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GIVE OTHER COUNTRIES THE ECONOMIC AND POLITICAL WEAPONS TO UNDER
MINE WHAT WE HAD ACHIEVED. HE HAD ACCORDINGLY ASKED THE SECRETARY-
GENERAL OF THE GATT TO POSTPONE THE NEXT MEETING OF THE TEXTILES
COMMITTEE UNTIL NEXT MONDAY. DAVIGNON ADDED THAT THE COMMISSION WOULD
NOT RECOMMEND MEMBER STATES TO AGREE FORMALLY TO THE RENEWAL OF THE
MFA UNTIL THE BILATERAL AGREEMENTS NOW INITIALLED HAD BEEN EMBODIED,
NOT JUST IN MEMORANDA OF UNDERSTANDING, BUT IN FORMAL SIGNED AGREE-
MENTS.
3. DAVIGNON INTRODUCED HIS ACCOUNT OF THE BILATERAL NEGOTIATIONS WITH
A FULSOME TRIBUTE TO THE COMMISSION SERVICES, NOTABLY TRAN, FOR
THEIR REMARKABLE ACHIEVEMENT. MOST OF HIS PRESENTATION WAS ON FAMIL-
IAR LINES. POINTS OF INTEREST INCLUDED:
(A) NO AGREEMENTS HAD BEEN INITIALLED WITH INDIA, PAKISTAN, AND
BRAZIL BUT THE CONDITIONS WERE SUCH THAT AN AGREEMENT COULD BE INIT-
IALLED IF THE COUNCIL AGREED THE EXTRA QUANTITIES RECOMMENDED IN
THE REPORT.
(B) NOT COUNTING PORTUGAL AND SPAIN, SOME 90% OF TEXTILE IMPORTS
FROM MEA PRODUCERS WAS NOW COVERED BY THE AGREEMENTS REACHED. THIS
MEANT THAT THE COMMUNITY HAD SUCCEEDED IN PROVIDING SECURITY FOR
ITS TEXTILE INDUSTRY FOR 5 YEARS WITHIN LIMITS TOLERABLE TO THE
INDUSTRY, PROVIDED THE INDUSTRY MADE CERTAIN ADAPTATIONS.
(C) ONE OF THE RESULTS WOULD BE VIRTUAL PARALYSIS OF INVESTMENT
IN MANY OF THE SUPPLYING COUNTRIES.
(D) FOR NEW SUPPLIERS, HE REFERRED TO THE PROVISIONS IN THE JUNE MANDATE (S/1003/77, ANNEX I, PARA 12).
THERE WAS NO DANGER OF BREACHES IN THE DYKE.
4. DAVIGNON ASSERTED THAT, EXCEPTING PROVISIONS FOR INDIA, PAKISTAN,
EGYPT AND BRAZIL, THE GLOBAL CEILINGS IN THE MANDATE HAD NOT BEEN EXCEEDED AND THAT ON PRODUCTS IN GROUP 1 OTHER THAN COTTON YARN AND
COTTON CLOTH THE COMMISSION'S RESERVES HAD IN FACT NOT BEEN FULLY EXHAUSTED (A FACT WHICH HE EXHORTED MEMBER STATES NOT TO DIVULGE).
THE PAPER CIRCULATED TODAY OFFERED A SOLUTION TO THE PROBLEM
OF COTTON YARN AND COTTON CLOTH. THE PROBLEM WAS PSYCHOLOGICALLY AND
POLITICALLY IMPORTANT BUT ECONOMICALLY SURMOUNTABLE.·
2 CONFIDENTIAL
15.
IN