31 May 1950 ENGLISH TARIFFS and TRADE ORIGINAL: ENGLISH/ FRENCH
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RESTRICTED SPECIAL GATT/CP/62 GENERAL AGREEMENT ON 31 May 1950 ENGLISH TARIFFS AND TRADE ORIGINAL: ENGLISH/ FRENCH CONTRACTING PARTIES DISCRIMINATORY ADMINISTRATION OF IMPORT RESTRICTIONS STATEMENTS BY CONTRACTING PARTIES ON USE OF IMPORT RESTRICTIONS TO SAFEGUARD THEIR BALANCESTHEIR OF PAYMENTS Replies to GATT/CP/39 Paragraph 1 (g) of Article XIV of the General Agreement requires the Contracting Parties to report, not later than March 1, 1950, on any action still being taken by the contracting parties under the exceptional transitional period arrangements of Article XIV for non-observance of the rule of non-discrimination in the application of import restrictions which they apply under Article XII to safeguard their balances of payments. To prepare for this reports the Secretariat issued a questionnaire on 7 October 1949 (GATT/CP/39) to ascertain which of the contracting parties were still taking action under these arrangements and to obtain details of their restrictions and data concerning their foreign trade. The replies to the Secretariat's enquiry were examined at the Fourth Session of the Contracting Parties, which was held in Geneva from 23 February to 3 April 1950. The resulting report has been printed (Sales No. GATT 1950-1) and copies may be obtained from the office of ICITO, Palais des Nations, Geneva. On the completion of the report the Contracting Parties decided that the replies to the Secretariat's enquiry should be issued in a restricted document. Accordingly, the replies are reproduced in full in this document. GATT/CP/62 Page 2 TABLE OFCONTENTS Page THE ENQUIRY ISSUED BY THE SECRETARIAT (GATT/CP/39) . 3 REPLIES FROM CONTRACTING PARTIES WHICH WERE NOT IMPOSING IMPORT RESTRICTIONS FOR BALANCE-OF- PAYMENT REASONS Belgium. .. .... .. Syria. .. 8 BelgiumUnited States. 10 REPLIES FROM CONTRACTING PARTIES IMPOSING RESTRICTIONS FOR BALANCE-OF-PAYMENT REASONS Australia . 11 Brazil . 27 Canada. 31 . 49 Chile. .. 52 . Czechoslovakia. 56 . Denmark . 71 Finland . 81 Ceylon... 90 . 98 . India. .. 105 . 115 . Netherlands . 122 . Now Zealand . 131 France.. 150 . 157 Greece.. Southern Rhodesia.. 168 . 173 Italy. U. of South. Africa.. 175 United Kingdom. 5 182 (Note: The Roman numerals in the margin of the replies Norway indicate. the... questions to which subsequent paragraphs relate. The replies to Question 1 have boon .. were an Pakistanin cases where affirma- omitted they merely Sweden tion)..... GATT/CP/62 Page 3 ENQUIRY ISSUED TO CONTRACTING PARTIES ON 7 OCTOBER 1949 (GATT/CP/39) I. Do you restrict the importation of merchandise in order to safeguard your balance of payments under the provisions of Article XII? Note: In replying to this question, as well as to others indicated below contracting parties should boar in mind that import restrictions include those made effective either directly or indirectly through state trading operations or otherwise. The expression "state-trading operations" is meant to include the operation of enter- prises, wherever located, to which the contracting party has granted, formally or in effect, exclusive or special privileges. The answer to this question, as well as to the others indicated below, should also take into account restrictions operated by means of exchange controls if those controls are used as a substitute for, or a supplement to import restrictions. II. If so, describe the general system of import restrictions to safeguard your balance of payments which is now in effect. Note: This description should be sufficiently detailed to give an accurate general picture of the nature of the controls used and the criteria by which the use of such controls is governed. Among other things, the description should indicate the specific techniques used, e.g., global quotas, quotas allocated by specific countries or groups of countries, or other techniques. Where your system of import controls differs for different classes of commodities or distinguishes among groups of countries, the nature of such differences and of such distinctions should be adequately described. Where your description indicates deviations from the rule of non-discrimination,indicate whether such deviation is pursuant to Article XIV 1 (b) or 1 (c) or to Annex J. III. Describe the main changes introduced since January 1, 1948 in the system outlined in your reply to question 2 above, particularly those which have had the effects of either intensifying or alleviating the discriminatory effects of your restrictions. IV. For an adequate number of individual commodities representing a cross section of products subject to import restrictions describe in detail the provisions, policies, and practices followed with respect to import restrictions in each commodity. Supplement such description with specific statistical and other information designed to describe the effects which existing import restrictions have had upon the distribution among sources of supply from which such imports are obtainable. GATT/CP/62 Page 4 Note: The commodities selected should be of sufficient number to provide an adequate cross section of commodities affected by existing import restrictions. It is believed that such illustrations would probably not be representative unless in total they represented at least 30 percent of the import trade of the reporting country and covered at least 10 commodities. In determining the effects of such restrictions upon sources of supply, comparable data on prices existing in alternative sources would be extremely helpful. V. 1 Describe the effects which you believe discriminatory import restrictions imposed by you or by other countries, have had upon the volume and pattern of your export trade. GATT/CP/62 page 5 REPLIESEFROM CONTRACTING PARTIES WHICH WERENOT IMPOSING IMPORT RESTRICTIONS FOR BALANCE-OF-PAYMENT REASONS B(Translation)E L G I U M V. A. Discriminatory restrictions imposed by Belgium Since Belgium now places no restrictions on the importation of goods to safeguard her balance of payments in accordance with the provisions of Article XII of the General Agreement on Tariffs and Trade no discrimination is practised by Belgium within the framework of her import trade policy. In the years following the 1940-45 war Belgium set out to adopt a distinctly liberal economic policy. To that end she has opened her frontiers wide to foreign products. B. Discriminatory restrictionsimposed by other countries Belgium's free import policy was inevitably bound to lead to a rapid saturation of the domestic market, with the result that the latter would cease to afford Belgian industry an adequate demand enabling it to market its production. It was precisely at that juncture that Belgium, in view of the many assurances she had received not only during bila- teral negotiations, but also within the international organi- sations, had hoped to find in the export market the outlets no longer available in the domestic market. Unfortunately this hope proved vain. Despite the demand for Belgian products in most markets our exporters were confronted not only with severe import restrictions but also with widespread discrimination. Belgium is not at present in a position to supply the Contracting Parties with a detailed account of the effects on the volume and pattern of her export trade of the discrimina- tory import restrictions imposed by other countries, but she can mention a few of them: (1) Effectson the pattern of our export trade Generally speaking, foreign countries, alleging financial difficulties as grounds for discrimination, have developed the idea of essential and non-essential commodities. This distinction has affected the level of activity in certain Belgian industries. We find, for example, in Belgium at the present time that certain branches of industry (glass, leather, non-ferrous metals etc.) are working to only 60 or 80% of their pre-war productions capacity while in other branches (metallurgical and steel industries) the coefficient is 120 and even 169. The direct corollary of this situation was an increase in unemployment, which at the present time affects more than 300,000 out of a working population of approximately 2 million. GATT/CP/62Page 6 BELGIUM (continued) (2) Effects on theVolume of ourExport Trade It is impossible at the moment to estimate the overall prejudice caused to the total volume of Belgian exports. Nevertheless, merely by way of example, the Belgian delegation can cite two particular cases for which it has adequate data: (a) In her export trade with the United Kingdom Belgium does not enjoy the advantages of the Open General Licence which the United Kingdom has accorded to other countries. With regard to the first "batch" of releases, and taking only the articles for which Belgium had received quotas into account, it may be estimated, very roughly, That the Open General Licence would have enabled the sale of Belgian products to be increased from £7,100,000 to £10,000,000 over a period of twelve months. If we take the second "batch" of releases and opportunities in the Outer Sterling Area into account we, may reasonably put the damage sustained at £5 million. (b) Discrimination by the Union of South Africa against Belgian exports affects several products. The Belgian delegation would like, by way of examples to cite here the particular case of sheet glass and plate glass. The two main suppliers of the Union of South Africa for these products were the United Kingdom and Belgium, a fact which is illustrated by the following pre-war statistics: Imports of Sheet Glass and Plate Glass into the Union of South Africa Value of Imports in £ Year Total from the United from Kingdom Belgium 1937 213, 513 117,073 64, 143 1938 166,495 96,761 43, 973 A comparison of the above statistics with the post-war figures at once shows the effect on Belgium of the discriminatory measures applied by the Union of South Africa. GATT/CP/62 BELGIUM(continued) Page 7 EXports of Sheet Glass and Plate Glass to the Union of South Africa Exports in tons Year from Belgium from the United Kingdom 1948 6, 548 13,206 1949 871 (1) 14,398 1950 ? (estimates) (1) First 10 months of 1949.