28. 9. 74 Official  Journal  of the European  Communities No C 115/1 
II 
(Preparatory  Acts) 
ECONOMIC  AND  SOCIAL  COMMITTEE 
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 
The text  on which  the  Opinion  is based  has  not  been  published  in the  Official  Journal 
of the  European  Communities. 
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  the  Bureau,  decided  to deliver  an opinion  on the  abovementioned 
subject  on its own  initiative. 
B. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
1 he Economic  and  Social  Committee  prepared  its Opinion  on the  above  matter  at its 
111th  plenary  session,  held  in Brussels  on 23 and  24 May  1973. 
The full  text  of the  Opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE: 
Having  regard  to the  decision  of its  Bureau  on 
27 March  1973  to entrust  the  Section  for  External 
Relations  with  the  preparation  of an opinion  on the 
coming  multilateral  negotiations  in GATT; 
Having  regard  to the  agreement  given  by its Mem-
bers at the  plenary  session  of 28 and  29 March  1973, 
as regards  the  preparation  of an  Opinion  on  the 
matter; 
Having  regard  to the  statement  made  at the  meeting 
of the  Section  on 13 April  1973,  by Mr.  Wellenstein, 
representative  of the  Commission,  on the  broad  lines 
of the  'overall  approach'  adopted  by the  Commission in its memorandum  to the  Council  on the  develop-
ment  of an overall  approach  to trade  in view  of the 
coming  multilateral  negotiations  in GATT; 
Having  regard  to  the  Opinion  delivered  by  the 
Section  for  External  Relations  at  its  fourth 
meeting,  held  on 21 May  1973; 
Having  regard  to the  report  submitted  to the  Section 
by Mr  de Precigout,  the  Rapporteur,  and  to the  pro-
ceedings  of the  Section  at its meetings  of 13 April 
and 2 and  21 May  1973; 
Having  regard  to its deliberations  at its 111th  plenary 
session,  held  on  23  and  24  May  1973,  sitting  of 
24 May  1973; 
No C 115/2 Official  Journal  of the European  Communities 28. 9. 74 
Whereas  the  Heads  of State  or of Government  of 
the Member  States  or of the  acceding  countries  to 
the European  Communities  decided  at the  Summit 
Conference  held  in Paris  from  19 to 21 October  1972 
that the  position  of the  Community  in the  GATT 
multilateral  negotiations  should  be decided  not  later 
than  1 July  1973; 
Whereas  in a memorandum  to the  Council  dated 
4 April  1973  the  Commission  set  out  the  'overall 
approach'  which  it is proposing; 
Whereas  the  point  of view  of the  Economic  and 
Social  Committee  should  be submitted  to the  Com-
mission  and  to the  Council  before  the  latter  adopts 
its Decision,  and  whereas  it consequently  seems 
necessary  in the  view  of the  Section  that  it should 
give its  first  reactions  on  this  'overall  approach', 
while  reserving  the  right  to carry  out  at a later  date 
a detailed  examination  of the  various  aspects  of the 
negotiations; 
Has adopted,  by 103  votes  in favour  and 9 abstentions, 
THE  FOLLOWING  OPINION: 
The large  industrialized  nations  recognized  in early 
1972  that  it was  necessary  to undertake  a complete 
re-examination  of  the  whole  of  international 
economic  relations  with  a view  to  negotiating 
improvements  to meet  the  structural  changes  that 
have  taken  place  over  the last  few  years. 
The declaration  covers  raw  materials  of agricultural 
products  and  industrial  products. 
It announces  that  special  attention  will  be given  to 
the problems  of the developing  countries. 
An important  political  impulse  was  thus  given  by 
the joint  declarations  of February  and  March  1972, 
in which  the Community,  Japan  and  the United  States, 
who  together  account  for  more  than  60%  of world 
trade,  agreed  to actively  prepare  new  multilateral 
negotiations  to begin  in 1973,  and  in which  they 
invited  all the  contracting  parties  to GATT  to join 
in this  undertaking. 
At the  Conference  of Heads  of State  or of Govern-
ment  of the  Member  States  or of the  acceding 
countries  to the  European  Communities,  held  in 
Paris  from  19 to 21 October  1972,  the  Community 
declared  that  in  order  to  ensure  harmonious 
development  of world  trade  it was  determined: — 'to  contribute,  while  respecting  what  has  been 
achieved  by  the  Community,  to a progressive 
liberalization  of international  trade  by measures 
based  on reciprocity  and  relating  to both  tariffs 
and non-tariff  barriers; 
— to maintain  a constructive  dialogue  with  the 
United  States,  Japan,  Canada  and  its  other 
industrialized  trade  partners  in a forthcoming 
spirit,  using  the most  appropriate  methods'. 
At the  same  time  it confirmed  its desire  for  the  full 
participation  of  the  developing  countries  in  the 
preparation  and  progress  of these  negotiations,  which 
should  take  due  account  of the  interests  of those 
countries. 
I. General  comments 
1. The  trade  negotiations  due  to open  in Tokyo  in 
October  1973  are  of exceptional  importance  to the 
European  Community,  the  world's  greatest  importer 
and exporter,  by reason  of their  subject  matter,  their 
scope  and  the  almost  world-wide  nature  of their 
effects. 
In his  message  to Congress  on 10 April  1973  con-
cerning  the  proposal  for  a Trade  Reform  Act,  the 
President  of the  United  States  committed  himself  to 
regular  consultation  and  rigorous  cooperation  with 
it throughout  the negotiations. 
The Economic  and  Social  Committee  trusts  that, 
in these  negotiations  which  are  so important  for 
Europe,  there  will  be similar  cooperation  with  the 
European  Parliament  and  that,  contrary  to what 
happened  in previous  negotiations,  the  Economic 
and Social  Committee  will  be requested  to give  its 
opinion  to the  Community  institutions.  It will  take 
the necessary  steps  to be able  to do so. 
2. Aware  of the  economic  development  and  social 
progress  which  the  world  can  expect  from  progressive 
trade  liberalization,  the  Committee  believes  it to be 
essential  not  to forget  the  purpose  of the  multilateral 
negotiations  in GATT  and  the  spirit  in which  they 
were  decided,  namely,  the  promotion  of increased 
stability  and  a faster  rise  in the  standard  of living. 
it is therefore  appropriate  to recall,  as the Commission 
does,  that  in December  1971  the Community  declared 
that it was  ready  to take  part  in overall  negotiations 
on the  basis  of mutual  advantage  and  reciprocity 
28. 9. 74 Official  Journal  of the European  Communities No C 115/3 
with  a view  to pursuing  further  the trade  liberaliz-
ation  policy  to which  it had  made  an important 
contribution  in its original  form. 
The Committee  is quite  aware  that  the President  of 
the United  States  and  several  American  spokesmen 
have  recently  established  a link  between  trade,  mone-
tary and  defence  problems  and  the  fact  that  a vast 
scheme  for United  States/Europe  relations  has  been 
announced. 
The Committee  attaches  due  importance  to these 
major  issues  which  must  not  be dealt  with  subsidia-
rily in trade  negotiations  aimed  at facilitating  the 
growth  of trade. 
In this  Opinion,  the Economic  and  Social  Committee 
intends  to deal  exclusively  with  the trade  negotiations 
due to be held  in GATT  which  form  the subject  of 
the Commission's  memorandum  to the Council. 
3. In its memorandum  to the  Council,  the  Com-
mission  emphasizes  that  'the  large-scale  international 
action  to which  we  aspire  on  trade  would  be 
seriously  jeopardized  if ways  were  not  found  to 
shield  the world  economy  from  the monetary  shocks 
and imbalances  which  have  occurred  in the last  few 
months'. 
The Committee  entirely  agrees  that  unless  a stable 
monetary  system  is set up, the effects  of the negotia-
tions  cannot  be gauged  and  the  results  achieved 
would  be jeopardized.  The  parity  changes  since  the 
Kennedy  Round  have  profoundly  changed  the results 
achieved  during  those  talks. 
4. The  Community  has  every  reason  to adopt  a 
constructive  attitude  at the talks.  It must  determine 
its own  objectives  as clearly  as anyone,  with  an eye 
to lowering  the main  barriers  to the growth  of world 
trade,  in the  first  place  those  which  affect  its own 
exports,  but also  taking  into  account  the social  pre-
occupation  to be satisfied. 
Since  it was  decided  to open  negotiations,  the 
demands  of some  of the  Community's  trading 
partners  have  been  widely  aired  and  defended  before 
world  opinion.  The  same  must  happen  in respect 
of the European  viewpoints.  The  Community's  nego-
tiators  must  also  be backed  by public  opinion.  The Commission's  memorandum  to the  Council  on its 
overall  approach  to these  negotiations  cannot  fulfil 
this role,  of course. 
5. In particular,  it seems  necessary  to state  that 
while  the  United  States'  unfavourable  balance  of 
payments  is a matter  of concern  to all and  must 
therefore  be remedied,  it cannot  reasonably  be 
imagined  that  the GATT  negotiations  will  be the main 
means  of achieving  this. 
In 1971  the  United  States'  balance  of payments 
showed  a deficit  of around  30 thousand  million 
dollars  and  in 1972  a deficit  of 14 thousand  million 
dollars  on a liquidity  basis  and  10-3  thousand  million 
dollars  on the basis  of official  statements.  Given  its 
size and  nature,  it seems  that  this  deficit  is not likely 
to be substantially  reduced  by the steps  to be nego-
tiated  by the EEC. 
The United  States'  trade  balance  with  the EEC  in 1972 
accounts  for about  600  million  dollars  of the aggre-
gate deficit.  This  deficit  is, however,  of very  recent 
origin  — up till 1970  the United  States  ran a surplus 
on its trade  with  the EEC,  and  indeed  it still  has  a 
surplus  on its trade  with  all Member  States,  except 
the Federal  Republic  of Germany.  In the same  year, 
the United  States'  trade  with  Canada,  which  receives 
special  treatment  from  the United  States,  showed  a 
deficit  of around  25 thousand  million  dollars. 
In its trading  with  Japan,  the United  States'  deficit  has 
passed  four  thousand  million  dollars. 
Finally,  according  to the American  statistics,  Ameri-
can exports  to the  EEC  have  increased  faster  than 
those  to the  rest  of the  world.  Between  1960  and 
1971  total  exports  rose  by 115  %, exports  to the 
EFTA  countries  by 81 % and  exports  to the  EEC 
by 143  %• 
The European  Community's  trade  balance  with 
Japan  shows  a large  deficit  which  has been  increasing 
steadily  for several  years. 
Similarly,  the Community  is running  a deficit  on its 
trade  with  Canada. 
6. It is imperative  for  all the  negotiators  to have 
powers  which  are  as extensive  and  clear-cut  as 
possible. 
As the Community's  representative  at the negotations, 
the Commission  should  be given  a precise  mandate 
No C 115/4 Official  Journal  of the European  Communities 28. 9. 74 
and the means  necessary  to conduct  negotiations  not 
only on tariffs  but also  on non-tariff  barriers. 
(a) In the light  of the Kennedy  Round,  this  mandate 
should  of course  take  into  account  the institutional 
differences  between  the EEC  and  its trading  part-
ners and  lay down  that  any  unilateral  application 
of Community  concessions  would  be ruled  out 
. unless  the  agreed  quid  pro  quos  were  put  into 
effect  completely. 
In particular,  careful  note  should  be made  of the 
fact that  in his message  of 10 April  1973,  the 
President  of the United  States  pledged  himself  to 
submit  agreements  on non-tariff  barriers  to Con-
gress  for  approval,  either  House  being  able  to 
veto their  implementation. 
(b) In order  that  the  EEC  is not  placed  in a weak 
position  a suitable  positional  balance  must  be 
established  from  the outset.  It is therefore  to be 
hoped  that  the Community  makes  it known  that  it 
reserves  the  right  to use  any  measures  of an 
equivalent  effect  to any  adopted  by the  other 
parties  to the negotiations. 
Given  the difference  between  the decision-making 
procedures  of one  individual  country  and  of a 
Community  comprising  several  countries,  it seems 
necessary  that  the means  to react  should  be given in advance  to the Commission  in order  to ensure 
that such  reservation  of the  right  to retaliate  is 
credible. 
7. In order  to give  greater  value  to the balance  and 
reciprocity  of the  concessions,  it is important  that 
the negotations  not  be limited  to relations  between 
two or three  trading  partners.  They  should  be really 
multilateral  negotations  encompassing  concessions  of 
a large  number  of countries,  both  for tariff  and  non-
tariff  barriers. 
II. Industrial  customs  tariffs 
As envisaged  by the  Council  in its Resolution  of 
December  1971,  the negotiations  will  have  to be based 
on genuine  reciprocity. 
This  would  not  be the  case  if the  envisaged  re-
ductions  in customs  duty  still  left  significant  tariff 
disparities  resulting  in the negotiation  allowing  trade 
in some  products  to develop  in one  direction  only. 
It should  be remembered  that  the  tariff  protection 
level  in the  United  States,  Canada  and  Japan  is on 
the whole  higher  than  it is in the EEC. 
Firstly,  the average  tariff  is lower  in the EEC  than  in 
those  countries  as the following  figures  show: 
EEC USA Canada Japan 
Arithmetical  average  duty 6-9 11-1 9-3 10-1 
Average  weighted  by  imports  from  the  13 
industrialized  countries 6-4 7-3 6-8 10-1 
Secondly,  the  EEC  tariff  is much  more  consistent 
than  those  of its other  competitors.  Thus,  for  the 
EEC  less  than  7 % of the  tariff  lines  have  a rate 
higher  than  12 % whereas  in the  USA  and  Japan 
almost  a third  of the tariff  lines  are above  this  rate. 
With  regard  to industrial  products,  imports  subject 
to more  than  15 % duty  represent  3-2  % of total 
imports  for the EEC  and  4-2 % for Japan,  as against 
10 % for the USA  and  16-3  % for Canada. 
Certain  studies  have  shown  that  the  disparities 
between  effective  protection  rates  are  even  more marked  if tariffs  are calculated  on the  basis  of the 
value  added. 
Without  waiting  till it has  examined  all the  tech-
niques  mentioned  and  can  assess  the  scope  of the 
negotiable  tariff  reductions,  let alone  the  eventual 
elimination  in time  of customs  duties,  the Committee 
therefore  approves  the  Commission's  intention  and 
stresses  the  necessity  of aiming,  within  the  overall 
objective  of lowering  tariffs,  at levelling  out  differ-
ences  caused  by troughs  and  peaks.  More  generally, 
it approves  the set of proposals  in Chapter  II of the 
Commission's  Memorandum  to the Council. 
28. 9. 74 Official  Journal  of the European  Communities No C 115/5 
III. Non-tariff  barriers 
The Committee  points  out  that  the  effect  on trade 
of non-tariff  barriers  will  make  itself  increasingly  felt 
as customs  duties  are  reduced.  Non-tariff  barriers 
will therefore  have  to be a key  issue  at the  nego-
tiations,  where  they  should  be closely  linked  with 
tariff  barriers.  This  is particularly  true  of non-tariff 
barriers,  such  as the 'American  Selling  Price'  system, 
whose  effect  is comparable  to that  of customs 
tariffs. 
(a) It seems  reasonable,  as the Commission  intends, 
to make  a distinction  between  non-tariff  barriers 
which  have  a general  impact  and  those  which 
only  concern  certain  sectors  or products. 
There  is a strong  case  for dismantling  non-tariff 
barriers  sector  by sector,  so as to do justice  to 
the principles  of reciprocity  and  balance. 
In addition,  for  certain  non-tariff  trade  barriers 
having  a horizontal  effect  (such  as customs 
valuation  methods),  general  agreements  should  be 
made,  whose  importance  as regards  reciprocity 
and balance  will  have  to be gauged  as part  of an 
overall  appraisal  of the respective  concessions. 
(b) On at least  two  points  the  intentions  expressed 
by the  President  of the  United  States  in his 
message  to Congress  concur  with  those  of the 
Commission,  namely,  on  barriers  linked  to 
customs  valuations  and  on  rules  governing 
labelling  and  packaging.  However,  the Committee 
emphasises  that  even  these  barriers  operate  in 
different  ways  depending  on the  product.  For 
example,  customs  officials  attached  to American 
Embassies  in Europe  state  that  they  are  unable 
to calculate  the  duties  which  will  be levied  on 
some  products  on entry  into  the  United  States. various  countries  should  be added  to the  list of 
non-tariff  barriers  quoted  by the Commission  in 
its memorandum  to the Council. 
Similarly,  negotiations  should  be conducted  with 
various  countries  on the abolition  of administrative 
practices  involving  deflections  of trade,  taxes  or 
other  measures  which  penalize  imported  produce 
in comparison  with  local  produce  and  also 
export  subsidies.  The  Committee  reserves  the 
right  to come  back  to this  question  at a later  date. 
A special  effort  should  be made  to reduce  and 
simplify  external  trade  formalities  and procedures. 
A large  number  of countries  should  be involved 
in this  effort. 
(d) Finally,  the  Committee  draws  attention  to the 
consequences  of the  fact  that  on the  one  hand 
the socialist  countries  have  up  to now  not 
recognized  the  Community  as a partner  in the 
negotiations  and,  on the  other  hand,  that  some 
of these  countries  are parties  to the GATT  agree-
ment  whereas  others  are  not.  The  Committee 
stresses  that  the  quantitative  restrictions  do not 
seem  to be negotiable,  resulting  as they  do from 
the nationalization  of trade  in the  socialist 
countries.  It therefore  believes  that  it is necessary 
for special  provisions  to be made  for  relations 
with  these  countries  so as to ensure  the maximum 
development  of trade  with  them,  guarantee  the 
necessary  reciprocity  and  avoid  market  disruption 
by abnormal  prices.  The  Committee  points  to the 
assurances  which  seem  to have  been  obtained  on 
this point  by  the  American  Administration. 
According  to  President  Nixon's  address  to 
Congress,  the  trade  agreement  with  the  Soviet 
Union  will  include  a 'clause  which  calls  upon  each 
party  to reduce  exports  of products  which  cause 
market  disruptions  in the  other  countries'.  The 
American  Administration  could  act  unilaterally 
where  the need  arises. 
(e) For  the rest,  the Committee  approves  the points 
made  in Chapter  III of the  memorandum  from 
the Commission  to the  Council.  In particular,  it 
supports  the  Commission's  suggestion  of setting 
up within  the  framework  of an agreement  on 
non-tariff  barriers  a joint  consultation  procedure 
with  a view  to working  out solutions  to possible 
disputes. 
(c) Despite  the  improvements  in  anti-dumping 
measures  achieved  at previous  negotiations,  the 
way in which  anti-dumping  laws  are  applied  in (f) The  Committee  stresses  that  the  arrangements 
negotiated  with  a view  to abolishing  non-tariff 
barriers,  unlike  the  tariff  reductions,  will  not 
minimize  the advantage  gained  by the developing 
countries  from  generalized  preferences. 
No C 115/6 Official  Journal  of the European  Communities 28. 9. 74 
IV. Agricultural  talks 
The memorandum  from  the  Commission  to the 
Council  makes  no reference  to the common  agricul-
tural  policy,  not even  mentioning  its name.  But,  it is 
public  knowledge  that  this  policy  is the object  of the 
most  violent  attacks  from  the  United  States,  who 
have  given  notice  of their  intention  of getting  it 
modified  in important  respects. of the  common  market  and  is not  a subject  for 
negotiation.  It therefore  seems  vital  to take  a stand 
on this  point  so as to confirm  that,  as Sir Christopher 
Soames  declared  before  the European  Parliament,  'our 
objectives  must  be  to negotiate  measures  on  a 
reciprocal  basis  to permit  the  regular  expansion  of 
agricultural  trade'  and  that  the  Community  'will 
resist  any  attack  on the  principles  of the  Common 
Agricultural  Policy'. 
While  agreeing  that  agricultural  products  must  be 
included  in the negotiations,  the Economic  and  Social 
Committee  notes  that  because  of  the  special 
conditions  in agriculture  and  the  instability  of the 
world  markets  in agricultural  products,  the common 
agricultural  policy  in its entirety  is an essential  part EEC  imports  of agricultural  products  from  third 
countries,  in particular  the  United  States,  have 
continued  to rise  since  the  establishment  of the 
common  market,  and  trade  in agricultural  products 
shows  a growing  deficit  on the  Community's  side, 
as can be seen  from  the following  figures: 
EEC  External  Trade:  all agricultural  products 
Million  u.a. Index 
1958 1971 1958 1971 
EEC  imports 
— from  third  countries 7 356 13 027 100 177 
— USA's  share 885 2163 100 244 
EEC  exports 
— to third  countries 1 921 4 134 100 215 
— USA's  share 199 450 100 226 
EEC  agricultural  deficit 
— with  all third  countries 5 435 8 893 100 164 
— with  the  USA 686 1 713 100 250 
However,  the Community  too is encountering  barriers 
to the growth  of agricultural  exports,  particularly  in 
the United  States  and  Japan,  because  of the  protec-
tionist  agricultural  policies  of these  countries. 
It is however  desirable  that  international  arrange-
ments  should  be sought  within  the  framework  of a 
good  conduct  agreement,  concluded  on the  basis  of 
mutual  and  balanced  advantages  for  the developed 
and for the developing  countries  so as to allow  an 
expansion  of trade  in agricultural  products,  bearing 
in mind  the  rightful  interests  of producers  and 
consumers  in all the regions  of the Community. The Committee  points  out  the  necessity  of taking 
into account  the possible  effects  on the  products  of 
the agricultural  and  food  industries  of the  decisions 
which  will  be  taken  on  agricultural  products. 
Negotiations  on  the  products  of these  industries 
cannot  be entered  into  until  the  result  of these 
decisions  are known. 
V. The  developing  countries 
In its memorandum  to the Council,  the Commission 
states  that  in the  negotiations  particular  account  is 
to be  taken  of the  interests  of the  developing 
28. 9. 74 Official  Journal  of the European  Communities No C 115/7 
countries.  Not  only  must  these  countries  suffer  no 
disadvantages,  but  their  exports  revenue  must  be 
improved.  Furthermore,  'the  task  will  have  to be 
accomplished  without  detriment  to the  advantages 
enjoyed  by those  developing  countries  with  which 
the Community  has special  relations'. 
There  seems  to be no doubt  that  the  abolition  of 
non-tariff  barriers  must  not  entail  any  disadvantages 
for developing  countries.  This  is not the case  for the 
tariff  reductions  negotiated  between  industrialized 
countries,  which  will  lead  to a corresponding 
reduction  of the  advantages  granted  to developing 
countries  under  the  generalized  preferences  scheme. 
In the extreme  case  of customs  duties  being  reduced 
to zero,  a contingency  which  has  been  ruled  out  by 
the Commission,  the  concessions  to the  developing 
countries  would  be completely  neutralized. introduction  of a comparable  scheme  by the  other 
industrialized  countries. 
The Committee  reserves  the right  to come  back  on 
this matter  in its work  on the  Community's  devel-
opment  aid policy,  for which  it has  already  stressed 
the necessity. 
VI. Safeguard  clauses 
In its memorandum  the Commission  states  that  'the 
object  of a safeguard  clause  must  be to enable  purely 
transitory  difficulties  to be overcome'. 
The developing  countries  could  doubtless  be 
compensated  to some  extent  by the  qualitative  and 
quantitative  extension  of generalized  preferences, 
which  is proposed  by the  Commission  subject  to 
certain  conditions.  In fact,  the  Community  has 
adopted  a system  of preferences  which  make  no 
exceptions  for manufactured  goods.  At the  Summit 
Conference  it pledged  itself  to broaden  the scope  of 
this system. 
However,  this  would  of necessity  impair  the advan-
tages  enjoyed  by developing  countries  with  whom 
the Community  has special  relations. 
Thus  it appears  that  the objectives  proposed  to the 
Community  in respect  of developing  countries  are 
worthy  of praise,  but  they  cannot  both  be achieved 
at the same  time. 
They  can  be achieved  concurrently  only  if tariff 
reductions  between  industrialized  countries  do not 
cover  products  which  come  under  the  generalized 
preferences  scheme  and  are  of particular  interest  to 
developing  countries  or at least  some  of them. 
This  seems  hard  to achieve  since  the EEC  has adopted 
a preference  system  without  exceptions,  while  other 
countries  have  provided  for  a scheme  with  certain 
exceptions,  although  they  have  not  so far  applied 
this. The Section  supports  the  idea  that  the  application 
of the  safeguard  clauses  must  in principle  be of a 
clearly  exceptional  character,  both  in the  EEC  and 
in other  countries.  However,  Article  XIX  of the 
GATT  agreement  should  be amplified  in order  to 
make  it possible  to deal  with  clear-cut  situations 
and enable  its provisions  to be applied  in a selective 
manner. 
What  is more,  this  leaves  unresolved  a category  of 
problems  whose  importance  the  Committee  is 
obliged  to point  out.  The  problems  in question  are 
sometimes  called  'social  dumping'  though  this  is a 
misnomer  since  we are dealing  here  with  deep-rooted 
cost differences  resulting  from  substantial  wage 
disparities  while  dumping  implies  deliberate  selling 
below  cost.  Barring  a halt  in wage  increases  in the 
developed  countries,  these  deep-rooted  labour  costs 
differences  cannot  be considered  transitory,  even  if 
social  policy  in the developing  countries  has  to aim 
at reducing  wage  disparities.  If the safeguard  clause 
does  not cover  them,  it will  eliminate  a considerable 
number  of industrial  jobs  in Europe  at a time  when 
its industries  should  be recruiting  farmers  leaving 
the land  as a result  of changes  in the  agricultural 
structures.  In this  case,  there  would  be no alternative 
to exempting  substantial  sectors  of industry  from 
the liberalization  measures  in order  to safeguard  full 
employment  in the  Community.  This  too  does  not 
seem  desirable  either.  The  solution  however  seems 
to be an 'organization  of trade',  ensuring  an orderly 
development  of trade. 
The Economic  and  Social  Committee  notes  the 
Commission's  intention  of  subordinating  any 
extension  of its generalized  preferences  scheme  to the The Committee  also  reserves  the right  to return  to 
'ecological  dumping'  which  in most  of the developed 
countries  will  affect  the activities  that  are  going  to 
No C 115/8 Official  Journal  of the European  Communities 28. 9. 74 
have  to spend  more  and  more  on environmental 
protection,  which  they  would  not have  to do if they 
were  located  in certain  other  parts  of the world. 
In conclusion,  the Committee  confirms  its intention 
to carry  out  a detailed  examination  of all  the 
questions  raised  by the coming  multilateral  negotia-tions  in GATT,  which  its Members  wish  to be able 
to comment  on in the light  of all the factors  con-
cerned. 
Done  at Brussels,  24 May  1973. 
The Chairman 
of the Economic  and  Social  Committee 
Alfons  LAPP  AS 
Opinion  on the memorandum  from  the Commission  on the technological  and  industrial 
policy  programme 
The text  on which  the Opinion  is based  has not been  published  in the Official  Journal 
of the European  Communities. 
A. LEGAL  BASIS  FOR  THE  OPINION 
At its 114th  plenary  session  held  on 24 and  25 October  1973  the Committee,  acting 
on a proposal  from  the Bureau,  decided  to deliver  an opinion  on the abovementioned 
subject  on its own  initiative. 
B. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its Opinion  on the above  matter  at its 
115th  plenary  session,  held  in Strasbourg  on 28 and  29 November  1973. 
The full  text  of the Opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE: 
Having  regard  to the  letter  dated  10 May  1973  by 
which  the Commission  sent  the Economic  and  Social 
Committee,  for the information  of its members,  the 
'memorandum  from  the  Commission  on  the 
Technological  and Industrial  policy  programme'; 
Having  regard  to the decision  taken  by the Economic 
and Social  Committee  at the plenary  session  on 24 
and 25 October  1973,  on a proposal  from  its Bureau, 
to deliver  an opinion  on this  memorandum  on its 
own initiative  and  to entrust  the Section  for Industry, 
Commerce,  Crafts  and  Services  with  the preparation 
of the work  on the matter; 
Having  regard  to the  oral  report  presented  by Mr 
Kley,  the Rapporteur; 
Having  regard  to the  Opinion  delivered  by the 
Section  for Industry,  Commerce,  Crafts  and  Services 
on 7 November  1973; Having  regard  to the  discussions  during  the  115th 
plenary  session  on 28 and  29 November  (meeting 
on 29 November); 
Whereas  the purpose  of the Commission  memoran-
dum is to prepare  the ground  for a preliminary  policy 
debate  in the Council  of Ministers; 
Whereas  it is the task  of the  Economic  and  Social 
Committee  to participate  in this  debate  by delivering 
an opinion; 
Has adopted,  by 45 votes  to 8, with  9 abstentions, 
THE  FOLLOWING  OPINION: 
A. GENERAL  COMMENTS 
The Economic  and  Social  Committee  has  already 
described  its attitude  to the objectives  and  the basic