0003230
G.F. 323
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182.
Mr. McEnery pointed out that there appeared to be an incon- sistency in what Baron de Geer had said since Sweden did not seek similar restraint from Finland. Baron de Geer replied that Sweden needed competition but it could not countenance unfair competition from low-cost suppliers.
183.
Referring back to Mr. Ho's statement (see Appendix II) Baron de Geer enquired whether it would be correct to interpret paragraph 5(c) to mean that Hong Kong was seeking growth for each and every item commensurate with the growth in total imports of these items. Mr. Ho confirmed this and said that paragraph 5(c) was in substance similar to the equity provision in paragraph 7 of Article 3 of the Cotton Textiles Arrangement. Mr. Ho drew Baron de Geer's attention to paragraph 12 of the Memorandum of Under- standing between the Governments of Hong Kong and Sweden signed by Mr. Jordan in August, 1969 which contained the equity clause.
184. Baron de Geer observed that in the recent negotiation between Sweden and Yugoslavia, which subsequently broke down, with consequences he had already reported, Yugoslavia had used the same line of argument.
185.
Baron de Geer went on to enquire whether paragraph 6 of the statement recognised the possibility the exclusion of growth in exceptional cases, since paragraph 2 of Annex B of the Cotton Textiles Arrangement laid down that in exceptional cases, growth ranging from anything up to 5% might be applied. In reply, Mr. Ho stated that the provisions of paragraph 2 of Annex B concerned the second year of a restraint whilst paragraph 3 covered the operation of the restraint in subsequent years; the Cotton Textiles Committee's Resolution of 17th December, 1969 was also written in the same spirit. Baron de Geer said that he noted Mr. Ho's formal statement and would report back to his Government.
186.
Mr. Ho then referred to items which were at one time under restraint and subsequently liberalised. He quoted the examples of cotton woven blouses (841.137) and cotton woven nightgarments (841.170, 186); the first item having been restrained in 1969-70 and the second in 1968-69. If such items were put under export authorisation in a new restraint period, then export authorisations should not be suspended unless the former restraint limits had been reached. The principle behind this argument could be found in the opening paragraph of Annex B in the Cotton Textile Arrangement, Baron de Geer noted Mr. Ho's remarks but said that he had no instruc- tions regarding this.
187.
Discussions then turned to the date for the second round of the consultations and it was provisionally agreed that the Hong Kong delegation should visit Stockholm after the Cotton Textiles Committee meeting to be held on 25th and 26th May, 1970. After agreeing that no press release be made, the two delegations exchanged their final courtesies. The meeting was adjourned at 4.00 p.m.
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