International Trade Files, Lot 57D294, Box 110

Position Paper for the United States Delegation to the Fourth Session of the Contracting Parties to GATT


TAC D–117/50

Report on Exceptions to the Rule of Non-Discrimination Article XIV–1(g)


Article XIV–1(g) provides that

“Not later than March 1, 1950 … and in each year thereafter, the Contracting Parties shall report on any action still being taken by contracting parties under sub-paragraphs (b) and (c) of this paragraph or under Annex J. …”

A questionnaire (GATT/CP/39) was circulated to the CPs and a report based on the replies to this questionnaire and other information will be prepared at the Fourth Session in accordance with Article XIV–1(g).1


In the preparation of the report required by Article XIV–1(g), the United States Delegation should participate on the basis of the following considerations:

In accordance with our understanding with the British, the Delegation should avoid provoking the United Kingdom Delegation into making statements as to the basic policies governing the operation of their discriminatory trade controls and arrangements. If however, the United Kingdom Delegation or some other Delegation should provoke a discussion of these basic policy issues, or if, in the process of preparing the report these issues should be raised, the United States Delegation should seek further instructions regarding the nature of the statement which should be made in reply by the United States Government.
However, the Delegation should point out the necessity in terms of the objectives of the GATT, of expediting the restoration of worldwide multilateral trading and full currency convertibility. It should be emphasized that a positive approach to the solution of balance-of-payments problems is through increased exports, particularly to hard currency areas, instead of the continued use of import restrictions.
The Delegation should, of course, review the discriminatory restrictions which are being applied in the light of the standards set up by the GATT.
If the factual information contained in the replies to the questionnaire do not appear to be adequate to permit a judgment as to whether or not the discriminatory restrictions are being applied consistently with the GATT, the Delegation should propose that the necessary information be obtained.


The British have agreed to revise their reply to the questionnaire (GATT/CP/39) to eliminate the sections setting forth the basic policy objectives underlying the United Kingdom’s discriminatory trade controls and arrangements. The United States has agreed, in return, not to raise issues in this connection which would call for an exposition of basic policy on the part of the British. This arrangement was agreed to by the United States because there was not enough time to obtain government-wide agreement on the substantiative reply which would have to have been made by the United States to the original British policy statement.

However, the Delegation should take the opportunity to indicate the necessity of expediting the return to world-wide multilateral trading, and of increasing exports to hard-currency areas as a positive means of helping to alleviate balance-of-payments difficulties. The making of such a statement is consistent with our understanding with the British.

  1. In reply, 20 of the Contracting Parties had acknowledged that they were applying import restrictions under Article XII in order to safeguard their external financial position and were taking advantage of the transitional period arrangements of Article XIV for not fully observing the rule of nondiscrimination. The countries reporting such restrictive practices were Australia, Brazil, Canada, Ceylon, Chile, Czechoslovakia, Denmark, Finland, France, Greece, India, Italy, the Netherlands, New Zealand, Norway, Pakistan, Sweden, Southern Rhodesia, South Africa, and the United Kingdom.