:
COVERING CONFIDENTIAL
и потни они
IN
144
Mr Hurray
THE MULTI-FIBRE ARRANGEMENT
1.
R
EASI
(138)
RET
12 AUG 1977
*.57
4KK12116.61
As promised I am sending you a copy of my letter to Mr March in Hong Kong briefing him on the recent developments in the negotiations to consider the future of the MFA.
2.
Because the documents supplied to Mr March covered this point well, I did not in my letter to him say exactly what the MFA was. The "Arrangement regarding international trade in textiles" was established as a result of the Tokyo Declaration of 1973 on the Multilateral Trade Negotiations. The purpose was to establish guidelines for the bilateral agreements on textiles trade between the importing countries on the one hand and the exporters on the other, so that these bilaterals, their form and their interpretation, are subject to standardized rules. Very briefly, the MFA enshrines an agreement that all exports of "sensitive categories" textiles; of which there are about 26, should be subject to bilateral agreements and that the export and import of these be covered by quotas. These quotas are based on actual exports during 1973 (or, in some cases, 1972) and a fundamental part of the arrangement is that the quotas should be allowed to grow each year; generally by a figure of no more than 6%. As far as the European Community is concerned, there is a further internal agreement known as the Burden Sharing Arrangement whereby those countries which have traditonally imported large quantities of textiles from various suppliers, e.g. Britain and France, should be allowed to impose lower quota growth rates which are balanced by much larger quota growths (i.e. much larger than 6%) in those countries with no traditional textile import trade, e.g. Germany and Denmark.
8 August 1977
Sleart
ß.
2.0.3.8
JNB Stewart
Hong Kong & General Dept
Thank
All
is
Kow
clear to
HAR.
you.
COVERING CONFIDENTIAL