TNAG-0146-FCO40-182-Exports-of-textiles-to-United-States-of-America-1969 — Page 162

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9.

CONTIDENTIAL

to gain support by reducing the number of countries

likely to suffer concretely from their proposal, but

in any event it would clearly be unwelcome to the

Americans to have to take non-discriminatory action,

particularly in view of the compensation required.

(ii) The text of Article XIX would require the Americans

to reach agreement with the countries whose exports

were affected, and this has traditionally been

interpreted to mean that they have to offer compensation,

or incur liability to retaliation. The American

Administration at present lack legislative authority

to offer compensation by way of tariff reductions on

other items.

The possibility should perhaps be considered of the Americans

taking unilateral action to curtail imports from certain countries

without invcking Article XIX of the GATT. But it is hardly likely that

the United States could so flagrantly set aside their obligations

particularly when countries so important as Japan would be among those

to suffer.

Tariff Action

10. Article XIX may be invoked to cover increases in bound rates of

duty as well as the imposition of quantitative restrictions. The same

rules apply as in the case of q.r. and the increase in duty should be

temporary only. Since the considerations set out in para. 8 in

connection with Article XIX q.r. apply equally in this case, there is

even less reason to suppose the Americans would take this course.

11. The Americans are, however, known to be considering seriously the

/possibility

DENTIAL

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