0003230
G.F. 323
CONFIDENTIAL
- 10
Third Session: 10.00 a.m. Thursday
30th July. 1970
37.
Dorward said that he was still not in a position to make a formal response to the E.E.C. proposals but he and his colleagues had done some work on them the previous evening and he asked for certain clarification.
38.
As regards the country limits proposed, he was surprised to note that not only had the French Government cut back on its already derisory quota limits, but the Benelux Governments had made an offer which involved growth on the items which were allegedly sensitive at present and subject to specific category limits and a cut-back in the basket which contained the non-sensitive items. Ernst repeated what he had said at the previous session in regard to the French proposals, namely that the offer was a compromise and no logical explanation could be offered.
39.
Dorward said that he would wish to propose certain re- wording of the English version of the draft as regards carryover and anticipation. Ernst said it would be helpful if the suggestions could be incorporated in a draft side letter which might be sent to him before the next round of negotiations. Dorward agreed.
40.
As regards the provision in the draft agreement for the maintenance of trade patterns, Dorward said that in any agreement reached this could be no more than a "best endeavours" undertaking on the part of the Hong Kong Government. Ernst said that this would be quite acceptable. The provision was included in the draft for reasons quite unconnected with E.E.C. trade relations with Hong Kong.
41.
As regards the unit of control, Dorward said that Hong Kong had not adopted the metric system and that in its major cotton textile restraint agreements (with the United Kingdom, the United States, Germany and Canada) control was exercised in square yards. In the case of the agreement with the Benelux, a mixed system of control by yardage and weight was employed. Since, on the basis of the offer made at the previous session, it was apparent that the E.E.C. envisaged the bulk of the future trade in cotton textiles between Hong Kong and the E.E.C. still going to Germany, Dorward suggested that it would be helpful if the system of control currently applied in regard to the Hong Kong/German Agreement could be adopted for a Community Agreement. It seemed to him that the best way to achieve this would be to proceed with negotiations on the basis of metric tons and to apply the G.A.T.T. conversion factor of 9,000 square yards to the metric ton to whatever figures were finally agreed.
42.
In answer to a question by Ernst, Dorward said that it was Hong Kong's practice to measure made-ups and garments in square yards by applying the set of conversion factors produced by the United States in 1962.
43.
Ernst said that he was aware there were differing opinion within the Community on the matter of conversion factors but he was agreeable in principle to follow the procedure already established for the Hong Kong/German restraint agreement. He asked that details of the conversion factors proposed should be put in a special draft protocol and sent to him in advance of the next meeting.
agreed.
Dorward
CONFIDENTIAL
/44.