TNAG-0132-FCO40-168-Tariff-preferences-for-developing-countries-1969 — Page 109

Reference...

2.

Mr. Stewart

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AUSTRALIAN PREFERENCE SCHEME FOR LESS DEVELOPED

COUNTRIES

The Scheme is detailed at 1/E/1 on HWB 6/23, in a long memorandum drawn up by the Hong Kong Commerce and Industry Department. The following is extracted from that memorandum:

"The Australian Scheme:

The Australians regard preferential duties in favour of the less-developed countries as justified only when manufacturing industries of such countries are unable to compete with established suppliers in markets of third countries over a most-favoured- nation tariff. Therefore the Australian preference system applies only to those products for which such a "competitive need" has been established. The poverty of the list of these products at Appendix I shows clearly that the interests of the Australian industry were equally as important as the "competitive need" of the less developed countries. The interests of Australian industry are also protected by limiting the total value of the imports of each item eligible for preference. Details of these tariff quotas and of the preference margins have also been included in Appendix I.

In the absence of any international agreement on the question, the Australian Government decided that the countries eligible for the preferences would be the "77" caucus of less developed countries in the UNCTAD, and British and Australian dependent territories. Hong Kong was thus included on the list although at one stage the Indians pressed in private with the leader of the Australian delegation to the GATT for Hong Kong's exclusion.

?

Consistent with the "competitive need" concept, India and Pakistan were excluded from the quota for jute matt-woven fabrics and Hong Kong from the quotas for cotton fabrics of huckaback or honeycomb weave. other textile articles (an item whose contents both we and the Australians are unable to identify), wicker, bamboo or cane chairs, and other furniture (all furniture other than vehicle seats, wooden chairs, wicker, etc. chairs and medical furniture). Subsequently the item for which India and Pakistan were excluded was removed from the list at India's request (see paragraph 20 below)."

Under the GATT, countries are not allowed to make exceptions to the m-f-n rule to promote the introduction of new preference systems. To legalise their proposals the Australians applied under

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