ITALY-TRADE-JUNE 28, 1948 United States of America and Italy and to confirm the understand- ing reached as a result of these conversations as follows: 1. For such time as the Government of the United States of America participates in the occupation or control of any areas in western Ger- many, Japan or southern Korea, the Government of Italy will apply to the merchandise trade of such areas the provisions relating to the most favored nation treatment of the merchandise trade of the United States of America set forth in the Treaty of Friendship, Commerce and Navigation, signed February 2, 1948 (and, pending the entry into force of such Treaty, in the exchange of Notes on commercial policy of August 14, 1947), or, for such time as the Gov- ernments of the United States of America and Italy may both be contracting parties to the general agreement on tariffs and trade, dated October 30, 1947, the provisions of that agreement, as now or hereafter amended, relating to the most favored nation treatment of such trade. It is understood that the undertaking in this para- graph relating to the application of the most favored nation provisions of the Treaty of Friendship, Commerce and Navigation shall be subject to the exceptions recognized in the general agreement on tariffs and trade permitting departures from the application of most favored nation treatment and that the undertaking relating to the exchange of notes on commercial policy shall be subject to such exceptions and to the exceptions recognized in that Treaty of Friend- ship, Commerce and Navigation; provided that nothing in this sen- tence shall be construed to require compliance with the procedures specified in the general agreement with regard to the application of the exceptions in the general agreement. 2. The undertaking in point 1 above will apply to the trade of any area referred to therein only for such time and to such extent as such area accords reciprocal most favored nation treatment to the marchan- dise trade of Italy. 3. The undertakings in points 1 and 2 above are entered into in the light of the absence at the present time of effective or significant tariff barriers to imports into the areas herein concerned. In the event that such tariff barriers are imposed, it is understood that such under- takings shall be without prejudice to the application of the principles set forth in the Havana Charter for an International Trade Organiza- tion relating to the reduction of tariffs on a mutually advantageous basis. 4. It is recognized that the absence of a uniform rate of exchange for the currency of the areas in western Germany, Japan or southern Korea referred to in point 1, above, may have the effect of indirectly subsidizing the exports of such areas to an extent which it would be difficult to calculate exactly. So long as such a condition exists, and if consultation with the Government of the United States of America fails to reach an agreed solution to the problem, it is understood that it would not be inconsistent with the undertaking in point 1 for the Government of Italy to levy a countervailing duty on imports of such goods equivalent to the estimated amount of such subsidization, where 61 Stat., Pt. 4, p. 3962. 61 Stat., Pts. 5 and 6. 62 STAT.] 2915
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