Books and pamphlets, n.s.p.f. - Par. 1410 (Tariff Act of 1930). The books, pamphlets, and music here considered are exclusive of Bibles, and must be printed in English, be not more than 20 years old, and be imported under conditions of general trade (i.e., exclusive of those which are specially imported for the Government or for educational and similar institutions, and not for sale); otherwise they are duty free. In the new trade agreement the rate of duty on prayer books of foreign authorship is reduced from 71⁄2 to 4 percent ad valorem, and on those not of foreign authorship from 12 to 7 percent. On other books and pamphlets the duty is reduced from 7 to 5 percent ad valorem if of foreign authorship and from 20 to 10 percent ad valorem if not of foreign authorship. On books for children's use, the rate is lowered from 15 to 7 percent, and on book bindings wholly or in part of leather, the rate is changed from 15 to 7 percent. United States production of books and pamphlets was valued at 165 million dollars in 1939. The value of books and pamphlets sold in 1943 was 305 million dollars and in 1945 was 370 million dollars. The latter figures are on & different basis and not comparable with the 1939 data, but the value of books and pamphlets produced has undoubtedly increased greatly since 1939. -Before the war the annual value of exports and imports were about 6 and 2 million dollers, respectively. In 1946, imports amounted to $600,000. Under the provisions of the copyright law, books (whether by American or foreign authors) which are protected by United States copyright must be printed in the United States from plates made or type set in the United States. Under this law imports are virtually limited to books in English which have never been copyrighted in the United States and those on which copyrights have expired. GENERAL PROVISIONS The general provisions of the Agreement are divided into three parts. Part I gives legal effect to the tariff concessions set out in the Schedules of the Agreement and, in addition, lays down the basic rule of nondiscrimination in tariff and customs matters generally. Part II deals with barriers to trade other than tariffs, such as quotas, protective excise taxes, restrictive customs formalities and the like. The provisions of Part II are intended to prevent the value of the tariff concessions from being impaired by the use of other devices, and also to bring about the general relaxation of non-tariff trade barriers, thus assuring a further quid pro quo for the action taken with respect to tariffs. Part III deals with procedural matters, and with other questions relevant to the Agreement as a whole. Included in Part III are provisions setting out the relationship between the Agreement and the proposed Charter for an International Trade Organization; provisions establishing a mechanism for the administration of the Agreement; and provisions for its entry into force, amendment and termination. A summary of the detailed provisions within each of the three broad parts of the Agreement follows. Part I - Tariffs and Preferences Article I - The Most-Favored-Nation Clause. Article I incorporates the most-favored-nation clause in its unconditional and unlimited form. This clause is the cornerstone of nondiscrimination in international commercial relations. Its purpose is to make certain that the tariffs applied by each party to the Agreement to products imported from the other parties will not be higher than the tariffs applied to the same products when imported from any other country. Thus, the clause provides a guarantee that when American exports arrive in a foreign country which is a party to the Agreement they will not be faced with a tariff higher than the tariff applicable to competing exports from some other country. The most-favored-nation clause as included in bilateral trade agreements entered into in the past by the United States and other countries has always been subject to exceptions which permitted the establishment, maintenance and increase of preferences between certain areas, such as, for example, between the areas comprising the British Empire, between France and its colonies, and between the United States and Cuba. The General Agreement is unique in that it contains a blanket limitation on all such preferences so that they cannot be increased above the levels in effect on a date prior to the Agreement. This general binding of preferences extends not only to products on which concessions have been granted in the Schedules of the Agreement, but to all products entering into international trade, and represents a commitment above and beyond the reductions and eliminations of preferences on particular products provided for in the Schedules. The limitation at existing levels of every preference on all products is an effective bar to new preferential arrangements in the future and is an essential and farreaching step towards the agreed goal of eliminating all forms of discriminatory treatment in international commerce. The most-favored-nation provisions of the General Agreement also extend to export taxes. Export taxes have in the past largely served as a means of restricting or diverting exports of raw materials. Agreement to observe the rule of nondiscrimination in applying such taxes is an important step in carrying out point 4 of the Atlantic Charter looking toward "access, on equal terms, to the........raw materials of the world". From the point of view of the immediate interests of the United States, a significant result will be the elimination of the discriminatory tax on exports of tin ore and concentrates from the Malayan Union. Prior to the Agreement, Malayan exports of tin ore and concentrates destined for smelters in the United States were subject to higher tax than the tax payable on exports to smelters within the British Empire, thus tending to favor the maintenance of smelting facilities in the Empire and to discourage the development of such facilities in the United States and elsewhere. When Malaya puts the Agreement into force, any tax thereafter maintained on exports of tin ore and concentrates must be the same for all countries, irrespective of destination, and the United States smelting industry will be in as favorable a position as the smelting industry of any other country in obtaining access to tin supplies in Malaya. There are no exceptions to the provisions for most-favored-nation treatment on export taxes. Article II Tariff Concessions. Article II incorporates, as a legal and integral part of the Agreement, the tariff concessions set forth in the Schedules. It provides, in general, that the products listed in the Schedules will not be subject to any ordinary customs duties higher than those specified in the Schedules and, in addition, will not be subject to any supplementary charges on importation higher than those in force on October 30, 1947. Article II also safeguards the tariff concessions against adverse changes in methods of tariff valuation or currency conversion; against changes in tariff classifications; and against unwarranted increases in rates of specific duties in the event of currency depreciation. Article III National Treatment on Internal Taxes and Regulations. Tariff concessions can easily be nullified by internal excise taxes or other internal regulations which operate to protect home industries by laying greater burdens on the imported than on the domestic product. Such discriminatory taxes and regulations also introduce confusion into international trade transactions in general because they confront the foreign trader with hidden trade barriers in addition to the direct barriers raised at the customs border. Article III is designed to do away as far as possible with such internal trade barriers and to require that any protection given be in the form of measures applied openly against imports at the time of importation. To this end the Article provides that all internal commodity taxes which apply to imported products must apply equally to the like domestic products; that internal regulations in general may not treat imported products less favorably than domestic products; and that any internal quotas or "mixing" regulations (which require the consumption of foreign or domestic products in specified amounts or proportions) must not restrict imports to an extent greater than they did on April 10, 1947 and must be subject to negotiation for their further limitation or elimination. The rule limiting the use of internal "mixing" regulations is an important. one. "Mixing" regulations are as effective as absolute import quotas and prohibitions as a device for restricting trade. While their use is not widespread at the moment (they are probably not used today in more than a score of instances throughout the world), they would, if left unchecked, undoubtedly have become serious obstacles to world commerce. Article IV Cinematograph Films. Article IV, relating to motion-picture films, recognizes that the economic peculiarities of the film trade make import duties an unsuitable device for affording legitimate protection to national film industries. As a counterpart of import duties, therefore, Article IV establishes for the film trade alone an approved protective device in the form of screen quotas which reserve a portion of screen time for domestic films, and screen quotas are of course made negotiable in the same manner as tariffs. A most important feature of Article IV is the further provision that no screen time other than that reserved for domestic films may be allocated in any manner. A few existing preferential film quotas are permitted to continue, but their incidence may not be increased, and no new quotas of this type may be introduced. In general, therefore, this provision means a guarantee of free competition in the film markets of the parties to the agreement, except to the extent that nations may produce their own films for domestic exhibition. As a consequence of providing nations with a legitimate means of protecting their domestic film trade, all other discriminatory devices of all kinds would be outlawed. Under the terms of the Article there can be no renter or distributor quotas, no discriminatory taxes, no trading of special privileges between nations, and none of the other discriminatory measures which might be devised. Article V Freedom of Transit. Article V provides for the free movement of goods and vehicles across national territories on routes convenient for international transit. It prohibits the imposition of special transit duties or other restrictions and requires that all regulations dealing with transit shall be reasonable, One result of the application of the Article on freedom of transit will be the elimination of the requirement prohibiting the transportation by truck, in bonded transit, of United States goods across Canadian territory between Detroit and Buffalo. Article VI - Antidumping and Countervailing Duties. Antidumping and countervailing duties, the proper purpose of which is to offset export dumping and subsidization, have frequently been misused for the purpose of hampering normal competition in international trade. Article VI lays down rules confining the use of these special duties to the circumstances in which they are justified and limiting them to the amounts necessary to accomplish their proper purpose. Article VII Valuation for Customs Purposes. When goods are subject to ad valorem duties, based upon the value of the goods, the methods followed at the custom house in determing the value of the goods is as important to the foreign trader as is the rate of duty itself. If these methods are arbitrary, or result in fictitious valuations, a much greater burden on trade can result than would appear from the height of the duty. Article VII is designed to assure that fair valuation systems will be used in assessing ad valorem duties. It provides that the values to be used shall be "actual" values and not arbitrary or fictitious values, and sets out a suitable definition of "actual" value for customs purposes. Provision is made that internal taxes shall not be included in the value of a shipment of goods if they have not in fact been paid on that shipment. In converting foreign currencies for the purpose of arriving at the value of imported products, a general requirement is made that the par value of the currency, involved, as established by the International Monetary Fund, shall be used. This requirement, however, can be set aside in cases where trade transactions are not in practice carried on in terms of the par value. Whatever the detailed method of valuation followed, the general principle is established that valuation methods should be stable and should be given sufficient publicity to enable traders to estimate, with a reasonable degree of certainty, the value of goods for customs purposes. Article VIII - Formalities connected with Importation and Exportation. Many of the difficulties facing foreign traders lie in unnecessary or needlessly elaborate customs requirements and formalities. Article VIII looks toward the removal of these obstacles at the earliest practicable date. Recognition is given to the principle that supplementary customs fees and charges should be limited to the cost of services rendered and should not represent a means of indirect protection to domestic industries, and to the need for reducing the number and diversity of such fees and charges, for minimizing the incidence and complexity of import and export formalities, and for decreasing and simplifying import and export documentation requirements. Provision is made that the parties to the Agreement shall not impose substantial penalties for minor breaches of customs regulations. · Article IX Marks of Origin. Article IX provides for nondiscriminatory treatment in the application of requirements for the marking of imported products to indicate their origin; for the liberalization of marking regulations so as to permit importers to mark their goods at the time of importation rather than at the time of manufacture or export; for the elimination of marking requirements which may have the effect of damaging imported goods or materially reducing their value or unreasonably increasing their cost; and for limiting the use of marking penalties or fines to cases where the importer has unreasonably delayed his compliance with marking regulations, has applied deceptive marks, or has intentionally omitted to apply the required marks. A related paragraph looks toward international cooperation to prevent the "pirating" of geographical trade names which are distinctive of the produce of a particular country or region. Article X- Publication and Administration of Trade Regulations. Article X is designed to assure full publicity and fair administration in the matter of laws and regulations affecting foreign trade. It provides for the publication of all such laws and regulations in such a manner as to enable both governments and traders to become acquainted with them; for the official publication of any increased duties simultaneously with or prior to their application; and for the establishment or maintenance of customs courts or similar independent procedures to assure justice and fair dealing in the administration of trade regulations. Articles XI through XV Quantitative Restrictions and Exchange Controls. Quantitative restrictions, or quotes, rigidly limit to an absolute amount or value the quantity of goods which may be imported or exported. The use of quotas for protective purposes took place on an increasing scale during the inter-war years, so that today quotas are one of the most serious obstacles to an expansion of international trade. Action for the reduction of tariffs such as is provided for in the Schedules of the General Agreement would be meaningless without comprehensive measures to deal with the problem of quotas. The Articles of the General Agreement relating to quotas (and to exchange control techniques) represent the establishment of an agreed policy among the contracting parties to avoid the use of quotas for normal protective purposes and to eliminate their use for other, extraordinary purposes (such as to safeguard the balance-of-payments), when the conditions making them necessary have ceased to exist. In substance, therefore, these Articles may be briefly described as constituting a general prohibition against the use of quotas, this prohibition then being made subject to carefully defined and closely controlled exceptions permitting their use in justifiable or necessary circumstances. Article XI contains the general prohibition against quotas and sets forth certain "permanent" exceptions. The main permanent exception would permit the imposition of an import quota on a foreign agricultural product if the production or consumption of the like domestic product is also subject to restriction in equal degree. The purpose of this exception is to allow the continuation or establishment of governmental controls over agricultural production which are necessary to prevent heavy surpluses of farm products and drastic price declines. An example is the United States Sugar Act of 1937 |