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proposals were compatible.
Mr. Nehmer said he still could not understand
81.
why, if Hong Kong was ready to consider a selective approach,
the U.S. proposals which went only slightly beyond this
were unacceptable.
82.
Mr. Jordan said first they established a precedent
which if widely followed would be damaging to international
trade in general.
Secondly G.A.T.T. Article XIX referred
to damage to industry by specific products. Thirdly one
of the basic ains of the G.A.T.T. was to eliminate restric-
tions on trade and to confine those shown to be necessary,
to the absolute minimum, and to where damage to domestic
producers was threatened or taking place. The U.S. proposals
called for restraints across the board which would mean
restraints on products which were not causing damage and
on products which Hong Kong did not even export.
83.
Mr. Nehmer said this was no different from Hong
Kong's cotton bilateral agreement. Mr. Jordan pointed out
that there was an international instrument for use in
connection with problems caused by cotton imports; there
was no such instrument for non-cottons. Furthermore he
presumed that when the cotton comprehensive bilateral
agreement was negotiated certain compensations were given
to Hong Kong in exchange for extending coverage to items
which Hong Kong did not ship.
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CONFIDENTIAL
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