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criteria in para raph (2) of the group's Mandate, namely (a) achieving the benefits that the system is intended to bring to developing countries, (b) simplicity and reasonable- ness of administration from the point of view of donor and recipient countries, (c) avoiding excessive deflection of trade and (d) ensuring that equivalence of access to the markets of the various industrialised countries is not dis- torted (burden-sharing). This iew was expressed in the Chairman's summing up, with which there was no dissent. He pointed out that existing systems were usually tailored to a particular set of circumstances, that in many cases their rules were complex and often designed to avoid particular cases of trade diversion or to protect particular industries, and that some of them could probably not achieve the benefits developing countries expect. It was also difficult to judge origin rules in isolation from other features of a preference scheme, e.g., the range of products covered, depth of tariff cut, safeguards, etc.
8. The Chairman then went on to suggest that one approach might be to seek an origin system (or perhaps a combination of systems) which was as far as possible "neutral" in its effects. One way of putting this was to say that the system should neither add to, nor subtract from, the degree of liberality of the references scheme as a whole. was to say that the scheme should give concrete operational effect to the concept of "substantial transformation" and that the origin system as such should not be expected to fulfill
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other purposes. (This concept of "neutrality" had occurred at various points throughout the discussion and it was rot necessarily universally accepted).
9. In view of the above points the Chairman concluded that, if cxisting systems of origin were adopted for a generalised preferences scheme, the variations between them could be seriously questioned from the point of view of (i) simplicity of operation and (ii) equivalence of access and burden-sharing. It also had to be borne in mind that some countries did not as yet possess systems that could be an lied to preferences and that developing countries would find it difficult to adapt to differing systems in different markets. This clearly pointed to the need, at least in the long run, to adopt a single system of origin, but it might be necessary to continue with existing rules over a transitional period. To an ly them more permanently would, however, cut across or falsify some of the objectives set cut in the Mandate.
10.
These conclusions clearly imply that a fair amount of further work still remains to be done in this group. This might involve the study cf existing national systems in more depth (perhaps on the basis of a questionnaire (enclosed) circulated by the Secretariat, the replies to which will be tabulated in the interim report). It will, however, depend
tu a large extent on progress made in the parent Ad Hoc Working Group on the main features of a preferences scheme as a whole. To some extent it will also depend on the views of developing countries and the point at which a crking Party on origin is established by the UNCTAD Special Committee.
Relation to Work in UNCTAD
11. There was some discussion at the end on whether it would be desirable for OECD countries to agree to the early
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