NOTHING TO BE WRITTEN IN THIS MARGIN
(11) forestalling, and build up of stocks, could take place in 1972 when it is known that the Government does not intend to seek derogation from the EEC agreements when we join the Common Market;
Comment DTI consider that Ministers (in the debate in
November )may be under pressure to make a statement about
future policy within the EEC and that we shall then
have to say that we shall not seek derogation (if we
do not, argue the DTI, the Commission would doubt our
real intentions on Article 4). Once our policy to the
EEC is announced, DTI consider that there will be
additional buying of imports to beat the restrictions
which will be introduced on 1.1.73.
E.I.D. (1) will no doubt give the FCO view on whether
we need (or should) mention the derogation in November,
although there would be some advantage in keeping this
aspect confidential until we have had a further chance
to discuss with the Commission some of the various
issues which might be involved in a "common problem"
approach. One cannot deny that there might be fore-
stalling once our position on derogation is known, but
not only is this something in the future but also it
should not be exaggerated. Given that the Community
have operated a system of qrs and tariffs for 15 years,
our derogation cannot be said to be a completely new
factor. There is also the more general comment on
that
forestalling/the costs of building up/stocks not inten-
ded for immediate sale provide their own economic brake
on such activities.
(iii) prices of imports in 1972 might be exceptionally
low because of the number of forward contracts already
placed; and because new Asian suppliers would be
8
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/entering