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30. Both the Australiens and the South Africans have objected to any cuts, not only on the items where they have contractual proferences, but also on virtually any ilom in the tariff
where they have a trade interest. We have already held preliminary talks with the Australiano, during which they nointained a rigid line, rofusing to identify any items where. their objections might be less strong and arguing that a reduced cut, such as the 50 per cent already proposed in our offer for some important contractual items, would still gravely damage their trade. Wo have agreed not to table any substantive offers without further consultations. The adoption of duty quotas for manufactures and semi-manufactures may help to limit Australia's concern but in the last resort, we shall presumably have to delete from our offers all the items on which the countries concerned are not prepared to relinquish their contractual rights. Even as far back as UNCTAD 1 we made it clear that we could not grant preferences on itens where we could not obtain release from contractual obligations.
(b) Develoning
31.
The developing countries will expect to obtain sufficient advantages elsewhere to compensate them for having to share their preferences in the UK. and again this is something which we have always made clear is a fundamental
condition for our participation. Our position on this was
reaffirmed at the last Commonwealth Prime Ministers' Conference
in January. Some informal contacts have already been made. with Commonwealth developing countries during Sessions of the Special Committee on Preferences, when we have taken the line that purposeful consultations can only take place when
/it is
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