§ Mr. Erroll
Her Majesty's Government have now concluded a bilateral tariff agreement with the European Economic Community. This agreement, together with the agreement which we have already concluded with the United States, will result in a substantial reduction in tariff barriers on a reciprocal basis.
The commitments on the Common Tariff of the Community which are now being made public on the completion of negotiations with Britain fall into two parts.
First, the Community undertook commitments on the Common Tariff in negotiations with Britain under Article XXIV (6) of the General Agreement on Tariffs and Trade; in these negotiations the Six, by making compensatory concessions, secured release from prior commitments in cases where the application of the Common Tariff involves raising duties above the level at which they had previously been bound in the tariffs of individual member states. The Community (in addition to binding rates in the Common Tariff against increase) undertook to reduce the duties in the Common Tariff on products in which we estimate that our trade in 1959 was worth about £36 million. These products include agricultural tractors, worsted and flax yarns, woollen piece goods, whisky, electric washing machines, paint and biscuits. In addition, our exports will benefit from reductions in the Common 150W Tariff as a result of agreements between the Community and third countries under Article XXIV (6); our trade in the products concerned in 1959 is estimated at some £28 million.
Secondly, we have concluded with the Community an agreement for new tariff concessions in which they undertake to reduce, generally by one-fifth, the duties in the Common Tariff on a wide range of products including certain leather goods, marine engines, refrigerators, agricultural machinery, electrical equipment and commercial vehicles. British trade will also benefit from tariff reductions, mostly of one-fifth, which the Community undertook to make in their recent Agreement with the United States. British trade with the Community in the products affected by the reductions provided for in the agreements concluded with ourselves and the United States was worth in 1959 about £173 million. (These products are, in general, additional to those which were the subject of concessions in the agreements under Article XXIV (6)). On the other side imports into Britain from the Community valued in 1959 at £115 million will benefit from the tariff reductions (mostly of one-fifth) which we are now undertaking to make and from those provided for in the agreement which we recently concluded with the United States.
Reductions which the Community have agreed to make in the Common Tariff will not come into full effect until it replaces the individual tariffs of the member States. Under the Treaty of Rome the difference between the duties in these tariffs and the duties in the Common Tariff is, in general, to be reduced in three stages, at the first stage by 30 per cent, at the second stage by a further 30 per cent., and finally to be eliminated by 1970.
The Six have already taken the first of these three steps by which they will bring into operation the Common Tariff. In the case of most industrial products they approximated the duties in their individual tariffs to the Common Tariff notionally reduced by one-fifth. They have, therefore, already taken in most cases the first of the three steps by which they will bring into operation the concessions now agreed upon.151W
Under the Treaty of Rome the second stage in the approximation of the individual tariffs of the Member States to the Common Tariff is to be achieved by 1966, but the Community have recently decided to bring forward this stage to 1st July, 1963.152W
The changes in our tariff will be brought into effect in one stage as soon as practicable.
Copies of the schedules of concessions exchanged between Britain and the Community will be placed in the Library.