TNAG-0142-FCO40-178-Long-term-policy-on-International-trade-in-textiles-1969 — Page 148

CONFIDENTIAL

MR. DIXON said that on agricultural products also our first offor was more generous than the offers of other countries. The revised offer in Annex B of the paper reduced the scale of our offer in terms of beneficiary country trade in 1967 from 108 to 37 million dollars and should go some way towards meeting the interests of developed Commonwealth countries. If all items of interest to these countries were excluded

the offer would be reduced to a derisory 12 million dollars.

It was

therefore necessary to strike some balance between the conflicting

interests of the former and the non-Commonwealth developing countries.

If the Committee agreed the basis of the revised offer, consultations with the developed Commonwealth countries and South Africa would be necessary

before it could be tabled. The offer was broadly in line with that

put forward by the EEC and the Scandinavians but slightly more generous

and might be further reduced in the light of the consultations with the

Commonwealth.

In discussion the following Lain points were made

(a) There was general agreement with the scope of the revised offer on agricultural products and that the Board of Trade and Ministry of Agriculture should now begin consultations with Commonwealth developed

countries.

(b) It was suggested that there would be advantage in adopting a duty

quota system for industrial products; the EEC were committed to it and

Australia was already operating it for developing countries. The EEC

had decided on duty quotas because they avoided the problem of how to

select exceptions and gave an automatic safeguard to domestic industry,

especially on sensitive items. This approach might be easier for other

Commonwealth countries to accept because they would still retain some

advantage in our markets when the duty free ceiling was reached. Moreover,

it had previously been accepted that decalage and duty quotas would have to

be applied to imports of industrial products from the Commonwealth if we

joined the EEC. We could not, therefore, claim that duty quotas were

impracticable and if we succeeded in joining the EEC we would have to adopt them anyway.

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CONFIDENTIAL