(vii) "Swing" facilities
(a). if categories were performance-based, we agreed cross-swing based on the receiving category
10%
(c)
10% upswing from Group III to IV was agreed
present unlimited downswing facility to remain
(d) downswing into "baskets" agreed, but not unlimited outswing from the baskets.
3. Timing (1)
HMG hoped that the revised agreement would be made operative by the end of January (allowing for reference to Ministers, consultations with Lancashire and approval by the Commission). We appreciated Hong Kong's anxiety about the need for getting the arrangement in hand as quickly as possible but it would be counter- productive to rush the industry. In the intervening period, Hong Kong would continue to licence exports against the present categories on a seven-day validity basis. These issues could latter be logged against the new categories in the revised arrangement.
4. Timing (2)
It was agreed that it would be desirable to put negotiations on trade in 1973 (when the UK became part of the enlarged Community) in hand as soon as possible. Hong Kong would hope the Commission would be able to finalise the arrangements by April/May 1972.
5. HONG KONG'S REPLY TO THE MODIFIED PROPOSAL
Mr Haddon-Cave said that HMG's proposals in para 2 above appeared to offer very little.
(i) The merger of Group IV and V was negated by the
glove "stop".
(ii) The swing facility agreed between Group III and Group IV
was worth much less than amalgamation of the two Groups;
and
the EEC arrangement effectively allowed them 100% swing because there were only two major groups.
(iii) The 10% cross-swing facility was difficult to evaluate
without doing the arithmetic.
Hong Kong agreed to examine the proposal in more detail, and present their final analysis on Friday morning.
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