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Mr Cortazzi
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Ajals
CONFIDENTIAL
RECEIVED IN RERY No. 61
9 MAR 1977
HKM 121/616/1
Q
HONG KONG: MEETING WITH MR JORDAN, DIRECTOR OF COMMERCE, 11 FEBRUARY
1. You asked for a brief on the future of the Multi-Fibre Arrangement (Hong Kong Telno 131) and. other possible topics that Mr Jordan might raise over lunch with with you.
2.
I attach, by way of background, copies of two of the briefs prepared by the DOT for the annual round of UK/Hong Kong consultations on textiles matters held on 8 February, namely:-
(1) The Multi-Fibre Arrangement (MFA).
(2) The EEC/Hong Kong Textile Agreement.
3. Future of the Multi-Fibre Arrangement (MFA)
At the meeting with the DOT, Mr Jordan argued that the present MFA, which expires at the end of 1977, shaild remain unchanged. He pointed out, as is the case, that the Americans favoured a
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continuation of the present agreement; asserted that it was the Community only that wanted changes; and referred to rumours that the Community wished to change the MFA so as to penalise Hong Kong and South Korea and use any savings on allocations to these two countries to help less developed countries.
4. The DOT/DOI representatives would neither deny nor confirm the rumours to which Mr Jordan referred (these were mentioned in Hong Kong Tel No 131). They said that many ideas are being canvassed within the Community but that they hoped agreement would be reached within the Community by the end of March on proposed changes in the MFA. The Chairman of the meeting, Mr Steele (Deputy Under-Secretary, DOT) warned Mr Jordan that both within the UK and other Community countries there was support for the view that the poorest developing countries should benefit from, eg the MFA. Renegotiation was important to Hong Kong, Mr Steele also pointed out; if there was not a satisfactory renegotiation the the UK might be forced to fall back on action under Article 19 of GATT, ie total restrictions on all imports of textiles.
CONFIDENTIAL
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