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representatives therefore suggested that, while accepting that the text of the Arrangement should remain unchanged, the exporting countries should propose that the Committee should adopt certain guidelines for the bilateral discussions.
5.
The Hong Kong representatives suggested that the exporting countries should propose to the Committee that, along with the hypothesis that the Arrangement should be extended, the Committee should also accept another that the importing countries would endeavour further to improve trading opportunities for the exporting countries and would review and progressively relax existing restrictions with a view to their eventual elimination. suggestions made were:
6.
The specific
(i) that Article 2 restrictions should be entirely removed within the period of extension of the Arrangement;
(ii) that arrangements made under Article 4 should be generally in accordance with the other provisions of the Arrangement, in particular with regard to swing and growth;
(iii) that growth should be at 5% per year or a level no lower
than the growth in total imports of cotton textiles in the market concerned, whichever was the greater;
(iv) that flexibility provisions should include 10% swing,
10% carryover and 10% anticipation;
(v) that comprehensive agreements under Article 4 should be reviewed annually with a view to the elimination of restrictions no longer necessary;
(vi). that the term "textile manufactured products" in
Article 9 should be limited to articles whose essential characteristics derive from their textile component (i.e. excluding articles whose essential characteristics derive from plastic, leather, etc.).
These suggestions received a chorus of support from most of the countries represented at the exporters' meeting, and very few additional suggestions were made.
7.
In the importers group it soon became apparent that the U.S. and the E.E.C. were not prepared to settle for anything less than a three-year extension without amendments. The U.K. idea that early steps should be taken to review the situation with a view to the eventual termination of the Arrangement did not get off the ground. The importers eventually agreed on the text of a document which the Committee would be invited to accept on the basis of the working · hypothesis of the three-year extension. This text involved three elements, namely:
(a) a promise to offer increased export opportunities to
exporting countries during the period of prolongation and to progressively relax restrictions in the course of bilateral consultations;
(b) a further meeting of the C.T.C. in early 1970 to confirm
the working hypothesis or take other action; and
(c)
a proposal that a longer term study on the state of world trade in cotton textiles should start as early as possible.
/8.
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CONFIDENTIAL