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If other countries fell into line with this well and goed, but the Community were not willing to make significant changes in their system if this was required to reach agreement on a common system of origin. On the other hand most EFTA countries represented (1.e. Denmark, Sweden, Norway, Switzerland, Finland) preferred a value added system, at least to start with, with perhaps individual process criteria being established step by step at a later stage. The U.K. attitude was somewhere in the middle but with some preference for a transformation rather than a value added system on grounds of practicability (in this connection I pointed out that most developing countries do not possess the costing and accounting facilities to properly work a value added system). The Australians said that they had experienced no difficulties in working the value added criteria in their preferences scheme, but closer questioning soon revealed that this was mainly because they never checked the validity of declarations. Finally, the U.S., apart from one short intervention in favour of value added, did not reveal their thinking. One doubts whether they have yet made up their minds. Their representa- tives said very little throughout the meeting, apart from expressing the view that the whole exercise was premature and should await further discussion in the Ad Hoc Working Group on the shape of a preferences scheme as a whole.
Examination of Previous Report
5. The examination of the 1967 Report referred to above was useful, mainly in drawing out differing attitudes to the salient features f an origin system. The major points covered were as follows:
(a) There was general agreement with the concept of
"substantial transformation" as conferring origin; but this carried the greup little further forward because it is a concept which is open to differing interpretations in practice and which has to be translated into rules which are administratively workable.
(b) There was general support for a common drigin system as an ideal but, apart from perhaps Denmark, no-one thought it could be introduced immediately and the general view was that existing systems would probably need to be used in the first stages of a scheme. On the other hand it was pointed out that this could lead to uncertainties and complications for the LDCs and that it could affect burden-sharing..
(c) Group origin from developing countries found more favour than individual origin but there was some disagreement on whether this should cover all beneficiary countries as a group or should be based on e.g., regional groupings. The Japanese, for obvious reasons, seemed to favour individual origin.
(a) The longest debate, which recurred throughout the
session, was on the criteria të be adopted for origin purposes. This centred round the "value added" or "transformation" systems referred to in paragraph 4 above. It was pointed out that both systems were really only different methods of applying the concept
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