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3. OUR PROVISIONAL OFFER ON PROCESSED AGRICULTURAL PRODUCTS (CHAPTERS 1 TO 24 OF THE BRUSSELS NOMENCLATURE) HAS BEEN CONSIDERABLY SCALED DOWN TO BRING IT MORE INTO LINE WITH THE OFFERS OF OTHER DONORS. WE HAVE NOT CHANGED THE SUBSTANCE OF OUR INDUSTRIAL ILLUSTRATIVE OFFER (CHAPTERS 25 TO 99 OF THE B.N.) ALTHOUGH FOR PRESENTATIONAL REASONS THE EXCEPTIONS HAVE BEEN LISTED IN A SHORTENED FORM. THIS IS HOWEVER VERY GENEROUS COMPARED WITH THOSE OF OTHER MAJOR DONORS AND IT IS CLEAR THAT ALL THE CONDITIONS TO WHICH IT

IT WAS SUBJECT WILL NOT BE SATISFIED. AS STATED IN THE COVER NOTE, WILL THEREFORE NEED TO BE MODIFIED. WE HAVE NOT BEEN ABLE TO DECIDE HOW FAR OR IN EXACTLY WHAT WAY IT SHOULD BE MODIFIED LARGELY BECAUSE IT IS STILL NOT CLEAR WHAT FORM THE U.S. OFFER WILL EVENTUALLY TAKE.

4. THE FOLLOWING POINTS SHOULD BE MADE WHEN COPIES OF OUR OFFER

ARE HANDED OVER:-

(1) WHEN WE TABLED OUR ILLUSTRATIVE LISTS IN OECD IN MARCH WE MADE IT CLEAR THAT THESE WOULD BE MODIFIED IF NECESSARY SO AS TO MAKE THEM COMPARABLE IN SCOPE AND COVERAGE WITH THE OFFERS OF OTHER PROSPECTIVE DONORS. WE HAVE ALREADY MADE SOME REVISION TO THE LIST OF PROCESSED AGRICULTURAL PRODUCTS ALTHOUGH IT STILL REMAINS PROVISIONAL. WE DO NOT, HOWEVER, YET HAVE ENOUGH INFORMATION ABOUT THE INTENTIONS OF OTHER DONORS TO ENABLE US TO REVISE OUR INDUSTRIAL ILLUSTRATIVE OFFER ALTHOUGH WE EXPECT IT WILL NEED TO BE MODIFIED. NEITHER OFFER IS THEREFORE, SUBSTANTIVE. WE

. NEVERTHELESS CONSIDERED THAT IT WAS USEFUL TO INCLUDE THEM IN THE

SUBSTANTIVE DOCUMENTATION FOR UNCTAD, WITH THIS PROVISO, AS A BASIS FOR PRELIMINARY CONSULTATIONS WITH DEVELOPING COUNTRIES. DISCUSSIONS WILL CONTINUE IN OECD AND WE SHALL KEEP COMMONWEALTH GOVERNMENTS INFORMED OF DEVELOPMENTS.

(11) WE HAVE EMPHASISED BOTH IN OECD AND IN UNCTAD THAT ONE OF THE POINTS WE HAVE TO KEEP VERY MUCH IN MIND IN DETERMINING THE NATURE OF OUR OFFERS IS THE EXTENT TO WHICH COMMONWEALTH DEVELOPING COUNTRIES WOULD RECEIVE NEW ADVANTAGES IN THE MARKETS OF OTHER DONOR COUNTRIES TO COMPENSATE THEM FOR SHARING THEIR EXISTING PREFERENTIAL ADVANTAGES IN THE UK MARKET.

(111) IT SEEMS TO HAVE BEEN GENERALLY ACCEPTED THAT COMMONWEALTH

/CONSULTATIONS

CONFIDENTIAL

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