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include special steel, ball bearings, certain ceramic products, footwear and television seta);
b that it is virtually certain that the US will not change the decision reached in 1975 that petroleum products are to be regarded as meeting the rational security criterion which means that these are debarred from US tariff reductions;
c that it is likely that the US will except a number of other products following consultation with their thirty or so sectoral advisory committees.
It does not follow that products excepted by the US under a, b, or c above will be regarded as acceptable as exceptions by the Community. But it is likely to offer scope for withdrawals.
6 The criteria we have been considering within CRE1 for allocating products to a list of exceptions if this is needed and in any case to a list of withdrawals are these:
a
products where the present tariff is high (or high enough)
to give an effective degree of protection, and where in the opinion of the sponsoring division there is reason to believe that a tariff cut would damage the industry by making the protection ineffective;
b
products from industries which have asked for protection against disruptive import penetration, where in the sponsoring division's view and ours they have made out a reasonable case, but where the Government has not been able to meet this request; and
C "infant" industry products - if they can be satisfactorily identified where protection now could form the basis for the development of a buoyant competitive industry in ten years' time.
You will note that this would exclude from the exceptions list the range of textile products covered by the Multi Fibre Arrangement.
7
J
When the time comes to allocate industries against the criteria our aim will have to be to ensure that our UK interests are given as great a prominence as - and preferably greater than those of other Member States. At that stage therefore we shall need to have cogent argumentation from sponsoring divisions on the case to be made in favour of excepting particular products. We do not know in advance how many Community exceptions will be negotiable internationally, and how many UK products will be negotiable within them, so we shall need to place our products in some order of priority.
8
with
There is no harm in drawing on the material above in informal discussion interested individuals in industry. We suggest however that industry as such should not be consulted on the particular points raised in this minute. We should however be grateful for any comments from recipients on the questions raised in paragraphs 4 and 6 above. (Questions on the points in this minute can go, as you prefer, to JH Clement (215 5438), M P Strike (215 3816) or me (215 5458)).
T SHARP CRE 1
17 November 1977
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