TNAG-0762-FCO40-966-Effect-of-GATT-Multi-Fibre-Arrangement-(MFA)-on-Hong-Kong-ex-1978 — Page 29

>

THE MULTILATERAL TRADE NEGOTIATIONS: THE POSITION REACHED IN MID NOVEMBER 1977

1 What follows represents in broad terms the position reached as seen

in mid-November 1977.

a

There is now agreement among all parties to the negotiations to

attempt to conclude the preparatory phase by January 15, 1978

with a view to completing the negotiations as a whole in the

course of a few months thereafter. One reason for doing this is

that the US might find it easier to get a deal through Congress

in mid 1978 than later;

another is that some of the US

Administration's powers under the 1974 Trade Act expire at the

end of next year; although the negotiating authority provisions

continue for a further year.

b

There has been discussion among the main participants in the

negotiations of a hypothesis for tariffs on industrial products

under which high tariffs would be reduced by some 60% or more

and low tariffs by little or nothing: the reductions would be

spaced over 10 years; the weighted average reduction in tariffs

would amount to some 40% which would also be roughly the amount

of the reduction applying to a middling tariff of say 12%. This

hypothesis has not been formally endorsed by any major participant

in the negotiations although it has been welcomed as presenting

a possible way forward. On the part of the Community there is an

insistence that such a hypothesis can only be accepted if there

is a real chance to stop the tariff reductions half way through