DN March Esq OBE
CONFIDENTI AL
4 August 1977
The US have concluded favourable bilateral agreements under the present MFA and their own domestic market does not suffer so much from import penetration.
Current Position
9.
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In the GATT Textiles Committee negotiations in Geneva during July the Commission attempted to reach a tough enough deal with the producers for it to be acceptable to Member States. By 24 July negotiations seemed to have ground to a halt. Commission, with the US and Japan, had introduced a text (COMTEX 44) designed to form the basis of a consensus. were supported, albeit reluctantly, by the exporters who cover 85% of textile trade, including Hong Kong and South Korea. text provided for the Community to renegotiate the present bilateral agreements under the MFA with the possibility of reasonable departures from certain elements of it. The implication was that if the Community obtained satisfactorily "protectionist” bilaterals, it would review the MFA unchanged at the end of the year. Member States, especially the French, were reluctant to agree but UK Ministers accepted the approach arguing that the bilaterals would be the crucial test and that the Community must not be committed to signing without satisfaction in the bilateral negotiations.
10. A rival text to COMITEX 44, which met few of the EEC objectives, was intrɑduced by Brazil and India who felt that under-hand modifications were being made to the MFA (and whose expanding textile industries would be severely hit by the cut-back of growth rates). The Canadians could not agree to either text and the French, speaking on their own in the Textiles Committee (where under EEC rules it is for the Commission only to speak and not Member States) said that the EEC-USA-Japan text did not go far enough towards meeting French and European objectives.
11. The Textile Committee adjourned on 24 July but COMTEX 44 remains on the table with a draft Protocol open for signature after 15 December renewing the MFA unchanged. The Commission will now press ahead with preparation for the bilateral negotiations with those exporting countries who are ready to negotiate on the basis of the EEC/USA/Japan text. These include Hong Kong. The French appear to accept this although, like us, they will only agree to the Community renewing the MFA unchanged at the end of the year if the results of the bilaterals are satisfactory.
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CONFIDENTIAL