CONFIDENTIAL
MR. DIXON said that on agricultural products also our first offor was more generous than the offers of other countries. The revised offer in Annex B of the paper reduced the scale of our offer in terms of beneficiary country trade in 1967 from 108 to 37 million dollars and should go some way towards meeting the interests of developed Commonwealth countries. If all items of interest to these countries were excluded
the offer would be reduced to a derisory 12 million dollars.
It was
therefore necessary to strike some balance between the conflicting
interests of the former and the non-Commonwealth developing countries.
If the Committee agreed the basis of the revised offer, consultations with the developed Commonwealth countries and South Africa would be necessary
before it could be tabled. The offer was broadly in line with that
put forward by the EEC and the Scandinavians but slightly more generous
and might be further reduced in the light of the consultations with the
Commonwealth.
In discussion the following Lain points were made
(a) There was general agreement with the scope of the revised offer on agricultural products and that the Board of Trade and Ministry of Agriculture should now begin consultations with Commonwealth developed
countries.
(b) It was suggested that there would be advantage in adopting a duty
quota system for industrial products; the EEC were committed to it and
Australia was already operating it for developing countries. The EEC
had decided on duty quotas because they avoided the problem of how to
select exceptions and gave an automatic safeguard to domestic industry,
especially on sensitive items. This approach might be easier for other
Commonwealth countries to accept because they would still retain some
advantage in our markets when the duty free ceiling was reached. Moreover,
it had previously been accepted that decalage and duty quotas would have to
be applied to imports of industrial products from the Commonwealth if we
joined the EEC. We could not, therefore, claim that duty quotas were
impracticable and if we succeeded in joining the EEC we would have to adopt them anyway.
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CONFIDENTIAL