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TO IMMEDIATE UKREP BRUSSELS TEL NO 2373 OF 15 DECEMBER
TEXTILES: RENEWAL OF THE MULTIFIBRE ARRANGEMENT
THE SECRETARY OF STATE FOR TRADE SPOKE TO COMMISSIONER DAVIGNON BY
TELEPHONE YESTERDAY EVENING (14 DECEMBER) ABOUT A NUMBER OF POINTS
OF CONCERN TO UK MINISTERS, THE FOLLOWING IS A SUMMARY OF THEIR
CONVERSATION.
COTTON YARN AND CLOTH
2. MR DELL PRESSED DAVIGNON ABOUT THE NEED TO GO SO FAR TO REACH
AGREEMENT WITH INDIA, PAKISTAN, EGYPT AND BRAZIL. HE ASKED WHY THE
COMMISSION WERE NOT PREPARED TO BE AS TOUGH WITH THESE COUNTRIES AS
WITH HONG KONG. HE REMINDED DAVIGNON OF THE ASSURANCES GIVEN IN
THE MARGINS OF THE COUNCIL IN LUXEMBOURG ON 18 OCTOBER ABOUT THE
INTENTION TO KEEP UK GROWTH ON COTTON YARN TO ZERO. THIS ASSURANCE
HAD NOT BEEN MET. MR DELL ACKNOWLEDGED THE COMMISSION'S EFFORTS TO
REDUCE THE UK'S SHARE OF THE INCREASE BUT DESPITE THIS, THE UK WAS BEING ASKED TO TAKE 5.47 MORE YARN IN 1978 THAN IN 1976. SUCH AN
INCREASE WOULD CREATE GREAT DIFFICULTIES FOR THE UK INDUSTRY, IN
VIEW OF THE POLITICAL SENSITIVITY, HE ASKED IF SOMETHING FURTHER
COULD BE DONE TO HELP THE UK.
3. DAVIGNON SAID HE DID NOT THINK THE COMMISSION COULD GET AGREEMENT
WITH THESE COUNTRIES FOR LESS. THE COMMISSION HAD ALREADY BEEN
VERY TOUGH WITH INDIA AND PAKISTAN (WHOSE NEGOTIATORS HAD ACTED AGAINST THEIR INSTRUCTIONS IN ACCEPTING THE PRESENT PROPOSALS) AND
EGYPT: IT HAD BEEN NECESSARY TO BRING IN BRAZIL IN ORDER TO AVOID A
MAJOR UPSET IN GENEVA OVER THE RENEWAL PROTOCOL. THE SOLUTION
PROPOSED ALREADY TOOK ACCOUNT OF THE UK'S SPECIAL PROBLEMS ON COTTON
YARN AND IT WAS BECAUSE THE COMMISSION FULLY UNDERSTOOD THE UK'S
POLITICAL SENSITIVITY IN THIS AREA, THAT THEY REFRAINED FROM DRAWING
UNDUE ATTENTION TO WHAT THEY REGARDED AS THE ECONOMIC WEAKNESS
OF THE UK'S CASE, WHEN PRESSED AGAIN BY MR DELL, DAVIGNON SAID
HE HAD GONE AS FAR AS HE COULD. ANY ATTEMPT TO REOPEN THESE
NEGOTIATIONS WOULD BE COUNTERPRODUCTIVE: THE FOUR COUNTRIES WOULD
SIMPLY COME BACK WITH MUCH HIGHER DEMANDS.
CONFIDENTIAL
14. DAVIGNON