R STRICTED
Te:
Director of Commerce and Industry, Hong Kong.
From: Counsellor (Hong Kong Affairs), Geneva.
Memorandum No.116
File No. GVA/10/8/1
230
Date:
17 September 1970
My memorandum No.115 of 14 September.
O.E.C.D.
Trade Committee
The OECD Trade Committee met in Paris on 14 and 15 September. Lam (Board of Trade) represented the U.K.
2. The meeting was, as expected, dominated by the preferences issue cn which final preparations had to be made for the meeting of the UNCTAD Special Committee on Preferences in Geneva on 21 September. To that end the Committee had before it the Report prepared by the Ad Hoc Group the previous week (TC(70)23 enclosed). It also heard statements on their revised offers from the four donors who had not been ready to report to the Ad Hoc Group (EEC, Japan, Canada and United States).
Revised Offers
3. The statements made on the revised offers revealed the following:
EEC The EEC would make very few changes from their original illustrative offer. On processed agricultural products in Chapters 1-24 of the Brussels Nomenclature there were some changes of no interest to Eong Kong. On industrial products their position on cotton textiles was redefined. Previously they were prepared to offer preferences to developing countric. participating in the CTA up to the levels of their quotas. They have now changed this to bring cotton textiles into line with all other products, i.e. preferences will be granted to all beneficiary countries on the basis of the Community's actual imports from them plus 5 per cent of their imports from non- beneficiaries. In the case of non-participants in the CTA, this will be conditional on their being prepared to conclude agreements with the EEC similar to the agreements concluded with countries participating in the CTA (note: the tariff quotas will probably be smaller in this case because most CTA quotas are considerably under-utilised). The EEC also made it clear that they will exclude primary products in Chapters 25 - 99.
Japan The level of the ceiling for products in Chapters 25 - 99 has been increased by increasing the supplementary quota from 5 per cent to 10 per cent of imports from non-beneficiaries. This is the case also on the so-called "selected products" on which there will only be a 50% cut in duties. As a general rule, also, two digit BTN numbers (i.e. Chapters), instead of 4 digit numbers, will be used in delimiting the tariff quotas. On the selected products the "competitive clause" (prcviding fer elimination of donors who gained more than 50% of the qucta) has been cut out (I reported this in para. 3 of my telegram from Paris No.65 to FCO). In addition, seven 4 digit BTN numbers had been made exceptions (mainly covering leather
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