December 15, 1977, the Director-General of GATT opened a Protocol extending the MFA, and on December 29, 1977, William Vanden Huevel, the U.S. Representative to the European Office of the United Nations and other International Organizations, informed the Director-General of GATT that the United States accepted the Protocol.

The extension of the MFA permits participating countries to continue to enter into bilateral agreements on mutually acceptable terms to eliminate defined risks of market disruption in importing countries and disruption to the textile trade of the exporting countries. The MFA deals with trade in wool, manmade fibers, and cotton. Pursuant to the procedures set forth in article 3 of the MFA, textile importing countries may, when market disruption exists in a particular category not already subject to restraint, unilaterally restrain such imports from particular countries.

The opening of the Protocol was based on the Conclusions of the Textiles Committee adopted on Dec. 14, 1977; these conclusions, which are attached to the Protocol, follow:

5.1 As regards what was described by one major importing participant in its statement to this Committee as its pressing import problems, the Textiles Committee recognized that such problems should be resolved bilaterally under the provisions of article 4 or article 3, paragraphs 3 and 4.

5.2 The Committee noted one major importing participant's statement concerning the basis upon which it intended to achieve its stated objectives by bilateral consultations and negotiations and noted the expression of goodwill and flexibility made by certain exporting participants now predominant in the exporting of textile products of all the three fibers covered by the Arrangement.

5.3 The Committee agreed that, within the framework of the MFA, any such consultations and negotiations should be conducted in a spirit of equity and flexibility with a view to reaching a mutually acceptable solution under article 4, paragraph 3 or article 3, paragraphs 3 and 4, which does include the possibility of jointly agreed reasonable departures from particular elements in particular cases.

5.4 It was agreed that any such departures as mentioned in sub-paragraph 3 above would be temporary and that participants concerned shall return in the shortest possible time to the framework of the Arrangement.

10. Taking into account the evolutionary and cyclical nature of trade in textiles and the importance to both importing and exporting countries of prior resolution of problems in a constructive and equitable manner for the interest of all concerned, and on the basis of the elements mentioned in paragraphs 1 through 9 above, the Textiles Committee considered that MFA in its present form should be extended for a period of four years subject to confirmation by signature as from 15 December 1977 of a Protocol for this purpose.

GATT Doc. No. COM.TEX/W/47. The text of the referenced articles of the MFA follows:

Article 3

3. If, in the opinion of any participating importing country, its market in terms of the definition of market disruption in Annex A is being disrupted by imports of a certain textile product not already subject to restraint, it shall seek consultations with the participating exporting country or countries concerned with a view to removing such disruption. In its request the importing country may indicate the specific level at which it considers that exports of such products should be restrained, a level which shall not be lower than the

general level indicated in Annex B. The exporting country or countries concerned shall respond promptly to such request for consultations. The importing country's request for consultations shall be accompanied by a detailed factual statement of the reasons and justification for the request, including the latest data concerning elements of market disruption, this information being communicated at the same time by the requesting country to the Chairman of the Textiles Surveillance Body.

4. If, in the consultation, there is mutual understanding that the situation calls for restrictions on trade in the textile product concerned, the level of restriction shall be fixed at a level not lower than the level indicated in Annex B. Details of the agreement reached shall be communicated to the Textiles Surveillance Body which shall determine whether the agreement is justified in accordance with the provisions of this Arrangement.

Article 4

1. The participating countries shall fully bear in mind, in the conduct of their trade policies in the field of textiles, that they are, through the acceptance of, or accession to, this Arrangement, committed to a multilateral approach in the search for solutions to the difficulties that arise in this field.

2. However, participating countries may, consistently with the basic objectives and principles of this Arrangement, conclude bilateral agreements on mutually acceptable terms in order, on the one hand, to eliminate real risks of market disruption (as defined in Annex A) in importing countries and disruption to the textile trade of exporting countries, and on the other hand to ensure the expansion and orderly development of trade in textiles and the equitable treatment of participating countries.

3. Bilateral agreements maintained under this Article shall, on overall terms, including base level and growth rates, be more liberal than measures provided for in Article 3 of this Arrangement. Such bilateral agreements shall be designed and administered to facilitate the export in full of the levels provided for under such agreements and shall include provisions assuring substantial flexibility for the conduct of trade thereunder, consistent with the need for orderly expansion of such trade and conditions in the domestic market of the importing country concerned. Such provisions should encompass areas of base levels, growth, recognition of the increasing interchangeability of natural, artificial and synthetic fibers, carry forward, carryover, transfers from one product grouping to another and such other arrangements as may be mutually satisfactory to the parties to such bilateral agreements.

4. The participating countries shall communicate to the Textiles Surveillance Body full details of agreements entered into in terms of this Article within thirty days of their effective date. The Textiles Surveillance Body shall De informed promptly when any such agreements are modified or discontinued. The Textiles Surveillance Body may make such recommendations as it deems appropriate to the parties concerned.

The General Agreement on Tariffs and Trade, with annexes and schedules, and protocol of provisional application was concluded on Oct. 30, 1947 (TIAS 1700; 61 Stat. (5), (6); 4 Bevans 639; 55–61 UNTS; entered into force for the United States on Jan. 1, 1948).

§ 3

International Economic Assistance and
Development

General Economic Development

U.N. Development Program

On June 16, 1977, John J. Gilligan, Administrator of the Agency for International Development, made a statement before the 24th session of the Governing Council of the U.N. Development Program

(UNDP) in Geneva in which he indicated that the United States is "prepared to consider longer term funding of the United Nations development programs" if "necessary reforms are undertaken." Among the reforms he called for were the adoption of stringent management controls and the concentration of efforts on the world's poorest people.

Excerpts from Governor Gilligan's remarks concerning the basic needs of the poor majority of the world's population follow:

*

In our view, international development means not only closing the gap between rich and poor nations, but also between the rich and poor within nations.

Let me take note of the excellent background document to our discussion today (DP/261), prepared by the Secretariat, which emphasizes "the pressing need to promote greater equity and social justice within countries as well as among them."

We should see the major objective of development as providing all human beings with the opportunity to develop their full potential.

If such equality of opportunity is to have any meaning, the basic needs of the world's poor majority must be met.

Although there is no precise definition of such basic needs, an emerging international consensus points to at least certain minimum levels of food, shelter, health, education and employment.

Unfortunately, not enough people realize that at least one billion people one quarter of the world's population-live in conditions of absolute poverty.

We should know the unpleasant truth: Despite certain successes in development, the number of people living in this absolute and degrading poverty is increasing.

The rapid increase in Gross National Product in many developing countries over the past two decades has not led to an increase in living standards for the poorer half of their growing populations.

We all know about the "trickle-down theory." For the world's poorest people, however, a considerable amount of development assistance of the past two decades has not trickled down.

The American people, the American Congress, and the new American Administration will no longer accept a "trickle-down theory" in those programs where its people and money are involved.

A new strategy to meet basic human need requires new approaches to rural and industrial development.

It means increased agricultural production, and greater equity in income distribution.

For many countries, greater equity must mean significant changes in land tenure-in other words, land reform.

Greater equity also means improved access to agricultural resources fertilizer, water, transportation and credit.

Increased expenditures must also be made on rural health and educational facilities.

And in industrial development, we must place major emphasis on labor-intensive production.

As the people in this room know, when we talk about meeting basic needs, we are not talking about an international welfare program.

We are talking about giving the poor a chance to improve their standard of living by their own efforts.

We are talking about giving them a chance and the means to rise above those extreme poverty levels that stunt human development. We are talking about the global enhancement of human rights; for the fundamental needs of the world's people are also their rights and without these, all other rights, civil, political and social, lose meaning.

Just as President Carter's new Administration will take a strong stand on issues of civil, political and social rights, so too shall we strive for the achievement of fundamental economic rights.

We believe that the United Nations Development Program not only should offer its assistance to the poor countries of the world. but should ensure that it is providing opportunities for the poor majority within those countries.

We also believe that this development effort cannot be allowed to be a one-way street, with all of the thinking, and planning, and working, and spending generated in only one direction.

We believe that the United Nations Development Program should require recipient nations to commit themselves to meeting the minimum needs of their populations. . . to distributing the benefits of development on an equitable basis . . . and to protecting the human rights of their populations so that development can be selfsustaining.

And we believe that the United Nations has the means to determine whether nations are making good on these commitments. Our government is committed to working with the United Nations Development Program to achieve these objectives.

Our view of a new international economic system, which we shall help to build, is that it not only should offer new opportunities for nations to participate in the world economy, but must provide the opportunities for all citizens to participate in the growing economies of their countries.

Agency for International Development Press Release AID-77-44 (June 16, 1977).

Conference on International Economic Cooperation (CIEC)

During his testimony on June 21, 1977, before the Congressional Joint Economic Committee, Richard N. Cooper testified concerning the achievements of the Conference on International Economic Cooperation (CIEC) with regard to development assistance and assistance for industrialization in part as follows:

One of CIEC's most notable achievements was in the area of development assistance. The Group of 8 countries made commitments to increase the volume of aid and agreed to a variety of concepts to enhance the quality and distribution of these flows. All traditional donors agreed-for the first time to increase official development assistance "substantially."

U.S. commitment along these lines had an important positive impact; the Administration has taken this commitment within the context of its intention to request increases in economic assistance over the next five years, starting with the current fiscal year. In keeping with this important policy decision, donor countries further agreed to begin negotiations on a general capital increase for the World Bank.

Developed countries in CIEC also agreed to establish a $1 billion Special Action Program of aid for the poorest LDC's (i.e., generally those eligible for concessional assistance from the International Development Association. Contributions to this program will take various forms as determined by each participant and in accord with a burden-sharing formula among donors.

Subject to appropriate congressional action, the U.S. contribution of $375 million will be funded by fiscal year 1979 in our regular bilateral assistance program. The European Economic Community will contribute $385 million to a special account of IDA for fast disbursing assistance. Other developed-country participants will split the remaining $240 million, generally via bilateral measures. The Japanese share is $114 million in new assistance. Sweden and Switzerland, and in part Canada, will participate via debt relief.

The conference also reached important broad agreements in other development-related areas. The participants agreed on a set of general concepts concerning infrastructure development which represents the first official text on this subject in a North-South forum. They recommended that the United Nations arrange a conference under Economic Commission for Africa-African Development Bank auspices to define and carry forward the objectives of an African Transport and Communications Decade (1978-87) which would be aimed at improving both economic and social infrastructures, with special emphasis on transportation and communications. In the area of assistance to industrialization, agreement covered a wide variety of aspects, including better coordination for technical assistance and support for UNIDO [U.N. Industrial Development Organization] sectoral consultations. The conference, however was unable to agree on two particularly extreme demands by developing countries concerning adjustment assistance and access to markets. These relate to industrialized countries using adjustment assistance for redeployment of industry from developed to developing countries and to their eliminating immediately all trade barriers to imports from developing countries.

*

77 Dept. of State Bulletin 96-97 (1977).

Portions of the Annex to the Report of the Conference concerning Infrastructure read in part as follows:

257-179 O-79-49