prevented from imposing fees or other charges on imports commensurate with the cost of services it renders in connection therewith. At the Ninth Session of the Contracting Parties in 1954-55, the United States asserted that France had increased its stamp tax beyond the allowable The matter was temporarily resolved, however, when the French representative noted that France had not increased the tax--and did not intend to increase it--beyond the point necessary to meet the cost of ser1/ vices rendered, as authorized by the General Agreement. In August 1955. however, France increased the tax from 2 percent to 3 percent, with the specific provision that the increase in the proceeds from it be applied to the budget for agricultural family allowances.

The United States immediately complained to the Contracting Parties that France's action was inconsistent with its obligations under the General Agreement. When the matter came before the Contracting Parties at their 10th Session, the French representative agreed that the increase in the tax violated the agreement. But, he stated, France had decided on the increase in exceptional circumstances --when it had been necessary to finance his country's program of agricultural family allowances and when there seemed to be no possibility of financing such allowances by normal methods. Also, he noted, the increase in the level of protection involved was small and did not seem to be of such a nature as to seriously damage the interests of the contracting parties or to alter the channels of trade. He assured the Contracting Parties, however, that

his Government would adjust the tax as soon as possible.

1/ See Operation of the Trade Agreements Program (eighth report), Pp. 34-36.

At the 11th Session, the French delegate informed the Contracting Parties that the draft of his country's Finance Act for 1957 provided for the reduction of the stamp tax from 3 to 2 percent. The Contracting Parties requested the French Government to inform them when the measure had been approved. As approved by the French National Assembly on December 29, 1956, however, the Finance Act continued the stamp tax at the rate of 3 percent. For this reason, the Contracting Parties placed the United States complaint on the agenda for their 12th Session. Federal Republic of Germany's turnover tax on imports of

printed matter (art. III

In the latter part of 1954 the customs authorities of the Federal Republic of Germany began to calculate the country's 4-percent compensatory turnover tax on imported printed matter on its "wholesale" price-that is, on the ultimate German retail price reduced by a fixed percentage. Formerly, the tax had been based on the invoice price, which is the contractual price paid by the publisher to the printer, and which is still used as the base for the tax on domestic printed matter. At the 11th Session the Netherlands complained that, under the new method of calculating the tax, the taxable value of imported printed matter includes copyright, royalty, and other cost elements, whereas the taxable value of domestic printed matter does not include them. Moreover, according to the Netherlands, the method of calculating the tax is not in accordance with the principles of article III of the General Agreement, which provide for "national"

treatment of imported products for purposes

of internal taxation. The differcncc in calculating the tax results in a higher tax on foreign printed matter than on such matter obtained from German printing establishments.

During the 11th Session the delegates of the Netherlands and the Federal Republic of Germany and the delegate from Austria--which is also an interested party--expressed hope that the matter could be settled satisfactorily through consultations by the contracting parties concerned. Accordingly, the Contracting Parties took no action on the matter at

that session.

Greek increase of bound duties (art., XIX)

On October 3, 1956, Greece increased the duties it had bound in the General Agreement on refrigerators and long-playing phonograph records. In its complaint concerning the increased duties at the 11th Session in 1956, the Federal Republic of Germany requested that the Contracting Parties examine only the increased duty on phonograph records.

Inasmuch as Greece had increased the duty on refrigerators under what it believed to be the "critical circumstances" envisioned in paragraph 2 of article XIX of the General Agreement, Western Germany did not insist that its complaint on that item be discussed at the 11th Session. However, it reserved the right to bring the matter to the attention of the Contracting Parties later if consultations show that the prerequisite conditions for action by Greece under article XIX do not exist. Greece claimed that the possibility of injury to domestic producers of refrigerators arises, not because the domestic product cannot compete with the imported product, but because of heavy imports resulting from the ability of importers to

sell imported refrigerators to domestic purchasers on the installment plan--which type of financing is made possible by foreign capital loaned for that purpose to the retailers of refrigerators in Greece.

At the time that Greece bound its duty on phonograph records at Annecy and Torquay, long-playing records (33-1/3 and 45 revolutions per minute) were a new development and were not imported by Greece. The Greek concession on phonograph records did not mention record speed. In the opinion of the German delegation to the 11th Session, as well as that of a group of experts that the Contracting Parties appointed during the session, the general practice in classifying new or modified products is to apply provisions of the tariff item that specify the products by name, or, if no such item exists, to assimilate the new products into existing classifications in accordance with the principles established by national tariff legislation. It was the opinion of the experts that long-playing records should have been included under the bound item, and that, if Greece had desired to modify its concession on phonograph records, it should have resorted to the procedures provided in articles XVIII, XIX, and XXVIII of the General Agreement.

After the discussion, the Contracting Parties decided to refer the matter to the Intersessional Committee, which in turn was to refer it to a working party. The Contracting Parties directed the working party to consider both the technical and the policy aspects of the problem.

United Kingdom subsidization of exports of eggs, cattle, and potatoes (art. XVI

At its meeting that began on April 24, 1957, the Intersessional Committee considered a complaint by Denmark that during the first few months of 1957 the United Kingdom had begun to export large quantities of eggs, cattle, and potatoes to Denmark's traditional European markets. The Danish representative expressed the opinion that the exports in question were the result of production in excess of the United Kingdom's domestic requirements, and that such excess production resulted from the operation of the United Kingdom's guaranteedprice program for these products. According to the Danish representative, his country was willing to await future developments with respect to the United Kingdom's action to reduce its exports of cattle and potatoes. He felt, however, that the United Kingdom had failed to take sufficient action with respect to exports of eggs, and that he must ask the United Kingdom to discuss with Denmark the possibility of limiting the exportation of subsidized eggs in accordance with the provisions of article XVI of the General Agreement. The Danish complaint was supported by the Netherlands, Belgium, Germany, and Sweden.

After discussion, the Intersessional Committee recommended that the United Kingdom and Denmark continue the consultations that they had undertaken and that, in determining its future policy with respect to subsidies on the products in question, the United Kingdom consider the views expressed by the various contracting parties. The Committee also appointed a panel to examine the Danish complaint. The panel