GENERALISED FREFERENCE SCHEME: BENEFICIARIES
The DTI now propose to implement the UK's Gen- eralised Preference Scheme (GPS) on 1 October this year, so following closely on the EEC (1 July) and the Japanese (probably 1 August), without waiting to see how and when the US Administration decides to put GPS legislation to Congress. The omens are not good for speedy and uncomplicated passage of such leg- islation in the present mood of Congress, and we might have to wait for an unacceptable length of time if we wished to see its outcome.
2.
Clause 1 of the 1971 Finance Bill enables HMG to grant tariff preferences to the goods of countries claiming to be developing countries. The goods and the countries to be so favoured will be specified in sub- sequent Orders in Council.
Because of the decisior
to go ahead in October, the DTI need to put up a sub- mission to their Ministers urgently on certain quest- ions, including that or the developing countries to benefit from the UK Scheme.
3. Mr Kemmis of CRE1 has prepared the attached paper on Beneficiaries (the pencilled amendments are mine) which sets out the criteria for inclusion in UK GPS, and discusses the various "problem" benefic- iaries. He would now like FCO comments on the paper, whose conclusions will be incorporated into his sub- mission to Ministers.
4. My own view is that the paper is broadly on the right lines, though it needs to bring out more clear- ly the need to model our list of beneficiaries fairly closely on that of the EEC. There are two reasons for this; a) because as a member of the enlarged EEC we shall have to do so anyway, and b) because the EEC have been the first to declare their choice of bene- ficiaries
the members of the UNCTAD Group of 77 and the Dependent Territories of third parties. By following their example on the grounds of equitable "burden-sharing", we can avoid the need to justify particular exclusions from our own list. We can at the same time leave open to disappointed candidates the hope that we will include them at a later date if they can persuade the EEC to do so.
5. Departments need not concern themselves too closely with the drafting of this paper, as only its conclusions will be used in the submission. However, the DTI do require cur urgent comments by lunchtime Tuesday 29 June on the actual countries to be included in the UK Scheme. I would therefore be most grate- ful for telephonic reactions by at least mid-morning tomorrow, and if at all possible, by close of play tonight. I apologise for the short notice.
6. I enclose separate minutes to each Dept. dealing with points of individual interest to them.
Comments of. to any of the following:
I. Perceval M. Fluch
Myself
G 54
G 57 649
K.S.. Bun
K.F.X. Burns
Defor
Trade Policy
20 June 1971
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