RESTRICTED
IN COTTON YARNS THAN THE UK). HE ACKNOWLEDGED OUR POLITICAL AS WELL
AS OUR ECONOMIC DIFFICULTIES IN THIS SECTOR. THIS SUGGESTION WAS BROADLY SUPPORTED BY LAVENANT (FRANCE).. THE BENELUX DELEGATIONS SA THAT THEY COULD NOT ACCEPT ANY FORMULA THAT WOULD PUT A DISCRIMINAT- ORY LOAD ON THEM IN THIS SECTOR IMPLYING THAT THEY REJECTED THE GER-
MAN SUGGESTION: THEY COULD LIVE WITH GROWTH OF 2.6 PERCENT PROVIDED
THAT THE BURDEN WAS SHARED FAIRLY. OUR INSISTENCE THAT WE HAD TO
MAINTAIN A RESERVE ON THIS CAUSED THE GERMANS IN EXASPERATION TO WITHDRAW THE SUGGESTION THEY HAD MADE, THOUGH SOUNDINGS WE MADE AFTER THE MEETING SUGGESTED THAT THE DOOR MAY NOT BE ENTIRELY CLOSED (SEE PARA 5 BELOW).
3. THE ITALIANS, MOVING FROM THEIR PREVIOUS POSITION, SAID THAT THEY WERE PREPARED TO ACCEPT A GROWTH RATE OF 0.3 PERCENT. TO THIS
TRAN SAID THAT SUCH A GROWTH RATE WAS INDECENT AND
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WOULD FACILITATE HIS NEGOTIATIONS EVEN LESS THAN A ZERO GROWTH RATE.
LITTLE SUPPORT WAS EVINCED FOR THE ITALIAN POSITION.
4. UNLESS THIS AFTERNOON'S SESSION CAN REACH AGREEMENT ON THIS POINT
AND THIS SEEMS UNLIKELY - THE WORKING GROUP'S REPORT WILL GO FOR- WARD TO COREPER WITH A GROWTH RATE OF 0.6 PERCENT ((FOR COTTON YARNS)). IT CANNOT BE EXPECTED THAT THE UK POSITION WILL RECEIVE
SYMPATHETIC TREATMENT IN COREPER ON THIS BASIS,
5. IT SEEMS TO US HOWEVER THAT THERE MAY STILL BE THE MAKINGS OF
A DEAL HERE WITH THE COMMISSION'S BLESSING AND THE COOPERATION OF THE FRENCH AND GERMANS, WHEREBY WE WOULD GET NIL BROWTH ON COTTON YARN. THE COMPROMISE PROPOSAL ON BURDEN SHARING NOW BEING CONSI D- ERED IN THE MARGINS OF THE MEETING (FULL DETAILS ARE BEING TELEG- RAPHED TO MISS LOWNE) FOR THE 8 MOST SENSITIVE PRODUCTS WOULD RES- ULT FOR THE UK IN 970 TONS MORE COTTON CLOTH (5509) IMPORTED FROM LOW COST SOURCES IN 1981 THAN WOULD HAVE BEEN THE CASE ON THE FIRST BURDEN SHARING CALCULATION (BASED ON INTERNAL GLOBAL CEILINGS). HOW~ EVER THE 1981 CEILING WILL REMAIN LOWER THAN ACTUAL IMPORTS OF COTT- ON CLOTH IN 1976 (67190 TONS AGAINST 70643).
6. THE REVISED BURDEN SHARING PROPOSAL SHOULD RESULT IN MATERIAL DECLINE IN LOW COST IMPORT PENETRATION IN THE UK BY 1981 FOR SYN~~ THETIC DISCONTINUOUS CLOTH, KNITTED JERSEYS AND BLOUSES WITH SMALL INCREASES FOR KNITTED SHIRTS AND WOVEN SHIRTS. TROUSERS
SHOULD BE STABILISED,
2
RESTRICTED