CONFIDENITAL
7.
(a) both other donor and beneficiary countries would in certain
circumstances be justified in requesting consultations in the
event of preferences being withdrawn (the former on grounds of
burden-sharing; the latter if their exports suffered as a result);
(e) such consultations might take place either before or after with-
drawal, but it was recognized that consultation would in practice
probably take place after withdrawal, on an analogy with the
"critical circumstances" procedure in para. 2 of Article XIX of
the GATT;
(f) the OCD would provide a satisfactory forum for consultations with
other donors, who would be notified of any withdrawals;
(g) consultations with developing countries might take place either in
a restricted group of those countries most directly concerned:
or, if a wider forum were accepted, as part of a regular review
of the operation of the scheme as a whole; it was generally
revognized that the LDC's would want such consultations to take
place under UNCTAD rather than GATT auspices, and no-one objected
to this in principle;
(h) no-one objected to the Japanese proposal that a donor country whose
exports had suffered as a result of the granting of a particular
preference should be entitled to make representation to the
importing country.
One point, made by the Turkish delegate, was that the sudden and
apparently arbitrary withdrawl of preferences could disrupt the development
plans of LDCs. He pointed out that the crucial question was injury and
considered that an objective definition could be made of this. He also
made a distinction between injury and competitiveness.
8.
As a conclusion it was agreed, on the Chairman's proposition, that the
Working Party of the Trade Committee (composed of permanent delegations in
Paris) should be asked to draft a short paper, on the basis of the
CONFIDENTIAL
/discussion,