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9. Doubts whether the "adjustment mechanism" can be regarded as practicable makes it increasingly uncertain whether in the last resort the EEC will continue to accept the recommendation in the Special Group's report that the beneficiaries of a generalised preference scheme should be all countries and territories claiming developing status (the self-election principle).
10. The Tapanese, although dragged along in the wake of the America.. nversion to support for preferences, view the prospect of eventual implementation of a scheme with alarm and some distaste Their main fear is that their exports to the Uniced States and other developed country markets may prove to be particularly vulnerable in face of the grant of preferences to developing countries. This is because of the extent to which Japanese exports are concentrated on The textiles, consumer goods and "light manufactures". developing country competitors whom the Japanese fear most appear to be Hong Kong, Taiwan and South Korea.
11. This Japanese preoccupation has led them strongly to advocate that preferences should not be granted to "compe- titive" developing country exports (even if this means à discriminatory element in the arrangements) and also to support the inclusion of stringent safeguards which would cover in particular "disruption" of trade in third country markets.
12.
The Japanese have also advocated the automatic exception of products which are already subject to quantitative restrictions. Their own list of residual quantitative restrictions is longer than that of any other developed country. They have been given no encouragement to think that they are to get off the hook so easily by getting others to endorse the idea of automatic exclusion.
13. The Canadians, also reluctant converts to the general
There principle of preferences, have special concerns. is no internationally agreed definition by which primary products can be differentiated from semi-manufactures. The Canadians would like to get it accepted that non-ferrous metals up to the stage of refinery shapes and certain other "primary products" in which they have a major export interest should be excluded from the preference arrangements by all developed countries.
14. They also seem to fear that unless all the other donors are tied down firmly to maintaining preferences once granted, some of them, the Americans in particular, may be inclined to resort over easily to any safeguarding escape clause in order to eliminate or to reduce the scope of the new preferential advantages. The Canadians do not believe their internal procedures would enable them to follow suit. For this reason, they advocate alone that the preference giving countries should accept firm obligations to maintain preferences and should be required to seek the authorisation of an international body before they can be entitled to invoke safeguards.
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