CONFILENTIAL
2-
We do not yet know how extensive the scope of the generalised preference scheme is likely to be and in particular whether the new teriff advantages which are to be made available to all developing countries by the Americans and others will be at all comparable, in terms of velue with the scale of tariff advantages which Commonwealth developing countries
In view of these uncertainties now enjoy in our market.
it seems to us too early to undertake any commitment about our future attitude and this has been made clear to the Americans.
The
5. You can, if appropriate, point out that for the most part the preferences accorded to us by developing Commonwealth countries do not have any contrectual basis. eventual decision on whether or not they should be maintained rests therefore with the Commonwealth countries concerned. (The exceptions are the preferences accorded to us under Some bilateral trade agreements by India and Pakistan). 3% of total British exports, and 12% of our exports to all developing countries, benefit from preferences in Commonwealth developing countries.
Further, Background.
6. For your own information we are also concerned about the likely reaction of the Commonwealth developing countries which give us preferences to any declaretion of the kind proposed by the Americans. These countries teke the view thet by maintaining preferences for us they are insuring themselves avainst the possibility that we might remove or curtail their advantages in our market. If we were to announce that we would willingly acquiesce in action on their part to remove our preferences these countries would undoubtedly, press us for assurances that we had no intention of curtailing the advantages they now enjoy.
This is not something to
which we would wish to commit ourselves in present circumstances.
FCO/WH DISTRIBUTION
Guidance Dept.
+
CONFIDENTIAL
XXXXX