CONFIDENTIAL
1) THE PROPOSED CUT-BACKS WOULD NOT IN ANY CASE BENEFIT EUROPEAN INDUSTRY SO MUCH AS OTHER THIRD COUNTRIES LIKE INDIA, THE COMMUNITY'S MEDITERRANEAN PARTNERS AND NEW SUPPLIERS. THIS WAS ILLOGICAL: UNLIKE THESE OTHER SUPPLIERS HONG KONG'S ECONOMY WAS ALMOST ENTIRELY BASED ON INDUSTRIAL EXPORTS, 50 PER CENT OF WHICH WERE TEXTILES. THE IMPACT OF THE PROPOSED MEASURES WOULD THEREFORE
BE DISPROPORTIONATELY GREAT IN HONG KONG.
(IV) HONG KONG HAD A GOOD TRACK RECORD IN ACCEPTING RESTRAINT AGREEMENTS IN THE PAST, AND HAD HERSELF PROPOSED IN THE GENEVA DISCUSSIONS ON A RENEWED M F A THE PHRASE DEALING WITH ''JOINTLY
AGREED AND REASONABLE DEPARTURES'' FROM THE ORDINARY RULES OF THE
MFA.
(V) THE COMMISSION'S PROPOSALS WERE DOUBLY HARMFUL. THEY NOT
ONLY INVOLVED CUTS BELOW 1976 QUOTA LEVELS: THEY WERE ALSO
DISCRIMINATORY IN THEIR APPLICATION.
3. HAFERKAMP REPLIED THAT THE COMMISSION HAD RECEIVED MANY
REPRESENTATIONS ON THE TEXTILE MANDATE. THE U.K. AND FRANCE
HAD BEEN WORST HIT BY THE RECESSION IN THE TEXTILE INDUSTRY,
A SITUATION WHICH HAD LED EARLIER IN THE YEAR TO FRENCH
UNILATERAL MEASURES WHICH WERE SUBSEQUENTLY, AND WITH DIFFICULTY TAKEN OVER BY THE COMMUNITY. THE COMMISSION'S AIM IN THE CURRENT
MANDATE WAS TO BRING SOME STABILITY AND SECURITY INTO THE
TEXTILE TRADE FOR BOTH IMPORTERS AND EXPORTERS, WHILE TAKING PARALLEL STEPS TO RESTRUCTURE THE COMMUNITY INDUSTRY. IT WOULD
BE IMPORTANT TO AVOID A NEGATIVE PRECEDENT ON THE EVE OF THE
MTN'S. THE COMMISSION COULD NOT IGNORE EITHER THE 6 MILLION
UNEMPLOYED IN EUROPE OR THE NEED TO PROVIDE SOME ROOM FOR NEW
COMERS TO THE MARKET. THE PROPOSALS ENDORSED LAST WEEK BY THE COUNCIL OF MINISTERS WERE NOT DISCRIMINATORY: THE RESTRAINTS IN QUESTION WOULD APPLY TO ALL DOMINANT SUPPLIERS BUT ONLY FOR CERTAIN
PRODUCTS.
4, ELLIOTT ADDED THAT, WHILE THE U.K. WAS CERTAINLY IN FAVOUR OF GREATER PROTECTION FOR ITS TEXTILE INDUSTRY, WE WOULD NOT WISH TO SEE HONG KONG TREATED UNFAIRLY IN RELATION TO COMPARABLE
SUPPLIERS.
15.
COMMISSIONER
2 CONFIDENTIAL