CONFIDENTIAL
7. NICOLL (UK) SPOKE ALONG THE LINES OF YOUR TELEGRAM UNDER REFER- ENCE. WE WELCOMED THE COMMISSION'S DECISION TO REPORT TO COREPER. BUT
WE WERE STILL CONCERNED TO AVOID ANY POSSIBILITY OF MISUNDERSTANDING. WE ATTACHED GREAT IMPORTANCE TO THE NEGOTIATING DIRECTIVES ELABOR-
ATED BY THE COUNCIL BEING RESPECTED IN FULL. THE CORE OF THESE DIR- ECTIVES WAS THE SERIES OF INTERNAL GLOBAL CEILINGS FOR PRODUCTS
IN GROUP 1. IT WAS IMPORTANT THAT NO OFFER SHOULD BE MADE TO NEGOT-
LATING PARTNERS WHICH WOULD RESULT IN THE CEILINGS BEING EXCEEDED.
THERE WAS NO POSSIBILITY OF THE UK AGREEING TO ANY INCREASES IN THE
INTERNAL GLOBAL CEILINGS FOR THESE PRODUCTS AT THIS STAGE: ANY SUCH
PROPOSALS WOULD IN ANY CASE BE A MATTER FOR DECISION BY THE
COUNCIL. SIMILARLY, IN NOTING THAT THE COMMISSION HAD NOW INITIAL-
LED MEMORANDA OF UNDERSTANDING WITH A NUMBER OF SUPPLYING COUNTRIES, THE UK ALSO NOTED THAT THIS ACT COULD NOT BIND MEMBER STATES TO THE
PACKAGE INITIALLED. THE COMMISSION WOULD NO DOUBT CONTINUE TO TAKE
ACCOUNT OF VIEWS OF MEMBER STATES AS EXPRESSED IN THE ARTICLE 113
COMMITTEE. WE COULD ONLY TAKE AN OVERALL VIEW OF THE RESULTS ACHIEV-
ED WHEN THE SUBJECT CAME UP FOR THE COUNCIL TO DECIDE ON.
8. THE UK HAD ALWAYS BEEN CONCERNED THAT THE OFFERS BEING MADE TO
A NUMBER OF THIRD COUNTRIES, PARTICULARLY TO BRAZIL, WERE TOO GEN- EROUS AS COMPARED WITH THOSE BEING MADE TO OTHER DOMINANT
SUPPLIERS AND THE POOREST DEVELOPING COUNTRIES. THE COMPROMISE
OFFER MADE BY THE COMMISSION TO BRAZIL TOOK US BEYOND THE LIMIT WHICH
WE COULD CONTEMPLATE. AS TRAN HAD EMPHASISED, A DECISION ON BRAZIL
WOULD HAVE TO BE TAKEN AT THE POLITICAL LEVEL. WE SHOULD NEVERTHE-
LESS MAKE IT PLAIN AT THIS STAGE THAT THE UK DID NOT ACCEPT THAT
BRAZIL SHOULD HAVE SPECIAL TREATMENT BECAUSE OF THE FEAR OF RETAL-
IATION AGAINST THE COMMUNITY'S INTERESTS IN THAT COUNTRY, THE SAME
CONSIDERATIONS COULD BE HELD TO APPLY TO OTHER MAJOR SUPPLIERS.
9. WE AGREED WITH THE COMMISSION ON THE IMPORTANCE OF SECURING
AGREEMENTS WITH THE THREE DOMINANT EXPORTS HONG KONG, SOUTH KOREA,
AND INDIA. THE COMMUNITY MUST LOOK FOR TACTICAL OPENINGS WITH
THESE COUNTRIES WHICH WOULD ENABLE US TO SECURE OUR MAJOR OBJECTIVES.
AS REGARDS HONG KONG WE HAD NOW STUDIED THEIR COUNTERDRAFT OF A MODEL
AGREEMENT, AND WERE READY TO DISCUSS IT IN THE ARTICLE 113 COMMITTEE
AS LONG AS HONG KONG WAS AT THE SAME TIME READY TO TALK ON THE
BASIS OF THE COMMUNITY'S OFFER ON FIGURES. WE COULD ONLY HOPE THAT
WHAT TRAN HAD SAID IN HIS PRESS BRIEFING EARLIER TODAY WOULD ENCOUR-
AGE THE HONG KONG NEGOTIATORS TO GO DOWN THIS ROAD.
--3- CONFIDENTIAL
/10.