in excess of those applied to like domestic products. With minor exceptions, products that originate within the union are not subject to less favorable treatment than the same kind of products that are of foreign origin. This freedom from restriction also applies to foreign goods imported into one of the countries of the union after payment of common customs duties, except when the goods are altered in one of the countries before shipment to the other, or for those few commodities for which the import duties of the two countries differ.

Proposed accession of Laos and Tunisia

Article XXVI of the General Agreement provides that a contracting party may sponsor the accession to the agreement of its territories, on behalf of which it has previously accepted the rights and obligations of the agreement. Prerequisite to such accession is a declaration by the contracting party concerned that the customs authorities of the territory in question possess full autonomy to conduct the territory's external commercial relations.

France made such a declaration with respect to Laos on September 13, 1956, and with respect to Tunisia, on October 8, 1956, and asked the Contracting Parties to place the question of the accession of those territories on the agenda for the 11th Session. According to France, the Royal Government of Laos--under the provisions of the Pau Agreements of March 8, 1949--had acquired the right to negotiate and sign trade agreements and to adopt its own customs legislation and regulations. Tunisia had obtained internal autonomy under the conventions of June 3, 1955, and had obtained its independence under the Protocol of Agreement of March 20, 1956. Before the 11th Session of the Contracting Parties began, however, France asked the Contracting Parties to drop from the agenda consideration

of the proposed accession of Laos and Tunisia, and the Contracting

Parties agreed to do so.

Proposed accession of Switzerland

On September 15, 1956, Switzerland asked the Contracting Parties to consider--at their 11th Session--its provisional accession to the

Switzerland

General Agreement under the provisions of article XXXIII. recognized the existence of certain special problems in connection with its accession, but preferred to defer their solution until after it had acceded by making several reservations to the provisions of the General Agreement. The Swiss Government pointed out that tariff negotiations, which are prerequisite to provisional accession, would be possible after the Swiss Federal Council and Parliament had approved a revision of the Swiss customs tariff.

The Contracting Parties approved Switzerland's request that it be permitted to undertake tariff negotiations with a view to provisional accession to the General Agreement. The arrangements and procedures that the Contracting Parties agreed upon are similar to those that were employed for the provisional accession of Japan. They will consist of (1) a decision by the Contracting Parties inviting Switzerland to participate in the activities of the Contracting Parties, declaration, signed by Switzerland and those contracting parties that wish to do so, providing that trade between the signatories and Switzerland will be governed by the terms of the declaration, and providing for entry into force of the tariff concessions that result

and (2) a

1/ For the Decision of October 23, 1953, inviting Japan to accede to the General Agreement, see Contracting Parties to GATT, Basic Instruments. Second Supplement, Sales No.: GATT/1954-2, Geneva, 1954,

from the negotiations.

The terms of the declaration will include all

the provisions of the General Agreement, but will be subject to such reservations as may be made by Switzerland and approved by the Contracting Parties, and to the reservations that may be made by the other contracting parties that sign the declaration.

The Contracting Parties directed the Intersessional Committee to arrange for the proposed tariff negotiations, and to establish a negotiations committee to draft the declaration relating to Switzerland's provisional accession. The Contracting Parties decided that the provisions of the declaration will be effective for a period of 2 years from the date it is accepted by Switzerland--subject to the possibility of renewal by mutual consent--or until such time as Switzerland definitively accedes to the General Agreement, whichever is earlier. The Contracting Parties also agreed that, at their first regular session following the signature of the declaration, they will adopt a resolution inviting Switzerland to participate in the work of the Contracting Parties. This resolution would continue in effect for the same period as the declaration.

In requesting permission to accede to the General Agreement on a provisional basis, Switzerland stated that it must make three reservations. The first reservation relates to the maintenance of quantitative restrictions on imports of certain agricultural products and on trucks--restrictions that Switzerland is required to maintain by existing legislation. According to Switzerland, its Federal law on agriculture, its alcohol monopoly law, and its wheat monopoly law require it to maintain import restrictions on certain agricultural products in order to prevent a further decline in the rural population,

to combat alcoholism, and to assure an adequate supply of bread. Restrictions on the importation of trucks, according to Switzerland, are essential to the country's defense; the Swiss Army is authorized to mobilize civilian trucks in times of emergency, and it would be impossible for it to maintain stocks of spare parts for several dozen makes. The Swiss representative pointed out, however, that despite Switzerland's reservation as to quantitative restrictions, Switzerland--as a member of OEEC--still would be subject to the limitations that organization imposes on their use.

The contracting parties particularly concerned with the exportation of agricultural products objected to the Swiss reservation on the ground that no country acceding to the General Agreement should be granted a waiver that, in any respect, goes beyond the terms of the so-called hard-core decision of March 5, 1955. They maintained that the Swiss reservation did not satisfy the requirements set forth in that decision, as it had no time limit and did not provide for the progressive elimination of restrictions. Switzerland, however, pointed out that it seeks only provisional accession to the General Agreement, and that the hardcore decision applies to countries that accede to the agreement

definitively.

Another objection that some contracting parties raised to Switzerland's provisional accession was that there is no sufficient indication that Switzerland would be able to accept fully the obligations of the General Agreement within a reasonable period of time. These contracting parties felt, therefore, that provisional accession--accompanied by the proposed reservation--would tend to become a permanent arrangement, and would create a precedent for the accession of other countries with

similar broad reservations. Most of the contracting parties felt,

however, that the Swiss reservation would be acceptable if it were limited to a 2-year period, and if Switzerland were willing to consult with the Contracting Parties on its quantitative import restrictions as soon as its provisional accession became effective.

The second reservation that Switzerland proposed concerns the provisions of articles XI-XIV, which deal with restrictions that contracting parties impose for balance-of-payments reasons. In place of the obligations specified in these articles, Switzerland desired to substitute the rules provided in the OEEC Code of Liberalization. According to Switzerland, it was necessary for it to make this reservation because it has no balance-of-payments difficulties, as defined in the General Agreement. By accepting the provisions of articles XI through XIV, Switzerland felt that it would be placed in a less favorable position than other OEEC countries that have such difficulties and that may apply the more lenient OEEC rules with respect to trade restrictions for balance-of-payments reasons. The Contracting Parties felt, however, that this reservation constituted such a radical departure from the basic provisions of the General Agreement that it would not be acceptable, even for provisional accession to the agreement. The Contracting Parties also felt that articles XII and XXIII of the agreement provide adequate protection against the difficulties that Switzerland envisaged in accepting without reservation the provisions of articles XI-XIV.