TNAG-0237-FCO40-273-Trade-relations-between-EEC-and-Hong-Kong-1990 — Page 154

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that they might succeed, the EEC would ask for GATT discussions

to keep the situation under control.

Should one of the major

exporters to the U.S., such as Japan, concede restraint on

other than a de minimis basis, the EEC would be compelled

immediately to review its own position; otherwise it was the

Commission's intention to move towards the elimination of the

various residual restrictions maintained in this sector by

Member States and to adopt a fully liberalised common policy.

22. Ernst then turned to the French restrictions on Hong Kong

outside the field of textiles. These he said posed a special

problem in the development of a common import policy. The

Commission were seeking maximum liberalisation but in order to

gain the agreement of Member States here he made a wry

reference to theoretical majority voting which did not operate

in practice it would be necessary to do something "to save

That is to say, unless some form of restraint

French face".

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was to be agreed or imposed on certain "sensitive" items from

Hong Kong, the degree of common liberalisation which could be

achieved would be disproportionately restricted. He mentioned

particularly the problem of umbrellas which not only appeared

on the French list but were causing concern in both the Benelux

and Germany because of the rapid build up of imports from Hong

Kong. He said that over 50% of Community consumption of

umbrellas came from Hong Kong and Japan.

23. We answered that Hong Kong always stood ready to discuss

with its trading partners, having regard to Article XXII of the

GATT, any problems they felt they were experiencing as a

result of imports from Hong Kong; but in saying this we

stressed the weight Hong Kong attached to the rules of the GATT

and, in particular, to the fundamental principle of non-

discrimination. As things stood we could hold out no hope of

voluntary restraint outside the field of textiles because of the

dangerous precedents involved. And we could not concede that

/the unilateral

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