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anticipation as a right, merely notifying the importing country, Ernst emphasized that he did not consider this would be a major point.
21.
Article 5 of the Model Agreement is a routine paragraph concerning exchanges of specific date and co-operation on classification and was passed without comment.
22.
Article 6, which refers to the maintenance of existing trade patterns, had already been referred to in the morning session and Ernst accepted that the Hong Kong Government could only accept any such clause on a "best endeavours" basis.
23.
Article 7 refers to an undertaking to consult on problems arising at any time and to hold annual consultations. This is comparable to the consultations provision in the existing Hong Kong/U.S.A. bilateral agreement and was passed over without
So likewise was Article 8 which covers duration, revision and denunciation of an agreement.
comment.
24.
Ernst said that in addition to the contents of the "Model Agreement", mutatis mutandis, an agreement with Hong Kong would involve an annex containing the 34 categories which were to be applied on a uniform basis in all Community cotton textile agreements and, within such agreements, by all Member States. Under questioning, Ernst said that it was firmly the intention that specific category limits, which would be minimal in number, would be a matter for negotiation between the exporting countries and the Commission in the course of the main consultations aimed at fixing total limits. All that would be left for the sub- negotiations with Member States would be administrative arrangements. Dorward noted this was liable to lead to excessive categorisation and would make for difficulties in a negotiation. Ernst envisaged that some general rules for administrative arrangements would be agreed previously with Member States and would be incorporated in any Article 4 agreement. This would in effect leave only details for sub-negotiations.
25.
Ernst said he thought both sides had reached about as far as they were likely to go on this occasion and asked if the Hong Kong side could give some indication of the relative priority it attached to base periods and growth factors. Jones said that this was clearly a matter for any eventual negotiation, but he repeated that the Hong Kong desiderata were linked to the provisions of the Cotton Textiles Arrangement and to the proposals in COT/W/122. Specifically they were :
(a)
on a working hypothesis of full coverage, a base period not lower than 1970 quotas plus 1969 liberalised trade, the latter being increased by some growth factor comparable to that which had been accorded to the restricted trade;
(b)
growth under an Article 4 arrangement not less than the 5% provided for in Annex B of the C.T.A. or the growth accorded to Japan, whichever was the higher;"
•
(c)
inclusion of existing liberalised trade in the coverage to be justified in accordance with the principles of Article 3 and of Annex C of the C.T.A.;
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(a) 10% ...