RESTRICTED
1 There was little discussion last Friday on either point although a number said in general terms that while the more than formula cuts might not be of great value they did have some. On the first point Mr. Gray expressed the opinion that it would be wrong to be critical every time.à high tariff is being maintained and that it might for example be more in the Community's interests to press hard on textiles and ceramics than on chemicals.
PRIORITIES FOR IMPROVEMENTS IN OFFERS
13. During the course of this week we shall be reassessing within CRE1 the voluminous material we have from meetings with production departments and the meetings in Geneva last week, on the relative current rates of tariff in the US, the Community and Japan, and also on the trade flows taking place currently over these tariffs. On the basis of this study we shall come to conclusions and speak to them without in many cases further consultation with production departments. It would however be useful to have any specific comments anyone may have on the basis of the full material which will by now have been circulated to all concerned and also on the criteria by reference to which we would expect to be guided which are listed below.
8.
b.
C.
d.
e.
We would not expect the Commission to press for the reduction in any high US or Japanese tariff in which there is no present and no substantial discerned potential future Community interest.
Where the Community has a positive trade interest in a high tariff US or Japanese item the Commission should press for reductions, not withstanding the fact that the predominant interest lies elsehwere, in such cases where the common tariff currently is below the level to which the tariff in question would be being reduced but the Commission should not in such cases press that hard, or at least should only do so where the tariff disparity is really large or the Community trade interest is really large.
J
Where the US or Japan have tariffs which are in the same general range as those of the Community and yet are pro- posing that these should be excepted or subject to less than formula cuts particular care is needed in order to see whether on balance the Community's prime interest is attacking or defensive: obvious cases where it would seem to be defensive are kraft-liner and slide fasteners on one of which Japanese action gives us a possible excuse for a less than formula cut while on the other it is the US which does so.
Where the US or Japan are proposing to except a tariff which is lower than the common tariff level (e.g. the US 4% tariff on bicycles) we should ensure that the Commision make no protest at all unless they are abundently satisfied that the industry in question is content to see a formula cut applied to it.
We should press the Commission to ensure that the Americans have taken on board in their work on exceptions the fact that in the textiles field the MFA should give them the pro- tection they need against developing countries; this is a
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