TNAG-0142-FCO40-178-Long-term-policy-on-International-trade-in-textiles-1969 — Page 208

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competitive products. This problem was examined by the G.A.T.T. Working Party on the Avoidance of Market Disruption and their tentative conclusions were enshrined in the Contracting Parties Decision of 19th November, 1960, reproduced at Annex 1. The Working Party agreed that market disruption could only be defined by reference to a number of elements in combination, of which the most important were the following :-

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a) a sharp and substantial increase or potential increase of imports of

particular products from particular sources;

b) these products are offered at prices which are substantially below those prevailing for similar goods of comparable quality in the market of the importing country;

c) there is serious damage to domestic producers or threat thereof.

This definition of what constitutes market disruption was given legislative force in the C.T.A., which includes in the record of understandings a note to the effect that (i) the damage to domestic producers must be caused directly by market disruption and not by. any change of consumer taste, technological advance or similar factors and (ii) a threat of market disruption must be an actual and not a potential threat. While it is true that the contracting parties have only accepted the validity of this definition in the case of cotton textiles it seems unlikely that a majority would vigourously contest its relevance in considering the justification for action to restrict imports of non- cotton textiles under Article XIX. The question would then be mainly one of arithmetic: whether the increase in imports was sharp and substantial and what was the effect on production and consumption of like and competitive products.

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