ANNEX Interpretative Notes 1. It is understood that the requirements of paragraph 1(a) of Article II, relating to the adoption of measures for the efficient use of resources, would include, with respect to commodities furnished under the Agreement, effective measures for safeguarding such commodities and for preventing their diversion to illegal or irregular markets or channels of trade. 2. It is understood that the obligation under paragraph 1(c) of Article II to balance the budget would not preclude deficits over a short period but would mean a budgetary policy involving the balancing of the budget in the long run. 3. It is understood that the business practices and business arrangements. referred to in paragraph 3 of Article II mean: (a) fixing prices, terms or conditions to be observed in dealing with others in the purchase, sale or lease of any product; (b) excluding enterprises from, or allocating or dividing, any territorial market or field of business activity, or allocating customers, or fixing sales quotas or purchase quotas; (c) discriminating against particular enterprises; (d) limiting production or fixing production quotas; (e) preventing by agreement the development or application of technology or invention whether patented or unpatented; (f) extending the use of rights under patents, trademarks or copyrights granted by either country to matters which, according to its laws and regulations, are not within the scope of such grants, or to products or conditions of production, use or sale which are likewise not the subjects of such grants; and (g) such other practices as the two Governments may agree to include. 4. It is understood that the Government of Denmark is obligated to take action in particular instances in accordance with paragraph 3 of Article II only after appropriate investigation or examination. 5. It is understood that the rate of exchange according to which the amount of kroner to be deposited in the Special Account provided for in Article IV should be computed is the par value agreed with the International Monetary Fund, which is at present 4.79901 kroner to one dollar. 6. It is understood that the order of sub-paragraphs (a), (b) and (c) in paragraph 6 of Article IV implies no order of priority or preference. 7. It is undestood that the phrase in Article V “after due regard for the reasonable requirements of Denmark for domestic use" would include the maintenance of reasonable stocks of the materials concerned and that the phrase "commercial export" might include barter transactions. It is also understood that arrangements negotiated under Article V might appropri ately include provision for consultation, in accordance with the principles of Article 32 of the Havana Charter for an International Trade Organization, in the event that stockpiles are liquidated. 8. It is understood that the Government of Denmark will not be requested, under paragraph 2 (a) of Article VII, to furnish detailed information about minor projects or confidential commercial or technical information the disclosure of which would injure legitimate commercial interests. 9. It is understood that the Government of the United States of America in making the notifications referred to in paragraph 2 of Article IX would bear in mind the desirability of restricting, so far as practicable, the number of officials for whom full diplomatic privileges would be requested. It is also understood that the detailed application of Article IX would, when necessary, be the subject of inter-governmental discussion. 10. It is understood that any agreements which might be arrived at pursuant to paragraph 2 of Article X would be subject to ratification by the Senate of the United States of America. 'Unperfected. Art. 32(3) of the Havana Charter reads as follows: "Such Member shall, at the request of any Member which considers itself substantially interested, consult as to the best means of avoiding substantial injury to the economic interests of producers and consumers of the primary commodity in question. In cases where the interests of several Members might be substantially affected, the Organization may participate in the consultations, and the Member holding the stocks shall give due consideration to its recommendations." MOST-FAVORED-NATION TREATMENT FOR AREAS UNDER OCCUPATION OR CONTROL Exchange of notes at Copenhagen June 29, 1948 Notice of Danish ratification given to the United States July 2, 1948 Expired in accordance with its terms No. 179 SIR: 62 Stat. 2883; Treaties and Other International Acts Series 1822 The American Ambassador to the Minister of Foreign Affairs AMERICAN EMBASSY COPENHAGEN, June 29, 1948 I have the honor to refer to the conversations which have recently taken place between representatives of our two Governments relating to the territorial application of commercial arrangements between the United States of America and Denmark and have the honor to confirm the understanding 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 Germany or the Free Territory of Trieste, the Government of Denmark will apply to the merchandise trade of such area the provisions relating to the most-favorednation treatment of the merchandise trade of the United States of America set forth in the General Convention of Friendship, Commerce and Navigation signed April 26, 1826,1 as amended by the Convention of April 11, 1857,2 or, for such time as the Governments of the United States of America and Denmark 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. 1TS 65, ante, p. 1. 2 TS 67, ante, p. 11. TIAS 1700, ante, vol. 4, p. 641. 3 It is understood that the undertaking in this paragraph relating to the application of the most-favored-nation provisions of the General Convention 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; provided that nothing in this sentence shall be construed to require compliance with the procedures specified in the General Agreement with regard to the application of such exceptions. 2. The undertaking in point 1, above, will apply to the merchandise 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 merchandise trade of Denmark. 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 undertakings shall be without prejudice to the application of the principles set forth in the Havana Charter for an International Trade Organization relating to the reduction of tariffs on a mutually advantageous basis. 4 4. It is recognized that the absence of a uniform rate of exchange for the currency of the area in western Germany referred to in point 1 above may have the effect of indirectly subsidizing the exports of such area 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 Denmark to levy a countervailing duty on imports of such goods equivalent to the estimated amount of such subsidization, where the Government of Denmark determines that the subsidization is such as to cause or threaten material injury to an established domestic industry or is such as to prevent or materially retard the establishment of a domestic industry. 5. The undertakings in this note will enter into force on the day on which the Government of Denmark notifies the Government of the United States of America that this note has been ratified and shall remain in force until January 1, 1951, and unless at least six months before January 1, 1951, either government shall have given notice in writing to the other of intention to terminate these undertakings on that date, they shall remain in force thereafter until the expiration of six months from the date on which such notice. shall have been given. Unperfected; for excerpts, see A Decade of American Foreign Policy: Basic Documents, 1941-49 (S. Doc. 123, 81st Cong., 1st sess.), p. 391. 259-333-71- -12 Please accept, Excellency, the renewed assurances of my highest consideration. I have the honour to refer to the conversations which have recently taken place between representatives of our two Governments relating to the territorial application of commercial arrangements between Denmark and the United States of America and have the honour to confirm, subject to ratification, the understanding reached as a result of these conversations as follows: [For text of understanding, see numbered paragraphs in U.S. note, above.] Please accept, Excellency, the renewed assurances of my highest consideration. GUSTAV RASMUSSEN His Excellency Ambassador JOSIAH M. MARVEL, Jr., The Embassy of the United States of America, Copenhagen. |