3.
CONFIDENTIAL
The intention would be to produce a reasonable offer in which an attempt would be made to secure the acquiescence of CPA developed countries by excluding a number of items on which they had contractual rights and had expressed interest.
Nobody except myself and the Tariff Division of the Board of Trade expressed support for the Board of Trade paper in principle. Mr. Goldsmith, however, managed to elicit the fact that derartments generally were prepared to accept it. He asked for any written comments on the draft paper to be submitted to Mr. Morris by the end of the week. Could I please have a draft for this purpose? The shape of the paper will be altered so that it will be submitted to PCO for information.
4. A few other pointa may be worth recording. On consultation with the Commonwealth it was left open whether there might be informal discussion with the Australians before we formally communicate to them omrevised offer. There was no substantive diecussion of the method of consultation with Commonwealth developing countries, though Mr. Goldsmith thought that it would be impossible to provide them with a firm view on the question of adequate compensation. What would be possible, he thought, would be to give them the information on which they could make a judgement by informing them what items of interest to them were in our lists and the lists of other donors.
5. On the method of calculating the size of our quotas there was inconclusive discussion as to whether this might be parallel with the EEC system (1.e. importa from non Commonwealth 1.d.c's plus 5% of imports from other countries lese FTA, Ireland and the CPA), but with a different percentage of imports from non beneficiary countries than the 4 used by the EEC. Another idea thrown out was that we might simply offer 1/3 of the net 1 quotes which the FEC offered. Working parties are to be set up, one of which under Mr. Morris will go into this question of the criteria for the calculation of quota limits and will produce statistica showing the size of quotas under the various variants. Another under the Tariff Division of the Board of Trade will go into the problems of operating a quota system and the U.K. legislative requirements.
"
Copy to :-
(R. G. 2RITTN) Trade Policy Department
22 July, 1969
Mr. Carter, Hong Kong Department
Mr. McKelvie
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