General Agreement on Tariffs and Trade

 

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 shalt 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 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–Frontier Traffic–Customs Unions
and Free-trade Areas

1. The provisions of this Agreement shalt 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 shalt 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
the 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 of 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 reductions
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
territory.

 

 

Author: international

Mentioned in these Entries

General Agreement on Tariffs and Trade, Treaties.