General Agreement on Tariffs and Trade

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, 1947, 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, 1948, 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.

Author: international

Mentioned in these Entries

General Agreement on Tariffs and Trade, Other provisions.