9.
CONFIDENTIAL
to gain support by reducing the number of countries
likely to suffer concretely from their proposal, but in any event it would clearly be unwelcome to the Americans to have to take non-discriminatory action, particularly in view of the compensation required. (ii) The text of Article XIX would require the Americans
to reach agreement with the countries whose exports
were affected, and this has traditionally been
interpreted to mean that they have to offer compensation,
or incur liability to retaliation. The American Administration at present lack legislative authority
to offer compensation by way of tariff reductions on
other itens,
The possibility should perhaps be considered of the Americans taking unilateral action to curtail imports from certain countries without invoking Article XIX of the GATT. But it is hardly likely that the United States could so flagrantly set aside their obligations particularly when countries so important as Japan would be among those
to suffer.
Tariff Action
10. Article XIX may be invoked to cover increases in bound rates of duty as well as the imposition of quantitative restrictions.
The same rules apply as in the case of q.r. and the increase in duty should be temporary only. Since the considerations set out in para. 8 in connection with Article XIX q.r. apply equally in this case, there is even less reason to suppose the Americans would take this course. 11. The Americans are, however, known to be considering seriously the
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/possibility