CONFIDENTIAL
ANNEX A
1.
UNCTAD Preference Scheme
Legal and Administrative Aspects of Duty Quotas
A duty quota permits a certain quantity of goods to be imported at a preferential (not necessarily a zero) rate of duty. Imports exceeding this quota, or failing to meet the conditions attached to it, are admitted without restriction, but must pay the normal rate of duty.
2.
There are no duty quotas in the United Kingdom. They would require legislation and special administrative machinery.
3. Our understanding of the duty quota system envisaged by the EEC for UNCTAD preference purposes is that the Yaounde countries will continue to enjoy their present privileges, but that the other l.d.c.s. will be entitled to duty-free access for eligible goods only within quota limits. These will be calculated on a uniform basis for virtually all industrial goods, but only on goods deemed sensitive will the limits be strictly enforced (by means of prior licensing). beneficiary will be allowed more than 50% of each duty quota.
4.
No
The EEC appear to intend that many aspects of the modus operandi of their duty quota system shall be kept confidential; this would be in line with their attitude that the UNCTAD preferences are concessions given at their discretion and are not the subject of negotiation with the l.d.c. beneficiaries. Nevertheless, it is not certain how far the EEC have thought through all the details of operation. In considering the adoption of somewhat similar arrangements by the United Kingdom it is necessary to bear in mind the standards of information, administra- tion, and Parliamentary control in tariff matters which Parliament and the British business world have come to expect.
The operation of duty quotas would involve two main 'areas of decision'. These are examined below.
5.
6. The first relates to the establishment of the duty quotas. Whether and in what sense a product is on quota' would be a matter of taxation of the subject. It would also be the subject of sectional pressures, both 'protectionist' and 'liberal'. Parliament is therefore likely to wish to determine at least the size and product coverage of the quotas. The EEC concept of 'non-sensitive' duty quotas would be extremely difficult in this connection. It is unlikely that Parliament would want different administrative standards and procedures to be applied to different quotas unless these differences were statutorily defined. It is hard to see how so self-contradictory a concept as a quota which was not intended to be operated as such could be described in legal language, and even if it could, the (necessarily arbitrary) allocation of products to one category or the other would lead to detailed disputations. Parliament and industry would probably take the logical view that any quota limits should be enforced.
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