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i.e. the agreement on overall terms is more liberal than the measures provided for in Article 3 of the KPA" (see Footnote). The Hong Kong statement, while designed to help close the gap in the Committee, in fact did no more than restate Hong Kong's existing policy and practice. In current Article 4 restraint agreements with several suppliers, including notably the US and the EEC, growth had been agreed for certain highly sensitive products at rates below the minimum 6 percent prescribed for Article 3 restraints; but "in overall terms" these agreements were still more liberal than "measures provided for in Article 3".
4.
There was, in the end, no consensus and, since the GATT operates only on the basis of consensus, the mooting would normally have been regarded as inconslusive. However, the Chairman of the Committeo, Mr. 0. Long, the Director General of the GATT, noted in his summing-up that there had been a request for a protocol to be opened 01. 15th December 1977 on the basis of an understanding (which included a reference to the possibility of "reasonable departures" as referred to in paragraph 3 above) reached between a number of key participants, including the EEC, the 13 and Hong Kong, and he noted the roquest as a firm intention by the delegations supporting this document to proceed on that basis. Mr. Long subsequently explained that the Textiles Committee as such had reached no decision on the future of the MFA but that, as requested at the meeting, a protocol would he opened for signature and that all those who signed it would bind themselves to deal with each other as regards their toxtile trade in the manner set out in the protocol.
5.
Mr. Long's closing words were that his own view, not just on textiles but on world trade generally, was that "it is extremely important to make every effort in order that the MFA be extended, failing which we might very well witness the beginning of the disinto- gration of international trade".
Footnote :
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Article 3 provides that an importing country may seek restraint on imports of particular products from particular sources in situations of "market disruption" as defined in the MFA; and that in such situation certain minimum provisions in respect of base levels, growth rates, and flexibility must be met. Article 4 on the other hand is designed to deal with "real risks" of market disruption. Participants may conclude
bilateral agreements under Article 4 on "mutually
acceptable terms" the only constraint being that such bilateral agreements "shall on overall terms including base levels and growth rates, be more liberal than measures provided for in Article 3".
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