The Palais des Nations overlooks Lake Leman in Geneva, Switzerland, a country traditionally the site of many international confer- ences. Today, this former headquarters of the League of Nations houses the European Office of the United Nations and the UNCTADĮ GATT international trade centre.
basis of the latest available figures (but will not be reduced). Once the ceiling for duty free entry has been reached in any year, further imports from developing countries will be charged the full rate of duty, but will qualify for duty free entry again at the start of the following year.
The way in which this formula will be applied can be shown by taking a hypothetical example. If imports of a given product into the EEC in 1968 from the beneficiary countries were $1,000, and $10,000 from all other countries (excluding trade between the Six), the quota would be made up of the basic amount of $1,000 plus an additional amount of 5 per cent of $10,000. This would give a total quota of $1,500.
A ceiling under this formula will in principle be available on all the manufactures and semi-manufactures in Chapters 25 to 99. The Community have stated that they intend to enforce the ceilings only on a limited range of goods that are considered to be sensitive (these have not yet been defined). Another provision in the formula is that preferential imports of each product from any one develop- ing country will not as a general rule be allowed to exceed 50 per cent of the total ceiling for that product. This is intended to limit the preferences granted to the more competitive developing coun- tries and to reserve a substantial share for the others. The ceilings on cotton textiles will be calculated according to the same formula but duty free entry will be accorded only to those developing countries from which imports into the Community are already sub- ject to quantitative restrictions under the GATT Long Term Arrangement, for the duration of that arrangement, and to other beneficiary countries which are prepared to give similar undertak- ings. There will be similar special arrangements for coir and jute textiles.
Industrial raw materials falling within Chapters 25 to 99 of the Tariff are excluded from the Community scheme. The tariff head- ings affected have not been defined, but the Community intends to follow a definition of primary products produced by the UNCTAD Secretariat in 1965 and in addition to exclude metals up to the manufacturing stage to ingots.
Tariff reductions, mostly averaging about one-fifth but with some larger ones, are offered on a range of processed agricultural pro- ducts. Preferential entry of these products would not be limited by means of a tariff quota, but an escape clause related to injury will apply.
The countries and territories associated with the EEC will con- tinue to enjoy their existing preferential arrangements.
UNITED STATES
The United States propose to grant duly free entry for all manu- factures and semi-manufactures other than most textiles (broadly speaking those of cotton, wool and man-made fibres), apparel, footwear, petroleum-based chemicals (those assessed for duty on the basis of the American Selling Price systems of Customs valua- tion) and petroleum products. Duty free entry is also offered on about 100 tariff positions for industrial primary products and for about 180 tariff positions covering processed agricultural products. All the offers are subject to a safeguard for domestic industry injured or threatened by increased imports as the result of the preference. This will be the standard escape clause procedure under existing United States legislation (to which amendments are_pro- posed in the Trade Bill currently before Congress), involving Tariff Commission hearings.
Developing countries which grant preferences to developed coun- tries (reverse preferences) will be excluded from the United States scheme. However, if these developing countries provide adequate assurances that their reverse preferences will be phased out within two or three years they will be able to benefit from the United States scheme from the outset.
JAPAN
The scheme proposed by Japan covers all goods (including raw materials) in Chapters 25 to 99 of the Tariff other than a short list of exclusions (including hydro-carbon oils subject to fiscal duties, leather clothing, silk fabrics and footwear of rubber or plastics). On goods in a list of 57 tariff headings, the preferential rate will be 50 per cent of the full rate of duty. The goods in this list include some textiles, leather and leather articles and toys. On all other goods in these Chapters of the Tariff the preferential rate will be duty free entry. This preferential entry will, however, be subject to ceilings that will be enforced on all goods. The ceilings will be calculated by a formula applicable to all goods which is generally similar to that of the EEC scheme. Each ceiling will consist of the total of imports from developing countries in a base year plus 10 per cent of imports into Japan from all other sources. If the pre- ferential imports of a particular product from any one beneficiary country exceeds 50 per cent of the ceiling in the course of a year the preference will be suspended for that beneficiary for the remainder of that year. The supplementary quota will be revised each year and will not be less than that of the previous year.
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