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five items in the field of garments which comprise 80 per cent of their imports, Mr. Ernst said that the Community would have to re-examine thoir position including the possibility of following the example set by the United States.
U.K. Textiles Policy
4. (11) Mr. Ernst said that if the U.K. adopted a tariff policy for cotton textiles, there might be additional problems of harmonisation in the event of U,K. entry into the Community.
Mr. Goldsmith said that the tariff we propose to intro- duce in January 1972 would be similar to the C.E.T.
It was only the other aspect of our policy i.e. the removal of quotas that might widen the gap between our policies.
Mr
Ernst said that if the E.E.C. had already rexcİLER decided/and introduced their common commercial policy vis-a-vis Hong Kong, it might simplify the issue.
Hong Kong and the Common Commercial Policy
5. (111) Mr. Stewart pointed out that the E.E.C.'s imports of textiles were very small in relation to their production.
Mr. Ernst said they wished to give Hong Kong a chance to prove that their problem was a small one in the sense that full liberalisation would not damage Community industries. Initially the Japanese had, like Hong Kong, refused in principle to accept any Community-wide restrictions but after two years' discussions under Article 4 of the L.T.A. they had agreed not to stand on "legalities".
Mr. Jordan said that the restrictions on cotton textiles under Article 4 of the L.T.A. agreed with Germany and Benelux were quite different from French Article 2 restrictions. Restrictions under the L.T.A. were irrelevant to the 24 items mentioned on the previous day as candidates for E.E.C. restrictions towards Hong Kong.
Mr. Ernst said that the voluntary agreement between Hong Kong and Germany on knitwear was a precedent. (It was pointed out that the German figures showing high penetration of its market by Hong Kong amounted to evidence of injury).
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