15 November 1962
URUGUAYAN RECOURSE TO ARTICLE XXIII
Report of the Panel (September 1964) adopted on 3 March 19651
(L/2278 - 13S/45)
1. On 6 July 1964 the Council agreed, on a request by the Government
of Uruguay, that this Panel be reconvened to pursue further the question
of compliance with the Article XXIII recommendations made by the CONTRACTING
PARTIES on 16 November 1962, to examine certain newly applied trade barriers
affecting Uruguayan exports and to re-examine the question of compatibility
of certain measures with the General Agreement. The exact terms on which
these various matters should be taken up by the Panel are restated in the
appropriate sections of the present report.
2. The Panel met in formal sessions from 21 to 25 September 1964, and
continued private deliberations on the content of its report in early October.
The membership of the Panel remained the same.2 As on previous
occasions, Mr. Biermann (Netherlands) did not participate in the Panel's
consideration of the cases of Belgium, France, the Federal Republic of
Germany and Italy. An observer for Australia attended the formal meetings.
(A) Compliance with the Article XXIII:2 Recommendations
3. The Panel was asked "to consult with the countries concerned as to
how they could more fully comply with the recommendations previously submitted
by the Panel and approved by the CONTRACTING PARTIES". The Panel recalled
that on the proposals which it had made in its report,3 the
CONTRACTING PARTIES had, on 16 November 1962, approved recommendations
under paragraph 2 of Article XXIII to seven contracting parties that they
give immediate consideration to the removal of certain specified measures,
and report by 1 March 1963 on action taken to comply with these recommendations
or on any other satisfactory adjustment.4
4. On the instructions of the Council, the Panel had reconvened in July
1963 to examine the reports received from the seven contracting parties.
The Panel's views were recorded in paragraph 6 of its report and its specific
comments on the individual cases in Annexes A to G to that report.5
5. In accordance with its new instructions the Panel consulted with
the delegations of Austria, Belgium, France, the Federal Republic of Germany,
Italy and Norway. The seventh contracting party covered in the 1962 recommendations,
namely Sweden, had reported full compliance.6
6. In the course of the discussions, the Panel noted that since the
July 1963 review some of the contracting parties concerned had made further
progress in complying with the recommendations by removing some more or
all of their restrictive measures in question. In some cases there had
been an improvement in the access for the Uruguayan exports in question,
for example, through an increase in the quota, or the replacement of quota
restriction by liberal licensing. In other cases the restrictive measure,
which constituted the subject of the original Uruguayan recourses to Article
XXIII and the recommendations, would soon be removed (notably the quantitative restrictions
on beef and preserved meat of EEC countries which are to be removed on
1 November 1964). In these cases, the Panel considered that the relevant
recommendations would ipso facto have become inoperative with the
disappearance of the restrictive measures in question. (As regards any
new measures applied or to be applied in their place, e.g. those pursuant
to the Common Agricultural Policy regulations of the EEC, the Panel's views
are noted in paragraph 18 of its first report7 and in section
C below.)
7. The information supplied to the Panel in regard to each of the six
contracting parties which had not complied with outstanding recommendations
at the time of the Panel's last report is set out in the tables in Annex
1. Besides reporting on the removal of restrictions and increases in access
to markets, this Annex also discusses the prospects for removal of the
remaining restrictions and action which might make possible progressive
relaxation.
8. The Panel proposes that the procedure recommended in paragraph 20
of its first report8 be renewed so that the Panel will continue
to be in a position promptly to deal with any Uruguayan proposal to suspend
concessions or obligations to compensate for any nullification or impairment
arising from the continued maintenance of the trade barriers constituting
the recommendations of 16 November 1962.9
(B) New measures
9. The Panel was asked "in the light of information provided by the
Government of Uruguay in L/1662/Rev.1, to examine the restrictions applied
since the latest report by the Panel and to submit recommendations". On
examining the table in L/1662/Rev.1, the Panel immediately found that most
of the measures included in it were not new measures applied since its
latest report,10 but measures which had already been dealt with
in its first report.11 The one case in which measures previously
considered might now be regarded as new is that in which the situation
of the country applying the restrictions has subsequently altered, as,
for example, by disinvocation of Article XII. Many other new measures were,
furthermore, of the kind regarding which the Panel had indicated that it
was unable to make a recommendation under Article XXIII:2. This had been
due to the unwillingness of the Uruguayan Government to claim that there
was infringement of GATT provisions or otherwise to demonstrate the grounds
for the invocation of the procedures relating to nullification and impairment.12
While a comprehensive table showing all of the obstacles confronting Uruguayan
trade (which might presumably include certain measures not in L/1662/Rev.1)
could, in the view of the Panel, conceivably be of value in indicating
the magnitude and complexity of the problems faced by Uruguay in expanding
its exports, it did not provide a basis for discussions relating to nullification
or impairment and the invocation of Article XXIII.
10. Prior to, and in the course of, the Panel's meeting, a number of
the governments mentioned in L/1662/Rev.1 informed the Uruguayan delegation
of corrections and modifications to the document. On the instruction of
the Panel, the secretariat assisted the Uruguayan delegation in identifying
the cases which could be regarded as genuinely new and could possibly be
in need of consideration under Article XXIII. These measures are listed
in Annex II to this report.
11. With respect to these measures, the Panel noted that it had been
constituted "to examine cases referred to it by Uruguay, in accordance
with the provisions of paragraph 2 of Article XXIII" and that the procedures of Article XXIII:2 were, in general, not to be resorted
to until possibilities of effecting "satisfactory adjustment" through direct
consultation (under Article XXII:1 or XXIII:1) had been exhausted. It was
recalled that when the previous cases were brought before the Panel in
1962, the Government of Uruguay supplied, in each case, papers concerning
the representations and consultations under Article XXII or XXIII:1 which
had led to the cases being brought under Article XXIII:2. The Uruguayan
delegation shared the view of the Panel that the instructions of the Council,
noted in paragraph 9 above, were not intended to, and could not, amend
the express provisions of the General Agreement. Hence, a contracting party
could not be obliged to appear before the Panel unless and until the CONTRACTING
PARTIES had referred the case to it on the advice of the contracting party
invoking the provisions that no "satisfactory solution" had been effected
through direct representation or consultation.
12. In dealing with the first group of Uruguayan applications under
Article XXIII: 2 in 1962, the Panel had been unable to find nullification
or impairment under the General Agreement in respect of a large number
of items. In many of such cases the contracting party concerned was nevertheless
urged to remove the measure in question or any adverse effect which it
might have on Uruguayan exports. The Panel was now informed by certain
contracting parties that they had been able to take action in this direction.
In respect of many of the cases, the Panel had also suggested that the
Uruguayan authorities should seek mutually beneficial solutions through
bilateral or multilateral consultations with the importing countries concerned.
The Panel recalled its view on the value of this approach, as noted in
paragraph 22 of its report,13 and urged the Uruguayan delegation
to make use of the facilities provided by paragraph 1 of Article XXII in
this regard.
(C) Questions of compatibility
13. The Panel was instructed, as its third task "to take up, in the
light of paragraph 19 of the Panel's first report,14 the question
of compatibility with the GATT referred to in paragraphs 16-18 of that
report". These paragraphs referred to three subjects:
(a) measures applied or to be applied pursuant to the Common
Agricultural Policy of the EEC;
(b) variable levies in general;
(c) measures claimed to be consistent with GATT or required by
national legislation existing on the date of the relevant application or
accession protocol.
14. EEC Common Agricultural Policy measures. _ In paragraph 18 of
its first report, the Panel had referred to the introduction by the EEC
of Common Agricultural Policy regulations on cereals, but noted that they
could not be taken up by the Panel because they had not formed part of
Uruguay's original submission. Pursuant to its new terms of reference,
the Panel has now advised the Uruguayan delegation that the Panel would
be in a position to examine any specific cases which the Government of
Uruguay wished to present, assuming it could also show at that time that
bilateral consultations had been tried unsuccessfully. The Panel understood
that Uruguay would soon be initiating proceedings in this manner in respect
of these measures. As regards the Common Agricultural Policy measures on
meat to be put in force on 1 November 1964, the Panel noted that it could
have no case before it until such submissions had been made by Uruguay
following unsuccessful bilateral consultations.
15. "Variable levies" in general. _ In its first report the Panel
had noted, in paragraph 17, the difficulties it faced in considering the
status of variable levies or charges. In addition to these difficulties,
the Panel also wished to point out the impossibility for a Panel of this
nature to deal with a general concept without specific instances possessing
defined features and characteristics on which comparison under GATT obligations
could be based. The Uruguayan delegation agreed that it would pursue the
matter in terms of the nature and effects of Uruguay's trade of the variable
levies actually applied.
16. Consistency of measures with GATT and protocols. _ In a number
of the cases presented in the original Uruguayan submissions, the Uruguayan
Government did not wish to challenge the contention of the contracting
parties concerned that the measures in question were either fully consistent
with GATT or, though not consistent, were permitted under the terms of
the relevant protocol of application, and the Panel refrained from examining
the legal question of consistency in these cases. While the Panel's new
terms of reference would appear to authorize it to "take up" the question
of compatibility in the specific cases in question, the Government of Uruguay
was not in a position to present to the Panel arguments or evidence which
would narrow down and define the points at issue on which rulings were
sought. Hence, the Panel found it difficult to proceed, and the delegation
of Uruguay agreed that, if it wished to pursue the matter further, it would
submit the necessary brief.
ANNEX I
Notes on discussions with contracting parties concerning compliance
with the Recommendations of 16 November 1962
1. On the proposals of the Panel on Uruguayan Recourse to Article XXIII,
the CONTRACTING PARTIES approved, on 16 November 1962, recommendations
to seven contracting parties concerning certain import restrictions and
other barriers to trade which they maintained.15 In July 1963,
the Panel examined the reports submitted by the seven contracting parties
concerned and reported its findings16 as to progress made in
compliance with those recommendations. Further discussions were held in
September 1964 with the six contracting parties, which had by then not
fully complied, and the following notes are intended to register the information
adduced in the course of these consultations.
2. These discussions principally covered only developments since July
1963. Consequently the notes must be read in conjunction with the previous
ones, which reported on progress made up to that time.
A. AUSTRIA
1. The CONTRACTING PARTIES recommended to the Government of Austria
that it give immediate consideration to the removal of the following measures:
Import permit requirement:
02.01 |
Frozen and chilled bovine meat
Chilled offals |
15.07 |
Crude and refined edible oils |
16.02 |
Preserved meat |
16.03 |
Meat extracts |
Discriminatory import permit requirement:
53.07 |
Yarn of combed wool |
53.11 |
Wool textiles |
Mixing regulation:
10.01 Wheat
2. Among these the "import permit requirement" applying to items 02.01,
16.02 and 16.03 and the "mixing regulation" applying to item 10.01 should
be deleted from the list for the reasons stated in paragraph 5 of Annex
A to L/2074. Edible oils, item 15.07, have been liberalized by successive
stages, of which the last became effective on 1 June 1964.
3. Recommendations are outstanding therefore only for:
Discriminatory import permit requirement:
53.07 |
Yarn of combed wool |
53.11 |
Wool textiles |
A part of these items has been liberalized in response to the GATT recommendations,
the remaining sub-items will be liberalized in the near future;17
the 1963 offer of bilateral quotas therefore becomes obsolete.
B. BELGIUM
1. The CONTRACTING PARTIES recommended to the Government of Belgium
that it give immediate consideration to the removal of the following measures:
Import permit requirement with quota:
02.01 Chilled and frozen bovine meat
Import permit requirement:
02.01 |
Frozen ovine meat |
15.07 |
Crude linseed oil
Crude and refined edible oils |
16.02 |
Preserved meat |
16.03 |
Meat extracts |
23.04 |
Oilcake and meal resulting from the extraction of vegetable oils |
53.05 |
Combed wool (tops) |
2. Among these, the "import permit with quota" applying to 02.01 (frozen
and chilled bovine meat) and the "import permit" applying to 16.03 (meat
extracts) should be deleted, these products having been liberalized.
3. Recommendations are outstanding for the import permit requirement
applying to all the other items. The Belgian authorities maintain their
position that the measure is purely administrative and not restrictive
or incompatible with GATT.18
C. FRANCE
1. The CONTRACTING PARTIES recommended to the Government of France that
it give immediate consideration to the removal of the following measures:
Import permit with quota:
02.01 |
Frozen and chilled bovine meat
Frozen ovine meat |
16.02 |
Preserved meat |
Import permit:
02.01 Chilled offals
Import permit and discrimination:
53.05 |
Combed wool (tops) |
53.07 |
Yarn of combed wool |
53.11 |
Woollen fabrics |
2. Among these, the "import permit with quota" applying to item 02.01 (bovine
meat) are to be removed on 1 November 1964.
3. Recommendations are therefore still outstanding on all the other
items mentioned above. The following are the points of substance noted
by the Panel:
(a) With respect to combed wool (tops) (item 53.05), the import
permit has been removed, but imports have been made subject to a countervailing
duty amounting to 3 per cent ad valorem. This charge applies only to imports
of tops of Uruguayan origin. The French authorities maintain that the import
charge on tops is designed to countervail the effects of the Uruguayan
export tax on raw wool, and meets the requirements of Article VI of GATT.
Modification of this measure is, however, under active consideration and
it is expected that the study to be engaged in from 9 October by a group
of experts, appointed by an international meeting of wool producers and
traders, might clarify certain factual questions, which would facilitate
a settlement. The Government of Uruguay is of the view that the Uruguayan
export tax on raw wool does not constitute a subsidy, as evidenced by the
fact that no other country in Europe has found it necessary to impose a
duty of this kind on Uruguayan tops and that nothing in the International
Monetary Fund Agreement nor in the GATT prevents the application of the
tax. Consequently, it considers the French import charge on tops to be
unjustified. The Panel has taken note of the arguments on both sides.19
(b) Imports into France of yarn of combed wool and woollen fabrics
(items 53.07 and 53.11 respectively) have been liberalized for OECD countries,
and the liberalization will be extended gradually to other countries, including
Uruguay. The French delegation has pointed out that there is no known case
in which a licence application has been denied for imports of these products
from Uruguay.
D. FEDERAL REPUBLIC OF GERMANY
1. The CONTRACTING PARTIES recommended to the Government of the Federal
Republic of Germany that it give immediate consideration to the removal
of the following measures:
Import permit requirement with discriminatory quota :
02.01 ovine meat
Import permit requirement with quota:
41.02 Neat leather
Import permit requirement with quota:
53.11 Woven fabrics of wool or of fine animal hair other than for
padding and felt cloth
Import permit requirement without quota:
53.07 Yarn of combed wool, not put up for retail sale, raw, other
than worsted yarns, bleached, dyed or printed
2. The "discriminatory quota" applying to 02.01 (frozen ovine meat)
has been replaced by a global quota as from 15 December 1962; consequently
the reference to the discriminatory element in this restriction has been
removed. The "import permit and quota" on neat leather has been removed
with effect from 1 June 1964. For a portion of item 53.11 (other woollen
and fine animal hair textiles) licences are issued freely; consequently
the reference to the "quota" for that portion of the item has been removed.
3. Recommendations are outstanding on the other measures, namely:
Import permit with quota:
02.01 Frozen ovine meat
Import permit with quota:
53.11 Tightly woven fabrics made of wool and fine animal hair for
furniture and interior decorating purposes (see below)
Import permit:
53.11 Other woollen and fine animal hair textiles
Import permit:
53.07 Yarn of combed wool, not put up for retail sale, raw, other
than worsted yarns, bleached, dyed or printed
The German authorities have renewed an earlier promise that tightly
woven fabrics made of wool and fine animal hair for furniture and interior
decorating purposes (53.11) will be liberalized on 1 January 1965.20
E. ITALY
1. The CONTRACTING PARTIES recommended to the Government of Italy that
it give immediate consideration to the removal of the following measures:
Quota 02.01 Frozen and chilled bovine meat
Discriminatory quota:
15.07 Crude linseed oil
2. The "quota" restriction on chilled bovine meat was removed on 15
June 1963. The quotas for frozen bovine meat have been increased for Argentina,
Brazil and Uruguay, amounting, in 1963, to 76,300 tons out of a total of
imports from all sources of 89,500 tons. Import provisions for the three
countries have been ample for 1964 and the quota restriction will be removed
by 1 November 1964. The discriminatory quota on crude linseed oil was removed
on 31 October 1962.
3. By 1 November 1964, all the Italian restrictions covered by the recommendations
will have been removed.
F. NORWAY
1. The CONTRACTING PARTIES recommended to the Government of Norway that
it give immediate consideration to the removal of the following measures:
Import permit requirement involving a maximum and inimum price system:
02.01 |
Frozen and chilled bovine meat
Frozen ovine meat
Chilled offals |
Import permit requirement:
16.02 |
reserved meat |
16.03 |
Meat extracts |
2. The Norwegian Government initiated a study to determine whether the
restrictions in question should be considered as consistent with the General
Agreement; on the basis of this study, the Norwegian Government was to
take a position as to possible changes in the import system for agricultural
goods. Up to now, the Government has not acted on the report by the officials.
ANNEX II
New measures21
Country |
Item No. |
Description of item |
Measures (as of 1
September 1964) |
Belgium/Luxemburg |
10.06 |
Rice (peeled) |
A provision of
the Association Agreement of Yaoundé accords a preference to rice
from associated countries |
France |
Germany |
Netherlands |
Italy |
Germany |
02.01 |
Meat of animals of the bovine
species, frozen and chilled |
Discriminatory quota of 14
July 1964 open only to imports from one country |
Japan |
02.01 |
Meat of animals of the bovine
species, frozen and chilled |
Import permit |
16.02 |
Preserved meat |
Import permit and quota (applicable
to part of the item) |
11.01 |
Wheat flour |
Import permit and quota |
ex 15.07 |
Groundnut oil and sunflower
seed oil, crude and refined |
Import permit (applicable to
part of the item) |
23.04 |
Oil cake and meat |
Import permit and quota (applicable
to part of the item) |
ex 41.02 |
Cowhide, tanned |
Import permit and quota |
ex 41.03 |
Sheepskin leather, tanned |
Import permit and quota |
ex 41.08 |
Patent leather |
Import permit and quota (applicable
to part of the item) |
53.11 |
Wool textiles |
Import permit and quota |
United States |
16.02 |
Preserved meat |
Certain state legislation requiring
relabelling of canned corned beef
to show country of origin in 1-inch high letters |
1This is the second of two reports by the Panel adopted on
3 March 1965. The first report, on the October 1963 meeting of the Panel,
appears on page 35.
2BISD, Eleventh Supplement, page 17.
3Ibid., page 95.
4Ibid., page 56.
5Ibid., pages 38 to 44.
6See page 44.
7BISD, Eleventh Supplement, page 100.
8Ibid., page 101.
9Ibid., page 56.
10See page 35.
11BISD, Eleventh Supplement, page 95.
12Ibid., pages 99-100.
13BISD, Eleventh Supplement, page 102.
14Ibid., page 101.
15BISD, Eleventh Supplement, pages 56 and 95-148.
16See page 35.
17Liberalization effected 1 October 1964 (L/2278/Add.1).
18The representative of Belgium noted, at the Council meeting
on 30 October 1964, that his Government considered that the items in question
were de facto liberalized (L/2278/Add.1).
19The representative of France announced in the Council, on
30 October 1964, that his government had decided to remove the countervailing
duty on wool tops (53.05-combed wool), and the duty was subsequently terminated
by a decree effective 24 December 1964 (L/2278/Add.1).
20This action has now been taken (L/2278/Add.1).
21See paragraph 10, page 2.
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