CONFIDENTIAL
anyway. If the E.E.C. and the U.S.A. are unwilling to treat them in accordance with the self-election principle, we have no obvious counter-move available. We might say that in that event we would regard ourselves as free to omit certain countries from the benefit of our new preferences in order to make the arrangements as a whole equitable. But if in practice we alone were to exclude such countries as Greece or Israel, this would have obvious consequences for our political and commercial relations with them.
OTHER CONSIDERATIONS
17. The United States in their offer repeated their caveat that they could not give preferences to developing countries which discriminated against American exports. The whole question of "reverse preferences" will need to be thrashed out before any scheme is implemented, but the crunch on this may not come for some time.
CONCLUSIONS
18.
The Committee is invited to recommend
(i)
whether we should still incline towards an offer of tariff reductions, with appropriate exceptions and safeguards, but unlimited by duty quotas;
(ii)
(iii)
(iv)
if so, whether we should go for a tariff cut such as 50%, with the possible exclusion of sensitive items (including certainly textiles in view of the interaction between cotton and non-cotton textiles and the apparent intention of many other countries to exclude them);
whether we can proceed with consultations on the basis of the revised offer on processed agricultural products set out in Annex B;
how we should react to any move by the other donor countries to retreat from the self-election principle e.g. by excluding Hong Kong.
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