CONFIDENTIAL
ANNEX
Article XIX of the G.A.T.T.
This article provides that:
"If, as a result of unforeseen developments and of the effect of the obligations incurred by a contracting party under this Agreement, including tariff concessions, any product is being imported into the territory of that con- tracting party in such increased quantities and under such conditions as to cause or threaten serious injury to domestic producers in that territory of like or directly competitive products, the contracting party shall be free, in respect of such product, and to the extent and for such time as may be necessary to prevent or remedy such injury, to suspend the obligation in whole or in part or to with- draw or modify the concession".
It should be noted that either tariff or quota action can be taken, and that Article XIX requires the country taking action to reach agreement with the other interested contracting parties: in default of agreement any contracting party which is affected is authorised to withdraw equivalent concessions. This means that compensation has to be offered to the countries whose trade is curtailed, or, alternatively, they are allowed to retaliate to the same extent. Action taken must also be non-discriminatory, i.e. applied to all suppliers of the products in question, and temporary.
CONFIDENTIAL
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