CONFIDENTIAL
(4) Although quotas would be nominally calculated for all products,
these would be divided into three categories, namely,
(a) Non-sensitive where there would be no surveillance and
imports from beneficiary countries could in practice be
imported without limit even if the notional ceiling were
exceeded. The only safeguard would be that any Member
State could request surveillance on any product if it felt
concerned.
(b) Quasi-sensitive where there would be a surveillance or
checking procedure on the volume of imports from beneficiary
countries, but where the quota would not be divided between
the Member States. I gather that in this case duty free
imports would be stopped when the quota level was attained.
(c) Sensitive where the duty free quota would be divided in
advance between Member States on a mutually acceptable basis.
(5) In the case of cotton textiles existing quotas under the CTA from
beneficiary countries would be permitted to enter duty free.
(6) Any beneficiary country which obtained 50% of the quota in any
year would thereafter be frozen at that level, but it would not
be subsequently excluded from participation in the preference
for that product.
Chapters 1 24 of the BN
<div
(7) A positive list of products on which preference could be granted
would be given for these chapters. This would not necessarily
be duty free entry and the degree of preference would at some
stage need to be defined.
Beneficiary Countries
(8) The present working assumption is that Hong Kong would be excluded
from the list of beneficiary countries.
Mr. Tran also said,
somewhat surprisingly, that the list would be confined to the 77.
We were not able to get out of him exactly what he meant, perhaps
CONFIDENTIAL
/because