FOREIGN 'ECONOMIC AND COMMERCIAL POLICY


is, "to the fullest extent not inconsistent with existing legislation".
Thus, the U.S. prohibition on the export of tobacco seed, which is
required by law, and certain similar export restrictions on agricultural
products which were cited earlier in this paper are not subject to the
interdiction of Article XI, paragraph 1.*
   Other significant exceptions to that paragraph are to be found in
the Agreement proper. One group of such exceptions applies to situa-
tions arising out of commodity shortages. Paragraph 2 (a) of Article
XI provides that the general rule of paragraph I shall not extend to
"export prohibitions or restrictions temporarily applied to prevent
or
relieve critical shortages of foodstuffs or other products essential to
the exporting . . . country". This exemption, howeverl does not relieve
the contracting party applying restrictions from    the nondiscrimi-
natory, most-favored-nation provisions of the GATT.
   Article XX, paragraph I(i) exempts from all the provisions of the
 GATT, except the nondiscrimination provisions, any measures "in-
 volving restrictions on exports of domestic materials necessary to
 assure essential quantities of such materials to a domestic processing
 industry during periods when the domestic price of such materials is
 held below the world price as part of a governmental stabilization
 plan; Provided that such restrictions shall not operate to increase the
 exports of or the protection afforded to such domestic industry, and
 shall not depart from the provisions of this Agreement relating to
 nondiscrimination . . .", and subject to the further requirements that
 such measures are not applied in a manner which would constitute a
 disguised restriction on international trade. Finally, Article XX,
 paragraph II(a) exempts from all the provisions of the GATT until
 not later than January 1, 1951 any measures essential to the acquisition
 or distribution of products in general or local short supply, or essen-
 tial to the control of prices by a contracting party undergoing short-
 ages subsequent to the War; but here again arbitrary or unjustifiable
 discrimination is not tolerable and the principle must be observed
 that all contracting parties are entitled to an equitable share of the
 international supply of the scarce product.
   In addition to exemptions relating to shortage situations, exemp-
 tions are to be found in Articles XI and XX for restrictions imposed
 on a number of other grounds. Among those which are especially
 relevant to the problem considered in this paper are "Export prohibi-
 tions or restrictions necessary to the,application of standards or
 regulations for the classification, grading or marketing of commodi-

   *The present policy of the Executive Branch is, of course, to obtain the
 elimination of these restrictions by legislative 1action, in connection.with
the
 ratification of the ITO Charter. [FootnOte In the'source text.]


699