2 RESTRICTED
guidelines on the way in which the list should be used to obtain
improvements in the US and Japanese offers.
INDUSTRIAL TARIFFS: EEC REQUESTS FOR IMPROVEMENTS
5
Requests have now been made by the Community for improvements
in the US, Japanese, Australian and South African offers. In addition
a number of advanced LDCs (including Brazil, South Korea, Argentina
and Mexico) have been asked to reduce tariffs on products of particular
interest to the EEC. Request lists are being considered for Canada and
New Zealand. In the former case, the complexity of the initial
Canadian tariff offer has delayed matters while in the latter we will
probably be inclined to attack only a very selective group of tariffs
given the reasonably generous nature of their initial offer (and their
current economic difficulties).
G
The most difficult issue in this area remains the disparity
between the EEC and Japanese offers. Japan, like the Community and the
USA and in accordance with understandings in the Tariff Group in 1975
has applied the formula to her bound tariff rates or to those operative
in 1971. It happens however, as a result of a series of unilateral
tariff reductions since the Kennedy Round (particularly in 1972 and
1973) that the rates now applied by Japan are, on average, considerably
lower than this. As a result, the initial Japanese offer involves a cut
of only 18% on the tariff rates actually being applied in the first
three months of this year. In response to US and EEC criticisms, the
Japanese have agreed to consider improving their offer and the
Community has tabled a first list of requests asking Japan at least to
apply the formula in those cases where she has failed to do so even on
the bound rates. The Community is currently considering how best to
obtain a further improvement; the view we are taking is that Japan
should apply greater than formula cuts in rates which are higher than