CONFID INTIAL
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products, which reflect the problems of various sectors of our domestic industry. We have no objection in principle to an examination of all member states' current restrictions, with a view to eventual harmonisation, provided that the "lowest common denominator" approach is firmly renounced from the outset. But we are doubtful of the value of a community list of sensitive products, since this would have to be constantly amended in order to reflect the products actually causing or threatening to cause disruption at any given time. The list would inevitably therefore tend to cover potentially sensitive products and would have to be so comprehensive at to have little meaning. The counter balance to such a list
appears to be another list, covering liberalised
products; we believe that formal liberalisation of this
kind makes it that much more difficult to take effective action should a new threat from a liberalised product appear, without offering any real compensating advantages. The same arguments against sensitive and liberalised lists
apply to sources as well as to products.
31 January morning. Yugoslavia. We have no objection to the inclusion of a UK share in a Community Article 4-type agreement on cottons with Yugoslavia. Our share would be based on the present level of our restrictions on imports from Yugoslavia, which have been published for 1973. But until the Six can reach agreement on the inclusion or exclusion of their outward processing trade in the Community ceilings we have nothing to contribute to the discussions.
31 January afternoon. GATT Textile Study. We believe it important to proceed to discussion of the principles which the Community would like to see adopted in a successor to the LTA. In this connection, we believe there may be merit in the suggestion put forward by the French at the meeting à neuf in Geneva on 19 January, viz that the principle that importing countries may negotiate or impose restrictions in defined circumstances should be balanced by the principle that the exports of the developing
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