THE MTNS: THE POSITION IN MID FEBRUARY, 1978
In a note dated 17 November 1977 the position reached at that time was described. This note brings the position up to date.
The preparatory phase of the negotiations was duly completed last month and agreement was reached that an attempt should be made to complete the negotiations by July 1978. So far as the Community was concerned agreement to go ahead on this basis was reached at the meeting of the European Foreign Affairs Council on 17 January; a copy of the Written Answer given by the Secretary of State for Trade after the Council meeting is attached and sets out what was agreed.
b. The hypothesis for industrial tariffs described in the
last note was accepted by the main participants last month although each of them emphasised that agreement on tariffs must go hand in hand with agreement on other topics to which they attach importance. For the Community, as the last note indicated was likely, agreement on the tariff hypothesis was conditional on agreement also to a provision that after completion of five of the eight steps by which tariffs would be reduced there would be the chance to con- sider whether the remaining three steps should be taken; the Community has also stressed that the balanced MTN package should include a provision enabling contracting parties.to take safeguard action against disruptive com- petition from particular countries. A third point stressed by the Community has been that for their part they reject the idea that exceptions to the tariff formula can be balanced by greater than formula reductions in other tariffs to their mind the willingness of the US to eliminate its low tariff on say cars in no way balances the effect on our trade of say exclusion from tariff cuts of a high woollen textiles item: the counterpart to US and Japanese exceptions is likely, the Community thinks, to have to be withdrawals from the Community tariff offer. Since the Community had always known that there would be some US and Japanese exceptions it follows that at the time the Council reached its decision to offer an initial tariff reduction amounting
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