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XV. Article XIV back to top
A. Text of Article XIV
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.
B. Text of Ad Article XIV
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.
C. Interpretation and Application of Article XIV
No jurisprudence or decision of a competent WTO body.
D. Relationship with other Articles
1. Article XVII
453. The interpretation and application of
Ad Articles XI, XII, XIII,
XIV and XVIII, which clarifies that the terms “import restrictions”
or “export restrictions” used in these Articles include “restrictions
made effective through state-trading operations”, was discussed by the
Panels on India — Quantitative Restrictions and Korea — Various
Measures on Beef. See paragraphs 407-408
above.
2. Reference to GATT practice
454. With respect to GATT practice on
Article XIV.
XVI. Article XV
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A. Text of Article XV
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.
B. Text of Ad Article XV
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.
C. Interpretation and Application of Article XV
No jurisprudence or decision of a competent WTO body.
1. Reference to GATT practice
455. With respect to GATT practice concerning Article
XV.
XVII. Article XVI
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A. Text of Article XVI
Article XVI: Subsidies
Section A — 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 —
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.
B. Text of Ad Article XVI
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.
C. Interpretation and Application of Article XVI
1. Article XVI:4
456. In
US — FSC, the Appellate Body discussed the relationship
between Article XVI:4 of GATT 1994 and the
SCM Agreement in interpreting
Article 3.1(a) of the SCM Agreement. See Chapter on the SCM
Agreement,
Section II.B.9(a).
2. SCM Agreement
457. With respect to WTO jurisprudence and materials produced by
competent WTO bodies concerning subsidies, see Chapter on the SCM
Agreement.
3. Reference to GATT practice
458. With respect to GATT practice on Article
XVI.
XVIII. Article XVII
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A. Text of Article XVII
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 nondiscriminatory treatment prescribed in this Agreement
for governmental measures affecting imports and exports by private
traders.
(b)
The provisions of
subparagraph (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 subparagraph (a) of this
paragraph) under its
jurisdiction from acting in accordance with the principles of
subparagraphs (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 their 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.
B. Text of Ad Article XVII
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 subparagraphs (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 ensure 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.
C. Understanding on the Interpretation of Article XVII of the General
Agreement on Tariffs and Trade 1994
Members,
Noting that Article XVII provides for obligations on Members in
respect of the activities of the state trading enterprises referred to
in paragraph 1 of Article XVII, which are required to be consistent with
the general principles of non-discriminatory treatment prescribed in
GATT 1994 for governmental measures affecting imports or exports by
private traders;
Noting further that Members are subject to their GATT 1994
obligations in respect of those governmental measures affecting state
trading enterprises;
Recognizing that this Understanding is without prejudice to the
substantive disciplines prescribed in Article XVII;
Hereby agree as follows:
1. In order to ensure the transparency of the activities of state
trading enterprises, Members shall notify such enterprises to the
Council for Trade in Goods, for review by the working party to be set up
under paragraph 5, in accordance with the following working definition:
“Governmental and non-governmental enterprises, including marketing
boards, which have been granted exclusive or special rights or
privileges, including statutory or constitutional powers, in the
exercise of which they influence through their purchases or sales the
level or direction of imports or exports.”
This notification requirement does not apply to imports of products
for immediate or ultimate consumption in governmental use or in use by
an enterprise as specified above and not otherwise for resale or use in
the production of goods for sale.
2. Each Member shall conduct a review of its policy with regard to
the submission of notifications on state trading enterprises to the
Council for Trade in Goods, taking account of the provisions of this
Understanding. In carrying out such a review, each Member should have
regard to the need to ensure the maximum transparency possible in its
notifications so as to permit a clear appreciation of the manner of
operation of the enterprises notified and the effect of their operations
on international trade.
3. Notifications shall be made in accordance with the questionnaire
on state trading adopted on 24 May 1960 (BISD 9S/184-185), it being
understood that Members shall notify the enterprises referred to in
paragraph 1 whether or not imports or exports have in fact taken place.
4. Any Member which has reason to believe that another Member has not
adequately met its notification obligation may raise the matter with the
Member concerned. If the matter is not satisfactorily resolved it may
make a counter-notification to the Council for Trade in Goods, for
consideration by the working party set up under paragraph
5,
simultaneously informing the Member concerned.
5. A working party shall be set up, on behalf of the Council for
Trade in Goods(1), to review notifications and counter-notifications.
In the light of this review and without prejudice to paragraph 4(c) of
Article XVII, the Council for Trade in Goods may make recommendations
with regard to the adequacy of notifications and the need for further
information. The working party shall also review, in the light of the
notifications received, the adequacy of the above-mentioned
questionnaire on state trading and the coverage of state trading
enterprises notified under paragraph 1. It shall also develop an
illustrative list showing the kinds of relationships between governments
and enterprises, and the kinds of activities, engaged in by these
enterprises, which may be relevant for the purposes of Article
XVII. It
is understood that the Secretariat will provide a general background
paper for the working party on the operations of state trading
enterprises as they relate to international trade. Membership of the
working party shall be open to all Members indicating their wish to
serve on it. It shall meet within a year of the date of entry into force
of the WTO Agreement and thereafter at least once a year. It shall
report annually to the Council for Trade in Goods.
(footnote original)
1 The activities of this working party shall be
coordinated with those of the working group provided for in Section III
of the Ministerial Decision on Notification Procedures adopted on 15
April 1994.
D. Interpretation and Application of Article XVII
1. General
(a) Relationship between paragraphs 1(a) and 1(b) of Article XVII
459. In
Canada — Wheat Exports and Grain Imports, the Panel found
that the disputed export regime was inconsistent with the principles in
subparagraph (b) of Article XVII:1. Canada (the respondent) alleged that
the Panel had established that a violation of subparagraph (b) was
sufficient to establish a breach of Article XVII:1 and also that the
Panel had failed to consider the proper relationship between
subparagraphs (a) and (b) of Article XVII:1. The Appellate Body held
that a failure to identify discriminatory conduct prior to determining
the consistency of a state trading enterprise’s (STE) conduct with
subparagraph (b) of Article XVII:1 would constitute an error of law. The
Appellate Body held:
“[I]n this case, we have already determined that the two
subparagraphs of Article XVII:1 are closely interrelated. As we have
said, a panel faced with a claim of inconsistency with Article XVII:1(a)
and (b) will, in most if not all cases, need to analyze and apply both
provisions in order to assess the consistency of the measure at issue.
Subparagraph (b) sets forth two specific conditions with which an STE
must comply if allegedly discriminatory conduct falling, prima facie,
within the scope of subparagraph (a) is to be found consistent with
Article XVII:1. Yet, in order to know whether the conditions in (b) are
satisfied, a panel must know what constitutes the conduct alleged to be
inconsistent with the principles of non-discriminatory treatment in the
GATT 1994. A panel will need to identify at least the differential
treatment at issue. The outcome of an assessment under subparagraph (b)
of whether the differential treatment is consistent with commercial
considerations may depend, in part, upon whether the alleged
discrimination relates to pricing, quality, or conditions of sale, and
whether it is discrimination between export markets or some other form
of discrimination.
It follows that, logically, a panel cannot assess whether particular
practices of an allegedly discriminatory nature accord with commercial
considerations without first identifying the key elements of the alleged
discrimination. We emphasize that we are not suggesting that panels are
always obliged to make specific factual and legal findings with respect
to each element of a claim of discrimination under subparagraph (a)
before undertaking any analysis under subparagraph
(b). Rather, because
a panel’s analysis and application of subparagraph (b) to the facts of
the case is, like subparagraph (b) itself, dependent on the obligation
set forth in subparagraph (a), panels must identify the differential
treatment alleged to be discriminatory under subparagraph (a) in order
to ensure that they are undertaking a proper inquiry under subparagraph
(b).
For these reasons, we are of the view that a failure to identify
any
conduct alleged to constitute discrimination contrary to the general
principles of the GATT 1994 for governmental measures affecting imports
or exports by private traders before undertaking an analysis of the
consistency of an STE’s conduct with subparagraph (b) of Article
XVII:1 would constitute an error of law. Had the Panel in this case
simply ignored the issue of possible discrimination within the meaning
of Article XVII:1(a) and passed immediately to its analysis under
subparagraph (b), we would have no difficulty — based on our analysis
above of the relationship between the two provisions — concluding that
the Panel erred in its interpretative approach. Yet this does not appear
to us to be what the Panel did. We set out in the next sub-section our
understanding of how the Panel conducted its analysis in this case.”(667)
460. The Panel on
Korea — Various Measures on Beef found that
despite domestic demand for imported beef, the Korean state trading
agency for beef imports had suspended its tenders for beef of foreign
origin, and had refused to sell imported beef from its stock, during a
certain period of time. In examining the consistency of this practice of
the Korean state trading agency with Articles
III, XI and XVII, the
Panel addressed the relationship between paragraphs 1(a) and
1(b) of
Article XVII. Referring to the Panel Report on Canada — FIRA(668), the
Panel, in a finding not reviewed by the Appellate Body, held that the
violation of one of these two paragraphs would suffice to show a
violation of the other paragraph:
“In other words the terms ‘general principle of
non-discrimination treatment prescribed in this Agreement’ (Art.
XVII:1(a)) should be equated with ‘make any such purchases or sales
solely in accordance with commercial considerations’ (Art.
XVII:1(b)).
The list of variables that can be used to assess whether a state-trading
action is based on commercial consideration (prices, availability etc…)
are to be used to facilitate the assessment whether the state-trading
enterprise has acted in respect of the general principles of
non-discrimination. A conclusion that the principle of
non-discrimination was violated would suffice to prove a violation of
Article XVII; similarly, a conclusion that a decision to purchase or buy
was not based on ‘commercial considerations’, would also suffice to
show a violation of Article XVII.”(669)
461. Further, noting that the Korean state trading agency had
exclusive rights of import for its 30 per cent share of Korea’s beef
import quotas, the Panel on Korea — Various Measures on Beef, in a
statement not reviewed by the Appellate Body, stated:
“Based on the panel findings in the Canada — Marketing Agencies
(1988) case, the Panel considers that to the extent that LPMO fully
controls both the importation and distribution of its 30 per cent share
of Korean beef quota, the distinction normally made in the GATT between
restrictions affecting the importation of products (i.e. border
measures) and restrictions affecting imported products (i.e. internal
measures) loses much of its significance.”(670)
(b) Ad Note Articles XI, XII, XIII, XIV and XVIII
462. The
Note Ad Articles XI, XII, XIII, XIV and
XVIII, which
clarifies that the terms “import restrictions” or “export
restrictions” used in these Articles include “restrictions made
effective through state-trading operations”, was discussed by the
Panels on India — Quantitative Restrictions and Korea — Various
Measures on Beef. See paragraphs 407-408
above.
2. Article XVII:1(a)
463. The Panel on
Korea — Various Measures on Beef, in a finding
not reviewed by the Appellate Body, described the legal status of
Article XVII:1(a) in the GATT framework in the following terms:
“Article XVII.1(a) establishes the general obligation on state
trading enterprises to undertake their activities in accordance with the
GATT principles of non-discrimination. The Panel considers that this
general principle of nondiscrimination includes at least the provisions
of Articles I and III of
GATT.”(671)
(a) Reference to GATT practice
464. With respect to GATT practice under
Article
XVII:1.
3. Article XVII:1(b)
465. In
Korea — Various Measures on Beef, the Panel discussed the
general character of Article XVII:1(b). See
paragraph 459 above.
(a) Reference to GATT practice
466. With respect to GATT practice under
Article XVII:1.
4. Article XVII:4
(a) Notification requirements
467. At its meeting of 20 February 1995, the Council for Trade in
Goods decided that “all new and full notifications dealt with under
Article XVII of GATT 1994 and Paragraph 1 of the Understanding on the
Interpretation of Article XVII of GATT 1994, should be submitted not
later than 30 June in every third year after 1995 and that the updating
notifications due in each of the two intervening years should be
submitted not later than 30 June of the respective year.”(672) The
Council for Trade in Goods, however, clarified that the deadlines for
future notifications would be established by the Working Party itself.(673)
468. With respect to the questionnaire used for as a basis for
notifications, see paragraph 471 below.
(b) Reference to GATT practice
469. With respect to GATT practice regarding notifications of state
trading.
5. Understanding on the Interpretation of Article XVII of the General
Agreement on Tariffs and Trade 1994
(a) Paragraph 1
470. With respect to the notification requirements set forth in
paragraph 1 of the Understanding, see paragraph 467
above.
(b) Paragraph 3
471. At its meeting of 21 April 1998, the Council for Trade in Goods
approved a revised questionnaire proposed by the Working Party, which is
to be used as a basis for notifications on state trading.(674)
(c) Paragraph 5
(i) Working Party on State Trading Enterprises
472. Pursuant to
paragraph 5 of the Understanding, the Council for
Trade in Goods established a Working Party on State Trading Enterprises
at its meeting of 20 February 1995, “to carry out the tasks described
in paragraph 5 of the Understanding on the Interpretation of Article
XVII of GATT 1994”.(675)
473. With respect to the establishment of the Working Party, see also
the Chapter on the WTO Agreement, Section
V.B.6(a).
(ii) “an illustrative list”
474. At its meeting of 15 October 1999, upon a proposal of the
Working Party, the Council for Trade in Goods adopted “an illustrative
list showing the kinds of relationships between governments and
enterprises, and the kinds of activities, engaged in by these
enterprises, which may be relevant for the purposes of Article XVII”.(676)
The illustrative list states that “[t]his list in no way affects the
rights and obligations of Members under the Understanding and under
Article XVII of GATT 1994 and its Interpretive Notes.”(677)
(iii) “general background paper”
475. At its meeting of 6 April 1995, the Working Party established
guidelines on the contents and the sources to be used in the preparation
of the general background paper to be prepared by the Secretariat on the
operation of the state trading enterprises as required under Paragraph 5
of the Understanding.(678) On 26 October 1995, the Secretariat accordingly
prepared and issued a background paper entitled “Operations of State
Trading Enterprises as they Relate to International Trade.”(679)
E. Relationship with Other Articles
1. Article I
476. The Panel on
Korea — Various Measures on Beef touched on the
relationship between Articles I and
XVII. See paragraph 463 above.
Article II
477. In
Korea — Various Measures on Beef, after finding that the
practice of the Korean state trading agency for beef of according
different treatment to grass-fed beef and grain-fed beef was
inconsistent with GATT Articles II:1(a) and
XI, the Panel exercised
judicial economy with respect to claims concerning the consistency of
that practice with Articles III:4 and
XVII.(680)
(a) Reference to GATT practice
478. With respect to GATT practice on this issue.
3. Article III
479. The Panel on
Korea — Various Measures on Beef discussed the
relationship between Articles III and
XVII. See paragraph 463 above.
(a) Reference to GATT practice
480. With respect to GATT practice on this issue.
4. Article XI
481. Exercising judicial economy, the Panel on
Korea — Various
Measures on Beef did not examine claims regarding certain practices of
the Korean state trading agency for beef under Articles III:4 and
XVII,
after it had found a violation of Articles XI and
II:1(a) with respect
to that practice. See also paragraph 477 above.
482. In
Korea — Various Measures on Beef, the Panel addressed the
practice of the Korean state trading agency which controlled a 30 per
cent share of Korea’s import quotas for certain products. See
paragraph 461 above.
483. With respect to the
Note Ad Articles XI, XII, XIII, XIV and XVIII, see
paragraph 462 above.
(a) Reference to GATT practice
484. With respect to GATT practice on this issue.
5. Articles XII, XIII, XIV and XVIII
485.
With respect to the Note
Ad Articles XI, XII, XIII, XIV and
XVIII, see paragraph 462 above.
(a) Reference to GATT practice
486. With respect to GATT practice on the
Note Ad Articles XII and XVIII.
F. Relationship with other WTO Agreements
1. Agreement on Agriculture
487.
Footnote 1 to Article 4.2 of the
Agreement on Agriculture sets
forth that “any measures of the kind which have been required to be
converted into ordinary customary duties” under that Agreement,
include “quantitative import restrictions, variable import levies,
minimum import prices, discretionary import licensing, non-tariff
measures maintained through state-trading enterprises …”. In Korea
— Various Measures on Beef, the Panel found, and the Appellate Body
agreed, that Korea was in violation of Article 4.2 of the
Agreement of
Agriculture and Article XI of the
GATT in that despite the demand for
imported beef, the Korean state trading agency for beef imports
suspended its tenders for beef of foreign origin, and refused to sell
imported beef from its stock, during a certain period of time. See
Chapter on the Agreement on Agriculture, Section
V.B.3. In this context,
the Appellate Body stated:
“Since the Panel has already reached the conclusion that the above
measures are inconsistent with Article XI and the
Ad Note to Articles XI, XII, XIII, XIV and XVIII relating to state-trading enterprises, the
same measures are necessarily inconsistent with Article 4.2 of
the
Agreement on Agriculture and its footnote referring to non-tariff
measures maintained through state-trading enterprises.”(681)
XIX. Article XVIII
back to top
A. Text of Article XVIII
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 subparagraph
(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 subparagraph (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 subparagraph (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 subparagraph (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 subparagraph 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 subparagraph (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 subparagraph
(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(1) 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.
(footnote original) 1 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”.
(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
subparagraph 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.
B. Text Ad Article XVIII
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.
Paragraphs 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.
C. Understanding on the Balance-of-Payments Provisions of the General
Agreement on Tariffs and Trade 1994
Members,
Recognizing the provisions of
Articles XII and XVIII:B of GATT 1994
and of the Declaration on Trade Measures Taken for Balance-of-Payments
Purposes adopted on 28 November 1979 (BISD 26S/205-209, referred to in
this Understanding as the “1979 Declaration”) and in order to
clarify such provisions(1).
(footnote original) 1 Nothing in this Understanding is intended to
modify the rights and obligations of Members under Articles XII or
XVIII:B of GATT 1994. The provisions of Articles XXII and
XXIII of GATT
1994 as elaborated and applied by the Dispute Settlement Understanding
may be invoked with respect to any matters arising from the application
of restrictive import measures taken for balance-of-payments purposes.
Hereby agree as follows :
Application of Measures
1. Members confirm their commitment to announce publicly, as soon as
possible, time-schedules for the removal of restrictive import measures
taken for balance-of-payments purposes. It is understood that such
time-schedules may be modified as appropriate to take into account
changes in the balance-of-payments situation. Whenever a time-schedule
is not publicly announced by a Member, that Member shall provide
justification as to the reasons therefor.
2. Members confirm their commitment to give preference to those
measures which have the least disruptive effect on trade. Such measures
(referred to in this Understanding as “price-based measures”) shall
be understood to include import surcharges, import deposit requirements
or other equivalent trade measures with an impact on the price of
imported goods. It is understood that, notwithstanding the provisions of
Article II, price-based measures taken for balance-of-payments purposes
may be applied by a Member in excess of the duties inscribed in the
Schedule of that Member. Furthermore, that Member shall indicate the
amount by which the price-based measure exceeds the bound duty clearly
and separately under the notification procedures of this Understanding.
3. Members shall seek to avoid the imposition of new quantitative
restrictions for balance-of-payments purposes unless, because of a
critical balance-of-payments situation, price-based measures cannot
arrest a sharp deterioration in the external payments position. In those
cases in which a Member applies quantitative restrictions, it shall
provide justification as to the reasons why price-based measures are not
an adequate instrument to deal with the balance-of-payments situation. A
Member maintaining quantitative restrictions shall indicate in
successive consultations the progress made in significantly reducing the
incidence and restrictive effect of such measures. It is understood that
not more than one type of restrictive import measure taken for
balance-of-payments purposes may be applied on the same product.
4. Members confirm that restrictive import measures taken for
balance-of-payments purposes may only be applied to control the general
level of imports and may not exceed what is necessary to address the
balance-of-payments situation. In order to minimize any incidental
protective effects, a Member shall administer restrictions in a
transparent manner. The authorities of the importing Member shall
provide adequate justification as to the criteria used to determine
which products are subject to restriction. As provided in paragraph 3 of
Article XII and paragraph 10 of Article
XVIII, Members may, in the case
of certain essential products, exclude or limit the application of
surcharges applied across the board or other measures applied for
balance-for-payments purposes. The term “essential products” shall
be understood to mean products which meet basic consumption needs or
which contribute to the Member’s effort to improve its
balance-of-payments situation, such as capital goods or inputs needed
for production. In the administration of quantitative restrictions, a
Member shall use discretionary licensing only when unavoidable and shall
phase it out progressively. Appropriate justification shall be provided
as to the criteria used to determine allowable import quantities or
values.
Procedures for Balance-of-Payments Consultations
5. The Committee on Balance-of-Payments Restrictions (referred to in
this Understanding as the “Committee”) shall carry out consultations
in order to review all restrictive import measures taken for
balance-of-payments purposes. The membership of the Committee is open to
all Members indicating their wish to serve on it. The Committee shall
follow the procedures for consultations on balance-of-payments
restrictions approved on 28 April 1970 (BISD 18S/48-53, referred to in
this Understanding as “full consultation procedures”), subject to
the provisions set out below.
6. A Member applying new restrictions or raising the general level of
its existing restrictions by a substantial intensification of the
measures shall enter into consultations with the Committee within four
months of the adoption of such measures. The Member adopting such
measures may request that a consultation be held under paragraph 4(a) of
Article XII or paragraph 12(a) of Article XVIII as appropriate. If no
such request has been made, the Chairman of the Committee shall invite
the Member to hod such a consultation. Factors that may be examined in
the consultation would include, inter alia, the introduction of new
types of restrictive measures for balance-of-payments purposes, or an
increase in the level or product coverage of restrictions.
7. All restrictions applied for balance-of-payments purposes shall be
subject to periodic review in the Committee under paragraph 4(b) of
Article XII or under paragraph 12(b) of Article
XVIII, subject to the
possibility of altering the periodicity of consultations in agreement
with the consulting Member or pursuant to any specific review procedure
that may be recommended by the General Council.
8. Consultations may be held under the simplified procedures approved
on 19 December 1972 (BISD 20S/47-49, referred to in this
Understanding as “simplified consultation procedures”) in the case
of least-developed country Members or in the case of developing country
Members which are pursuing liberalization efforts in conformity with the
schedule presented to the Committee in previous consultations.
Simplified consultations procedures may also be used when the Trade
Policy Review of a developing country Member is scheduled for the same
calendar year as the date fixed for the consultations. In such cases the
decision as to whether full consultation procedures should be used will
be made on the basis of the factors enumerated in paragraph
8 of the 1979 Declaration. Except in the case of least-developed country Members,
no more than two successive consultations may be held under simplified
consultation procedures.
Notification and Documentation
9. A Member shall notify to the General Council the introduction of
or any changes in the application of restrictive import measures taken
for balance-of-payments purposes, as well as any modifications in
time-schedules for the removal of such measures as announced under
paragraph 1. Significant changes shall be notified to the General
Council prior to or not later than 30 days after their announcement. On
a yearly basis, each Member shall make available to the Secretariat a
consolidated notification, including all changes in laws, regulations,
policy statements or public notices, for examination by Members.
Notifications shall include full information, as far as possible, at the
tariff-line level, on the type of measures applied, the criteria used
for their administration, product coverage and trade flows affected.
10. At the request of any Member, notifications may be reviewed by
the Committee. Such reviews would be limited to the clarification of
specific issues raised by a notification or examination of whether a
consultation under paragraph 4(a) of Article XII or
paragraph 12(a) of
Article XVIII is required. Members which have reasons to believe that a
restrictive import measure applied by another Member was taken for
balance-of-payments purposes may bring the matter to the attention of
the Committee. The Chairman of the Committee shall request information
on the measure and make it available to all Members. Without prejudice
to the right of any member of the Committee to seek appropriate
clarifications in the course of consultations, questions may be
submitted in advance for consideration by the consulting Member.
11. The consulting Member shall prepare a Basic Document for the
consultations which, in addition to any other information considered to
be relevant, should include: (a) an overview of the balance-of-payments
situation and prospects, including a consideration of the internal and
external factors having a bearing on the balance-of-payments situation
and the domestic policy measures taken in order to restore equilibrium
on a sound and lasting basis; (b) a full description of the restrictions
applied for balance-of-payments purposes, their legal basis and steps
taken to reduce incidental protective effects; (c) measures taken since
the last consultation to liberalize import restrictions, in the light of
the conclusions of the Committee; (d) a plan for the elimination and
progressive relaxation of remaining restrictions. References may be
made, when relevant, to the information provided in other notifications
or reports made to the WTO. Under simplified consultation procedures,
the consulting Member shall submit a written statement containing
essential information on the elements covered by the Basic Document.
12. The Secretariat shall, with a view to facilitating the
consultations in the Committee, prepare a factual background paper
dealing with the different aspects of the plan for consultations. In the
case of developing country Members, the Secretariat document shall
include relevant background and analytical material on the incidence of
the external trading environment on the balance-of-payments situation
and prospects of the consulting Member. The technical assistance
services of the Secretariat shall, at the request of a developing
country Member, assist in preparing the documentation for the
consultations.
Conclusions of Balance-of-Payments Consultations
13. The Committee shall report on its consultations the General
Council. When full consultation procedures have been used, the report
should indicate the Committee’s conclusions on the different elements
of the plan for consultations, as well as the facts and reasons on which
they are based. The Committee shall endeavour to include in its
conclusions proposals for recommendations aimed at promoting the
implementation of Articles XII and
XVIII:B, the 1979 Declaration and
this Understanding. In those cases in which a time-schedule has been
presented for the removal of restrictive measures taken for
balance-of-payments purposes, the General Council may recommend that, in
adhering to such a time-schedule, a Member shall be deemed to be in
compliance with its GATT 1994 obligations. Whenever the General Council
has made specific recommendations, the rights and obligations of Members
shall be assessed in the light of such recommendations. In the absence
of specific proposals for recommendations by the General Council, the
Committee’s conclusions should record the different views expressed in
the Committee. When simplified consultation procedures have been used,
the report shall include a summary of the main elements discussed in the
Committee and a decision on whether full consultation procedures are
required.”
D. Interpretation and Application of Article XVIII
1. Article XVIII:B
(a) General
488. The Panel on
India — Quantitative Restrictions, in a finding
not addressed by the Appellate Body, explained the function of Article
XVIII:B within the GATT framework. The Panel distinguished the
conditions for taking balance-of-payments measures under Article XVIII
from those applicable under Article XII of
GATT and considered
paragraphs 2, 9 and 11 of Article
XVIII:
“It is clear from these provisions that Article
XVIII, which allows
developing countries to maintain, under certain conditions, temporary
import restrictions for balance-of-payments purposes, is premised on the
assumption that it ‘may be necessary’ for them to adopt such
measures in order to implement economic development programmes. It
allows them to ‘deviate temporarily from the provisions of the other
Articles’ of GATT 1994, as provided for in, inter alia, Section
B.
These provisions reflect an acknowledgement of the specific needs of
developing countries in relation to measures taken for
balance-of-payments purposes. Article XVIII:B of GATT 1994 thus embodies
the special and differential treatment foreseen for developing countries
with regard to such measures. In our analysis, we take due account of
these provisions. In particular, the conditions for taking
balance-of-payments measures under Article XVIII are clearly distinct
from the conditions applicable to developed countries under Article XII
of GATT 1994.(682)
We also find that while Article XVIII:2 foresees the possibility that
it ‘may’ be ‘necessary’ for developing countries to take
restrictions for balance-of-payments purposes, such measures might not
always be required. These restrictions must be adopted within specific
conditions ‘as provided in’ Section B of Article
XVIII. The specific
conditions to be respected for the institution and maintenance of such
measures include Article XVIII:9, which specifies the circumstances
under which such measures may be instituted and maintained, and Article
XVIII:11 which sets out the requirements for progressive relaxation and
elimination of balance-of-payments measures.”
(b) Jurisdiction of panels
489. In
India — Quantitative Restrictions, the Appellate Body
reviewed the Panel’s finding that India’s import restrictions for
balance-of-payments reasons were inconsistent with Article XI:1 and that
India was not entitled to maintain these balance-of-payments
restrictions under the terms of Note
Ad Article XVIII:11. India argued
that panels have no authority to examine Members’ justifications of
balance-of-payments restrictions, because footnote 1 to the
Understanding on the Balance-of-Payments Provision of the GATT 1994 (the
“BOP Understanding”) provides that the DSU may be invoked in respect
of matters relating to the specific use or purpose of a
balance-of-payments measure or to the manner in which a
balance-of-payments measure is applied in a particular case, but not
with respect to the question of balance-of-payment justification of
these measures. Rejecting this argument, the Appellate Body stated as
follows:
“Any doubts that may have existed in the past as to whether the
dispute settlement procedures under Article XXIII were available for
disputes relating to balance-of-payments restrictions have been removed
by the second sentence of footnote 1 to the BOP
Understanding, …
In our opinion, this provision makes it clear that the dispute
settlement procedures under Article XXIII, as elaborated and applied by
the DSU, are available for disputes relating to any matters concerning
balance-of-payments restrictions.
…
We note India’s arguments relating to the negotiating history of
the BOP Understanding. However, in the absence of a record of the
negotiations on footnote 1 to the BOP Understanding, we find it
difficult to give weight to these arguments. …
Therefore, in light of footnote 1 to the
BOP Understanding, a dispute
relating to the justification of balance-of-payments restrictions is
clearly within the scope of matters to which the dispute settlement
provisions of Article XXIII of the GATT 1994, as elaborated and applied
by the DSU, are applicable.”(683)
490. With reference to the competence of the BOP Committee and the
General Council under GATT Article XVIII and the
Understanding on the
Balance-of-Payments Provisions of the General Agreement on Tariffs and
Trade 1994, the Appellate Body considered that this competence would not
be rendered redundant if panels were permitted to review the
justification of balance-of-payments restrictions:
“Recourse to the dispute settlement procedures does not call into
question either the availability or the utility of the procedures under
Article XVIII:12 and the BOP Understanding. On the contrary, if panels
refrained from reviewing the justification of balance-of-payments
restrictions, they would diminish the explicit procedural rights of
Members under Article XXIII and
footnote 1 to the
BOP
Understanding, as
well as their substantive rights under Article XVIII:11.
We are cognisant of the competence of the BOP Committee and the
General Council with respect to balance-of-payments restrictions under
Article XVIII:12 of the GATT 1994 and the BOP Understanding. However, we
see no conflict between that competence and the competence of panels.
Moreover, we are convinced that, in considering the justification of
balance-of-payments restrictions, panels should take into account the
deliberations and conclusions of the BOP Committee, as did the panel in
Korea — Beef.
We agree with the Panel that the review by panels of the
justification of balance-of-payments restrictions would not render
redundant the competence of the BOP Committee and the General Council.
The Panel correctly pointed out that the BOP Committee and panels have
different functions, and that the BOP Committee procedures and the
dispute settlement procedures differ in nature, scope, timing and type
of outcome.”(684)
491. Further, in response to India’s argument that while panels did
not lack jurisdiction with respect to balance-of-payments restrictions,
they should nevertheless exercise judicial restraint, the Appellate Body
stated:
“India clarified its claim of legal error by stating that although
panels, in principle, have competence to review any matters relating to
balance-of-payments restrictions, they should exercise judicial
restraint with respect to these matters. …
…
[W]e note that, if the exercise of judicial restraint were to lead
in practice, as India seems to suggest, to panels refraining from
considering disputes regarding the justification of balance-of-payments
restrictions, such exercise of judicial restraint would, as discussed
above, be inconsistent with Article XXIII of the GATT
1994, as
elaborated and applied by the DSU, and footnote 1 to the
BOP Understanding.”(685)
(c) Right to maintain balance-of-payments measures
492. In
India — Quantitative Restrictions, India argued before the
Panel that it had the right to maintain balance-of-payment measures
until the BOP Committee or the General Council advised it to modify
these measures under Article XVIII:12 or established a time-period for
their removal under paragraph 13 of the BOP
Understanding. The Panel, in
a finding not specifically addressed by the Appellate Body, disagreed:
“We note at the outset that there is no explicit statement in
Article XVIII:B or the 1994 Understanding that authorizes a Member to
maintain its balance-of-payments measures in effect until the General
Council or BOP Committee acts under one of the aforementioned
provisions. Article XVIII:B, however, addresses the issue of the extent
to which balance-of-payments measures may be maintained. Article
XVIII:11, which is analyzed in more detail in Part G below, specifies
that a Member:
‘shall progressively relax any restrictions applied under this
Section [i.e., Article XVIII:B] as conditions improve, maintaining them
only to the extent necessary under the terms of paragraph 9 of this
Article [XVIII] and shall eliminate them when conditions no longer
justify their maintenance.’
The obligation of Article XVIII:11 is not conditioned on any BOP
Committee or General Council decision. If we were to interpret Article
XVIII:11 to be so conditioned, we would be adding terms to Article
XVIII:11 that it does not contain.
Moreover, the obligation in Article XVIII:11 requires action by the
individual Member. It is qualified only by a proviso and Ad Note (which
we discuss in Part G and which are not relevant here) and it is not made
subject to the accomplishment of other procedures. In light of the
unqualified nature of the Article XVIII:11 obligation, it would be
inconsistent with the principle pacta sunt servanda to conclude that a
WTO Member has a right to maintain balance-of-payments measures, even if
unjustified under Article XVIII:B, in the absence of a Committee or
General Council decision in respect thereof. Thus, we find that India
does not have a right to maintain its balance-of-payments measures until
the General Council advises it to modify them under Article XVIII:12 or
establishes a time-period for their removal under paragraph 13 of the
1994 Understanding.”(686)
493. In
India — Quantitative Restrictions, India argued that a
Member invoking a balance-of-payments justification is entitled to
maintain the measures until the General Council, following a
recommendation from the BOP Committee, requires it to modify or remove
them under Article XVIII:12(c)(i) or (ii). As referenced in
paragraph
492 above, the Panel rejected this argument. However, India further
argued that Article XVIII:12(c)(i) or (ii) confirms the existence of a
“right to a phase-out” for measures which no longer meet the
criteria set out in Article XVIII:9, by providing for a “specified
period of time” to be granted to secure compliance with the relevant
provisions when an inconsistency has been identified. In this context,
India also claimed that paragraphs 1 and 13 of the Understanding provide
an incentive for Members to present a time-schedule for removal even
when there are no current balance-of-payments difficulties within the
meaning of Article XVIII:9, thereby confirming the existence of a “right”
to a phase-out even in the absence of current balance-of-payments
difficulties within the meaning of Article
XVIII:9. The Panel rejected
India’s arguments:
“The text of paragraph 13 of the Understanding itself does not
specify whether the balance-of-payments difficulties which justified the
imposition of the measures should still be in existence when a time
schedule is presented for their elimination. However, the notion of
presentation of a time-schedule, starting when the balance-of-payments
difficulties still exist, is consistent with the temporary nature of
balance-of-payments measures and with the requirement for their gradual
elimination. Also, the time-schedules referred to in paragraphs 1 and
13
of the 1994 Understanding are the same and paragraph 1 specifies that
‘such time-schedules may be modified as appropriate to take into
account changes in the balance-of-payments situation.’ This suggests
that a time-schedule would have to be presented before the
balance-of-payments difficulties disappear, otherwise, the reference to
‘take into account changes in the balance-of-payments situation’
would become redundant.
This does not mean that the General Council has no margin of
discretion in deciding whether or not to accept or not a time-schedule
that would provide protection to the Member concerned. We have seen that
the Ad Note suggests also that measures could, under certain
circumstances, be maintained for a time when balance-of-payments
difficulties which initially justified their institution are no longer
in existence. In addition, paragraph 13 of the 1994 Understanding
provides that ‘the General Council may recommend that, in adhering to
such a time-schedule, a Member may be deemed to be in compliance with
its GATT 1994 obligations’ (emphasis added). There is no clear
evidence that this phrase has to be interpreted as covering only
situations under which a phase-out period would exactly coincide with
the gradual disappearance of balance-of-payments difficulties.
In light of the above, we conclude that the procedure for submission
and approval of a time-schedule incorporated in the 1994 Understanding,
which is specific to the Committee consultations, does not give WTO
Members a ‘right’ to a phase-out period which a panel would have to
protect in the absence of balance-of-payments difficulties in the sense
of Article XVIII:B.(687) Even assuming that such a ‘right’ could be
recognised under paragraph 13 of the 1994
Understanding, such a
recognition would in any case require a prior decision of the General
Council.”(688)
(d) Reference to GATT practice
494. With respect to GATT practice concerning
Article XVIII:B.
2. Article XVIII:9
(a) General
495. In
India — Quantitative Restrictions, the Panel decided that
in its evaluation of the situation of India’s monetary reserves under
Article XVIII:9, it would need to examine the facts existing on the date
of its establishment. The Panel gave both legal and practical reasons
for not focusing on the situation existing at a later point in time:
“With respect to the date at which India’s balance-of-payments
and reserve situation is to be assessed, we note that practice, both
prior to the WTO and since its entry into force, limits the claims which
panels address to those raised in the request for establishment of the
panel, which is typically the basis of the panel’s terms of reference
(as is the case here).(689) In our opinion, this has consequences for the
determination of the facts that can be taken into account by the Panel,
since the complainant obviously bases the claims contained in its
request for establishment of the panel on a given set of facts existing
when it presents its request to the DSB.
In the present situation, the United States primarily seeks a finding
that, at the latest on the date of establishment of the Panel (18
November 1997), the measures at issue were not compatible with the WTO
Agreement and were not justified under Article XVIII:11 of GATT
1994.
Therefore, it would seem consistent with such a request and logical in
the light of the constraints imposed by the Panel’s terms of reference
to limit our examination of the facts to those existing on the date the
Panel was established.
This result is also dictated by practical considerations. The
determination of whether balance-of-payments measures are justified is
tied to a Member’s reserve situation as of a certain date. In fixing
that date, it is important to consider that the relevant economic and
reserve data will be available only with some time-lag, which may vary
by type of data. This is unlikely to be a problem if the date of
assessment is the date the panel is established, since the first written
submission is typically filed at least two (and often more) months after
establishment of a panel. However, using the first or second panel
meetings as the assessment date is more problematic since data might not
be available and, if the date of the second panel meeting were chosen,
it could significantly reduce the utility of the first meeting.
We note that, in the case on Korea — Beef, the panel relied on the
conclusions of the BOP Committee reached before its establishment, but
also considered ‘all available information’, including information
related to periods after the establishment of the panel.(690) In this
case, the parties and the IMF have supplied information concerning the
evolution of India’s balance-of-payments and reserve situation until
June 1998. To the extent that such information is relevant to our
determination of the consistency of India’s balance-of-payments
measures with GATT rules as of the date of establishment of the Panel,
we take it into account.(691)”(692)
(b) Article XVIII:9(a)
496. In
India — Quantitative Restrictions, the Panel examined
whether the Indian balance-of-payments measure met with the conditions
set out in subparagraph (a) of Article XVIII:9. The Panel first made a
general statement about its analytical approach and then held that it
would consider the “adequacy” of India’s reserves for the purposes
of both Article XVIII:9(a) and XVIII:9(b):
“The issue to be decided under Article XVIII:9(a) is whether India’s
balance-of-payments measures exceeded those ‘necessary … to
forestall the threat of, or to stop, a serious decline in monetary
reserves’. In deciding this issue, we must weigh the evidence
favouring India against that favouring the United States and determine
whether on the basis of all evidence before the Panel, the United States
has established its claim under Article XVIII:11 that India does not
meet the conditions specified in Article
XVIII:9(a).
…
The question before us is whether India was facing a
serious decline
or threat thereof in its reserves (Article
XVIII:9(a)) or had inadequate
reserves (Article XVIII:9(b)). In analyzing India’s situation in terms
of Article
XVIII:9(a), it is important to bear in mind that the issue is
whether India was facing or threatened with a serious decline in its
monetary reserves. Whether or not a decline of a given size is serious
or not must be related to the initial state and adequacy of the
reserves. A large decline need not necessarily be a serious one if the
reserves are more than adequate. Accordingly, it is appropriate to
consider the adequacy of India’s reserves for purposes of Article XVIII:9(a), as well as for Article
XVIII:9(b).”(693)
497. The Panel on
India — Quantitative Restrictions then considered
information supplied by the International Monetary Fund (IMF), which
indicated the level of reserves which could be considered “adequate”
for India:
“In this connection, we recall that the IMF reported that India’s
reserves as of 21 November 1997 were US$ 25.1 billion and that an
adequate level of reserves at that date would have been US$ 16 billion.
While the Reserve Bank of India did not specify a precise level of what
would constitute adequacy, it concluded only three months earlier in
August 1997 that India’s reserves were ‘well above the thumb rule of
reserve adequacy’ and although the Bank did not accept that thumb rule
as the only measure of adequacy, it also found that ‘[b]y any
criteria, the level of foreign exchange reserves appears comfortable’.
It also stated that ‘the reserves would be adequate to withstand both
cyclical and unanticipated shocks’.
…
Turning now to the question of whether India was facing a serious
decline or threat thereof in its reserves, it is appropriate to consider
the evolution of its reserves in the period prior to November 1997. As
noted above, as of 31 March 1996, India’s reserves were US$17 billion;
as of 31 March 1997, India’s reserves were US$22.4 billion. We note
that at the time of the BOP Committee’s consultations with India in
January and June 1997, the IMF reported that India did not face a
serious decline in its reserves or a threat thereof. As of 21 November
1997, India’s reserves had risen to US$25.1 billion and the IMF
continued to be of the view that India did not face a serious decline in
its reserves or a threat thereof. In our view, in light of the foregoing
evidence, and taking into account the provisions of Article XV:2, as of
the date of establishment of the Panel, India was not facing a serious
decline or a threat of a serious decline in monetary reserves as those
terms are used in Article
XVIII:9(a). In the event that it might be
deemed relevant to add support to our findings concerning India’s
reserves as of November 1997, we have also examined the evolution of
India’s reserves after November 1997. We note that India’s reserves
fluctuated around the November level in subsequent months, falling to a
low of US$23.9 billion in December 1997 and rising to a high of US$26.2
billion in April 1998. They were US$24.1 billion as of the end of June
1998.”(694)
3. Article XVIII:11
(a) Burden of proof
498. In
India — Quantitative Restrictions, citing its statement in
US — Wool Shirts and Blouses(695), the Appellate Body agreed with the
Panel that it is for the responding party to demonstrate that the
complaining party violated its obligation not to require the responding
party to change its development policy:
“The proviso precludes a Member, which is challenging the
consistency of balance-of-payments restrictions, from arguing that such
restrictions would be unnecessary if the developing country Member
maintaining them were to change its development policy. In effect, the
proviso places an obligation on Members not to require a developing
country Member imposing balance-of-payments restrictions to change its
development policy.
…
We consider that the invocation of the proviso to Article XVIII:11
does not give rise to a burden of proof issue insofar as it relates to
the interpretation of what policies may constitute a ‘development
policy’ within the meaning of the proviso. However, we do not exclude
the possibility that a situation might arise in which an assertion
regarding development policy does involve a burden of proof issue.
Assuming that the complaining party has successfully established a prima
facie case of inconsistency with Article XVIII:11 and the Ad Note, the
responding party may, in its defence, either rebut the evidence adduced
in support of the inconsistency or invoke the proviso. In the latter
case, it would have to demonstrate that the complaining party violated
its obligation not to require the responding party to change its
development policy. This is an assertion with respect to which the
responding party must bear the burden of proof. We, therefore, agree
with the Panel that the burden of proof with respect to the proviso is
on India.”(696)
499. On the issue of the allocation of the burden of proof with
respect to the Ad Note to the United States, India argued that the Panel
had not applied the rules in accordance with the principles laid down by
the Appellate Body in EC — Hormones.(697) Specifically, India objected
to the fact that the Panel had taken into account the responses of India
in its assessment regarding whether the United States had made a prima
facie case. The Appellate Body did not share India’s view:
“We do not interpret the … statement as requiring a panel to
conclude that a prima facie case is made before it considers the views
of the IMF or any other experts that it consults. Such consideration may
be useful in order to determine whether a prima facie case has been
made. Moreover, we do not find it objectionable that the Panel took into
account, in assessing whether the United States had made a prima facie
case, the responses of India to the arguments of the United States. This
way of proceeding does not imply, in our view, that the Panel shifted
the burden of proof to India.”(698)
(b) Note Ad Article XVIII:11
(i) General
500. The Panel on
India — Quantitative Restrictions, in a finding
not reviewed by the Appellate Body, addressed the question whether Note
Ad Article XVIII:11 permitted India to maintain balance-of-payments
restrictions which did not meet the requirements of Article
XVIII:9.
India argued that it should not be required to remove its quantitative
restrictions immediately, even if it were found that it currently did
not experience balance-of-payments difficulties within the meaning of
Article XVIII:9, because immediate removal would create the conditions
for their reinstitution within the meaning of Note
Ad Article XVIII:11.
The Panel held that three questions had to be addressed in this context:
namely (a) whether the Ad Note covered situations where the conditions
of Article XVIII:9 were no longer met; (b) what conditions must be met
in order to allow for the maintenance of measures under the Ad Note; and
(c) whether these conditions were met in the present case. With respect
to the first question — namely, whether the Ad Note covered situations
where the conditions of Article XVIII:9 were no longer met — the Panel
considered the wording of the Ad Note:
“It seems clear to us that the use of the word ‘respectively’
in this provision allows the sentence to be read to refer to two
situations, so that the second sentence of paragraph 11 should not be
interpreted to mean (i) that a Member is required to relax restrictions
if such relaxation would thereupon produce conditions justifying the
intensification of restrictions under paragraph 9 of Article XVIII or
(ii) that a Member is required to remove restrictions if such removal
would thereupon produce conditions justifying the institution of
restrictions under paragraph 9 of Article XVIII.
The ordinary meaning of the words therefore suggests that the Ad Note
could cover situations where the conditions of Article XVIII:9 are no
longer met but are threatened. This would make it possible for a
developing country having validly instituted measures for
balance-of-payments purposes and whose situation has sufficiently
improved so that the conditions of Article XVIII:9 are no longer
fulfilled, not to eliminate the remaining measures if this would result
in the reoccurrence of the conditions which had justified their
institution in the first place.”(699)
501. Having found that the ordinary meaning of the words of
Note
Ad Article XVIII:11 could extend to situations where the conditions of
Article XVIII:9 no longer exist, but are threatened, the Panel
considered also the context of the Ad Note and the notion of “gradual
relaxation”:
“This appears consistent with the context of the provision, in
particular with the general requirement of gradual relaxation of
measures as balance-of-payments conditions improve, under Article XVIII:11. The notion of ‘gradual relaxation’ contained in Article
XVIII:11 should itself be read in context, together with Article XVIII:9. Article XVIII:9 requires that the measures taken shall not ‘exceed
those necessary’ to address the balance-of-payments situation
justifying them. The institution and maintenance of balance-of-payments
measures is only justified at the level necessary to address the
concern, and cannot be more encompassing. Paragraph
11, in this context,
confirms this requirement that the measures be limited to what is
necessary and addresses more specifically the conditions of evolution of
the measures as balance-of-payments conditions improve: at any given
time, the restrictions should not exceed those necessary. This implies
that as conditions improve, measures must be relaxed in proportion to
the improvements. The logical conclusion of the process is that the
measures will be eliminated when conditions no longer justify them.
The Ad Note clarifies that the relaxation or removal should not
result in a worsening of the balance-of-payments situation such as to
justify strengthened or new measures. It thus seeks to avoid a situation
where a developing country would be required to remove the measures,
foreseeing that in doing so, it will create the conditions for their
reinstitution. In light also of the need to restore equilibrium of the
balance-of-payments on a sound and lasting basis, acknowledged in the
first sentence of Article XVIII:11, it appears that removal should be
made when the conditions actually allow for it. In this sense, we can
agree with India that the developing country Member applying the
measures is not required to follow a ‘stop-and-go’ policy. It is
worth noting, however, that in circumstances where the
balance-of-payments situation has gradually improved, if measures have
been gradually relaxed as conditions improved under the terms of Article
XVIII:11 and maintained only to the extent necessary under the terms of
Article XVIII:9, it could be anticipated that only a minor portion of
the measures initially instituted would remain to be removed by the time
the balance-of-payments conditions have improved to the extent that the
country faces neither a serious decline in monetary reserves or a threat
thereof, or inadequate reserves. The elimination of these measures would
thus constitute the final stage of a gradual relaxation and elimination.
We therefore conclude that the Note
Ad Article XVIII:11 could apply
to both situations where balance-of-payments difficulties still exist
and when they have ceased to exist but are threatened to return. It is
therefore possible for India to invoke the existence of such risk in
order to justify the maintenance of the measures. However, this
possibility is available only to the extent that the conditions foreseen
in the Ad Note are fulfilled. We must therefore determine what these
conditions are before examining whether they are fulfilled in this
instance.”(700)
502. Having answered the first of the three questions listed in
paragraph 500 above, the Panel then turned to the second question,
namely which conditions had to be satisfied for a measure to be
justified in the light of Note
Ad Article XVIII:11, although the
conditions under Article XVIII:9 were no longer met. The Panel gave the
following overview:
“Three elements thus appear to be contemplated in this text:
(i) that conditions justifying the intensification or institution,
respectively, of restrictions under paragraph 9 of Article XVIII would
occur
(ii) that the relaxation or removal of the measures
would produce
occurrence of these conditions
(iii) the relaxation or removal would
thereupon produce these
conditions.”(701)
(ii) “would produce”
503. In its analysis of the conditions which a balance-of-payment
measure, imposed by a developing country, had to comply with in the
light of Note
Ad Article XVIII:11, the Panel on
India — Quantitative
Restrictions first addressed the term “would … produce”:
“We agree with the Panel that the Ad Note, and, in particular, the
words ‘would thereupon produce’, require a causal link of a certain
directness between the removal of the balance-of-payments restrictions
and the recurrence of one of the three conditions referred to in Article
XVIII:9. As pointed out by the Panel, the Ad Note demands more than a
mere possibility of recurrence of one of these three conditions and
allows for the maintenance of balance-of-payments restrictions on the
basis only of clearly identified circumstances. In order to meet the
requirements of the Ad Note, the probability of occurrence of one of the
conditions would have o be clear.”(702)
(iii) “thereupon”
504. With respect to the term “thereupon” in the phrase “would
thereupon produce”, the Appellate Body in India — Quantitative
Restrictions rejected India’s argument that the Panel had erred in
interpreting the term “thereupon” contained in Note
Ad Article XVIII:11 to signify “immediately”:
“We also agree with the Panel that the Ad Note and, in particular,
the word ‘thereupon’, expresses a notion of temporal sequence
between the removal of the balance-of-payments restrictions and the
recurrence of one of the conditions of Article
XVIII:9. We share the
Panel’s view that the purpose of the word ‘thereupon’ is to ensure
that measures are not maintained because of some distant possibility
that a balance-of-payments difficulty may occur.
…
We recall that balance-of-payments restrictions may be maintained
under the Ad Note if their removal or relaxation would thereupon
produce: (i) a threat of a serious decline in monetary reserves; (ii) a
serious decline in monetary reserves; or (iii) inadequate monetary
reserves. With regard to the first of these conditions, we agree with
the Panel that the word ‘thereupon’ means ‘immediately’.
…
We agree with the Panel that it would be unrealistic to require that
[the two other conditions, i.e. ] a serious decline or inadequacy in
monetary reserves should actually occur within days or weeks following
the relaxation or removal of the balance-of-payments restrictions. The
Panel was, therefore, correct to qualify its understanding of the word
‘thereupon’ with regard to these two conditions. While not
explicitly stating so, the Panel in fact interpreted the word ‘thereupon’
for these two conditions as meaning ‘soon after’. This is also one
of the possible dictionary meanings of the word ‘thereupon’. We are
of the view that instead of using the word ‘immediately’, the Panel
should have used the words ‘soon after’ to express the temporal
sequence required by the word ‘thereupon’.”(703)
(C) Proviso to Article XVIII:11
505. In
India — Quantitative Restrictions, the Appellate Body
rejected India’s argument that, contrary to the proviso to Article
VIII:11, the Panel required India to change its development policy by
holding that India could manage its balance-of-payments situation using
macroeconomic policy instruments alone, without maintaining quantitative
restrictions:
“[W]e are of the opinion that the use of macroeconomic policy
instruments is not related to any particular development policy, but is
resorted to by all Members regardless of the type of development policy
they pursue. The IMF statement that India can manage its
balance-of-payments situation using macroeconomic policy instruments
alone does not, therefore, imply a change in India’s development
policy.
…
We believe structural measures are different from macroeconomic
instruments with respect to their relationship to development policy. If
India were asked to implement agricultural reform or to scale back
reservations on certain products for small-scale units as indispensable
policy changes in order to overcome its balance-of-payments
difficulties, such a requirement would probably have involved a change
in India’s development policy.”(704)
4. Article XVIII:12
(a) Article XVIII:12(c)
506. The Panel on
India — Quantitative Restrictions discussed
Article XVIII:12(c)(i) and (ii) in rejecting India’s argument that
panels have no authority to evaluate Members’ balance-of-payments
justifications. See the excerpt referenced in paragraph 492
above. (705)
507. Further, the Panel rejected India’s argument that
Article
XVIII:12(c)(ii) confirms the existence of a right to a phase-out for
measures no longer justified by current balance-of-payments
difficulties, stating as follows:
“We note that Article
XVIII.12(c)(ii), provides a specific
mechanism in order for the BOP Committee to address possible violations
of the provisions of, inter alia, Article XVIII:B and provides for a
period of time to be granted to the Member in order to implement the
requirement to remove or modify the inconsistent measures. In the
situation envisaged by Article
XVIII:12(c)(ii), a period of time is
granted when an inconsistency with the provisions of either Article XVIII:B or Article XIII has been identified. The period of time which is
allocated to the Member in order to bring its measures into conformity
is thus comparable, but not identical, to an implementation period of
the sort provided for in Article 21.3 of the
DSU. However, this specific
mode of determination of the ‘implementation’ period applies to
procedures initiated under Article XVIII:12(c), which is not the
procedure under which this Panel is acting. We consider the issue of
whether a phase-out would be appropriate in this case in our suggestions
in respect of implementation, where we note this provision of Article
XVIII:12(c)(ii).”(706)
5. Understanding on the Balance-of-Payments Provisions of the General
Agreement on Tariffs and Trade 1994
(a) General
508. The Panel on
India — Quantitative Restrictions, in a finding
not addressed by the Appellate Body, explained the legal status of the
BOP Understanding in relation to Articles XII and
XVIII of GATT 1994:
“[The text of Article
XVIII:B] should now be read in light of the
1994 Understanding, which clarifies the provisions of Articles XII and
XVIII:B and of the 1979 Decision. The 1994 Understanding, which refers
to the procedures for balance-of-payments consultations adopted in 1970
(‘full consultation procedures’) and 1972 (‘simplified
consultation procedures’) as well as the 1979 Decision, contains
provisions on the application of balance-of-payments measures, as well
as provisions relating to the procedures for balance-of-payments
consultations and their conclusion, but it does not explicitly refer to
Articles XVIII:12(c) and (d).”(707)
(b) Footnote 1
509. The Appellate Body, in
India — Quantitative Restrictions,
referred to footnote 1 of the BOP Understanding in considering a panel’s
authority to examine the conformity with the WTO Agreement of Members’
measures taken for balance-of-payments purposes. See the excerpts
referenced in paragraphs 489-491
above.
(c) Paragraph 1
510. In
India — Quantitative Restrictions, India argued that
paragraphs 1 and 13 of the Understanding provide an incentive for
Members to present a time-schedule for removal even when there are no
current balance-of-payments difficulties within the meaning of Article
XVIII:9, thereby confirming the existence of a “right” to a
phase-out even in the absence of current balance-of-payments
difficulties within the meaning of Article XVIII:9. The Panel rejected
this argument. See the excerpt referenced in paragraph 493
above.
(d) Paragraph 5
(i) Committee on Balance-of-Payments Restrictions
Establishment of Committee
511. At its meeting of 31 January 1995, the General Council
established the WTO Committee on Balance-of-Payments Restrictions.(708)
Terms of reference
512. At its meeting of 31 January 1995, the General Council adopted
the following terms of reference for the Committee on the
Balance-of-Payments Restrictions:
“(a) to conduct consultations, pursuant to
Article XII:4, Article XVIII:12 and the Understanding on the Balance-of-Payments Provisions of
the General Agreement on Tariffs and Trade 1994, on all restrictive
import measures taken or maintained for balance-of-payments purposes
and, pursuant to Article XII:5 of the General Agreement on Trade in
Services, on all restrictions adopted or maintained for
balance-of-payments purposes on trade in services on which specific
commitments have been undertaken; and
(b) to carry out any additional functions assigned to it by the
General Council.”(709)
Rules of procedure
513. At its meeting of 13 and 15 December 1995, the General Council
approved the rules of procedure adopted by the Committee on the
Balance-of-Payments Restrictions.(710)
Observer status
514. At its meeting of 13 and 15 December 1995, the General Council
took a decision with respect to participation in the meetings of the
Committee on the Balance-of-Payments Restrictions.(711)
(e) Paragraph 9
515. At its meeting of 21 October 1996, the Committee on the
Balance-of-Payments Restrictions adopted the format for the annual
notification mandated under Paragraph 9 of the
Understanding.(712) In
order for the Committee on the Balance-of-Payments Restrictions to have
a basis for the following year’s schedule of consultations, it was
proposed that notifications be completed and submitted to the
Secretariat annually by 15 November.(713)
(f) Paragraph 13
(i) Interpretation
516. In
India — Quantitative Restrictions, India argued that
paragraphs 1 and 13 of the Understanding provide an incentive for
Members to present a time-schedule for removal even when there are no
current balance-of-payments difficulties within the meaning of Article XVIII:9, thereby confirming the existence of a “right” to a
phase-out even in the absence of current balance-of-payments
difficulties within the meaning of Article XVIII:9. The Panel rejected
this argument. See the excerpt referenced in paragraph 493
above.
(ii) Reporting procedures
517. At its meeting of 15 November 1995, the General Council adopted,
inter alia, the following procedure for reporting for the Committee on
Balance-of-Payment Restrictions to the General Council:
“The Committees on Budget, Finance and Administration and on
Balance-of-Payments Restrictions will also submit, in addition to
reports submitted during the course of the year on specific issues, a
short factual report at the end of the year.”(714)
E. Relationship with other Articles
1. Articles XI, XIII, XIV and XVII
518. The interpretation and application of
Note Ad Article XI, XII,
XIII, XIV and XVIII, which clarifies that the terms “import
restrictions” or “export restrictions” as used in these Articles
include “restrictions made effective through state-trading operations”,
was discussed by the Panels on India — Quantitative Restrictions and
Korea — Various Measures on Beef. See paragraphs 407-408
above.
2. Article XII
519. In
India — Quantitative Restrictions, the Panel explained the
relationship between Articles XII and
XVIII:B in clarifying the function
of Article XVIII:B. See paragraph 488
above.
3. Reference to GATT practice
520. With respect to GATT practice on this subject-matter.
Footnotes:
667.
Appellate Body Report on Canada — Wheat Exports and
Grain Imports, paras. 110-112. In this case, the Appellate Body found
that the Panel had not ignored subparagraph (a) of Article XVII and
therefore had not erred. back to text
668. Panel Report on Canada — FIRA, para. 5.16. back to text
669. Panel Report on Korea — Various Measures on Beef, para.
757. back to text
670. Panel Report on Korea — Various Measures on Beef, para.
766. back to text
671. Panel Report on Korea — Various Measures on Beef, para.
753. In support of its proposition, the Panel went on to refer to the
following two GATT Panel Reports: (i) Panel Report on Canada — Provincial Liquor Board
(EC), para. 4.26; and Panel Report on Canada
— Provincial Liquor Board (US), para. 5.15. back to text
672. G/C/M/1, paras. 5.6-5.7. back to text
673. G/C/M/1, para.5.5. The Working Party accordingly set forth
the following deadlines: (i) 30 June 1995 for the 1995 notifications
(G/STR/N/1); (ii) 30 September 1998 for the 1998 new and full
notifications (G/STR/N/4); and (iii) 29 June 2001 for the 2001 new and
full notifications (G/STR/N/7). back to text
674. G/C/M/33, section 3. The text of the approved
questionnaire can be found in G/STR/3. back to text
675. G/C/M/1, subsection 5(A).
back to text
676. G/C/M/41, section 3. The text of the adopted illustrative
list can be found in G/STR/4. back to text
677. G/STR/4, para. 4. back to text
678. G/STR/M/1, paras. 25-46. back to text
679. G/STR/2. back to text
680. Panel Report on Korea — Various Measures on Beef, para.
7.80. With respect to judicial economy in general, see the Chapter on
the DSU, Section XXXVI.F. back to text
681. Panel
Report on Korea — Various Measures on Beef, para.
768. back to text
682. (footnote original) In particular, the conditions to be
met for the institution of balance-of-payments measures are different in
Article XVIII:9 and Article
XII, and an Ad Note which applies to the
conditions for progressive relaxation and elimination of restrictions
under Article XVIII:11 has no analogue in Article
XII. back to text
683. Appellate Body Report on
India — Quantitative
Restrictions, paras. 87-88 and 94-95. Following these paragraphs, in
support of this finding, the Appellate Body referred to Panel Report on
Korea — Beef (US), paras. 117–118. Also, the Appellate Body rejected
the argument that India presented referring to Panel Reports on EC —
Citrus; EC — Bananas I; and Korea — Beef (US). Appellate Body Report on
India — Quantitative
Restrictions, para. 100. back to text
684. Appellate Body Report on
India — Quantitative
Restrictions, paras. 102–104. In this regard, see also the Panel’s
finding referenced in para. 492 of this Chapter. back to text
685. Appellate Body Report on
India — Quantitative
Restrictions, paras. 106 and 108. back to text
686. Panel Report on
India — Quantitative
Restrictions, paras.
5.78–5.80. back to text
687. (footnote original) As we note in our suggestions for
implementation, a phase-out period typically has been negotiated (see
text accompanying footnotes 366–368). back to text
688. Panel Report on
India — Quantitative
Restrictions, paras.
5.233–5.235. back to text
689. (footnote original) Appellate Body Report on
EC
— Bananas III, para. 143 and Appellate Body Report on
India — Patent
(US), paras. 87–89. back to text
690. (footnote original) Panel Report on Korea — Beef (US),
paras. 122–123. back to text
691. (footnote original) We note for instance that such
information might be relevant to an examination of the existence of a
threat of serious decline in monetary reserves under Article XVIII:9 or
to an examination of the conditions contemplated in the Note
Ad Article XVIII:11. back to text
692. Panel Report on
India — Quantitative
Restrictions, paras.
5.160–5.163. back to text
693. Panel Report on
India — Quantitative
Restrictions, paras.
5.169 and 5.173. back to text
694. Panel Report on
India — Quantitative
Restrictions, paras.
5.174 and 5.177. back to text
695. Appellate Body Report
on US — Wool Shirts and Blouses p.14. With respect to burden of proof in general, see Chapter on
DSU,
Section XXXVI.D. back to text
696. Appellate Body Report on
India — Quantitative
Restrictions, paras. 134 and 136. back to text
697. India cited the following finding:
“In accordance with our ruling in United States — Shirts and
Blouses, the Panel should have begun the analysis of each legal
provision by examining whether the United States and Canada had
presented evidence and legal instruments sufficient to demonstrate that
the EC measures were inconsistent with the obligations assumed by the
European Communities under each article of the SPS Agreement addressed
by the Panel. … Only after such a prima facie determination had been
made by the Panel may the onus be shifted to the European Communities to
bring forward evidence and arguments to disprove the complaining party’s
claim.”
Appellate Body Report on EC —
Hormones, para. 109. back to text
698. Appellate Body Report on
India — Quantitative
Restrictions, para. 142. With respect to the burden of proof in general,
see also the Chapter on DSU, Section
XXXVI.D. back to text
699. Panel Report on
India — Quantitative
Restrictions, paras.
5.188–5.189. back to text
700. Panel Report on
India — Quantitative
Restrictions, paras.
5.190–5.192. back to text
701. Panel Report on
India — Quantitative
Restrictions, para.
5.194. back to text
702. Appellate Body Report on
India — Quantitative
Restrictions, para. 114. back to text
703. Appellate Body Report on
India — Quantitative
Restrictions, paras. 115, 117 and 119. back to text
704. Appellate Body Report on
India — Quantitative
Restrictions, paras. 126 and 128. back to text
705. With respect to the relevant finding of the Appellate Body
in India — Quantitative Restrictions, see the excerpts referenced in
para. 489 of this Chapter. back to text
706. Panel Report on
India — Quantitative
Restrictions, para.
5.227. back to text
707. Panel Report on
India — Quantitative
Restrictions, para.
5.48. back to text
708. WT/GC/M/1, section 7.A.(1). back to text
709. WT/GC/M/1, section 7.A.(1). The adopted terms of reference
can be found in WT/L/45. back to text
710. WT/GC/M/1, section 4. I. (a). The approved rules of
procedure can be found in
WT/BOP/10. back to text
711. WT/GC/M/1, section 2. back to text
712. WT/BOP/14. back to text
713. WT/BOP/14. back to text
714. WT/L/105, section 2. back to text
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