UNDERSTANDING ON THE INTERPRETATION OF ARTICLE XXXV
           OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1947



The CONTRACTING PARTIES,

      Having regard to the interlinked provisions of paragraph 1 of Article 
XXXV of the General Agreement on Tariffs and Trade 1947;

      Noting that by invoking Article XXXV a contracting party on the one 
hand, or a government acceding to GATT 1947 on the other, declines to apply 
GATT 1947, or alternatively Article II of that Agreement, to the other 
party; 

      Desiring to ensure that tariff negotiations between contracting 
parties and a government acceding to GATT 1947 are not inhibited by 
unwillingness to accept an obligation to apply GATT 1947 as a consequence of 
entry into such negotiations;

      Agree as follows:

      A contracting party and a government acceding to GATT 1947 may engage 
in negotiations relating to the establishment of a GATT schedule of 
concessions by the acceding government without prejudice to the right of 
either to invoke Article XXXV in respect of the other.