TNAG-0135-FCO40-171-Tariff-preferences-for-developing-countries-1969 — Page 148

2.

TARIFF PREFERENCES FOR DEVELOPING COUNTRIES

CONFIDENTIAL

The Committee considered a memorandum by the Board of Trade (PC0(69) 18) about tariff preferences for developing countries.

MR. GOLDSMITH said that the Organisation for Economic Co-operation and Development (OECD) group of countries were committed to providing substantive documentation on tariff preferences for developing countries to the United Nations Conference for Trade and Development (UNCTAD) by the end of October. The United Kingdom had already indicated that it would grant tariff preferences on all industrial products, except for cotton textiles, pig-iron, and egg albumens, with both a general reservation and specific reservations on non-cotton textiles and iron and steel products if other countries did not follow suit. The United Kingdom list, which was very generous, had not been matched by other countries.

On industrial products the European Economic Community (EEC) were proposing to adopt a duty quota system operated under a formula based on imports from developing countries other than preferential sources plus 5 per cent of imports from countries those products had to pay the Common xternal Tariff. For sensitive products in about 40 teriff sub-headings the quotas would be pre-allocated; for seni-sensitive items a check would be made and the quota and category reviewed in the light of experience, while for all remaining goods quota ceilings would be only notional. The illustrative lists submitted by other countries particularly the United States were less precise and required clarification but, in gencral they proposed tariff reductions with specific exclusions. Although only the EEC countries had proposed a duty quota approach, it was possible that others might be persuaded to follow them in spite of the administrative difficulties involved.

The question for the United Kingdom was whether to adopt the duty quota technique or offer tariff reductions subject to certain safeguards or possibly a combination of both. There was no need to take a final decision at the present time, but it was clear that our original offer could no longer be submitted to UNCTAD without qualification unless other countries were prepared to improve their offers substantially. As there was little prospect of their doing so, the scope of our offer must be roduced. It was necessary also to consider what action we should take if other donor countries were unwilling to aclmonledge the self-election principle by excluding Hong Kong from the list of developing countries.

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CONFIDENTIAL