TNAG-0142-FCO40-178-Long-term-policy-on-International-trade-in-textiles-1969 — Page 147

CONFIDENTIAL

CONFIDENTIAL

2.

TARIFF PREFERENCES FOR DEVELOPING COUNTRIES

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 Kingdon 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 (FEC) 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 whose products had to pay the Common

External Tariff. For sensitive products in about 40 tariff sub-headings the quotas would be pre-allocated; for semi-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 general

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

reduced. It was necessary also to consider what action we should take

if other donor countries were unwilling to acknowledge the self-election

principle by excluding Hong Kong from the list of developing countries.

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CONFIDENTIAL