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The Multilateral Supervision of International Trade: Has the Textiles Experiment Worked?

Published online by Cambridge University Press:  27 February 2017

Gary H. Perlow
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The largest industry in the United States, India, Austria, Pakistan, Hong Kong, South Korea, and Portugal, among others, is the textile and clothing industry. And perhaps in no other sector of postwar trade, save agriculture, have such persistent cries for protection been raised. Trade in textiles has demanded and received special treatment from national and international authorities since the late 1950’s. It is against this backdrop that some of the more important developments in the international regulation of commercial activities have occurred.

Type
Research Article
Information
American Journal of International Law , Volume 75 , Issue 1 , January 1981 , pp. 93 - 133
Copyright
Copyright © The American Society of International Law 1981

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References

1 Sarna, , Safeguards Against Market Disruption—The Canadian View, 10 J. World Trade L. 355, 366 (1976).Google Scholar Before embarking on a discussion of textiles, it is helpful to bear in mind that it is a complex sector of trade and production. There are many constantly changing production processes and stages of production, such as fibers, yarns, fabrics, finishing, and knitting. Henceforth, the term “textiles” will encompass the great variety of end products, including clothing, unless the context indicates otherwise.

2 Sutton, , Equality and Discrimination in International Economic Law (VI): Trends in the Regulation of International Trade in Textiles, 31 Y.B. World Aff. 190, 209 (1977).Google Scholar

3 On the precedential value of aspects of the international regulation of textiles trade, see G. Curzon, Multilateral commercial Diplomacy: The General Agreement On Tariffs And Trade And Its Impact On National Commercial Policies And Techniques 258 (1965); K. Dam, The GATT Law And International Economic Organization 313-14 (1970); G. Patterson, Discrimination In International Trade: The Policy Issues 1945-1965, At 320-21 (1966); Cf.A. Shonfield, G. Curzon, V. Curzon, T. Warley, & G. Ray, International Economic Relations Of The Western World 1959-1971, Vol. 1: Politics And Trade 274-78 (1976) [hereinafter cited as Shonfield & Curzon]; Balassa, The ‘NewProtectionism’ and the International Economy,12 J. World Trade L. 409, 421-22, 426 (1978); Bardan, The Cotton Textile Agreement 1962-1972,7 id.at 8, 34-35 (1973); Taake & Weiss, The World Textile Arrangement: The Exporter's Viewpoint, 8 id.at 624, 651 (1974); Tumlir, A Pevised Safeguard Clause for GATT?,7 id.at 404, 408 (1973). Although there has been occasional talk of a world steel agreement, a multilateral and separate approach to trade control in individual sectors of industrial products has not spread beyond textiles.

4 See Smith, M., Voluntary Export Quotas and U.S. Trade Policy—A New Nontariff Barrier, 5 L. & Pol'y Int'l Bus. 10, 12 N.8 (1973)Google Scholar; See GenerallyW. Rostow, Politics And The Stages Of Growth 98-100 (1971).

5 Textiles were in the forefront of a broad expansion of Japanese exports in the 1950's. Japan's industrial exports grew 600% between 1949 and 1959, from $533 million to $3,413 million. K. Dam, supranote 3, at 297. The U.S. industry was also troubled by changing patterns of consumption, development of the textiles industry in Latin America—long a market for U.S. exports—and imports of increasingly competitive man-made fibers. U.S. Int'l Trade Comm'n, Usitc Pub. No. 850, The History And Current Status Of The Multifiber Arrangement 1 (1978) [hereinafter cited as USITC Report].

6 General Agreement on Tariffs and Trade, signedOct. 30, 1947, entered into force Jan.1, 1948, TI AS No. 1700, 55 UNTS 194 [hereinafter cited as GATT]. Complete text in force as of March 1, 1969, is reprinted in4 General Agreement On Tariffs And Trade, Basic Instruments And Selected Documents 1-76 (1969) [hereinafter cited as GATT, BISD]. The GATT, which is the principal international legal instrument governing international trade, is comprehensively examined in J. Jackson, World Trade And The Law Of GATT (1969).

7 The United States had recently resorted to a GATT Article XXV waiver with respect to agricultural products and did not regard it an opportune time to approach the GATT contracting parties with a request for another (protectionist) waiver. Article XIX, permitting global nondiscriminatory trade restraints when domestic import-competing industries are seriously injured by fair import competition, was deemed too blunt an instrument involving potentially costly repercussions. Shonfield & Curzon, supranote 3, at 258. For an analysis of GATT Article XIX and its shortcomings, see Tumlir, supranote 3.

8 Japan agreed to limit its exports to the United States of cotton textiles and manufactures to 235 million square yards per year for the 5-year period 1957-1961. This ceiling was adjusted during the period owing to changed conditions, with the result that the ceiling in 1961 was 5 percent higher than in 1957. USITC Report, supranote 5, at 2 & n.2.

9 The four U.S.-Japanese voluntary restraint agreements of the depression years set the pattern of pressure by strong import-competing industries for action by their governments, which, in turn, pressure the exporting countries’ governments (or even industries) into “voluntarily” restraining imports. The term is something of a misnomer as the thinly veiled threat of harsher, unilateral action underlies most negotiations for such restraints.

10 The following chart reveals that other exporting countries were able to profit in the U.S. market at Japan's expense, resulting in a redistribution of U.S. suppliers:

The value of Hong Kong's exports to the United States increased from $5.8 million in 1956 to $17.4 million in 1957 and $54.8 million in 1958. Shonfield & Curzon, supranote 3, at 259. Thisperiod marked the beginning of a remarkable growth in LDC textile exports, particularly from Far Eastern producers, that was to continue throughout the 1960's. Taiwan, for instance, saw the value of its textile exports rise from $21.3 million in 1960 to $203.5 million in 1968 and $479 million in 1970. M. Smith, supranote 4, at 24 n.60.

11 The Europeans, like the Americans, had been worried by the threat posed by the Japanese, but, unlike the Americans, they at first justified trade restrictions under the “escape clauses” of the GATT. Article XXXV, which permits non application of the GATT rules to new members, was invoked by Britain and France (and a host of LDC's) when Japan acceded to the GATT in 1955. Almost all of those European countries not relying on Article XXXV applied discriminatory quotas on the basis of the Article XII escape clause concerning balance-of payments difficulties. The United States thus remained the most open market before and after Japanese accession. By 1958, with the lifting of exchange control in Europe, Japanese exports increased to those countries relinquishing protection under Article XII. By 1964 most developed countries’ invocations of Article XXXV had come to an end. It is against this liberalizing trend that the Europeans sought to exempt textiles.

12 The Japanese Government and textile industry did not always embrace VER's. Considerable resistance was encountered when the United States attempted to cover Japanese exports of synthetic fibers, wool, and blends with VER's in the late 1960's. Prodded by its domestic industry, the Japanese Government for the first time expressed a preference for restraints imposed under GATT Article XIX. Negotiations proceeded throughout 1969 and 1970. VER's were finally accepted in late 1971. This episode apparently did not represent a reversal of Japanese policy.

13 GATT, BISD, supranote 6, 9th Supp. 107 (1961).

14 Id.at 106. In so doing, the working party lent credence to the psycho-political considerations proffered as particular to cotton textiles: the psychological impact of imports, though intangible, must be given due recognition. In any given market, a relatively small percentage of an imported item priced well below the domestic price has a major effect in upsetting the price structure and the normal competitive relationships. Moreover, the amount of imports at any specified time is less important psychologically than the potential amount of imports at some later time. Unless later possibilities can be defined, decisions with regard to investment or plant expansion are made more difficult. U.S. Dep't Of Commerce, Business And Defense Services Adm'n, Textile Outlook For The Sixties 50 (1969), quoted inBardan, supranote 3, at 28.

15 GATT, BISD, supranote 6, 9th Supp. 26-28 (1961). The contracting parties agreed that a situation of “market disruption” generally contained the following elements: (i) a sharp and substantial increase or potential increase of imports of particular products from particular sources; (ii) these products are offered at prices which are substantially below those prevailing for similar goods of comparable quality in the market of the importing country; (iii) there is serious damage to domestic producers or threat thereof; (iv) the price differentials referred to in paragraph (ii) above do not arise from government intervention in the fixing or formation of prices or from dumping practices. In some situations other elements are also present and the enumeration above is not, therefore, intended as an exhaustive definition of market disruption. Id.at 26. In other words, as Kenneth Dam has observed, this meant that there was not a difference in substance, but a difference in degree “between the conditions that [give] rise to an ordinary increase in international trade and those that [give] rise to the economic impact associated with the concept of market disruption.'” K. Dam, supranote 3, at 299. The economic principle of comparative advantage was thus being challenged. Ibid.

16 See generallyUSITC Report, supranote 5, at 6 - 8 . Dam notes that the adjective “orderly” was becoming as important in the lexicon of importing countries as “disruptive.” K. Dam, supranote 3, at 300.

17 GATT, supranote 6, Art. 1.

18 General Agreement on Tariffs and Trade, Arrangements Regarding International Trade in Cotton Textiles, July 21, 1961, 12 UST 1675, TIAS No. 4884 [hereinafter cited as STA].

19 Long Term Arrangements Regarding International Trade in Cotton Textiles, Feb. 9, 1962, 13 UST 2673, TIAS No. 5240, extended byProtocols of May 1, 1967, 18 UST 1337, TIAS No. 6289, and June 15, 1970,21 UST 1971, TIAS No. 6940, reprinted in GATT, BlSD,supranote 6, 11th Supp. 25(1962) [hereinafter cited as LTA]. The membership consisted of Group I (net importing) countries: Australia, Austria, Belgium, Canada, Denmark, Finland, France, West Germany, Italy, Luxembourg, the Netherlands, Norway, Sweden, the United Kingdom, and the United States; and Group II (net exporting) countries: Colombia, Greece, Hong Kong, India, Israel, Jamaica, Mexico, Pakistan, Portugal, the Republic of China, the Republic of Korea, Spain, Turkey, and the United Arab Republic. Poland and Japan, also members, were not categorized.

20 Documents of the MFA's Textiles Committee will be cited Com.Tex/].

21 Arrangement Regarding International Trade in Textiles, doneDec. 20,1973,25 UST 1001, TIAS No. 7840, extended byProtocol of Feb 1, 197'8, reprinted In GATT, BISD,JU/wa note 6, 21st Supp. 3 (1975) [hereinafter cited as MFA]. As of November 1979, the Protocol extending the MFA had been accepted by 48 parties, representing a net increase of 17 members over the LTA. Seenote 19supra.The new members were Bangladesh, Bolivia, Brazil, the Dominican Republic, El Salvador, Ghana, Guatemala, Haiti, Hungary, Ireland, Indonesia, Macao, Malaysia, Peru, the Philippines, Romania, Singapore, Sri Lanka, Switzerland, Thailand, Trinidad and Tobago, Uruguay, and Yugoslavia. The following members of the MFA, during its first term, had not accepted the Protocol as of November 1979: Australia, Greece, Norway, Portugal, Spain, and Taiwan. GATT Doc. Com.Tex/Sb/519, para. 3 (1979) [ GATT documents of the MFA's Textiles Surveillance Body will hereinafter be cited Com.Tex/Sb/; and GATT dTo be sure, Article 1 of the LTA stated that the measures to be taken under the LTA would not affect the participating countries’ rights and obligations under the GATT. However, the LTA conflicted to such a degree with the GATT that it amounted to a special exception and derogation, rather than a complementary adjunct. The LTA was not an “autonomous” system of regulation, though: there were substantive and institutional Connections with the GATT organization.

22 Though not expressly obligated, importing countries were supposed to have used the period of relief provided by the arrangements to facilitate the adjustment of their inefficient cotton textile industries: “the participating countries are of the opinion that it may be desirable to apply, during the next few years,special practical measures of international cooperation which will assist in any adjustment that may be requiredby changes in the pattern of world trade in cottcn textiles …” (emphasis added). LTA, supranote 19, Art. 1. This led one writer to hail the LTA as a revolutionary step, for never before had … the attempt … been made to deal by an agreed overall plan with the expansion of new industries in one part of the world and the contraction of the same industries in another part… . It is implicitly agreed that factors of production have to be withdrawn from industries which have lost their absolute or comparative advantage and that a reallocation of resources has to take place the world over for a better exploitation of world resources. This is almost an economist's dream. G. Curzon, supranote 3, at 256-57.

23 In 1962, for example, the United States negotiated bilateral restraint agreements under Article 4 of the LTA with 17 principal suppliers after having unilaterally imposed restraints under Article 3; by 1972, the United States had bilateral agreements with 30 exporting countries. The United Kingdom restricted imports unilaterally and bilaterally throughout the course of the LTA without permitting the entire annual growth rate stipulated in the Arrangement. See GATT, BISD, supranote 6, 11th Supp. 40 (1963). The EEC, entering the LTA with a more protected market than either the United States or the United Kingdom, succeeded in expanding access to its markets, but in conjunction with the negotiation of bilateral restraint agreements. “Dirigisme”became entrenched as the approach to the problems of textile trade.

24 LDC export potential was restricted in many areas rather than gradually liberalized. Yet LDC exports did increase as a whole from $1,250 million in 1960 to $3,850 million in 1970, although over 70 percent of the decade's export expansion was accounted for by developed countries. See generallyD. Robertson, Fail Safe Systems For Trade Liberalisation 32-33 (Trade Policy Research Centre, Thames Essay No. 12, 1977). LDC production increased at a faster clip, but developed countries’ increased output was greater in value terms. Developed countries’ imports increased by $3,860 million during the 1960's: cotton yarn imports doubled and cotton cloth increased by 50 percent. Three-quarters of the increased imports, however, originated in other developed countries.

25 SeeBardan, supranote 3, at 25-26.

26 This failure has been ascribed to loose drafting e.g., no specified time limits) and to the lack of a supervisory mechanism for determining just which pre existing restrictions had to be eliminated. SeeSutton, supranote 2, at 194.

27 To be sure, interpretative activity under the LTA was not wholly unilateral in character. The Cotton Textiles Committee did engage in indirect interpretation of LTA standards and procedures by means of its formal conclusions. See, e.g., GATT, BISD, supranote 6, 12th Supp. 66, 70-72 (1964).

28 Even so, LDC's accounted for only 6% of world trade in man-made yarns and fabrics. Overseas Development Institute, The Textile Trade, Developing Countries And The Multi-Fibre Agreements 2 (1976).

29 U.S. imports of man-made textiles increased from 31 million lbs. in 1960 to 329 million lbs. in 1970. USITC Report, supranote 5, at 12.

30 D. Robertson, supranote 24, at 36.

31 See id.at 37.

32 Seenote 20 supra.The successful outcome of the negotiations has been attributed to several factors. Developing countries came to realize that a new agreement taking better account of their interests would be preferable to the likelihood of uncontrolled protectionism absent an agreement. Their dissatisfaction with the LTA, along with that of the industrialized importing countries, provided the impetus to seek a compromise solution. Negotiating momentum was maintained by (1) limiting the talks to one sector of trade to be subjected to control for a finite period of time, (2) including only those countries in the talks with an interest in textile trade, and (3) using the GATT Secretariat effectively as an intermediary body. Taake & Weiss, supranote 3, at 650-52.

33 Wool was included because the U.S. Government wished to preserve what was left of a weak and small domestic industry.

34 MFA, Art. 1(2).

35 Ibid Art. 2(2) and (3).

36 Ibid.

37 MFA, Art. 2(2)(i).

38 The MFA refined and elaborated the LTA's description of “market disruption.” Nevertheless it remained an ill-defined, suppositive concept: The determination of a situation of “market disruption” … shall be based on the existence of a serious damage to domestic producers or actual threat thereof. Such damage must demonstrably be caused by [the following two factors, which generally appear in combination: a sharp and substantial rise in volume from particular sources, and prices, which are substantially below prevailing market prices]… . The existence of damage shall be determined on the basis of an examination of the appropriate factors having a bearing on the evolution of the stage of the industry in question such as: turnover, market share, profits, export performance, employment, volume of disruptive and other imports, production, utilization of capacity, productivity and investments. No one or several of these factors can necessarily give decisive guidance. MFA, Annex A. See alsonote 163 infraand the accompanying text.

39 MFA, Art. 3(5)(i). During the first 4-year term of the MFA, 21 unilateral restraints were notified under this provision. Consultations yielded 35 Article 3(4) bilateral agreements, and thus avoided unilateral measures. Com.Tex/Sb/196, para. 63 (1976); Com.Tex/Sb/S65, para. 7 (1978). During the first 23 months of the renewed MFA in 1978 and 1979, only 4 Article 3(4) agreements and 4 unilateral restraints were notified. Com.Tex/Sb/365, para. 51 (1978); Com.Tex/Sb/519, para. 8 (1979).

40 MFA, Art. 3(6). Nine restraints had been adopted under this “emergency” provision during the first 4 years of the Mfa. Com.Tex/Sb/196, para. 63 (1976); Com.Tex/Sb/365, para. 7 (1978). The subsequent 23 months have seen but one “emergency” restraint. Com.Tex/Sb/ 519, para. 8(1979).

41 MFA, Art. 3(8).

42 MFA, Ann. B, para. 1.

43 Two exceptions are recognized. A lower positive growth rate is permitted if (1) the 6% growth rate would cause a recurrence of market disruption, or (2) the 6% growth rate would damage the “minimum viable production” of those countries having “small markets, an exceptionally high level of imports and a correspondingly low level of domestic production.” MFA, Ann. B, para. 2. The latter “MVP” exception has been unsuccessfully claimed by some countries to be a principle of general application. See generallynotes 99 and 152 infra.

44 “Carryover” entails allocating an unused portion of the previous year's quota to the present year, and “carryforward” a portion of next year's quota to the present year with, of course, an equivalent decrease in next year's quota. “Swing,” on the other hand, does not operate to increase the current year's aggregate quota. It allows the exporting country to reallocate a portion of the quota from one product group under restraint to another, whether or not there are 2 or more agreements covering multiple products. For the relevant minimum limits, see MFA, Ann. B, para. 5.

45 MFA, Art. 4(3). To date, Article 4 agreements have proven more popular than restrictions imposed under Article 3. Seenotes 103 and 104 infraand the accompanying text. Seventy-one new agreements were notified during the first 4 years of the MFA, and seventy-nine during the first 23 months of the MFA's extension. Com.Tex/Sb/196, para. 88 (1976); Com.Tex/Sb/ 365, paras. 29 and 58 (1978); Com.Tex/Sb/519, para. 26 (1979).

46 Originally, there had been some concern that if market disruption, ora threat of it, couldnot be demonstrated for the purpose of imposing an Article 3 restraint, and if the exporting country proved an unwilling partner in Article 4 discussions, then the importing country would have no recourse to a (legal) restraint. It has been claimed that many net importing countries accepted the MFA on the tacit understanding that net exporting countries would be willing to negotiate restraint agreements under Article 4. SeeSutton, supranote 2, at 206. Since the text masks real conflicting intentions, Sutton argues that interpretations of Article 4 cannot be strictly legal, but also should heed the “basic yet unwritten conditions of each group.” W. at 207. The frequent use of “Consultation” clauses in bilateral agreements has since alleviated much of the concern. Seenote 110 infra.On the whole, importing countries have had relatively little difficulty obtaining protection under Article 4.

47 Adjustment was not made obligatory: “actions taken under this Arrangement should be accompanied by the pursuit of economic and social policies … required by changes in the pattern of trade in textiles and in the comparative advantage of participating countries… . “ MFA, Art. 1(4).

48 Some observers were able to predict future problem areas on the basis of shortcomings in consensus: “it is relatively easy to foresee that the establishment of the Textiles Surveillance Body will lead to considerable difficulties because during the negotiations only an accord on partial aspects but not, for instance, on the budget or personnel policy was achieved.” Taake & Weiss, supranote 3, at 653. Neither of these issues led to problems in and of themselves, but as things have developed they were good indicators of the bumpy road ahead.

49 MFA, Art. 11(1).

50 Letter from Ambassador P. Wurth, Chairman of the TSB, Aug. 3, 1979. The TSB is served by a small staff linked with the GATT Secretariat. In fact, the TSB is financed from the GATT's resources and is housed on GATT premises.

51 See, e.g.,COM.TEX/2, paras. 29 and 30 and Annex (1974) (dissatisfaction expressed by Hungary, Poland, and the EEC); COM.TEX/8, paras. 44, 57, and 58 (1977) (Canada, Yugoslavia, and Hong Kong). Some delegations have expressed regret at the permanency of some seats and the inadequacy of rotation, but nothing has ever come of suggestions for TSB enlargement. The small size facilitates frequent meetings and close wbrking relationships. Cf.Taake & Weiss, supranote 3, at 652. The permanency of the 3 seats, however, does carry advantages not enjoyed by delegations sharing rotating seats. The accumulation of expertise is one.

52 It has been threatened, as when the Polish representative remarked “that it would be understandable if his Government was to look at some of the TSB's recommendations with hesitance due to the absence of representation ther'eon by a Socialist country.” COM.TEX/5, para. 53 (1975). The EEC, initially suspicious of the authority it believed the MFA conferred on the TSB, sought to “stack” TSB meetings with its people. SeeCom.Tex/Sb/1, para. 5 n.l (1974). The attempt to have all EEC member states attend meetings as “experts” when so warranted met with unanimous opposition. Instead, it was agreed that the EEC representative could be assisted by observers from its member states affected by a matter, who would not be official participants and thus not take part in TSB discussions. In time, as EEC apprehension waned, observers were no longer used. It should be noted that TSB members are typically backed up by alternates, often from another country, who attend meetings with all the obligations and rights of participation in the event a TSB member is absent. SeeCom.Tex/Sb/196, para. 11 (1976).

53 But cf. Jackson, , Governmental Disputes in International Trade Relations: A Proposal in the Context of GATT, 13 J. World Trade L. 1 (1979)Google Scholar, where the author argues that the similar dual role of the GATT panelist “makes it difficult if not impossible for him to view his actions in such a panel as insulated from the influences of his government's foreign economic policy, and consequently the relationship of that government to other countries in the world, including the disputing parties.” Id.at 6. To the extent that GATT panelists are handpicked for each dispute, while TSB members consider all matters raised during the course of their term, one could argue that GATT panelists are more likely to be less affected and hence more objective. This does not necessarily make them more effective.

54 Interview with Robert Shepherd, U.S. member of the TSB, in Geneva, Jan. 22, 1980.

55 The TSB early decided on a procedure to guard against bias. In disputes between two parties, one with and the other without a representative sitting on the TSB, the former would delegate the task of argumentation to another in his delegation. Originally, both advocates were permitted to remain during, and even participate in, the TSB's deliberations. In practice, this hampered the deliberations; so by subsequent agreement only the continued participation of the advocate whose country was not represented on the TSB was permitted. Neither his assent nor that of the TSB member concerned is necessary to form a consensus. Com.Tex/Sb/30, Ann. I (1974), modified byCom.Tex/Sb/319, paras. 3’ and 4 (1978).

56 This classification is drawn from G. van Hoof 8(K. de Vey Mestdagh, Supervision in International Organizations and Other Arrangements of an Economic Character: In Search of Its Effectiveness 16-19 (unpub. study, Europa Institute Library, University of Utrecht, 1979).

57 See COM.TEX/3, paras. 14 and 15 (1974). A major report on production and trade in textiles and clothing from 1974 to 1976 has been compiled. COM.TEX/W/35 and addenda (1976). Information is also collected in the crucial area of industrial adjustment, but responses have been spotty owing in part to the complexity of the data. SeeCOM.TEX/W/36 and Add. 1 (1976). The problem of information supply is discussed generally infraat pp. 120-23.

58 MFA, Art. 11(8). This does not mean that recommendations are binding with immediate effect, as some would prefer.

59 In practice, referral to the GATT Council has been rare. It would raise problems of equality since some MFA members have not always been contracting parties to the GATT. At the time of their provisional accession to the MFA in 1974, Bulgaria, Colombia, El Salvador, Guatemala, Mexico, and Paraguay were not contracting parties to the GATT. Thailand and Bolivia were not GATT members as of 1978 when they acceded to the Protocol extending the MFA.

60 junately, neither textiles nor international trade, in general, can currently be characterized as such. It is true that the TSB has been faced with conflicts caused by its dual roles. And its usual response in such situations of favoring a passive role as mediator cannot please the “rule-oriented” observer. Yet it would be going too far to say that the moral effect of TSB decisions has suffered. The TSB has, in fact, confronted the most economically powerful member of the MFA on legal grounds. See generallypp. 109-12 infra.If anything has caused the TSB's effectiveness at correction to decline, it has been the attack on its political standing occasioned by the confrontation, as well as the crumbling of consensus in the textiles field. On the effectiveness of TSB supervision, see generallypp. 118-30 infra,

61 MFA, Art. 10(3).

62 Com.Tex/Sb/27, Annex (1974). The TSB then devised a substitute procedure for justification. Id.,para. 6.

63 Com.Tex/Sb/44, paras. 10 and 11 (1974).

64 GOM.TEX/SB/83, para. 7 (1975).

65 See, e.g.,Com.Tex/Sb/89, para. 4 (1975), regarding a discussion by the TSB concerning the “right to swing,” which was later elaborated in discussions of its relationship with other MFA provisions in Com.Tex/Sb/196, para. 97 (1976) and Com.Tex/Sb/365, para. 74 (1978).

66 Com.Tex/Sb/144, para. 7 (1976). In its report to the TC, the TSB clearly stated that it sought to resolve an issue of interpretation. Com.Tex/Sb/196, para. 85 (1976). In the TC's report in late 1976, the existence of the particular issue was mentioned without further discussion or comment on the TSB's handling of it. COM.TEX/8, para. 31 (1977).

67 This can be seen in the joint handling of perhaps the most pressing issue of interpretation arising during the MFA's first 4-year term, involving the reconciliation of two conflicting MFA provisions. At the heart of the problem lay the troublesome relationship between the MFA and the GATT in the field of textile and clothing trade. The process of interpretation can be traced through Com.Tex/Sb/115, at 8 (1975); COM.TEX/5, paras. 35-48 (1975); Com.Tex/Sb/56, para. 8 (1975); Com.Tex/Sb/64, para. 7 (1975); COM.TEX/8, paras. 60-70 (1977); Com.Tex/Sb/210, paras. 6-10 (1977); Com.Tex/Sb/222 (1977); Com.Tex/Sb/225, at 3, and paras. 6-9 (1977); Com.Tex/Sb/255, paras. 7-10 (1977). The issue was finally resolved in the 1977 negotiations that extended the lifetime of the MFA. SeeTC Conclusions, infranote 79, para. 9. The example shows that there is no single, but rather a fluid, approach to interpretative/ creative decision making. Here the TSB by virtue of its small size, frequent meetings, and political standing was able to “fine tune” a potential area of agreement revealed by the TC's rough focusing. Also illustrated by the example is an important limitation on the effectiveness of the process: consensus building takes time. In the MFA system there is the added complication of the limited tenure and uncertain future of the Arrangement and, hence, its supervisory organs. As in the GATT system, differences of interpretation caused by a rift in substantive consensus are solvable, if at all, in the give-and-take of major rounds of multilateral negotiations.

68 Seenote 37 supraand the accompanying text.

69 These programs were intended to permit the gradual elimination of pre existing unilateral restrictions within a maximum period of 3 years. MFA, Art. 2(2)(i). Programs had to be adopted and notified to the TSB before March 31, 1975, and thus the final stage of elimination had to end no later than March 31, 1977.

70 For the rather technical facts and legal arguments, see Com.Tex/Sb/214, paras. 5 and 7 (1977).

71 Com.Tex/Sb/196, para. 61 (1976) (program re Pakistan); id.,para. 62 (Hong Kong, India); Com.Tex/Sb/196/Add.l, para. 2 (1976) (Brazil, Colombia, Korea, Macao, Malaysia, Mexico, Singapore, Thailand).

72 Com.Tex/Sb/212, para. 2 (1977).

73 Ibld.,para. 3.

74 The TSB regretted that the EEC “could not accept without comments” the implication in its assertion concerning the TSB's approach to its responsibilities. Com.Tex/Sb/214, para. 6 (1977).

75 Communautés Européennes, Lettre d'Information du Bureau de Genéve, No. 53, at 1 (1977), quoted inUNCTAD, Report, UN Doc. TD/B/C.2/192, at 23 (1978) [hereinafter cited as UNCTAD Report]; see alsoCOM.TEX/10, para. 112 (1978).

76 Seenotes 107-109 infraand the accompanying text.

77 Protocol Extending the Arrangement Regarding International Trade in Textiles (1978), reprinted inCOM.TEX/10, at 48 (1978) [hereinafter cited as the Protocol].

78 Id,Preamble.

79 Conclusions of the Textiles Committee adopted on 14 December 1977, para. 7 (1978), reprinted inCOM.TEX/10, at 49-50 (1978) [hereinafter cited as TC Conclusions]. The TC Conclusions were incorporated by reference into the Protocol, supranote 77.

80 The powers of the TSB were an important issue for the net importing countries during the negotiations. Egypt had controverted the EEC position by claiming that the TSB was primarily an arbitral rather than a conciliatory body. Com.Tex/10, para. 64 (1978). The Israeli spokesman circumspectly stated that conciliation was not the only task of the TSB; he wished it maintained as a “quasi-legal body.” Id.,para. 80. Many called for a more active TSB role. India wanted the supervisory structure to guarantee that all bilateral agreements would be subject to scrutiny as to their conformity to the MFA. Id.,para. 48. Macao complained that even ex post facto reviews of agreements were insufficient; instead, requests for bilateral Consultations should be first channeled through the TSB for a determination whether market disruption claims are justifiable. Id.,para. 68.

81 The EEC would prefer a TSB that is an objective, dispassionate “conscience” of the MFA. Interview with Tran Van Thinh, Delegate of the EEC to the International Organizations in Geneva, in Geneva, Jan. 21,1980. An EEC spokesman has stated in the TC that the EEC regards the TSB as having the dual functions of conciliation and surveillance, which includes the examination of restraints and the determination of “departures” from the rules. COM.TEX/13, para. 29 (1978).

82 Interview with R. Davies, GATT Secretariat, in Geneva, Jan. 22, 1980.

83 Interview with J. Beck, EEC member of the TSB, in Brussels, March 27, 1980.

84 An earlier TC meeting had revealed broad support for the MFA's objectives and a desire to maintain a multilateral framework in one form or another after the MFA's expiry in December of 1977. SeeCOM.TEX/8, para. 52 (1978).

85 On June 21, 1977, the EEC Council of Ministers directed the Commission to commence negotiations on the renewal of the MFA in accordance with guidelines that left little room for maneuver. SeeEC BULLETIN, NO. 6, at 2.2.30 (1977).The thrust of these guidelines was to secure maximum protection prior to any extension of the MFA by negotiating bilateral restraint agreements with roughly 30 exporting countries. This approach was justified by the assertion that the large and growing number of relatively small-volume suppliers made it necessary to account for the cumulative impact of their imports. Accordingly, restrictions could be placed on trade with new or small exporters that were not individually causing market disruption but were contributing to such a situation. This concept of “cumulative market disruption” was not only incompatible with Article 6(3)'s protection of small-volume suppliers, but stretched the notions of market disruption and selectivity beyond recognition, without at all returning to the most-favored-nation standard.

86 As explained by the EEC spokesman, the stabilization plan meant that for a “limited number” of products, growth would not exceed the growth rate of consumption; whereas for other products, a higher growth rate would be permitted. The growth rate of less sensitive products could reach or even exceed the 6% rate stipulated in MFA, Annex B. COM.TEX/10, para. 15 (1978). The products the EEC wished to subject to restraint were divided into 5 categories according to their import “sensitivity.” The most sensitive grouping included such common items as T-shirts, knitted shirts, knitted jerseys, men's and women's woven trousers, women's blouses, and men's shirts. Growth rates were low: imports of cotton yarn, for instance, were negotiated to increase at an annual rate of 0.3%. SeeUNCTAD Report, supranote 75, at para. 45.

87 COM.TEX/10, para. 16 (1978).

88 See, e.g., id.,paras. 22 (Hong Kong's reaction), 27 (Japan), 46 (India), and 66 (South Korea).

89 COM.TEX/W/44 (1977). The paper was circulated by the United States and received the support of the EEC as well as Hong Kong, South Korea, and the ASEAN countries.

90 Ibid,(emphasis added). In the U.S. view this merely restated the existing exceptions to the rules already written into the MFA. The majority of countries thought otherwise.

91 Pakistan, Egypt, India, and Brazil (the main cotton exporters) were among the objectors. The latter two submitted a paper based on the U.S. proposal, but without a “reasonable departures” clause. It received scant support.

92 COM.TEX/W/47 (1977).

93 TC Conclusions, supranote 79, at para. 5.3: “The Committee agreed that, within the framework of the MFA, [bilateral] Consultations and negotiations should be conducted in a spirit of equity and flexibility with a view to reaching a mutually acceptable solution … which does include the possibility of jointly agreed reasonable departures from particular elements in particular cases.“

94 EC Bulletin, No. 1, at 2.2.28 (1978).

95 Despite their anger at the Commission's overstepping its mandate vis-à-vis the cotton exporters, France and Britain in particular were pleased with the results of the bilateral and MFA negotiations. The UK Secretary of State for Trade concluded, “[w]e have obtained very tight restrictions on more than twenty sensitive products, representing about seventy-five per-cent of the United Kingdom imports, and satisfactory restraints on effectively all other products.” The Times (London), Dec. 21,1977, at 15. One commentator called the negotiations “one of the most successful lobbying actions ever carried out by the protectionist lobby as a whole and the textile industry in particular.” The Guardian, Feb. 6, 1978, at 14.

96 Specifically, Australia in 1975 and Canada in 1976 had restrained clothing and textiles with measures that fell outside the MFA. In the case of Canada, 6 restraints were imposed under GATT Article XIX, the last of which unilaterally abrogated some bilateral agreements negotiated under the MFA. These actions triggered the interpretative conflict alluded to in note 67 supra.

97 Cf.Subcomm. On Trade Of The H.R. Comm. On Ways And Means, 95th Cong., 2d Sess., Background Material On The Multifiber Arrangement 3 (Comm. Print 1978) [hereinafter cited as Trade Subcommittee Report]: “[i]n short, the EC was demanding terms which neither the exporting countries nor the United States would consider ‘jointly agreed reasonable departures.'“

98 Cf.UNCTAD Report, supranote 75, at para. 51(c) (“[t]he introduction of the concept of ‘reasonable departures’ has largely changed the function of the Arrangement …“).

99 The TSB came down hardest on the highly restrictive Swedish agreements. The Swedes had not invoked the reasonable departures clause, but relied on paragraph 6 of the TC Conclusions, supranote 79, which recognized that the problems of “minimum viable production” countries should be “resolved in a spirit of equity and flexibility.” Seenote 152 infra.The TSB specifically ruled that paragraph 6 could not function as an escape clause. Com.Tex/Sb/519, para. 58 (1979). Since the agreements were short-term on the order of a year or two, the TSB refrained from passing on their conformity. Instead, pointed comments and recommendations were made with an eye to future agreements and extensions of existing ones.

100 It has been said that there cannot be any absolute determinations of “unreasonableness,” for what may be unreasonable in one situation may be reasonable in another. Interview with J. Beck, EEC member of the TSB, in Brussels, March 27, 1980. On the other hand, any absolute determinations of “reasonableness” run the risk of turning into an open invitation to violate express MFA rules. Nevertheless, one could argue that several types of MFA violations have become de facto “reasonable departures” by virtue of the frequency with which they have appeared with impunity. In an analogous instance, the TSB came to regret its decision that the absence of swing provisions in agreements could be excused, although they were required by MFA Annex B, if a “reflection of a mutual recognition of the minimum viable production principle… .” Com.Tex/Sb/365, para. 74 (1978). This decision was thereafter seized upon by Sweden to justify the total absence of swing provisions in its bilateral agreements.

101 Cf.Trade Subcommittee Report, supranote 97, at 3: “[w]e do not know … whetherthe Europeans obtained more restrictive bilaterals than did the United States. If they did, there will be calls by the U.S. industry and labor for a renegotiation of our bilaterals to make them more restrictive and to ensure that textiles are not diverted from the European market to ours.“

102 This reflects the importance governments have been attaching to planning and predictability in the textiles sector. In addition, importing countries realize that disputes are less likely to arise than when unilateral measures are taken.

103 The following chart breaks down the types of restraints notified to the TSB over time:

* Notifications of termination of restraints are not included. The symbols "N," "E," and "M" represent notifications of restraints that are new, extended, or modified, respectively. With regard to unilateral action under Article 3(6), the symbol "a" represents an emergency action taken unilaterally, and "b," in connection with an understanding. The latter is still essentially unilateral in character. It should be noted that bilateral agreements under Article 4 are often notified to the TSB many months after they are in de facto operation, despite the 30-day notification limit of Article 4(4).

+ During this period Austria instituted a bilateral surveillance system to supersede an Article 3(4) agreement with Hong Kong.

# Some of these new agreements represent restrictions preexisting the MFA that had been converted to Article 4 agreements as permitted by Article 2. The United States, for instance, converted preexisting restrictions into 18 Article 4 agreements between January 1974 and September 1976.

104 The following table shows the ratio of all Article 3 measures to Article 4 measures taken by the major industrialized importing countries:

105 No proof of a “real risk” is required, nor could it be, given the impracticality of establishing it with legal certainty. In practice, the requirement has come to mean that importing countries should not pursue sweeping programs of trade control, but should exercise a modicum of sobriety in deciding when to negotiate a restraint.

106 In light of this difference between the two articles, it is not surprising that the TSB receives less information from the parties vis-à-vis Article 4. Under Article 3, an importing country's request for bilateral Consultations must be “accompanied by a detailed factual statement of the reasons and justification for the request, including the latest data concerning elements of market disruption,” which is also forwarded to the TSB Chairman along with the text of any agreement. Com.Tex/Sb/35, Ann. A (1974). There is no similar requirement under Article 4; by virtue of a TSB decision, the parties must merely submit, along with the text of the agreement, “a short reasoned statement” indicating compliance with Article 4. Com.Tex/Sb/ 35, Ann. B, para. 2(b) (1974). In all cases, however, the TSB may request additional information.

107 MFA, Art. 3(4). To date, the TSB has never declared an agreement unjustified, much less invalidated one, though it is legally feasible (but cf.Sutton, supranote 2, at 208); the political environment would simply not support too judicial an approach. Instead, the TSB has limited itself to calling into question the conformity of Article 3 measures to the rules of the MFA.

108 MFA, Art. 4(4).

109 Com.Tex/Sb/19, para. 8 (1974); Com.Tex/Sb/44, para. 26 (1974).

110 Com.Tex/Sb/519, para. 61 (1979). “Consultation clauses” amount to automatic trigger mechanisms to bring unrestrained products under restraint. In the EEC bilateral agreements, for example, the clauses enable the EEC to request immediate Consultations to agree upon quantitative limits when the imports of an unrestrained product exceed a certain specified percentage of total imports. During the consuLTAtion, the EEC can require the exporting country to suspend the issuance of export certificates.

111 Com.Tex/Sb/322, para. 5 (1978); Com.Tex/Sb/365, para. 70 (1978).

112 Com.Tex/Sb/380, para. 4 (1979). Not only may the TSB play an active role in the implementation of an agreement, but it can play a role in its negotiation as well. With respect to Article 3(4) agreements, Article 3(5)(ii) confers authority to review matters raised by either party engaged in bilateral negotiations. Article 11(4), which confers a similar but general competence, could be invoked in relation to Article 4 negotiations, but thus far has not been.

113 See MFA, Ann. B, para. 1.

114 See notes 43 and 44 supraand the accompanying text.

115 See, e.g., Art. 1(3) (“[a] principal aim … shall be to further the economic and social development of developing countries and secure a substantial increase in their export earnings … and to provide scope for a greater share for them in world [textile] trade“); Art. 6( 1) (special and differential treatment for LDC's); and Ann. A: III (in considering questions of market disruption, account must be taken of LDC interests).

116 But seeCOM.TEX/10, para. 14 (1978) (assertion made during the 1977 negotiations by the EEC spokesman that the expansion and progressive liberalization of trade had been substantially achieved vis-à-vis the Community). In fact, the TSB found that overall there had been “some liberalization” of world textile trade during the first 2½years of the MFA's operation, although it is impossible to gauge the influence the MFA has had on it. Com.Tex/Sb/196, para. 144 (1976). Trade in “textiles” (textile yarns, fabrics, made-up articles, and related products) declined. Id.,para. 113. Between 1973 and 1975, the share of developing countries in textile trade declined from 31 percent to 29 percent and in clothing trade increased from 51 percent to 53 percent. Id., para. 115. During the same period, imports of clothing and textiles into developed countries from developing countries increased 29 percent: clothing increased 48 percent and textiles declined slightly. Their relative share of the markets, though, has not changed greatly. India, Pakistan, and Egypt were the big losers during the 1973-1975 period because of their dependence on textile exports as opposed to clothing. Korea was the big winner. Hong Kong remained the world's largest exporter of clothing and became the third largest importerof textiles in 1975. Id.,para. 127.

117 Substantive consensus refers to the general agreement between the rules and the commercial policy objectives of the various member states. In contrast, political consensus refers to group solidarity in the perceived need for a set of rules. These terms are derived from R. Hudec, The Gatt Legal System And World Trade Diplomacy 262-63 (1975).

118 Seepp. 105 and 106 supra.

119 G. van Hoof & K. de Vey Mestdagh, supranote 56, at 51.

120 SeeCom.Tex/Sb/83, para. 9 (1975); Com.Tex/Sb/196, para. 80 (1976).

121 See note 106 supra.

122 Com.Tex/Sb/196, para. 80 (1976).

123 Com.Tex/Sb/83, Annex (1975). A similar, though far less demanding, list was prepared for Article 4 notifications. Com.Tex/Sb/35, Ann. B (1974). And the TC at its first meeting had suggested a list of minimum documentation requirements with respect to notifications under Article 2. COM.TEX/2, para. 11 (1974).

124 Com.Tex/Sb/273, para. 6 (1977).

125 Com.Tex/Sb/365, para. 71 (1978).

126 See,e.g.,Com.Tex/Sb/251, para. 2 (1977); Com.Tex/Sb/365, paras. 12 and 22 (1978).

127 See, e.g.,Com.Tex/Sb/245, paras. 6-10 (1977); Com.Tex/Sb/365, paras. 24-26 and 56 (1978) (an Indian-Swedish dispute over the latter's imposition of unilateral restraints; the matter rebounded between the TSB and bilateral discussion without conclusion until the restraints finally expired).

128 See, e.g.,Com.Tex/Sb/196, paras. 71, 72, and 79 (1976).

129 See, e.g., Com.Tex/Sb/196, para. 78 (1976).

130 To a lesser extent, it has hindered Article 2 and 3 reviews as well. Belated Article 2(4) status reports on compliance with that article, for instance, undercut the effectiveness of the TSB's review of the timely elimination and conformation of pre existing restraints. Cf.COM.TEX/ SB/83, para. 8 (1975). Under Article 3, notifications have not only arrived past deadlines, but in a few cases they were “regretfully” not given. SeeCom.Tex/Sb/364, para. 7 (1978). Lateness has also hampered ad hoc reviews. See, e.g., Com.Tex/Sb/144, para. 9 (1976) (TSB Chairman criticizes the slow response to his request for the submission of information on national import surveillance systems).

131 Results will not be dramatic because (1) most potentially injurious trade has already been covered by the barrage of new agreements since 1978; (2) modifications and renewals of those agreements, which are likely to be more frequent than the negotiation of new agreements during the remainder of the current term, do not demand as much time for formalization anyway; and (3) the time between the de facto operation and initialing of new agreements still might exceed 30 days.

132 See, e.g.,Com.Tex/Sb/364, para. 7 (1978) (notifications to TSB Chairman of requests for Art. 3 consultations).

133 See, e.g.,COM.TEX7SB/83, para. 8 (1975).

134 Seepp. 105 and 106 supra.

135 F. van Hoof & K. de Vey Mestdagh, supranote 56, at 52.

136 Ibid.

137 Interview with Robert Shepherd, supranote 54.

138 Seenote 127 supra.

139 Following the EEC's failure to adopt the TSB's recommendations in the phase-out programs controversy, the Pakistani spokesman remarked that “even verdicts from this Body [the TSB] in favour of exporting countries did not solve their problems, because decisions of the TSB were acceptable to the importing countries only if they were in their favour.” COM.TEX/10, para. 50 (1977).

140 Seepp. 105 and 107 supra.

141 Sec Com.Tex/Sb/196, paras. 5-9 (1976).

142 See generallypp. 107-08 supra.

143 See alsop. 128 infra.

144 Australia and Canada were two such countries. Both, along with France, sought to preserve their GATT rights in the textiles field. Australia, for one, perceived the GATT as a means to redress the imbalance of the MFA. No doubt, the inclusion of a provision in the Protocol limiting GATT rights in the textiles field played a part in Australia's decision to discontinue its MFA membership and may have been a factor in Canada's late acceptance of the Protocol.

145 Seenote 47 supra.

146 Cf.note 22 supra.

147 Cf.(U.S.) S. REP. No. 93-1298, 93d Cong., 2d Sess. 119 (1974), where it was stated in relation to the comparable GATT “escape clause,” Article XIX: the rationale for the “escape clause” has been and remains, that as barriers to international trade are lowered, some industries and workers inevitably face serious injury, dislocation and perhaps economic extinction. The “escape clause” is aimed at providing temporary relief for an industry suffering serious injury, or the threat thereof, so that the industry will have sufficient time to adjust to the freer international competition. Exporting countries tend to emphasize conversion, and importing countries modernization and specialization among the goals of adjustment.

148 To create such obligations on the international level was and is unacceptable to many countries. International adjustment assistance codes have been proposed, but have come to naught for lack of political and economic resolve among countries with large, ailing industries. See, e.g.,G. & V. Curzon, Global Assault On Non-Tariff Trade Barriers 32 (1972). Developed countries have demonstrated their willingness to undertake slow and gradual structural changes by virtue of their liberalization of trade within the GATT system.

149 On “swing,” see note 44 supra.

150 See, e.g.,Com.Tex/Sb/196,para. 97 (1976).

151 Seepp. 111-12 and 114-15 supra.

152 -pc Conclusions, supranote 79, para. 6: “The Committee recognized that countries having small markets, an exceptionally high level of imports and a correspondingly low level of domestic production are particularly exposed to the trade problems mentioned in the preceding paragraphs, and that the problems should be resolved in a spirit of equity and flexibility… .“

153 COM.TEX7SB/519, para. 58 (1979). The possibility remains, however, for Sweden to seek cover under the reasonable departures clause.

154 Japan, of course, and some state trading countries are the exceptions. Industrial countries have declined to tamper with their mutual trade under the MFA, presumably because exports from their mature, less dynamic industries do not cause market disruption. Cf.Shonfield & Curzon, supranote 3, at 275. But note the rumblings in the EEC in late 1979 and early 1980 for protection against U.S. synthetics: the British Trade Minister reiterated the EEC position stated in late 1979 that the U.S. double-tier pricing system for oil and natural gas gave U.S. producers an unfair advantage that was “disrupting the market.” Int'l Herald Tribune, Nov. 21,1979, at 7, col. 2. There are, of course, important political considerations involved in any restriction of U.S.-EEC trade.

155 Com.Tex/Sb/296, para. 9 (1976).

156 Com.Tex/Sb/27, Annex (1974).

157 Seenote 55 supra.

158 Com.Tex/Sb/519, para. 67 (1979). As of this writing, the EEC has not invoked a “price clause.“

159 See note 110 supraand the accompanying text.

160 Cf.MFA, Art. 5.

161 United States: Trade Act of 1974, Pub. L. No. 93-618, 19 U.S.C. §§2111-2487, 88 Stat. 1978 (1975) [hereinafter cited as Trade Act of 1974].

162 Seenote 38 supra.

163 Dam points to the intrinsic weakness of the “market disruption” concept when he questions whether it is an objectively verifiable phenomenon with different and distinct consequences from ordinary competition. He recognizes that “if the competitive threat of less-developed countries becomes severe enough, developed countries may not hesitate to mold the notion of ‘market disruption’ to their desire to impose import controls.” K. DAM, supranote 3, at 314.

164 Com.Tex/Sb/51, para. 9 (1974).

165 Domestic industrial turmoil is usually attributable to more than one single cause. To isolate each and rank them in order of significance with any precision ordinarily requires the assistance of a shaman. Cf.T. Enger, U.S. Tariff Adjustment and Adjustment Assistance,6 J. World Trade L. 518, 522 (1972).

166 The TSB has ordinarily recommended use of Article 4 whenever an Article 3 measure was found nonconforming. In this way, Article 4 has been used as a safety valve when the TSB felt itself pressed into too judicial a role. Thus, for instance, when the TSB found that the EEC had not sustained a claim of market disruption in an EEC-India dispute under Article 3, it noted that “there might be a real risk of market disruption [as required by Article 4].” Com.Tex/Sb/365, para. 18 (1978). This desire to avoid confrontation explains in part the TSB's reluctance to discuss the issues publicly.

167 This does not mean that the terms cannot be better understood and their relationships clarified. The U.S. International Trade Commission, charged with the task of determining serious injury to domestic producers who seek import relief under §201 of the Trade Act of 1974, resorted to a dictionary during one proceeding to supply definitions to comparable terms. Stainless Steel and Alloy Tool Steel, U.S. Int'l Trade Comm'n, Investigation No. TA-201-5, USITC Pub. No. 756 (1976), reprinted inJ. Jackson, Legal Problems Of International Economic Relations 652-53 (1977). The ITC routinely issues public reports discussing the application of economic factors in specific cases, the question of serious injury, the relationship between increased imports and serious injury, and other related matters. See generally id.at 649-63.'

168 A new wrinkle is that some committees, unlike the Textiles Committee, are “established under” the relevant agreement rather than within “the framework of the GATT.” See, e.g.,Agreement on Government Procurement, doneApr. 11, 1979, Art. VII, para. 1, GATT Doc. Mtn/Ntm/W/211/Rev.2, reprinted in18 Ilm 1052 (1979). Time will tell whether the difference is insignificant or will have an effect on supervisory activities.

169 See generallyJackson, supranote 60, at 44-46, 49-52.

170 See, e.g., Agreement on Interpretation and Application of Articles VI, XVI, and XXIII of the General Agreement on Tariffs and Trade, done Apr. 12, 1979, Pt. VI, Art. 18, MTN/NTM/W/236 [hereinafter cited as Subsidies and Countervailing Measures Agreement]. To see the essential similarity with the GATT panel system, compare id. with GATT, Art. XXIII and Texts Concerning A Framework for the Conduct of World Trade, done Apr. 12,1979, Point 3, Annex, Agreed Description of the Customary Practice of the GATT in the field of Dispute Settlement (Article XXIII:2), para. 6, MTN/FR/W/20/Rev.2.

171 In some agreements provision is made for economic sanctions. See, e.g., Subsidies and Countervailing Measures Agreement, supra note 170, Pt. VI, Art. 18, para. 9: "[i]f the Committee's recommendations are not followed within a reasonable period, the Committee may authorize appropriate countermeasures (including withdrawal of GATT concessions or obligations). . . ." There is no reason to believe that these sanctions will be any more effective than GATT sanctions in effectuating correction.

172 The Safeguards Code is an effort to refine Article XIX of the GATT and codify current practice, which, for the most part, is extralegal. On Article XIX and its faults, see Tumlir, supra note 3.

173 See Draft Integrated Text On Safeguards, ch. 6, MTN/SG/W/45 (1978).

174 A sticking point in the extended negotiations was the powers the Committee on Safeguard Measures should have. LDC's wanted to grant the power to make prior determinations of conformity of safeguard measures to the code; this would in effect exceed the comparable power of the TSB. The EEC resisted and argued for ex post facto reviews. See 2 GATT, THE TOKYO ROUND OF MULTILATERAL TRADE NEGOTIATIONS 14-15 (1980).