194 TOKYO ROUND AGREEMENTS
DECLARATION ON TRADE MEASURES TAKEN
FOR BALANCE-OF-PAYMENTS PURPOSES
Adopted on 28 November 1979
(L/4904)
The CONTRACTING PARTIES,
Having regard to the provisions of Articles XII and XVIII:B of the General
Agreement;
Recalling the procedures for consultations on balance-of-payments r estrictions
approved by the Council on 28 April 19701and the procedures for regular consultations
on balance-of-payments restrictions with developing coun tries approved by the Council
on 19 December 19722;
Convinced that restrictive trade measures are in general an inefficie nt means
to maintain or restore balance-of-payments equilibrium;
Noting that restrictive import measures other than quantitative r estrictions have
been used for balance-of-payments purposes;
Reaffirming that restrictive import measures taken for balance-of-pay ments
purposes should not be taken for the purpose of protecting a p articular industry or
sector;
Convinced that the contracting parties should endeavour to avoid that restrictive
import measures taken for balance-of-payments purposes st imulate new investments
that would not be economically viable in the absence of the me asures;
Recognizing that the less-developed contracting parties must take into account
their individual development, financial and trade situati on when implementing
restrictive import measures taken for balance-of-payment s purposes;
Recognizing that the impact of trade measures taken by developed countri es on
the economies of developing countries can be serious;
Recognizing that developed contracting parties should avoid the imposi tion of
restrictive trade measures for balance-of-payments purpo ses to the maximum extent
possible;
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1BISD 18S/48-53.
2BISD 20S/47-49.TRADE MEASURES FOR BALANCE-OF-PAYMENTS PURPOSES 195
Agree as follows :
1. The procedures for examination stipulated in Articles XI I and XVIII shall apply
to all restrictive import measures taken for balance-of-pa yments purposes. The
application of restrictive import measures taken for balan ce-of-payments purposes
shall be subject to the following conditions in addition to t hose provided for in
Articles XII, XIII, XV and XVIII without prejudice to other p rovisions of the General
Agreement:
(a) In applying restrictive import measures contracting part ies shall abide by
the disciplines providedfor in the GATT and give preference to the measure
which has the least disruptive effect on trade1;
(b) The simultaneous application of more than one type of trade measure for
this purpose should be avoided;
(c) Whenever practicable, contracting parties shall publicl y announce a time
schedule for the removal of the measures.
The provisions of this paragraphare not intended to modify t he substantive provisions
of the General Agreement.
2. If, notwithstanding the principles of this Declaration, a developed contracting
party is compelled to apply restrictive import measures for balance-of-payments
purposes, it shall, in determining the incidence of its meas ures, take into account
the export interests of the less-developed contracting par ties and may exempt from
its measures products of export interest to those contracti ng parties.
3. Contracting parties shall promptly notify to the GATT the introduction or
intensification of all restrictive import measures taken f or balance-of-payments
purposes. Contracting parties which have reason to believe that a restrictive import
measure applied by another contracting party was taken for b alance-of-payments
purposes may notify the measure to the GATT or may request the GATT secretariat
to seek information on the measure and make it available to al l contracting parties
if appropriate.
4. All restrictive import measures taken for balance-of-pa yments purposes shall
be subject to consultation in the GATT Committee on Balance- of-Payments Restrictions
(hereinafter referred to as "Committee").
5. The membership of the Committee is open to all contracting parties indicating
their wish to serve on it. Efforts shall be made to ensure that the composition of the
Committee reflects as far as possible the characteristics o f the contracting parties in
general in terms of their geographical location, external f inancial position and stage
of economic development.
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1It is understood that the less-developed contracting parti es must take into account their individual
development, financial and trade situation when selecting the particular measure to be applied.196 TOKYO ROUND AGREEMENTS
6. The Committee shall follow the procedures for consultati ons on
balance-of-payments restrictions approved by the Council on 28 April 19701
(hereinafter referred to as "full consultation procedures ") or the procedures for regular
consultationsonbalance-of-paymentsrestrictionswithd evelopingcountriesapproved
by the Council on 19 December 19722(hereinafter referred to as "simplified
consultation procedures") subject to the provisions set ou t below.
7. The GATT secretariat, drawing on all appropriate sources of information,
including the consulting contracting party, shall with a vi ew to facilitating the
consultations in the Committee prepare a factual backgroun d paper describing the
trade aspects of the measures taken, including aspects of pa rticular interest to
less-developed contracting parties. The paper shall also c over such other matters as
the Committee may determine. The GATT secretariat shall giv e the consulting
contracting party the opportunity to comment on the paper be fore it is submitted to
the Committee.
8. In the case of consultations under Article XVIII:12 ( b) the Committee shall base
its decision on the type of procedure on such factors as the fo llowing:
(a) the time elapsed since the last full consultations;
(b) the steps the consulting contracting party has taken in the light of conclusions
reached on the occasion of previous consultations;
(c) the changes in the overall level or nature of the trade measu res taken for
balance-of-payments purposes;
(d) the changes in the balance-of-payments situation or prosp ects;
(e) whether the balance-of-payments problems are structural or temporary in
nature.
9. A less-developed contracting party may at any time reques t full consultations.
10. The technical assistance services of the GATT secretari at shall, at the request
of a less-developed consulting contracting party, assist i t in preparing the documentation
for the consultations.
11. The Committee shall report on its consultations to the Co uncil. The reports on
full consultations shall indicate:
(a) the Committee s conclusions as well as the facts and reasons on which they
are based;
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(b) the steps the consulting contracting party has taken in the light of conclusions
reached on the occasion of previous consultations;
(c) in the case of less-developed contracting parties, the fac ts and reasons on
which the Committee based its decision on the procedure foll owed; and
(d) in the case of developed contracting parties, whether alte rnative economic
policy measures are available.
If the Committee finds that the consulting contracting part y s measures
(a) are in important respects related to restrictive trade mea sures maintained
by another contracting party1or
(b) have a significant adverse impact on the export interests o f a less-developed
contracting party,
it shall so reportto the Council which shall take such furthe r action as it may consider
appropriate.
12. In the course of full consultations with a less-develope d contracting party the
Committee shall, if the consulting contracting party so des ires, give particular attention
to the possibilities for alleviating and correcting the bal ance-of-payments problem
through measures that contracting parties might take to fac ilitate an expansion of the
export earnings of the consulting contracting party, as pro vided for in paragraph 3
of the full consultation procedures.
13. If the Committee finds that a restrictive import measure taken by the consulting
contractingpartyforbalance-of-paymentspurposesisinc onsistentwiththe provisions
of Articles XII, XVIII:B or this Declaration, it shall, in it s report to the Council,
make such findings as will assist the Council in making appro priaterecommendations
designed to promote the implementation of Articles XII and X VIII:B and this
Declaration. The Council shall keep under surveillance any matter on which it has
made recommendations.
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1It is noted that such a finding is more likely to be made in the c ase of recent measures than of
measures in effect for some considerable time.