TNAG-0135-FCO40-171-Tariff-preferences-for-developing-countries-1969 — Page 170

CONFIDENTIAL

tabled positive illustrative lists of a considerable number of agricultural products. Their submission implies that the "competitive need approach" would apply to these and that the tariff reductions would be the same as those to

The which they refer in the industrial product field. other prospective preference-giving countries have in the main submitted lists of a relatively modest nature of agricultural products to which they are prepared to apply the same tariff reductions as to products in the industrial field. All these offers fall a long way short of the list submitted by the United Kingdom.

OPTIONS OPEN TO THE UNITED KINGDOM

5.

It will be clear from this outline of the attitude of other countries that most of them have been by no means precise about what they are prepared to do. On the other hand, there is a clear distinction between what has been offered on industrial goods by the E.E.C. (duty-free entry subject to limits determined in accordance with the formula) and by most of the others (duty reductions, either with substantial exceptions or with the implication that they will insist on such exceptions). The donor countries are not obliged to offer a uniform scheme and it is open to each country to decide what kind of offer it will make. The effective choice for the United Kingdom, therefore, is between following one or other of these patterns, i.e. should we be guided by what the E.E.C. are prepared to do or by what the Americans, Japanese and others seem prepared to do? Should we adopt the duty quota technique, or should we offer tariff reductions subject to other safeguards?

DUTY QUOTAS

6.

A note on the legal and administrative aspects of duty quotas is at Annex A. This shows that duty quotas would give rise to troublesome legal and practical problems of a kind which we have not hitherto been faced in the United Kingdom, and that additional expense would be involved for both the Government and industry. Legislation and new administrative machinery would be required. The main benefits of the new tariff preferences would be more likely to accrue to the United Kingdom importers who were relieved of the duty; the exporters in the developing countries might be very little better off. The "cut off" method of administering the quota would be likely to discriminate against the more distant developing countries, and prior allocation would be necessary to avoid this and other disadvantages; as explained in the annex, however, the prior allocation method would have its own serious disadvantages. of these disadvantages would be removed if the quotas, once allocated,

but at first could be administered by the exporting countries;

Some

sight it would be hard to allocate quotas (some of them no doubt small) equitably and acceptably among a large number of developing countries.

We

7.

The proposed method of operating duty quotas would be this. should apply duty quotas in the first instance only to imports of those products which we regard as particularly sensitive from the These would probably range of developing countries in question. include most textiles and perhaps some other products. Other goods would be allowed duty-free without limit but with the reservation that we were free to impose quota limits on duty-free entry in future years if the trade situation which developed seemed to us to warrant it. Imports which at present enter duty-free from the

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