Conflict Between the Gatt and E.E.C. Agreements: Reply

JACQUELINE MATTHEWSJACOB VINER showed that not only preferential tariff agreements, but also customs unions could be harmful to world trade, ifsubsequent trade diversion was greater than trade creation. Yet the GATT allows customs unions and free trade areas in article 24.The issue raised may be phrased as follows: should the E.E.C. extend to all contracting parties of the GATT, on anon-discriminatory basis, tariff concessions granted to, say, the Lomé countries? One must differentiate between developed anddeveloping countries. If concessions are to be extended to developed countries, it should be on a reciprocal basis, such as thosebeing debated at the present Tokyo round of the GATT. With regard to developing countries, the situation is different, since noreciprocity is required from them (article 36-8). Those countries with an economic structure similar to the Lomé countries may applyto become signatories to the Convention, whilst others could benefit from the E.E.C. Generalized Preferences Scheme which hasbeen accepted by the GATT.The principle of non-discrimination is indeed important to South Africa today, because the exclusive preferential arrangements shehas benefited from since the Ottawa Conference of 1932, ended with the entry of Britain into the E.E.C. This fact, and the presentSouth African policy of raising import tariffs (in the name of import substitution) constitute a weak position from which to advocatea strict application of the GATT rules, since the spirit of the GATT opposes both discrimination and increasing protective duties.South Africa should rather rely on her superior technology, know-how and marketing experience to compete with less developedcountries in the sphere of agricultural exports.University of NatalDurban

1978 SAJE v46(2) p185

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