XN000022-1982-08-05 — Page 5

THURSDAY, AUGUST 5, 1982

HONG KONG REPLIES TO EEC THREAT

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THE ACTING DIRECTOR OF TRADE, MR JUSTIN YUE TODAY (THURSDAY) CHARACTERISED THE STATEMENT MADE YESTERDAY BY MR HORST KRENZLER THE EEC'S CHIEF TEXTILE NEGOTIATOR, AS UNHELPFUL IN THE ON-GOING NEGOTIATIONS FOR NEW BILATERAL AGREEMENTS.

IN A PRESS INTERVIEW, MR KRENZLER THREATENED TO IMPOSE UNILATERAL ACTION ON IMPORTS OF TEXTILES FROM THOSE SUPPLIERS WHO CHOSE TO BAULK AT THE EEC'S DEMAND FOR QUOTA CUTBACKS.

THE EEC IS RESORTING TO THE SAME TACTICS THAT IT USED IN 1977. SUCH TACTICS WILL ONLY SERVE TO HARDEN ATTITUDES ON BOTH SIDES WHEN WE RESUME NEGOTIATIONS IN SEPTEMBER, MR YUE SAID.

MR YUE ALSO QUESTIONED THE BASIS FOR MR KRENZLER'S ASSERTION THAT THE EEC CAN LEGALLY IMPOSE IMPORT QUOTAS AGAINST THE 13 NATIONS WHICH MR KRENZLER NAMED.

+ DO NOT UNDERSTAND WHAT PROVISION OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE MR KRENZLER IS REFERRING TO WHEN HE TALKED ABOUT THE ECONOMIC HARDSHIP CLAUSE. WHAT I DO UNDERSTAND IS THAT ARTICLE XIII OF THE GATT REQUIRIES ALL IMPORT RESTRICTIONS TO BE NON-DISCRIMINATORY, AND APPLIED ACROSS THE BOARD INSTEAD OF TO A SELECTED FEW, HE SAID.

ARTICLE XIII: 1 OF THE GATT STIPULATES SPECIFICALLY THAT +NO PROHIBITION OR RESTRICTION SHALL BE APPLIED BY ANY CONTRACTING PARTY ON THE IMPORTATION OF ANY PRODUCT OF THE TERRITORY OF ANY OTHER CONTRACTING PARTY, UNLESS THE IMPORTATION OF THE LIKE PRODUCT OF ALL THIRD COUNTRIES IS SIMILARLY PROHIBITED OR RESTRICTED+. THIS MEANS THAT IF UNILATERAL IMPORT QUOTAS ARE IMPOSED AGAINST HONG KONG AND A FEW OTHER SUPPLIES ONLY, THE EEC WOULD BE ACTING IN CONTRAVENTION OF THIS PROVISION OF THE GATT.

+SUCH AN ACTION WOULD UNDERMINE THE VERY BASIS OF THE GATT, AND SHOULD BE ROUNDLY CONDEMNED BY ALL THOSE CONCERNED WITH THE PROMOTION AND PRESERVATION OF THE RULES GOVERNING INTERNATIONAL TRADE, + MR YUE ADDED.

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