CONFIDENTIAL
25. Our line should therefore be to continue to press the virtues of a preferential scheme but to be flexible about its precise method of operation until we have some knowledge of what other countries are prepared to do. If this is accepted, the "offer lists" due to be tabled on 1st March, becomes a tactical rather than a substantive issue. It will suit our book best to put forward a very short list of exceptions from a working hypothesis of duty free entry. In this way, we will be able to show the devel...g countries that our consistent support for a scheme is in no sense hypocritical. If we are obliged in the last resort to withdraw many of our offers or to offer reduced autỹ t.catment rather than duty free entry, we can quite truthfully claim that we have only done so because we cannot go further than our developed country partners. In the field of processed agricultural products, it should be our aim to produce a reasonable list of preferential offers in order to show that we have paid full regard to the strong pressure from developing countries for conces- sions within this field.
Existing Preferences:
26. It seems unreasonable of the Americans to be pressing so hard for a commitment now that we will eventually be prepared to give up the preferences which we enjoy in a
Until we number of Commonwealth developing countries. have seen the colour of the Americans' money (in the shape of their offer list), it would be imprudent for us to say anything to imply that we would acquiesce in the suppression of our reverse preferences. It is far from clear whether American and other offers would be regarded by the Common- wealth developing countries as a whole or by some of them, as adequate compensation for the extent to which we were prepared to extend Commonwealth preference treatment to
If it should turn non-Commonwealth developing countries. out that the Dutch, Germans and Italians succeed in forcing a renegotiation of the Yaounde Convention on terms which called for the phasing out of EEC preferences in the associated territories, a new situation would have arisen which we could consider. On the whole, it seems most likely that French insistence that these preferences should be maintained will prevail. This is a subject on which we could keep our options open until we see how matters develop.
6
CONFIDENTIAL
Board of Trade 27th November 1968