GOVERNMENTS OF OECD MEMBER COUNTRIES*,

CONSIDERING that, among other factors, the rise in oil prices is aggravating the economic problems confronting Member countries, and notably the problem of inflation, as well as causing additional structural problems, and that it is creating an unprecedented change in the structure of the balance of payments and, in particular, a deterioration of current accounts of Member countries as a whole;

CONSIDERING that all Member countries are affected by these developments though in varying degrees;

AGREE:

that the nature and size of the above-mentioned problems facing Member countries as well as a number of developing countries call for wide co-operative action in the fields of economic, trade, financial, monetary, investment and development policies;

that the financing of international payments deficits will constitute a difficult problem for certain Member countries and that, accordingly, Member countries will co-operate fully to facilitate such financing and are ready to consider appropriate arrangements which may prove necessary in this respect;

that unilateral trade or other current account measures by one or more Member countries to deal with this situation would aggravate the problems of other countries and, if generalised, would be self-defeating and have a depressing effect on the world economy;

that countries have responsibilities both as importers and exporters to avoid disruption of regular trade flows;

that, as a matter of urgency and without prejudice to the outcome of the monetary and trade negotiations, there is therefore a need for a joint undertaking having as its objective to prevent new unilateral action which may have a detrimental impact on international economic relations;

DECLARE THEIR DETERMINATION, in the light of the foregoing and for a period of one year,

(a) to avoid having recourse to unilateral measures, of either a general or a specific nature, to restrict imports or having recourse to similar measures on the other current accounts transactions, which would be contrary to the objectives of the present Declaration;

(b) to avoid measures to stimulate exports or other current account transactions artificially; and, inter alia, abstain from destructive competition in official support of export credit and aim at taking appropriate co-operative actions to this effect in the immediate future;

(d) to consult with each other, making full use of the general procedures of consultation within OECD, in order to assure that the present Declaration is properly implemented;

(e) to implement the present Declaration in accordance with their international obligations and with due regard to the special needs of developing countries.

In adopting the above Declaration, Governments of OECD Member countries AGREED on the following comments:

(a) The Secretary-General will reflect on the appropriate follow-up action which the agreed paragraph on the financing of international payments deficits may require within the Organisation and report his conclusions as soon as possible.

(b) It is understood that the purpose of the Declaration is not to preclude trade measures on particular products which can be justified under existing international provisions, such as Article XIX of the GATT, and which are not linked with the situation described in the Declaration.

(c) It is understood that the reference to developing countries in paragraph (e) of the Declaration covers also developing Member countries.

(d) While the Declaration is not a legally binding international agreement, the Governments of OECD Member countries express their firm political determination that in carrying out their policies they will observe the spirit of the Declaration as well as the particular elements it contains.