22
communicating shortly on this question with the governments concerned. Should it not prove possible to find a mutually satisfactory procedure, the implementation of the Long-Term Arrangement would present serious problems for the United States.
25. Pending a final decision on the question of the Protocol relating to Canada, the representative of Canada reserved the position of his Government on para- graphs 2 and 3 of this Annex.
ANNEX C
26. In connexion with sub-paragraph (ii) of this Annex, prices should be com- pared, in cases of genuine market disruption, not in relation to the price for the domestic product only, but also in relation to the prices at which other exporting countries also sell their goods in the importing country.
27. In connexion with sub-paragraph (iii) the "damage" referred to must be damage caused directly by market disruption and not by any change of consumer taste, technological advance, or similar factors.
28. References to a "threat" of market disruption in the Arrangement mean an actual threat and not a potential threat.
PROTOCOLS
29. This question was discussed in the light of statements made by certain repre- sentatives on the subject of exemption for their countries from the provisions of paragraphs 1 and 3 of Article 2 and paragraphs 2 and 3 of Annex B. Such state- ments were made by the representatives of Canada, Denmark, Norway, Sweden and the United Kingdom.
30. The Committee agreed that any country exempted in this way would be covered by an individual Protocol, which would be attached to the Arrangement, and that this question should not be covered by a special article in the Arrangement.
31. Although it was agreed that the United Kingdom's case fully met the criteria referred to below, the Committee came to no final conclusion as regards any par- ticular country and finally decided to accept the procedure described hereunder.
32. The Committee agreed that any country which considered that it fulfilled the following criteria, namely:
(i) that, in the decade preceding the entry into force of the Arrangement, it had experienced a substantial contraction in its cotton textile industry; and
(ii) that it was importing a substantial volume of cotton textiles, particularly from the less-developed countries and territories and Japan, in relation to its own production of cotton textiles,