TNAG-0237-FCO40-273-Trade-relations-between-EEC-and-Hong-Kong-1990 — Page 147

CONFIDENTIAL

Cotton Textiles

6. The meeting opened with a lengthy dissertation from

Ernst, stressing again the informality of the occasion but

offering to go as far as he could to indicate broad Commission

thinking. Basically it was their intention to develop a

generally liberal common textiles policy, moving away from

the present mixed policies of individual Member States. The

present was a good time to make a start on this because it

was a period of high overall demand and of some overheating in

the economies of the Community. But this was a situation which

might not last. In the medium-term the Commission hoped to

progressively adapt the situation to world market conditions,

i.e. to liberalise.

7. Ernst then described the existing legal position in regard

to international trade negotiations as decided by the Council

in late 1969 for the post-transitional period. This was that:

(a) existing agreements of individual Member States could

8.

be extended only for a strictly limited term as, for

example, in the case of the Hong Kong Article 4

agreements with the Benelux and Germany;

(b) new agreements could only be concluded by the Community

as such. In each case the Commission would make a

proposition to the Council of Ministers who would have

to decide whether negotiations could be opened, as well

as the Community's negotiating position;

(c) in the case of countries which do not recognise the

EEC as such, individual Member States could continue

bilateral negotiations for three years up to 31

December 1972; but they would need to consult the

Community on their negotiating position and on the

final agreement before it was concluded.

As regards the Cotton Textiles Arrangement, Ernst

restated that the Community favoured a three years' extension;

with a long-term study being launched immediately after

agreement on the extension in order to examine the possibility

CONFIDENTIAL

/of