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EN CLAIR
FM HONGAID 31 1700
UNCLASSIFIED
TO ROUTINE DIRECTOR OF TRADE, INDUSTRY AND CUSTOMS
OF .31 OCTOBER
REPTO @RUSSELS
AND GENEVA FOR TSAO
FROM JORDAN
EEC TEXTILES
L0200
THE DELEGATION HAS ALREADY REPORTED (TELEX R333 /HKDEL/2(0) THE EEC'S 107% PROPOSED COMMUNITY PESTRAINT LIMITS FOR HYPER- SENSITIVE CATEGORIES. THESE AS YOU KNOW INVOLVE IN CATEGORIES 2 AND 4-0 CUTBACKS ON 1976 COMMUNITY IMPORTS RANGING FRON 5.5. TO 33 PER CENT. OUR PRELIMINARY CALCULATIONS OF THE PERCENTAGES BY WHICH THESE FIGURES FALL SHORT OF THE LIMITS THAT AN EXTRAPOLATION OF THE CURRENT AGREEMENT INTO 1978 WOULD PROVIDE RANGE GENERALLY BETWEEN 15 PER CENT AND 30 PER CENT.
THERE IS ONE STARTLING EXCEPTION.
THAT IS COTTON FABRICS, WHERE THE CUTBACK ON EXTRAPOLATED 1976 LIMITS IS OVER 50 PER CENT (ON EEC 1976 IMPORTS IT IS 33 PER CENT). NO ONE CAN EVEN PRETEND THAT THE COMMUNITY IS HERE SEEKING A REASONABLE DEPARTURE".
1
BUT NOT ONLY THAT. THE COTTON FABRICS LIMIT NOW PROPOSED FOR THE COMMUNITY FOR 1970 IS WAY BELOW THE FIRST LIMIT SET FOR THE UNITED KINGDOM ALONE IN 1959 (118 M. SQ.Y.). AND EVEN IF WE TAKE CATS 1 AND 2 TOGETHER, THE COMBINED LIMITS PROPOSED FOR THE WHOLE COMMUNITY FOR 1978 IS ONLY 149 M. SQ.Y.
THE EEC HAS NOT GIVEN US THE PROPOSED MS BREAKDOWN YET SUT 70 PER CENT OF THE CURRENT EEC QUOTA FOR COTTON AND SYNTHETIC FABRICS IS FOR THE U.P. AND 70 PER CENT OF 149 M. IS 104 M., AGAIN BELOW THE 1959 FIGURE.
THE ADVISERS HAVE DRAWN PARTICULAR ATTENTION TO THIS BECAUSE:
(A) BY FAR THE GREATER PART OF OUR FABRIC EXPORTS TO THE EEC GOES TO THE UK.,
HERE
(B) THEY FEEL THEREFORE THAT THIS IS CLEARLY A CASE THE UK RATHER THAN THE COMMUNITY IS SEEKING TO CUTBACK HK. AND THAT THE DEPTH OF THE CUT MUST BE DUE MAINLY TO THE UK'S INSISTENCE OF DEPRIVING HK OF ITS TRADITIONAL TRADE.
THEY POINT OUT THAT WHEN IN 1959 THEY A ACCEPTED THE FIRST VOLUNTARY RESTRAINT TO HELP THE UK INDUSTRY ADJUST, NEITHER TALYAN NOR KOREA AS IN THE PICTURE. HAVING BEEN UNDER RESTRAINT ALL THESE YEARS WHILE OTHERS ENTERED THE MARKET WHOSE DEVELOPMENT WAS FOR THEM LIMITED, THEY ARE NOW FACED WITH A DEMAND FOR A CUTBACK TO SELOW THE 1959 LIMIT TO MAKE MORE ROOM FOR EVEN NEWER NEWCOMER ON THE BANDWAGON.
THEY ASK THAT THE HKG MAKE REPRESENTATIONS IN LONDON ABOUT THE MANIFEST INJUSTICE OF THE EEC'S PROPOSALS. BUT PLEASE CHECK MY FIGURES FIRST.++++
284 CL
HAGOVT G
73126 CNDI HYM