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by other participating countries, the EEC would have no alternative but to seek formal changes in the actual terms of the MFA; and
(b) in any event, the important point so far as the EEC
was concerned was that its stabilisation objectives be achieved by means of bilateral agreements which must all be concluded by the end of 1977. Should the bilateral negotiations not have been successfully completed by that date the EEC would be obliged to take appropriate measures to ensure the attainment of its stabilisation objectives.
What in effect this meant was that the EEC would be prepared to accept an extension of the MFA without change, provided that a form of words could be devised for inclusion in the records of the Textiles Committee meeting which would take note of EEC problems as it saw them and its proposals on how it was to solve them. The EEC's obvious intention was to avoid the virtually impossible task (in the face of united opposition by developing countries to any changes to the MFA which would make it more restrictive) of negotiating a modified MFA before the end of 1977. Instead, it envisaged a situation where it would negotiate a series of bilateral agreements which would enable it to achieve its so- called "stabilisation" objectives without having to change the MFA; and also without necessarily having to respect it in certain important regards.
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The Hong Kong delegation stated formally that, in seeking a mutually acceptable solution in bilateral negotiations under Article 4 of the MFA, "one must, of course, not exclude the possibility of reasonable departures from particular elements, provided the outcome is one which meets the criteria set out in Article 4: i. e. the agreement on overall terms is more liberal than the measures provided for in Article 3 of the MFA". (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 situations 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"). The Hong Kong statement, while designed to help close the gap in the Committee, in fact did no more than restate our 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 ce rtain highly sensitive products
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