0003230
G.F. 323
CONFIDENTIAL
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that the difference between Hong Kong export licensing statistics and the Benelux import licensing statistics could be caused by the fact .that, whereas Hong Kong usually issued export licences close to the date of shipment, Benelux import licences were normally taken out at the time the contracts were placed and were for three months', validity with a further three months' extension on request.
19.
Mr. Haddon-Cave concluded from a comparison of the import and export statistics that performance in the current restraint period would be about 600,000 shirts compared with the level of 750,000 available for issue in Hong Kong. In these circumstances, and as the Benelux intake from third countries would probably be in the region of 50,000 shirts, he asked whether the Benelux Governments would be prepared to release a proportion of the reserve of 150,000. He asked this in order to give Hong Kong time to issue this balance to the trade. He would propose to issue it on a first-come-first-served export authorisation basis thus giving maximum flexibility at both the import and the export ends of the trade.
20.
Mr. Verhagen emphasized the risks involved in releasing a proportion of the reserve and asked for this issue to be considered in relation to the future of the present undertaking. He formally proposed that the current undertaking be extended for three months up to 31st December and that the level for this period should be 300,000 shirts being one quarter of the overall ceiling of 1.2 million agreed for the full year 1967.
21.
Mr. Haddon-Cave asked whether the Benelux wished to extend only for three months in order to see whether a continued restraint was necessary. Mr. Verhagen explained that the Benelux Governments might propose an Article 4 agreement to Hong Kong before the end of the year.
Within the Community, discussions were proceeding on the possibility of introducing a global approach covering the entire cotton textiles sector as from 1st January, 1968. He considered that one of
· the advantages of an Article 4 agreement was that it would no longer be necessary to use Article 3. However, should no agreement be reached within the Community by the end of the year, the Benelux Governments would be prepared to consider a further extension of the shirts undertaking on an Article 3 basis into 1968.
22.
Mr. Haddon-Cave explained that Hong Kong interpreted the L.T.. as a temporary expedient to meet specific cases of market disruption and had been most reluctant to move over to multi-product multi-year agreements. Hong Kong had entered into such an agreement with the United States because of the extensive coverage of the Article 3 restraints; in the case of Germany, there had been special circumstances arising from the extent of Hong Kong's trade and from Hong Kong's position relative to other less-developed suppliers. German statistics certainly did not show a situation of market disruption.
23.
In the case of the Benelux, there was neither a United States type situation with a large number of Article 3 restraints nor, as far as he knew, special circumstances similar to those relating to the German situation. Nevertheless, he recognised there might be difficulties for Hong Kong at the end of the transitional period, 1st January, 1970, if Hong Kong did not have agreements on the same basis with all the Member States.
24.
Mr. Verhagen said that another important consideration was that, on 1st July, 1968, the full Customs Union would be in force in the Community and there should be, as from that date, a common commercial policy on imports of cotton textiles anong the Six. It was, therefore, important to bear in mind this date as well as 1st January, 1970.
CONFIDENTIAL