No C 62/12 Official  Journal  of the  European  Communities 15. 3. 75 
17. The  Committee  also  considers  that  the  success 
of the  Community's  Mediterranean  policy  will  hinge 
on how  the  Community  envisages  the  world  role  it is 
to play  and  on what  means  it has  at its disposal. 
Furthermore,  the  Community's  capacity  for  action  in 
the field  of external  relations  is determined  by 
progress  towards  economic  and  monetary  integration 
and this  will  be increasingly  the case  in the future. Done  at Brussels,  30 January  1975. 
The Chairman 
of the Economic  and  Social  Committee 
Henri  CANONGE 
ANNEX 
to the Opinion  of the Economic  and  Social  Committee 
The following  amendment  was  rejected  during  the discussion: 
1. Insert  at the end  of paragraph  4: 
'It is to be hoped  that  the  Community  will  then  enter  into  negotiations  with  this  country, 
which  is a potential  member  of the Community,  to establish  new  relations  with  it, encouraging 
the democratic  development  and  the economic  and  social  advance  which  began  after  the fall 
of the fascist  regime.  Such  relations  should  enable  the isolation  of Portugal  from  the rest  of 
Western  Europe  to be ended. 
Similarly,  a favourable  response  should  be made  to the desire  of Greece  to draw  progressively 
and rapidly  closer  to the  Community.  This  is another  European  State  which  is a potential 
member  of the Community,  but its Association  Agreement  with  the Community  was  "frozen"' 
during  the period  of dictatorship'. 
Reasons 
The reasons  which  prevented  a rapprochement  between  the  EEC  and  the  two  countries  no 
longer  apply,  now  that  they  do not have  fascist  governments. 
2. Result  of the vote 
for: 18 
against:  40 
abstentions:  18. 
Opinion  on the  developing  countries  in the GATT  negotiations 
The Opinion  of the  Committee  does  not  relate  to any  particular  text. 
A. LEGAL  BASIS  FOR  THE  OPINION 
At its 110th  plenary  session  held  on 28 and  29 March  1973  the  Committee,  acting  on a 
proposal  from  its Bureau,  decided  to deliver  an Opinion  on the  abovementioned  subject 
on its own  initiative. 
15.3.75 Official  Journal  of the European  Communities No C 62/13 
B. OPINION  OF THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  drew  up its Opinion  at its 127th  plenary  session, 
held in Brussels  on 29 and  30 January  1975. 
The Opinion  is published  below: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to the fourth  paragraph  of Article  20 
of its Rules  of Procedure; 
Having  regard  to the  decision  taken  by the  plenary 
session  of 28 and  29 March  1973,  at the suggestion  of 
the Bureau,  that  the Economic  and  Social  Committee 
should  draw  up an Opinion  on the  memorandum 
from  the  Commission  to  the  Council  on  the 
development  of an overall  approach  to trade  in view 
of the coming  multilateral  negotiations  in GATT; 
Having  regard  to the view  of the Committee  that  it 
should  make  known  its initial  reactions  to the overall 
approach,  while  reserving  the right  to carry  out  at a 
later  date  a detailed  examination  of the  various 
aspects  of these  negotiations; 
Having  regard  to its Opinion  on the abovementioned 
memorandum,  adopted  on 24 May  1973  (x); 
Having  regard  to the Opinion  adopted  by the Section 
for External  Relations  at its meeting  on 14 January 
1975; 
Having  regard  to the  oral  report  made  by  the 
Rapporteur,  Mr Romer; 
Having  regard  to the discussions  at its 127th  plenary 
session  of 29 and  30 January  1975  meeting  of 30 
January  1975, 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
by 55 votes  to 13 and  with  eight  abstentions: 
1. The  Committee  believes  that  the  fundamental 
objective  of the  GATT  negotiations  is to expand 
external  trade  as an instrument  for raising  national 
standards  of living  (cf.  EEC—USA  agreement  1972). 
This  objective  is particularly  to the  fore  in an 
examination  of the  problems  of the  developing 
countries  in the GATT  negotiations. 
W OJ  No C 115,  28. 9. 1974,  p. 1. 2. Since  September  1973  there  have  been  world 
shortages  in industrial  raw  materials  and  in some 
primary  agricultural  products,  and  these  have 
triggered  off an upheaval  of the  world's  economy. 
These  developments  carry  very  grave  consequences 
for some  of the  developing  countries,  and  have 
changed  the positions  of the  industrialized  countries 
relative  to each  other.  They  have  also  made  the need 
to achieve  monetary  and  market  stability  at world 
level  even  more  imperative. 
3. The  GATT  negotiations  are one  of the means  of 
bringing  this  about,  and  so the responsibility  of the 
Community  and  the  other  developed  countries  to 
make  these  negotiations  succeed  has  received  a 
completely  new  significance. 
4. The  Committee  approves  the  aims  of the 
present  GATT  negotiations  in relation  to developing 
countries.  The  Committee  also  approves  the objectives 
set out  in the  GATT  ministerial  declaration  of 14 
September  1973  at Tokyo.  It supports  the  EEC 
attitude  as expressed  in the Commission  document  of 
4 April  1973  (page  13),  and  the Council's  document 
of 26 June  1973  (Chap.  V), regarding  the need  for an 
overall  Community  approach  to trade  in the context 
of the multinational  negotiations  in GATT. 
5. The  Committee  believes  that  since  almost 
two-thirds  of the GATT  member  countries  are LDCs, 
it is essential  that  their  interests  be given  particular 
consideration  by the  industrialized  countries  in the 
GATT  trade  negotiations. 
6. Since  the  decision  to open  another  round  of 
negotiations  in the framework  of GATT,  the world 
has seen  a number  of developments  which  have 
brought  new  aspects  into  focus.  The  oil crisis  has 
divided  the  developing  countries  into  countries 
possessing  sources  of energy,  countries  possessing 
other  essential  products  (scarce  raw  materials)  which 
they can  exchange  for energy  or use  to buy  energy, 
and countries  possessing  neither  one  nor  the  other. 
The same  applies  to the  industrialized  countries.  In 
order  to come  to terms  with  this  new  situation  in the 
coming  negotiations,  allowance  must  be made  for the 
No C 62/14 Official  Journal  of the European  Communities 15. 3. 75 
need  to ensure  that  the less-developed  countries  can 
obtain  the  energy  they  require  on reasonable  terms, 
and that  industrialized  countries  are  guaranteed 
supplies  in exchange  for a further  opening  up of their 
markets  to the  products  of the  less^developed 
countries. 
7. It  is in the  developing  countries'  interest  to 
export  in order  to provide  foreign  exchange  to pay 
for needed  imports  of capital,  intermediate  and 
consumer  goods,  and  also  to help  to create  a rational 
and competitive  structure  of  industrial  and 
agricultural  production  in their  own  economy. 
However,  the  capacity  for  trade  and  the  need  for 
trade  vary  greatly  among  LDCs,  and  must  take 
account  of the  size  of the  domestic  economy,  its 
degree  of diversification,  its sophistication,  and  the 
extent  to which  internal  and  local  regional  output 
can satisfy  demand.  In addition,  existing  political  and 
economic  connections  with  developed  or  other 
developing  countries  may  define  or limit  the structure 
and scope  for expansion  of any  one  country's  trade. 
For these  reasons,  it is hard  to maintain  that  one 
common  interest  exists  among  all  developing 
countries. 10. In  view  of the  abovementioned  facts,  the 
Committee  has  concentrated  on  a few  specific 
problems: 
— primary  (agricultural  and  mineral)  products, 
— semi-processed  and  processed  agricultural 
products, 
— manufactures, 
— MFN  tariffs  and  the  generalized  system  of 
preferences, 
— the  safeguard  clause  and  the developing  countries. 
11. The  Committee  recognizes  the  importance  of 
the problem  of the non-tariff  barriers  to trade,  which 
have  become  increasingly  common  in recent  years 
and which  create  serious  difficulties  for  the 
developing  countries.  But  in view  of the  complexity 
of this  question,  the Committee  has decided  not to go 
into it in the present  Opinion.  It nevertheless  reserves 
the right  to take  the matter  up at a later  date. 
8. As  far as agricultural  products  are  concerned, 
the Committee  points  out  that  it has  always 
emphasized  the  need  to  develop  and  diversify 
production  capacity  in developing  countries  so that 
they can  increasingly  satisfy  their  own  food  needs 
(see in particular  its Opinion  on the food  crisis  and 
the Community's  responsibility  towards  developing 
countries,  and  on the memorandum  on the food  aid 
policy  of the  European  Community  (1)).  However, 
this does  not  rule  out  the  fact  that  in the  case  of 
certain  countries  or certain  products  the  exporting 
of agricultural  products  may  constitute  a source  of 
income. 
9. Most  developing  countries  have  a small  number 
of major  'traditional'  exports  (usually  primary 
products);  and  a range  of minor  exports  of processed 
or manufactured  goods  which  they  are attempting  to 
develop.  Although,  obviously,  it is important  to 
review  the range  and  growth  of major  exports  from 
LDCs,  which  in the  case  of certain  products  are 
already  considerable,  to disregard  the  potential  for 
developing  new  exports  which  exists  in particular 
countries  would  give  a distorted  picture  both  of the 
trade  opportunities  and  of the  trade  barriers  which 
confront  developing  countries. 
H OJ No C 125,  16. 10. 1974,  p. 23. 12. Primary  (agricultural  and  mineral)  products 
12.1.  For  developing  countries  as  a group, 
agricultural  and  mineral  products  (other  than 
petroleum)  account  for some  65 % of total  exports  to 
developed  countries.  Food  and  agricultural  raw 
materials  alone  account  for some  40 % of the total. 
Broadly  speaking,  it is still  true  to  say  that 
LDCs,  whose  main  exports  are agricultural  products, 
are among  those  with  the  lowest  levels  and  growth 
rates  of per capita  income. 
12.2.  The  problems  the  LDCs  face  are  largely 
those  of widely-fluctuating  world  prices  for primary 
products,  which  form  a very  sizeable  part  of their 
exports;  secondly,  as development  takes  place  in 
these  poorer  countries,  it is these  products  which  are 
first expanded  and  which  need  to have  export 
markets  found  for them. 
12.3.  Another  major  problem  faced  by producers 
of agricultural  primary  products  (whether  edible, 
inedible,  competing  or non-competing)  is still  the 
generally  low  income  and  low  price  elasticities  of 
demand  for such  products,  particularly  in developed 
countries.  A study  by the  World  Bank  — whose 
conclusions  are  broadly  supported  by  FAO  and 
UNCTAD  research  — has  suggested  that  complete 
15.3.75 Official  Journal  of the  European  Communities No C 62/15 
trade  liberalization  in these  products  would  result  in 
an increase  of only  some  $ 4 billion  in exports  from 
LDCs  by 1980  — a gain  which  would  still  represent 
around  15  % of  LDC  exports  of  agricultural 
commodities  in that  year.  In so far  as LDCs  gain, 
rather  than  other  developed  countries  trading  in 
competing  or similar  goods,  it is likely  that  the 
poorer  LDCs  would  be the  main  gainers  from  such 
liberalization,  provided  that  these  LDCs  are  able  to 
bring  about  the efficient  marketing  of their  products. 
12.4.  There  are,  however,  considerable  economic, 
social,  regional  and,  in the  final  analysis,  political 
problems  involved  in liberalization  of agricultural 
trade  by  developed  countries.  Apart  from  the 
traditional  tropical  goods,  many  such  products  face 
both  tariff  and  non-tariff  barriers  in most  Western 
economies. 
12.5.  Even  without  trade  liberalization  for 
agricultural  products,  some  developing  countries  may 
be interested  in  the  promotion  of  worldwide 
commodity  stabilization  schemes.  One  essential 
condition  of such  schemes,  however,  is that  they 
should  allow  reasonable  access  for  exports  from  all 
participating  countries,  as well  as the maintenance  of 
stable  price  levels. 
12.6.  It  is therefore  necessary  to bring  out  the  full 
importance  of  the  direction  chosen  by  the 
Community,  namely  the  conclusion  of  world 
agreements  for  the  most  important  primary 
agricultural  products.  It must  be realized  that  in this 
field  the  interests  of the  developing  countries  and 
those  of agricultural  producers  in the  Community 
and the other  developed  countries  are identical. 
12.7.  The  need  for  world  agreements  covering 
staple  agricultural  products  is all the  more  urgent  in 
view  of the  fact-highlighted  by  the  world  food 
conference  — that  a large  part  of the  world's 
population  is underfed.  The  negotiation  of world 
agreements  in GATT  is a valuable  opportunity  to 
tackle  the  complex  question  of food  aid,  and  such 
agreements  could  even  be effective  instruments  for 
providing  solutions. 
12.8.  More  particularly,  these  agreements  must 
include  the  provisions  necessary  to establish  reserve 
stocks  of the  staple  agricultural  products  and.  they 
should  lay down  the  rules  for managing  these  stocks. 
The nations  of the  world  will  show  that  they  are 
totally  incapable  of responding  to the  most  basic needs  of humanity  if they  disregard  the importance  of 
such  action,  which  has  been  emphasized  for  many 
years  by  certain  governments,  the  Economic  and 
Social  Committee,  the  FAO  and  all  the  other 
organizations  concerned. 
12.9.  The  Committee  further  believes  that  the 
main  agricultural  commodities  for  which  global 
agreements  should  be  maintained,  or  new  ones 
negotiated,  are  coffee,  tea,  cocoa,  oilseeds  and  sugar. 
Such  a worldwide  approach  should  lead  to the 
optimum  liberalization  of trade  barriers  (tariff  and 
non-tariff)  and  to the  negotiation  of worldwide 
commodity  agreements. 
13. Semi-processed  and  processed  agricultural 
products 
13.1.  One  problem  which  may  arise  in this  area  of 
negotiation  is the  possibility  of a conflict  between 
stabilization  of prices,  or of export  revenues,  for 
basic  commodities,  and  liberalization  of  trading 
access  for  processed  or semi-processed  goods  made 
from  these  commodities.  Agricultural  processing  is 
often  the  first  stage  in the  'industrialization'  of a 
developing  country.  This  increases  the absolute  value 
of exports.  The  increased  employment  resulting  from 
the processing  of a country's  own  commodities 
would  probably  first  benefit  the  poorer  sections  of 
the exporting  country's  population. 
13.2.  At  present,  all  developed  countries'  tariff 
structures  constitute  a barrier  to imports  of processed 
agricultural  goods.  The  Kennedy  Round  did  very 
little  to alleviate  this  problem,  and  the  generalized 
preference  scheme  has  made  no great  impact  either. 
Unlike  the EEC,  certain  industrialized  countries  have 
not introduced  generalized  preferences,  and  they  do 
not cover  'sensitive'  products  anyway.  See  Opinion  of 
the Economic  and  Social  Committee  (*) on  the 
proposals  and  communications  concerning  the  grant 
of generalized  tariff  preferences  for  1975  on 
semi-manufactured  products  falling  within  Chapters 
1 to  24  of the  Common  Customs  Tariff  and 
manufactured  and  semi-manufactured  products 
falling  within  Chapters  25  to 99,  originating  in 
developing  countries.  But  developing  countries 
themselves  (some  of whom  have  gone  to the extent  of 
banning  exports  of raw  products  to encourage  trade 
in processed  goods)  see  the advantages  of developing 
(») OJ No C 16, 23. 1. 1975,  p. 16. 
No C 62/16 Official  Journal  of the  European  Communities 15.3.  75 
processing  industries;  and  investors  from  developed 
countries  have  become  increasingly  interested  in the 
growth  of these  industries  in LDCs. 
13.3.  The  reduction  of trade  barriers  to processed 
products  could  be just  as beneficial  to developing 
countries  as commodity  stabilization  schemes,  but 
conflict  between  the  development  of processing  on 
the one  hand,  and  commodity  stabilization  schemes 
on the other,  might  arise  in two  ways: 
— commodity  agreements  which  commit  suppliers  to 
providing  given  quantities  of goods  for  export 
could  starve  local  processing  industries  of 
supplies.  This  could,  however,  be avoided  if such 
agreements  allow  a priority  to be  given  to 
supplies  for local  industries; 
— there  could  be a trade-off  in the  negotiations 
between  'concessions'  in the form  of commodity 
agreements,  and  reductions  in tariffs  or NTB's  on 
processed  goods. 14. Manufactures 
14.1.  60  % of LDC  exports  of manufactures, 
excluding  processed  agricultural  goods,  go  to 
developed  countries  and  the share  of manufactures  in 
LDC's  exports  to the  West  is growing.  Exports  of 
engineering  goods,  light  manufactures  (such  as 
electronics),  iron  and  steel  and  worked  non-ferrous 
metals  are the most  rapidly-growing  groups. 
14.2.  The  average  rise  in  LDC's  export  of 
manufactures  has,  according  to UNCTAD,  been 
about  15 % per  year  since  1960,  but  exports  of 
manufactures  are still  highly  concentrated  in a few 
major  countries,  particularly  if chemicals,  food 
products,  beverages  and  tobacco  and  timber  products 
are excluded.  Most  of the  important  LDCs  which 
export  manufactures  (with  the notable  exceptions  of 
India  and  Pakistan)  are among  the richer  developing 
countries.  However,  export  of  manufactures  is 
gradually  spreading  from  these  semi-developed  or 
'industralizing'  LDCs  to others. 
13.4.  Some  developing  countries  have  developed, 
or have  the potential  to develop,  an export  capacity 
in agricultural  products  which  compete  directly  with 
the produce  of developed  countries.  The  main 
products  in this  category  are sugar,  rice,  meat,  milk 
products  and  tobacco.  Most  of these  are  goods  in 
which  existing  associates  of the Community  and  the 
associable  Commonwealth  countries  have  a direct 
interest. 14.3.  Developed  countries'  policies  towards 
imports  of  manufactures  from  LDCs  show  a 
conflicting  pattern.  Ostensibly,  such  imports  are 
•encouraged  (except  in the  US)  through  duty-free 
access  under  the  generalized  preference  scheme. 
There  is some  evidence  that  the  scheme  does 
encourage  new  exports  of manufactures,  but little  is 
known  about  its effects  and  in any  case  they  vary 
considerably  from  country  to country  and  from 
product  to product. 
13.5.  It  is accepted  that  the  Council  of Ministers 
has ruled  out  the  possibility  of  international 
negotiation  in  GATT  on  the  principles  and 
mechanisms  of the CAP,  but,  as of now,  national  and 
Community  agricultural  policies  must  take  account 
of the  changes  of outlook  which  are  a logical 
outcome  of the  present  world  situation  regarding 
supply  and  effective  and  potential  demand  for 
agricultural  and  food  products  and  of estimated 
trends.  It follows  that  the CAP  — in as far as is in 
keeping  with  the social  and  production  requirements 
of Community  agriculture  and  the  necessary 
minimum  reliability  of food  supplies  — must  there-
fore be aligned  more  and  more  on the need  to create 
better  conditions  on the  world  market,  expand  the 
developing  countries'  own  agricultural  production 
and, in the meantime,  aid those  countries  which  need 
help.  Any  radical  change  in the CAP  could  only  make 
it more  difficult  to attain  these  objectives. 14.4.  Another  aspect  of the  difficulties  LDCs 
experience  in exporting  are  rules  of origin.  The 
Committee  is of the opinion  that  these  rules  have  up 
to now  been  implemented  too  rigidly.  It would  be 
helpful,  in the development  of new  industries  in the 
LDCs,  were  the  rules  of origin  to be made  more 
flexible.  One  method  would  be the grouping  together 
of certain  geographical  units  into  the same  'place  of 
origin'.  Such  a system  would  require  supervisory 
arrangements  to  preclude,  among  other  things, 
deflections  of trade. 
14.5.  International  multifibre  textile  arrangement 
14.5.1.  This  is the first  multilateral  structure  which 
has been  worked  out  under  the  new  GATT  round 
15.3.75 Official  Journal  of the  European  Communities No C 62/17 
with  a view  to organizing  trade  in a group  of 
products.  It may  provide  a precedent  for  the 
treatment  of other  sensitive  products,  but  before 
taking  a stand  on this  matter  the Committee  wants  to 
receive  the  necessary  information  from  the 
Commission  and  examine  all the  aspects  of such  an 
agreement. 
15. Most-favoured-nation  tariffs,  and  the  generalized 
system  of preferences 
15.1.  The  declared  aim  of  the  EEC  in  the 
negotiations  is to seek  a significant  lowering  of 
customs  tariffs  leading  to a harmonization  of tariffs. 
The Community  has  also  undertaken  to improve  its 
own generalized  system  of preferences  in anticipation 
of other  developed  countries'  introduction  of GSP 
schemes  and  some  improvements  have  already  been 
made  for  1974,  following  Community  enlargement. 
Recently  a number  of further  improvements  have 
been  made  to the Community's  generalized  system  of 
preferences. 
15.2.  The  Community's  GSP  —  as  far  as 
manufactures  are concerned  — discriminates  actively 
in favour  of LDCs  against  non-European  developed 
countries.  The  enlargement  of the  EEC,  however,  has 
already  brought  about,  and  will  continue  to create  a 
marked  expansion  of  the  number  of  developed 
countries  whose  manufactured  exports  can  enter  the 
Community  duty-free;  first,  by enlarging  the  EEC's 
domestic  market  to  nine  countries,  and  second, 
through  the  1972  treaties  with  the  EFTA  countries, 
aimed  at industrial  free  trade  by 1977.  The  latter 
treaties  will  allow,  in particular,  products  from 
Portugal  (a main  competitor  of many  LDCs)  to be 
freely  traded.  When  the  Community's  network  of 
bilateral  association  and  trade  agreements  is also 
considered,  it becomes  clear  that  the  discriminatory 
advantage  given  to LDCs  who  gain  only  GSP  terms 
for their  manufactures  is small. 
15.3.  The  Committee  therefore  considers  that  in 
the GATT  negotiations  exceptions  to the  general 
tariff-reduction  rules  must  be allowed  in favour  of 
the LDCs.  These  exceptions  could  relate  to the size  of 
the cuts  of the  reduction  period,  or could  even  take 
the form  of refraining  from  tariff  reduction  in the 
case of products  covered  by the  GSP  which  are  of 
special  importance  to the LDCs. 
16. The  safeguard  clause  and  the  developing 
countries 
16.1.  Low-income  countries  which  develop 
competitive  lines  of  manufactured  exports  are particularly  susceptible  to accusations  of market 
disruption. 
16.2.  The  Committee  examined  Article  19 of the 
GATT  rules.  It notes  that  the  Article  provides  the 
necessary  measures  to limit  imports  in cases  of 
emergency,  but  is too  broad  in scope.  Restraints 
cannot  be  applied  to  'disruptive'  imports  from 
individual  countries,  but  must  be imposed  across  the 
board:  all exporting  countries  must  suffer. 
16.3.  Use  of Article  19 by an importer  may  create 
an unnecessary  restrictive  trading  atmosphere  and 
may lead  to retaliation  by other  countries  which  feel 
they have  been  unfairly  treated.  For  exporting 
countries,  Article  19 has  the major  disadvantages  that 
'emergency'  action  is not  linked  to any  time  scale  for 
a return  to free  trade:  thus  protection  can  become 
permanent.  In particular,  there  is no commitment  by 
importing  governments  to pursuing  any  programme 
designed  to  phase  out  genuinely  uncompetitive 
industries  or to improve  their  competitive  position 
through  modernization,  diversification  and  so on. 
16.4.  It  is believed  that  developed  countries  have  a 
genuine  interest  in the  international  regulation  of 
emergency  import  restrictions,  in view  of the fact  that 
one type  of protectionism  often  guarantees  another. 
But they  look  for sanctions. 
16.5.  Since  developing  countries  also  have  a direct 
interest  in seeing  that  their  growing  exports  are  not 
subject  to multilateral  restrictions  in the  importing 
countries  because  of alleged  'market  disruption',  the 
Committee  proposes  that  negotiations  in GATT 
should  seek  to define  what  is meant  by  'market 
disruption'. 
16.6.  Four  principles  are  proposed  as a basis  for 
negotiating  a multilateral  safeguard  clause: 
— that  emergency  protection  should  have  a finite 
time  limit,  and  be progressively  cut back  over  the 
period.  The  time  limit  could  vary  from  sector  to 
sector; 
— that  emergency  protection  must  be accompanied 
by a visible  effort  by  the  importing-country 
government,  and  the  industry,  to  adjust, 
modernize  or diversify  into  competitive  lines  of 
production; 
No C 62/18 Official  Journal  of the  European  Communities 15.3.75 
— that  steps  should  also  be taken  in the  social  field 
in order  to safeguard  workers'  incomes  and  jobs 
and promote  retraining.  In the  case  of the  EEC, 
the Committee  stresses  the  part  which  the  Social 
Fund  should  play  in this  context; Done  at Brussels,  30 January  1975. protection  measures  affecting  only  individual 
world  trade  partners  are  introduced. 
— that  a 'global'  authority  should  be set  up  under 
the GATT  to act  as 'referee'  over  such  a scheme 
and be  called  in  especially  when  emergency The Chairman 
of the Economic  and  Social  Committee 
Henri  CANONGE 
ANNEX 
to the  Opinion  of the  Economic  and  Social  Committee 
The following  amendment  was  rejected  during  the  discussion. 
Replace  item  14.5.1  by the  text  agreed  to unanimously  by the  Study  Group: 
'14.5.1.  This  is the  first  multilateral  structure  which  has  been  worked  out  under  the  new 
GATT  round  with  a view  to safeguarding  trade  in a group  of products.  It may 
provide  a precedent  for  the  treatment  of other  sensitive  products. 
14.5.2.  Under  this  arrangement,  which  covers  substantially  all  classes  of textiles  and 
clothing,  importing  countries  may  unilaterally  limit  imports  of "disruptive"  products 
from  particular  sources  to the  previous  year's  level  in the  first  year  of restrictions; 
thereafter  imports  must  be allowed  to rise  by a minimum  rate  of 6 % annually. 
14.5.3.  Importing  countries  may  also  conclude  voluntary  bilateral  agreements  with  exporting 
countries  to "eliminate  real  risks  of market  disruption"  while  ensuring  "the  expansion 
and orderly  development  of trade  in textiles  and  the  equitable  treatment  of partici-
pating  countries". 
14.5.4.  The  Committee  considers  that  such  bilateral  agreements  should,  in principle,  be 
more  liberal  than  unilateral  restrictions.  Developing  countries'  exports  should  also, 
in principle,  be more  liberally  treated  than  those  from  other  countries,  and  exports 
from  countries  whose  total  exports  are  small  should  not  be restricted. 
14.5.5.  The  Committee  fears,  however,  that  textile-exporting  developing  countries  are  not 
likely  to be satisfied  by the  arrangement,  as the  growth-rate  provisions  laid  down 
are low  compared  to the  actual  growth  of developed  countries'  textile  imports  from 
14.5.6.  Nevertheless,  the  arrangement  is probably  still  a better  deal  for  LDCs  interested 
in exporting  textiles  than  no international  regulation,  in the  present  protectionist 
climate.' 
The Study  Group,  which  for  a whole  year  has  been  dealing  with  the  developing  countries' 
relations  with  the  industrial  world  in connection  with  the  GATT  negotiations,  came  to the 
conclusion  that  it would  be desirable  in this  Opinion  to comment  on the  multifibre  arrangement LDCs. 
Reason 
15.3.75 Official  Journal  of the  European  Communities No C 62/19 
and the  bilateral  arrangements  between  the  Community  and  a number  of East  Asian  developing 
countries  which  derive  from  it. If the  Economic  and  Social  Committee  does  not  comment  on 
this matter  now,  then  it will  be too  late,  as it is in these  next  few  months  that  the  Council  of 
Ministers  will  be discussing  the  mutual  allocation  of quotas  among  the  Member  States  and  the 
Commission's  general  negotiating  brief  for  the  start  of the  abovementioned  negotiations. 
Result  of the vote 
for: 19 
against:  35 
abstentions:  16. 
Opinion  on the 
— proposal  for a Directive  completing  the provisions  under  Title  V of the  Directive  on 
mountain  and  hill  farming  and  farming  in certain  less-favoured  areas  which  was 
adopted  by the Council  on 21 January  1974 
— proposals  for  Directives  concerning  the  Community  list  of less-favoured  farming 
areas  within  the meaning  of the Directive  on mountain  and  hill  farming  and  farming 
in certain  less-favoured  areas,  adopted  by the Council  on 21 January  1974 
The text  referred  to "the  Committee  has  not  been  published  in the Official  Journal  of the 
European  Communities. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 7 January  1975,  the  Council  referred  the  abovementioned  proposals  to the 
Economic  and  Social  Committee  under  Article  198  of the  Treaty  establishing  the 
European  Economic  Community. 
B. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  drew  up its Opinion  at its 127th  plenary  session, 
held  in Brussels  on 29 and  30 January  1975. 
The Opinion  is published  below: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to the  referral  on 7 January  1975  by 
the Council  of the European  Communities; 
Having  regard  to Articles  43 and  198  of the  Treaty 
establishing  the European  Economic  Community; Having  regard  to the  decision  taken  by its Bureau 
instructing  the Section  for Agriculture  to draw  up an 
Opinion  on the  matter  under  the  urgency  procedure 
(Articles  46 and  47 of the Rules  of Procedure); 
Having  regard  to the  oral  report  made  by  the 
Rapporteur,  Mr Berns;