TNAG-1494-FCO40-2052-Future-of-Hong-Kong-General-Agreement-on-Tariffs-and-Trade-(-1986 — Page 70

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BUT A GOOD DEAL OF COMMON GROUND HAS BEEN ACHIEVED SO FAR. MUST

NOT JEOPARDISE THIS NOW. WE HAVE BEEN DISCUSSING THE WAY FORWARD

WITH THE FRENCH. THEY HAVE CONFIRMED THAT THEY SHARE THESE BROAD

OBJECTIVES. WE BELIEVE THAT IF HANDLED SENSITIVELY, THEY AND OUR

OTHER COMMUNITY PARTNERS WILL BACK A SATISFACTORY AGREEMENT AT

PUNTA DEL ESTE.

4. ANY ATTEMPT TO PUT THE CAP IN THE DOCK ON EXPORT REFUNDS IN

ISOLATION FROM THE GENERAL PROBLEMS OF AGRICULTURAL TRADE WOULD,

HOWEVER, BE UNACCEPTABLE EVEN TO THE UK. IT WOULD CERTAINLY

ENCOURAGE THOSE EC MEMBER STATES WITH RESERVATIONS ABOUT THE

OUTCOME OF THE PREPCOM TO TRY AND UNRAVEL THE PACKAGE AT THE

MINISTERIAL. IN ORDER TO MAKE PROGRESS AND TO ENSURE THAT THE EC

CONTRIBUTES POSITIVELY, THE DEBATE MUST BE COUCHED IN TERMS OF

THE TRADE DISTORTING EFFECTS OF AGRICULTURE AS A WHOLE.

5.

THE FORTHCOMING CONFERENCE OF AGRICULTURAL EXPORTERS CAN PLAY

A VALUABLE ROLE IN PREPARING THIS DEBATE. BUT WE HOPE YOU WILL

BEAR THE ABOVE CONSIDERATIONS IN MIND IN WORKING FOR A SUCCESSFUL

OUTCOME. SIMPLE ATTACKS ON OTHER COUNTRIES' AGRICULTURAL

POLICIES - OR INTRANSIGENT DEMANDS FOR E.G THE ELIMINATION OF

EXPORT SUBSIDIES AS A PRECONDITION FOR A NEW ROUND ARE NOT THE

WAY TO SECURE PROGRESS ON LINES WE BOTH WISH TO SEE.

6.

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(IF DISCUSSION DEVELOPS ON THE TERMS OF THE DRAFT GATT MINISTERIAL DECLARATION). W47 REV 2 (THE SWISS/COLOMBIAN DRAFT

THAT WILL BE TABLED AT PUNTA DEL ESTE TEXT OF PARAGRAPH ON

AGRICULTURE IN MIFT) REFERS TO THE GATT COMTAG RECOMMENDATIONS

ACCEPTED BY CONTRACTING PARTIES IN DECEMBER 1984. THESE INCLUDED

A REFERENCE TO QUOTE BRINGING EXPORT COMPETITION UNDER GREATER

DISCIPLINE UNQUOTE, AND AN AGREEMENT TO EXAMINE A GENERAL BAN ON

EXPORT SUBSIDIES (IN CONJUNCTION WITH IMPROVEMENTS IN THE

EXISTING RULES) AS ONE APPROACH TO THIS QUESTION. THIS AGREEMENT

HAS NOT BEEN PREJUDICED BY THE OUTCOME OF THE PREPCOM, AND SHOULD

GIVE AUSTRALIA ALL IT NEEDS IN SUBSTANCE. SOME EC MEMBER STATES

DO NOT MUCH LIKE THIS LANGUAGE. BUT WE BELIEVE THAT THEY WILL

ACCEPT IT IF THE QUOTE NON-SUBSIDISING UNQUOTE FOOD EXPORTERS DO

NOT ADOPT TOO HARD A LINE IN THE RUN-UP TO PUNTA.

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