PERU
RESTRICTED
3. TRAN (COMMISSION) PROPOSED OFFERING THE PERUVIANS TWO ALTERNATIVES
OR
(A) NO AGREEMENT AND THEREFORE UNILATERAL MEASURES FROM 1 JANUARY:
B) AN AGREEMENT BASED ON TWO ELEMENTS:
(1) A QUOTA OF 500 AND 200 TONNES RESPECTIVELY FOR NORMAL COTTON
YARN AND CLOTH FOR 1978 AND
(11) AN EXCHANGE OF LETTERS ON SPECIAL QUALITY COTTON YARN AND
CLOTH FOR WHICH THERE WOULD BE LIMITS OF 3,028 AND 1,590 TONNES RESPECTIVELY FOR 1978 CUTSIDE THE QUOTA, PROVIDED THAT IMPORTS WERE
NOT, REPEAT NOT, BELOW THE NORMAL COMMUNITY PRICE FOR THE SAME
PRODUCT.
IN THE ARTICLE 113 COMMITTEE MEETING, MOST MEMBER STATES EXPRESSED
DOUBT ABOUT THE COMMISSION'S PROPOSALS. THE BELGIANS POINTED OUT THAT
THERE WAS NO SPECIAL QUALITY COTTON CLOTH, ONLY YARN. MOST DELEGAT-
IONS AGREED THAT THE PROBLEM SHOULD BE PUT TO THE COUNCIL. TRAN SAID
THAT THE COMMISSION WAS NOT PREPARED TO RAISE IT AT THE COUNCIL:
THEY INTENDED TO EXECUTE THEIR NEGOTIATING MANDATE. 'EUROCOTON' HAD
TOLD HIM PRIVATELY THAT THEY WOULD BE SATISFIED WITH THIS SPECIAL
ARRANGEMENT FOR QUALITY COTTON AND CLOTH PROVIDED THAT IT DID NOT UNDERCUT THE COMMUNITY'S INDUSTRY IN TERMS OF PRICE. AGREEMENT WAS SUBSEQUENTLY CONCLUDED (ALTHOUGH THE TERMS ARE NOT YET KNOWN);
SEE PARA 11 BELOW.
KORE^
4. MY TELNO 7336 (NOT TO ALL) REFERS. FOLLOWING A MEETING BETWEEN THE KOREANS AND COMMISSIONER DAVIGNON, THE KOREANS NOW HAVE UNTIL MIDDAY TODAY TO ACCEPT THE COMMISSION'S OFFER OR TO FACE IMMEDIATE
AUTONOMOUS MEASURES WITH A 20% CUTBACK. THE COMMISSION ARE CONFIDENT
THAT THE KOREANS WILL SIGN..
HONG KONG
i.
5. AFTER A WEEK OF INFORMAL DISCUSSIONS, HONG KONG RETURNED TO FOR-
MAL DISCUSSIONS ON 23 NOVEMBER, AGREEMENT HAS BEEN REACHED WITH THEM
CN BASE LEVELS AND GROWTH RATES FOR NEARLY ALL PRODUCTS IN GROUPS
111 AND IV. HOWEVER, WHEN CONFRONTED WITH A NEW COMMUNITY REQUEST IN CATEGORIES 2 AND 3, (COTTON AND SYNTHETIC CLOTH) FOR AN INNER
STOP FOR OTHER THAN GREY OR BLEACHED CLOTH THE HONG KONG DELEGATION
WALKED OUT IN ANGER. THE COMMISSION NEGOTIATOR IS NOW DISCUSSING
2
RESTRICTED
/ INFORMALLY