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3.
Hong Kong will argue that there will be a general
reluctance among contracting parties to see the present
GATT escape clause (Article XIX) investigated because
they need a clause which allows them some latitude in
dealing with domestic pressures. Hong Kong will say
there has been some reluctance on the part of importing
countries to resort to Article XIX because its use has,
under established practice, to be non-discriminatory
and therefore must interfere widely with established
trading relationships and can bring widespread
retaliation, whereas the problems with which the
importing countries have wished to deal in recent years
have been in textiles, those of rapidly increasing
imports from a few sources only. The contracting
parties recognised that Article XIX could not cover such
problems effectively in the case of cotton textiles when
they considered the results of a working party set up in
the late 1950's and they thereafter found a solution
outside the terms of the GATT in the Cotton Textiles
Arrangement under which discriminatory action can be
taken.
4.
Thus Hong Kong believes another working party on
textiles will come up against the same problems and, if
it did not recommend a further waiver from the GATT to
cover non-cottons, would be more likely to respond to
pressure from the major importing countries by
recommending an end to non-discriminatory application of
Article XIX than to restrict the occasions on which it
could be used. If this happened, it could produce a
situation where developing countries like Hong Kong were
discriminated against and where import controls and cut-
backs in trade were the rule. Hong Kong would prefer to
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