702 _ FOREIGN RELATIONS, 1950, VOLUME I |

limitations on the use of export restrictions would in turn limit the
effectiveness of the bilateral trade agreement as a technique in trade
bargaining and thus would influence countries in their future decisions
on the extent to which resort should be had to such agreements. Finally,
the elimination of certain export restrictions would remove the justi-
fication for many import restrictions which now are rationalized as
being a necessary offset to the export restrictions of other countries.t

Suggested course of action—The following course of action is
suggested : 7

(1) The U.S. should place the subject of export, restrictions on the
agenda for the Fourth Session. _

(2) The U.S. should make a statement in plenary session introduc-
ing the problem. The statement should be couched in terms designed
to avoid the “policeman” kind of approach; it should deal with the
problem as one with which all the contracting parties are jointly con-
cerned. The statement should cover the following points:

(a) That there are increasing indications of the existence of
export restrictions in effect by GATT members. under circum-
stances not sanctioned by the GATT;

(6) That the situation appears to be sufficiently widespread to
justify the attention of the collective Contracting Parties, rather
than placing reliance solely upon the complaints of individual
contracting parties;

(ec) That a working party should be set up to recommend
measures by the Contracting Parties to deal with the situation.®

(3) The U.S. should then seek agreement in the working party and
among the Contracting Parties on the following points: -

(a) An agreement that, subject to the provisions of the Protocol
of Provisional Application, export restrictions designed with
_ certain express objectives, e.g., tie-in sales, bargaining for short-
supply items of other countries, protection of processing indus-
tries, prevention of price cutting, whether used in connection with
the bargaining of bilateral agreements or otherwise, violate the
provisionsoftheGATT; |
(6) A request that the individual contracting parties review
their existing export restrictions in the light of the GATT pro-
visions, notably Articles XI and XIII, and the Contracting
Parties’ conclusions pursuant to this resolution, and undertake

t For example, the Dutch justify the maintenance of quantitative restrictions
on imports of Swedish furniture on the grounds that the Swedes are preventing
the export of timber to the Dutch furniture industry except at prices well in
excess of those paid by Swedish furniture manufacturers. [Footnote in the
source text.]

®*This subparagraph initially read: “(¢) That a working party should be set
up to develop the next steps which the Contracting Parties should take to
consider or to deal with the situation. ” he change was made by TAC at its
February 6 meeting. _