TNAG-1492-FCO40-2050-Future-of-Hong-Kong-General-Agreement-on-Tariffs-and-Trade-(-1986 — Page 20

SERVICES

12. CONTINUING GULF BETWEEN HARDLINE LDCS AND DC PROPONENTS OF

SERVICES. US URGED THE PREPCOM TO FOCUS ON DRAFTING. THEY SOUGHT A

GENERAL FRAMEWORK OF LEGALLY-BINDING PRINCIPLES FOR SERVICES WHICH

MIGHT BE SUPPLEMENTED WITH SECTORAL SPECIFIC AGREEMENTS. OTHER DCS

(NORICS, EC, AUSTRALIA, SWITZERLAND) SUPPORTED. TRAN (EC) INSISTED

THAT PROPONENTS MUST PUT THEIR VIEWS TO THE MINISTERIAL: THE EC WOULD BE SUBMITTING A TEXT. HARDLINE LDCS, BRAZIL, INDIA, ARGENTINA, YUGOSLAVIA AND CUBA) RETORTED THAT NO DECISION ON THE

INCLUSION OF SERVICES IN THE NEW ROUND COULD BE TAKEN BEFORE THE

JARAMILLO GROUP HAD COMPLETED THE 1982 MINISTERIAL MANDATE.

JAPAN (BALANCE OF BENEFITS FROM THE GATT SYSTEM)

13. TRAN (COMMISSION) REPEATED EC CALL TO INCLUDE THIS AS A GENERAL OBJECTIVE FOR THE NEW ROUND. CHIBA (JAPAN) ARGUED THAT THE CONCEPT

OF A STRICT BALANCE OF BENEFITS IN GATT WAS FALSE. CONCESSIONS

NEGOTIATED ON A RECIPROCAL BASIS COULD NOT BE QUANTIFIED ON A STRICT

RATIO

BETWEEN IMPORTS AND EXPORTS. THERE WAS CONFUSION BETWEEN TEMPORARY

AND PERMANENT BENEFITS. US OBSERVED THAT THERE WERE OTHER

INEQUITIES (EG AGRICULTURE) WHICH ARGUED FOR A MORE EQUITABLE

SYSTEM.

#

14. HILL (JAMAICA) TOUCHED OBLIQUELY ON LDC GRADUATION SUGGESTING

THAT INTEGRATION INTO THE GATT SYSTEM WAS ALREADY OCCURING AS A

RESULT OF IMF/IBRD ACTIONS.

COMMENT

15. WITH THE COMPLETION OF PHASE TWO THE FOCUS MUST NOW BE UPON THE DRAFTING EXERCISE. DUNKEL APPEALED TO DELEGATIONS FOR FURTHER

CONTRIBUTIONS. IN ORDER TO BEGIN FORMAL DISCUSSION OF DRAFTS AT

THE NEXT SESSION OF THE PREPCOM ON 9-12 JUNE, THE INFORMAL PROCESS WILL NEED TO BE ACCELERATED. THIS MAY PROVE DIFFICULT, GIVEN THE ABSENCE OF MANY LDC AMBASSADORS IN BRASILIA FOR THE GSTP MEETING IN

MID-MAY. SECRETARIAT STAFF ARE BECOMING ACUTELY CONSCIOUS OF HOW MUCH GROUND HAS TO BE COVERED, BEFORE THE 18 JULY DEADLINE, GIVEN THE CONTINUING WIDE GAP BETWEEN DCS AND LDCS.

SANKEY

(ADVANCED AS REQUESTED)

YYYY

FRAME INTERNATIONAL AND AGRICULTURE

FCO PLEASE ADVANCE TO: WILLIAMS, LANE, MADELIN, COCKING, MAFF,

BRAITHWAITE, SHEPHERD, WARREN, FCO

GBL NAN 0816

INTERNATIONAL TRADE Y

FRAME AGRICULTURE

ECD (E)

ECD (I)

3-

CONFIDENTIAL

Copies το mr.williams

MR. LANĘ mr.cocking MR. MADELIN