CONFIDENTIAL 88
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6.
Mr. Nicholl said that when the current Hong Kong/EEC textiles agreement was negotiated in 1977, the object of asking Hong Kong to accept cutbacks on its quotas was to create better access to the EEC market for the poorer developing countries. However, it was noted that the 'gap' left by the cutbacks on Hong Kong had been filled not by the poorer developing countries, but by the developed countries.
Mr. Parkinson accepted that the cutbacks had not necessarily gone in the direction originally intended, but pointed out that the UK could do nothing to interfere with the activities within the Free Trade Areas. In respect of the Mediterranean suppliers, quotas had been imposed on Turkey. Agreements had also been reached with Cyprus and Malta. biggest growth, however, came from the US. This was causing the most problems for the UK at present.
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7.
Mr. Cheong said that due to political and industrial pressures, developed countries had resorted to the use of the 'reasonable departure' clause without justification. Mc. Lau added that industries in developed countries were now even suggesting that growth in re- strained access rights should be related to the growth of the market,
8.
Mr. Parkinson said that a number of ideas regarding MFA III had been put to the Government but the Government had not at the moment made up its mind on any of these issues. The MFA had been drawn up on the assumption that the market would grow. There were therefore provisions for growth in quotes in the MFA. This assumption had subsequently been found to be inaccurate. The UK market had in fact been stagnant or contracting. Yet, some were still working on the basis that the assumption was correct. The UK industry argued that this was unfair.
9.
Mr. Chen said that weavers and spinners in Hong Kong were facing very keen competition from Pakistan, South Korea, Taiwan and recently China. Given Hong Kong's liberal trade policy, they could expect to get no protection against imports. In the circumstances, they had to give up the lower end of the market. Despite these diffi- culties, they were confident that they would continue to survive.
10.
In reply to the Chairman's question about EEC/China textile trade, Mr. Parkinson said that China's present quota levels were very low. The Chinese were unlikely to be happy about what they had already got.
11.
Referring to the globalisation concept which envisaged a peculiar globe excluding developed countries, the Chairman said that if it was intended that China should somehow be squeezed into this globe, the implications for Hong Kong would be horrifying. Indeed, if the concept was allowed to gain credibility, it would have impli~ cations for all concerned. Mr. Parkinson said that personally he did
think that the globalisation concept would hold up.
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12.
Referring to the entry of Greece into the EEC, Mr. Yeung said that Comitextil had suggested that the global ceiling for imports into the ERC should be "revised downwards" by the amount of Greece's exports to the current nine Members States. This proposal not only ignored the fact that an enlarged Community must have enlarged importa and therefore enlarged consumption, in which case there would be more imports into the EDC, but also the fact that an enlarged Community would carry additional international obligations. Mr. Parkinson
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