THE INDUSTRY AND TRADE COMMITTEE 75 j March 1980] Mr R W Gray, cb, Mr S Abramson, cmg, [Continued
Mr R J Meadway, Mr J W Preston and Mr I H Lightman [Chairman Contd.]
perhaps 2 or 3 years to see exactly how the United States operates under this provision.
We are very much relieved that, as part of the MTN settlement, the United States did adopt the material injury criterion—that is to say they have to find material injury before they can impose a countervailing duty.
How it will come out in particular cases is not something one can make generalisations on at this stage; it will depend on the climate in the United States.
What we are worried about, not only for the United States but for the UK as well, is that they will be in a rush; that on the whole with a slower growth of output in world trade, the pressures for all industrial countries to take protective measures will undoubtedly become stronger.
There is no doubt about that.
The last point I make is that the United States administration itself sees the dangers of too great a dash into protectionism, of too great an invocation of the GATT rules.
I think that one could say that all administrations, including ours in the United Kingdom, the Commission in Brussels and the United States adminis¬ tration itself, will be concerned to make sure if they possibly can that the danger done to world trade by the use of these various devices to afford some kind of relief is kept at a minimum.
Mr McNally 188.
You say that the codes are designed to bring under greater control the so-called non-tariff barriers to trade, but is this a growing problem?
Are there more non-tariff barriers cropping up, or are you getting this under control ?
(Mr Gray.)
What I was talking about a moment ago was the subsidies and counter¬ vailing code.
No, I do not think there really are more non-tariff barriers.
I think that what has happened in the world during the lifetime of the GATT has been that the GATT has tackled the tariff problem in a series of tariff negotiations.
As a result, I would say — and I am talking about the developed industrial world now — that the average level of tariff is much less than half what it was at the end of the war.
There has been an enormous reduction in tariffs in the developed world.
It is not the same in the developing world which we might have to deal with in a moment.
As these tariff barriers have been removed — and in many cases now the level of tariff is really less than the effect of variations that can occur as a result of exchange rale movements, for
example — so people have begun to notice rather more the non-tariff barrier aspect.
Although there are undoubtedly a range of non-tariff barriers, including in the United Kingdom (though we are not any different from other countries), I think these non-tariff barriers have been noticed more, and it really was a fundamental purpose of the MTN arrangements to deal with those problems.
Here I would like to make one point.
You can deal with a tariff, you can say that that tariff will be cut by X per cent over a certain period.
A non-tariff barrier is, by its nature, rather different.
You cannot abolish non-tariff barriers in quite the same way.
Certain of them have been dealt with in the MTN, such as the US wine gallon assessment: the Americans have promised to remove their discriminatory treatment in taxing Scotch whisky.
Generally speaking, however, non-tariff barriers take the form of whole processes or whole attitudes, for example, in standards and that kind of thing (I think that is probably the best case), import licensing, methods of import licensing.
One can do something there.
In methods of customs valuation one can also do some¬ thing there.
The point I am trying to make is that this will take place over time in most cases, and the GATT provides not only some kind of rule on these things, but it provides procedures under which the various non-tariff barriers can be isolated and perhaps dealt with.
Mr Mikardo 189.
Are the most common non-tariff barriers quotas and voluntary restriction agreements?
Are they not as readily quantifiable, and moveable up and down, as tariffs?
(Mr Gray.)
They are, yes.
The point is that they are not that easy to deal with.
In our own case we have a range of quotas (for example, on textiles, under the Multi-Fibre Arrangement), and I think I could say that it is not our purpose to remove those quotas.
This is a very large subject in international trade.
There you have a range of quotas of long standing, of ever-increasing sophistica¬ tion against the low-cost world.
So that is one non-tariff barrier that is not dealt with by the MTN, but will be dealt with, which¬ ever way, in a renegotiation of the Multi-Fibre Arrangement, and that is certain next year or the year after.
Then other countries maintain a range of quota controls.
1 am talking about developed countries at the moment.
Those are quota controls main-
