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COVERED IN (D) SHOULD EMBRACE FIBRE COVERAGE AS WELL AS PRODUCT
COVERAGE.
2. HONG KONG'S EXPORTS TO THE SIX OF CERTAIN ITEMS, PARTICULARLY SKIRTS, BLOUSES, SHIRTS AND TROUSERS, INCREASED VERY SUBSTANTIALLY IN 1972, BUT MOST OF THEM WENT TO GERMANY AND BENELUX (MAINLY THE NETHERLANDS, WE EXPECT) AND A LOT WERE COTTON. IT SEEMS THEREFORE UNLIKELY NOT ONLY THAT A CASE FOR COMPREHENSIVE RESTRAINTS CAN BE MADE BUT ALSO THAT A COMMUNITY CASE CAN BE MADE ON ANY ITEM.
THE DANGER IS THAT IN ANY COMMUNITY ARRANGEMENT THE MEMBERS WHO ARE
NOT SUFFERING WILL WISH TO WRITE IN TO THE AGREEMENT THEIR OWN
CURRENT LEVELS OF IMPORTS. THIS WOULD DAMAGE OUR FUTURE PROSPECTS AND MMAKE THE ACHIEVEMENT OF YOUR AIMS, AS SET OUT IN THE DTI PAPER 'TEXTILE TRADE POLICY IN THE ENLARGED EEC', MORE DIFFICULT. WE SHALL THEREFORE STILL HAVE A DIFFICULT PROBLEM EVEN IF A 'REGIONAĽ CASE (YOUR PARA 2(F)) IS MADE, BUT A COMMUNITY-WIDE AGREEMENT
IS DEMANDED.
3. IN DECEMBER, IN BRUSSELS WITH HIJZEN AND TERFLOTH (IN DAHREADORE'S ABSENCE) AND IN GENEVA WITH ERNST, JORDON EMPHASISED AGAIN THE BASIC REQUIREMENT OF A SOUND STATISTICAL CASE AND IN PARTICULAR THAT
IMPORT FIGURES FOR HK ALONE PROVE NOTHING RELEVANT,
4. WE ARE NOT SURPRISED THAT THE INITIATIVE SHOULD HAVE COME FROM THE GERMANS. IN DECEMBER (AS REPORTED IN BRUSSELS TELEGRAM 82 TO HK) FRIEDRICHS WENT ON AT LENGTH ABOUT THEIR SERIOUS CONCERN AT THE GROWTH IN IMPORTS OF CERTAIN ITEMS FROM HK.
5. WE HAVE THEREFORE BEEN CONSIDERING WHETHER A UNILATERAL RESTRAINT ON SELECTED ITEMS TO GERMANY ALONE MIGHT BE WORTHWHILE. JORDON
MENTIONED THIS POSSIBILITY TO POWNALL IN GENEVA.
THE MAIN POINT IS THAT, UNLESS SUCH ACTION WERE TO DO US MORE HARM THAN COOD, WE COULD TAKE IT ONLY IF WE WERE SATISFIED THAT THERE WAS A CASE THAT WOULD JUSTIFY A NECOTIATED RESTRAINT. HOWEVER DESPITE FRIEDRICHS' STATEMENT THAT HE WOULD SEND US STATISTICS THAT HOULD JUSTIFY THE CONCERN HE EXPRESSED, NOTHING HAS YET COME TO HAND.
6. IT SEEMS TO US THAT YOUR APPROACH MAY NOT BE ACCEPTABLE TO THE GERMANS IN THEIR PRESENT FRAME OF MIND. FURTHERMORE, THE FRENCH ARE LIKELY TO BLOCK ANY ACTION, AT LEAST UNTIL AFTER THEIR ELECTIONS,
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THE FOINT
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