GRS 1000
IMMEDIATE
DESKRY 261000Z
CYPHER/CAT A
FROM UKREP BRUSSELS 260938Z
RESTRICTED
FRAME EXTERNAL
DESKBY 261200Z
RESTRICTED
LKK 121
2
TO IMMEDIATE FCO TELNO 6376 OF 26TH OCTOBER 1977
INFO ROUTINE SINGAPORE, LIMA, BOGOTA, MANILA, BRASILIA.
MULTI FIBRE ARRANGEMENT
BILATERAL NEGOTIATIONS:
PROGRESS REPORT NO 2 (24-25 OCTOBER).
A. SUMMARY.
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1. THE COMMISSION BEGAN A CAMPAIGN FOR A HIGHER GLOBAL CEILING ON COTTON YARN. THE REGIONAL RESTRAINTS WE WON BILATERALLY FROM THE COMMISSION TWO WEEKS AGO ARE NOW COMING TO LIGHT AND PROVOKING CRITICISM AND COUNTER-CLAIMS FROM OTHER MEMBER STATES. AN AGREEMENT IS BEING INITIALLED WITH SINGAPORE.
B. ARTICLE 113 COMMITTEE, 25 OCTOBER
(1) COTTON YARN.
2. IN AN EXCHANGE THAT AROSE OUT OF DISCUSSION OF THE PROBLEMS WITH COLOMBIA AND PERU (SEE PARAS 8 AND 9 BELOW), TRAN (COMMISSION) SAID THAT THE NEGOTIATING RESERVE ON COTTON YARN WAS NOW EXHAUSTED, EVEN THOUGH SEVERAL MAJOR EXPORTERS WERE YET TO COME TO BRUSSELS. (HALF THE RESERVE IS BEING KEPT IN HAND, HOWEVER, FOR THE MEXICANS). THE COMMISSION COULD NOT NEGOTIATE WITH 0.3% OR 0.6% GROWTH RATES. THE COMMUNITY WOULD HAVE TO GO BEYOND THIS CEILING IF IT WANTED TO CONCLUDE AGREEMENTS WITH COUNTRIES SUCH AS COLOMBIA AND PERU THEY WERE NOT LARGE EXPORTERS NOW, AND A SMALL CONCESSION COULD BRING THEM ON BOARD. THE ALTERNATIVE, IF THEY, AND OTHERS SIMILARLY PLACED, REFUSED TO SIGN AN AGREEMENT, WOULD BE UNCONTROLLED AND GROWING ACCESS FOR THESE EXPORTERS, SINCE IT WAS INCONCEIVABLE THAT THE COMMUNITY WOULD TAKE GATT ARTICLE XIX ACTION AGAINST SUCH
RESTRICTED
SMALL COUNTRIES.