XN000022-1982-01-28 — Page 2

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THURSDAY, JANUARY 28, 1982

TALKS ON FRENCH IMPORT RESTRICTIONS

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MR LAWRENCE MILLS, THE COMMISSIONER OF TRADE, WILL LEAVE TOMORROW (FRIDAY) FOR GENEVA FOR TALKS WITH THE

EEC COMMISSION, REPRESENTING FRANCE, ON THE SUBJECT OF IMPORT RESTRICTIONS MAINTAINED BY FRANCE AGAINST NINE HONG KONG PRODUCTS.

APART FROM THE RESTRICTION ON QUARTZ WATCHES, INTRODUCED IN OCTOBER LAST YEAR, OTHER PRODUCTS SUBJECT TO RESTRICTIONS ARE SOYA SPROUTS, SOME CLOTHING ITEMS WHICH FALL OUTSIDE HONG KONG'S RESTRAINT AGREEMENT WITH THE EEC, UMBRELLAS, TRANSISTOR RADIOS, TOYS, COMPOUND M CROSCOPES AND PLEASURE BOATS.

AT THE TALKS, WHICH START ON FEBRUARY 2, HONG KONG WILL CLAIM THAT THE DISCRIMINATORY FRENCH IMPORT RESTRICTIONS ARE INCONSISTENT WITH THE GATT, AND CONSTITUTE A NULLIFICATION OR IMPAIRMENT OF BENEFITS TO WHICH HONG KONG IS ENTITLED.

COMMENTING ON WHETHER HONG KONG WILL TAKE RETALIATORY MEASURES AGAINST THE FRENCH, MR MILLS SAID THAT IT WAS PREMATURE TO CONSIDER SUCH STEPS AT THIS STAGE. HE POINTED OUT THAT THE TALKS, WHICH WILL BE HELD UNDER ARTICLE XXIII OF THE GATT, ARE AIMED AT PERSUADING THE FRENCH TO DISMANTLE THEIR IMPORT RESTRICTIONS COMPLETELY. IF THE FRENCH AGREED TO DO THIS, THE QUESTION OF RETALIATION WOULD NOT ARISE.

+THE GATT PROCEDURES COVERING THE SETTLEMENT OF DISPUTES PROVIDE THAT THE TWO PARTIES CONCERNED SHOULD FIRST OF ALL SEEK TO RESOLVE THE IR PROBLEMS THROUGH BILATERAL CONSULTATIONS. THESE ARE THE TALKS WHICH I WILL BE HAVING IN GENEVA,+ SAID MR MILLS,

+ IF THE TALKS FAIL, EITHER PARTY MAY THEN REFER THE MATTER TO THE GATT COUNCIL AND ASK THE COUNCIL TO ESTABLISH A PANEL OF EXPERTS TO CONSIDER THE MATTER AND TO MAKE RECOMMENDATIONS. ONLY IF THE PANEL OF EXPERTS FIND IN HONG KONG'S FAVOUR AND THE FRENCH REFUSE TO ACCEPT THE PANEL OF EXPERTS' RECOMMENDATIONS, COULD HONG KONG BE AUTHORISED TO RETALIATE AGAINST FRANCE,+ ADDED MR MILLS,

MR MILLS WILL BE ACCOMPANIED BY MR DEREK JONES, HONG KONG'S MINISTER (DESIGNATE) TO THE EEC. THEY WILL BE JOINED BY OFFICERS FROM THE HONG KONG GOVERNMENT'S BRUSSELS AND GENEVA OFFICES FOR THE TALKS.

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