FOREIGN ECONOMIC AND COMMERCIAL POLICY


is that a discussion of the issue will create certain difficult and delicate
problems.
  In the first place, Czechoslovakia will almost certainly seize the
occasion again to press its complaint that existing U.S. export con-
trols are in violation of the GATT. This issue was raised at Annecy
and was the occasion of extensive debate and recrimination.
  On the other hand, it is clear that the Czech position would be
defeated if pressed to a vote before the contracting parties; this is even
more certain than it was at Annecy, since in the interim closer agree-
ment on export licensing controls has been reached with a number
of OEEC countries which are also GATT countries. Moreover, the
probability is that the time devoted to the Czech charges could be
limited substantially more than was the case at Annecy, in view of
the fact that this would be a repeat performance on which the con-
tracting parties had already expressed themselves. In any case, if the
U.S. were to decide to raise the export restriction issue, it would be
well to consult with the Chairman of the Contracting Parties in
advance to determine how best to limit any discussion which the
Czechs might precipitate.
  Another moderately embarrassing problem arises out of the fact
that the U.S. is required by law to maintain certain export restric-
tions, i.e., the restriction on the export of tobacco seed, which would
be in violation of the GATT provisions were it not for the Protocol
of Provisional Application. Moreover, the U.S. is an indirect party
to the restrictions on the export of rubber tree strains which are main-
tained by a number of Latin American countries party to the GATT.
  Nevertheless, there are compelling reasons for raising the issue of
export restrictions at this time. The most compelling is the fact that
the protective incidence of existing export restrictions is becoming
far more widely appreciated and recognized than has heretofore been
the case. Current deliberations within the OEEC on the subject of
dual pricing have served to highlight the abuses practiced through
export restrictions. To date none of the complainant countries appears
to have invoked the relevant GATT provisions either because of a
failure to appreciate the relevance of these provisions or because of a
judgment that the use of the GATT commitment would prove in-
effectual. An effective contribution by the GATT to a problem of such
general interest and importance would contribute substantially to its
prestige and the general level of its future effectiveness.
  Moreover, the economic benefits to be derived from the lifting of
export restrictions inconsistent with the GATT would clearly be sub-
stantial. The immediate economic benefits to be derived from the lift-
ing of such restrictions to the extent that they were inconsistent with
the GATT would be substantial in themselves. In addition, effective


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