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THE RESTUCTION BETWEEN WHAT THE PROTOCOL MIGHT ALLOW AND THAT HON KOND WAS PREPARED TO DO WAS FURTHER HIGHLIGHTED IN THE DISCUSSID OF THE INTERPRETATION OF THE LETTERS EXCHANGED PETWEEN KENZLER AND MR MILLS.
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THE EEC ATTEMPTED TO ARGUE THAT, UNDER THE TERMS OF THE LETTERS, HONG KONG HAD AGREED TO ACCEPT CUTBACKS ON ITS QUOTAS AS A MEANS SOLVING THE UNIQUE PROBLEMS+ WHICH THE COMMUNITY CLAIMS IT MAS. THE HONG KONG DELEGATION SAID THAT ITS COMMITMENT MAS LIMITED TO HELPING TO FIND SOLUTIONS TO THE EEC'S UNIQUE PROBLEMS, ONCE THESE PROBLEMS HAD BEEN DEMONSTRATED AND ONCE IT HAD BEEN SHOWN THAT HONG KONG WAS A CONTRIBUTORY FACTOR.
UNLESS THE PROBLEMS COULD BE DEMONSTRATED AND HONG KONG COULD BE SHOWN TO CE A CONTRIBUTORY FACTOR, THE SACRIFICES WHICH HONG KONG MIGHT MAKE WOULD BE MEANINGLESS AND THE PROBLEMS OF THE EEC WOULD NOT BE EASED. HONG KONG WAS NOT COMMITTED TO THE SINGLE SOLUTION CONTAINED IN THE EEC'S INSTRUCTIONS NAMELY CUTBACKS ON BASE LEVELS.
THE DISCUSSION OF THESE QUESTIONS TOOK UP A GREAT DEAL OF THE TIME AND IT WAS NOT POSSIBLE TO REACH ANY AGREED POSITION ON THEM AT THIS STAGE.
THE TALKS THEN TURNED TO THE SUBSTANCE OF THE NEGOTIATION AND THE ECONOMIC JUSTIFICATION FOR THE EEC'S REQUESTS FOR RESTRAINT.
THE EEC PUT FORWARD, IN SOME DETAIL, STATISTICAL INFORMATION IN SUPPORT OF ITS CLAIM OF REAL RISK OF MARKET DISRUPTION IN RESPECT OF 45 CATEGORIES OF PRODUCTS.
THE EEC GROUPED THESE CATEGORIES INTO VARIOUS DEGREES OF +SENSITIVITY PLACING PARTICULAR EMPHASIS ON THE FIRST EIGHT CATEGORIES WHERE, THE COMMUNITY CLAIMED, IT HAD PARTICULAR DIFFICULTIES AND WHERE IT WAS SEEKING CUTBACKS OF 12 PER CENT ON HONG KONG'S 1982 QUOTAS.
AFTER EXAMINING THE STATISTICAL JUSTIFICATION, HONG KONG SAID IT WOULD BE PREPARED TO ACCEPT THE CONTINUATION OF RESTRAINTS ON 34 CATEGORIES.
OF THESE 34, FIVE CATEGORIES WERE IN THE VERY SENSITIVE+ GROUPING WHICH THE COMMUNITY HAD ESTABLISHED. HOWEVER, HONG KONG REFUSED TO ACCEPT THE 12 PER CENT CUTBACKS PROPOSED FOR THESE CATEGORIES, POINTING OUT THAT IN SOME OF THEM, HONG KONG WAS NOT THE PRINCIPAL SUPPLIER, AND THAT HONG KONG PRICES WERE HIGHER THAN THOSE OF SOME OTHER SIGNIFICANT SUPPLIERS.
IN TWO OR THREE CASES, UNRESTRAINED DEVELOPED COUNTRIES HAD EXPORTED GREATER QUANTITIES THAI. HONG KONG WAS ALLOWED TO SHIP UNDER THE TERMS OF ITS QUOTAS AND AT PRICES ONE HALF OF THOSE OF HONG KONG FURTHERMORE, OVER THE
OVER THE LIFE OF THE CURRENT AGREEMENT, THE EEC'S IMPORTS IN THE SO-CALLED +SENSITIVE+ CATEGORIES FROM HONG KONG HAD SENERALLY DECLINED ON AVERAGE BY ABOUT 14 PER CENT. AGAINST THIS BACKGROUND, THE HONG KONG DELEGATION COULD SEE NO JUSTIFICATION FOR ANY CUTBACKS ON SASE LEVELS THE JUSTIFICATION FOR THE 20' TING-TI, FOR RESTRAINTS EVEN ON NORMAL TER AS WAS NOT VERY STR. 56.