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23. The discussion on the interpretation of Article 12 of the Arrangement centered mostly around sub-paragraph 3 of the Article relating to handloom textiles and mostly with reference to the Indian experience. According to the relevant provision, the Arrangement is not to apply to developing country exports of handloom fabrics, provided that such products are properly certified under arrangements established between the importing and exporting participating countries concerned. From the point of view of the countries which participated in this discussion, the meaning of the Article was quite clear, namely, that the Arrangements did not apply to exports of handloom textiles as long as certification in a mutually agreed manner had been put into operation. In the Textiles Committee discussions, developed countries seemed to take the view, on the other hand, that it was open to the importing countries to operate the restrictive provisions of the Arrangement even in the case of handloom products where such certification proce- dures had not been agreed on. There were instances of deliberate delays in agreeing on such procedures. The argument had also been put forward that the volume of imports of handloom textiles from particular countries had been disproportionately high compared to machine-made products, and that this was against the intent of the Arrangement. Arguments like these had unfortunately been advanced even by some of the Nordic countries which generally had the reputation of having a liberal outlook on trade. The feeling on the whole was that the intent and operation of this par- ticular provision should be preserved, since several deve- loping countries had a vital interest not merely in tradi- tional hand-made products but also in providing employment to millions of people in their countries.
24. There was a lively discussion on the interaction between the provisions of Article XIX of the GATT dealing with emergency action and the provision of the MFA. Although a derogation from GATT, the MFA was regarded as a measure specially designed to deal with international trade in textiles. Article 9 of the Arrangement stipulated that in view of the safeguards provided within the Arrangement, the participating countries were required as far as possible to refrain from taking additional trade measures which may have the effect of nullifying the objectives of the Arrangement. Some countries had nevertheless resorted to Article XIX of GATT, and no indication was given as to why MFA had been bypassed. It was of course true that under Article 1 (6), the Arrangement did not affect the rights and obligations of the participating countries under the GATT, but recourse to both for applying restrictive measures was going far beyond the scope of the relevant provisions. While one or
two participants thought that the invocation of GATT provisions made it possible for GATT member countries to seek the protection available under the appropriate provisions of GATT and even to resort to retaliatory measures where appropriate and justified, the feeling generally was that resort to restrictive action outside the MFA for products fully covered by the Arrangement was neither appropriate nor justified in the spirit of the Arrangement. For countries
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