CONFIDENTIAL
12=
on Cotton.
(11) An Article 4 arrangement should be concluded
(iii) There should be item by item discussion on the remaining 15 or 16 items on the E.E.C. list. On umbrellas for example the E.E.C. imported 60 per cent of their consumption from Japan and Hong Kong.
(iv) There should be a general safeguard clause.
Mr. Goldsmith said that to accept any such arrangement seemed to him to be tantamount to setting aside Hong Kong's GATT rights. It was anomalous for the E.E.C. to be pressing the Japanese to stand firm against pressure for bilateral restraints on certain non-cotton textiles while pressing Hong Kong to accept such restraints on a Community basis not only for certain non- cotton textiles items but for many other products as well. To acquiesce in face of this pressure would expose Hong Kong to similar pressure from the U.S. We would reflect on what Mr. Wellenstein and Mr. Ernst had said. No doubt they would similarly reflect on the points we had put to them.
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