CONFIDENTIAL
POINTS FOR DECISION
3. As the offers implied by our illustrative lists have not been matched by others and do not seem likely to be, it will now be essential to modify them. There are two reasons for this, the first domestic, the other international. We have told industry that we attach great importance to the so-called "burden-sharing principle", which means that we should be prepared to do as much as, but not more than, our main trading partners in the way of opening up our market further to imports from developing countries. On the international side, Commonwealth developing countries would object to an over- generous offer from Britain, since they would argue that they stood to lose more by sharing their preferences in the British market than they stood to gain from the concession of preferences in other markets. The question is how we should modify our offers.
ATTITUDE OF OTHER COUNTRIES
4. (i)
Industrial Products
The E.E.C. have offered to grant limited duty-free entry on all manufactures and semi-manufactures in Chapters 25 to 99. They have evolved a formula based on imports from developing countries other than preferential sources in a recent year plus 5 per cent of imports from countries whose products have to pay the Common External Tariff. They are prepared to give duty-free entry up to the figures determined by this formula. They have put forward no exceptions. Their only qualifications are that the formula will not be applied to cotton textiles. Instead they will give duty free entry to countries whose imports are covered by the Long Term Arrangement. They also envisage that duty-free entry for jute and coir products should be limited to amounts agreed bilaterally with the main suppliers. No single developing country will be allowed to exceed 50 per cent of any quota. It is not clear how the E.E.C. would propose to treat imports from Hong Kong.
The United States say that they stand ready to examine "the open-ended preference approach of the type submitted by the United Kingdom and the tariff approach of the type submitted by the European Communities. An additional approach which deserves attention is the competitive need approach". The United States submission then goes on to illustrate what they mean by this. They suggest that the preference should consist of a reduction in their m.f.n. tariff by half, or by 10 percentage points, whichever is the greater; but that preference would be withheld initially or withdrawn subsequently on a product from a country which supplied in any calendar year more than 10 per cent by value, amounting to at least $100,000, of total imports of the item. They have attached to this statement an illustrative list of major sensitive product categories "which may have to be treated in part or in whole in some special way". sensitive list is as follows:·
Leather and fur skins
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Wood and cork and their products
Textile and apparel products
Organic chemicals and drugs Lead and titanium pigments
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