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(ii)
A parallel examination of China's likely export development will be equally relevant. Textiles and clothing are one sensitive sector in which China's exports are likely to grow. It could be argued that China's GATT membership is of no great relevance to this, at least as long as we have something like the existing LIFA. Equally, if we succeed in phasing out the PA, this should be a useful lever for securing Chinse concessions elsewhere. But there are doubtless other sectors, too, which should be considered.
(iii) (paragraph 7 of the DTI paper). Despite the undertaking to liberalise inport quotas from Poland, Hungary, Czechoslovakia and Romania, we maintain selective QRS against them. No doubt something similar could be negotiated in the case of China (although leaving aside textiles and footwear our existing QRS on China do not appear to cover a very impressive list of products: matches, leather gloves, hats, pottery). Incidentally, Regulation 1763/82 (Safeguard action against China) is identical to Regulation 1765/2 (Safeguard action against State traders including the GATT State Traders), and (paragraph 11 of the DTI paper) the Member States' national safeguard mechanism - Article 13 of Regulation 1766/82 - lapsed at the end of 1984. It falows that the UK not longer has any freedom to curb imports from China save through Community action.
5. We ought also to consider the timing of any Chinese accession negotiations. China does not appear to want to push ahead just yet. The negotiations may well get under way and run in parallel with the new GATT Round. I wonder accordingly whether we should not be considering China's application as one of the key topics for the new Round. Apart from any linkage that may flow from treating China as a developing country, if that is what is decided, the scale of the China problem and its implications for the multilateral trading system suggest that this might have some overall bgic. Even if there is no formal link between the two, we should at least reflect at an early stage on the impact which the China dimension will have for some of our key objectives in the new Round, notably graduation and the Japan problem (both of which should help to create a reasonable climate for seeking a balance in China's rights and obligations), and even safeguards (I find it difficult to assess whether the China problem will keep or hinder our efforts on selectivity, but it is surely bound to have an impact).
/ 6. Finally
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