TNAG-0135-FCO40-171-Tariff-preferences-for-developing-countries-1969 — Page 53

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PART II

estion of Principle

Should developed countries grant special tariff treatment to products of ·

developing countries? The Group considered that two basic issues were involved,

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pratintic and the

fiz

ther of principle. The pragmatic issue is whether special

1 kopen binerat can be expected significantly to improve the export earnings of develoylag countries. The insuo of principle is whether the grant of such treatment mirht be expected so to undermine the m.f.n. principle that the risks outweigh the

persikip denigro fa doveloping countries. Although logically distinct, there

1.3 a commexico between these issues. If it were concluded that developing countries ould not expect to derive much effective benefit in terms of higher export sales Maom the grant of special tariff treatment, it would strengthen the case against allowing departure from Article I of the GATT. If, on the other hand, it could reasonably be inferred that developing countries would derive valuable. trade boneliin, it might be held that there was sufficient justification to face, while

trying to minimize, the risks involved.

The Group last year devoted much time to consideration of the probable effects in the experta of developing countries of various types of trade policy measures, including special tariff treatment. They concentrated in particular on existing

preferential arrangements between some developed and some developing countries in the hope of being able to make use of these precedents in arriving at some judgment

about the likely effects. They were unable to do so then and are in no better

position to do so now Indeed, the Group would go further. Just as they have not

found it possible to make any quantitative judgment of the influence which existing

preferential arrangements, some of long-standing, have had on trade flows, they

believe that it would be impossible in the future, even if special tariff treatment

were granted, to determine with any useful degree of precision the extent to which

the grant of such treatment had stimulated total imports into their markets from

developing countries. The factors influencing trade patterns are too varied to enable the effect of tariff changes to be isolated and quantified, whether in the

short or lenger term.

3.

Although the Group have found it impossible to form any quantitative judgment

on the effect of the grant of special tariff treatment on the exports of developing countries, they recognize the strength of fealing on the part of the Governments of

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