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FOREIGN RELATIONS, 19 5 0, VOLUME I


ties in international trade . . . (Article XI, paragraph TI (b)). The
phrase "restrictions necessary to the.., marketing of commodi-
ties . . ." is presumably to be construed narrowly in view of its con-
text. Another relevant exception which should be noted is that appli-
cable to measures which are "necessary to secure compliance with
laws and regulations which are not inconsistent with this Agreement,
including those relating to . . . the enforcement of [state trading] 4
monopolies . . .
   Another important exception is found in Article XIV, paragraph
 4, which authorizes export controls by countries in balance-of-pay-
 ments difficulties where such controls are necessary to divert the
 country's export to hard-currency markets.
   Finally, the general exemption contained in Article XXI under the
 heading of "Security Exceptions" is, of course, applicable to
export
 restrictions.
   It is reasonably clear that export restrictions cannot be justified on
 the basis of the balance-of-payments exceptions to the GATT, except
 in connection with hard-currency set-aside schemes of the kind con-
 templated by Article XIV, paragraph 4. The general rule with re-
 spect to these exceptions appears first of all in Article XII, paragraph
 1; but that paragraph is limited to import restrictions. Paragraph 2,
 which amplifies paragraph 1, contains the same limitation. And
 Article XIV, which authorizes the discriminatory application of
 quantitative restrictions under certain circumstances, limits that
 authorization to restrictions applied "under Article XII", i.e.,
to
 import restrictions.t
   It is also evident that, except for the exemption provided by the
Protocol of Provisional Application and by the Security Exceptions
Article, countries are not justified under any GATT exception in
following a policy of using the release of scarce materials as a bargain-
ing weapon in bilateral agreements, wherever such bargaining leads
(as it necessarily must) to a discriminatory pattern of such
restrictions.
   Tactical pro's and con's-If the U.S. should decide to raise the issue
of export restrictions at the next Session of the GATT, the likelihood

  'Brackets appear in the source text.
  t Article XV, paragraph 9, provides that "nothing in this Agreement
shall
preclude . . . the use by a contracting party of restrictions or controls
on imports
or exports, the sole effect of which . . . is to make effective . . ."
exchange con-
trols or exchange restrictions in accordance with the Articles of Agreement
of
the International Monetary Fund. While this might be used as a basis for
justi-
fying export restrictions in some circumstances, it is difficult to see how
such
justification could apply to any restrictions other than those related to
export
set-aside schemes. [Footnote in the source text.]