TNAG-0136-FCO40-172-Tariff-preferences-for-developing-countries-1970 — Page 31

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First liberality, i.e. the need to do something which had a

major impact on developing country trade. Second commonality.

In their view the intention all along has been to develop a

common system and this was clearly the intention in UNCTAD

Resolution 21(II) agreed in New Delhi. Separate action could

cause distortion of trade as well as difficulties in assessing

burden sharing. It could also increase the danger of argu-

ments with the developing countries, a danger which would be

easier to avoid with a common system.

Third there was non-

discrimination. The U.S. was opposed to any preferences which

discriminated in favour of one group of developing countries

Their scheme was based on MFN treatment

against another.

at two levels one for developed countries and the other for

all LDCs. The obvious consequence of this was the elimination

of existing special and reverse preferences at all levels.

As regards special preferences this would happen automatically

with a common scheme moving to zero tariffs.

The U.S. felt

strongly about both these matters and would exclude developing

countries continuing to participate in special or reverse

preferences.

Finally there was non-reciprocity.

Nothing in

Kronk concluded by

return should be asked from the LDCs.

pointing out that any U.S. scheme would need to be approved by

Congress and that Congress would not agree unless a common

scheme were adopted and special and reverse preferences were

eliminated. Exceptions must also be minimal and escape clause

action comparable between all donors. The scheme would also

be temporary and it should not interfere with future MFN cuts.

13. The EEC (di Martino) "thanked" the U.S. and Japanese for

their "late offers" and pointed out that the Community had

supported the principle of preferences for six or seven years

(which is rather a distortion of the truth). It might be

thought that the no limitation/safeguard type of scheme was the

more liberal. But in the circumstances of the EEC it might

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/not be,