development of industrial and other economic resources and the raising of standards of productivity, such a contracting party may experience a high level of demand for imports.

Accordingly,

(1)

notwithstanding the provisions of paragraph 2 of
this Article, no contracting party shall be required
to withdraw or modify restrictions on the ground

that a change in the policies referred to above
would render unnecessary the restrictions which it
is applying under this Article;

(11) any contracting party applying import restrictions
under this Article may determine the incidence of
the restrictions on imports of different products
or classes of products in such a way as to give
priority to the importation of those products which
are more essential in the light of such policies,
Contracting parties undertake, in carrying out

(c)

their domestic policies:

(1) to pay due regard to the need for restoring
equilibrium in their balance of payments on a
sound and lasting basis and to the desirability
of assuring an economic employment of productive
resources;

(11) not to apply restrictions so as to prevent
unreasonably the importation of any description
of goods in minimum commercial quantities,

the exclusion of which would impair regular

4.

channels of trade, or restrictions which would
prevent the importation of commercial samples,
or prevent compliance with patent, trademark,
copyright, or similar procedures; and

(111) to apply restrictions under this Article in

such a way as to avoid unnecessary damage to the

commercial or economic interests of any other

contracting party.

(a) Any contracting party which is not applying restrictions under this Article, but is considering the need to do so, shall, before instituting such restrictions (or, in circumstances in which prior consultation is impracticable, immediately after doing so), consult with the CONTRACTING PARTIES as to the nature of its balance-of-payments difficulties, alternative corrective measures which may be available, and the possible effect of such measures on the economies of other contracting parties. No contracting party shall be required in the course of consultations under this sub-paragraph to indicate in advance the choice or timing of any particular measures which it may ultimately determine to adopt.

(b) The CONTRACTING PARTIES may at any time invite any contracting party which is applying import restrictions under this Article to enter into such consultations with them, and shall invite any contracting party substantially intensifying such restrictions to consult within thirty days. A contracting party thus invited shall participate in such discussions. CONTRACTING PARTIES may invite any other contracting party to take part in these discussions. Not later than January 1, 1951,

The

The CONTRACTING PARTIES shall review all restrictions existing on that day and still applied under this Article at the time of the review.

(c) Any contracting party may consult with the CONTRACTING PARTIES with a view to obtaining their prior approval for restrictions which the contracting party proposes, under this Article, to maintain, intensify or institute, or for the maintenance, intensification or institution of restrictions under specified

future conditions.

As a result of such consultations, the

CONTRACTING PARTIES may approve in advance the maintenance, intensification or institution of restrictions by the contracting party in question insofar as the general extent, degree of intensity and duration of the restrictions are concerned.

To

the extent to which such approval has been given, the requirements of sub-paragraph (a) of this paragraph shall be deemed to have been fulfilled, and the action of the contracting party applying the restrictions shall not be open to challenge under sub-paragraph (d) of this paragraph on the ground that such action is inconsistent with the provisions of paragraph 2 of this Article. (d) Any contracting party which considers that another contracting party is applying restrictions under this Article inconsistently with the provisions of paragraphs 2 or 3 of this Article or with those of Article XIII (subject to the provisions of Article XIV) may bring the matter for discussion to the CONTRACTING PARTIES; and the contracting party applying the restrictions shall participate in the discussion. The CONTRACTING PARTIES, if they are satisfied that there is a prima facie case

that the trade of the contracting party initiating the procedure is adversely affected, shall submit their views to the parties with the aim of achieving a settlement of the matter in question which is satisfactory to the parties and to the CONTRACTING PARTIES. If no such settlement is reached and if the CONTRACTING PARTIES determine that the restrictions are being applied inconsistently with the provisions of paragraphs 2 or 3 of this Article or with those of Article XIII (subject to the provisions of Article XIV), they shall recommend the withdrawal or modification of the restrictions. If the restrictions are not withdrawn or modified in accordance with the recommendation of the CONTRACTING PARTIES within sixty days, they may release any contracting party from specified obligations under this Agreement towards the contracting party applying the restrictions.

(e) It is recognized that premature disclosure of the prospective application, withdrawal or modification of any restriction under this Article might stimulate speculative trade and financial movements which would tend to defeat the purposes of Accordingly, the CONTRACTING PARTIES shall make provision for the observance of the utmost secrecy in the conduct of any consultation.

this Article.

5.

If there is a persistent and widespread application of import restrictions under this Article, indicating the existence of a general disequilibrium which is restricting international trade, the CONTRACTING PARTIES shall initiate discussions to consider whether other measures might be taken, either by those contracting parties whose balances of payments are under pressure

or by those whose balances of payments are tending to be

exceptionally favourable, or by any appropriate inter-governmental organization, to remove the underlying causes of the disequilibrium, On the invitation of the CONTRACTING PARTIES, contracting parties shall participate in such discussions.

1.

Article XIII

Non-discriminatory Administration of Quantitative

Restrictions

No prohibition or restriction shall be applied by any contracting party on the importation of any product of the territory of any other contracting party or on the exportation of any product destined for the territory of any other contracting party, unless the importation of the like product of all third countries or the exportation of the like product to all third countries is similarly prohibited or restricted.

2.

In applying import restrictions to any product, contracting parties shall aim at a distribution of trade in such product

approaching as closely as possible to the shares which the various contracting parties might be expected to obtain in the absence of such restrictions, and to this end shall observe the following

provisions:

(a) wherever practicable, quotas representing the total
amount of permitted imports (whether allocated among supply-
ing countries or not) shall be fixed, and notice given of
their amount in accordance with paragraph 3(b) of this
Article;

(b) in cases in which quotas are not practicable, the
restrictions may be applied by means of import licences
or permits without a quota;