า
Ther are no specific ruls, and very little case law, as to how co: pensation for "damage" should be calculated. Clearly there should be compenne ti n for actual cut-back in trade compared to a reasonabl. past period; the question of compensation for a loss of potential increase would be a matter for negotiation. There would be no need for compensation to inv. lve : concession in textiles, if on alternative could be found which gui.fied the exporters, or which CAT", if appealed to, regarded as satisfactory.
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2. If we took action under Article XIX any member of GATT (other than Hong Kong or other UK dependent territories) who hai eny trade-ith us in the restrict d commoditi s would be entitled to consult with us if they haİ a "substantial interest" ("Substantial nterest" has ne er ben p.sitiv ly defined but there a e preced nts for regarding it as 10% or more of total inports.) Consultation, like notification to GATT, should take pl. ce before action is taken (the timing is ninety days for consultati me and them thirty more if agreement is not reach d); but again, action may be taken in advance of consultation "in critical circumstances" detined an bent than in which demege would be caused which would be "difficult to repair" The compensation to which th y would be entitled is likewise not early defined but would have to be "substantially equivalent" to any damage which they claimed to have been caused. In case of disagremont either about damage or compensation app al would lle to GATT as a bolj. The nor4. of copensation is by way of tariff reductions on exports of inter at to the exporting country concerned." This acons that in effect we have no cop to offer to Commonwealth countries whose goods mostly enter the UK duty-"?e« 30 that Commonwealth suppliers, if they wanted their pound of i'l sh, woul. have to retaliate against our exporte.
Tariffs
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10.
As far as increased teriff's or "surcharges" a e conc›rned there are GATT obligations if the duties are not bound and there are nɔ GATT obli. to maintain Commonwealth pref rence (but there is a GATT obliration not ta Increase it). As far as increases in bound mîn rates are concerned compensation is required. Article XIX may be invoked to cover incr bound duties, on the same conditions as for qui Article XIX, however, a that actin is temporary. A pervenent increase in a bond duty rogs? of Article XXVIII. Thic includes muny complications about "open " tizing but the essential requirements are the same as those for Arti. 1 action; the increase in duty cannot be discriminatory and must be opensat
for.
USE OF ARTI LS XIX IN RESP CT OF COTTON TEXTIL S
11.
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The LWA incluies & proviso in Article 1 that the measures Fe the LTA do not affect the rights and obligati ns or participating contri under GATT. It has never been very clear what, if anything, this prowing intended to meen; on'he face of it it wo ld enable members of the LTA to de co pensation for restrictions imposed on their exports. It a ghi, huever. entitle us, without actually denouncing or re-igning from the LTA, to take Article XIX action on cotton textiles if we were prepared to make this ni discriminatory and to compensate; in this case we could cut inports back.