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CONFIDENTIAL
situation.
But important not to over-dramatise either.
Our preferred option, reflected in Commission's
mandate, is to remain within MFA framework. But
obviously Community cannot commit itself to doing so
before we know whether complete deal on offer is
acceptable.
(In Hong Kong only)
4.
Welcome Hong Kong's constructive contribution to
Geneva negotiatons.
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5. UK concerned to be fair to Hong Kong because of
constitutional link and open market. But became clear
at December Council that in order for there to be any
prospect of agreement on EC negotiating position
principle of cutbacks on dominant suppliers for the
five most sensitive clothing categories would have to
be accepted. However possibility of compensation in
the form of outward processing quotas was kept open and
extent of compensation should be decided by next
Council on 25 January. UK will continue to argue
importance of recognition by EC of Hong Kong open
market. Could not accept less favourable treatment for
Hong Kong than for other "dominants".
/(In
CONFIDENTIAL