CONFIDENTIAL
What is more, the operation of the Community's "burden sharing formula" allows Member States who have historically large imports from traditional suppliers to take only a small proportion of the annual growth in quotas, which the Community is obliged to give these suppliers under the existing MFA. For example, the UK has firm quotas on imports of sensitive products from Hong Kong and is giving only 1% annual growth on some items as opposed to the normal MFA growth of at least 6%.
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4. The British indústry needs control on the overall total of imports of sensitive products from all low-cost suppliers. Only in this way can the argument be countered that each new supplier is insignificant in itself and should therefore not be controlled. The total of such "penny-packets" has caused cumulative market disruption. And only in this way can the problem of the cumber-
some procedures of the present MFA be overcome, because such a control would be operated against all low-cost suppliers of certain sensitive products by means of one measure, rather than a series of bilateral negotiations. This would be the nature of the "globalisation" clause for which the UK has argued in the new
MFA.
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The Position in the Community so far
5. At the 8 March Council, seven Member States were in favour of negotiating a "globalisation" clause in a new MFA. The FRG and Denmark argued that it was not negotiable in Geneva and thus insistence on it would be damaging to free trade as well as likely to cause difficulties in the North/South dialogue. The Council instructed the Commission to prepare a paper, in line with the majority view, on the way to deal with cumulative disruption.
6. The paper the Commission produced on 12 March was unsatis- factory for the UK. It concentrated on reducing growth rates on imports from dominant suppliers (which are not a problem for us) while proposing nothing effective to deal with new suppliers of sensitive products. It also said nothing about how its proposals would be given international approval.
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CONFIDENTIAL