General Agreement on Tariffs and Trade in the United States

Article XVIII
Governmental Assistance to Economic Development

1. The contracting parties recognize that the attainment of the
objectives of this Agreement will be facilitated by the progressive
development of their economies, particularly of those contracting parties
the economies of which can only support low standards of living and are
in the early stages of development.

2. The contracting parties recognize further that it may be necessary for
those contracting parties, in order to implement programmes and policies
of economic development designed to raise the general standard of living
of their people, to take protective or other measures affecting imports,
and that such measures are justified in so far as they facilitate the
attainment of the objectives of this Agreement. They agree, therefore,
that those contracting parties should enjoy additional facilities to
enable them (a) to maintain sufficient flexibility in their tariff
structure to be able to grant the tariff protection required for the
establishment of a particular industry and (b) to apply quantitative
restrictions for balance of payments purposes in a manner which takes
full account of the continued high level of demand for imports likely to
be generated by their programmes of economic development.

3. The contracting parties recognize finally that, with those additional
facilities which are provided for in Sections A and B of this Article,
the provisions of this Agreement would normally be sufficient to enable
contracting parties to meet the requirements of their economic
development. They agree, however, that there may be circumstances where
no measure consistent with those provisions is practicable to permit a
contracting party in the process of economic development to grant the
governmental assistance required to promote the establishment of
particular industries with a view to raising the general standard of
living of its people. Special procedures are laid down in Sections C and
D of this Article to deal with those cases.

4. (a) Consequently, a contracting party the economy of which can only
support low standards of living and is in the early stages of development
shall be free to deviate temporarily from the provisions of the other
Articles of this Agreement, as provided in Sections A, B and C of this
Article.

(b) A contracting party the economy of which is in the process of
development, but which does not come within the scope of sub-paragraph
(a) above, may submit applications to the CONTRACTING PARTIES under
Section D of this Article.

5. The contracting parties recognize that the export earnings of
contracting parties, the economies of which are of the type described in
paragraph 4 (a) and (b) above and which depend on exports of a small
number of primary commodities, may be seriously reduced by a decline in
the sale of such commodities. Accordingly, when the exports of primary
commodities by such a contracting party are seriously affected by
measures taken by another contracting party, it may have resort to the
consultation provisions of Article XXII of this Agreement.

6. The CONTRACTING PARTIES shall review annually all measures applied
pursuant to the provisions of Sections C and D of this Article.

Section A

7. (a) If a contracting party coming within the scope of paragraph 4 (a)
of this Article considers it desirable, in order to promote the
establishment of a particular industry with a view to raising the general
standard of living of its people, to modify or withdraw a concession
included in the appropriate Schedule annexed to this Agreement, it shall
notify the CONTRACTING PARTIES to this effect and enter into negotiations
with any contracting party with which such concession was initially
negotiated, and with any other contracting party determined by the
CONTRACTING PARTIES to have a substantial interest therein. If agreement
is reached between such contracting parties concerned, they shall be free
to modify or withdraw concessions under the appropriate Schedules to this
Agreement in order to give effect to such agreement, including any
compensatory adjustments involved.

(b) If agreement is not reached within sixty days after the
notification provided for in sub-paragraph (a) above, the contracting
party which proposes to modify or withdraw the concession may refer the
matter to the CONTRACTING PARTIES, which shall promptly examine it. If
they find that the contracting party which proposes to modify or withdraw
the concession has made every effort to reach an agreement and that the
compensatory adjustment offered by it is adequate, that contracting party
shall be free to modify or withdraw the concession if, at the same time,
it gives effect to the compensatory adjustment. If the CONTRACTING
PARTIES do not find that the compensation offered by a contracting party
proposing to modify or withdraw the concession is adequate, but find that
it has made every reasonable effort to offer adequate compensation, that
contracting party shall be free to proceed with such modification or
withdrawal. If such action is taken, any other contracting party referred
to in sub-paragraph (a) above shall be free to modify or withdraw
substantially equivalent concessions initially negotiated with the
contracting party which has taken the action.