Enter
Submit to dark officer
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IN CONFIDENTIAL
R.GSTAT No:51
25. 1971
BRITISH EMBASSY WASHINGTON, D.C.
ECO 6/13
H K X G /
21 May, 1971
Dear Britten
18
office
ij Copy 15 49" Laura (HKD) 2 copies Lorme
2) ( M. Bums
M. Perceval
Swinspo.
Westa following Mesuggest te im para 8 urgently
NuB 2415
U.S. Generalised Preferences
As foreshadowed in my letter of 19 May, Alec Hermann and I yesterday had a long and (we hope you will agree) useful talk with Ernest Stem of the Peterson office at the White House. Stem indicated that the inter-agency report on the U.S. generalised preferences scheme was on his own desk; and he readily confirmed that among the unresolved issues were the reverse preferences condition and Hong Kong.
Reverse Preferences
2.
J.S.
The present
t alternatives (Stern said) were for the
(a) to obtain from beneficiaries advance assurances or
undertakings that any preferences discriminating against the United States would be phased out and removed by 1975; or
(b) to allow developing countries a sort of interim
conditional eligibility which they would lose if their reverse preferences had not been eliminated by 1975.
Stem saw no third way; but he made it clear that in alternative (a) a developing country could become eligible if at any time it in fact eliminated its reverse preferences, even though it would not be a participant from the outset unless it gave assurances o do so by 1975. He added that he found it very difficult So believe there could be one rule for the the Commonwealth Caribbean but another rule for the "Mediterranean"
poor countries of countries. He thought Congress would find difficulties with such : distinction, and also that Spain and Israel would exert very strong bargaining leverage on the U.S. to be treated on an M.F.N. basis in the same way as the Caribbean on this issue.
3.
We developed an argument along the lines that the problems in the Caribbean in relation to reverse preferences vere unique. We stressed that it was not a question of the United Kingdom giving up Commonwealth preferences in the area: the issue that had to be faced was how to give these very poor countries a continuing access to markets for the primary products which were vital to their economies. The Yaounde re-negotiations would not start for another two years and similarly the successor to the Commonwealth Sugar Agreement looked like being deferred for
R. G. Britten, Esq.,
Trade Policy Department,
F.C.O.
-1-
CONFIDENTIAL