-5-
agreement does not necessarily have to be
more
base levels and growth rates, be more liberal than measures provided for in Article 3 Hong Kong's interpretation of this is that while an Article 4/liberal than Article 3 provisions in every respect, its terms must in some cases be an improvement on and in other cases no worse than Article 3 provisions
19.
*
Paragraph 8 of Article 3 provides that measures taken under it may be renewed or extended for a dditional periods in which case the provisions of Annex B shall apply
20.
Paragraph 2 of Annex B provides that where restraint measures remain in force for another 12 month period, there must at least be 6% growth. or, in certain exceptional cases, a lower positive, growth, on the previous restraint level. Paragraph 3 of Annex B provides that should the meanures remain in force for further periods, the level for éach subsequent period should be increased by 6%
in certain circumstances, a lower positive growth rate.
21
It is clear fromthese provisions that cutbacks in existing restraint levels are not permitted under Article 3 since in the most excepti onal circumstances there must still be positive growth when a restraint is renewed. or extended. It follows that where Article 4 restraints are renewed or extended, there must be at least some positive growth on existing restraint levels and that therefore outbacks are not permitted.
22
One of the EEC's requests in negotiating the renewal of the MFA was to seek the agreement of exporting countries, especially the large ones, not to invoke the provisions of a ragraph 1(b) of Annex B. But paragraph 1 or Annex B applies only in the case of new restraints under Article 3
Vince