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- 2 -
former French and Belgian colonies, Nigeria, the former British colonies
in East Africa, Tunisia and Morocco. (Greece and Turkey also have
gotten preferences but they are first steps in eventual full membership
after a 22-year transition period.) The arrangements obviously help
their economic development and the trade effects on outsiders have been
small, so it has been both difficult and relatively unimportant to oppose
them.
Now, however, the Community is negotiating preferential arrangements
with several much more important countries -- not only Spain but Israel,
Australia, Yugoslovia, the UAR, Lebanon, and even Argentina. Many
other non-EC members, including Switzerland and Sweden, are clamoring
for preferences as well. And it is quite possible that the United Kingdom
and other applicants for full membership in the EC will seek "associate
status" and hence trade preferences if their bids for full membership bog
down.
The United States is not completely clean when it comes to implementa-
tion of the MFN rule. We do not extend such treatment to the Communist
countries, except for Yugoslavia and Poland, but this departure has a
clear (if disputable) security rationale. We continue to give special
preferences to the Philippines, although these are being phased out. Our
most important departure is that we have now joined the other industrialized
countries in offering trade preferences to all LDCs; however, a major
SECRET
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"ocrText": "SECRET\n- 2 -\nformer French and Belgian colonies, Nigeria, the former British colonies\nin East Africa, Tunisia and Morocco. (Greece and Turkey also have\ngotten preferences but they are first steps in eventual full membership\nafter a 22-year transition period.) The arrangements obviously help\ntheir economic development and the trade effects on outsiders have been\nsmall, so it has been both difficult and relatively unimportant to oppose\nthem.\nNow, however, the Community is negotiating preferential arrangements\nwith several much more important countries -- not only Spain but Israel,\nAustralia, Yugoslovia, the UAR, Lebanon, and even Argentina. Many\nother non-EC members, including Switzerland and Sweden, are clamoring\nfor preferences as well. And it is quite possible that the United Kingdom\nand other applicants for full membership in the EC will seek \"associate\nstatus\" and hence trade preferences if their bids for full membership bog\ndown.\nThe United States is not completely clean when it comes to implementa-\ntion of the MFN rule. We do not extend such treatment to the Communist\ncountries, except for Yugoslavia and Poland, but this departure has a\nclear (if disputable) security rationale. We continue to give special\npreferences to the Philippines, although these are being phased out. Our\nmost important departure is that we have now joined the other industrialized\ncountries in offering trade preferences to all LDCs; however, a major\nSECRET"
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