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H K Ke 12 | 12
1981
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Mr Kinchen (ECD(E) E111)
FRENCH IMPORT RESTRICTIONS ON GOODS FROM HONG KONG
1.
No
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Mr Peter Wise of HKGO called on Mr Clift on Friday, 30 October to let him know that Hong Kong are considering taking action against France under GATT in response to the introduction by France of quantitative restrictions on watches from Hong Kong.
2. Since the 1950's the French have applied quantitative restrictions to a number of products from Hong Kong and other non-Zone 1 countries. These have been somewhat reduced over the years, but by the end of the Tokyo round of GATT negotiations there was still no agreement on quantitative restrictions. Hong Kong believe these to be in contravention of the GATT code.
3.
About a week ago, the French announced the introduction of a quantitative restriction on Hong Kong watches. translation of the announcement is attached. This is regarded by Hong Kong as a completely new quantitative restriction, and one which is illegitimate under the GATT code. According to Community law, the restriction remains under the control of France, rather than the Commission, because imports of watches were already subject to licencing surveillance. the Hong Kong Trade, Industry and Customs Department believe that they have a good case against the new restrictions under GATT Article 23.
However,
4. It seems probable that Hong Kong will decide to go ahead with their case. If they do, it is likely that they will approach the French within the next month, through the French Consul-General in Hong Kong, and possibly also through the Hong Kong Minister in Brussels. The issue of the other remaining quantitative restrictions, of which a list is attached, will be brought up at the same time, again under Article 23.
5.
It is not expected that the proceedings will concern HMG directly, and Mr Wise does not think they are likely to affect the MFA negotiations, but he had been instructed to tell the FCO of the position.
CODE 18.77
2 November 1981
C G Edgar
Hong Kong & General Department K242 233.4828