UK and REC Line
The UK has made vigorous attempts at all levels to liberalise the Community's negotiating mandate in accordance with Foreign and Common- wealth Secretary's speech to the Council in April. There is support for a liberal view in the Community, but also for a more restrictive view. To some extent, everyone is shadow boxing until the Trade Reform Act is (or is not) passed; we appear to have made some impression but it is difficult to say how much.
Confidentially also, it may be noted that the well publicised EEC. 'Global Approach to the negotiations has been supplemented recently by a Commis- sion document. This is under discussion and should not be publicised, to avoid weakening the EEC position at the negotiating table viz a viz other countries.
A final version of the Commission paper will probably be endorsed by a Council of Trade Ministers in December. Some of the points to be dis- cussed which will be of interest to Hong Kong are:
(a) Tariffs
We are still interested in a simple harmonisation formula for tariffs (as called for in the Global Approach),
However the diffi- Such a formula may
culties are becoming more and more clear. actually shackle our negotiations. We are pleased that the dis- cussion in the paper is very open. The adoption of such a formula might well be in the interests of countries such as Hong Kong who suffer from tariff excalation in developed country markets.
The range proposed for the average overall reduction of tariffs is only 25%-50%. We in the UK would prefer a more ambitious initial position.
The Commission paper accepts the use of a threshold below which tariffs should not be reduced (this was in the Global Approach). However, the Commission have suggested that exceptions could be made on a selective basis (this is more in line with UK thinking).
(b) Safeguards
The UK could agree with the following principles embodied in the Commission paper:
There should be "international discipline". This means that before any nation takes safeguarding action against a particular imported Furthermore, product, market desruption must be real and sericus. no nation should be judge in its own cause.
Discriminatory applications of safeguarding measures should be permiss able. The paper includes this and the next condition within the term "flexibility".
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