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that they might succeed, the EEC would ask for GATT discussions
to keep the situation under control.
Should one of the major
exporters to the U.S., such as Japan, concede restraint on
other than a de minimis basis, the EEC would be compelled
immediately to review its own position; otherwise it was the
Commission's intention to move towards the elimination of the
various residual restrictions maintained in this sector by
Member States and to adopt a fully liberalised common policy.
22. Ernst then turned to the French restrictions on Hong Kong
outside the field of textiles. These he said posed a special
problem in the development of a common import policy. The
Commission were seeking maximum liberalisation but in order to
gain the agreement of Member States here he made a wry
reference to theoretical majority voting which did not operate
in practice it would be necessary to do something "to save
That is to say, unless some form of restraint
French face".
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was to be agreed or imposed on certain "sensitive" items from
Hong Kong, the degree of common liberalisation which could be
achieved would be disproportionately restricted. He mentioned
particularly the problem of umbrellas which not only appeared
on the French list but were causing concern in both the Benelux
and Germany because of the rapid build up of imports from Hong
Kong. He said that over 50% of Community consumption of
umbrellas came from Hong Kong and Japan.
23. We answered that Hong Kong always stood ready to discuss
with its trading partners, having regard to Article XXII of the
GATT, any problems they felt they were experiencing as a
result of imports from Hong Kong; but in saying this we
stressed the weight Hong Kong attached to the rules of the GATT
and, in particular, to the fundamental principle of non-
discrimination. As things stood we could hold out no hope of
voluntary restraint outside the field of textiles because of the
dangerous precedents involved. And we could not concede that
/the unilateral
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