General Agreement on Tariffs and Trade 15

General Agreement on Tariffs and Trade

 

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 I 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 importation
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 the 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 a 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 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 balances of
payments of which are under pressure or by those the balances 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.

 

Conclusion

Notes

See Also

References and Further Reading

About the Author/s and Reviewer/s

Author: international

Mentioned in these Entries

General Agreement on Tariffs and Trade.


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