PRIORITY
CYPHER/CAT A
RESTRICTED
also to NKGO.
copied by Velegraph to HIS
PA
HK
1973
24 I
FM UKREP EC BRUSSELS 2312457
RESTRICTED
FRAME
TO PRIORITY FCO TELNO 326 OF 23 JANUARY INFO ROUTINE BONN COPENHAGEN DUBLIN THE HAGUE LUXEMBOURG PARIS ROME UKMIS GENEVA INEQ SAVING. BRUSSELS (FOR DODGE) GOVERNOR HONG KONG
FCO TELEGRAM NO. 54 TO BONM
RESTRAINTS ON NON-COTTON TEXTILES FROM HONG KONG
Ka tiver 8. REGISTEMI, • 30 JAND3
1. AT THE MEETING OF THE TEXTILES WORKING GROUP ON 22 JANUARY, THE UK WAS REPRESENTED BY GWINNELL AND COSTIN (DTI) AND DE FONBLANQUE (UKREP).
16
2. ERNST (COMMISSION) OPENED BY SAYING THAT IN VIEW OF THE UK'S POLYESTER COTTON AGREEMENT WITH HONG KONG THE LATTER HAD BECOME THE MOST DISRUPTIVE SUPPLIER OF NON-COTTON TEXTILES TO THE OTHER MEMBERS OF THE COMMUNITY. THERE WAS NO TIME TO DISCUSS AT THIS POINT OTHER S.E, ASIAN COUNTRIES, ANY VOLUNTARY RESTRAINT AGREEMENT MUST
DE NEGOTIATED BY THE COMMUNITY AS A WHOLE ON THE BASIS OF AGREED
SENSITIVE ITEMS.
3. GWINNELL OUTLINED THE UK'S POSITION SAYING THAT, WHILST IT WAS POSSIBLE THAT THE GERMANS HAD A CASE, COMMUNITY-WIDE RESTRICTIONS SHOULD HAVE A SPECIFIC PURPOSE, E G MINIMISATION OF UNEMPLOYMENT, AND SHOULD BE SELECTIVE IN COVERAGE AND OF LIMITED DURATION AND THAT
DAMAGE TO THE HOME INDUSTRY SHOULD BE PROVEN.
4. THE GERMAN DELEGATION CRITICISED THE UK'S RESTRAINT AGREEMENT
WITH HONG KONG. THEY WERE PREPARED TO BE LIBERAL BUT WERE SUFFERING FROM THE DIVERSION OF GOODS FROM THE US AND LATTERLY U K MARKETS TO THE EXTENT THAT IMPORTS OF CERTAIN PRODUCTS HAD DOUBLED IN THE LAST 4 MONTHS. THIS WAS BECOMING A POLITICAL PROBLEM IN GERMANY AND PRESSURE FROM UNIONS WAS BUILDING UP. THEY AGREED WITH THE COMMIS-. SION'S PROPOSALS INCLUDING THE LIST OF SENSITIVE PRODUCTS CIRCULATED IN SEPTEMBER, SUBJECT TO MINOR MODIFICATIONS.
5. THE FRENCH AND ITALIAN DELEGATIONS, SUPPORTED BY THE IRISH,
FAVOURED AN OVERALL SOLUTION WHICH WOULD RESTRICT ALL NON-COTTON
PRODUCTS WHETHER SENSITIVE OR NOT AND WHICH WOULD NOT BE CONFINED TO HONG KONG, THE FRENCH ARGUED HOWEVER THAT IT WOULD TAKE A CON- SIDERABLE TIME TO AGREE ON SUCH A SOLUTION AND THAT AS AN INTERIM
MEASURE THE COMMUNITY SHOULD TAXE UNILATERAL MEASURES.
RESTRICTED
76.