30 Round scernario other countries also benefit<sup>from the reduction of the EC's</sup> external barriers, with the consequence of less<sup>gains for Hunga.y.</sup> Compared to its present treatment, Hungary<sup>would gain progressively more</sup> from GSP treatment, special Mediterranean<sup>preferences, and from membership of</sup> EFTA, in that order. In all of these cases the additional<sup>liberalization that</sup> would occur under the Uruguay Round scenarios<sup>is greater than in the absence of</sup> the Uruguay Round, outweighing any erosion<sup>of such preferences. The main reason</sup> for this is that in the Uruguay Round scenarios<sup>there is a reduction of non-</sup> tariff barriers in the agriculture sector<sup>and the elimination of MFA (with no</sup> tariff changes) in the textiles and clothing<sup>sector.</sup> Under the improved preference scenarios, tariffs alone are reduced,<sup>with no changas in the incidence</sup> of non-tariff barriers. It is also noted that<sup>Hungary would expect to get more</sup> from the Uruguay Round scenarios alone than it<sup>would from GSP in the absence of</sup> the Uruguay Round, i.e. MFN liberalization<sup>would serve it better than</sup> "preferential" treatment.

The final two results shown in Table 12<sup>relate to the creation of a wider</sup> European space, with a projected 24.4 percent<sup>expansion from the reduction of EC</sup> tariffs to zero for all European countries<sup>and a 37.9 percent expansion following</sup> the elimination of NTBs as well as the tariff reductions.

we now look more closely at the sectoral<sup>breakdown of the results by two</sup> digit StTC, Revision 1, categories - see Table<sup>13. In the first set of scenarios</sup> - reflecting improved preferential tariff<sup>treatment for Hungary alone, the</sup> sectoral breakdown typically reflects the overall<sup>results, namely that membership</sup> of the EFTA is better than the treatment afforded<sup>under the Mediterranean rate</sup> which in turn is better than the treatment<sup>under the GSP provisions. However,</sup> in agriculture the gains under GSP and Mediterranean<sup>country treatment are also</sup> greater than the gains that would be obtained<sup>from membership of EFTA. In the</sup> case of EC membership the sectoral results<sup>are similar to those for EFTA</sup> membership in the manufactures sub-sectors, reflecting<sup>the duty free trade under</sup> the EC-EFTA Protocol, but EC membership brings<sup>markedly greater gains in the</sup> agriculture and related sectors. The sectors<sup>where the greatest gains are to be</sup> obtained from EC membership would be, in declining<sup>order: iron and steel, meat</sup> and meat preparations, fruits and vegetables,<sup>textiles, and clothing.</sup> The second set of scenarios -- in which the assumed<sup>Uruguay Round results</sup> provide a backdrop for looking at the effects<sup>of improved treatment for Hungary</sup> in the EC. As in the first set of scenarios,<sup>the greatest gains are under the</sup> scenario in which Hungary gains EC membership.<sup>Setting this aside, and outside</sup> the food categories, the greatest gains would,<sup>with few exceptions, be from EFTA</sup> membership, receipt of Mediterranean preferences,<sup>and GSP treatment, in declining</sup> order. For products with no NTBs, EFTA membership<sup>would be as good as being in</sup> the EC itself. In the food categories, the<sup>treatment typically accorded to GSP</sup> beneficiaries and Mediterranean countries would<sup>be preferable to that accorded</sup> EFTA countries, and the treatment of the Mediterranean<sup>countries is significantly</sup> better than GSP treatment in some categories.