0003230
G.F. 323
CONFIDENTIAL
8.
The result of Hong Kong having taken the lead at the exporters' meeting was that when the C.T.C. itself met in plenary session on 17 December, the Hong Kong representative was asked by the Director-General to make the first speech, which he did on the lines of paragraphs 4 and 5 above. The Chairman then suggested that this be taken as a basis for discussion. Although the majority of exporting countries followed with statements of support, the effect of solidarity was spoiled by the fact that the Indian representative intervened immediately after Hong Kong to indicate that he could not fully accept the Hong Kong statement either as a basis for discussion or as expressing the position of exporters. In addition the fact that some other exporting countries suggested "improvements" of their own (which were for the most part different versions of suggestions already made by Hong Kong) did not help matters.
9.
Although the Committee eventually adopted a document on the lines of the importers' draft, the fact that the Hong Kong proposals received the support of the majority of exporters did appear to have some effect on the importers' proposals, which were presented by the E.E.C. later in the day. As finally adopted they included the following provisions:
(a) that in the course of bilateral consultatims to be held
in the near future, importing countries should endeavour to offer increased export opportunities and more flexible conditions for the operation of bilateral arrangements; (b) that they should also endeavour in these consultations to
give specific indications of the treatment they would grant to exporting countries during any period of extension; (c) that these consultations would entail no commitment on
the future of the Arrangement but should be based on the hypothesis of a three-year extension;
(a) that the Committee should resume its discussions early
in 1970 with a view to agreeing this extension or taking other action;
(e) that as soon as possible after the extension has been
agreed upon, the Committee should undertake a review of the state of international trade in cotton textiles and its longer-term development.
10.
The majority of participating countries accepted these proposals. It was therefore left that the Chairman would decide when to call the next meeting of the Committee in the light of progress made in bilateral consultations. It is understood that the Secretariat now feels that since the GATT itself will be meeting in plenary session throughout the second half of February, it is unlikely that the Cotton Textiles Committee will be called together again before March.
11.
As Members are aware, representatives of the European Commission have from time to time hinted at a Hong Kong/E.E.C. Article 4 arrangement. We have never pursued this because we could see little advantage for Hong Kong in it; the Commission's ideas are certainly more restrictive than those of the West Germans, our best customers in the E.E.C. While we should have been interested to know what' terms the Commission would offer, they were clearly not prepared to show their hand until we had agreed to enter into negotiations.
ANSID DENZIA I
/12.