XN000022-1985-07-26 — Page 4

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FRIDAY, JULY 26, 1985

+ECB AND THE FTA REGARD THE COMMISSION POSITION AS TIMID,+ SAID THE STATEMENT.

+IT FAILS TO ACCOUNT FOR THE GROWING TIDE IN FAVOUR OF LIBERALISATION IN MEMBER STATES SINCE CONSUMERS AND IMPORTERS LAUNCHED THEIR JOINT CAMPAIGN LAST YEAR. IT REPRESENTS A LOWEST COMMON DENOMINATOR APPROACH, HEMMED IN BY THE CONSTRAINTS OF ASSESSING THE POSITIONS OF GOVERNMENTS IN THE REST OF THE WORLD, RATHER THAN GIVING ANY CLEAR LEAD FOR THE EUROPEAN COMMUNITY.

THE TWO GROUPS SAID THEY HAD RESERVATIONS ABOUT A COMMISSION REPORT ON THE TEXTILE INDUSTRY WHICH INFLUENCED THE PREPARATION OF THE PUBLISHED EEC POSITION. THE REPORT IS AN APOLOGY FOR PROTECTION BIASED IN FAVOUR OF THE INDUSTRY, THEY SAID.

THERE WERE THREE SPECIFIC OBJECTIONS TO THE COMMISSION'S ANALYSIS, SAID THE ECB AND THE FTA.

FIRSTLY THE PROTECTIONIST BIAS IN FAVOUR OF THE TEXTILE INDUSTRY IS ALL TOO APPARENT AND FIGURES FOR IMPORTS ARE INFLATED BY INCLUDING COUNTRIES WHICH DO NOT COME UNDER THE MFA. AT THE SAME TIME THE POINT THAT, WITH SIGNS OF RECOVERY, THE INTERESTS OF THE EEC CLOTHING AND APPAREL INDUSTRY NOW LIE IN EXPANDING EXPORTS.

SECONDLY, THE COST OF IMPORT RESTRICTIONS TO CONSUMERS IS IGNORED. ALL COST-BENEFIT ANALYSES OF THE MFA SHOW A SUBSTANTIAL HIDDEN TAX OF BETWEEN 10 AND 20 PER CENT ON CONSUMERS - PARTICULARLY ON THOSE WHO DEPEND ON CHEAP IMPORTED CLOTHING AND ON FAMILIES BUYING CHILDREN'S CLOTHING.

THIRDLY, NO ACCOUNT HAS BEEN TAKEN OF THE NEED FOR AN ORDERLY TRANSITIONAL PERIOD. THE COMMISSION HAS BASED ITS POSITION ON THE ASSUMPTION THAT THERE CAN BE NO IMMEDIATE RETURN TO GATT RULES BUT NOBODY IS ADVOCATING ABOLISHING THE MFA OVERNIGHT. WHAT IS REQUIRED IS AN ORDERLY TRANSITIONAL PERIOD TO ACHIEVE FREE TRADE BY 1991.

+THE COUNCIL OF MINISTERS SHOULD START FROM THE ASSUMPTION NOT THAT THE MFA SHOULD BE MAINTAINED BUT HOW TO PHASE IT OUT GRADUALLY, + SAID THE TWO GROUPS.

MR TSANG SAID THAT THE STATEMENT WAS AN ENCOURAGING SIGN THAT THOUGH THE CLIMATE OF PROTECTIONISM OVERSEAS SOMETIMES SEEMED VERY STRONG, GROUPS SUCH AS CONSUMERS WERE NOW PUTTING THEIR POSITION CLEARLY AND MAKING EFFORTS TO ENSURE THAT IT WAS KNOWN THAT PROTECTIONISM BENEFITED NO-ONE IN THE LONG RUN.

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