CONFIDENTIAL
9. WE HAVE THEREFORE BEEN CONSIDERING THE TEXTILE POSITION
FURTHER AND WHAT STEPS ARE OPEN TO US TO PROTECT OUR INTEREST
AND ASSIST YOU IN SECURING SUBSTANTIAL IMPROVEMENT IN THE G S P.
10. IT SEEMS TO ME TIME THAT WE PLAYED OUR ONLY CARD, WHICH IS SUGGESTED IN DODGE'S PARAGRAPH 11: THE E E C WANTS AN M T A
ARTICLE 4 AGREEMENT WITH US, AND OTHERS. WE HAVE FROM TIME TO
TIME MENTIONED THE LINK BETWEEN G S P AND THE M T A. IF THE 1975
G S P WERE TO DISCRIMINATE AGAINST US EVEN TO THE EXTENT
ENVISAGED IN THE ORIGINAL COMMISSION PROPOSALS, WE SHOULD BE
OBLIGED TO STAND ON OUR RIGHTS UNDER THE M T A AND TO INSIST
THAT THE E E C LIMIT ITS REQUESTS TO M T A ARTICLE 3, 1.E. WE WOULD CONSIDER RESTRAINT ONLY ON A PRODUCT BY PRODUCT, MEMBER STATE BY MEMBER STATE BASIS (OR COMMUNITY BASIS IF THERE WAS A COMMUNITY WIDE CASE). WE FEEL THAT WE COULD REASONABLY EXPECT YOUR SUPPORT IN DOING THIS. OUR PROPOSED ACTION WILL BECOME EVEN MORE NECESSARY IF TRAN'S CURRENT IDEAS ARE ACCEPTED. I THINK THAT DODGE, WITH YOUR AGREEMENT, SHOULD MAKE THIS CLEAR TO THE COMMISSION AND TO THE MEMBER STATES REPRESENTATIVES IN BRUSSELS.
GS P AND TEXTILES CANNOT BE KEPT IN SEPARATE COMPARTMENTS WHEN
GSP INCLUDES DISCRIMINATION AGAINST OUR TEXTILES.
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11. TIME IS SHORT, AND IF WE ARE TO AVOID SERIOUS DIFFICULTY IN U.K./H K RELATIONS, AND INDEED THE POSSIBILITY OF SERIOUS INTERNAL DIFFICULTIES HERE, WHERE AS YOU KNOW INDUSTRIAL
EMPLOYMENT AND REAL WAGES ARE FALLING, I THINK YOU. WILL AGREE
THAT IT IS NECESSARY THAT WE SHOULD KNOW AS QUICKLY AS POSSIBLE
YOUR IDEAS AS TO HOW THE COMMITMENT TO SEEK SUBSTANTIAL
IMPROVEMENT' FOR HONG KONG SHOULD BE MET, SO THAT WE CAN GIVE
SOME THOUGHT TO THEM BEFORE LEAVING HERE.
12. PROPOSE THAT DODGE SHOULD NOT RESPOND IMMEDIATELY TO
TRAN'S ''SELF-LIMITATION'' PROPOSAL. ALTHOUGH WE DISLIKE THE
IDEA AS PRESENTED, WE MUST WEIGH IT WITH THE 'SUBSTANTIAL
IMPROVEMENT'', AND WE NEED TO KNOW BEFOREHAND WHAT LINE YOU
WOULD TAKE IN THE WORKING GROUP. OTHERWISE WE RISK UNDERMINING
YOUR POSITION AS WELL AS OUR OWN. NEVERTHELESS WE MUST RESPOND
FAIRLY SOON.
MACLEHOSE
EUROPEAN ECONOMIC DEPARTMENTAL DISTRIBUTION
EID HK100
ADDITIONAL DISTRIBUTION
FRAME
3 CONFIDENTIAL