1. Case: Italian Discrimination Against Imported Agricultural Machinery
International Trade Dispute
Tran Ngoc Chau
Yang Yang
Jin Jing

2. Facts When : 15 July 1958 Complainant: United Kingdom Government
Respondent: Italian Government
Subject: Italian Agricultural Machinery
Why United Kingdom Government Complaint?

3. Facts Because : Special credit terms was
given to Italian farmers if they
purchased Italian agricultural
machinery (violation of Art.III:4)

4. Issues
The United Kingdom delegation noted that Article III:4 of the General Agreement provided that products imported into the territory of any contracting party "shall be accorded treatment no less favorable than that accorded to like products of national origin in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation..."
— presented a discrimination
— an inconsistency with the provisions of Article III

5. Issues
The Italian delegation considered that the General Agreement was a trade agreement and its scope was limited to measures governing trade; thus the text of paragraph 4 of Article III applied only to such laws, regulations and requirements which were concerned with the actual conditions for sale, transportation, etc., of the commodity in question and should not be interpreted in an extensive way.
— concerned the development of the Italian economy and the improvement in the employment of labor

6. Issues
In the view of the Italian delegation it would be inappropriate for the CONTRACTING PARTIES to construe the provisions of Article III in a broad way since this would limit the rights of contracting parties in the formulation of their domestic economic policies in a way which was not contemplated when they accepted the terms of the General Agreement.

7. Decisions & Reasons
To prevent indirect protection, the panel stressed that: imported products be treated in the same way as domestic products.
Contradiction found in Italian argument, that if Article III would have been interpreted by drafters like Italy did it, then Article III 8(b) would not have been necessary.

8. Decisions & Reasons
Though the Panel as well as the UK agreed with the Italian argument that sovereign governments had the right to adopt measures to
-foster economic development
-protect domestic industry
However, those measures shall be transparent.

9. Evaluation
To develop domestic economy, many contracting parties’ similar actions like Italy are acquiesced as the exception of the General Agreement.