TNAG-1297-FCO40-1652-Visit-by-Sir-Geoffrey-Howe--Secretary-of-State-for-Foreign-a-1984 — Page 186

83. There will be free trade with the Six in the products concerned subject only, throughout the transitional period, to arrangements to compensate for the difference in price levels. These will take the form of fixed levies on our exports to them and fixed compensatory payments on their exports to us. These levies and export payments will be gradually reduced by six steps over the five years, as prices come into line. There will be comparable arrangements for trade between the present members of the Community and the other applicant countries, and between the applicant

countries.

84. The operation of the levy system will give producers in the enlarged Community preference over imports from other countries whenever market prices are below the threshold. British producers will share in this preference throughout the Community and will have the safeguard of the intervention prices to support their market.

85. For those agricultural commodities for which the Community has a common external tariff instead of, or in addition to, levies, the transitional arrangements will take the form of tariff adjustments similar to those agreed for industry (paragraph 79). Our tariff will gradually be adjusted to the common external tariff and eliminated against other members of the enlarged Community. The precise arrangements remain to be worked out in detail. For horticulture, which depends on the tariff as its main form of protection, there will be a slower rate of tariff adjustment with no change at all in the first year of transition. For apples and pears our existing import quotas will be replaced by compensatory import levies offsetting the difference between British and Community prices. These levies will be phased out over five years so as to bring prices gradually into line, with the same provision for flexibility as in the case of agricultural prices. The horticultural industry is subject to some climatic and structural disadvantages, but there are many sectors in which it is competitive and in all sectors there will be opportunities for efficient growers who can adapt to the new situation. Assistance for new investment is already given under the horticulture

horticulture improvement scheme and the Government have recently announced a high rate of grant for grubbing up old orchards to improve the market for commercial producers. Where efficient growers face special problems of adjustment they will be given the necessary help to meet them. The Government will consider with the industry how this can best be done.

86. It has further been agreed that the enlarged Community will be ready to take prompt and effective action to remedy any difficulties arising out of the transitional arrangements for agriculture and horticulture or any threat of abrupt dislocation to Commonwealth and other third country suppliers.

87. The transitional arrangements provide a sound basis for a smooth and orderly transition for our farmers and growers under conditions of fair competition and stability. They also allow time for the adjustment of trading patterns, with safeguards against dislocation. British farm output is on a rising trend and it has been the policy of the Government to encourage this. In the enlarged Community British farmers generally can expect better overall returns for their produce despite higher feed costs. There

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