XN000022-1984-08-22 — Page 5

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WEDNESDAY, AUGUST 22, 1984

+DESPITE THE FACT THAT THE REGULATIONS HAVE BEEN ANNOUNCED AS TAKING EFFECT FROM SEPTEMBER 7, WE WERE TOLD THAT AT THIS POINT THE U.S. WAS UNABLE TO RESPOND TO OUR MAIN ARGUMENTS BECAUSE OF THE NEED TO CONSIDER FURTHER THESE AND OTHER POINTS OF VIEW.

+ALTHOUGH CERTAIN QUESTIONS OF CLARIFICATION WERE ANSWERED THERE STILL APPEARS TO BE SOME CONFUSION ABOUT THE REGULATIONS. APPARENTLY DISCUSSIONS ARE GOING ON WITHIN THE ADMINISTRATION AS TO THE FINAL FORM AND CONTENT OF THE REGULATIONS IN THE LIGHT OF THE COMMENTS BEING RECEIVED.

+WE WERE ASSURED THAT THE POINTS WE HAD MADE WOULD BE TAKEN INTO ACCOUNT IN THIS REVIEW. NEVERTHELESS THE UNITED STATES STATED THAT IT WAS THE INTENTION AT THIS POINT IN TIME THAT THE INTERIM REGULATIONS WOULD GO INTO EFFECT AS PUBLISHED.+

HOWEVER, MR MACLEOD SAID THAT THE BROADER PICTURE GAVE RATHER MORE GROUNDS FOR HOPE THAN THE OUTCOME OF THE BILATERAL CONSULTATION ITSELF MIGHT SUGGEST.

+ THE FACT IS THAT THIS IS A PROBLEM WHICH WILL AFFECT MANY EXPORTING COUNTRIES, NOT JUST HONG KONG, AND NOT JUST THE DEVELOP ING COUNTRIES.

+PERHAPS AT LEAST AS IMPORTANTLY, MANY INFLUENTIAL GROUPS IN THE U.S. ITSELF ARE AGAINST THE NEW REGULATIONS, AND THERE IS NO DOUBT THAT PRESSURES FROM MANY SOURCES ARE BEING EXERTED TO REVERSE THIS DECISION. THUS I HAVE CERTAINLY NOT GIVEN UP HOPE THAT THIS WILL HAPPEN, HE SAID.

+FOR OUR PART THE NEXT FORUM IN WHICH WE SHALL BE FORMALLY INVOLVED IN PRESSING OUR VIEWS IS THE GATT TEXTILES COMMITTEE SCHEDULED TO MEET IN GENEVA ON SEPTEMBER 4 TO DISCUSS THIS SPECIFIC ISSUE, A SIGN IN ITSELF OF THE WIDESPREAD DISMAY WHICH THIS MEASURE HAS CAUSED.

+FURTHERMORE, WE HAVE NOT YET EXHAUSTED THE AVENUE OF BILATERAL CONSULTATIONS, THE DOOR REMAINS OPEN TO RESUME DISCUSSIONS ONCE THE U.S. IS READY TO RESPOND TO OUR MA IN ARGUMENTS, OR IN THE LIGHT OF OTHER DEVELOPMENTS, MR MACLEOD SAID.

THE DELEGATION'S ADVISERS, MR STEPHEN CHEONG AND MR KENNETH FANG, TOGETHER WITH MR BILL DORWARD, THE HONG KONG COMMISSIONER IN NEW YORK, APART FROM ADVISING THE DELEGATION, HAVE MET A CROSS- SECTION OF PEOPLE IN WASHINGTON WHO CAN HELP TO COUNTER THE TIDE OF PROTECTION ISM.

THE ADVISERS ARE HOPEFUL THAT A SUCCESSFUL OUTCOME WOULD EVENTUALLY BE ACHIEVED, THEY WILL BE TRAVELLING TO NEW YORK WHERE THEY INTEND TO CONTINUE LIAISON WITH OTHER U.S. GROUPS WHICH WOULD PROVIDE COUNTER PRESSURES TO THE PROTECTIONIST FORCES RESPONSIBLE FOR THE PROMULGATION OF THESE REGULATIONS.