TNAG-0385-FCO40-431-Trade-relations-between-Hong-Kong-and-the-EEC-1974 — Page 208

RESTRICTED .

4. OTHER THAN ROMANIA, THE DUTCH RAISED THE PROBLEM OF THE MOST COMPETITIVE OF THE DEVELOPING COUNTRIES, ON THE LINES OF THEIR

STATEMENT OF 12 SEPTEMBER. THEY WISHED THE COUNCIL TO BE ASKED

TO INSTRUCT THE GROUP TO WORK ON A SCHEME IN THE COURSE OF THE

NEXT YEAR WHICH WOULD HAVE THE EFFECT OF EXCLUDING FROM BENEFIT

OF PREFERENCES THE MOST COMPETITIVE COUNTRIES WITH REGARD TO THE

PRODUCTS WHICH THEY PRODUCED MOST COMPETITIVELY, A NON -

DISCRIMINATORY RULE TO THIS EFFECT SHOULD DE EMBODIED IN THE GSP

SCHEME FOR 1975. THE CUTCOME OF THE DISCUSSION ON THIS WOULD

AFFECT THE DUTCH ATTITUDE TO THE SUGGESTION FOR THE INCLUSION OF BULGARIA. TRAN (COMMISSION) ASKED HOW SUCH A RULE COULD

EXCLUDE PRODUCTS FROM ROMANIA AND BULGARIA WITHOUT ALSO EXCLUDING

GOODS FROM HONG KONG. HE DID, HOWEVER, INDICATE THAT THE

COMMISSION WOULD BE PUTTING FORWARD PROPOSALS FOR THE GSP FOR

1975 FOR DEALING WITH THE PROBLEM. WE SAID THAT WE TOOK NOTE OF

THE NETHERLANDS VIEW, BUT COULD NOT UNDERTAKE TO BE READY TO

DISCUSS IT NEXT WEEK.

5.

THE COMMISSION PUT FORWARD A NEW PROPOSAL FOR THE KEY FOR

ALLOCATING QUOTAS ON SENSITIVE PRODUCTS BETWEEN THE MEMBER STATES

WHICH GAVE DENMARK 5% OF THE TOTAL AS THEY HAD REQUESTED AND

REDUCED OTHER MEMBERS' SHARES ACCORDINGLY, THE ITALIANS, FRENCH

AND GERMANS ALL ARGUED FOR REDUCTIONS IN THEIR SHARE UNDER THE KEY. WE SAID THAT WE COULD ACCEPT EITHER OF THE COMMISSION'S PROPOSALS.

THE COMMISSION ALSO ARGUED THE NEED FOR A COMMUNITY RESERVE,

MAINTAINING THAT THIS WOULD HELP TO SOLVE THE PROBLEMS ARISING

WHEN THE STANDARD KEY RESULTED IN A QUOTA FOR A PARTICULAR MENDER

STATE WHICH WAS EITHER VERY MUCH LARGER OR VERY MUCH SMALLER THAN

ITS ACTUAL TRADE. IN THE FORMER CASE, THE APPLICATION OF THE

STANDARD KEY LED TO STERILISATION OF QUOTAS AND THIS COULD

BE REDUCED BY THE USE OF COMMUNITY RESERVE. THEY ARGUED THAT THIS

WAS AN IMPORTANT QUESTION FOR THE COMMISSION AND THAT THEY WOULD

BE PUTTING FORWARD A PROPOSAL FOR SUCH A RESERVE TO THE COUNCIL >

WHATEVER THE POSITIONS TAKEN UP BY MEMBER STATES. THE GERMANS

OPPOSED THE IDEA OF A COMMUNITY RESERVE AND THE FRENCH SAID THEY

HAD INSTRUCTIONS NOT TO ACCEPT IT. THE DANES SUPPORTED THE

COMMUNITY RESERVE AND WE SOUGHT CLARIFICATION OF THE WAY IT WOULD

WORK INDICATING THAT WE HAD STRONG RESERVATIONS,

· 3. 3- RESTRICTED

/ 6. CN