on imports may be granted for non-discriminatory measures proposed for the promotion of economic

development (Art. 13, 14). Each of these possible escapes 1s circumscribed by limiting criteria, accompanied by additional commitments, and subject to detailed procedures and administrativo controls. The last two of them require the prior approval of the ITO.

I. A country member of ITO that is in balance-ofpayments difficulty may use import quotas, but only during the period and to the extent that this is necessary "to forestall the imminent threat of or to stop, a serious decline in its monetary reserves", or "to achieve a reasonable rate of increase in its reserves" (Art. 21). The ITO must base its decision as to whether a country falls within this exception on a determination made by the International Monetary Fund (Art. 24).

A country making use of this exception commits itself

(4) "to avoid unnecessary damage to the commercial

or economic interests of any other member"; and (5) progressively to relax and ultima tely to elimi

nate !ts restrictions as its financial condition improves.

It may consult with the ITO on its own initiative and must do so on request before increasing old restrictions or applying new ones.

A member may ask the ITO to approve old or new restrictions and the ITO, if it does so, may limit their extent, intensity, and duration, In other cases, any member may complain that the fore coing rules have been violated, and the ITO may release it from concessions or obligations toward the violator.

For the duration of its transition period under Article XIV of the International Monetary Fund, a country in balancə-of-payments difficulty may discriminate in administering import quotas on either of two bases (Art. 23 and Annex K):

(1)

any country operating under Article 23 may emoloy discriminations paralleling those permitted under Article XIV of the Fund (or an analagous exchange agreement with the ITO) or continue and adapt discriminations in effect on March 1, 1948; or

countries operating under either of the forogoing provisions must

(1) promote the maximum development of multilateral

trade possible during the transition period, and

(2) consult the ITO, after March 1, 1952, concerning

the continued use of discriminatory measures.

During and after the Fund transition period, a country in balance-of-payments difficulty may ask the ITO for permission temporarily to employ discriminatory measures affecting a small part of its external trade.

II. Members of the ITO who enter into an interim agreement loading to the eventual formation of a customs union or free trade area may establish customs duties departing from the mos t-favored-nation rule if they satisfy the following conditions (Art. 44):

(1)

they must proceed by reducing duties to insiders, not by raising duties to outsiders;

(2)

(3)

they must move toward the ultimate elimination
of duties on substantially all of their internal
trade ;
in the case of a cus toms union, they must move
toward the ultima to elimination of all other
internal restrictions and the establishment of
a common tariff ;

(4)

they must present to the ITO À plan and schedule which provides for the final establishment of the customs union or free trade area within a reasonable period of time;

(5) if the ITO is convinced that the plan and schedule

will, in fact, result in the establishment of such an arrangement within a reasonable period they may proceed with the project;

(6) otherwise, they must modify or abandon their plans.

Members of the ITO can grant new tariff preferences to one another, but not to non-members, if they surmount the following obstacles (Art. 15):

1) the ITO must find that their territories are con

tiguous or belong to the same economic region;