from initiating new subsidies or increasing old ones during the course of the procedures involved in the negotiation of such an agreement. (Article 27) d. No Member granting any subsidy which operates directly or indirectly to maintain or increase its exports of primary commodities may apply such subsidy in a way which would give it more than an equitable share of the world market. What constitutes an equitable share of the world market is to be determined either by agreement between the Member granting the subsidy and other affected Members, or, if such agreement is not reached, by the Organization. În making a determination as to what constitutes an equitable share of the world market, the Organization shall have particular regard to the Member's share of world trade in the commodity during a previous representative period. (Article 28) Many of the countries who negotiated the Charter, including the United States, engage in various forms of state trading. Their state trading enterprises are usually to some extent in competition with private traders. The purpose of this Section of the Charter is to provide rules for the conduct of state trading operations which would cause them to operate as nearly as possible according to the same principles and subject to the same rules as private enterprises. Two essential principles are involved -- non-discrimination and the expansion of trade by reduction or limitation of barriers. Article 29 contains an undertaking by each Member that it will administer its state enterprises the purchases and sales of which involve imports and exports in a manner consistent with the general principles of non-discriminatory treatment prescribed in the Charter for governmental measures affecting imports or exports by private traders. This would require that such enterprises should make their purchases and sales solely in accordance with commercial considerations, including price, quality and other conditions of sale, and also should afford the enterprises of other member countries adequate opportunity in accordance with customary business practices to compete for participation in such purchases or sales. purchased solely for governmental purposes which are not. for resale in commercial markets, e.g., stockpiling. Article 30 deals with marketing organizations such as are maintained by a number of countries partly for regulatory purposes and partly for buying and selling. It states that such organizations are subject to the rules of Article 29 when they engage in purchases and sales, and that any regulations they may impose on private enterprises are subject to the other provisions of the Charter, e.g. Chapter IV. Article 31 requires Members to negotiate for the reduction of any protective elements that may exist in the operation of an export or import monopoly. For example, a state trading enterprise, importing a product which is also produced domestically, may charge more than its cost plus profit when it sells the product. This mark-up operates to protect the domestic producer. The Charter requires that it must be notified to the Organization and shall be subject to negotiation in the same manner as a tariff. Moreover, it requires that an import monopoly shall import and offer for sale such quantities of the product as will be sufficient to satisfy the full domestic demand for it. Article 32 requires that any Member having acquired a stockpile of a product and wishing to liquidate it must do so in a manner calculated to avoid disturbance of world markets or serious injury to the interests of producers and consumers of the product, to give at least four months' notice of intention to liquidate, and to consult with other Members whose interests may be affected, at their request. This Section deals with the important subject of customs regulations, which often have a more restrictive effect on trade than the actual level of tariff rates. Therefore, in these Articles, the drafters of the Charter sought to reach agreement for material simplification and standardization of such regulations, and particularly to ensure that they be precise and widely published, so that traders could know what was expected of them. Article 33 expresses the principle that there should be freedom of transit through each member country by the most convenient route for goods which are simply going through its territory from one outside country to another. Charges may be imposed for services in transit, but they must be reasonably commensurate with the cost of the service. There must be no discrimination in treatment as between goods going from or coming to one member country rather than another. 2. Anti-Dumping and Countervailing Duties (Article 34) Article 34 recognizes that dumping of products of one country into another at less than their normal value is to be condemned if it causes or threatens material injury. There has been much disagreement in the past as to just what constitutes dumping and measures hampering normal competition in international trade have been adopted as "antidumping" measures. This Article therefore contains a definition of dumping and provisions designed to prevent abuse of anti-dumping measures. It permits Members to levy an anti-dumping duty, but this duty may not be greater in amount than the margin of dumping. It also permits an imposition of countervailing duties to offset the effect of subsidies paid on export, manufacture, or production in exporting countries. But neither anti-dumping nor countervailing duties may be le vied unless the effect of the dumping or subsidy involved is determined to cause or threaten material injury. The Article does not apply to incidental subsidization resulting from domestic price stabilization systems which result from time to time in sales abroad at prices higher than are charged domestically. 3. Valuation for Customs Purposes (Article 35) Perhaps no other subject has given more difficulty in the administration of customs laws. Clearly, the basis of valuation upon which an ad valorem rate of duty is imposed is just as important as the rate of duty itself. towards the standardization of definitions of value and procedures for determining the value of products subject to ad valorem duty, and meanwhile to accept certain principles of valuation. The basic principle laid down is that the value for customs purposes shall be the actual value of the kind of merchandise imported. It may not be based on the value of merchandise of domestic origin or upon some arbitrary or fictitious value. Actual value is defined as the price at which such or like merchandise is sold in the ordinary course of trade, under fully competitive conditions, in comparable quantities, or in quantities not less favorable to importers than those in which the greater volume of the merchandise is sold in the trade between the countries of exportation and importation. The Article requires that any currency rate used in the computation of value shall normally be based on the par value of the currency involved, established pursuant to the Articles of Agreement of the International Monetary Fund. Finally, and very important, the Article requires that the basis and methods of determining dutiable value shall be stable and shall be given sufficient publicity to enable traders to know what is involved. In this Article Members recognize the need for reducing the number and diversity of fees and charges connected with importation and exportation and for simplifying tariff formalities and documentation. They commit themselves to take action to effect this simplification as quickly as they can. They also agree that fees and charges shall not be used for protective or fiscal purposes, but shall be reasonable and related to the cost of the service rendered. The Organization is given power to study and recommend to Members specific measures for the simplification and standardization of customs formalities and techniques and for the elimination of unnecessary requirements. -18 5. Marks This Article requires that marking requirements should be uniform for imports from all countries and contains a number of technical provisions designed to reduce the administrative difficulties connected with the requirement of marks of origin. 6. Publication and Administration of Trade Regulations (Article 38) Article 38 provides for the prompt publication of all laws and regulations affecting foreign trade in such manner as to enable governments and traders to become acquainted with them. It also provides for the administration of such laws and regulations in a uniform, impartial and reasonable manner, and for the setting up of suitable facilities to enable traders to consult with the appropriate authorities regarding these laws and regulations. This Article also contains a very important provision requiring each Member to maintain an impartial tribunal, such as the United States Customs Courts, separate from the authority administering the customs regulations to which appeal from administrative decisions can be made. 7. Information, Statistics, and Terminology (Article 39) Article 39 provides for the collection and publication of international trade statistics. It requires Members to publish as promptly as possible statistics on their external trade, their revenue from customs duties, and their subsidy payments affecting export and import trade. It authorizes the Organization to act as a center for the collection, exchange and publication of statistical information and for promotion of the comparability of statistics and standardization of nomenclature used in tariff and trade documents. 1. F Section F - Special Provisions Consultation, Territorial Application and Frontier Articles 42 and 43 are technical articles dealing |