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will continue to be served best by waiting to see what happens and not by taking any premature initiatives or by showing undue concern It hypothetical possibilities that may not materialise. The Depart- ment is, however, keeping in constant touch with its Brussels, Office on developments as they emerge and are also maintaining close CO ct on these matters with the British Government who are ultimab. - ly responsible for Hong Kong's interests in matters of external commercial policy.
Cotton Textiles
26.
Although there has thus bon very little progress made with the formulation of a common import policy for the whole Community there has been more movement in the case of cotton textiles. When the GATT Cotton Textiles Arrangement was extended for three years in 1967 the Community acted for the first time as a group in discusi with the exporting countries concerned. For the purposes of the bilateral consultations to sue whether conditions of access could be conceded which were acceptable enough to the exporting countries to enable them to support the extension of the C.T..., the . . C. divided the exporting countries subject to restraint into two groups. In the first group was Japan and Hong Kong (as the Community did not consider Hong Kong to be a developing country as far as cotton textiles were concerned). In the second group were developing countries, notably India and Pakistan. With oach developing country the E. ..C. negotiated global tohnago figures for imports over the three years of the extended C.T.A. These were divided into two groups, namely greys of mercurised fabrics and other fabrics and articles of cotton. The total figures involved were then allocated as between the Member States, and detailed negotiations with the exporting countries on specific category limits etc and the manner of administration of the quotas (o.g. export controls or import controls) were conducted by each individual Member State (the Benelux negotiating as one). In the course of these negotiations the E.B.C. conceded significant increases in quotas for the developing countries concerned.
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27.
In the case of Hong Kong, on the other hand, talks with the Community as a whole wore confined to a stock-taking of what had been achieved in separate negotiations with individual Member States. A three year Article 4 bilateral had been concluded with Germany covering the years 1967 69 and involving most of Hong Kong's cotton textile exports to that country, There was also at that time an Article 3 arrangement with the Benelux countries limited to cotton shirts (later extended to include nightwear, handkerchiefs and some nude-up goods); and France continued to limit imports from Hong Kong, claiming the cover of Article 2 of the C.T.A. was liberalised (following the dropping of m earlier very short
In Italy the trade lived Article 3 arrangement on cotton fabrics). Luter, in 1968, Article 4 bilateral, covering Lost Hong Kong exports of cotton fabrics and garments, was negotiated with the Benelux countries. It is noteworthy that, in the course of negotiating the latter arrangement. the Benelux countries insisted ostensibly on the use of an model agreement, although they did in the nd accept some departure
B.E.C. from this in confidential side agreements.
an
28.
The net result is that, although the Community as a whole is taking more and more interest in both the form and the content of Hong Kong's cotton textile arrangements with individual Mumber States, Hong Kong hus not up to now negotiated with the B.2.0. such. During the course of the visit referred to in paragraphs 23 above, however, the senior Commission official hinted at the possibili of Hong Kong nugoti ting an article 4 arrangement with the whole
as
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