have notified the existing measures that it wishes to maintain to all governments which signed the Charter on the day of its general signatures, or if this Charter has already entered into force, to the Members of the Organization. Any Member maintaining any such measure shall within one month of assuming Membership in the Organization notify it of the measure concerned, the considerations in support of its maintenance and the period for which it wishes to maintain the measure. The Organization shall, as soon as possible, but in any case within twelve months of such Member assuming Membership in the Organization, examine and give a decision concerning the measure as if it had been submitted to the Organization for its concurrence under Article 13.

2. The Organization, in making a decision under this Article specifying a specifying a date by which any modification in or withdrawal of the measure is to be made, shall have regard to the possible need of a Member for a suitable period of time in which to make such modification or withdrawal.

3. This Article shall not be construed to apply to a measure which would be inconsistent with any obligation that the Member concerned has assumed through negotiations with any other Member or Members pursuant to Chapter IV or which would tend to nullify or impair the benefit to such other Member or Members of any such obligation.

Paragraph 1 (c).

The United States Delegation wishes to have it recorded that it assumes that sub-paragraph (c) is to be interpreted as permitting Members so notified effectively to question the nature and extent of such measures before the adherence of the Member proposing to maintain them becomes effective.

Article 15.

The Delegation of Brazil entered a reservation pending a decision on the question of voting requirements under this Article.

The Delegation of Chile reserved its position both with respect to the principle of prior approval and with respect to the voting requirements of a two-thirds majority if the latter is decided upon.

Article 16.

General Most-favoured-nation Treatment.

1. With respect to customs duties and charges of any kind imposed on or in connection with importation or exportation or imposed on the international transfer of payments for imports or exports, and with respect to the method of levying such duties and charges, and with respect to all rules and formalities in connection with importation and exportation, and with respect to all matters referred to in paragraphs I and 2 of Article 18, any advantage, favour, privilege or immunity granted by any Member to any product originating in or destined for any other country, shall be accorded immediately and unconditionally to the like product originating in or destined for all other Member countries respectively.

2. The provisions of paragraph I of this Article shall not require the elimination, except as provided in Article 17, of any preferences in respect of import duties or charges which do not exceed the levels provided for in paragraph 3 of this Article and which fall within the following descriptions:

(a) preferences in forcè exclusively between two or more of the territories listed in Annex A to this Charter, subject to the conditions set forth therein;

(b) preferences in force exclusively between two or more territories which on 1 July 1939 were connected by common sovereignty or relations of protection or suzerainty and which are listed in Annexes B, C, D and ... of this Charter,

subject to the conditions set forth therein;

(c) preferences in force exclusively between the United States of America and the Republic of Cuba;

(d) preferences in force exclusively between neighbouring countries listed in Annexes. E, F and ... of this Charter.

3. The margin of preference on any product in respect of which a preference is permitted under paragraph 2 of this Article shall not exceed (a) the maximum margin provided for under the General Agreement on Tariffs and Trade or any subsequent operative agreement resulting from negotiations under Article 17, or (b) if not provided for under such agreements, the margin existing either on 10 April 1947 or on such earlier date as may have been established for a Member as a basis for negotiating the General Agreement on Tariffs and Trade, at the option of such Member.

Article 17.

Reduction of Tariffs and Elimination
of Preferences.

1. Each Member shall, upon the request of the Organization, enter into and carry out with such other Member or Members as the Organization may specify, negotiations directed to the substantial reduction of tariffs and other charges on imports and exports and to the elimination of the preferences referred to in paragraph 2 of Article 16 on a reciprocal and mutually advantageous basis. These nego

Article 16.

The following kinds of customs action, taken in accordance with established uniform procedures, would not be contrary to a general binding of margins of preference:

(i) the re-application to an imported product of a tariff classification or rate of duty, properly applicable to such product, in cases in which the application of such classification or rate to such product was temporarily suspended or inoperative on 10 April 1947; and

(ii) the application to a particular commodity of a tariff item other than that which was actually applied to importations of that commodity on 10 April 1947. in cases in which the tariff law clearly contemplates that such commodity may be classified under more than one tariff item.

The Delegations of Chile and Lebanon reserved their position on this Article. Paragraph 2.

The Delegation of Cuba reserved its position in relation to preferences accorded by differential internal taxes.

Article 17.

The provisions of this Article do not prevent Members from concluding new, or maintaining existing, bilateral tariff agreements which are not incorporated in the General Agreement on Tariffs and Trade, provided that such agreements are consistent with the relevant principles of Article 17 and that the concessions made by a Member under such agreements are generalized to all members in accordance with Article 16.

The Cuban Delegation reserved its position.

tiations shall proceed in accordance with the following rules:

(a) In the negotiations relating to any specific product

(i) when a reduction is negotiated only in the most-favoured-nation rate, such reduction shall operate automatically to reduce or eliminate the margin of preference applicable to that product;

(ii) when a reduction is negotiated only in the preferential rate, the mostfavoured-nation rate shall automatically be reduced to the extent of such reduction;

(iii) when it is agreed that reductions will be negotiated in both the mostfavoured-nation rate and the preferential rate, the reduction in each shall be that agreed by the parties to the negotiations;

(iv) no margin of preference shall be increased.

2. If any Member considers that any other Member has failed to fulfil its obligations under paragraph I of this Article, such Member may refer the matter to the Organization, which, after investigation, shall make appropriate recommendations to the Members concerned. If the Organization finds that a Member has failed without sufficient justification, having regard to its economic position and the provisions of the Charter as a whole, to carry out negotiations within a reasonable period of time in accordance with the requirements of paragraph 1 of this Article, the Organization may determine that any Member or Members shall, notwithstanding the provisions of Article 16, be entitled to withhold from the trade of the other Member any of the tariff benefits which may have been negotiated pursuant to paragraph I of this Article, and embodied in Part I of the General Agreement on Tariffs and Trade. If such benefits are in fact withheld, so as to result in the application to the trade of the other Member of tariffs higher than would otherwise have been applicable, such other Member shall then be free, within sixty days after such action is taken, to withdraw from the Organization upon the expiration of sixty days from the date on which written notice of such withdrawal is received by the Organization.

3. The provisions of this Article shall operate in accordance with the provisions of Article 81.

Article 18.

National Treatment on Internal Taxation
and Regulation.

1. The products of any Member country imported into any other Member country shall be exempt from internal taxes and other internal charges of any kind in excess of those applied directly or indirectly to like products of national origin. Moreover, in cases in which there is no substantial domestic production of like products of national origin, no Member shall apply new or increased internal taxes on the products of other Member countries for the purpose of affording protection to the production of directly competitive or substitutable products

Paragraph I.

The undertaking to negotiate regarding preferences necessarily implies that prior international commitments to grant particular preferences will not be permitted to frustrate the undertaking to negotiate. For this reason the provisions of sub-paragraph 1 (a) of the New York draft have been omitted from the Charter as being implicit.

Obviously any agreement reached affecting preferences provided for in any prior commitment would require, in order to be implemented, such change in the latter as might be necessary to give effect to the agreement. This change would either have to be agreed between the parties to the prior commitment or, if they could not agree, the party wishing to make the change, in order to proceed, would have to terminate the prior commitment in accordance with its terms.

Article 18.

The Delegation of Norway reserved its position on this Article.

Paragraph 1.

The Delegation of China reserved its position provisionally and proposed the deletion of the second and third sentences.

The Delegation of Chile reserved its position on the second and third sentences.

The Delegation of Cuba reserved its position and proposed a new paragraph permitting the exemption of domestic products from internal taxes for development

purposes.

which are not similarly taxed; existing internal taxes of this kind shall be subject to negotiation for their reduction or elimination in the manner provided for in respect of tariffs and preferences under Article 17.

2. The products of any Member country imported into any other Member country shall be accorded treatment no less favourable than that accorded to like products of national origin in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution, or use. This paragraph shall not

5. The provisions of this Article shall not apply to the procurement by governmental agencies of products purchased for governmental purposes and not for resale or use in the production of goods for sale, nor shall they prevent the payment to domestic producers only of subsidies provided for under Article 25, including payments to domestic producers derived from the proceeds of internal taxes or charges and subsidies effected through governmental purchases of domestic products.

Article 19.

Films.

3. In applying the principles of paragraphs 2 of this Article to internal quantitative regulations relating to the mixture, processing or use of products in specified amounts or proportions, the Members shall observe the following provisions:

(a) no regulations shall be made which, formally or in effect, require that any specified amount or proportion of the product in respect of which such regulations are applied must be supplied from domestic sources;

(b) no Member shall, formally or in effect, restrict the mixing, processing or use of a product of which there is no substantial domestic production with a view to affording protection to the domestic. production of a directly competitive or substitutable product.

4. The provisions of paragraph 3 of this Article shall not apply to:

(a) any internal quantitative regulation

relating to cinematograph films and meeting the requirements of Article 19; (b) any other measures of internal quanti

tative control in force in any Member country on 1 July 1939 or 10 April 1947 at the option of that Member; Provided that any such measure which would be in conflict with the provisions of paragraph 3 of this Article shall not be modified to the detriment of imports and shall be subject to negotiations for its limitation, liberalization or elimination in the manner provided for in respect of tariffs and preferences under Article 17.

Paragraph 3.

The Chilean Delegation reserved its position. Paragraph 4.

The New Zealand Delegation reserved its position on sub-paragraph (b) pending further consideration.

If any Member establishes or maintains internal quantitative regulations relating to exposed cinematograph films, such regulations shall take the form of screen quotas which shall conform to the following conditions and requirements:

(a) Screen quotas may require the exhibition of cinematograph films of national origin during a specified minimum proportion of the total screen time actually utilized over a specified period of not⚫ less than one year in the commercial exhibition of all films of whatever origin, and shall be computed on the basis of screen time per theatre per year or the equivalent thereof.

(b) With the exception of screen time reserved for films of national origin under a screen quota, no screen time, including screen time released by administrative action from minimum time reserved for films of national origin, shall formally or in effect be allocated among sources of supply.

(c) Notwithstanding the provisions of subparagraph (b) above, Members may maintain screen quotas conforming to the conditions of sub-paragraph (a) which reserve a minimum proportion of screen time for films of a national origin other than that of the Member imposing such screen quotas; Provided that no such minimum proportion of screen time shall be increased above the level in effect on 10 April 1947.

(d) Screen quotas shall be subject to negotiation for their limitation, liberalization or elimination in the manner provided for in respect of tariffs and preferences under Article 17.

Paragraph 5.

The Delegation of China reserved its position provisionally and proposed to delete the words. "or use in the production of goods for sale".

Article 19.

The Delegation of the United Kingdom reserved its position for the time being.

SECTION B.

Article 20.

General Elimination of Quantitative Restrictions.

1. No prohibitions or restrictions other than duties, taxes or other charges, whether made effective through quotas, import or export licences or other measures, shall be instituted or maintained by any Member on the importation of any product of any other Member country or on the exportation or sale for export of any product destined for any other Member country.

2. The provisions of paragraph I of this Article shall not extend to the following:

(a) export prohibitions or restrictions temporarily applied to prevent or relieve critical shortages of foodstuffs or other products essential to to the exporting Member country;

(b) import and export prohibitions or restrictions necessary to the application of standards or regulations for the classification, grading or marketing of commodities in international trade; if, in the opinion of the Organization, the standards or regulations adopted by a Member under this sub-paragraph have an unduly restrictive effect on trade, the Organization may request the Member to revise the standards or regulations; Provided that it shall not request the revision of standards internationally agreed under paragraph 7 of Article 38;

(c) import restrictions on any agricultural

or fisheries product, imported in any form, necessary to the enforcement of governmental measures which operate: (i) to restrict the quantities permitted to be marketed or produced of the like domestic product, or, if there is no substantial domestic production of the like product, of a domestic product for which the imported

product can be directly substituted;

or

(ii) to remove a temporary surplus of the like domestic product, or, if there is no substantial domestic production of the like product, of a domestic product for which the imported products can be directly substituted, by making the surplus available to certain groups of domestic consumers free of charge or at prices below the current market level; or

(iii) to restrict the quantities permitted to be produced of any animal product the production of which is directly dependent, dependent, wholly or mainly, on the imported commodity, if the domestic production of that commodity is relatively negligible.

Any Member applying restrictions on the importation of any product pursuant to this sub-paragraph shall give public notice of the total quantity or value of the product permitted to be imported during a specified future period and of any change in such quantity or value. Moreover, any restrictions applied under (i) above shall not be such as will reduce the total of imports relative to the total of domestic production, as compared with the proportion which might reasonably be expected to rule between the two in the absence of restrictions. In determining this proportion, the Member shall pay due regard to the proportion prevailing during a previous representative period, and to any special factors which may have affected or may be affecting the trade in the product concerned.

3. Throughout this Section the terms "import restrictions" or "export restrictions" include restrictions made effective through State-trading operations.

Article 20.

The Cuban Delegation reserved its position in view of the rejection of its proposal for excepting restrictions up to 50% of domestic consumption for promoting the maintenance, development or reconstruction of an indus

try.

The Chinese and Lebanese Delegations reserved their position in respect of the proposal by the Chinese Delegation to add a sub-paragraph 2 (d) providing a procedure for releasing a Member, without the prior approval of the Organization, from the obligation to refrain from import restrictions when the industry in question is of vital importance.

Paragraph 2 (c).

The Chilean Delegation reserved its position.

The term "in any form" in this paragraph covers the same products when in an carly stage of processing and still perishable, which compete directly with the fresh product and if freely imported would tend to make the restriction on the fresh product ineffective.

Paragraph 2: last sub-paragraph.

The term "special factors" includes changes in relative productive efficiency as between domestic and foreign producers, or as between different foreign producers, but not changes artificially brought about by means not permitted under the Charter.