Since Hong Kong's exports to the EEC of the 6 items where outbacks are being sought have all declined in 1977, the EEC cannot possibly establish a case for restraint under Article 3 in any of them. There has, in fact, been a sharp and substantial decline in exports rather than the sharp and sub- stantial increase which is a prime requirement for an Article 3 restraint. Therefore paragraph 1(b) of Annex B is irrelevant in respect of these,
24.
6 items as far as Hong Kong 18 concerned?
23.
At the Textiles Committee Meeting in July, it was Hong Kong that referred to "the possi bility of jointly agreed reasonable departures from particular elements of the MFA7, provided .....
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We outcome is one which meets the criteria'
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set out in Article 4". In making such a statement, Hong Kong was doing no more than reaffirming its past and present practice, having conceded in 1975 very low growth rates of 0.5% in many cases, and swing of only 5% in some cases, under its current agreement with the EEC, and having just concluded
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new agreement with the USA also providing for growth rates lower than 6%. But even taking Hong Kong's statement at its face value, the FEC's proposals for substantial cutbacks, not only on existing restraint levels, but also on 1976 import- levels, for the 6 items concerned can hardly be regarded as "reasonable departures".
24.
1
I feel it necessary to say that in making these demands we see the EEC as in fact saying that it does not intend to abide by some of the most fundamental rules of the MFA. It is in effect trying to a chieve in bilateral negotiation. that which it could not achieve in the multi-``` lateral forum. If Hong Kong were able to agree to such major departures from the MFA, then it would have had no need to oppose the EC's demande for oubstantial and substantive changes to the MF