0003230
G.F. 323
CONFIDENTIAL
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with any of the other exporting countries with which the B.E.C. had negotiated or were in process of negotiating cotton textile restraints. And Hong Kong's reactions were different to theirs because of different circumstances. With no barriers maintained against imports from any of its trading partners, Hong Kong had no reciprocal concessions to offer in negotiation. It was for all these reasons, therefore, that great store was placed by rights under international agreements, because these provided Hong Kong's only defence against restrictions which could cause extensive damage to the economic development and hence the con- tinued political stability of the community.
4.
Dorward expressed his disappointment in the response which the Commission had made to the approach made to them in Brussels by Messrs. Dodge and Christofas. The statistical material which had been provided added little to the sum of Hong Kong's knowledge and was not significant without the opportunity for comparison of import figures from Hong Kong with Community produc- tion, consumption and exports and imports from third countries. The Commission's response, furthermore, contained no factual justification of the Community's request for restraint; and indeed no actual request as such had been received, but merely an offer of the terms the Community would grant. In view of Hong Kong's G.A.T.T. rights and the provisions of the Cotton Textiles Arrange- ments, these could not be considered as the same thing.
5.
In the circumstances Dorward said his Government found it difficult to see how a satisfactory conclusion to the negotiations could be possible without a greater willingness on the part of the Commission than had so far been shown to bring their proposals into line with the provisions of the C.T.A. This was not, he emphasised, a reflection of unwillingness on his part to negotiate but rather it demonstrated Hong Kong's belief that in any such negotiation those seeking restraint must provide justification for their request. Where the restraint sought was as extensive as that which the Community had proposed, then a fortiori the eventual coverage and content of any agreement had to be determined by careful examination of the case and the supporting figures.
6.
Both sides had many pressing and important commitments, however, so Dorward suggested that since they were met with a limited amount of time at their disposal perhaps some progress could be made. This could be possible on the assumption that the Commission would be willing to produce more substantial material in the near future. On such an understanding, progres could be made on the hypothesis that such material would justify Hong Kong agreeing to restrain, to a greater or lesser extent, the volume of its cotton textile exports to the Community; such an agreement to be negotiated as soon as possible. On this working hypothesis an examination could be made of such elements as the possible methods for calculating a base figure, growth factors, administrative arrangements and flexibility provisions.
7.
In this last regard, Dorward noted with some satisfaction the Community's offers in regard to swing, anticipation, carryover and export control contained in the documents handed over to Mr. Dodge. He said his Government did not wish to appear unhelpful in the face of these offers, but they were after all not the most important elements in the package. It was for this reason that he earnestly repeated his request that the Commission present a factual statement of the reasons and justification for seeking the
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CONFIDENTIAL