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further reflection and to raise other and different issues (Japan) broadly agreed. Jagmetti said that Switzerland too could fully subscribe to the conclusions of the DISC report and regretted the emergence of the device of linking unrelated issues together for tactical purposes. It was a pity that some of the other objectors to the US use of this device in the DISC case were not above resorting to it themselves (a clear dig at the Community and the Cost Escalation case). Sweden for the Nordics conceded that the risk of disruptive trade effects was clear in the DISC case, only potential in the others, But the Nordics' main concern was to avoid doing anything that might damage the GATT's dispute settlement machinery, so crucial to the smaller Contracting Parties. Feij, in his most elder-statesmanlike vein, spoke as foreshadowed. Colmant confirmed that the French would be circulating a memorandum spelling out their views. Servais said Belgian views were unchanged.
10.
Brungart emphasised that the US position too was unchanged. The appropriate next step would be to adopt the four reports and they would object quite vigorously to any proposal to adopt only one of them. Nothing that had so far been mid in defence of the three countries' tax practices seemed to justify calling the panels' find- ings in question. All four panels had arrived at basically the same
He conclusion, ie that breaches of Article XVI.4 were involved. pleaded for all concerned to work with goodwill for a satisfactory result as the United States was doing. The Chairman, winding up, saw no progress towards a solution, so the matter must be reverted to at a later meeting.
11.
Item 7: Revision of Salary Scales (1/4487)
The Director-General's recommendation that he be authorised to apply the revised scales of salary and post adjustments in accordance with the changes in professional salaries and allowances approved by the General Assembly at its 31st Session was approved without
comment.
Item 8: Erosion of Salaries
12. The Chair recalled the discussion of this matter at the March Council and that a "compromise" proposal had been then put forward
This had been supported by by the representative of Yugoslavia. several delegations but others had felt it required study and an He had been assurance that it would be acceptable to the staff. informed that the Staff Assembly had subsequently decided to give
Speaking in my the proposal their full and unanimous support. Presidency capacity on behalf of the member states of the Community and like-minded friends, I explained that the Yugoslav proposal raised for us effectively the same difficulties as had the Director-General's original proposal. The US, Norway for the Nordics, Canada and Australia concurred, Tomic (Yugoslavia) was disappointed, as were Egypt, Turkey, Brazil, Jamaica, Nigeria and Spain.
13.
Notwithstanding hints from more than one of these that further time should be allowed to find a solution and that the money in the suspense account should remain there meanwhile, the Chairman con- cluded that since there was obviously no consensus in favour of Tomic's proposal it was time to decide what to do with the balance of the 1974 surplus. He supposed that the Council could re-confirm
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