A&L. 371
2700689
3,000-7/67-M$5633
From: Counsellor for Hong Kong Commercial Affairs, Washington
To : Director of Commerce and Industry
lemorandum No. (continued)
· 2 ·
BRITISH EMBASSY,
WASHINGTON, D.C.
through the possible activation of Article VII of the I.M.F. Agreement and of GATT Article XIV. The bankers on the Advisory Committee argue that monetary (including exchange rate) flexibility should be the main mechanism for dealing with Balance of Payments problems.
(6) Other ways of strengthening GATT should be considered. The U.S. and other countries should make definitive acceptance of GATT a major objective.
(7) The criteria for quote escape clause unquote action (i.e. temporary tariff increases or quotas) should be somewhat relaxed. The present requirement that increased imports should be causally linked tó tariff imcreases should be replaced by a fairly rigorous test that increased imports from whatever cause should be the (the) primary cause of serious (serious) injury to an industry (industry). Industries given relief should be required to report their
orts to adjust to import competition. It should be possible to terminate escape clause action before the full period originally imposed.
(8) Consideration should be given to the possibility of toughening U.S. legislative powers against foreign restrictive business practices which damage U.S. trade unless harmonisation of the rules concerning such practices in international trade can be agreed upon.
(9) The powers (under Section 252 of the Trade Expansion Act of 1962) for retaliatory tariffs or quotas against foreign import restrictions which are illegal under GATT should be extended to industrial as well as agricultural products.
(10) The procedure for import relief on national security grounds (which has been used only once to impose the oil quota systen) should be speeded up. The President should also be authorised to reduce import barriers in the interest of national security. The relevance of the oil Import Programme to the national interest should be reviewed,
(11) The practicability in present circumstances of NAFTA or similar arrangements is discounted as prejudicial to the continuing elimination of trade barriers on a K.F.N. basis. The concept might be re-examined, however,
if it appeared unlikely that liberal trade policies based on M.F.N. principles could succeed. Advisory Committee comments show some sympathey for NAFTA,
(12) The Administration should seek limited authority to reduce tariffs by up to 20% below the pst-Kennedy Round level so as to be able to negotiate compensation for increases in bound rates in escape clause cases, etc. The power should not be usable for general tariff negotiations.
(13) The American Selling Frice system should be abolished on the terms negotiated in the Kennedy Round.
(34) The possibility should be explored of international codes on non-tariff barriers, government procurement and restrictive business practices, as well as health, safety and other regulations.
(15) The possibility of sectoral negotiations in GATT, covering non- tariff berriers as well as tariffs, should be explored.
/(16)