and other
territories)
French West
Africa
Cameroons under
French Trusteeship8)
French Somali
Coast and Dependencies
French
Establishments in Oceania
French
Establishments in the Condominium of the New Hebrides8)
Indo-China
Madagascar and
Dependencies
Morocco (French
zone)8)
New Caledonia and
Dependencies
Saint-Pierre and
Miquelon
Togo under French
Trusteeship8)
Tunisia
ANNEX C
List
of Territories referred to in Paragraph 2 (b) of Article I as respects the
Customs Union of Belgium, Luxemburg and the Netherlands
The Economic
Union of Belgium and Luxemburg
Belgian Congo
Ruanda Urundi
Netherlands
New Guinea
Surinam
Netherlands
Antilles
Republic of
Indonesia
For imports into
the territories constituting the Customs Union only.
ANNEX D
List
of Territories referred to in Paragraph 2 (b) of Article I as respects the
United States of America
United States of
America (customs territory)
Dependent
territories of the United States of America
Republic of the
Philippines
The imposition of
an equivalent margin of tariff preference to replace a margin of preference in
an internal tax existing on 10 April, 1947, exclusively between two or more of
the territories listed in this Annex shall not be deemed to constitute an
increase in a margin of tariff preference.
ANNEX E
List
of Territories covered by Preferential Arrangements between Chile and
Neighbouring Countries referred to in Paragraph 2 (d) of Article I
Preferences in
force exclusively between Chile on the one hand, and
1. Argentina
2. Bolivia
3. Peru
on the other
hand.
ANNEX F
List
of Territories covered by Preferential Arrangements between Lebanon and Syria
and Neighbouring Countries referred to in Paragraph 2 (d) of Article I
Preferences in
force exclusively between the Lebano-Syrian Customs Union, on the one hand, and
1. Palestine
2. Transjordan
on the other
hand.
ANNEX G
Dates
establishing Maximum Margins of Preference referred to in Paragraph 4) The authentic text
erroneously reads "Paragraph 3".
of Article I
Australia
........................................................ October 15, 1946
Canada
........................................................... July 1, 1939
France
............................................................ January 1, 1939
Lebano-Syrian
Customs Union ..................... November 30, 1938
Union of South
Africa ................................... July 1, 1938
Southern Rhodesia
......................................... May 1, 1941
ANNEX H
Percentage
Shares of Total External Trade to be used for the Purpose of Making the
Determination referred to in Article XXVI (based on the average of 1949-1953)
If, prior to the
accession of the Government of Japan to the General Agreement, the present
Agreement has been accepted by contracting parties the external trade of which
under Column I accounts for the percentage of such trade specified in paragraph
6 of Article XXVI, column I shall be applicable for the purposes of that
paragraph. If the present Agreement has not been so accepted prior to the
accession of the Government of Japan, column II shall be applicable for the
purposes of that paragraph.
Column I Column
II
(Contracting
parties (Contracting parties on
on
1 March 1955) 1 March 1955 and Japan)
Australia |
3.1 - |
|
3.0 |
|
|
100.0 |
100.0 |
Note : These
percentages have been computed taking into account the trade of all territories
in respect of which the General Agreement on Tariffs and Trade is applied
ANNEX I
Notes
and Supplementary Provisions
Ad Article I
Paragraph 1
The obligations
incorporated in paragraph 1 of Article I by reference to paragraphs 2 and 4 of
Article III and those incorporated in paragraph 2 (b) of Article II by
reference to Article VI shall be considered as falling within Part II for the
purposes of the Protocol of Provisional Application.
The
cross-references, in the paragraph immediately above and in paragraph 1 of
Article I, to paragraphs 2 and 4 of Article III shall only apply after Article
III has been modified by the entry into force of the amendment provided for in
the Protocol Modifying Part II and Article XXVI of the General Agreement on
Tariffs and Trade, dated September 14, l948.) This Protocol entered into force
on 14 December 1948.
Paragraph 4
The term
"margin of preference" means the absolute difference between the
most-favoured-nation rate of duty and the preferential rate of duty for the
like product, and not the proportionate relation between those rates. As
examples:
(1) If the
most-favoured-nation rate were 36 per cent ad valorem and the
preferential rate were 24 per cent ad valorem, the margin of preference
would be 12 per cent ad valorem, and not one-third of the
most-favoured-nation rate;
(2) If the
most-favoured-nation rate were 36 per cent ad valorem and the
preferential rate were expressed as two-thirds of the most-favoured-nation
rate, the margin of preference would be 12 per cent ad valorem;
(3) If the
most-favoured-nation rate were 2 francs per kilogramme and the preferential
rate were 1.50 francs per kilogramme, the margin of preference would be 0.50
franc per kilogramme.
The following
kinds of customs action, taken in accordance with established uniform
procedures, would not be contrary to a general binding of margins of
preference:
(i) The
re-application to an imported product of a tariff classification or rate of
duty, properly applicable to such product, in cases in which the application of
such classification or rate to such product was temporarily suspended or
inoperative on April 10, 1947; and
(ii) The
classification of a particular product under a tariff item other than that
under which importations of that product were classified on April 10, 1947, in
cases in which the tariff law clearly contemplates that such product may be
classified under more than one tariff item.
Ad Article II
Paragraph 2 (a)
The
cross-reference, in paragraph 2 (a) of Article II, to paragraph 2 of Article
III shall only apply after Article III has been modified by the entry into
force of the amendment provided for in the Protocol Modifying Part II and
Article XXVI of the General Agreement on Tariffs and Trade, dated September 14,
1948.) This Protocol entered into force on 14 December 1948.
Paragraph 2 (b)
See the note
relating to paragraph 1 of Article I.
Paragraph 4
Except where
otherwise specifically agreed between the contracting parties which initially
negotiated the concession, the provisions of this paragraph will be applied in
the light of the provisions of Article 31 of the Havana Charter.
Ad Article III
Any internal tax
or other internal charge, or any law, regulation or requirement of the kind
referred to in paragraph 1 which applies to an imported product and to the like
domestic product and is collected or enforced in the case of the imported
product at the time or point of importation, is nevertheless to be regarded as
an internal tax or other internal charge, or a law, regulation or requirement
of the kind referred to in paragraph 1, and is accordingly subject to the
provisions of Article III.
Paragraph 1
The application
of paragraph 1 to internal taxes imposed by local governments and authorities
with the territory of a contracting party is subject to the provisions of the
final paragraph of Article XXIV. The term "reasonable measures" in
the last-mentioned paragraph would not require, for example, the repeal of
existing national legislation authorizing local governments to impose internal
taxes which, although technically inconsistent with the letter of Article III,
are not in fact inconsistent with its spirit, if such repeal would result in a
serious financial hardship for the local governments or authorities concerned.
With regard to taxation by local governments or authorities which is
inconsistent with both the letter and spirit of Article III, the term
"reasonable measures" would permit a contracting party to eliminate
the inconsistent taxation gradually over a transition period, if abrupt action
would create serious administrative and financial difficulties.
Paragraph 2
A tax conforming
to the requirements of the first sentence of paragraph 2 would be considered to
be inconsistent with the provisions of the second sentence only in cases where
competition was involved between, on the one hand, the taxed product and, on
the other hand, a directly competitive or substitutable product which was not
similarly taxed.
Paragraph 5
Regulations
consistent with the provisions of the first sentence of paragraph 5 shall not
be considered to be contrary to the provisions of the second sentence in any
case in which all of the products subject to the regulations are produced
domestically in substantial quantities. A regulation cannot be justified as
being consistent with the provisions of the second sentence on the ground that
the proportion or amount allocated to each of the products which are the
subject of the regulation constitutes an equitable relationship between
imported and domestic products.
Ad Article V
Paragraph 5
With regard to
transportation charges, the principle laid down in paragraph 5 refers to like
products being transported on the same route under like conditions.
Ad Article VI
Paragraph 1
1. Hidden dumping
by associated houses (that is, the sale by an importer at a price below that
corresponding to the price invoiced by an exporter with whom the importer is
associated, and also below the price in the exporting country) constitutes a
form of price dumping with respect to which the margin of dumping may be
calculated on the basis of the price at which the goods are resold by the
importer.
2. It is
recognized that, in the case of imports from a country which has a complete or
substantially complete monopoly of its trade and where all domestic prices are
fixed by the State, special difficulties may exist in determining price
comparability for the purposes of paragraph 1, and in such cases importing
contracting parties may find it necessary to take into account the possibility
that a strict comparison with domestic prices in such a country may not always
be appropriate.
Paragraphs 2 and 3
1. As in many
other cases in customs administration, a contracting party may require
reasonable security (bond or cash deposit) for the payment of anti-dumping or
countervailing duty pending final determination of the facts in any case of
suspected dumping or subsidization.
2. Multiple
currency practices can in certain circumstances constitute a subsidy to exports
which may be met by countervailing duties under paragraph 3 or can constitute a
form of dumping by means of a partial depreciation of a country's currency
which may be met by action under paragraph 2. By "multiple currency
practices" is meant practices by governments or sanctioned by governments.
Paragraph 6 (b)
Waivers under the
provisions of this sub-paragraph shall be granted only on application by the
contracting party proposing to levy an anti-dumping or countervailing duty, as
the case may be.
Ad Article VII
Paragraph 1
The expression
"or other charges" is not to be regarded as including internal taxes
or equivalent charges imposed on or ⅰ
n connection with
imported products.
Paragraph 2
1. It would be in
conformity with Article VII to presume that "actual value" may be
represented by the invoice price, plus any non-included charges for legitimate
costs which are proper elements of "actual value" and plus any
abnormal discount or other reduction from the ordinary competitive price.
2. It would be in
conformity with Article VII, paragraph 2 (b), for a contracting party to
construe the phrase "in the ordinary course of trade ... under fully
competitive conditions", as excluding any transaction wherein the buyer
and seller are not independent of each other and price is not the sole
consideration.
3. The standard
of "fully competitive conditions" permits a contracting party to
exclude from consideration prices involving special discounts limited to
exclusive agents.
4. The wording of
sub-paragraphs (a) and (b) permits a contracting party to determine the value
for customs purposes uniformly either (1) on the basis of a particular
exporter's prices of the imported merchandise, or (2) on the basis of the
general price level of like merchandise.
Ad Article VIII
1. While Article
VIII does not cover the use of multiple rates of exchange as such, paragraphs 1
and 4 condemn the use of exchange taxes or fees as a device for implementing
multiple currency practices; if, however, a contracting party is using multiple
currency exchange fees for balance of payments reasons with the approval of the
International Monetary Fund, the provisions of paragraph 9 (a) of Article XV
fully safeguard its position.
2. It would be
consistent with paragraph 1 if, on the importation of products from the
territory of a contracting party into the territory of another contracting
party, the production of certificates of origin should only be required to the
extent that is strictly indispensable.
Ad Articles XI, XII, XIII, XIV and XVIII
Throughout
Articles XI, XII, XIII, XIV and XVIII, the terms "import
restrictions" or "export restrictions" include restrictions made
effective through state-trading operations.
Ad Article XI
Paragraph 2 (c)
The term "in
any form" in this paragraph covers the same products when in an early
stage of processing and still perishable, which compete directly with the fresh
product and if freely imported would tend to make the restriction on the fresh
product ineffective.
Paragraph 2, last sub-paragraph
The term
"special factors" includes changes in relative productive efficiency
as between domestic and foreign producers, or as between different foreign
producers, but not changes artificially brought about by means not permitted
under the Agreement.
Ad Article XII
The CONTRACTING
PARTIES shall make provision for the utmost secrecy in the conduct of any
consultation under the provisions of this Article.
Paragraph 3 (c)(i)
Contracting
parties applying restrictions shall endeavour to avoid causing serious
prejudice to exports of a commodity on which the economy of a contracting party
is largely dependent.
Paragraph 4 (b)
It is agreed that
the date shall be within ninety days after the entry into force of the amendments
of this Article effected by the Protocol Amending the Preamble and Parts II and
III of this Agreement. However, should the CONTRACTING PARTIES find that
conditions were not suitable for the application of the provisions of this
sub-paragraph at the time envisaged, they may determine a later date; provided
that such date is not more than thirty days after such time as the obligations
of Article VIII, Sections 2, 3 and 4, of the Articles of Agreement of the
International Monetary Fund become applicable to contracting parties, members
of the Fund, the combined foreign trade of which constitutes at least fifty per
centum of the aggregate foreign trade of all contracting parties.
Paragraph 4 (e)
It is agreed that
paragraph 4 (e) does not add any new criteria for the imposition or maintenance
of quantitative restrictions for balance of payments reasons. It is solely
intended to ensure that all external factors such as changes in the terms of
trade, quantitative restrictions, excessive tariffs and subsidies, which may be
contributing to the balance of payments difficulties of the contracting party
applying restrictions, will be fully taken into account.
Ad Article XIII
Paragraph 2 (d)
No mention was
made of "commercial considerations" as a rule for the allocation of
quotas because it was considered that its application by governmental
authorities might not always be practicable. Moreover, in cases where it is
practicable, a contracting party could apply these considerations in the
process of seeking agreement, consistently with the general rule laid down in
the opening sentence of paragraph 2.
Paragraph 4
See note relating
to "special factors" in connection with the last sub-paragraph of
paragraph 2 of Article XI.
Ad Article XIV
Paragraph 1
The provisions of
this paragraph shall not be so construed as to preclude full consideration by
the CONTRACTING PARTIES, in the consultations provided for in paragraph 4 of
Article XII and in paragraph 12 of Article XVIII, of the nature, effects and
reasons for discrimination in the field of import restrictions.
Paragraph 2
One of the
situations contemplated in paragraph 2 is that of a contracting party holding
balances acquired as a result of current transactions which it finds itself
unable to use without a measure of discrimination.
Ad Article XV
Paragraph 4
The word
"frustrate" is intended to indicate, for example, that infringements
of the letter of any Article of this Agreement by exchange action shall not be
regarded as a violation of that Article if, in practice, there is no
appreciable departure from the intent of the Article. Thus, a contracting party
which, as part of its exchange control operated in accordance with the Articles
of Agreement of the International Monetary Fund, requires payment to be
received for its exports in its own currency or in the currency of one or more
members of the International Monetary Fund will not thereby be deemed to
contravene Article XI or Article XIII. Another example would be that of a
contracting party which specifies on an import licence the country from which
the goods may be imported, for the purpose not of introducing any additional
element of discrimination in its import licensing system but of enforcing
permissible exchange controls.
Ad Article XVI
The exemption of
an exported product from duties or taxes borne by the like product when
destined for domestic consumption, or the remission of such duties or taxes in
amounts not in excess of those which have accrued, shall not be deemed to be a
subsidy.
Section B
1. Nothing in
Section B shall preclude the use by a contracting party of multiple rates of
exchange in accordance with the Articles of Agreement of the International
Monetary Fund.
2. For the
purposes of Section B, a "primary product" is understood to be any
product of farm, forest or fishery, or any mineral, in its natural form or
which has undergone such processing as is customarily required to prepare it
for marketing in substantial volume in international trade.
Paragraph 3
1. The fact that
a contracting party has not exported the product in question during the
previous representative period would not in itself preclude that contracting
party from establishing its right to obtain a share of the trade in the product
concerned.
2. A system for
the stabilization of the domestic price or of the return to domestic producers
of a primary product independently of the movements of export prices, which
results at times in the sale of the product for export at a price lower than
the comparable price charged for the like product to buyers in the domestic
market, shall be considered not to involve a subsidy on exports within the
meaning of paragraph 3 if the CONTRACTING PARTIES determine that:
(a) the system
has also resulted, or is so designed as to result, in the sale of the product
for export at a price higher than the comparable price charged for the like
product to buyers in the domestic market; and
(b) the system is
so operated, or is designed so to operate, either because of the effective
regulation of production or otherwise, as not to stimulate exports unduly or
otherwise seriously to prejudice the interests of other contracting parties.
Notwithstanding
such determination by the CONTRACTING PARTIES, operations under such a system
shall be subject to the provisions of paragraph 3 where they are wholly or
partly financed out of government funds in addition to the funds collected from
producers in respect of the product concerned.
Paragraph 4
The intention of
paragraph 4 is that the contracting parties should seek before the end of 1957
to reach agreement to abolish all remaining subsidies as from 1 January 1958;
or, failing this, to reach agreement to extend the application of the
standstill until the earliest date thereafter by which they can expect to reach
such agreement.
Ad Article XVII
Paragraph 1
The operations of
Marketing Boards, which are established by contracting parties and are engaged
in purchasing or selling, are subject to the provisions of sub-paragraphs (a)
and (b).
The activities of
Marketing Boards which are established by contracting parties and which do not
purchase or sell but lay down regulations covering private trade are governed
by the relevant Articles of this Agreement.
The charging by a
state enterprise of different prices for its sales of a product in different
markets is not precluded by the provisions of this Article, provided that such
different prices are charged for commercial reasons, to meet conditions of
supply and demand in export markets.
Paragraph 1 (a)
Governmental
measures imposed to insure standards of quality and efficiency in the operation
of external trade, or privileges granted for the exploitation of national
natural resources but which do not empower the government to exercise control
over the trading activities of the enterprise in question, do not constitute
"exclusive or special privileges".
Paragraph 1 (b)
A country
receiving a "tied loan" is free to take this loan into account as a
"commercial consideration" when purchasing requirements abroad.
Paragraph 2
The term
"goods" is limited to products as understood in commercial practice,
and is not intended to include the purchase or sale of services.
Paragraph 3
Negotiations
which contracting parties agree to conduct under this paragraph may be directed
towards the reduction of duties and other charges on imports and exports or
towards the conclusion of any other mutually satisfactory arrangement
consistent with the provisions of this Agreement. (See paragraph 4 of Article
II and the note to that paragraph.)
Paragraph 4 (b)
The term
"import mark-up" in this paragraph shall represent the margin by
which the price charged by the import monopoly for the imported product
(exclusive of internal taxes within the purview of Article III, transportation,
distribution, and other expenses incident to the purchase, sale or further
processing, and a reasonable margin of profit) exceeds the landed cost.
Ad Article XVIII
The CONTRACTING
PARTIES and the contracting parties concerned shall preserve the utmost secrecy
in respect of matters arising under this Article.
Paragraphs 1 and 4
1. When they
consider whether the economy of a contracting party "can only support low
standards of living", the CONTRACTING PARTIES shall take into
consideration the normal position of that economy and shall not base their
determination on exceptional circumstances such as those which may result from
the temporary existence of exceptionally favourable conditions for the staple
export product or products of such contracting party.
2. The phrase
"in the early stages of development" is not meant to apply only to
contracting parties which have just started their economic development, but
also to contracting parties the economies of which are undergoing a process of
industrialization to correct an excessive dependence on primary production.
Paragraphs 2, 3, 7, 13 and 22
The reference to
the establishment of particular industries shall apply not only to the
establishment of a new industry, but also to the establishment of a new branch
of production in an existing industry and to the substantial transformation of
an existing industry, and to the substantial expansion of an existing industry
supplying a relatively small proportion of the domestic demand. It shall also
cover the reconstruction of an industry destroyed or substantially damaged as a
result of hostilities or natural disasters.
Paragraph 7 (b)
A modification or
withdrawal, pursuant to paragraph 7 (b), by a contracting party, other than the
applicant contracting party, referred to in paragraph 7 (a), shall be made
within six months of the day on which the action is taken by the applicant
contracting party, and shall become effective on the thirtieth day following
the day on which such modification or withdrawal has been notified to the
CONTRACTING PARTIES.
Paragraph 11
The second
sentence in paragraph 11 shall not be interpreted to mean that a contracting
party is required to relax or remove restrictions if such relaxation or removal
would thereupon produce conditions justifying the intensification or
institution, respectively, of restrictions under paragraph 9 of Article XVIII.
Paragraph 12 (b)
The date referred
to in paragraph 12 (b) shall be the date determined by the CONTRACTING PARTIES
in accordance with the provisions of paragraph 4 (b) of Article XII of this
Agreement.
Paragraphs 13 and 14
It is recognized
that, before deciding on the introduction of a measure and notifying the
CONTRACTING PARTIES in accordance with paragraph 14, a contracting party may
need a reasonable period of time to assess the competitive position of the
industry concerned.
Paragraphs 15 and 16
It is understood
that the CONTRACTING PARTIES shall invite a contracting party proposing to
apply a measure under Section C to consult with them pursuant to paragraph 16
if they are requested to do so by a contracting party the trade of which would
be appreciably affected by the measure in question.
Paragraphs 16, 18, 19 and 22
1. It is
understood that the CONTRACTING PARTIES may concur in a proposed measure
subject to specific conditions or limitations. If the measure as applied does
not conform to the terms of the concurrence it will to that extent be deemed a
measure in which the CONTRACTING PARTIES have not concurred. In cases in which
the CONTRACTING PARTIES have concurred in a measure for a specified period, the
contracting party concerned, if it finds that the maintenance of the measure
for a further period of time is required to achieve the objective for which the
measure was originally taken, may apply to the CONTRACTING PARTIES for an
extension of that period in accordance with the provisions and procedures of
Section C or D, as the case may be.
2. It is expected
that the CONTRACTING PARTIES will, as a rule, refrain from concurring in a
measure which is likely to cause serious prejudice to exports of a commodity on
which the economy of a contracting party is largely dependent.
Paragraph 18 and 22
The phrase
"that the interests of other contracting parties are adequately
safeguarded" is meant to provide latitude sufficient to permit
consideration in each case of the most appropriate method of safeguarding those
interests. The appropriate method may, for instance, take the form of an
additional concession to be applied by the contracting party having recourse to
Section C or D during such time as the deviation from the other Articles of the
Agreement would remain in force or of the temporary suspension by any other
contracting party referred to in paragraph 18 of a concession substantially
equivalent to the impairment due to the introduction of the measure in
question. Such contracting party would have the right to safeguard its
interests through such a temporary suspension of a concession; Provided that
this right will not be exercised when, in the case of a measure imposed by a
contracting party coming within the scope of paragraph 4 (a), the CONTRACTING
PARTIES have determined that the extent of the compensatory concession proposed
was adequate.
Paragraph 19
The provisions of
paragraph 19 are intended to cover the cases where an industry has been in
existence beyond the "reasonable period of time" referred to in the
note to paragraphs 13 and 14, and should not be so construed as to deprive a
contracting party coming within the scope of paragraph 4 (a) of Article XVIII,
of its right to resort to the other provisions of Section C, including
paragraph 17, with regard to a newly established industry even though it has
benefited from incidental protection afforded by balance of payments import
restrictions.
Paragraph 21
Any measure taken
pursuant to the provisions of paragraph 21 shall be withdrawn forthwith if the
action taken in accordance with paragraph 17 is withdrawn or if the CONTRACTING
PARTIES concur in the measure proposed after the expiration of the ninety-day
time limit specified in paragraph 17.
Ad Article XX
Sub-paragraph (h)
The exception
provided for in this sub-paragraph extends to any commodity agreement which
conforms to the principles approved by the Economic and Social Council in its
resolution 30 (IV) of 28 March l947.
Ad Article XXIV
Paragraph 9
It is understood
that the provisions of Article I would require that, when a product which has
been imported into the territory of a member of a customs union or free-trade
area at a preferential rate of duty is re-exported to the territory of another
member of such union or area, the latter member should collect a duty equal to
the difference between the duty already paid and any higher duty that would be
payable if the product were being imported directly into its territory.
Paragraph 11
Measures adopted
by India and Pakistan in order to carry out definitive trade arrangements
between them, once they have been agreed upon, might depart from particular
provisions of this Agreement, but these measures would in general be consistent
with the objectives of the Agreement.
Ad Article XXVIII
The CONTRACTING
PARTIES and each contracting party concerned should arrange to conduct the
negotiations and consultations with the greatest possible secrecy in order to
avoid premature disclosure of details of prospective tariff changes. The
CONTRACTING PARTIES shall be informed immediately of all changes in national
tariffs resulting from recourse to this Article.
Paragraph 1
1. If the
CONTRACTING PARTIES specify a period other than a three-year period, a
contracting party may act pursuant to paragraph 1 or paragraph 3 of Article
XXVIII on the first day following the expiration of such other period and,
unless the CONTRACTING PARTIES have again specified another period, subsequent periods
will be three-year periods following the expiration of such specified period.
2. The provision
that on 1 January 1958, and on other days determined pursuant to paragraph 1, a
contracting party "may ... modify or withdraw a concession" means
that on such day, and on the first day after the end of each period, the legal
obligation of such contracting party under Article II is altered; it does not
mean that the changes in its customs tariff should necessarily be made
effective on that day. If a tariff change resulting from negotiations
undertaken pursuant to this Article is delayed, the entry into force of any
compensatory concessions may be similarly delayed.
3. Not earlier
than six months, nor later than three months, prior to 1 January 1958, or to the
termination date of any subsequent period, a contracting party wishing to
modify or withdraw any concession embodied in the appropriate Schedule, should
notify the CONTRACTING PARTIES to this effect. The CONTRACTING PARTIES shall
then determine the contracting party or contracting parties with which the
negotiations or consultations referred to in paragraph 1 shall take place. Any
contracting party so determined shall participate in such negotiations or
consultations with the applicant contracting party with the aim of reaching
agreement before the end of the period. Any extension of the assured life of
the Schedules shall relate to the Schedules as modified after such
negotiations, in accordance with paragraphs 1, 2, and 3 of Article XXVIII. If
the CONTRACTING PARTIES are arranging for multilateral tariff negotiations to
take place within the period of six months before 1 January 1958, or before any
other day determined pursuant to paragraph 1, they shall include in the
arrangements for such negotiations suitable procedures for carrying out the
negotiations referred to in this paragraph.
4. The object of
providing for the participation in the negotiation of any contracting party
with a principle supplying interest, in addition to any contracting party with
which the concession was originally negotiated, is to ensure that a contracting
party with a larger share in the trade affected by the concession than a
contracting party with which the concession was originally negotiated shall
have an effective opportunity to protect the contractual right which it enjoys
under this Agreement. On the other hand, it is not intended that the scope of
the negotiations should be such as to make negotiations and agreement under
Article XXVIII unduly difficult nor to create complications in the application
of this Article in the future to concessions which result from negotiations
thereunder. Accordingly, the CONTRACTING PARTIES should only determine that a
contracting party has a principal supplying interest if that contracting party
has had, over a reasonable period of time prior to the negotiations, a larger
share in the market of the applicant contracting party than a contracting party
with which the concession was initially negotiated or would, in the judgement
of the CONTRACTING PARTIES, have had such a share in the absence of
discriminatory quantitative restrictions maintained by the applicant
contracting party. It would therefore not be appropriate for the CONTRACTING
PARTIES to determine that more than one contracting party, or in those
exceptional cases where there is near equality more than two contracting
parties, had a principal supplying interest.
5.
Notwithstanding the definition of a principal supplying interest in note 4 to
paragraph 1, the CONTRACTING PARTIES may exceptionally determine that a
contracting party has a principal supplying interest if the concession in
question affects trade which constitutes a major part of the total exports of
such contracting party.
6. It is not
intended that provision for participation in the negotiations of any
contracting party with a principal supplying interest, and for consultation
with any contracting party having a substantial interest in the concession
which the applicant contracting party is seeking to modify or withdraw, should
have the effect that it should have to pay compensation or suffer retaliation
greater than the withdrawal or modification sought, judged in the light of the
conditions of trade at the time of the proposed withdrawal or modification,
making allowance for any discriminatory quantitative restrictions maintained by
the applicant contracting party.
7. The expression
"substantial interest" is not capable of a precise definition and
accordingly may present difficulties for the CONTRACTING PARTIES. It is,
however, intended to be construed to cover only those contracting parties which
have, or in the absence of discriminatory quantitative restrictions affecting
their exports could reasonably be expected to have, a significant share in the
market of the contracting party seeking to modify or withdraw the concession.
Paragraph 4
1. Any request
for authorization to enter into negotiations shall be accompanied by all
relevant statistical and other data. A decision on such request shall be made
within thirty days of its submission.
2. It is
recognized that to permit certain contracting parties, depending in large
measure on a relatively small number of primary commodities and relying on the
tariff as an important aid for furthering diversification of their economies or
as an important source of revenue, normally to negotiate for the modification
or withdrawal of concessions only under paragraph 1 of Article XXVIII, might
cause them at such time to make modifications or withdrawals which in the long
run would prove unnecessary. To avoid such a situation the CONTRACTING PARTIES
shall authorize any such contracting party, under paragraph 4, to enter into
negotiations unless they consider this would result in, or contribute
substantially towards, such an increase in tariff levels as to threaten the
stability of the Schedules to this Agreement or lead to undue disturbance of
international trade.
3. It is expected
that negotiations authorized under paragraph 4 for modification or withdrawal
of a single item, or a very small group of items, could normally be brought to
a conclusion in sixty days. It is recognized, however, that such a period will
be inadequate for cases involving negotiations for the modification or
withdrawal of a larger number of items and in such cases, therefore, it would
be appropriate for the CONTRACTING PARTIES to prescribe a longer period.
4. The
determination referred to in paragraph 4 (d) shall be made by the CONTRACTING
PARTIES within thirty days of the submission of the matter to them unless the
applicant contracting party agrees to a longer period.
5. In determining
under paragraph 4 (d) whether an applicant contracting party has unreasonably
failed to offer adequate compensation, it is understood that the CONTRACTING
PARTIES will take due account of the special position of a contracting party
which has bound a high proportion of its tariffs at very low rates of duty and
to this extent has less scope than other contracting parties to make
compensatory adjustment.
Ad Article XXVIII bis
Paragraph 3
It is understood
that the reference to fiscal needs would include the revenues aspect of duties
and particularly duties imposed primarily for revenue purpose, or duties
imposed on products which can be substituted for products subject to revenue
duties to prevent the avoidance of such duties.
Ad Article XXIX
Paragraph 1
Chapters VII and
VIII of the Havana Charter have been excluded from paragraph 1 because they
generally deal with the organization, functions and procedures of the
International Trade Organization.
Ad Part IV
The words
"developed contracting parties" and the words "less-developed
contracting parties" as used in Part IV are to be understood to refer to
developed and less-developed countries which are parties to the General
Agreement on Tariffs and Trade.
Ad Article XXXVI
Paragraph 1
This Article is
based upon the objectives set forth in Article I as it will be amended by
Section A of paragraph 1 of the Protocol Amending Part I and Articles XXIX and
XXX when that Protocol enters into force.) This Protocol was abandoned on 1
January 1968.
Paragraph 4
The term
"primary products" includes agricultural products, vide
paragraph 2 of the note ad Article XVI, Section B.
Paragraph 5
A diversification
programme would generally include the intensification of activities for the
processing of primary products and the development of manufacturing industries,
taking into account the situation of the particular contracting party and the
world outlook for production and consumption of different commodities.
Paragraph 8
It is understood
that the phrase "do not expect reciprocity" means, in accordance with
the objectives set forth in this Article, that the less-developed contracting
parties should not be expected, in the course of trade negotiations, to make
contributions which are inconsistent with their individual development,
financial and trade needs, taking into consideration past trade developments.
This paragraph
would apply in the event of action under Section A of Article XVIII, Article
XXVIII, Article XXVIII bis (Article XXIX after the amendment set forth in
Section A of paragraph 1 of the Protocol Amending Part I and Articles XXIX and
XXX shall have become effective) This Protocol was abandoned on 1 January 1968.
), Article
XXXIII, or any other procedure under this Agreement.
Ad Article XXXVII
Paragraph 1 (a)
This paragraph
would apply in the event of negotiations for reduction or elimination of
tariffs or other restrictive regulations of commerce under Articles XXVIII,
XXVIII bis (XXIX after the amendment set forth in Section A of paragraph
1 of the Protocol Amending Part I and Articles XXIX and XXX shall have become
effective13)), and Article XXXIII, as well as in connection with other action
to effect such reduction or elimination which contracting parties may be able
to undertake.
Paragraph 3 (b)
The other measures referred to in this paragraph might include steps to promote
domestic structural changes, to encourage the consumption of particular
products, or to introduce measures of trade promotion.