TNAG-0762-FCO40-966-Effect-of-GATT-Multi-Fibre-Arrangement-(MFA)-on-Hong-Kong-ex-1978 — Page 83

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understanding the industrial policy of the Community and the

difficulties in persuading Congress to introduce the material injury

criterion into cantervailing without a reciprocal concession in the

MTN's, we cannot accept any restraint upon the ability of Member

States to provide subsidies for regional and industrial purposes. This

is a difficult problem which will need careful consideration if we are

to achieve an acceptable solution within the overall agreement.

CUSTOMS VALUATION

15

There has been considerable progress on the Customs Valuation

Code, in informal bilateral discussion. The US is currently considering

in detail the EEC draft code and it is hoped that after further

discussion with both the major developed and developing countries revised

(and unattributed) proposals for a code can be submitted to the MTN

Sub-Group.

STANDARDS

16

Further informal discussions are being held to resolve the

outstanding problems on the draft code for the elimination of

Technical Barriers to Trade. Although discussions on the Standards Code

have resulted in a number of revisions there remain some sensitive

issues; in particular the questions of special and differential

treatment for developing countries; of a suitable dispute settlement

mechanism; and the balance of the Codes' obligations between federally

and centrally-structured countries.

GOVERNMENT PROCUREMENT

17 Work has continued on a possible text of a government procure-

ment code. The Community continues to offer to apply worldwide its

second supplies directive provided that others, including federal states,