TNAG-0630-FCO40-778-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1988 — Page 29

RESTRICTED

REACHING THIS VIEW THE COMMITTEE TOOK INTO ACCOUNT THAT CONTACTS

BETWEEN THE AMERICANS AND THE COMMISSION WOULD BE CONTINUING:

IS ALREADY CLEAR THAT THE COMMISSION WILL BE INFORMING THE

AMERICANS THAT A TWO STAGE TARIFF REDUCTION WITH A MEANINGFUL BREAK

CLAUSE AND SOME COMMITMENT ON THE AMERICAN PART TO A SELECTIVE

SAFEGUARD SEEM, FROM THE COMMUNITY'S POINT OF VIEW,

INDISPENSABLE CONDITIONS FOR FURTHER PROGRESS TOWARDS A SUCCESSFUL

CONCLUSION OF THE MTNS.

DISCUSSION

3. DENMAN (COMMISSION) REFERRED TO THE HESITATIONS WHICH HAD

EMERGED ON THE US SIDE ABOUT THE WORKING HYPOTHESIS ON TARIFFS,

AND CIRCULATED A RECENT EXCHANGE OF LETTERS BETWEEN HAFERKAMP AND STRAUSS (COPY BY HAND OF GRAY), WHICH CONFIRMED RUMOURS

THAT THE AMERICANS HAD NOT RECOGNISED THAT A LARGER TARIFF CUT IN

TWO STAGES MUST INCLUDE, SO FAR AS THE COMMUNITY WAS CONCERNED, A CLEARLY CONDITIONAL SECOND STAGE. DENMAN ADDED THAT, IF THE NEED FOR A SUCCESSFUL CONCLUSION TO THE MTNS WAS ACCEPTED, THE CENTRAL

QUESTION WAS WHETHER IT WAS ACCEPTABLE TO MEMBER STATES TO CONSIDER

A TARIFF CUT OF THE ORDER OF 406 SPREAD OVER A LENGTHY TIMESCALE

BUT WITH THE SECOND TRANCHE LINKED TO ECONOMIC CONDITIONS.

4

TRIOLI (ITALY) TOOK A FAIRLY POSITIVE LINE, BUT RAISED

THREE PARTICULAR QUESTIONS:~

A) IT WAS IMPORTANT THAT THE COMMUNITY SHOULD REACH A UNANIMOUS

VIEW ON A QUESTION THAT WAS ESSENTIAL POLITICAL:

(B) THE COMMUNITY'S NEGOTIATING POWER SHOULD NOT BE

UNDER-ESTIMATED. FROM A VERY RECENT VISIT THAT STRAUSS HAD

PAID TO ROME, HE HAD A CLEAR IMPRESSION THAT THE AMERICANS

WERE READY TO ACCEPT CONDITIONS IN A TWO STAGE APPROACH:

(C) THERE WERE SECTORAL INDUSTRIAL PROBLEMS THAT HAD BEEN

STUDIED IN ROME, BUT NOT, PERHAPS, SUFFICIENTLY IN THE COMMUNITY, AND THE QUESTION OF INDUSTRIAL OR SECTORAL

EXEMPTIONS FROM THE TARIFF FORMULA MERITED FURTHER AND EARLY

STUDY: THE COMMISSION SHOULD TAKE FULL ACCOUNT OF THIS.

5.

DE MOREL (FRANCE), WHO BEFORE THE MEETING TOLD US THAT THE FRENCH WERE UNDER FIRM INSTRUCTIONS (WITH WHICH THE DREE RATHER DISAGREED) TO TAKE A NEGATIVE LINE, SAID THAT THE HYPOTHESIS WAS NOT

2 RESTNICTEN

ACCEPTABLE.